Does anyone know of a regulation which addresses the appropriateness (or lack thereof) of Government participation in contractor hiring decisions? I know a similar question was raised in a recent thread on this forum, but it never got a definitive response.

The situation is as follows: Our company has just been awarded a new contract and needs to hire a number of people for non-key personnel positions. The CTO has expressed an interest in participating in the selection process, either by reserving the right to approve/reject the candidates we propose, or by making recommendations (which presumably would be risky to ignore).

Since the contract is just beginning, we are concerned about delays in project startup caused by this extra step in the hiring process, and also about setting a precedent which would prevent us from hiring anyone in the future without CTO approval.

I have read FAR 37.104 on personal services contracts, and clearly hiring approval in itself does not constitute "continuous supervision and control" as described there. Still, it seems to violate the Contractor's right to make its own hiring decisions based on who it believes will get the job done. It also increases the risk to the Government by giving the Contractor extra hurdles to jump through before it can do that job. Besides, what's the use of designating "key personnel" in the contract if even the non-key are subject to Government approval?

I suspect this is a common problem. Does anyone know of a specific regulation, statute or court case which deals with it?

We are getting more fools in government contracting than I ever imagined! Hey, don't complain, now you have an excuse for every failure, every problem and every delay.

What was that saying about those who smile when things go wrong have found someone to blame it on? You have. Those people either never knew the basics (There seem to be legions!) or forget that every intrusion into the contractor's responsibility acts to shift responsibility from the contractor to them.

What was that old saw about those who fail to get the concept? These people sound so clueless that if quoted "a specific regulation, statute or court case" their eyes would glaze. My sympathies.

I suggest that you start by expressing your concerns to the KO. You never know, mybe she/he will listen! If you are concerned that it could affect your success and/or profitability, I'd mention that, too. They might get the hint that they're overstepping the Government's legitimate role, (assuming that the contract is silent regarding hiring of non-key personnel). Most KO's respect honest concerns of the Contractor. happy sails! joel hoffman

I'm an ex Air Force CO working on "cost plus" prime contracts for another agency (Not DOD). Here's my take on this.
Every time Gov't CO wants to get involved in any decision making process, everything slows down. Things that should take hours have taken weeks, even longer. Sometimes they are bad decisions.
Then the finger pointing starts on who is to blame when something goes wrong that resulted from that CO's medling. I've seen this scenario too many times in the last 10 years.
If the gov't is going to hire a contractor to do something, let them do it.
From the Contractor's viewpoint, the government is the client and we (the contractor) are going to support the client. If the client wants something done a certain way, then we do it - even if it is not a wise idea. What the client wants, the client gets. After all the contractor wants to keep the client happy.
This happens in commercial business also, so don't think this is limited to government.

Anon818:

I do not know of any statute, regulation, or board or court decision which states whether or not the government can participate in the contractor hiring/firing process. Of course, it should not, but that's another thing entirely.

What does your contract say? Does it give the government the right to approve or deny your employment decisions or to make those decisions for you? If the answer is no, then the CO cannot make you let them participate if you decide to decline his or her request. The question is whether or not you want to do that. If the contract does give the government that right, then there isn't much you can do since you agreed to it.

This is one of the those awful customer relations problems that you're going to have to solve.

Thanks to all for your responses. Vern, our contract includes a standard clause requiring CO consent for replacement of key personnel, but it is silent on the subject of who ultimately has the right to approve or reject non-key personnel. My feeling is that if the Government meant to reserve this right for itself, the contract would say so, but of course feelings don't count for much in these matters.

Part of the problem is that the CO role on this contract is in transition at the moment -- I believe they have an interim person in the job, with a new one expected shortly -- so help is unlikely to come from the Contracts Office. (The pressure to participate is coming from the technical office.) This is why I was hoping to find some nice impartial reference that we could point to without ruffling any feathers. Unfortunately, it sounds like we're on our own.

If this is a fixed-price contract, it is especially reasonable for you to politely, but firmly explain your concerns and state your position that it is your responsibility to hire the people you need. Good Luck. happy sails! joel

Thanks, Joel. It's CPFF though. :-( If we're able to work out a solution which might be useful to others in similar situations, I'll post it here. Meanwhile, thanks again to you and to everyone else who responded. Your moral support is appreciated!

Anon818:

I cannot assess the clause without seeing what it says. Generally, such "key personnel" clauses allow the government to allow or disallow the assignment of a contractor employee to contract work on the basis of his or her qualifications, which is not quite the same as participating in the selection process.

You might try telling the CO that government participation in contractor employee selection decisions might make the government a party to a discrimination lawsuit. This may or may not be true, but I would think that its a legitimate concern.

Vern, your statement about an EEO suit is well founded. I know of at least one case years ago where a female employee of a contractor was able to bring a harassment claim against a Federal employee although the EEO laws only apply to employees or applicants for employment.

Vern, the Key Personnel clause reads as follows:

"The Contractor must identify the key personnel with whom it intends to fulfill the contract. An illustrative list of key personnel which the Contractor might furnish for the performance of this contract is as follows:

[Names and job titles are inserted here. Of course now that the contract is signed they're no longer illustrative; this language is left over from the RFP.]

"The personnel and positions listed above are considered to be essential to the work being performed hereunder. Prior to replacing any key personnel, the Contractor must notify both the Contracting Officer and Cognizant Technical Officer reasonably in advance and must submit written justification (including proposed substitutions) in sufficient detail to permit evaluation of the impact on the program. No replacement of personnel may be made by the Contractor without the written consent of the Contracting Officer."

(Uh-oh: In retyping this just now I noticed that the word "key" was omitted from the last sentence of the clause, so if taken out of context it might appear to refer to -all- personnel. This appears to be an error, since the clause is headed KEY PERSONNEL and seems intended to refer only to the individuals it mentions by name. It sure doesn't help our case any, though.)

At any rate, except for this apparent error, the contract is silent on the subject of approval for non-key personnel. Those are the people still to be selected, hence the subject of my original question. Just to make this really interesting, the contract is to be performed overseas and the individuals in question will be foreign nationals, hence outside the protection of EEO legislation.

Anon818:

I would not interpret that clause as giving the government the right to participate in contractor employee selection decisions.

The clause says you cannot replace a key person without the government's written consent. It does not say that the government gets to select the replacement or participate in the selection. Indeed, the clause says that you must identify the proposed replacement. At most, I would interpret the clause as permitting the government to verify that a proposed replacement has qualifications at least equal to those of the person being replaced, in order to prevent a negative impact on the program.

Thanks, Vern. I guess this brings us back to what you said in your 9:02 AM post -- that the CO cannot make us let the Government participate if we decline to take their advice, but that the question is whether we want to do that.

In any case, I've summarized all the advice provided here for our company VP in charge of the project, who is flying out to meet with the client next week. Hopefully he'll be going into battle as well-armed as one can be in this situation.

I'm sorry Anon818. I sort of snapped and was your first responder. It was late and I just vented without even trying to do much else. It does seem the fool quota in government contracting is rising rapidly.

Anyway, there was a previous discussion and in case you did not see it here is the EEO reference, even if it does not apply in this case: http://www.wifcon.com/discus/messages/5/53.html#POST220

The discussion top seems to be: http://www.wifcon.com/discus/messages/5/53.html

Interesting thought though, other countries do have employment regulations that you, as a contractor hiring in country, may be forced to obey. You could possibly be caught between a rock and a hard place if you just let this pass. Otherwise, maybe you should just smile and look towards those you can blame this on-the technical office with a weak, complicit contracting officer.

For the life of me I just can't understand why Govt would want to participate in Contractors hiring decisions. I can only assuem that it's a "control" thing.

My first instinct is that the Government is awarding a contract to the KTR (and "paying" them) to take care of these types of things. I don't see the logic in paying someone to do something, but then I do the work. Can't figure that out.

We always had the "key contractors personnel" type of clause in all of our construction and some service contracts. However, we never were involved in hiring, rather, the contractor would sumbit names with resumes and certificates as applicable for KO review and approval.

Good luck to your VP.

All my customers insist that our contracts state that they will review the resumes of all hired employees and have the right to reject those they do not believe meet the standards in the statement of work. This seem logical to ensure the contractor does not provide substandard workers. They have been caught doing so.

However, it goes deeper into the belief of Program Managers that they are hiring a staff. They have to be constantly reminded that contract employees are not part of their "staff" to be assigned as they see fit. The PMs ask for FTEs and when personnel won't approve them, the PMs request "professional services personnel" who end up being quasi personal services contractors.

Is it the PMs fault? I don't think so, they are given taskings to provide results and then senior management and human resources deny them the FTEs to get the tasks accomplished. What are they to do? They take the path of least resistance and hire some consultants that end up working in the division for 5, 10 or 15 years.

We have program offices where even the director is a contractor. FTEs come and go on temporary duty. These programs have a high risk of failure so why don't upper management get some real government employees to supervise. Because the political appointees at the top say NO.

Anon2U

Of course, there are many reasons why Government would contract-out work. However, I don't understand why Govt personnel would want to be involved in the contractor's employee hiring process other than to review resumes of those truly "key people".

So the chips fall for whatever reason, the Govt is contracting out the work vice having Government employees perform it. I remain of the opinion that it should then be a Government - Contractor relationship and not a "quasi staff or quasi personal services contract".

I'm with Phil C. There's no way the Government should be involved in any hiring decisions.

I also think there's rarely a need for key personal designations for most contracts. If contracts are awarded using statements of objectives, the issue of key personnel is moot. You either get your required outcomes or you don't. You let the contractor deliver what they are supposed to do in the manner they deem most appropriate.

When OPM published their rules on temp services, they did expressly say the government should not be involved in selecting the contractor's employees or telling them who to hire. They saw this as crossing the line into personal services. I don't see why this is any less true of other contract services.

The government does often include the right to approve people assigned to "key" positions, but should not be involving itself in every selection. There are other way in which the Government has to be sort of involved in hiring, such as the background checks required to get a badge allowing access to the Government facility.