Effective Dates: 05/03/2023 - Present Previous | Next

TN 1 (05-23)

DI 39530.015 Lease/Purchase of DDS Equipment

A. Definition

Lease/purchase agreements provide that some or all payments made for the use of equipment,over a specified period of time, may be applied toward the purchase of the equipment.

This policy does not apply to IT equipment. IT equipment is different from general DDS equipment.

B. Policy

1. Advantages of lease/purchase agreement

  • •

    Buyer has option of discontinuing item before purchase.

  • •

    Vendor bears obligation to replace defective or troublesome equipment with new or improved equipment at minimal or no cost to buyer.

  • •

    Leased equipment that becomes unserviceable due to amount or cost of repairs can usually be disposed of without further obligation.

2. Interest on borrowing

If equipment is acquired through lease/purchase, interest on borrowing is considered as an unallowable cost, even if allowable under State rules. This includes:

  • •

    Bond discounts

  • •

    Costs of financing or refinancing operations

  • •

    Legal and professional fees paid in connection with financing or refinancing.

3. Regional approval

The DDS must obtain prior RO approval before entering into a lease/purchase agreement. The DDS must also obtain prior RO approval before converting from a lease/purchase agreement to a purchase agreement.

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0439530015
DI 39530.015 - Lease/Purchase of DDS Equipment - 05/03/2023
Batch run: 05/03/2023
Rev:05/03/2023