Lease Refinancing

Progress in Reducing Army's Equipment Leasing Costs Gao ID: AFMD-90-67BR March 13, 1990

Pursuant to a congressional request, GAO reviewed: (1) the Army's progress in implementing its lease refinancing program, aimed at reducing its equipment leasing costs; and (2) the Department of Defense's (DOD) efforts to expand the program throughout other military activities.

GAO found that: (1) between 1985 and 1988, DOD equipment leasing declined; (2) the Army found that its program covered a small portion of lease obligations that could be viable candidates for pooling and refinancing; (3) the Army pursued individual lease renegotiations as an option for reducing leasing costs; (4) 2,203 Army equipment leases it reviewed were valued at over $315 million, but 2,039 leases valued at $275 million were not eligible for refinancing; and (5) the Army was the only military activity with a major lease refinancing program, but in fiscal year 1988, other military activities had 711 leases valued at about $230 million, representing 45 percent of DOD equipment leases.

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