[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR37.104]

[Page 733-734]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 37_SERVICE CONTRACTING--Table of Contents
 
                 Subpart 37.1_Service Contracts_General
 
Sec.  37.104  Personal services contracts.

    (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).

[[Page 734]]

    (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]