105 CONS

Hello. Yes, I did receive some useful responses. Thanks.

We are looking to purchase a water filtration system that could cost upwards of $30k. We will not know ahead of time if the equipment will meet all environmental mandates until it is put into use and the filtered water is sampled and tested. We plan on renting the equipment for 30-60 days and include an option to purchase after testing is completed. This will ensure the equipment meets the all required mandates before we commit to a purchase. We will prepare a solicitation for a short term rental and include and option CLIN and clause 52.207-5 Option to Purchase Equipment. Do we also have to comply with all requirements at FAR 17.2 and include option clauses such as 52.217-5, 52.217-8, 52.217-9, etc.? We just want to ensure we are compliant with all aspects of the FAR as our ultimate end goal is to procure the equipment.

FAR 37.101 Defines service contract as a contract that directly engages the time and effort of a contractor whose primary purpose is to perform an identifiable task rather than to furnish an end item of supply. Included in this definition is repair of equipment. Recently, one of our members paid for services rendered on their GPC to repair a floor sweeper that was broken down. A representative from the manufacturer had to travel to our location to perform repair services that totaled just over $3,200.00. The total included roughly $2,000.00 for travel/labor and $1,000.00 for new parts. Our position is that this is considered a service since it is a repair of equipment that we already own and it therefore violated the micro-purchase threshold of $2,500.00 for services. The requirement should have instead been issued under contract with the inclusion of the proper prevailing wage rates. The member differs in opinion based on the fact that roughly $1,000.00 spent was for new parts and it therefore can be considered a supply purchase, which the micro-purchase threshold of $3,500.00 for supplies would be applicable under this situation. Are we correct in our interpretation? Is this in fact a service since we are paying for labor associated with a repair for equipment? Further, anyone have other policy/guidance that provides a clear definition of a supply vs. a service?