(Note: The following response was provided as part of a response to additional information received from the submitter, outside of AAP.)

While I understand the "...directly engages the time and effort..." point, it could have been written that way not necessarily to fully describe what a service is...but rather to more emphatically distinguish a service from a supply.  The point about Part 41 not being mentioned in 37.000 is well-taken. On the other hand, it may be that Part 41 was left out because Part 41 is an exception in that it does NOT take precedence over FAR Part 37 in the case of inconsistencies. Not probable, but possible. The definition of "service contract" at FAR 37.101 provides some examples of a service, of which "communication services" is one. Do communication services (think cellular service) "...directly engage the time and effort...?" They don't, just as utilities services don't. If anything, utilities require even more direct time and effort when it comes to operating and maintaining power plants (think water and heat).