Introduction

Decisions to build, buy, or lease a capital asset such as a building require the commitment of large sums of money. Four steps are involved in evaluating building acquisition alternatives:

1. Identify your space needs. Include the amount of floor space, parking, and other facility needs. Your Facilities Master Plan (in conformance with Forest Service Manual 7312.1 and 1241) and Preliminary Project Analysis (as directed by Forest Service Handbook 7309.11, "Buildings and Related Facilities Handbook") are excellent starting points.
2. Identify estimated costs associated with each alternative. The cost of construction, land, purchase prices for existing buildings, operation and maintenance costs for the buildings, lease costs in your location-both GSA rates and private sector rates-are just some of the figures that need to be collected. Use the spreadsheet and its references to compile sufficient information. The governing document is Office of Management and Budget (OMB) Circular A-94, "Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs." Section 13.c of OMB Circular A-94 has specific cost information for lease-purchase analysis.
3. Determine the time period of the project. Use the lease period (including any option periods) or the economic life of the asset. OMB Circular A-94 defines economic life as an asset's remaining or productive lifetime, beginning when it is acquired and ending when the asset is retired from service. Regardless of which figure you use, remember: the period must be at least 10 years, in accordance with Forest Service Handbook 7309.11, "Buildings and Related Facilities Handbook."
4. Choose an alternative based on your economic analysis (with the help of the spreadsheet model) and any pertinent factors that influence your final decision. The spreadsheet model is just one of the tools that should be used when making your decision. This report was prepared to help Forest Service managers use the spreadsheet.

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