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dak9204

COTS Services?

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This could be a dumb question, but I would be curious to know if services can be considered COTS (not just a commercial item).  FAR 2.101 defines "a commercially available off-the-shelf" item as:

 

(1) Means any item of supply (including construction material) that is—

(i) A commercial item (as defined in paragraph (1) of the definition in this section);

(ii) Sold in substantial quantities in the commercial marketplace; and

(iii) Offered to the Government, under a contract or subcontract at any tier, without modification, in the same form in which it is sold in the commercial marketplace; and

(2) Does not include bulk cargo, as defined in 46 U.S.C. 40102(4), such as agricultural products and petroleum products.

Noting the definition appears to limit COTS to paragraph (1) of the definition of a "commercial item," it would appear that commercial services can never qualify as COTS.

Am I reading this correctly?  What if you sell a technology item that qualifies as COTS, but also installation services, maintenance services, repair services, training services and other services ancillary to the sale of that technology item?  Would the fact that you sell such services as a package with the COTS item take it out of the definition of COTS?

 

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12 minutes ago, dak9204 said:

"...means any item of supply..."

Doesn't this quote directly from the definition as you provided it answer the question?    I see no mention of any item of service>

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15 minutes ago, C Culham said:

Doesn't this quote directly from the definition as you provided it answer the question?    I see no mention of any item of service>

Yes and no.  The term "commercial item" also includes services (hence, services can qualify as an "item" under that definition).  Likewise, under FAR 2.101 "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."  Yet installation services fall under paragraph (5) of the definition of "commercial item" (not paragraph (1) as cited in the definition of COTS).

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My take is that per 2.101,services are not "supplies" because services are generally labor hours and not "property."  To me, property in the given context is a "thing," i.e., a physical object. Since it is not an item of supply, it is not COTS.

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3 hours ago, Neil Roberts said:

My take is that per 2.101,services are not "supplies" because services are generally labor hours and not "property."  To me, property in the given context is a "thing," i.e., a physical object. Since it is not an item of supply, it is not COTS.

Thanks Neil.  Are all "services" treated equally under the FAR?  For example, support & maintenance services for software/hardware are not the same as consulting services billed by labor hour.  The former seem to be more in the category of an item of supply, since they deliver intellectual property rights in the form of bug fixes, patches, updates, upgrades, etc...  Consulting services do not.

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16 hours ago, dak9204 said:

Yes and no.

 

I think it is Yes it does -

Further reference to support yes it does (emphasis added) that can be found in full here -  https://www.federalregister.gov/documents/2009/01/15/E9-551/federal-acquisition-regulation-far-case-2000-305-commercially-available-off-the-shelf-cots-items

 

“Paragraphs (F) and (G) of the definition deal with commercial services. These paragraphs were not referenced in the statutory definition of a COTS item. Services are therefore necessarily excluded from the definition. To make the definition clearer, the reference to the definition of commercial item has been revised to point to the first paragraph of the definition of commercial item"

Also consider the definition from FAR 37.101 -

"Service contract" means a contract that directly engages the time and effort of a contractor whose primary purpose is to perform an identifiable task rather that to furnish and end item of supply.

 

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30 minutes ago, C Culham said:

 

I think it is Yes it does -

Further reference to support yes it does (emphasis added) that can be found in full here -  https://www.federalregister.gov/documents/2009/01/15/E9-551/federal-acquisition-regulation-far-case-2000-305-commercially-available-off-the-shelf-cots-items

 

“Paragraphs (F) and (G) of the definition deal with commercial services. These paragraphs were not referenced in the statutory definition of a COTS item. Services are therefore necessarily excluded from the definition. To make the definition clearer, the reference to the definition of commercial item has been revised to point to the first paragraph of the definition of commercial item"

Also consider the definition from FAR 37.101 -

"Service contract" means a contract that directly engages the time and effort of a contractor whose primary purpose is to perform an identifiable task rather that to furnish and end item of supply.

 

I respect your interpretation, but I don't believe that the Federal Register notice explanation answers the question.  The language you quote makes a distinction between the performance of an identifiable task rather than furnishing an end item of supply.  I think this makes my point that not all "services" (as that term is used commercially) are the same.  In 2015 the DoD published an interesting whitepaper entitled "Is Commercial Off-the-Shelf Software Maintenance a Supply or Service?  http://www.esi.mil/download.aspx?id=6144 (see pp 7-8, also citing FAR 37.101).  If a service is accompanied by the delivery/use of intellectual property (e.g., bug fixes, patches, code), it would seem to be considered an item of supply.  The question may also be answered by how the Government purchases the "service" - if it's paid upfront, it's often deemed a product, but if paid in arrears it's a service.

 

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39 minutes ago, dak9204 said:

I respect your interpretation

And I yours.   Interesting read, thank you, but I am struck first by this comment in the paper on page 8 - "Conversely, no clear-cut definition exists for a supply or product."  Seems the authors overlooked "supplies" definition from FAR 2.101 that you already noted.  So are fixes, patches, codes the "alteration or installation of" for software?  To me it is more in how you frame it.  I can buy a training and its COTS buy I can't buy a trainer as COTS. 

I will leave it at that.

 

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1 hour ago, C Culham said:

And I yours.   Interesting read, thank you, but I am struck first by this comment in the paper on page 8 - "Conversely, no clear-cut definition exists for a supply or product."  Seems the authors overlooked "supplies" definition from FAR 2.101 that you already noted.  So are fixes, patches, codes the "alteration or installation of" for software?  To me it is more in how you frame it.  I can buy a training and its COTS buy I can't buy a trainer as COTS. 

I will leave it at that.

 

Thanks.  I guess you could buy a training, but buying a trainer would violate FAR 52.222-50 (Combating Trafficking in Persons).  😉

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