Leasing versus purchasing lessons learned from CINCPACFLT's lease of Dell informaiton technology

Abstract

On June 30, 1999 Fleet Industrial Supply Center Norfolk, Detachment Philadelphia (hereafter referred to as FISC) received a requirement from Commander in Chief, U.S. Pacific Fleet1 (CINCPACFLT) for the acquisition of information technology (IT) equipment in order to support Year 2000 (Y2K) remediation efforts. Because FISC had previously established Blanket Purchase Agreements (BPAs) with several computer firms during previous IT equipment purchases, CINCPACFLT asked FISC to execute a similar arrangement for their IT acquisitions. CINCPACFLT desired to use FISC’s significant experience and knowledge in IT BPA contracts. The timeline between requirements generation and delivery was compressed because CINCPACFLT needed all of the equipment in place throughout the CINCPACFLT area of responsibility (AOR) before 31 December 1999. Additionally, CINCPACFLT informed FISC that they did not have Other Procurement, Navy (OPN) funds available for purchasing IT equipment. However, CINCPACFLT did have sufficient Operations and Maintenance (O&M) funds to lease the needed IT equipment. Within these major constraints, CINCPACFLT and FISC executed three lease contracts: one for ashore-based commands (hereafter called the ashore lease), one for forces afloat commands (hereafter called the afloat lease), and one for eight file servers (hereafter called the file server lease).