Third-party Lease Review

ONE OF the dilemmas in-plant printers have always faced is managing around the ironclad lease agreements forced upon them by capital equipment manufacturers—primarily the digital print engine suppliers.

This is not to suggest that any of these suppliers have delivered lemons or won’t provide the expected maintenance support. Generally speaking, with ongoing maintenance, the basic equipment usually performs as expected. This is difficult to ascertain, however, as lawsuit settlements always include a nondisclosure clause hand-cuffing (or “mouth-cuffing”) the printer to stop him or her from ever describing their problems with the equipment and the actual settlement features.

The number of lawsuits during the last decade has been increasing and may be surprisingly high to many IPG readers. These litigations are always initiated by the manufacturer against the private sector printer for failure to pay contracted fees. The printer, at its attorney’s advice, puts the monthly fee into escrow until the problems are resolved or rectified. In short order, the manufacturer sues.

No Funds for the Fight

Very few public sector in-plants are allowed to follow this litigious course of action. The in-plants are forced to live with the suppliers’ unfulfilled promises because the public sector does not have funds available to fight a legal battle. However, during the National Government Printers Association (NGPA) conference in 2005, more than one state printer representative described their successful efforts to keep a well known manufacturer off the bidding list for a year because of nonperformance.

This manufacturer’s army of attorneys worked nonstop to get its client’s name back on the qualified bidders list for the next round of bid solicitations. It was not a changed management philosophy that got them back on the list. It was relentless legal wrangling by the manufacturer against the state purchasing entity. This was a short-lived, though welcome, in-plant victory.