Sign In
  • Question

    Does the bona fide need rule apply to software license maintenance? Given the significant discount of the original purchase and maintenance, believe it is in the best interest of the government to continue maintenance of these licenses at the current rate rather than re-purchase licenses at a significantly higher rate, plus increased maintenance costs, at a later date. If the bona fide need rule does apply, can an exception be made based on long-term benefit to the government resulting from cost avoidance by reinstating maintenance now at the current rate.


    Answer

    Yes the Bona Fide needs applies to Software maintenance.  Under 10 USC §2410a, one can buy 12 months of maintenance at a time any time during the year.  However, there is multi-year authority, 10 USC §2306b and 2306c, which can fund up to 5 years of maintenance.  Congress has provided executive, legislative, and judicial entities substantial authority for multiyear contracting for goods and services using annual funds. The military departments are authorized by 10 U.S.C. §§ 2306b and 2306c to enter into multiyear contracts for goods and services, respectively, for periods of not more than 5 years if certain administrative determinations are made. Section 2306b applies not only to routine supplies, but also to the military departments acquisition of available for the contract, appropriations currently available for the same general purpose, or appropriations made specifically for those payments. A multiyear contract entered into under authority of 10 U.S.C. §§ 2306b or 2306c is binding on both parties for the full term of the contract unless terminated as provided in the statute.  A contract under sections 2306b or 2306c must relate to the bona fide needs of the contract period as opposed to the need only of the first fiscal year of the contract period. The statute does not authorize the advance procurement of materials not needed during the 5-year term of the contract.
     
    Please consult with your comptroller and legal personnel to determine if your case qualifies for a multiyear contract using 10 USC 2306b and 2306c.

    Open full Question Details