Services refer to the labor, time, or effort that a supplier furnishes as performance for separate consideration and not labor, time, or effort included in or incident to the production or sale of a commodity. 

  • “Included in” means that the cost of labor, time, or effort, if applicable, are covered in the cost of the commodity. For example, a department purchases a computer and the cost includes free delivery and installation. 
  • “Incident to” means that the cost of labor, time, or effort are not covered in the cost of the commodity but is provided for an additional fee.  For example, a department purchases a computer and there is a small delivery or installation fee; the additional fee would be considered incidental to the purchase. 

The following types of contracts are excluded from being considered a contract requiring services

  • Employment agreements
  • Collective bargaining agreements
  • Architectural or engineering contracts requiring the approval of the Division of Building Authority or the Division of Higher Education
  • Other commodities and services exempt by law. This means that exempt purchases do not require state reporting or review.