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ConfusedIntern

Is Network Access A Supply or Service?

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I have a requirement for a follow-on contract that I am confused about what category it falls under: Supply or Service.  I've read the definition of supplies in FAR Part 2 as well as the definition of Service in FAR Part 37; However, these definitions still leave me without an answer. 

My requirement, as I understand it, is a monthly fee for use for access to a secure Network.  This is a logical network that allows us to get into different applications to meet our needs.  It's essentially connectivity from our contractor to us.  We maintain the equipment that allows us to access the network, we just pay on a per month basis to access the network.  My understanding of this requirement is that we are being provided a service which includes 24/7 monitoring and support.  There is no cost breakdown on what portion of our fee goes towards that support element and which directly to the access available.  I think of it as internet service; However, there's a question on whether it is technically a "subscription."

The argument was made that it might be a supply since we are not directly engaging the services of a contractor.  I think of a supply as a tangible end item like a magazine subscription- the end result is an item of supply being furnished.

Can someone please help me understand if this is a supply or a service?

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Does this past WIFCON thread help?

 

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Confused,

If you decide it is a service, will you require contractor compliance with a Service Contract Act wage determination? 

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When I am scratching my head I use the Product Service Codes to level my thinking.  Seems in this case that service codes in the D3 arena fit better than the 70 in the product codes.

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It sounds similar to Software As A Service.  Google that and see if that’s it or at least close.  If so your action is a service.  

A good check is seeing what object class code your finance/controller office assigned to the existing contract.  Look at the accounting line data in the contract.  If the first two digits start with 25., they considered it a service.  If it’s 26. or 31., they think it’s a supply.

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On 4/25/2019 at 11:41 AM, ConfusedIntern said:

a monthly fee for use for access to a secure Network

I do IT contracting, this classification issue comes up a lot (esp. in combination with NAICS codes and Small Business Set-Asides).

When in doubt, I try to use this simple analysis, and try to avoid going down the product vs. service vs. 'software' rabbit-hole.

1) FAR 2: “Supplies” means all property.  So, the question is are we buying property in any sense of the word?  In your case, no, probably not.  

2)  Usually 'access to' means it's a service.  Every moment you don't use that access, its not consumed and gone forever, which is a key trait of services.

3) A Subscription can be sub-set of Service.  Supporting evidence: In the PSC taxonomy, subscriptions are sprinkled throughout the D3XX group. 

Probably a Service.

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General, Subscription can also be a subset of Supply.  Think of magazine subscriptions.

Confused, Please answer my and Don’s questions — they are valid questions in this discussion.  

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I misunderstood the question.  I thought work involved network access and application processing and support.  After reading again, I think it’s just network access as in the original subject line.

Network access as described with the monthly fee is just telecommunications, which is a service.   The contractor provides 24/7 monitoring and support.  

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So many posters are answering the question, but let's not be too hasty.  And even if you do want to provide an answer, remember that the FAR has at least two definitions of service contract:  for example, see in 37.101 and also in 22.001 -- THESE DEFINITIONS ARE NOT THE SAME.  An acquisition could a service contract for one definition and not for another.

So, let's ask the original poster two important questions again--

On ‎4‎/‎25‎/‎2019 at 10:19 PM, ji20874 said:

Confused,

If you decide it is a service, will you require contractor compliance with a Service Contract Act wage determination? 

 

On ‎4‎/‎26‎/‎2019 at 11:28 AM, Don Mansfield said:

@ConfusedIntern,

For what purpose are you trying to make the classification?

 

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40 minutes ago, ji20874 said:

So many posters are answering the question, but let's not be too hasty.

Yes it would be nice if the OP returned to clarify but with regard to FAR 37 and FAR 22 Neil Roberts provided a link to a previous lengthy discussion that addresses same, just sayn. 

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3 hours ago, C Culham said:

Yes it would be nice if the OP returned to clarify but with regard to FAR 37 and FAR 22 Neil Roberts provided a link to a previous lengthy discussion that addresses same, just sayn. 

Right.  I think that for some of the posters here who are saying YES to service, really they might be saying YES to the FAR 37 definition and NO to the FAR 22 definition.

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The OP doesn’t appear to be coming back.  Based on the wording, this is telecommunications and clearly a service.  Let’s not overthink the issue and involve FAR 22.  It’s similar to utilities where use of service employees is incidental. 

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