DOCUMENT

MODL - OA4 Award Lease VS Buy 2006

  • YEAR CREATED: 2006
  • ENTITY TYPE: City/Township
  • TYPE OF DOCUMENT: MODL - Model, Templates
The document discusses the lease vs. purchase analysis conducted by the Houston Independent School District (HISD) when acquiring equipment. The district compares the costs and benefits of leasing versus purchasing equipment, particularly copiers, computers, and vehicles. For copiers, HISD currently leases 960 copiers on a month-to-month basis. The lease contract includes various services such as delivery, setup, maintenance, unlimited copies, toner, staples, and equipment movement at no extra cost. This arrangement allows each campus and department to accurately budget for copier expenses. Leasing also ensures that HISD can have newer copiers with up-to-date technology, which would be cost-prohibitive if purchased. In comparison, the cost to purchase a copier depends on its speed and capacity. Smaller copiers cost around $6,000 to $10,000 each, while larger ones range from $20,000 to $60,000 each. Maintenance agreements are required for purchased copiers, covering repairs, replacement parts, and toner. The maintenance cost is approximately 20% of the initial machine cost and increases as the machine ages. Additionally, there are depreciation and asset management responsibilities associated with owning a copier, including annual reporting, asset tagging, inventory verification, and auctioning at the end of its useful life. Regarding computers, HISD chooses to purchase rather than lease them due to the relatively low capital outlay and ease of disposal. The useful life of a purchased computer exceeds its depreciation period at HISD. For vehicles such as school buses, vans, and trucks, HISD also prefers purchasing over leasing. The capital outlay is significant, but the useful life of a good vehicle can surpass the depreciation period. Ownership allows HISD to make modifications as needed without seeking permission from a lessor. For example, they plan to equip their school bus fleet with GPS equipment and have customized certain trucks and vans for specific jobs.
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