Equipment rentals and leases are allowed under State regulations. The length of time of the transaction determines whether an agreement will be considered a rental or a lease.
Vehicle rentals and property rentals are not covered under this policy and procedure. The University travel policy (section 1.0 Travel) includes information regarding vehicle rentals. The Office of Real Estate and Space Management should be contacted at 706-542-6794 regarding real estate (property) rentals.
For procedural purposes, rental of equipment is categorized in two ways: as rentals (short term transactions of 90 days or less) and as leases (transactions of more than 90 days). Rentals or leases may contain a purchase option with credit accruing against such option as lease payments are made.
Rentals (transactions of 90 days or less) that are $500 or less may be purchased with petty cash.
Purchasing Card (P-Card):
Rentals may be purchased with a p-card. The p-card’s single transaction limit is applicable to the allowable dollar amount.
Purchase Request (UGAmart requisition):
If petty cash or p-card procedures are not utilized, rentals must be initiated by a UGAmart requisition. The vendor’s rental agreement should be attached to the UGAmart requisition.
Leases (more than 90 days) should be requested by processing a UGAmart requisition in accordance with normal purchasing procedures. The State of Georgia requires the lessor to execute the State's Standard Agency Agreement. If the lessor has provided this agreement, it should be attached to the purchase request but it should not be signed by the department and no commitments should be given by departments for the lease or delivery of equipment. After necessary approvals and processing, which may include competitive bidding, a purchase order will be issued to cover the lease. For competitive bids, Procurement will include the State Purchasing Division Lease/Rental contract in the solicitation. Rental payment will be made after proper approval by the department. Partial payment forms or check requests used to initiate monthly or other periodic rental payments against equipment leases should indicate the order/contract number against which funds are encumbered.
Leases may be handled as multiyear agreements. See Policy Section 2.2.8
For lease financing agreements, the contract may provide for interest payments or for the allocation of a portion of the contract payment to interest. The University is permitted to pay interest on installment purchase or lease/purchase contracts provided the contract clearly defines the interest rate and payments. (O.C.G.A.) Section 50-5-64.5 prohibits state entities from paying interest as a late fee on outstanding principal balances associated with contracts.
Termination of Lease Agreements: A department wishing to terminate a lease contract before the end of the lease period should provide a written request to the University Procurement Office. Procurement will review the agreement and determine if termination is possible.
Rentals – agreements of 90 days or less
Leases – agreements of more than 90 days
Lessor – vendor providing equipment
Leases will have a contract/agreement associated with the transaction.
Record Copy: Procurement
Retention: 7 years after expiration, BOR 0472-14-002
SPD-SP027 State Entity Contract for Equipment Rental or Lease