Urgent IT hardware/software buy under FAR 6.302-2. FAR 6.302-2(d)(1)(ii) limits the total PoP to 1 year, including options, unless HCA determines exceptional circumstances.

We have J&A and impact statement approved. As we finalize the parts list, we discovered the requirement includes 3-year software licenses necessary to operate the hardware. The licenses are a mix of term-based and cloud/SaaS, so these appear to fall under services rather than supplies (per recent legal guidance: perpetual = supply; term/SaaS = service).

Issue: If the hardware delivers ~120 days after award and the software license/support term begins at hardware acceptance, even a 12-month license term would extend the contract beyond 12 months from award, exceeding the FAR 6.302-2 limit unless we obtain HCA approval.

Questions:

1. If the software license is bundled/delivered with the hardware under the same hardware CLIN, can it be treated as a supply, thereby avoiding the 1-year PoP limit?

2. If treated as a service, is there any way to allow a full 12-month license/support period without an HCA exceptional circumstances determination?

3. If not, am I correct that the available compliant paths are:

   • Shorten the license/support PoP so the entire contract ends within 12 months of award,

   • Obtain HCA approval for performance beyond one year, or

   • Separate the software license requirement and award it under a different authority/competitive action later?

Looking for interpretations, experience, or examples from others who have handled similar urgent hardware + software license requirements under 6.302-2.

Software typically falls under "7AXX" product code, which to me makes it a supply.

Are you buying the license on a subscription basis or a perpetual license? If buying on a subscription basis, have you considered a perpetual licensee for the total cost of ownership? If you are going subscription route, how do you consider what happens next FY to be a current FY need, ie bona fide needs rule? This is the biggest hurdle in your way IMO to getting over the can you have a supply PoP for a license for more than 12 months.

If a subscription based license is required, and you are unsure when the start date would be based upon delivery of the hardware, can you issue the contract with the required licenses to be an option? Require in the contract that the Government be notified 30 days in advance of the delivery of the hardware so you can exercise the option with one day written notice (or something along these lines). Alternatively, can you issue the contract as an IDIQ and issue orders? One order for the hardware and then subsequent orders for the licenses?

On 11/6/2025 at 8:50 AM, NJKO12 said:

Urgent IT hardware/software buy

Edited response....

My first thought is you have not said whether the buy is over the SAT and whether the buy is considered to be acquisition of commercial product or services? If so doesn't FAR 13.106 and/or FAR 13.5 come into play? Or posed another way why are you applying FAR 6.302-2?

The answers to your questions depend on the governing FAR Parts. Many of your problems go away if this IT is commercial (Part 12), and it is exempt from FAR Part 6 (Part 13).

The hardware delivers ~120 days after award and the software license/support term begins at hardware acceptance, even a 12-month license term would extend the contract beyond 12 months from award, exceeding the FAR 6.302-2 limit unless we obtain HCA approval.

[Correct me if I am wrong wifcon]:

I think a reasonable person would determine that the lead time between delivery of a product, and the start date when the software needed to use the product is turned on, does not count towards the one year "total period of performance".

Typically, in my agency, a contract for this would have two Line Items (we don't do sub-CLINs). CLIN 1 for product with a delivery date and $. CLIN 2, not separately priced, for the software.

If the overall requirement is for the product, and you have to categorize the entire thing as a single value- like PSC for category management, or NAICS for non-manufacturing rule , or whatever - use the product's value.

Often the buyer cannot 'shorten the PoP.' Many software-sellers cannot or will not do this. Typical response: "Sure, government customer, you can limit your PoP to 274 days as you like, just uninstall our software, but the contract will state, and you will pay for, 365 days, just like all our other customers." A reason to know if this is commercial.

If you can separate out the software, and buy it separately through normal procedures, without FAR 6.3, you would of course want to do that.

18 hours ago, General.Zhukov said:

I think a reasonable person would determine that the lead time between delivery of a product, and the start date when the software needed to use the product is turned on, does not count towards the one year "total period of performance".

I am having trouble digesting this. The FAR does not give a specific definition of period of performance. With regard to the OP's example one would think that "award" begins the period of performance in that the contractor would be expected to begin the effort of providing the hardware as it seems award would be the beginning of the time the contractor is responsible for performing the work. I guess one could wiggle it anyway they could, say like a construction contract - notice to proceed etc - to make the effort fit the limitation. Outside of the possiblity of commercial and/or under the SAT where different statuory policy applies with regard to single source/sole source I do wonder -

If that compelling why not HCA approval?

After re-reading the OP I am wondering why the need does not fit one respnsible source?

On 11/11/2025 at 10:37 AM, C Culham said:

the beginning of the time the contractor is responsible for performing the work.

I am honestly unsure of the correct way of thinking about 'total period of performance' - so I default to the more generous definition. For FAR 6.3 purposes, the time after award, but before the requirement is being met, would not count. I suppose this is similar to the bona fide needs lead time exception. Definitely could be wrong though.

Consider a very common thing in my agency - a gas chromatography system. A commercial scientific instrument which (often) needs several weeks of configuration & calibration, and annually renewed software, to be operational. Does the PoP start when the box is delivered on January 1 - or February 2, when it's switched on and starts working - or January 15, at acceptance when the on-site OEM install tech and agency lab guy sign off on it? Genuinely don't know if there is a definitive answer here.

38 minutes ago, General.Zhukov said:

I am honestly unsure

Me too I guess if I think hard. I am not going back to research why PoP is used versus award. My guess is because of where PoP is definitive in a specific procurement like construction.

This said the OP has disappeared it seems so to their specific instance we are left guessing. I will leave it here until and if the OP reappears.