(a) A personal services contract is characterized by the employer-employee relationship it creates between the Government and the contractor's 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.
(b) Agencies shall not award personal services contracts unless specifically authorized by statute (e.g., 5 U.S.C. 3109) to do so.
(c)(1) An employer-employee relationship under a service contract occurs when, as a result of (i) the contract's terms or (ii) the manner of its administration during performance, contractor personnel are subject to the relatively continuous supervision and control of a Government officer or employee. However, giving an order for a specific article or service, with the right to reject the finished product or result, 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.
(2) Each contract arrangement must be judged in the light of its own facts and circumstances, 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 not relevant, while relatively continuous Government supervision of a substantial number of contractor employees would have to be taken strongly into account (see (d) below).
(d) The following descriptive elements should be used as a guide in assessing whether or not a proposed contract is personal in nature:
(1) Performance on site.
(2) Principal tools and equipment furnished by the Government.
(3) Services are applied directly to the integral effort of agencies or an organizational subpart in furtherance of assigned function or mission.
(4) Comparable services, meeting comparable needs, are performed in the same or similar agencies using civil service personnel.
(5) The need for the type of service provided can reasonably be expected to last beyond one year.
(6) The inherent nature of the service, or the manner in which it is provided reasonably requires directly or indirectly, Government direction or supervision of contractor employees in order to—
(i) Adequately protect the Government's interest;
(ii) Retain control of the function involved; or
(iii) Retain full personal responsibility for the function supported in a duly authorized Federal officer or employee.
(e) When specific statutory authority for a personal service contract is cited, obtain the review and opinion of legal counsel.
(f) Personal services contracts for the services of individual experts or consultants are limited by the Classification Act. In addition, the Office of Personnel Management has established requirements which apply in acquiring the personal services of experts or consultants in this manner (e.g., benefits, taxes, conflicts of interest). Therefore, the contracting officer shall effect necessary coordination with the cognizant civilian personnel office.
[48 FR 42365, Sept. 19, 2001, as amended at 66 FR 2133, Jan. 10, 2001]
Notes of Decisions
Seh Ahn Lee v. United States, 130 Fed. Cl. 243 (Fed. Cl. 2017).
· cites it 3× “The Federal Acquisition Regulations (“FAR”) state that “[a]geneies shall not award personal services contracts unless specifically authorized by statute,” 48 C.F.R. § 37.104 (b), and the Board was only authorized to award up to 60 such contracts, 22 U.”
Lee v. United States, 895 F.3d 1363 (Fed. Cir. 2018).
· cites it 2× “The plaintiffs' only allegation on that score is that "[i]ndependent contracts do not allow for such work, according to provisions of the [Federal Acquisition Regulation ("FAR") ], 48 C.F.R. § 37.104 ." That allegation, however, is directed to the requirements of the regulation,…”
John Miller, Jr. v. Hillary Clinton, 687 F.3d 1332 (D.C. Cir. 2012).
· cites it 2× “29 disregard the standard contracting requirements of the FAR and its associated statutes, including the requirements governing personal services contracts, see 48 C.F.R. §§ 37.104 et seq. This reading is buttressed by the State Department’s own Foreign Affairs Manual, which…”
Tech Sys., Inc. v. United States, 98 Fed. Cl. 228 (Fed. Cl. 2011).
“These routine aspects of government services contracts — that the government will not directly supervise the work being performed, see 48 C.F.R. § 37.104 (e)-(d), and does not tell the contractor how to achieve the result desired, see 48 C.”
UPMC Braddock v. Harris, 934 F. Supp. 2d 238 (D.D.C. 2013).
· cites it 2× “” 48 C.F.R. § 37.104 (a). 5 The ALJ and the ARB concluded that the definition of “nonpersonal services contract” in the Federal Acquisition Regulations is applicable to the Labor Secretary’s equal opportunity regulations.”
Fort Bragg Ass'n of Educators, Nea v. Fed. Labor Relations Auth., 870 F.2d 698 (D.C. Cir. 1989).
· cites it 4× “That court held that the Army’s use of PSCs violated a Federal Acquisition Regulation, 48 C.F.R. § 37.104 (b) (1987), which prohibits the use of PSCs unless specifically authorized by statute; the union proposal therefore did not interfere with the Army’s statutory right to hire…”
Lambro v. United States, 90 F.4th 1375 (Fed. Cir. 2024).
“104, 48 C.F.R. § 37.104 (not- ing that Congress must “specifically authorize[]” the government to enter into contracts that create an employ- ment relationship).”
West Point Elementary Sch. Teachers Ass'n v. Fed. Labor Relations Auth., 855 F.2d 936 (2d Cir. 1988).
· cites it 2× “The FLRA also rejected the Union’s argument that the Army’s use of personal service contracts was in direct violation of the Federal Acquisitions Regulations, 48 C.F.R. § 37.104 , finding that the Union had not adequately demonstrated the unlawfulness of such contracts, Jt.”
Techniarts Eng'g v. United States, 51 F.3d 301 (D.C. Cir. 1995).
“The district court further held that the USIA violated Federal Acquisitions Regulations, 48 C.F.R. § 37.104 (b), (FAR 37.104) by entering into unauthorized private service contracts in the course of internalizing newscast production.”
Rahimi v. Lansing (D.D.C. 2020).
· cites it 2× “101; 48 C.F.R. § 37.104 ; Pub. L. 107-228, Div.”
Briggs v. Quantitech Inc (N.D. Ala. 2021).
· cites it 2× “” 48 C.F.R. § 37.104 (b). As a general rule, a personal services contract exists when “contractor personnel are subject to the relatively continuous supervision and control of a Government officer or employee.”
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