subpart 207.4--equipment lease or purchase
(Revised November 01, 2001)
If the equipment will be leased for more than 60 days, the requiring activity must prepare and provide the contracting officer with the justification supporting the decision to lease or purchase.
207.470 Statutory requirements.
(a) Limitation on contracts with terms of 18 months or more. As required by 10 U.S.C. 2401a, the contracting officer shall not enter into any contract for any vessel, aircraft, or vehicle, through a lease, charter, or similar agreement with a term of 18 months or more, or extend or renew any such contract for a term of 18 months or more, unless the head of the contracting activity has—
(1) Considered all costs of such a contract (including estimated termination liability); and
(2) Determined in writing that the contract is in the best interest of the Government.
(b) Leasing of commercial vehicles and associated equipment. Except as provided in paragraph (a) of this section, the contracting officer may use leasing in the acquisition of commercial vehicles and associated equipment whenever the contracting officer determines that leasing of such vehicles is practicable and efficient (10 U.S.C. 2401a).
207.471 Funding requirements.
(a) Fund leases in accordance with DoD Financial Management Regulation (FMR) 7000.14-R, Volume 2A, Chapter 1.
(b) DoD leases are either capital leases or operating leases. The difference between the two types of leases is described in FMR 7000.14-R, Volume 4, Chapter 7, Section 070207.
(c) Capital leases are essentially installment purchases of property. Use procurement funds for capital leases.