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.
Contract Use:
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:
Employee reimbursements are inappropriate for any of the types of purchases contained in Object Class LL.
Recharges:
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- Commodity is not likely to be quickly outdated by advances in technology and the durability of the Commodity will provide a long-term useful life;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.
