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Personal Services

DAU GLOSSARY DEFINITION

Alternate Definition

A personal services contract is characterized by the employer/employee relationship it creates between the Government and contractor personnel. 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. Agencies cannot award personal service contracts unless specifically authorized by statute to do so.

General Information

An employer/employee relationship under a service contract occurs when, as a result of the contract’s terms or the manner of its administration, contractor personnel are subject to the relatively continuous supervision and control of a Government officer or employee. Depending on how a contract is administered and how contract personnel are used, the Government/contractor relationship may evolve into an unlawful personal services relationship. In determining whether such a relationship exists, the key question is: “Will the Government exercise relatively continuous supervision and control over the contractor personnel performing the contract?” It must be noted that simply requiring a specific product or service with the right to reject the finished product or result does not in itself characterize a personal services arrangement.

FAR 37.104(d) provides the following questions for determining whether a personal services relationship may exist:

  • Is performance on site? (i.e., on a Government installation)
  • Are the principal tools and equipment furnished by the Government?
  • Are the services being performed by the contractor directly related to the accomplishment of the agency’s assigned mission or function?
  • Are comparable services being performed in the same agency by civil service personnel?
  • Will the need for this type service be expected to last beyond one year?
  • Does the nature of the service being provided reasonably require Government direction or supervision of contractor employees in order to adequately protect the Government’s interest, retain control of the function involved, or retain personal responsibility for the function by a duly authorized Federal officer or employee?

Authorized Personal Services Contracts

Special personal services contracts for health care providers are authorized by 10 U.S.C. 1091; guidelines are in DoD Instruction 6025.5M, Personal Services Contracts for Health Care Providers. Personal service contracts for expert and consultant services must be authorized by a determination and findings (D&F), with a determination that (DFARS 237.104):

  • The duties are of a temporary or intermittent nature
  • Acquisition of the services is advantageous to the national defense
  • DoD personnel with necessary skills are not available
  • Excepted appointment cannot be obtained
  • A non-personal services contract is not practicable
  • Statutory authority (5 U.S.C. 3109) and other legislation apply
  • Any other determination required by statute has been made

Impact and Consequences

The impact and consequences of an unlawful personal services contract can vary with the circumstances of each situation. They may include:

  • Violation of the Anti Deficiency Act (ADA). ADA violations include “Accepting voluntary services for the United States, or employing personal services not authorized by law, except in cases of emergency involving the safety of human life or the protection of property.” (31 U.S.C. Section 1342)
  • Agency/Inspector General investigation
  • Administrative or disciplinary action
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