Sign In
  • Question

    This has been a debate for a long time. Is renting a vehicle without operators (from a company such as Enterprise for example) a supply or a service? FAR part 8.003 says that I SHALL use subpart 8.11. Subpart 8.1104(e) states that I must use supply clauses not service clauses. If the renting of a vehicle is a supply, what PSC code should be used? Is it safe to assume that we could use a GPC card up to $10,000 for the rental of vehicles?


    Answer

    Thank for your submission.  Your question is a good one, and one that is a classic argument in many contracting offices.  Some key definitions:

    FAR 2.101 defines supplies as: "Supplies means all property except land or interest in land. It includes (but is not limited to) public works, buildings, and facilities; ships, floating equipment, and vessels of every character, type, and description, together with parts and accessories; aircraft and aircraft parts, accessories, and equipment; machine tools; and the alteration or installation of any of the foregoing."

    - FAR 37.101 defines a service contract as: "Service contract means a contract that directly engages the time and effort of a contractor whose primary purpose is to perform an identifiable task rather than to furnish an end item of supply..."

    Based on the above FAR definitions, there is no clear cut answer; this is why vehicle lease/rental is subject to debate regarding its status as service or supply.  If properly documented in contract file, the contracting officer could go either way on this.

    Some factors to consider:

    I would expect your contract action is assigning a period of performance vice a delivery date.  This typically lends itself to a service acquisition more than a supply.

    Are you including a Performance Work Statement in your contract action or does the GSA contract being leveraged?  Again, if there is a PWS, this is more typical of a service vice supply.

    COR.  Is a COR appointed?  Again, if a COR is appointed, this falls more in the service vice supply lane.

    If you are leveraging a GSA contract, I would expect that the appropriate FAR clauses are already included, and the appropriate NAICS, PSC, and other relevant codes have been selected by the GSA contracting activity.  You would want to ensure you match what GSA has assigned for codes.  Does GSA include the Service Contract Labor Standards in their contract?  This would give an indication of how they view vehicle lease in terms of service or supply.

    Duration of lease. As mentioned above, typically, supply contracts are for a one time delivery.  If your lease is enduring, which it sounds like in this particular case is not true, that may be a situation that lends itself more toward administration as a service to ensure the contract is more diligently administered than the typical supply contract would be.  Conversely, a short term lease for an exercise (matter of days in my experience), may lend itself more to a supply.

    The guidance at FAR 8.1104(e) provides for insertion of supply clauses, but does not preclude the insertion of service clauses.

    Bottom line is you can consider your action either a supply or service based on what is more practical for your action.  In my experience, leases for exercises are difficult as the vehicles pass between many users with no accountability for damages.  Having a COR will help with that if it is made clear they will be responsible for determining who caused the damage or they will be accountable themselves.  Payment by a GPC card holder may also assist as ultimately they would have to drive the damage claim to resolution.  If you consider the lease a supply, the micro purchase threshold of $10K would apply, however, exercise caution to ensure you are not perceived to be splitting requirements.  Another consideration is if the individuals who need the cars are on orders, the Government Travel Card would be the appropriate means for securing the vehicles, removing contracting from the picture.

     

    Open full Question Details
Chat with DAU Assistant
Bot Image