GSA Aims to Make Buying SaaS Easier through New Policy – March 2024

Apr 2, 2024

The effort to make buying cloud services easier for agencies and more in line with industry standards continues with yet another acquisition workaround.

The General Services Administration issued its second acquisition letter in just over two years, giving its contracting officers permission to move closer to buying cloud services “by the drink,” or through a consumption based model.

Jeff Koses, GSA’s senior procurement executive, wrote that contracting officers, under certain conditions, can use upfront payments to buy software-as-a-service and it doesn’t violate federal procurement law that prohibits advanced payments.

“In the context of software licenses delivered or accessed via SaaS, payment is often made ‘upfront,’ meaning that payment is made contemporaneously with receipt of the software license and the beginning of the license service term. GSA contracting officers have been asked whether such upfront payment is considered an advance payment. It is not,” Koses wrote. “The central distinction is the contemporaneous access.”

Koses wrote advance payment is a specific type of contract financing method where payments are made prior to delivery or completion of the product or a service. It is not allowed under the Anti-Deficiency.

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