CHAPTER 2 - SPECIAL ITEM NUMBER 132-3: TERMS AND CONDITIONS
APPLICABLE TO LEASING
contemplates the use of the product for the term
of the lease specified in such delivery order (the
LEASE TYPES
“Lease Term”). In that regard, the Ordering
Marzik offers the following lease types: Agency, as lessee, understands that the lease
provisions contained herein and the rate
a. Lease to Ownership with Lease Terms
established for the delivery order are premised
of 12, 24, 36, 48 and 60 months,
on the Ordering Agency's intent to fulfill that
b. Lease with Option to Own with Lease agreement, including acquiring products for the
Terms of 12, 24, 36, 48 and 60 months, and; period of time specified in the order. Each lease
hereunder shall be initiated by a delivery order
c. Step Lease with Lease Terms of 12, 24, which shall, either through a statement of work
36, 48 and 60 months. or other attachment, specify the product being
Orders for leased products must specify the leased, and the required terms of the transaction.
leasing type. In connection with all of the above (b) Each ordering activity placing a
lease plans, Lease Terms of intermediate length delivery order under the terms of this option
greater than 12 months and up to a maximum of intends to exercise each renewal option and to
60 months are available under this Special Item extend the lease until completion of the Lease
Number 132-3. Rates for such intermediate Term so long as the need of the ordering office
Lease Terms will be the rates set forth herein for for the product or functionally similar product
the next higher length of Lease Term. For continues to exist and funds are appropriated.
example, the rate for a Lease Term of 18 months Marzik may request, and if requested, the
under one of the three lease plans would be the Government shall provide, if lawful, information
relevant rate for the 24 month Lease Term under from the ordering office concerning the essential
that lease plan as set forth herein. use of the products.
To the extent Marzik wishes to propose 3. LEASE TERM:
alternative lease terms and conditions that
provide for lower discounts/prices based on the (a) The date on which the ordering office
ordering office’s stated intent to fulfill the accepts the products is the Commencement Date
projected term of a lease including option years, of the lease. For acceptance to occur, the
while at the same time including separate products must operate in accordance with the
charges for early end of the lease, the following product’s published specifications and statement
terms apply. These terms address the timing and of work. Acceptance shall be in accordance with
extent of the Government’s financial obligation the terms of the contract or as otherwise
including any potential charges for early end of negotiated by the ordering activity and Marzik.
the lease.
(b) Any lease is executed by the Ordering
Office on the basis that the known requirement
for such product exceeds the initial base period
1. LEASING PRICE LIST NOTICE: of the delivery order, which is typically 12
months, or for the remainder of the fiscal year.
Pursuant to FAR 32.703-3(b), delivery orders
“The ordering activity is responsible for the with options to renew that are funded by annual
obligation of funds consistent with applicable (fiscal year) appropriations may provide for
law. Agencies are advised to review the lease initial base periods and option periods that cross
terms and conditions contained in this price list fiscal years as long as the initial base period or
prior to ordering and obligating funding for a each option period does not exceed a 12 month
lease.” period. Defense agencies must also consider
DOD FAR supplement (DFAR) 232.703-3(b) in
determining whether to use cross fiscal year
2. STATEMENT OF GOVERNMENT funding. This cross fiscal year authority does not
INTENT: apply to multi-year leases.
(a) The ordering activity and Marzik (c) The Total Lease Term will be specified
understand that a delivery order issued pursuant in each delivery order, including any relevant
to this SIN is a lease arrangement and renewal options of the ordering activity. All
Contract Number GS-35F-5857H Chapter 2 - Terms and Conditions Applicable to Leasing 2-1
CHAPTER 2 - SPECIAL ITEM NUMBER 132-3: TERMS AND CONDITIONS
APPLICABLE TO LEASING
delivery orders, whether for the initial base up to the amount beyond the order’s
period or renewal period, shall remain in effect Termination Ceiling. Any termination
through September 30 of the fiscal year (unless charges calculated under the
extended by statute), through any other Termination for Convenience clause
expiration date specified in the delivery order, or must be determined or identified in the
until the ordering activity exercises its rights delivery order or in the lease agreement.
hereunder to acquire title to the product prior to
(b) Termination for Convenience of the
such expiration date. The ordering activity, at its
ordering activity: Leases entered into under this
discretion, may exercise each option to extend
option may not be terminated except by the
the term of the lease through the lease term.
ordering activity’s contracting office responsible
Renewal delivery orders shall not be issued for
for the delivery order in accordance with FAR
less than all of the product and/or software set
52.212-4, Contract Terms and Conditions-
forth in the original delivery order. Delivery
Commercial Items, paragraph (l), Termination
orders under this SIN shall not be deemed to
for Convenience of the Ordering Activity. The
obligate succeeding fiscal year funds. The
costs charged to the ordering activity as the
ordering activity shall provide Marzik with
result of any Termination for Convenience of the
written notice of exercise of each renewal option
ordering activity must be reasonable and may not
as soon as practicable. Notice requirements may
exceed the sum of the fiscal year’s payment
be negotiated on an order-by-order basis.
obligations less payments made to date of
(d) Where an ordering activity’s specific termination plus the Termination Ceiling
appropriation or procurement authority provides
(c) Termination for Non-Appropriation:
for contracting beyond the fiscal year period, the
The ordering activity reasonably believes that the
ordering office may place a delivery order for a
bona fide need will exist for the entire Lease
period up to the expiration of the Lease Term, or
Term and corresponding funds in an amount
to the expiration of the period of availability of
sufficient to make all payment for the lease Term
the multi-year appropriation, or whatever is
will be available to the ordering office.
appropriate under the applicable circumstance.
Therefore, it is unlikely that leases entered into
under this option will terminate prior to the full
Lease Term. Nevertheless, the ordering
4. LEASE TERMINATION:
activity’s contracting officer may terminate or
(a) The Ordering Activity must elect the not renew leases at the end of any initial base
Lease Term of the relevant delivery order. period or option period under this paragraph if
Marzik (and assignee, if any) will rely on the (a) it no longer has a bona fide need for the
Government’s representation of its intent to product or functionally similar product; or (b)
fulfill the full Lease Term to determine the there is a continuing need, but adequate funds
monthly lease payments calculated herein. have not been made available to the ordering
office in an amount sufficient to continue to
(i) The ordering activity may
make the lease payments. If this occurs, the
terminate or not renew leases under this ordering activity will promptly notify Marzik,
option at no cost, pursuant to a and the product lease will be terminated at the
Termination for Non-Appropriation as
end of the last fiscal year for which funds were
defined herein (see paragraph (c)
appropriated. Substantiation to support a
below). In any other event, the ordering
termination for non-appropriation shall be
activity’s contracting officer may either provided to Marzik upon request.
terminate the relevant delivery order for
cause or Termination for Convenience (d) Termination Charges: At the initiation
in accordance with FAR 52.212-4 of the lease, termination ceilings will be
paragraphs (l) and (m). established for each year of the lease term. The
termination ceiling is a limit on the amount that
(ii) The Termination for
Marzik may be paid by the ordering activity on
Convenience at the end of a fiscal year the Termination for Convenience of a lease. No
allows for separate charges for the early claim will be accepted for future costs: supplies,
end of the lease (see paragraph (d)
maintenance, usage charges or interest expense
below). In the event of termination for
beyond the date of termination. In accordance
the convenience of the ordering activity,
with the bona fide needs rule, all termination
the ordering activity may be liable only
Contract Number GS-35F-5857H Chapter 2 - Terms and Conditions Applicable to Leasing 2-2
CHAPTER 2 - SPECIAL ITEM NUMBER 132-3: TERMS AND CONDITIONS
APPLICABLE TO LEASING
charges must reasonably represent the value the monthly lease payment.
Government received for the work performed (v) A confirmation of the
based upon the shorter lease term. No availability of the product on the
Termination for Convenience costs will be required delivery date.
associated with the expiration of the lease term. (vi) Extent of warranty coverage, if
any, of the leased products.
(e) At the order level, the ordering activity may,
(vii) The length of time the quote is
consistent with legal principles, negotiate lower
valid.
monthly payments or rates based upon
appropriate changes to the termination conditions (c) The Ordering Activity may issue a
in this section. delivery order to Marzik based on the
information set forth in Marzik’s quote. In the
event that the Ordering Activity does not issue a
LEASE PROVISIONS COMMON delivery order within the validity period stated in
TO Marzik’s quote letter, the quote shall expire.
ALL TYPES OF LEASE
AGREEMENTS 2. ASSIGNMENT OF CLAIMS:
GSAR 552.232-23, Assignment of Claims, is
The following terms and conditions are incorporated herein by reference as part of these
applicable to any lease awarded under lease provisions. The Ordering Office’s
this contract regardless of type or option. contracting officer will acknowledge the
assignment of claim for a lease in accordance
1. ORDERING PROCEDURES: with FAR 32.804-5. The extent of the assignee’s
protection is in accordance with FAR 32.804.
(a) When an Ordering Office expresses an Any setoff provision must be in accordance with
interest in leasing a product(s), the Ordering FAR 32.803.
Office will provide the following information to
Marzik:
(i) Which product(s) is (are) 3. PEACEFUL POSSESSION AND
required. UNRESTRICTED USE:
(ii) The required delivery date. In recognition of the types of products available
(iii) The proposed lease plan and for lease and the potential adverse impact to the
term of the lease. Ordering Activity’s mission, the Ordering
(iv) Where the product will be Activity’s quiet and peaceful possession and
located. unrestricted use of the product shall not be
(v) Description of the intended use disturbed in the event the product is sold by
of the product. Marzik, or in the event of bankruptcy of the
(vi) Source and type of Marzik, corporate dissolution of Marzik, or other
appropriations to be used. event. The product shall remain in the
(b) Marzik will respond with: possession of the ordering activity until the
expiration or other termination of the lease. Any
(i) Whether Marzik can provide assignment, sale, bankruptcy, or other transfer of
the required product. the leased product by Marzik will not relieve
(ii) The estimated residual value of Marzik of its obligations to the ordering activity,
the product (Lease with Option to Own and will not change the ordering activity’s duties
and Step Lease only). or increase the burdens or risks imposed on the
(iii) The monthly payment based ordering activity.
on the rate.
(iv) The estimated cost, if any, of
applicable State or local taxes. State 4. COMMENCEMENT OF LEASE:
and local personal property taxes are to
be estimated as separate line items in The date on which the Ordering Activity accepts
accordance with FAR 52.229-1, which the products is the Commencement Date of the
may be identified and added to the lease. Acceptance is as defined elsewhere in the
contract, or as further specified in the order.
Contract Number GS-35F-5857H Chapter 2 - Terms and Conditions Applicable to Leasing 2-3
CHAPTER 2 - SPECIAL ITEM NUMBER 132-3: TERMS AND CONDITIONS
APPLICABLE TO LEASING
of the applicable rate in its quote letter based on
the Treasury constant maturity as shown in the
5. INSTALLATION AND
Federal Reserve statistical release H.15 as of the
MAINTENANCE:
preceding date closest to the date of Marzik’s
a. Installation and Maintenance, when quote letter. As there is no 4-year constant
applicable, normally are not included in the maturity, 48 month Lease Terms shall be
charge for leasing. Marzik may require the calculated by interpolation of the 3-year and 5-
ordering activity to obtain installation and year Treasury constant maturity. For lease
maintenance services from a qualified source. orders less than $1 million, the monthly (or other
The ordering activity may obtain installation periodic) lease payment shall be calculated at an
and/or maintenance on the open market, from interest rate consisting of 525 basis points plus
Marzik’s schedule contract, or from other the Treasury constant maturity described herein.
sources. The ordering activity may also perform For lease orders greater than $1 million, the
installation and/or maintenance in house, if monthly (or other periodic) lease payment shall
qualified resources exist. In any event, it is the be calculated at an interest rate consisting of 500
responsibility of the ordering activity to ensure basis points plus the Treasury constant maturity
that maintenance is in effect for the Lease Term described herein.
for all products leased.
The lease payment may be calculated by using a
b. When installation and/or maintenance programmed business calculator or by using
are ordered under this schedule to be performed “rate” functions provided in commercial
by Marzik, the payments, terms and conditions computer spreadsheets (e.g., Lotus 1-2-3, Excel).
as stated in this contract apply. The rates and
c. For any lease extension, the extension
terms and conditions in effect at the time the
lease payment will be based on the original
order is issued shall apply during any subsequent
residual value, in lieu of the purchase price. The
renewal period of the lease. The maintenance
Ordering Activity and Marzik shall agree on a
rates and terms and conditions may be added to
new residual value based on the estimated fair
the lease payments with mutual agreement of the
market price at the end of the extension. The
parties.
formula to determine the lease payment will be
that in 6.b. above.
6. LEASE PAYMENTS: d. In the event the ordering activity
desires, at any time to acquire title to product
a. Prior to the placement of an order under
leased hereunder, the Ordering activity may
this Special Item Number, the Ordering Activity make a one-time lump sum payment. The lump
and Marzik must agree on a “base value” for the sum purchase option price will be the fair market
products to be leased. For Lease to Ownership
value of the product or payment will be based
(Capital Lease) the base value will be the
upon the unamortized principle, as shown on the
contract purchase price (less any discounts). For
payment schedule as of the last payment prior to
Lease with Option to Own (Operating Lease) and
date of transfer of ownership, whichever is less.
Step Lease, the base value will be the contract
purchase price (less any discounts), less a NOTE: At the order level, Ordering Activity
mutually agreed upon residual value (pre-stated may elect to obtain a lower rate for the lease by
or fair market value purchase option price at the setting the purchase option price as either, the
conclusion of the lease) for the products. For fair market value of the product or unamortized
Step Leases, the residual value shall be principle. The methodology for determining
separately established for the initial 12-month lump sum payments may be identified in the
base period and for each additional 12-month purchase order.
period of the Lease Term. The residual value
e. The point in time when lease rates are
will be used in the calculation of the original
established is subject to negotiation and
lease payment, lease extension payments, and the
evaluation at the order level.
purchase option price.
b. To determine the initial lease term
payment, Marik agrees to apply the negotiated f. Lease payments shall accrue from the
lease factor to the agreed upon base value as Commencement Date and be due monthly (or
follows: Marzik will notify the ordering activity other applicable period) following the
Contract Number GS-35F-5857H Chapter 2 - Terms and Conditions Applicable to Leasing 2-4
CHAPTER 2 - SPECIAL ITEM NUMBER 132-3: TERMS AND CONDITIONS
APPLICABLE TO LEASING
Commencement Date for the number of periods manufacturer's specifications and return
set forth in the Lease Term. Marzik, or its the products to Marzik at the location
assignee, shall invoice the Government for each specified by Marzik in the continental
monthly (or other periodic) lease payment. The US, in the same condition as when
first invoice shall be delivered to the delivered, ordinary wear and tear
Government within ten days of the excepted. Any expenses necessary to
Commencement Date and thirty (30) calendar return the products to good working
days prior to each due date thereafter. The order shall be at Ordering activity's
Government shall make payments periodically expense.
within thirty (30) calendar days of receipt of a
(ii) Marzik shall conduct a timely
proper invoice, and all late payments shall
inspection of the returned products and
include interest in accordance with the Prompt
within 45 days of the return, assert a
Payment Act. The periodic lease payments shall
claim if the condition of the product
remain fixed for the Lease Term as set forth in
exceeds normal wear and tear.
the delivery order. In addition to monthly
payments, alternate payment plans such as (iii) Product will be returned in
quarterly, semi-annual, or annual payments may accordance with the terms of the
be available and shall be set forth in contract and in accordance with Marzik
supplemental terms and conditions stated in the instruction.
delivery order.
(iv) With respect to software, the
Ordering activity shall state in writing
to Marzik that it has:
7. LEASE END/DISCONTINUANCE
OPTIONS: (1) deleted or disabled all
files and copies of the software
a. Upon the expiration of the Lease Term,
from the equipment on which
the ordering activity will return the Product to
it was installed;
Marzik unless the Ordering activity by 30 days
(2) returned all software
written notice elects either:
documentation, training
(i) to purchase the product for the manuals, and physical media
residual value of the product, or on which the software was
delivered; and
(ii) to extend the term of the
(3) has no ability to use
Lease, as mutually agreed. To compute
the returned software.
the lease payment, the residual value
from the preceding lease shall be the
initial value of the leased product. A
8. UPGRADES AND ADDITIONS:
new residual value shall be negotiated
for the extended lease and new lease a. The Ordering activity may affix or
payments shall be computed. install any accessory, addition, upgrade, product
or device on the product ("additions") provided
b. Relocation - The Ordering activity may
that such additions:
relocate products to another location within the
Ordering activity with prior written notice. No (1) can be removed without
other transfer, including sublease, is permitted. causing material damage to the product;
Ordering activity shall not assign, transfer or
(2) do not reduce the value of the
otherwise dispose of any products, or any
interest therein, or crate or suffer any levy, lien product; and
or encumbrance then except those created for the (3) are obtained from or approved
benefit of Marzik or it's assigns. by Marzik, and are not subject to the
interest of any third party other than
c. Returns:
Marzik.
(i) Within fourteen (14) days after
b. Any other additions may not be
the date of expiration or termination of
a lease, the Ordering activity shall, at its installed without Marzik's prior written consent.
own risk and expense, have the products At the end of the lease term, the Ordering
activity shall remove any additions which:
packed for shipment in accordance with
Contract Number GS-35F-5857H Chapter 2 - Terms and Conditions Applicable to Leasing 2-5
CHAPTER 2 - SPECIAL ITEM NUMBER 132-3: TERMS AND CONDITIONS
APPLICABLE TO LEASING
(1) were not leased from Marzik,
and
(2) are readily removable without
causing material damage or impairment 11. TAXES:
of the intended function, use, or value
The lease payments, purchase option prices, and
of the product, and restore the product
interest rates identified herein exclude all state
to its original configuration.
and local taxes levied on or measured by the
c. Any additions that are not so removable contract or sales price of the product furnished
will become Marzik's property (lien free). hereunder. The Ordering activity will be
invoiced for any such taxes as Marzik receives
d. Leases of additions and upgrades must
such tax notices or assessments from the
be co-terminus with that of the product.
applicable local taxing authority. Pursuant to the
provisions of FAR 52.229-1, State and Local
Taxes, the Ordering activity agrees to pay tax or
provide evidence necessary to support an
9. RISK OF LOSS OR DAMAGE: exemption from the tax.
The Ordering activity is relieved from all risk of 12. OPTION TO PURCHASE
loss or damage to the product during periods of EQUIPMENT:
transportation, installation, and during the entire
time the product is in possession of the Ordering (a) The Ordering activity may purchase the
activity, except when loss or damage is due to equipment provided on a lease or rental basis
the fault or negligence of the Ordering activity. under this contract. The Contracting Officer
The Ordering activity shall assume risk of loss or may exercises this option only by providing a
damage to the product during relocation, (i.e., unilateral modification to Marzik. The effective
moving the product from one Ordering activity date of the purchase will be specified in the
location to another Ordering activity location), unilateral modification and may be any time
unless Marzik shall undertake such relocation. during the period of the contract, including any
extensions thereto.
(b) Except for final payment and transfer of
10. TITLE: title to the Ordering activity, the lease or rental
portion of the contract becomes complete and
During the lease term, product shall always lease or rental charges shall be discontinued on
remain the property of Marzik. The Ordering the day immediately preceding the effective date
activity shall have no property right or interest in of purchase specified in the unilateral
the product except as provided in this leasing modification required in paragraph (a) of this
agreement and shall hold the product subject and clause.
subordinate to the rights of Marzik. Software (c) The purchase conversion cost of the
and software licenses shall be deemed personal equipment shall be computed as of the effective
property. The Ordering activity shall have no date specified in the unilateral modification
right or interest in the software and related required in paragraph (a) of this clause, on the
documentation except as provided in the license basis of the purchase price set forth in the
and the lease. Upon the Commencement Date of contract, minus the total purchase option credits
the Lease Term, the Ordering activity shall have accumulated during the period of lease or rental,
an encumbered license to use the software for the calculated by the formula contained elsewhere in
Lease Term. The Ordering activity’s this contract.
encumbered license rights in the software will be (d) The accumulated purchase option
subject to the same rights as provided to a credits available to determine the purchase
purchaser of a license under the terms of this conversion cost will also include any credits
contract except that the Ordering activity will not accrued during a period of lease or rental of the
have an unencumbered, paid-up license until it equipment under any previous Ordering activity
has made all lease payments for the full Lease contract if the equipment has been on continuous
Term in the case of an Lease To Ownership or lease or rental. The movement of equipment
has otherwise paid the applicable purchase from one site to another site shall be “continuous
option price. rental.”
Contract Number GS-35F-5857H Chapter 2 - Terms and Conditions Applicable to Leasing 2-6