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Hello Wifcon,

I'm a specialist at a civilian agency, and, along with a few colleagues, I continue to come across "support service" contracts that are being administered inappropriately.  I'd rather not be too specific for obvious reasons, but I'll do my best to lay this out in as helpful a manner as possible.  My goal is to find a way to get my customers what they need, as difficult (or sometimes impossible) as that may be.  

The current scenario is this:  the service contracts in question are essentially open-ended labor-hour contracts (2080 hours annually, no specific tasks or project), without the necessary approvals, and without the necessary administrative protocols/tracking of hours & work (I'm not familiar with labor-hour contract administration requirements, but I know they are more burdensome than what we are seeing on these contracts).  I've found on several contracts that I've reviewed myself, the CORs are assigning workload directly to the contractor's employees on a weekly basis, and several CORs have explicitly stated that these contracts are necessary because they either cannot hire someone to do the work, or they cannot get approval for the position on their organizational chart (they are circumventing the hiring process).

My assignment at this point is to structure these contracts so that the work can be completed in a way that does not violate any regulations or laws.  The only way that I know of to draft a contract that satisfies my customer's need (without violating any laws and regulations) is to define exactly the work/tasks/services that is required, and to avoid language like, "services required include, but are not limited to the following..."   That is actual language found in current/previous contracts.  My problem is that my customer wants a base + four, but does not know exactly at this time what work is required.

I'm thinking that a base + four is an impossible ask.  Whether I structure this as a task-based contract or a labor-hour contract, my customer is still using this contract as a catch-all for any kind of work they need completed, essentially making it a personal services contract.

Now, these kinds of support services are available through GSA, so I assume there is a correct way of setting these up.  My problem is that most of us are new to our positions, and none of us have a background in services contracts.  To make matters worse, the contracts that we'd typically use as examples are the exact contracts we are trying to fix.

 

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Don, considering FAR 37.104, my question would be what do you think allows it? Which laws or appropriations would allow Krimz’s organization to contract for personal services?  Is that what you are really asking of Krimz? 

“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) of this section).

       (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 1 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.”

Krimz posted this thread as a “beginner”. Krimz could ask this question of his or her supervisor for the contract file...
 

Krimz’s task however is to set up a contract that isn’t characterized as a personal services contract. That appears to be Krimz’s request for advice. 

 

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Generally, I tend to prefer contracts with broad scope over contracts with inflexibly narrow scope.  Generally, I am okay with contract text such as "services required include, but are not limited to the following..."

16 hours ago, Krimz said:

the service contracts in question are essentially open-ended labor-hour contracts (2080 hours annually, no specific tasks or project), without the necessary approvals

Maybe this is where you start -- start getting the necessary approvals.

16 hours ago, Krimz said:

My assignment at this point is to structure these contracts so that the work can be completed in a way that does not violate any regulations or laws.

Has there been a definitive finding that your organization's contracts are violating regulations or laws?  If so, you can address those specific findings.

I wish I could offer more help, but so much depends on your organization's culture and so forth.  So I'll just say this -- start small -- you cannot swallow the ocean in one gulp...

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21 hours ago, Krimz said:

several CORs have explicitly stated that these contracts are necessary because they either cannot hire someone to do the work, or they cannot get approval for the position on their organizational chart (they are circumventing the hiring process).

To me, this indicates that the contracts may be for the performance of inherently governmental functions.  In this regard, what information described in FAR 7.503(e) is being provided with the procurement request?

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20 hours ago, Don Mansfield said:

What do you think is prohibited by law or regulation?

 
 
Quote

 

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.

 

 

I'm not saying we can't contract for these services, but I don't see how an open-ended contract for undefined services meets the definition of FFP:

Quote

 

16.202-1 Description.

A firm-fixed-price contract provides for a price that is not subject to any adjustment on the basis of the contractor’s cost experience in performing the contract. This contract type places upon the contractor maximum risk and full responsibility for all costs and resulting profit or loss. It provides maximum incentive for the contractor to control costs and perform effectively and imposes a minimum administrative burden upon the contracting parties. The contracting officer may use a firm-fixed-price contract in conjunction with an award-fee incentive (see 16.404 ) and performance or delivery incentives (see 16.402-2 and 16.402-3 ) when the award fee or incentive is based solely on factors other than cost. The contract type remains firm-fixed-price when used with these incentives.

 

In the scenario at hand, these contracts are not actually FFP because they are open-ended.  How can the contractor provide an FFP quote unless we define exactly what work/tasks will be required?  The only way I know to structure a contract for this kind of requirement is to go the labor-hour route, which I'm told we will not receive approval for.  

I asked my customer to re-work their SOW so that it addressed a specific, well-defined project.  They say that will be difficult, that the contractor will be expected to do work that is not explicitly stated in the contract.  For example, I wouldn't issue a janitorial service contract that would allow for the COR to assign additional buildings/rooms/bathrooms over the course of the year.  And if I did solicit something like that, how would the contractor provide a FFP quote?  

Definitely not trying to be a stick in the mud, and in the end, I have to provide my customer a solution, I'm just afraid my solution will not be seen as a viable one.

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8 hours ago, ji20874 said:

Generally, I tend to prefer contracts with broad scope over contracts with inflexibly narrow scope.  Generally, I am okay with contract text such as "services required include, but are not limited to the following..."

Maybe this is where you start -- start getting the necessary approvals.

Has there been a definitive finding that your organization's contracts are violating regulations or laws?  If so, you can address those specific findings.

I wish I could offer more help, but so much depends on your organization's culture and so forth.  So I'll just say this -- start small -- you cannot swallow the ocean in one gulp...

I'm fine with a broad scope as long as it can be administered without much CO intervention.  We've been told that labor-hour contracts will not be approved, so that we should treat them as FFP and do our best to structure them so.  I'm just not sure how to do that since LH and FFP are polar opposite contract types.

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"How can the contractor provide an FFP quote unless we define exactly what work/tasks will be required?" 

Structure the contracts for what the government will pay for, not for the tasks the contractor will do.

Example:

001 / RECEPTIONIST / 250 / DAY / $200 / $50,000 / The contractor shall provide a qualified receptionist for eight hours, 9am-5pm, on every regular Government work day during calendar year 2021.  The receptionist will perform all traditional receptionist duties for whatever visitors or phone calls occur.  The contractor may invoice each calendar month for all days during the previous calendar month.

This is a FFP approach, not a LH approach.  The contractor has no say in the number of hours to accomplish the work.  The contractor is contractually bound to provide a receptionist every day, for 8 hours every day -- any failure is a breach.

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6 hours ago, ji20874 said:

"How can the contractor provide an FFP quote unless we define exactly what work/tasks will be required?" 

Structure the contracts for what the government will pay for, not for the tasks the contractor will do.

Example:

001 / RECEPTIONIST / 250 / DAY / $200 / $50,000 / The contractor shall provide a qualified receptionist for eight hours, 9am-5pm, on every regular Government work day during calendar year 2021.  The receptionist will perform all traditional receptionist duties for whatever visitors or phone calls occur.  The contractor may invoice each calendar month for all days during the previous calendar month.

This is a FFP approach, not a LH approach.  The contractor has no say in the number of hours to accomplish the work.  The contractor is contractually bound to provide a receptionist every day, for 8 hours every day -- any failure is a breach.

Asking them to provide a receptionist is exactly what I am trying to avoid.  To me, that is very clearly a personal service.  
 

 

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6 hours ago, Don Mansfield said:

@Krimz, You seem to have concluded that the contracts are for personal services. What exactly led you to that conclusion?

Because they are attempting to contract for a position that parallels a government employees PD.  And they explained to me that they’ve tried hiring a federal employee to do the work, but they can’t get certain approvals, so that they will need to contract for this person.

I’m fine with contracting for performance based acquisition and defining the need in terms of required results/deliverables, but that’s not what my customer wants.  They want an employee that they can assign work to on an as-needed basis.  They tick almost every box for FAR 37.104(c)(2)(d):

(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 1 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.

While this isn’t strictly a pass/fail test, taken all together, these are, by definition personal services.  In many cases, the customers are telling the contractor who to hire, and often it’s a retired employee of the agency.  Many COs in my office agree, and we are trying to navigate a complex political environment while also providing our customers with the support they need.

 

edit:  COs are not an HR specialist, and so I think we shouldn’t be responsible for contract-hiring for these departments.

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8 hours ago, Krimz said:

Asking them to provide a receptionist is exactly what I am trying to avoid.  To me, that is very clearly a personal service.  

I don't think a contract for receptionist services MUST be seen as personal services.

But if receptionist is a hang-up, let's try something different that is still non-personal services--

  • Example 2:
  • 001 / CUCKOO CLOCK REPAIR / 250 / DAY / $200 / $50,000 / The contractor shall provide a qualified Cuckoo Clock Technician III for eight hours, 9am-5pm, on every regular federal Government work day during calendar year 2021.  The technician will perform all repair tasks for whatever clocks are delivered by the agency using Government-provided spare parts.  Place of performance is the agency's clock repair room.  The contractor may invoice each calendar month for all days during the previous calendar month.

You came here asking for help in how to structure your contracts.  If you want to avoid doing any contract at all on the grounds of personal services, well, that's a different matter.

Since you are concerned that the needed services might be personal services, ask your attorney if your agency has authority to enter into personal services contracts.  Or, ask your attorney (or the chief of your contracting office) for an opinion on whether these are personal services.  You may rely on their opinion.  Don asked a question, but you answered it in a general and academic way -- you need to address the matter with specifics in a specific context within your agency so that your agency can decide if these are personal services.  And, as I said, you may rely on their opinion -- it is not necessary that you agree with it.

AN ASIDE:  Don't tilt at windmills.  Don't shut down your agency's ability to achieve its mission.  It takes people to get work done.  If the HR people won't or can't hire the needed people, and the contracting people won't or can't contract for the needed people, and both of those people point fingers at each other and also at the program office, you are all losers.  By the way, staffing augmentation contracts can be legal.  Temporary services contracts can be legal.  Contracts such as I described for receptionist services or cuckoo clock repair services can be legal.  You would rather be thought of as the hero rather than the obstacle.

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3 hours ago, ji20874 said:

I don't think a contract for receptionist services MUST be seen as personal services.

But if receptionist is a hang-up, let's try something different that is still non-personal services--

  • Example 2:
  • 001 / CUCKOO CLOCK REPAIR / 250 / DAY / $200 / $50,000 / The contractor shall provide a qualified Cuckoo Clock Technician III for eight hours, 9am-5pm, on every regular federal Government work day during calendar year 2021.  The technician will perform all repair tasks for whatever clocks are delivered by the agency using Government-provided spare parts.  Place of performance is the agency's clock repair room.  The contractor may invoice each calendar month for all days during the previous calendar month.

You came here asking for help in how to structure your contracts.  If you want to avoid doing any contract at all on the grounds of personal services, well, that's a different matter.

Since you are concerned that the needed services might be personal services, ask your attorney if your agency has authority to enter into personal services contracts.  Or, ask your attorney (or the chief of your contracting office) for an opinion on whether these are personal services.  You may rely on their opinion.  Don asked a question, but you answered it in a general and academic way -- you need to address the matter with specifics in a specific context within your agency so that your agency can decide if these are personal services.  And, as I said, you may rely on their opinion -- it is not necessary that you agree with it.

AN ASIDE:  Don't tilt at windmills.  Don't shut down your agency's ability to achieve its mission.  It takes people to get work done.  If the HR people won't or can't hire the needed people, and the contracting people won't or can't contract for the needed people, and both of those people point fingers at each other and also at the program office, you are all losers.  By the way, staffing augmentation contracts can be legal.  Temporary services contracts can be legal.  Contracts such as I described for receptionist services or cuckoo clock repair services can be legal.  You would rather be thought of as the hero rather than the obstacle.

jl20874, out of curiosity, what do you consider a personal service?

We can state service contracts in terms of outcomes, but the FAR is pretty clear that personal service contracts are prohibited unless authorized by statute, which they are not in my organization.  I'll try to find the law referenced in the FAR and by our HR that states circumventing the hiring process is illegal.  Some of these started as temporary personal service contracts NTE to 120 days, and then grew into base + 4 contracts, which was expressly prohibited.  Maybe I have a different definition of personal service than most, but the positions we are talking about here are professional in nature, and impact directly the agency's mission.

Using your example of receptionist, something we are expected to do is structure the contract in terms of tasks/deliverables.  So, in the case of a receptionist, they would be expected to perform 100 tasks per week.  We do not define what a task is and that's part of the problem, so how does the contractor know how to quote?  When we administer these as task-based, and the contractor asks for a definition of task, and we can't give it to them, it causes major issues.

The only other option is to run it as a personal service contract, which is prohibited.  And I'm not a "loser," but I'm not comfortable contracting for prohibited services.

I know support service contracts can be legal, I'm trying to figure out how to set it up, legally.  Contracting for a personal service is expressly prohibited according to the FAR.

 

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10 hours ago, Krimz said:

Asking them to provide a receptionist is exactly what I am trying to avoid.  To me, that is very clearly a personal service.  

Have you looked at FAR 37.112?

 

10 hours ago, Krimz said:

Because they are attempting to contract for a position that parallels a government employees PD.

Would this concept prohibit contracting for security guard services instead of using FPS guards?  I think this goes more to the question of whether  the contractor is performing an inherently governmental function.

I think you are missing the key point of a personal services contract.  As Joel pointed out, a "personal services contract is characterized by the employer-employee relationship it creates between the Government and the contractor’s personnel.  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."  To me, the factors listed in FAR 37.104(d) are generally poor indicators of whether a contractor is "subject to the relatively continuous supervision and control of a Government officer or employee."  A literal application of those factors would make a substantial number of contractor employee  who work onsite at a government location be considered to be performing on a personal services contract when clearly they are not.  For example, a literal application of these factors could indicate that a contractor performing onsite help desk functions is performing under a personal services contract. Also, think of a contract for the operation of a military dining facility (mess hall) contract.  Instead, a deeper analysis is needed to determine if contractor employees are "subject to the relatively continuous supervision and control of a Government officer or employee" so that an employer-employee relationship is created.

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11 minutes ago, Retreadfed said:

Have you looked at FAR 37.112?

 

Would this concept prohibit contracting for security guard services instead of using FPS guards?  I think this goes more to the question of whether  the contractor is performing an inherently governmental function.

I think you are missing the key point of a personal services contract.  As Joel pointed out, a "personal services contract is characterized by the employer-employee relationship it creates between the Government and the contractor’s personnel.  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."  To me, the factors listed in FAR 37.104(d) are generally poor indicators of whether a contractor is "subject to the relatively continuous supervision and control of a Government officer or employee."  A literal application of those factors would make a substantial number of contractor employee  who work onsite at a government location be considered to be performing on a personal services contract when clearly they are not.  For example, a literal application of these factors could indicate that a contractor performing onsite help desk functions is performing under a personal services contract. Also, think of a contract for the operation of a military dining facility (mess hall) contract.  Instead, a deeper analysis is needed to determine if contractor employees are "subject to the relatively continuous supervision and control of a Government officer or employee" so that an employer-employee relationship is created.

That is exactly what is happening with these contracts.  A very apparent employer-employee relationship has been established, and I do not know any other way to structure this contract so as to avoid that.  There are other details that I can't share here that I am sure would make this much more clear, but I think based on what I've given so far, it's pretty clear these are LH or personal service contracts, and should not be FFP.  Maybe I'm wrong.

As for FAR 37.112, that's exactly how some of these contracts began, as NTEs for 120 days.  These required approval at a very high level (I don't have the document in front of me, but they were Agency level approvals iirc).  The problem is, once the approval for temporary hire services was approved, the CO drafted the contract for base + 4, and now that's the way they are all drafted... base + 4.  If they are not temporary, they become personal services...  Not only are they not temporary, but they are recurring, every five years.

I'm not trying to be a stick in the mud, I am just up against a wall and I do not know where to go.

For convenience:

37.112 Government use of private sector temporaries.

Contracting officers may enter into contracts with temporary help service firms for the brief or intermittent use of the skills of private sector temporaries. Services furnished by temporary help firms shall not be regarded or treated as personal services. These services shall not be used in lieu of regular recruitment under civil service laws or to displace a Federal employee. Acquisition of these services shall comply with the authority, criteria, and conditions of 5 CFR Part 300, SubpartE, Use of Private Sector Temporaries, and agency procedures.

Edit:  I think security (or any of these services) can be contracted for so long as the authority to do so is available.  My Agency does not have that authority.  Some agencies do, I do know that.  But we do not.

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33 minutes ago, Krimz said:

the positions we are talking about here are professional in nature, and impact directly the agency's mission.

Almost all government procurement contracts are awarded to enable the agency to carry out its mission so this factor is not a major consideration in answering your question or the issue of whether the contract in question is a personal services contract.  I don't know what you mean specifically by "professional in nature"  but the government contracts for all sorts of professional services, e.g., engineers, doctors, nurses, etc.  I even reviewed a contract one time for someone to perform  services as a Catholic priest at a government hospital.

But going to your broader question of how to structure a contract where the requirement is rather nebulous.  Have you considered using a broad scope statement of work that could cover possibly everything the contractor could be expected to do, but allowing for the issuance of Letters of Technical Direction wherein the contractor is directed to focus its effort on a particular portion of the SOW.  This does not involve relatively continuous supervision of how the contractor performs the contract, but only provides guidance on the areas where  attention needs to be given.  The contractor is given the flexibility and authority for determining how to perform the contract within the TD.

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1 minute ago, Retreadfed said:

Almost all government procurement contracts are awarded to enable the agency to carry out its mission so this factor is not a major consideration in answering your question or the issue of whether the contract in question is a personal services contract.  I don't know what you mean specifically by "professional in nature"  but the government contracts for all sorts of professional services, e.g., engineers, doctors, nurses, etc.  I even reviewed a contract one time for someone to perform  services as a Catholic priest at a government hospital.

But going to your broader question of how to structure a contract where the requirement is rather nebulous.  Have you considered using a broad scope statement of work that could cover possibly everything the contractor could be expected to do, but allowing for the issuance of Letters of Technical Direction wherein the contractor is directed to focus its effort on a particular portion of the SOW.  This does not involve relatively continuous supervision of how the contractor performs the contract, but only provides guidance on the areas where  attention needs to be given.  The contractor is given the flexibility and authority for determining how to perform the contract within the TD.

 FAR 37.104

 

Quote

 

(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 1 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.

 

 

Like I said before, this isn't a pass/fail test, but the contracts in question tick almost every single box in FAR 37.104.

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I agree that we cannot use contracts to circumvent federal personnel ceilings.  I agree that personal services contracts are not allowed by the FAR except as otherwise allowed by statute.  You don't have to quote anything to prove those points.  We don't know what your services are because you haven't told us, and we don't know that those are nonpersonal except for your assertions.

That said, I could buy receptionist services as a nonpersonal without quantifying the number of phone calls or the number of visitors.  I could buy cuckoo clock repair services as nonpersonal without listing and quantifying tasks and deliverables.  I shared these as examples because you have not shared any specifics.  But whatever your facts are, you need to consider the reality:  if other agencies can buy services similar to yours as nonpersonal, then your agency can.

Don't take my loser comment personally.  If the HR people can't or won't support the agency mission, and the contracting people can't or won't support the agency mission, then everyone loses, your agency director loses, the taxpayer loses.  I want your agency to be successful.

Anyway, if the services are nonpersonal (you insist that they are, and we don't know because we don't what services are needed), and if your agency has zero authority to contract for personal services (that's what you told us), then that's the end of the story, right?  Do your chief of the contracting office and agency general counsel agree that the services are nonpersonal?  I'm trying to be helpful -- let them decide based on their broader experiences and so forth, and you can rely on their decision.

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I do want our agency to be successful, that's for sure.  My final question is, what is the difference in a labor-hour contract for 2080 hours, and a FFP contract for 2080 hours, both having identical SOWs?  That's what's confusing me, and I am only just realizing that.  I know what FFP is, and think if we defined exactly what the contractor was expected to do with defined quantities and deliverables, I can see how FFP would be appropriate whether the contractor proposes an hourly or each (task) UOM.  But our SOW is open-ended, and since the UOM is based on hours worked, I don't see how that can not be a personal service, or at the very least, a LH contract.  I do not have experience with LH contracts, but I am told they are administratively burdensome on everyone involved, and that's why my agency does not do them.  Because we do not have the resources to administer them.

Like I said, most of these began strictly as emergency temporary hire contracts NTE 120 days, and then after that approval was received, the contract was awarded as base + 4.  The contractor employee shows up to work, we give them an ID card, logical access to the building, a government computer, and the COR assigns their workload directly to them on a weekly basis.  In some cases the COR reviews timesheets and almost always approves leave.  We have several new employees who only learned after an entire year of working here that some of their "co-workers" area actually contractors.

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17 minutes ago, ji20874 said:

I agree that we cannot use contracts to circumvent federal personnel ceilings.  I agree that personal services contracts are not allowed by the FAR except as otherwise allowed by statute.  You don't have to quote anything to prove those points.  We don't know what your services are because you haven't told us, and we don't know that those are nonpersonal except for your assertions.

That said, I could buy receptionist services as a nonpersonal without quantifying the number of phone calls or the number of visitors.  I could buy cuckoo clock repair services as nonpersonal without listing and quantifying tasks and deliverables.  I shared these as examples because you have not shared any specifics.  But whatever your facts are, you need to consider the reality:  if other agencies can buy services similar to yours as nonpersonal, then your agency can.

Don't take my loser comment personally.  If the HR people can't or won't support the agency mission, and the contracting people can't or won't support the agency mission, then everyone loses, your agency director loses, the taxpayer loses.  I want your agency to be successful.

Anyway, if the services are nonpersonal (you insist that they are, and we don't know because we don't what services are needed), and if your agency has zero authority to contract for personal services (that's what you told us), then that's the end of the story, right?  Do your chief of the contracting office and agency general counsel agree that the services are nonpersonal?  I'm trying to be helpful -- let them decide based on their broader experiences and so forth, and you can rely on their decision.

Btw, I sent you a PM with more details. 

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1 hour ago, Krimz said:

...what is the difference in a labor-hour contract for 2080 hours, and a FFP contract for 2080 hours, both having identical SOWs? 

In a labor-hour contract, the contractor does not promise any specific number of hours, and is not obligated to perform any specific number of hours .  Rather, the contractor merely promises to do its best to get the job done within the ceiling price.  If the contractor gets the job done with fewer hours, that's okay.  The contractor decides how many hours to perform. 

Here's how a LH CLIN based on (not "for") 2,080 hours might look:

  • 001 / IMPORTANT SERVICES / 1 / JB / $21,600 / $41,600
    LABOR-HOUR, CEILING PRICE = $21,600, LCAT = CUCKOO TECHNICIAN III, HOURLY RATE = $20

In a firm-fixed-price contract where the unit is HOUR, the contractor promises to provide the promised number of hours, and is in default if it does not do so. 

Here's how a FFP CLIN for 2,080 hours might look:

  • 001 / IMPORTANT SERVICES  / 2,080 / HR / $20 / $41,600
    FIRM-FIXED-PRICE

Imagine you need to contract for nurses for a care facility for a year -- you don't know how many patients will be admitted, or how many injections will be given, or how many bedpans will be emptied.  But, you want the facility fully staffed at all times, and you require five nurses per twenty beds at all times, 24x7.  Your facility has 20 beds.  So, over the course of a 52-week year, you will need 43,680 nurse hours (24 hours x 7 days x 52 weeks x 5 nurses = 43,680 nurse hours).  You contract for those on a FFP basis.  The cost for nurses is $100/hour.

  • 001 / NURSE SERVICES  / 52 / WK / $84,000 / $4,368,000
    FIRM-FIXED-PRICE
    THE CONTRACTOR SHALL CONSISTENTLY AND CONTINUALLY STAFF THE FACILITY WITH FIVE NURSES FOR EVERY HOUR OF EVERY DAY, 24x7.  THE NURSES WILL PROVIDE ALL APPROPRIATE CARE ACCORDING TO GOVERNMENT PHYSICIAN INSTRUCTIONS, THE NURSING MANUAL, AND BEST NURSING PRACTICE.  FOR EACH WORK SHIFT, ONE NURSE WILL BE DESIGNATED BY THE CONTRACTOR AS THE CHIEF NURSE.  NO NURSE MAY WORK HOURS IN EXCESS OF THAT ALLOWED BY THE STATE GUIDE FOR NURSE SCHEDULING.  ALL CARE SUPPLIES WILL BE PROVIDED BY THE GOVERNMENT.

We don't want the contractor's best effort for provide nurses, and we don't allow the contractor to determine how many nurses to send for any day of the week, so we don't do this labor hour.  We know the need, and we insist that the contractor perform as promised, so we do this FFP.  If a scheduled nurse is sick, the contractor provides a replacement.  If a scheduled nurse has to attend training, the contractor provides a replacement.  Five nurses always, no excuses -- if the number on duty ever drops to four, the contractor is in default.  Some days and some shifts will have more work than others, so sometimes nurses will be busy and sometimes they will be bored, but the contractor input is constant -- five nurses.  This is a simple example for fixed staffing.  If we need for staffing to float, we can add a surge CLIN, still FFP, with estimated hours.

  • 002 / SURGE NURSE SERVICES  / 1,000 / HR / $150 / $150,000
    FIRM-FIXED-PRICE - QUANTITIES ARE ESTIMATES; THE GOVERNMENT WILL PAY ONLY FOR HOURS ACTUALLY ORDERED
    THE GOVERNMENT'S HOSPITAL DIRECTOR OR DESIGNEE MAY ORALLY ORDER SURGE NURSE SERVICES WITH 12-HOUR ADVANCE NOTICE TO THE CONTRACTOR.  ANY ORDER WILL BE FOR A MINIMUM OF ONE NURSE FOR A MINIMUM OF EIGHT HOURS.  THE NURSES WILL PROVIDE ALL APPROPRIATE CARE ACCORDING TO GOVERNMENT PHYSICIAN INSTRUCTIONS, THE NURSING MANUAL, AND BEST NURSING PRACTICE.  NO NURSE MAY WORK HOURS IN EXCESS OF THAT ALLOWED BY THE STATE GUIDE FOR NURSE SCHEDULING.  ALL CARE SUPPLIES WILL BE PROVIDED BY THE GOVERNMENT.

Note that the unit here is HR, but this is not a LH construct -- this is a FFP construct.  The contractor MUST provide the ordered hours, and is in default if it does not.  This is not an option CLIN; rather, it is a funded CLIN since the general rule is to fund to the estimate.  These nurse hours are more expensive because there is more risk to the contractor.

This is just a sample; there are other ways to meet the need with a FFP approach.

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@Krimz, the FAR's coverage of what constitutes personal services is notoriously misleading. I think you may have been misled. I know I was misled in the past. I remember gearing up for the same battle that you were considering.

Both the SARA Panel and the Section 809 Panel dedicated parts of their final reports to the issue of personal services and the need to clarify FAR 37.104. I suggest you read the relevant sections of both reports. A service can check all of the boxes in FAR 37.104 and not create an employer-employee relationship. An agency can decide to award a service contract instead of hiring a federal employee and not create an employer--employee relationship. A COR can assign work to a contractor employee and not create an employer-employee relationship.

Read the cases referenced in the reports I cited before concluding that your agency has been contracting for personal services. You may be surprised.

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1 hour ago, Don Mansfield said:

@Krimz, the FAR's coverage of what constitutes personal services is notoriously misleading. I think you may have been misled. I know I was misled in the past. I remember gearing up for the same battle that you were considering.

Both the SARA Panel and the Section 809 Panel dedicated parts of their final reports to the issue of personal services and the need to clarify FAR 37.104. I suggest you read the relevant sections of both reports. A service can check all of the boxes in FAR 37.104 and not create an employer-employee relationship. An agency can decide to award a service contract instead of hiring a federal employee and not create an employer--employee relationship. A COR can assign work to a contractor employee and not create an employer-employee relationship.

Read the cases referenced in the reports I cited before concluding that your agency has been contracting for personal services. You may be surprised.

Thanks, Don.  I’ll definitely check those out.

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