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  • Question

    When using the Government-wide Purchasing Card to purchase a subscription for COTS Software-as-a-Service (SAAS), should the purchase be treated as a supply or service?


    Answer

    Based on the background information given and without further supporting details, I would say that SaaS is generally treated as a supply coded purchase.  SaaS, in essense, is treated as another payment/billing option of procuring "software license" via subscription (versus procuring perpetual or term software license). 

    Based on historical purchases, government buyers generally treated S/W licenses (whether billed as SaaS/per usage basis or billed up-front for S/W access over a period-of-time) as a supply-coded acquisition.  To put it another way, you can treat it as buying an intangible supply item even when software publishers still owns the IP and the actual S/W. 

    Although the FAR doesn't specifically describe licenses or subscription as a an example of either a supply or service as defined in the FAR, the GSA's Product Service Code (PSC) manual  https://www.acquisition.gov/?q=Acquisition_Systems should give you a good indicator on whether software is considered a product or service buy.   For instance, 7030 (Information Technology Software) is considered a supply buy if the software is not beign developed for Government unique specifications. 

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