Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter.
Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.
OCR for page 95
APPENDIX F
CONTRACTING CAPABILITY AND PROCEDURES
Present executive branch policy permits leasing of capital assets,
but based on a full-cost comparison of lease versus buy. This policy
is explicitly set forth in the Office of Management and Budget (OMB)
Circular No. A-104, which ''prescribes a method for the economic
analysis that should be conducted [by federal agencies] when con-
sidering whether to use leasing in place of direct government purchase
and ownership as a means of acquiring the use of assets." The current
circular was issued on June 1, 1986.
The circular only applies to new contracting, that is, contracting
to have a new ship constructed by the private sector to government
specifications and then leased by an agency. But OMB would generally
expect the same type of analysis to be undertaken in any proposal to
' ~ , v i. While the
guidelines are "suggested" for use by agencies, they are required for
use in "all prospectuses, proposed legislations, budget justifications
or other proposals submitted to the Office of Management and Budget and
to the Congress."
The economic analysis prescribed under Circular No. A-104 is a
lease-versus-buy analysis with the objective of determining the method
of acquisitions that is least expensive to the federal government.
The lease-versus-buy cost comparisions should be made on the basis
of discounted (present-value) cost over the term of the lease. The
cost of leasing should include any special tax benefits to the charter
organization, for example, investment tax credits and accelerated
depreciation (largely done away with by the Deficit Reduction Act of
1984).
Finally, it should be noted that A-104 does not require an
agency to demonstrate that buying is more economical than leasing.
tease an exlsClne vessel versus ouYln~ a new vessel
95
OCR for page 96
Representative terms from entire chapter:
branch policy
