XI. Procurement and Contract Management

Guide to Financial Operations

XI.11.G Equipment Acquisition

XI. Procurement and Contract Management
Guide to Financial Operations


The purpose of this section is to provide guidance to state agencies on the procurement of equipment, including:

  • Establishment of need for the equipment;
  • Determining the method of acquisition for the equipment; and
  • Required approvals and other considerations.


The procurement record for an equipment acquisition agreement must include a justification of need for the equipment. Cost/price is a fundamental part of the needs evaluation and can play a crucial role in the decision making process. Sections 160.5 and 160.6 of the State Finance Law provide that cost may include the price of the good being purchased and can include the administrative, training, storage, maintenance or other overhead associated with the given good; the value of warranties, delivery schedules, financing costs and foregone opportunity costs associated with the given good; and the life span and associated life cycle costs. Life cycle costs may include, but shall not be limited to, costs or savings associated with construction, energy use, maintenance, operation, and salvage or disposal. Cost/price may also include, but is not limited to, when applicable and when specified in the solicitation, delivery charges, installation charges and other costs.


In the determination of need, a decision must be made as to how the equipment should be procured, i.e. whether the equipment should be purchased, either outright or over an extended term, or whether it should be leased. There are a number of determining factors that influence the acquisition method, including the purchase cost of the equipment and whether the need for the equipment is long-term or short-term. Generally, a straight lease should only be utilized to meet a short-term need for the equipment or for equipment with a short useful life. Otherwise, equipment should be acquired through some form of purchase.

Outright Purchase

If an agency has funds available, outright purchase should be considered, since this is typically the most economical method to acquire equipment.

Extended Term Purchase

As a general rule, an extended term purchase should be considered under the following circumstances:

  • The equipment is customarily purchased or leased over an extended term and is not traditionally acquired by outright purchase (e.g. computer hardware, telecommunication systems).
  • The total cost is less than the cost for a straight lease.

Equipment can be acquired over an extended term in one of the following methods:

Installment Purchase - Title to the equipment transfers to the State immediately and payments are made over an extended term (more than one year). The term of the contract cannot be longer than the useful life of the equipment. The payments are computed based on the purchase price (principal) and interest. Maintenance of the equipment may require a separate contract. (See Section 11.D - Equipment and Software Maintenance Contracts of this Chapter for additional information).

Lease Purchase - Title automatically transfers to the State after the final payment. The payments are computed in the same manner as an installment purchase, except maintenance generally is included with the principal and interest in the payment. Payment of a nominal fee (e.g. $1.00) may be required for title to pass to the State.

Lease with an Option to Purchase - Title does not pass to the State unless the option to purchase is exercised. The lease payments are structured as in a straight lease and include maintenance of the equipment; principal and interest components are not listed separately. Generally, a percentage of the lease payments accrue toward the purchase option price.

If a decision is made to acquire equipment over an extended term, instead of by outright purchase or straight lease, a method of financing must be chosen. Financing methods available are:

  • Certificates of Participation (issued only through OSC or with OSC approval).
  • Installment purchase or lease purchase contracts financed through:
    1. Equipment manufacturer or a manufacturer's subsidiary credit corporation.
    2. Private third-party financing company selected through competition.

For more specific information and required forms regarding Financing options, see the DOB Budget Policy and Reporting Manual and Forms.

Note: If an agency has an extended term purchase contract, and funds are available, consideration should be given to executing the early buy-out provision.

Straight Lease

With a straight lease, the State does not intend to acquire title to the equipment. Also, unlike with a purchase, the lease payment does not segregate into principal and interest and is usually obtained from a published price list.

A straight lease should be considered in the following circumstances:

  • The equipment vendor only supplies the equipment under a straight lease.
  • The agency has only a short-term need for the equipment.
  • The equipment to be acquired is experiencing rapid technological changes that may render the equipment obsolete in a relatively short period of time.


Required approvals for equipment acquisitions are outlined below.

Division of the Budget

DOB approval is required, pursuant to Article 5-A, Section 66-B of the State Finance Law, for all new installment purchases and lease purchases, including those financed by Certificates of Participation (COPs) and for all refinancing of such purchases. Agencies must submit completed H-101 forms to their budget examiner to secure prior DOB approval for all equipment contracts, contract amendments, or purchase orders procured through a new installment or lease purchase, regardless of the method of financing. Budget Policy and Reporting Manual Item H-300 requires agencies to submit Annual Technology Plans (ATPs) to facilitate statewide planning and coordination of technology initiatives.

Agencies should refer to the following DOB information for financing and technology arrangements:

DOB H-101- Budget Policy and Reporting Manual – Installment Purchase Financing

Form H-101-Request for Approval of Personal Property (Equipment) And Real Property State Supported Bonds

Form H101B - Request for Approval of Installment Purchase Financing

Form H101C- Request for Approval of Installment Purchase Contracts; Schedule of Payments to Vendors; State-Supported Bonds

Form H101S-Request for Approval of Personal Property (Equipment) and Real Property Vendor Financing or Statewide Lease Purchase Agreement

DOB H-300-Budget Policy and Reporting Manual – Statewide Policy for the Acquisition of Technology and Technology Related Services

DOB D-750-Budget Policy and Reporting Manual – State Vehicles
https://www.budget.ny.gov/guide/bprm/d/d-0750.html http://www.budget.ny.gov/guide/bprm/d/d750.html

Office of Information Technology Services (ITS)
Agencies should refer to the following ITS procedures and guidelines which outline provisions and policies for technology acquisitions:

ITS Policy 98-3 - Technology Acquisitions Review Procedures and Guidelines

ITS Policy NYS-P08-001 - Enterprise Plan to Procure Policy

Office of the State Comptroller

OSC approval is required for all contracts for the acquisition or lease of equipment, pursuant to Section 112(2) of the State Finance Law.

Further, pursuant to revised Part 7.14 of 2 NYCRR entitled Equipment Acquisitions:

“No financed equipment acquisition will be approved by the State Comptroller pursuant to section 112 of the State Finance Law, other than for the State University of New York or for the City University of New York or for the State Legislature, unless the outright purchase cost of such equipment is more than $250,000. Multiple items of the same type of equipment, or related items of equipment, procured pursuant to a single request for proposal may be grouped under one or several contracts, as part of a procurement package to reach the aforementioned dollar level.”


Capital Equipment

Equipment of a capital nature is generally purchased outright with monies set aside by the agency and appropriated for the purchase, based on the agency budget submitted to the Legislature for approval. See below for an attached listing of major types of capital equipment.

Federal Government Requirements

If the equipment purchase includes the use of Federal funds, in addition to complying with State rules and regulations, an agency must also comply with any Federal requirement(s) associated with such funding.

State Agency Procurement Practices

When considering an equipment acquisition, agencies must follow the procurement guidelines established in Article XI, State Finance Law, Section 163.3.a.(i), which states the purchase of commodities by state agencies, including the Office of General Services, shall be conducted in a manner which accords first priority to preferred sources in accordance with the provisions of Article XI, State Finance Law Section 163, second priority to centralized contracts, third priority to agency or multi-agency established contracts and fourth priority to other means of contracting.

Equipment Preventive Maintenance Contracts

Agencies should consider contracting for equipment preventive maintenance when the agency does not have the personnel with the capability to perform such preventive maintenance itself, and:

  • The services are necessary to keep the equipment in optimal working order to ensure the safety of State employees and the public;
  • The agency wants to extend the useful life of equipment because it will be more cost effective than procuring new equipment; and/or
  • It is critical to minimize equipment downtime due to the nature of the program for which the equipment is used.

For more information, see Section 11.D - Equipment and Software Maintenance Contracts of this Chapter.

Process and Document Preparation:

When an agency has determined a contract transaction is subject to prior approval by OSC (see Section 2.A - Thresholds of this Chapter for additional information), the agency submits one original contract document along with needed additional signature pages, the procurement record (Request For Proposal, Invitation For Bid, procurement record checklist, certified bid tabulation, etc.), copies of the required equipment acquisition documents and approval forms previously referenced under Required Approvals heading in this GFO. In addition, a Single Transaction Summary (STS) or AC 340-S and other documents (e.g., transmittal cover letter, and when required, vendor responsibility documentation. (See Section 2.E - Submission of Agency Contracts and Amendments and Section 2.G - Submission and Retention of Bids/Proposals of this Chapter, for additional information).

Process and Document Preparation Specific to the SFS:

SFS users will create a contract transaction in the SFS using the appropriate Audit Type. For transactions subject to OSC approval, users will generate a STS and submit the STS with the agreement (contract) and required procurement record documents to OSC.

Process and Document Preparation Specific to Agency Bulkload System Users:

SFS users that bulkload contract transactions into the SFS must use the appropriate Audit Type. For transactions subject to OSC approval, users will generate either a STS or AC 340-S and submit the STS or AC 340-S with the agreement (contract) and required procurement record documents to OSC.

Capital Equipment1


  • Cars
  • Trucks
  • Construction Equipment
  • Buses
  • Aircrafts


  • Desks
  • Chairs
  • Sofas
  • Refrigerators
  • File Cabinets
  • Freezers
  • Ovens

HVAC Systems

  • Air-Condition Systems
  • Boilers
  • Generators
  • Furnaces

1This listing is designed to identify the major types of capital equipment and is not all-inclusive.

Guide to Financial Operations

REV. 02/12/2020