Feds were hip to PC leasing before Seat Management

PC leasing had already picked up momentum before the General Services Administration
awarded its Seat Management Program contracts this month.

The Office of the Secretary of Defense for Health Affairs has a new blanket purchasing
agreement for leasing in place and plans up to five more during the next month, said Kevin
Friel, a contract analyst for OSDHA.

A 1997 directive from Edward D. Martin, then principal deputy assistant secretary in
the office, had mandated that all military health systems agencies lease their systems

“This is all new to us, but we’re getting it done,” said Friel, a
contractor who works for Conwal Inc. of McLean, Va.

The Navy Fleet and Industrial Supply Center in Philadelphia negotiated OSDHA’s
first BPA through the General Services Administration Information Technology Schedule
contract held by International Data Products Corp. of Gaithersburg, Md.

The BPAs will offer only PCs, printers and servers for lease. “We won’t get
too exotic,” Friel said.

On a smaller scale, the Education Department has leased about 1,800 Compaq Computer
Corp. Deskpros [GCN, July 13, Page 8]. Spreading the payments over a three-year period
made leasing appealing, said Hazel Fiers, the department’s acting deputy chief
information officer.

It’s also easier to manage leased equipment and standardize the hardware and
software, Fiers said.

Education will hire a manager to track the leased PCs using a database, she said. The
manager will approve any modifications made to PCs during the three-year leases.

Although agencies clearly are interested in PC leasing through existing vehicles such
as GSA schedule contracts, an industry consultant said that the practice raises many

“Is leasing a form of forced discipline to make sure you get technical
upgrades?” said Bob Dornan, senior vice president at Federal Sources Inc. of McLean,
Va. “Will the equipment get returned or replaced” at the lease end?

Dornan said lease flexibility costs money. Agencies can expect to pay 150 percent of
the original purchase price over a three-year lease, he said.

It might be preferable to buy with budget money already in hand, he said, because if
the agency’s budget is cut in the second or third year of a lease, the agency will
have trouble making payments.

leasing PCs from whom?


Number of units 


Kertulla advised agencies that are ready to go with leasing to work closely with the
chosen vendor and to educate employees about the difference between leasing and buying

Agencies also need to learn more about GSA schedule contract leasing provisions,
Kertulla said. During his research, he learned that vendors base their interest rates on
when delivery occurs. Certain other costs may be negotiable.

For example, OSDHA’s leasing provisions call for IDP to pay for shipping the
leased goods back at the end of the lease.

On the other hand, the Military Sealift Command’s lease with SMAC Data Systems of
Gaithersburg, Md., calls for the command to pay the ship-back costs, Kertulla said. The
command has the option to buy equipment at the end of the lease.

The terms of the lease with SMAC Data Systems require the command to pay for any help
desk calls that result from hardware or software changes made during the three-year
leases, Kertulla said.

The Census Bureau is leasing nearly half the notebook PCs it is procuring from Comark
Federal Systems of Chantilly, Va., said Alba Sanchez, a contracting officer.

Census is leasing many of the notebooks to perform fee-for-service work for other
agencies that it does not get paid for up front, Sanchez said.  

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