[Minor revision-posted 1/25/18 (replaces 4/30/16 edition)
Operating Policy and Procedure
OP 72.18: Lease-Purchase of Equipment
DATE: January 25, 2018
PURPOSE: The purpose of this Operating Policy/Procedure (OP) is to establish the procedures to be followed when lease-purchasing equipment.
REVIEW: This OP will be reviewed in January of even-numbered years by the Chief Procurement Officer with substantive revisions forwarded through the TTU Vice President for Administration & Finance and Chief Financial Officer (VPAF/CFO) to the TTUS Senior Vice Chancellor and Chief Financial Officer (SVC/CFO).
This policy will apply when lease-purchasing all types of equipment regardless of the source of funds.
A "proposed lease-purchase arrangement" for purposes of this OP shall mean a proposed arrangement whereby the requisitioning department intends to obtain title to equipment, whether by installment purchase or by lease with option to purchase and where the pay-off period extends beyond an existing appropriation period, such as extending beyond a fiscal year.
This policy does not apply to a traditional purchase of equipment or to a traditional lease of equipment without an option to purchase.
a. All requisitions for lease-purchase must be submitted to Procurement Services on a TechBuy non-catalog form.
b. Written justification for the lease-purchase must be attached to the TechBuy requisition and shall include:
A statement with supporting dollar values of why the proposed lease-purchase is cost effective compared to an outright purchase. The supporting dollar value documentation must include details pertaining to any actual or imputed interest, carrying charges, or other additional costs that will be added to the purchase price over the life of the proposed contract.
c. The lease-purchase will then be referred to the TTUS SVC/CFO and/or the TTU VPAF/CFO to determine if the Texas Tech University System may provide internal financing with better terms through the Revenue Finance System (see Section 07.05.4, Regents' Rules, Equipment financing). The TTUS SVC/CFO and/or the TTU VPAF/CFO will either approve the lease-purchase as submitted or refer the lease-purchase for a conversion to a traditional purchase to be financed through the Revenue Financing System.
d. All lease-purchases must be approved in writing by the TTUS SVC/CFO and/or the TTU VPAF/CFO.
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