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Rental of Equipment with an option to purchase

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We are looking to purchase a water filtration system that could cost upwards of $30k. We will not know ahead of time if the equipment will meet all environmental mandates until it is put into use and the filtered water is sampled and tested. We plan on renting the equipment for 30-60 days and include an option to purchase after testing is completed. This will ensure the equipment meets the all required mandates before we commit to a purchase.  We will prepare a solicitation for a short term rental and include and option CLIN and clause 52.207-5 Option to Purchase Equipment. Do we also have to comply with all requirements at FAR 17.2 and include option clauses such as 52.217-5, 52.217-8, 52.217-9, etc.? We just want to ensure we are compliant with all aspects of the FAR as our ultimate end goal is to procure the equipment.

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Are the environmental mandates known, the water quality, and an ongoing need for the system?  If so, why bother with a option to purchase?  Just establish in RFQ and purchase order the requirements the system must meet and that acceptance and payment for the system is contingent upon meeting specified requirements and satisfactory test results specified in the purchase order.  Unless it is necessary for some other reason, paying rental on item then purchasing it could wind up costing the agency more money, especially if the rental payments are still due even if the system does not meet environmental requirements.

Regarding the applicability of FAR Subpart 17.2 to clause 52.207.5, I don't think it does.  The scope of 17.2 is defined at 17.200 and it makes no reference to Subpart 7.4 or clause 52.207-5.  Maybe someone else in this forum is more familiar with use of clause 52.207-5.

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I'm with Todd -- it seems strange to have already decided on the solution without knowing that it will meet the need.  

Regarding the 52.217-x clauses, no, you don't need any of them.  You also don't need any of the determinations required by FAR Subpart 17.2.  Your authority is the 52.207-5 clause.  You're doing an option to purchase a leased or rented item, not an option to buy additional quantities.  Your attorneys or procurement analysts might tell you differently, of course.

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17.200 says “This subpart prescribes policies and procedures for the use of option solicitation provisions and contract clauses.”  A list is then provided describing when “this subpart does not apply”.  Neither Part 7 as a whole nor lease to purchase type contracts are listed as exceptions.

52.207-5 “Option to Purchase Equipment” is an option clause as illustrated by the clause’s title and 52.207-5(a) which says, “The Contracting Officer may exercise this option…”.

Regarding exercise of the option, 17.207(a) says “When exercising an option, the contracting officer shall…”.  It does not say “When exercising an option prescribed by this Part, the contracting officer shall…”.  Therefore, the requirements of 17.207 would be applicable as well.

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We plan on renting the equipment for 30-60 days and include an option to purchase after testing is completed.

You're talking about a simplified acquisition. Rent one for 30-60 days, test it, and if you like it, then buy one. Could anything be easier? WTH do you want to bother with an option? You'd have to get help to write an option clause, then you'd be back here asking how to comply with FAR 17.207.

Geez.

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