What does the FAR say about having separate workspaces for contractors and government? Should the contractors be intertwined with the government in an office environment?
The FAR does not address a general requirement for having seperate workspaces for contractors and government employees. Each federal agency has their own guidelines pertaining to the ethical interactions between government and contractor personnel. Since you are Air Force, you can first refer to the "AF Guide for the Government-Contrator Relationship, 2006."
In chapter 3.2, it says, "Many of the contractor personnel working side by side with government employees were once government employees themselves (e.g., retired military or former civil servants). It is important that government employees recognize that these individuals’ employment status has changed and, therefore, so have the rules applied to that employee. Similarly, it is important that contractor personnel understand that their status is different." It's inferred from this that it is not uncommon for Active Duty AF, AF civilians, and contractor personnel to work in the same area.
If you need additional assisatance, it's recommended that you contact your local Legal Office's Ethics Specialist.