Is the contractor legally authorized to transport the government employee in a rental car (rented by the contractor) that is reimbursable to the organization's contract? Would this action be considered a personal service?
What if it was the other way around?
I recommend that this issue be discussed with the agency counsel to ensure that no impropriety is unintentially created. This is less of a contratual issue than one of ethical use of transportation assets.
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That said, it sounds like the contractor is authorized to transport a government employee in a rental car (ultimately expensed to the government) without any appearance of impropriety, particularly if this is not on a continual basis. This presumes that only the vehicle renter would be reimbursed the expense and not both parties. If the government employee uses this transportation on a regular basis, it would seem to be improper.
In an urgent situation, it would seem plausable that the government employee renting a vehicle to attend a meeting could give a ride to the contractor person, provided the vehicle renter would be reimbursed for the expense and not the non renter.
The government prohibits personal services contracts (with some approved exceptions), but I do not see a contractual relationship being created by offering to share transportation to a meeting.