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FAR 37.104(d)(3) Meaning


jtolli

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In regards to personal services contracts the subject reference reads, "Services are applied directly to the integral effort of agencies or an organizational subpart in furtherance of an assigned function or mission." What does that really mean? It would seem that most service contracts apply to the integral effort of an agency or organization in support of an assigned function or mission. If not, then why would you need to have the contract if it is not directly supporting the mission of the agency? Prior to award of any contract the Army requires a Service Contract Approval document be processed, and part of this document is answering questions relative to whether the contract would result in a personal services contract. These questions are taken directly from FAR 37.104(d) (1) through (6). We always answer "no" to the question about the services being applied to the integral effort of the agency, but no one knows why we answer no.

I found a similar question on the AAP site, but the answer provided was basically that the person answering the question did not understand why the person asking the question did not understand what this particular FAR cite meant. The answer went on to partially quote FAR 37.104©(2) and say the above question is just one of the elements that must be considered when determining whether the proposed contract is personal in nature. I understand that, and understand why the question must be asked and answered, but don't really understand what the question means. Any thoughts?

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In regards to personal services contracts the subject reference reads, "Services are applied directly to the integral effort of agencies or an organizational subpart in furtherance of an assigned function or mission." What does that really mean?

It might be related to the question of whether the work entails inherently governmental functions.

It would seem that most service contracts apply to the integral effort of an agency or organization in support of an assigned function or mission. If not, then why would you need to have the contract if it is not directly supporting the mission of the agency?

The government contracts for lots of services that don't apply to the integral effort of an agency or organization in support of an assigned function or mission. For example, building security, mail operations, operation of cafeterias, housekeeping, facilities operations and maintenance, warehouse operations, motor vehicle fleet management operations, or other routine electrical or mechanical services wouldn't normally be considered to apply to the integral effort of an agency or organization in support of an assigned function or mission. One may argue that these services are "in support" of the agency's function or mission, but I don't think that's what the subject reference is after.

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Open your dictionary and read the definition of "integral." There are several, but here is one that will illustrate the purpose of d(3).

"consisting or composed of parts that together constitute a whole."

Not all service contract services directly apply to the mission of the agency. A couple of examples: A janitorial contract to clean the office spaces does not contribute directly to the furtherance of the mission of the agency. Similarly, a contract for EEO investigations does not contribute directly to the furtherance of mission of the agency, unless you are the EEOC whose mission is to investigate and litigate EEO complaints and enforce the EEO laws. Otherwise, the contract service is support to an overhead function of the agency: Human Resources Management.

So ask yourself whether what the contractor will be doing is part (one component) of the many things your agency does to execute its primary mission. For example, one of the missions of the NAVY's NAVFAC organization is to oversee and manage military construction. If NAVFAC hires a service contractor to perform construction management services (oversee the actual construction) it has contracted for direct effort that is integral to its mission. If it hires a janitorial contractor to clean the construction management offices, it has not contracted for an integral part of its mission.

Similarly, suppose HUD is your agency. Also, assume part of your mission is to process and approve or disapprove applications for grants. If your agency hires a contractor to evaluate grant applications and provide reports and recommendations on the grant applications to managers, it has contracted for direct effort that is integral to its mission. In this example the primary mission is to approve and disburse grant funds. This mission has several necessary components: receive applications; evaluate applications; and decide which applicants get the grant funds. The contractor is performing one of those components (direct effort).

When you answer this question, put on your thinking cap and understand the definition of integral and the concept of applying the contracted services directly to the integral effort furthering the agency's mission.

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Thanks for all the responses. I guess I did understand the question, but did not understand why we have always answered it "no". Your inputs helped me realize that we should be answering this "yes" as our contracts do directly support the integral mission of the organization.

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