How does the COR determine whether services are personal or nonpersonal?

The FAR provides the following definitions of personal and nonpersonal service contracts:

Nonpersonal service contract: A contract under which the personnel rendering the services are not subject, either by the contract's terms or by the manner of its administration, to the supervision and control usually prevailing in relationships between the government and its employees. (FAR 37.101.)

Personal service contract: A contract that, by its express terms or as administered, makes the contractor personnel appear, in effect, to be government employees. An employer-employee relationship under a service contract occurs when, as a result of the contract's terms or the manner of its administration during performance, contractor personnel are subject to the relatively continuous supervision and control of a government officer or employee. Giving an order for a specific article or service, with the right to reject the finished product or results, is not the type of supervision or control that converts an individual who is an independent contractor (such as a contractor employee) into a government employee. (FAR 37.104.)

Nonpersonal service contracts are proper under general contracting authority. However, personal service contracts must be specifically authorized by statute. The government is normally required to obtain its employees by direct hire under competitive appointment or other procedures required by the civil service laws. Obtaining personal services by contract, rather than by direct hire, circumvents those laws unless Congress has specifically authorized acquisition of the services by contract.

What general guidance should the COR follow in making the determination of whether service contracts are personal or nonpersonal?

Each contract arrangement must be judged in the light of its own facts and circumstances, with the key question always being: "Will the government exercise relatively continuous supervision and control over the contractor personnel performing the contract?" The sporadic, unauthorized supervision of only one of a large number of contractor employees might reasonably be considered irrelevant, and the services provided by the contractor would still be considered nonpersonal. However, relatively continuous government supervision of a substantial number of contractor employees would have to be taken into account in determining whether the services are personal or nonpersonal.

Certain elements can be used as a guide in assessing whether or not a proposed contract is personal in nature. If the following conditions apply, an improper personal services contract might exist:

Contractor employees are performing contract work at the government site

Principal tools and equipment have been furnished by the government

Services are applied directly to the integral effort of agencies or an organizational subpart in furtherance of the assigned function or mission

Comparable services, meeting comparable needs, are performed in the same or similar agencies using civil service personnel

The need for the type of service provided can reasonably be expected to last beyond one year

The inherent nature of the service, or the manner in which it is provided, reasonably requires direct or indirect government direction or supervision of contractor employees to:

- Adequately protect the government's interest

- Retain control of the function involved

- Retain full personal responsibility for a function that should be the responsibility of a duly authorized federal officer or employee.

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