Air Force Leases Software

An Air Force unit has become the first agency to acquire computer products through a lease under the General Services Administration schedules.

In the $17 million deal, the Air Force unit got a discount of more than 80 percent by opting for the lease-to-purchase arrangement instead of buying its software licenses through the schedule, according to GSA officials. The supplier is BTG Inc. of Fairfax, Va., which beat out the competition to make the first lease deal under a much-touted GSA innovation.

GSA officials have promoted leasing as a means through which agencies can avoid amassing inventories of obsolete hardware and software. But the Air Force acquisition will result in the service's owning the software, according to Mary Souther, BTG's vice president for strategic programs. The Air Force will get product upgrades, along with on-site maintenance, during the three-year lease period, she said.

The Air Force unit acquiring the software is the Medical Systems Implementation and Training Division (MEDSITE), part of the Air Force Materiel Command at Brooks Air Force Base, according to GSA officials in Kansas City, Mo. MEDSITE will install products from Informix Software Inc., which specializes in relational database systems, at 180 locations worldwide, they said.

GSA's Federal Acquisition Services for Technology (FAST) program in the agency's Greater Southwest and Heartland regions negotiated with BTG on behalf of MEDSITE. GSA said the deal was concluded in 15 days.

BTG's Souther said leasing allows agencies to spread out their payments and finance major infrastructure improvements over more than one year. A financial services company, FSM Inc. of McLean, Va., will finance the Air Force acquisition. FSM has arranged to pay the manufacturer for the software licenses at the beginning of the lease term, and this upfront payment prompted the manufacturer to discount the product substantially, Souther explained. She said agencies could expect to get discounts of 50 percent to 60 percent through IT leasing arrangements.

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