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Troy

Did the Legislature really mean "Personal Services" or not?

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38 U.S.C. 513 "Contracts and Personal Services"

"The Secretary may, for purposes of all laws administered by the Department, accept uncompensated services, and enter into contracts or agreements with private or public agencies or persons (including contracts for services of translators without regard to any other law), for such necessary services (including personal services) as the Secretary may consider practicable."

General Counsel has held that the plain language of the statute above did not intend to authorize issuance of a contract for any service that creates an employer-employee relationship.

FAR 37.104(a) say that "[a] personal services contract is characterized by the employer-employee relationship it creates..."

I'm confounded by OGC's advisory opinion, in that, the principle cannon of statutory construction is that the legislature says what it means and means what it says. In my view, OGC has by their interpretation, rendered meaningless the term "personal services" from the statute.

My question is simply, did the legislature really mean "personal services" or not?

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I don't have an answer, but have you considered that congress may not have had the definition of "personal services" found in the FAR in mind when it wrote the statute?

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My initial question was exactly that, maybe when the statute was written, personal services meant something else. I sought out in-kind statutes and compared 10 U.S.C. 1091 "Personal Services Contracts", and what I found is that this related statute was amended by P.L. 103-160 NDAA 1993 to add the term personal services.

The subject statute (38 U.S.C. 513) became law in 1991, so there is certainly sometime in between the two, where the definition of personal services could have still been evolving.

In an effort to find a harmonious interpretation of these two statutes I went back to FAR 37.101 Definitions and looked at Non-personal services. Specifically FAC 84-40 to establish what would have been meant by personal services in the years prior to the codified laws in-kind.

GAO B-224592 Dec. 23, 1986 and B-234146 Mar. 31, 1989, among others, helped to establish that the definition of personal services we know today is the same definition prevailing during the time both statutes where drafted. Again, in an effort to conclude external consistency with the related statutes and to find a harmonious interpretation, unless the statute in its own text, offers a different definition of personal services, I can only assume the FAR definition is the standard that was used by Congress, the same as it was used by GAO. However, without any statements of the legislature to assist in the interpretation, it might never be known for sure.

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When the statute refers to "such necessary services" isn't it referring to "uncompensated services"? If so, what does the FAR have to do with it?

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Jacques, here is the whole wording of Section 513

TITLE 38 VETERANS BENEFITS

PART 1 GENERAL PROVISIONS ( Sections 101- 905)

SUBCHAPTER I - GENERAL AUTHORITIES (sections 501 - 516)

§ 513. Contracts and personal services

The Secretary may, for purposes of all laws administered by the Department, accept uncompensated services, and enter into contracts or agreements with private or public agencies or persons (including contracts for services of translators without regard to any other law), for such necessary services (including personal services) as the Secretary may consider practicable. The Secretary may also enter into contracts or agreements with private concerns or public agencies for the hiring of passenger motor vehicles or aircraft for official travel whenever, in the Secretary’s judgment, such arrangements are in the interest of efficiency or economy.

(Added Pub. L. 102–83, § 2(a), Aug. 6, 1991, 105 Stat. 389)

It appears to me that the personal services could either be uncompensated or compensated in the overall context of the Section.

When the statute refers to "such necessary services" isn't it referring to "uncompensated services"? If so, what does the FAR have to do with it?

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What is probably happening is confusion about the term "personal services contract."

There are two kinds of "personal services contracts." I suspect that what is happening is that your General Counsel is interpreting the statute as referring to one kind and the FAR as referring to the other.

In general law, a personal services contract (or personal contract) is one that requires performance by a specific person. In such cases, performance by anyone else is unacceptable. This is typical of consultant contracts for the services of an expert. Under such contracts the contractor is not subject to the supervision of the buyer, but functions as an independent expert or professional. Such persons are independent contractors, not employees. I think your General Counsel is interpreting the statute to refer to that kind of personal services contract.

The other kind is the kind to which FAR 37.101 refers. They create an employer-employee relationship and are sometimes referred to as employment contracts. Under this kind of personal services contract, the buyer directs the work of the contractor's employees on a day to day basis, as it would any employee. For the history of the FAR prohibition, see Report of the Acquisition Advisory Panel to the Office of Federal Procurement Policy and the United States Congress (2007), pp. 400 - 404 available at: http://www.ndia.org/Advocacy/AcquisitionReformInitiative/Documents/4-24102_GSA.pdf.

The distinction was discussed in detail in an article by Peter J. Rittenburg, who was then Assistant General Counsel of the United States Information Agency, published in The Nash & Cibinic Report in February 1996 and entitled, "Contracting for the Services of Specific Individuals: Avoiding Personal Services Contracts." As he pointed out:

The Federal Acquisition Regulation creates confusion because it does not specifically deal with the independent contractor relationship in which the personal services of an individual are required. In addition, its use of the terms “nonpersonal” and “personal” to describe independent contractor and employment relationships, respectively, is contrary to the private contract law use of those terms.

Of course, I don't know what your General Counsel meant. You should ask.

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The distinction Vern describes above is good to keep in the back of your mind if you operate in a FAR-based environment. If you move out of that FAR-based environment, then you will be confused (as I was for a while) when leave to work for an employer who uses the general law definition.

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Thanks for all the valuable input. The next move I intended was to ask for an updated OGC opinion on the matter. Just wanted to make sure I wasn't missing something obvious before I went to them.

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Joel, thanks for setting me straight on your Post #5. I agree the statute is broader than I initially thought. As such, Troy may be right to be concerned. FAR 37.104( b ) provides, "Agencies shall not award personal services contracts unless specifically authorized by statute (e.g., 5 U.S.C. 3109) to do so." It seems from its face that 38 USC 513 is such a statute for the VA.

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