An interesting buy came into my office. (However, it may actually belong to another office, so I may not have a chance to work on it at all.) The maintenance shops at my base use 1990's DEC VAX computer systems, and they are obviously running into sustainability issues. A VAX replacement system is therefore in the works, but there is disagreement as to whether it is a commodity or a service. The replacement system is a commodity, but it will be sold through a value-added resaler that provides installation services. (The service may also include documenting current software configurations.) What would be the appropriate method to determine service vs supply in a peculiar situation such as this? Would the services be considered incidental? Thank you for your help!
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If the primary purpose of the contract is to provide an item (the replacement system) rather than perform a service (installation of the system), then the contract should be considered as a contract for supplies. Any services would be to support the supply item, and are not stand alone services.