GSA, vendors closer to new IT leasing terms

By Jason Miller

Connecting state and local government leaders

| April 17, 2002

The General Services Administration is reviewing vendor and industry association comments on proposed IT leasing terms for the Federal Supply Service schedule.

The General Services Administration is reviewing vendor and industry association comments on proposed IT leasing terms for the Federal Supply Service schedule. GSA on April 5 placed a 60-day moratorium on hardware and software leasing after several months of unsuccessful negotiations on a new agreement.

The draft terms lay out two options. The first places all the risk on the contractor, according to Larry Allen, executive director for the Coalition for Government Procurement, an industry association in Washington that is working with GSA on the issue.

The terms of the first option let agencies sign lease agreements for a fiscal year with renewal options based on annual funding allocations. The agency controls almost all aspects of the lease.

The second option is more favorable to vendors, Allen said. It lets vendors propose alternative terms for lower prices and include separate charges if a lease is ended early.

'Generally, with a couple of exceptions, the draft terms are right on track,' Allen said. 'We offered some comments on what needs to be strengthened so customers know what a lease is used for and how to use it properly.'

One industry executive, who asked not to be identified, said the new lease terms are less confusing overall but still need some clarification, such as on how lease rates are structured.

'As long as GSA is willing to negotiate and customize the terms for each customer, we are making progress,' the executive said. 'Certain terms will be changed and the rest will be structured like your commercial practices in a regular GSA contract.'

Allen said he expects the suspension to be lifted and new terms in place by the last week of April or in early May.

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