Can an agency accept a "free" software license?  Let's say the vendor approaches agency officials, offering to give the agency a trial period to use its software for X number of months.  How does this not violate competition rules?  Could it be done as a "gratuitous" service/product?

Sounds like it could be a gratuitous bailment or a no cost contract. Some previous discussion here: 

In particular this may be useful "At issue in the decisions was whether the no-cost contract violated the Antideficiency Act’s voluntary services prohibition. The voluntary services prohibition, by its own terms, would not be applicable if property, rather than services, were being provided."

It seems like the biggest risk in this case is not establishing liability for loss/damage, as is typically the case for bailments, but ensuring that the license agreement doesn't create some unintended obligation for the government, for example an auto-renewal clause that kicks in at the end of the trial period and converts it to a paid license.

Edited July 18, 20241 yr by RJ_Walther
edited to add additional thoughts

7 hours ago, govt2310 said:

Can an agency accept a "free" software license?  Let's say the vendor approaches agency officials, offering to give the agency a trial period to use its software for X number of months.  How does this not violate competition rules?  Could it be done as a "gratuitous" service/product?

You may want to do some research on "Open Source Software" (OSS).  It might fit your situation.

Assume that this is not Open Source Software (OSS).  Let's say it is definitely commercial software owned by a private company that sells it for profit to the public.  It cannot be a no cost contract because it is not like the vendor will be able to make money in any way.  An example of a NCC is conference space, where the hotel or event planner is able to make money by charging a registration fee to the conference attendees.  That is not the scenario here.  And isn't this "property" (software license), which means the ADA's voluntary services prohibition applies?

What’s described in the initial post is a common practice in the industry.  Government agencies typically deal with the competition issue in one of two ways.  The most common is preparing the justification and synopsizing after the no cost trial but before the purchase.  The less frequent approach is synopsizing upfront the agencies intent to enter into a no cost trial with the potential of ultimate purchase.

35 minutes ago, govt2310 said:

It cannot be a no cost contract because it is not like the vendor will be able to make money in any way. 

 

12 minutes ago, formerfed said:

What’s described in the initial post is a common practice in the industry.  

I am not going to wrack my brain but as I follow I have this quick thought.

In applying FAR part 12 and noting it is common practice why would it not be a "no cost" contract and as dumb as it might sound not require a justification.  I pose this thought with a subsequent question - Is not the value less than the SAT and as such a simple determination of reasonably available from one source and as zero value no need to synosize?

I do not need feedback on this thought, just something I thought I would throw out there for consideration.

45 minutes ago, govt2310 said:

It cannot be a no cost contract because it is not like the vendor will be able to make money in any way.

I'm not sure this is true, otherwise why would a for-profit company offer free trials? I assume they expect to influence future requirements for paid licenses (i.e. once you get used to using the software you will want to buy it when the trial period ends), or that some of their customers will fail to cancel the free trial in accordance with their terms and conditions and some auto-payment clause will kick in (this is what I would be concerned about from an ADA standpoint).

47 minutes ago, govt2310 said:

And isn't this "property" (software license), which means the ADA's voluntary services prohibition applies?

If I had to determine whether a software license is property or a service, for the purpose of understanding ADA voluntary services prohibition applicability, I would consider it "property" because it really doesn't have any of the characteristics of a service, which are explored in depth here: https://www.wifcon.com/articles/BP_24-5_wbox.pdf I don't think the fact that non-perpetual software licenses were recently given a Product and Service Code (PSC) which starts with an alpha character would be determinative.

7 hours ago, C Culham said:

In applying FAR part 12 and noting it is common practice why would it not be a "no cost" contract and as dumb as it might sound not require a justification.  I pose this thought with a subsequent question - Is not the value less than the SAT and as such a simple determination of reasonably available from one source and as zero value no need to synosize?

True.  I jumped ahead to the likelihood of the government deciding to acquire the license