SOMETIMES SOFTWARE DOESN’T FIT
T
he world of software acquisition, which I work in, is often overlooked and misunderstood, and for good reason. When it comes to information technology (IT) acquisition, hardware is what usually comes to
mind because it’s the part you see and touch every day. I’d like to try to bring software out of the shadows so the challenges faced in acquiring it are more clearly understood.
Te Federal Acquisition Regulation (FAR) governs the acquisi- tion process by which executive agencies of the U.S. government acquire supplies and services by contract. Issued pursuant to the Office of Federal Procurement Policy Act of 1974, the FAR has been updated over the years. But when it comes to establishing a multiple-award, indefinite delivery, indefinite quantity (IDIQ) contract for commercial off-the-shelf software, sometimes the FAR requirements just do not fit.
IS SOFTWARE A SUPPLY OR SERVICE? IDIQ contracts are used when the exact times or exact quantities of future requirements and deliveries are not known at the time of contract award. Multiple-award IDIQ contracts provide for an indefinite quantity of services for a fixed time. IDIQ contracts are most often used for acquiring services, but they fit software acquisition quite well. Te government places delivery orders or task orders against a basic contract for individual requirements. Minimum and maximum quantity limits are specified in the basic contract as either number of units or dollar values. Te govern- ment uses an IDIQ contract when it cannot predetermine the precise quantities of supplies or services that it will require during the contract period.
If, for example, you need a contract to acquire a software product for the entire Army that allows individual agencies and offices to place their own orders, then an IDIQ is for you. More on this later.
One of the first things an acquisition professional must do before developing the framework for a contract is to define the requirement. One of the questions that must be answered: “Is the requirement considered primarily a supply or a service?” Te definitions provided in the FAR to make this first basic deter- mination follow:
“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 char- acter, 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.
“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. A service contract may be either a nonpersonal or personal contract. It can also cover services performed by either professional or nonprofessional personnel, on an individual or organizational basis.
Commercial software is more like a service when it comes to government contracting. For clarification, I am not referring to software-as-a-service. I am referring to the familiar “term” and
“perpetual” software license definitions. A traditional term license grants rights to use the software for a specified period of time. A traditional perpetual license grants rights to use the software indefinitely. In reality, the only thing perpetual about software is the relationship you will have with the people who make it, if you want the product to function safely and securely.
For example, the government spends millions of dollars on soft- ware like Microsoft Office. We install the program and expect our applications to work day after day. But when the developer stops supporting the software in favor of a new version, the support stops, and we no longer have access to bug fixes, security patches or upgrades. We may have a perpetual license and “own” the soft- ware, but it’s no longer as secure as we need it to be without a support stream, and therefore it is useless.
Similar to an IT service contract, you purchase the service for the period of time it’s funded for, and when that period is up, the service ends. In this regard, software is similar to an IT service contract: You purchase the service for the period of time and when that period is up, the service ends. With software, it’s support that you purchase for a period of time; when that ends, so does the support.
Just as technology changes over time, the methods by which we acquire it should also change. 124 Army AL&T Magazine Fall 2019
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