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Consumption-based procurements and associated payments

Division A · Title VIII: Acquisition Policy, Acquisition Management, and Related Matters · Subtitle B: Amendments to General Contracting Authorities, Procedures, and Limitations

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Federal agencies are given new authority to buy services that are billed based on actual usage, such as cloud computing or subscription services, with specific rules for pricing, notifications, and contract modifications. The government’s acquisition regulations will be updated to define and manage these consumption-based purchases, and a pilot program for similar service models will be extended with a report due in 2029 and a sunset date in 2030. Advanced payments for certain technology services are also authorized under these provisions.

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Section Text · Sec. 830.
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(a) Advance payments related to certain services

Section 3324(d) of title 31, United States Code, is amended—

(1)

in paragraph (1)(C), by striking ; and and inserting a semicolon;

(2)

in paragraph (2)—

(A)

by inserting or commercially available content after publication ; and

(B)

by striking the period at the end and inserting ; and ; and

(3)

by adding at the end the following new paragraph:

(3)

charges for information and communications technology subscriptions, reservations, or tenancy, including cloud environments, for which the procuring agency defines appropriate access and security standards.

(b) Authority to acquire consumption-based solutions

(1) Amendment

Chapter 23 of title 41, United States Code, is amended by adding at the end the following new section:

2314. Authority to acquire consumption-based solutions

(a) Authority

The head of each executive agency may acquire services through consumption-based solutions.

(b) Procurement requirements

Not later than 180 days after the date of the enactment of this section, the Federal Acquisition Regulation shall be updated as necessary to create a new subcategory of services that—

(1)

is any combination of hardware, equipment, software, labor, or services that together provides a seamless capability;

(2)

has the ability to be metered and billed based on actual usage;

(3)

has predetermined pricing at fixed-price units;

(4)

requires the awardee to notify the agency contracting officer when consumption under the contract reaches 75 percent and 90 percent of the funded amount, respectively, of the contract; and

(5)

treats any modification of a contract entered into under the authority established in subsection (a) to add a new feature or capability in an amount less than or equal to 25 percent of the total value of such contract, as originally awarded, as procurements made using competitive procedures (as defined in section 152) for the purposes of chapter 33 of this title.

(c) Funding

Amounts authorized to be appropriated for acquisitions using the authority under subsection (a) may be used to enter into incrementally funded contracts or other agreements, including advanced payments.

(d) Consumption-based solution defined

In this section, the term consumption-based solution means a model under which a service is provided to an executive agency and may use any combination of software, hardware or equipment, data, and labor or services that provides a capability that is metered and billed based on actual usage at fixed-price units.

(e) Rule of construction

Nothing in this section may be construed to prohibit the use of the authority created under subsection (a) in combination with another contract type provided for under the Federal Acquisition Regulation.

(2) Technical and conforming amendment

The table of sections for chapter 23 of title 41, United States Code, is amended by adding at the end the following new section:

(c) Modification of pilot program for anything-as-a-service

Section 809 of the National Defense Authorization Act for Fiscal Year 2024 ( Public Law 118–31 ; 10 U.S.C. note prec. 3301) is amended—

(1)

by redesignating subsection (g) as subsection (i); and

(2)

by inserting after subsection (f) the following new subsections:

(g) Report

Not later than March 15, 2029, the Secretary shall provide a report to the congressional defense committees on the implementation of the pilot program, describing the use of the authority under this section and any lessons learned, along with a recommendation on whether to make the authority under this section permanent.

(h) Sunset

The authority under this section shall terminate on December 31, 2030.