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    Under a fixed price contract, would the cost for the purchase of a software license, even a perpetual license in this case, be a bona fide need in the year in which it was required and purchased, i.e., the base year? If the software license is a lease, then shouldn't the cost for the lease stop when the license is no longer needed to meet requirement? Also, who owns the license? I assume the contractor. If so, if they re-purpose the license on another contract, should I get a credit to my contract for those charges on a separate gov't contract?


    Answer

    This question has proved to be quite perplexing and ultimately you are going to want to pursue getting legal advice from your cognizant program attorney.  However, some things to consider are:
     
    1. If a license was required for the contractor to perform a task identified in the SOW, and the government agreed to pay for the license it would most likely be considered a bona fide need at that point.  Whether that tasking was removed later or not does not negate that the original need. 


    2. As to whether the Government is required to pay for the license - you might question a couple of other things that would fall into the legal or "reasonable" realm, such as:
    • the practice of amortizing the cost over the life of the contract.  One would imagine that the contractor pays for the license in full when purchased.
    • one might also question the "leasing" of the license to the government.  Some might venture to say that may not be appropriate. 
    • can you support the need to purchase "perpetual software licenses" when it sounds that a limited license would have been acceptable.  I don't know but would assume that a perpetual license is more expensive than a limited license.
     
    Again, please be sure to discuss these matters with your cognizant program or agency attorney. You have posed a very complex set of circumstances and questions and the AAP resource is not a substitute for seeking sound legal advice and recommendations.

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