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GAO-12-281R 1 (2012-02-07)

handle is hein.gao/gaobacfsh0001 and id is 1 raw text is: Accountabiliy - Integrity - Reliability United States Government Accountability Office Washington, DC 20548 February 7, 2012 The Honorable Joseph I. Lieberman Chairman The Honorable Susan M. Collins Ranking Member Committee on Homeland Security and Governmental Affairs United States Senate Subject: Air Force and Interior Can Benefit from Additional Guidance When Deciding Whether to Lease or Purchase Equipment Federal agencies spend more than $200 billion per year, on average, to lease or purchase equipment, with purchases accounting for nearly all of this spending.1 With agencies facing new fiscal austerity challenges, it is increasingly important that every dollar is spent cost effectively. The Federal Acquisition Regulation (FAR) provides that when agencies are seeking to obtain equipment, they should consider whether it is more economical to lease equipment rather than purchase it as a component of acquisition planning. This is known as a lease versus purchase analysis. You requested that we examine how this process is working. As agreed with your staff, we focused on one defense and one civilian agency, the Department of the Air Force (Air Force) and the Department of the Interior (Interior). We determined (1) the extent to which these agencies perform lease versus purchase analyses for equipment, and (2) the role the General Services Administration (GSA) plays in assisting agencies with making lease versus purchase decisions. We examined applicable federal regulations, guidelines, and policies for performing lease versus purchase analyses and making related decisions. We also selected and reviewed a nongeneralizable sample of 32 contracts involving eight equipment codes at the two agencies. We selected the equipment codes based on criteria such as suitability for leasing, but eliminated categories of equipment subject to specific acquisition regulations, such as fleet vehicles. We selected the two agencies based on our analysis of the 17 top spending agencies for fiscal years 2006 through 2010 that had leasing and purchasing obligations in each of the selected equipment codes-Air Force, which had among the lowest percentage of leasing obligations, and Interior, which had among the highest. We interviewed contracting officials at Air Force and Interior to discuss the circumstances surrounding the selected contracts, the extent of any lease versus purchase analyses that had been 1 During fiscal years 2006 through 2010, agencies annually spent, on average, about $200 billion to purchase equipment and almost $1 billion to lease equipment with rounding accounting for the difference between $201 billion and $200 billion. GAO-12-281 R Equipment Lease versus Purchase Analysis

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