This class includes only those codes that are appropriate for requisition/purchase order use that cover expenditures for the lease-purchase, and the lease and rental of equipment, and for the service that is provided to maintain and repair equipment.
Department staff should verify with their business manager or bookkeeper whether a contract (Massachusetts Higher Education Consortium ((MHEC)) or State) is available for the type of purchase to be made.
Employee reimbursements are inappropriate for any of the types of purchases contained in Object Class LL.
Requisition/purchase orders are inappropriate for recharge departments. Check with the respective recharge area for their requirements.
NOTE: Unless noted differently herein, a contract document, usually provided by the vendor, that details the terms and conditions of the lease-purchase, lease/rental, or maintenance service, must accompany the purchase document if the total of the commitment to the vendor exceeds $10,000. If funded by state monies, contact a buyer in Procurement for guidance.
Purchase of Commodity with Financing and Ultimate Ownership
- Department must first discuss their options with the Director of Procurement if financing is not covered by an MHEC contract
- Department must plan well in advance to establish the financing (three or more months);
- Department must do competitive bids through Procurement to establish the financing company if lease-purchase of commodity is not covered by an MHEC contract;
- Department must have a definite long term need for the Commodity;
- Commodity is not likely to be quickly outdated by advances in technology and the durability of the Commodity will provide a long-term useful life;
- Department wants to "own" equipment;
- Department does not have sufficient available funds for outright purchase;
- Department builds equity in equipment and title passes to the Department at end of Lease-Purchase payments;
- Interest rates vary, depending on the dollar amount to be financed and the type of commodity. It is not cost effective to finance low dollar value purchases (less than $100,000). The higher the amount to be financed, the lower the interest rate, and vice versa;
- Procuring departments are required to pay to service/maintain equipment throughout the term of the leasepurchase.
NOTE: A signed contract agreement is required, regardless of dollar amount or contract duration.