The General Services Administration has issued an acquisition letter providing contracting officers guidance on payment for software licenses delivered through software-as-a-service.
The letter signed Friday by Jeffrey Koses, senior procurement executive at GSA’s Office of Acquisition Policy states that an upfront payment for licenses accessed or delivered through SaaS should not be considered an advance payment.
An upfront payment is not considered advance payment if it meets certain conditions: access to software is granted contemporaneously with payment; the license is procured on a fixed-price or fixed-price with economic price adjustment basis; and the license’s billing or pricing model allows for no utilization or consumption metric other than quantity.
GSA said the acquisition letter is effective immediately.
