Dell Leasing Program
Frequently Asked Questions
1. What are the advantages of a Fair Market Value Lease for computer equipment?The option on whether to buy vs. lease IT equipment is an important business decision to be made by each individual University department; factors to consider may be the tax benefits of equipment ownership (i.e. M&E Tax Exemption), restriction on the funding sources to enter into a lease, and the length of time a department is planning to keep their computer equipment. In general, there are some benefits that are associated with IT operating leases:
If a department requires the use of the latest computer technology and is planning on keeping their computer equipment for no more than 3 years, the standard 3 year term of the Dell Leasing Program provides a flexible way to replace older equipment with newer technology and thereby avoiding the risk of technology obsolescence or performance degradation on their old computer equipment.
A department may use their operating budget (instead of capital budget) to make the annual lease payment which may allow an organization to better leverage their financial resources.
In the event that a department comes to the conclusion that it makes business sense to lease its IT equipment, the Dell Leasing Program offered by Dell Financial Services (DFS) is an easy option to do so. The Step-By-Step Guide on this page will show you the process on how to complete your order by choosing the Dell leasing option.
2. What is a “Fair Market Value”?
Fair Market Value is defined as an estimate of the market value of computer equipment based on what a knowledgeable, willing, and unpressured buyer would probably pay to a
knowledgeable, willing, and unpressured seller in the market. An FMV or fair market value purchase option lease, is like an extended rental program; i.e., more than a year in duration. At the end of the lease, options typically include 1) purchasing the equipment for its then fair market value, 2) extending the lease on a fixed-term basis or 3) returning the old equipment to the leasing company and start a new lease schedule with brand new equipment.
The advantage of leasing Dell branded equipment from DFS is leveraging Dell’s existing
secondary equipment market channels and thereby placing a higher “Fair Market Value” on the leased equipment, which can potentially lower the overall cost of the lease.
3. While we are under this program, who do I call to fix our Dell computers in case of a technical issue?
Dell computer equipment as listed on the eProcurement premier website comes standard with a “3 Year Basic Hardware Service with 3 Year NBD Limited Onsite Service After Remote Diagnosis” service offering. User requesting service on their Dell computer equipment would follow the same process as if they have purchased the equipment.
4. Is this program currently available for computer equipment other than Dell?
Currently, the Dell Leasing Program is available for Dell branded computer equipment only. Department may include non-Dell brand accessories available on the Dell eProcurement website as part of total order to be included in the lease.
5. What is the payment frequency for the Dell Leasing Program? The lease payments are paid annually in advance
6. Who do I contact regarding any billing issues? (i.e. If someone were billed a higher amount that what was quoted for their lease)
Department should contact Mr. Brian Rockwell, Account Executive of Public Sector for Dell Financial Services regarding any lease billing questions as well as other questions relating to the Dell Leasing Program in general. Brian can be reached at [email protected]
425-894-5632.
7. How should the order be set up in e-Procurement?
Please refer to the Step-by-Step Guide on how to choose the lease option when ordering Dell computer equipment from eProcurement.
8. What Object code should be used when choosing the leasing option in eProcurement? For a Fair Market Value Lease, user should use object/sub-object codes 03-85 when sitting up their order in eProcurement.
9. Does the department need to sign any document(s) as part of the Dell Leasing Program? After each order, DFS will generate a specific schedule to capture the details of that particular lease, Department will be responsible to review the schedule for accuracy and then email Ray Hsu at Procurement Services ([email protected]) with their approval.
Procurement Services will sign the schedule upon Departmental approval. 10. What are our options when the term of the lease expires?
In order to integrate the leasing option into the eProcurement workflow – Department has the following three options at the end of the 36 month lease term:
a. Department may purchase the leased equipment at the end of the lease term at a Fair Market Value to be assessed at that time by Dell. In general, this option is not recommended since ownership of the equipment is not the intended purpose of an operating lease. If Department is planning on eventually owning the computer equipment that they are leasing then a more cost effective leasing option should be explored (such as a capital lease).
b. If the department has no more use for the computer equipment at the end of the lease, they will return the leased equipment back to DFS once the term of the lease has been satisfied, and incur no more obligations, or
c. Department can return the leased equipment back to DFS and start a new lease schedule with new equipment for another 36 months. This option best meet the intent of the Dell Leasing Program.
DFS will provide Department under a current lease with a notice that includes any “end-of-lease” options at least 60 days prior to the expiration of the lease.
11. What is the process of returning the leased equipment back to DFS?
In accordance with the DFS Master Lease Agreement, UW is responsible for packaging and shipping the leased equipment back to a DFS designated location. In order to make this as easy as possible, Dell offers a comprehensive service that includes:
• wiping of the hard drive to erase any UW data ( a certificate of data destruction will be provided)
• packaging and palletizing of the equipment, and • freight service to the DFS designated location.
Departments utilizing the Leasing Program are highly recommended to take advantage of this service as it alleviates the risk of shipping and the logistics of equipment return and satisfies UW’s data security best practices ; the cost of the service is approximately $25 per computer with additional discounts available for larger quantities. This service may be ordered at any time during the Term of the lease or at the end of the lease planning that occurs 60 days prior to term expiration. Please contact Brian Rockwell for any questions regarding the Dell Leasing Program end-of-the-lease options.
12. Can one do an operating lease for customized computer equipment (like servers) that is not available as part of UW’s standardized configuration?
The Dell Leasing Program is available for both standardized and customized Dell equipment. If there is a need to order customized computer equipment from Dell, the department should contact Ms. DeeDee Ramirez ([email protected]), Dell NW Account Manager to obtain a price quotation for the desired equipment. Once the quote is generated, the Department can then enter the order directly into eProcurement by referencing the special quote number and chose leasing as the preferred payment methods in accordance with the Step-by-Step Guide. Department can contact Mr. Brian Rockwell or Ms. Laurie Hunt ([email protected]), Associate Director of eProcurement for any question regarding this process.
13. Is there an online tool to help me track how many equipment (maybe change this to: assets) that are being leased and their schedules under single or multiple leases?
The DFS Online Account Management provides user an online tool to track leased equipment schedules under the Dell Leasing Program. Please contract Brian Rockwell for more details regarding this tool.
14. Is there a minimum dollar threshold for this program?
The Dell Leasing Program does not impose a minimum dollar threshold for leasing Dell computer equipment. For efficiency in managing documents, approvals and equipment tracking under leases, departments are encouraged to consolidate their individual lease orders as much as possible. Please contact Brian Rockwell to get a special quotation if you are planning on leasing a large number of computer equipment.
15. What if I need to end the lease earlier then the agreed upon lease term?
Each FMV Lease is a financial obligation that binds UW to the term of the lease so while it may be possible to terminate the lease before the end of the term under extraordinary
circumstances; each Department should assume that once they sign up, they are responsible for the entire lease payment schedule regardless of any early termination. Departments need to plan their lease decisions carefully to avoid any potential financial impact.
16. Can I mix purchased items with lease items?
Since there are drastic difference in processes associated with purchasing and leasing
equipment, eProcurement does not allow the mixture of the two funding methods within the same requisition.
17. Do departments need to obtain a UW inventory tag for leased Dell equipment?
Departments are not required to tag their leased equipment UNLESS any single piece of the equipment under the Dell Leasing Program is over $2,000 USD. Please refer to the Equipment and Inventory Office policy regarding equipment tagging for capital and operating leases. Under the term of the DFS Master Lease, UW will be responsible for any loss or damages to the leased equipment while it is in our possession so exercising due care for the equipment is required (normal wear and tear is permissible). For ease of identification, DFS will provide a special label with the shipment of the leased equipment.
If you have additional questions regarding the Dell Leasing Program, please contact Brian Rockwell, Ray Hsu, or Laurie Hunt at our contact information below. Thank you for your consideration of the Dell Leasing Program!
Ray Hsu, Assistant Director for Procurement Services – 206-543-0793 [email protected]
Laurie Hunt, Associate Director for eProcurement – 206-685-3566 [email protected]
Brian Rockwell, Account Executive, DFS - 425-894-5632 [email protected]
