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    In the scenario above: (a) what are the legal or contracting definitions of "contractor" labor for the U.S. Government and its different types (e.g. Federal Funded Research & Development Corporation (FFRDC), University Affiliated Research Corporation (UARC), Systems Engineering & Technical Assistance (SETA), prime/original equipment manufacturer (OEM), small business)? (b) which contractors can assist DoD officials in oversight of other contractor's delivery of goods and services (ex. FFRDCs, UARCs, SETAs providing technical oversight or review of delivery by primes/OEMs or small businesses)? (c) what are the responsibilities of the U.S. Government/DoD to ensure explicit or implied conflicts of interest are avoided?


    a) The definition of labor is “effort expended by people in exchange for wages or salary. FAR Part 22 sets forth the policies of the government regarding the application of labor laws to the acquisition process.

    b)  To answer this question, it is important to understand the definition of “inherently governmental”.  As stated in the Government Contracts Reference Book, 3rd edition:  Inherently governmental functions are “functions that, as a matter of policy (rather than law), are so intimately related to the public interest as to mandate performance by government employees.  These functions include activities that require the exercise of discretion in applying government authority or the making of value judgements in making decisions for the government.  These functions typically  involve interpretation and execution of federal laws so as to bind the government; protect the governments interests; affect private persons’ life, liberty, or property; exert control over procurement of government property; or exert control over the collection, control, and disbursement of federal funds.” 

    The FAR 2.101 further states that inherently governmental functions cannot be performed by contractors.  So, in deciding which contractors can assist with oversight, you should determine if any of the functions you are asking them to perform are inherently governmental.  Simply assisting with oversight may not meet the definition of an inherently governmental function, but it is a fine line.  How the assistance in providing oversight is exercised and supervised by government personnel will help define whether or not it meets the definition above.  Recommend possibly getting assistance from your legal office in making that determination. 

    c)  It is the government’s responsibility to insure that conflicts of interest are not present in government contracts.  It is particularly important for contracting officer’s and program managers to insure that functions performed by contractors are not inherently governmental. 

    WE recommend reviewing the Office of Federal Procurement Policy Act, 41 U.S.C. 42. 

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