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We awarded a delivery order off of the NASA SEWP contract for the purchase of support for commercial software.  We purchased it as a product since the support was cataloged priced and we are charged by the pre-priced hour for this support.  Now we are in an internal debate if this is a service that would require a PWS, RAD and everything that goes with a service contract for support that will go away once the software is successfully integrated to meet our needs.  Going the service route could severely hamper the flexibility that the current award has.  PSC code 7A20, a product code, reads delivered by perpetual license, consisting of analysis, development, code, test and release packages associated wit application development projects.  It seems to me that more and more software companies are offering this type of assistance as a commodity but we need something to justify purchasing it this way.  

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I can't help you with your request for assistance in supporting your determination that labor hours provided at a fixed hourly rate are a commodity and thus a product. I work with contractors, and when we price out software that requires customization, it's typically one (large) Purchase Order; however, the licence(s) are on one Line Item and the customization support goes on another Line Item. The former Line Item is FFP but the latter Line Item is T&M.

Apologies if this is not helpful to you.

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1 hour ago, jbsmith said:

We awarded a delivery order off of the NASA SEWP contract for the purchase of support for commercial software.  We purchased it as a product since the support was cataloged priced and we are charged by the pre-priced hour for this support.  Now we are in an internal debate if this is a service that would require a PWS, RAD and everything that goes with a service contract for support that will go away once the software is successfully integrated to meet our needs.  Going the service route could severely hamper the flexibility that the current award has.  PSC code 7A20, a product code, reads delivered by perpetual license, consisting of analysis, development, code, test and release packages associated wit application development projects.  It seems to me that more and more software companies are offering this type of assistance as a commodity but we need something to justify purchasing it this way.  

1. There are guides about how to contract for software and address your specific issue.  Not gonna link now, but they are out there.  DoD has a few. Recommend using them.

2. Yes, this is the norm.  Software doesn't show up in the loading bay on shrink-wrapped pallet, ready for go.  Software these days almost always has supporting services integral to its operation. As they say, 'software is never done.'   

3. Practically speaking, here is some advice based on when I got a SBA protest related to classifying something software-like as a product or service.  If the total estimated value of the mixed product & services acquisition (which may include several different contracts) is predominantly for the product, then it is considered a product for SBA purposes.  You get get very complicated about this stuff, but that's the gist of it.

4. You are hiring some folks to help you set up some fancy software.  I could argue that what you describe may not be 'services' per FAR 37, which defines a service contract as "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 than to furnish an end item of supply.I'd argue that the purpose is to furnish the end item (software), so not services, technically, but I could be wrong.  But I would argue this if I had to wiggle my way out of some onerous administrative process that kicked in when something is defined as a service. 

5. So far as I know, there is no FAR rule saying *every* service has to have PWS, and the rest.  I mean, FAR 8.4 talks about  "services not requiring a statement of work."  Ask 'why do we have to do this?' not 'why don't we have to do this?'  

6. Here is a whole white paper devoted to pondering whether software maintenance is a product or service.  https://www.esi.mil/contentview.aspx?id=721

 

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