Fed buyers try leasing their IT from resellers

Through leases ranging from a few thousand dollars to several million, agencies have
begun using the new option available on more than a dozen General Services Administration
schedule contracts.

So far this year, GSA has given 15 vendors approval to lease products under
Multiple-Award Schedule contracts.

Last month, the Defense Department Health Affairs Office at Seymour Johnson Air Force
Base, N.C., agreed to pay $258,000 to lease 100 Dell Computer Corp. Dimension desktop
systems from Electronic Data Systems Corp. for three years, said Stephanie Ambrose, EDS'
account operations manager.

The 200-MHz Pentium minitowers have 32M of RAM, 2.1 Enhanced IDE hard drives, 15-inch
monitors and 12X/24X CD-ROM drives, she said. Microsoft Windows 95 and Microsoft Office
come preinstalled.

In a separate three-year contract for less than $17 million [GCN, July 14, Page 4], the
Air Force is leasing Informix Software Inc. database management software from BTG Inc. of
Fairfax, Va. BTG also is providing software maintenance services for 180 Air Force
locations worldwide, said Carlos Villar, director of GSA's Federal Acquisition Services
for Technology office in Kansas City, Mo.

Agencies now can lease everything from PCs and Unix servers to midrange systems and
mainframes through the schedule. In the past, they could lease only used equipment or
enter into capital leases, which required them to sign lease-to-own agreements.

Comark Federal Systems of Chantilly, Va., holds a five-year, $50 million contract with
the Census Bureau for optional buying or leasing of notebook computers.

A company spokeswoman said about one-third of the 3,000 notebooks ordered through the
contract have been leased.

Contrary to some vendors' claims, the question of whether leasing can be done with
operations and maintenance funds rather than capital funds depends on the individual
transaction and the agency's financial officer, said Alex Barenblitt, federal leasing
manager for Digital Equipment Corp.

DOD agencies have shown the greatest interest in leasing, according to Barenblitt. He
said the Energy Department has leased Digital products on the open market, and the Federal
Aviation Administration, National Institutes of Health, and Transportation Department have
shown interest in leasing.

Barenblitt said vendors need to do a better job of educating agency procurement
officials about leasing. But EDS' Ambrose said she believes agencies' chief information
officers are spreading the word to one another.

As a result, Berenblitt said, she has spent less time answering introductory questions
about leasing since the summer began.

Mary Souther, a BTG vice president, said she has found that agencies are discussing
leases for "large infrastructure upgrade improvements" so they can avoid
"locking into technology that could quickly become outdated."

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