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jayandstacey

manufacturing NAICS...or not?

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Hi all, new here so go easy on me. I'm seeking a NAICS choice interpretation.

An upcoming solicitation will be for brand-named extended warranty and support, to consist exclusively of the manufacturer's part numbers. It will likely be a set-aside.

13 CFR 121.402.B says "Procurements for supplies must be classified under the appropriate manufacturing NAICS code" yet this isn't really supplies (is it? I can't find a definition of supplies)

The solicitation is however for IT, and NAICS 541519 suggests (in note 18 of the SBA size standards) that unless the reseller is performing at least 15% of the work for the contract, the solicitation should be let under a manufacturer NAICS. The reseller won't be adding/selling any of their own work here - just reselling the OEM maintenance/support and adding their markup.

If it were products with no reseller services included, I'd go right to the manufacturer NAICS. I believe I should here too but what seem to be the relevant passages aren't clear.

Any suggestions?

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See the definition of supplies in FAR 2.101.

Please clarify -- What is the agency buying?

Thanks - does a definition in the FAR apply to a clause in the CFR?

The agency buy looks like this:

base year: qty X - "Brand Y" 1 year extended warranty on already-Agency-owned IT gear; (extended warranty includes maintenance, software upgrades, access to technical support and return/replacement rights.) = Brand X part number ABC123. indicate FFP offer. .

options: Four 1-year options to renew at the same FFP

The FAR 2.101 definition of "supplies"

“Supplies” means all property except land or interest in land. It includes (but is not limited to) public works, buildings, and facilities; ships, floating equipment, and vessels of every character, type, and description, together with parts and accessories; aircraft and aircraft parts, accessories, and equipment; machine tools; and the alteration or installation of any of the foregoing.

Where I'm struggling is that this is not real property - although maybe this comes under 'supplies' as the alteration or installation piece...seems a stretch.

Yet, the reseller is not actually preforming any service here other than tracking the Agency rights under the contract. That part won't be separately billed, it'll be baked into the reseller markup.

Out on FBO now I see other examples of precisely the same procurement by other agencies and they are under the manufacturing NAICS. But I've got agency folks saying thats not right, that a computer reseller NAICS is more appropriate.

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I have seen service/maintenance plans procured as both a supply and as a service. The argument for a service is that the company is providing a service (maintaining and repairing your stuff). The argument for the supply is that you are actually buying a thing---in this case a warranty. But sometimes it seems to depend upon the CO which way it will go and what the warranty actually entails. I prefer to think of them as services.

With whatever you are buying, I am curious, who would you be calling/doing the service/support/repair for this need? The way you made it sound to me is that this reseller is selling the warranty but when you call for help, it would be the manufacturer providing the resolution. And depending on the product/service, why you wouldn't try a sole source with the manufacturer (or limit it to other authorized repair centers)? Or is this simply a way to help your agency meet their SB set-aside goals?

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With whatever you are buying, I am curious, who would you be calling/doing the service/support/repair for this need? The way you made it sound to me is that this reseller is selling the warranty but when you call for help, it would be the manufacturer providing the resolution. And depending on the product/service, why you wouldn't try a sole source with the manufacturer (or limit it to other authorized repair centers)? Or is this simply a way to help your agency meet their SB set-aside goals?

Yes, thanks for the reply - the manufacturer is providing the service. Software upgrades, help desk calls, repair visits - it all comes from the manufacturer, the reseller will have no role in the fulfillment except to track when it begins and ends. However, the manufacturer only sells through their reseller partners - so no sole source to the manufacturer.

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Yes, thanks for the reply - the manufacturer is providing the service. Software upgrades, help desk calls, repair visits - it all comes from the manufacturer, the reseller will have no role in the fulfillment except to track when it begins and ends. However, the manufacturer only sells through their reseller partners - so no sole source to the manufacturer.

You could use a limited sources J&A to limit the sources to only the resell partners. Why pay the pass through fees on administering the database of warranties when you could contract directly with the authorized reseller? Surely your agency is able to track a simple database of warranties? I would think it is much cheaper for your agency to hire one or two personnel to administer this database as opposed to paying the pass through fee on the warranty itself, as well as the costs of administering the database.

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