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by a relatively low contribution in another.

(g) A relatively low degree of costsharing may be appropriate if, in the view of the operating divisions or their subordinate elements, an area of research requires special stimulus in the nati al interest.

(h) In the final analysis, the amount of cost participation should reflect the mutual agreement of the parties, provided that it is consistent with any statutory requirements.

335.070-3 Method of cost-sharing.

Cost-sharing on individual contracts may be accomplished either by a contribution of part or all of one or more elements of allowable cost of the work being performed, or by a fixed amount or stated percentage of the total allowable costs of the project. Costs so contributed may not be charged to the Government under any other grant or contract (including allocations to other grants or contracts as part of any independent research and development program). (49 FR 14020, Apr. 9, 1984. Correctly designated at 49 FR 36110, Sept. 14, 1984)

will incorporate the institutional agreement by reference, but will not establish a specific sharing ratio for the individual project. The amount of sharing on any particular project will therefore be left to the discretion of the performing organization, and relatively high contributions on some projects may offset relatively low contributions on other projects, provided that the agreed aggregate contribution is made during each of the contractor's fiscal years, and a contribution, even if nominal, is made to each covered project.

(c) The Public Health Service shall be responsible for negotiating all HHS institutional cost-sharing agreements. Agreements, when negotiated, will be binding upon all HHS activities. Eligible contractors wishing to negotiate institutional cost-sharing agreements should contact the Division of Grants and Contracts, Office of Resource Management, Public Health Service, Room 18 A 19, Parklawn Building, 5600 Fishers Lane, Rockville, Maryland 20857.

(1) All necessary implementing instructions to cover matters such as content of proposals, format of agreements, documentation, etc. shall be issued by the Public Health Service, subject to the prior approval of the Office of Acquisition and Grants Management.

(2) The Public Health Service shall provide the Office of Acquisition and Grants Management, and the Department's operating divisions with current listings of all institutional costsharing agreements, indicating the date on which they became effective with respect to contracts. Copies of individual agreements will be made available to the Department's other activities upon request. Each activity shall designate only one individual who shall be authorized to make such requests.

(d) The amount of cost-sharing negotiated under an institutional cost-sharing agreement will be determined in accordance with the appropriate guidelines contained in "A Guide to Institutional Cost Sharing Agreements” issued by the Office of Resource Management, PHS. The extent to which the performing organization shared in the costs of HHS-sponsored research in the

335.070-4 Institutional cost-sharing

agreements. (a) An institutional cost-sharing agreement covers the aggregate of some or all of the research projects supported by HHS research contracts and grants at a given performing organization. With respect to contracts, these agreements will apply only to cost-sharing type contracts resulting from unsolicited proposals and awarded without fee or profit. Eligibility for institutional cost-sharing agreements is limited to nonprofit institutions of higher education and other public or private nonprofit or not-for-profit organizations. Usually, a single agreement will cover all applicable research projects at a given performing organization; however, in unusual cases, separate agreements for individual departments or locations of the performing organization may be negotiated if deemed advantageous.

(b) The institutional cost-sharing agreements establish an overall sharing ratio applicable to the aggregate of all covered projects. Individual awards

past, and its anticipated ability to do so in the future, should also be taken into account. (49 FR 14020. Apr. 9, 1984, as amended at 54 FR 24344, June 7, 1989)

subpart will apply to the extent that the furnishing of services is involved. Other examples of service contracts include training and education, surveys and data collection, data processing, medical services, and stenographic services.

335.0705 Contract clauses.

Clauses for cost sharing in individually negotiated contracts or under institutional agreements are set forth in 352.232–71.

335.070-6 Contract award.

In consonance with the Department's objectives of competition and support of the small business program, award of contracts should not be made solely on the basis of ability or willingness to cost-share. Awards should be made primarily on the contractor's competence and only after adequate competition has been obtained among large and small business organizations whenever possible. The offeror's willingness to share costs should not be considered in the technical evaluation process but as a business consideration, which is secondary to selecting the best qualified

337.103 Contracting officer respon

sibility. (b) Contract actions for the services of experts and consultants are also exempt from the requirements of FAR Part 37.103(a)(3); they are to be certified in accordance with the provisions in General Administration Manual Chapter 8–15.

(c) For negotiated acquisitions, the determination shall be included as a statement in the negotiation memorandum. For sealed bid acquisitions, the determination shall be included as a separate statement in the contract file.

(d) In most cases, gathering the information and data on which to base the determination should be a joint effort between contracting and program personnel. The contracting officer shall request the advice of the Office of General Counsel and/or the personnel office before processing any request to acquire services if there is doubt as to whether an employer-employee relationship would be involved in performance of the contract. [49 FR 14022, Apr. 9, 1984, as amended at 50 FR 23126, May 31, 1985; 50 FR 38004, Sept. 19, 1985)



Subpart 337.1-Service Contracts


Sec. 337.101 Definitions. 337.103 Contracting officer responsibility. 337.104 Personal services contracts. 337.109 Services of quasi-military armed


Subpart 337.2-Consulting Services 337.204 Policy. 337.270 Consulting services reporting.

AUTHORITY: 5 U.S.C. 301; 40 U.S.C. 486(c).

SOURCE: 49 FR 14022, Apr. 9, 1984, unless otherwise noted.

337.104 Personal services contracts.

(a) As indicated in FAR 37.104, the paramount consideration in determining if an employer-employee relationship exists is the presence of direction or supervision by Government personnel of contractor employees, as a result of either the inherent nature of the service or the manner in which the service is provided. A personal service relationship exists if this direction or supervision is necessary to:

(1) Adequately protect the Government's interest;

(2) Retain control of the function involved; and/or

(3) Retain full personal responsibility by a duly authorized Federal officer or employee for the function supported.

Subpart 337.1-Service


337.101 Definitions.

Service contract. A contract may require the furnishing of both property and services, such as a research and development contract which requires a final report. In a case such as this, this

(c)(2) The degree of supervision nec- deny security clearances, and provide essary to establish an employer-em- for necessary health qualifications). ployee relationship is relatively con- (Also, it is permissible for the Governtinuous, close supervision. Sporadic su- ment to specify the technical and expepervision is not sufficient to constitute rience qualifications of contractor eman employer-employee relationship. (In ployees, if this is necessary to assure determining whether the Government satisfactory performance.); rather than the contractor exercises (ii) To what extent the Government "relatively continuous, close super- can assign tasks to, and prepare work vision” of contractor personnel, the schedules for, contractor employees fact that an engineer, for example, may during performance of the contract. require less supervision and may exer- (This does not preclude inclusion in the cise more independence of judgment contract of work schedules for the conthan a food service worker is not itself tractor—but not individual employdeterminative. If the Government ees or the establishment of a time of takes over that degree of supervision performance for orders issued under a that the contractor would otherwise requirement or other indefinite delivexercise over either individual, the re- ery-type contract.); lationship created between the Govern- (iii) To what extent the Government ment and either individual is tanta- can supervise or control the method in mount to that of employer and em- which the contractor performs the ployee.)

service, the number of people that will (d) The likelihood of the existence of be employed, the specific duties of indian employer-employee relationship in- vidual employees, and similar details. creases as the number and extent of (However, it is permissible to require the elements in FAR 37.104(d) in- that contractor employees comply with creases. However, the mere existence of regulations for the protection of life these elements does not constitute an and property. Also, it is permissible to employer-employee relationship unless recommend a specific number of people continuous, close supervision exists. In the contractor may employ, if this is determining the presence of the ref- necessary to assure performance; but erenced elements, relevant factors in- in that event, the contract must specicluding the following shall be consid- fy that this does not in any way miniered:

mize the contractor's obligation to use (1) The nature of the work. (i) If the as many employees as are necessary for Government can use Federal personnel proper contract performance.); to perform the required work, or if the (iv) If the Government can review Government has rights to the special- performance of each individual conized knowledge or equipment which is tractor employee (as opposed to reneeded to perform the work;

viewing the final product after comple(ii) Whether the services represent tion of the work.); and/or the discharge of a Government func- (v) If the Government has the right tion which calls for the exercise of per- to have contractor employees removed sonal judgment and discretion on be- from the job for reasons other than half of the Government (This factor, if misconduct or security. present in sufficient degree, may alone (3) Other provisions of the contract. (i) render the service personal in nature.); Whether the contractor undertakes a and/or

specific task or project that is defin(iii) If the services are to be a one- able either at the inception of the contime occurrence (or a continuing re- tract or at some point during performquirement of short term duration). ance, or whether the work is defined on

(2) Contractual provisions concerning a day-to-day basis. (However, this does the contractor's employees. (i) To what not preclude use of a requirement or extent the Government specifies the other indefinite delivery-type contract, qualifications of, or has the right to provided the nature of the work is speapprove, individual contractor employ- cifically described in the contract, and ees (other than the Government's right orders are formally issued to the conto approve or disapprove new key per- tractor rather than to individual emsonnel, remove key personnel, grant or ployees.);


(ii) Whether payment will be for re- (ii) A contract with an individual for sults accomplished or solely according delivery of lectures without Governto time worked. (This is a factor which ment supervision (even if they are to might be useful in a doubtful case, but be given on specific dates, or on speshould not in itself create doubt about cialized subjects, or if payment will be services which are otherwise clearly by the hour). nonpersonal.); and/or

(iii) A fixed price contract for jani(iii) Whether Government office or

torial services which provides for speworking space, facilities, equipment,

cific tasks to be performed in specific and supplies will be used for contract places, free of Government direction, performance. (This is a factor which

supervision, and control over the conmight be useful in a doubtful case, but

tractor's employees. should not in itself create doubt about

(iv) A research and development conservices which are otherwise clearly

tract providing for a level of effort nonpersonal.). (4) Administration of the contract. (i) If

which will be performed by the concontractor employees are used inter

tractor independent of Government dichangeably with Government person

rection, supervision, and control. nel; and/or

337.109 Services quasi-military (ii) If contractor employees are inte

armed forces. grated into the Government's organizational structure.

As distinguished in FAR 37.109, SO(e) and (1) Reserved.

licitations for protective services shall (8) The following are examples of per- include the following certification: sonal and nonpersonal services, but are

The bidder/offeror certifies it is not a deillustrative only and are not to be used tective agency, nor an employee of such as the basis for determination in any

agency as contemplated by 5 U.S.C. 3108. specific case.

(1) The following are examples of per- Subpart 337.2-Consulting sonal services contracts:

Services (i) A contract to furnish ordinary, day-to-day, stenographic and secretar

337.204 Policy. ial services in a Government office under direct Government supervision.

General Administration Manual (ii) A contract for the testing of a

Chapter 8-15 prescribes policies and substance where the project officer vis

procedures concerning approvals reits the contractor's facility several

quired before contracting for expert or times each week to consult with the

consulting services. principal investigator, review data,

(e) Services of experts or consultants specify methods of quality control, may be acquired by contract only specify testing to be done, and provide when: instruction to investigators.

(1) The services will be non personal (iii) A contract for the performance in nature, are critical to the planning, of a function which management must development, operation, or evaluation perform in order to retain essential of a Department program, cannot be control over the conduct of agency pro- accomplished by Government employgrams (e.g., negotiating contract ees, and are economically available amounts).

from the private sector, or (2) The following are examples of (2) The performance of the work by a nonpersonal services contracts:

consultant is directed by statute. (i) A contract for technical assistance work requiring specialized equip 337.270 Consulting services reporting. ment and trained personnel unavail

The clause set forth in 352.237–70 shall able to the Government. The contrac

be included in every contract for expert tor performs work described in the contract free of Government supervision,

or consulting services. and does not act on behalf of the Government.

PART 339—MANAGEMENT, ACQUI- required to designate a responsible inSITION, AND USE OF INFORMA

dividual to serve as the ADP system TION RESOURCES

manager who is to ensure, in coordina

tion with the cognizant systems secuSubpart 339.70-ADP Clearances and

rity officer, that ADP security require

ments are met and that each contracSystems Security

tor maintains an acceptable security Sec.

program. The project officer is respon339.7001 ADP Clearances.

sible for setting forth the specific por339.7002 ADP systems security.

tions of Part 6, ADP Systems Security, AUTHORITY: 5 U.S.C. 301; 40 U.S.C. 486 (c).

of the HHS IRM Manual which are apSOURCE: 49 FR 14023, Apr. 9, 1984, unless

plicable to the instant acquisition. otherwise noted.

(b) Contracting responsibilities. (1) The

contracting officer is responsible for Subpart 339.70-ADP Clearances

ensuring that a certification of ADP and Systems Security

systems security requirements, signed

by both the ADP system manager and 339.7001 ADP clearanres.

the ADP systems security officer, is

submitted with the request for conIn accordance with Chapter 410 of

tract. The contracting officer shall not the HHS Information Resources Man

initiate action on the request for conagement (IRM) Manual, the Office of Information Resources Management

tract until the properly executed cer

tification is received. The certification (OIRM), OASMB-OS, is responsible for

will state that the security requirethe review and approval of all requests

ments specified are reasonably suffifor proposed automatic data processing

cient for the intended application and (ADP) systems and modifications to ex

that they comply with current Federal isting ADP systems which require the

and HHS computer security policies, acquisition of ADP hardware, software

procedures, standards, and guidelines. packages, and services, and tele

(2) When developing the request for communications equipment, which ex

proposals, the contracting officer shall ceed the dollar thresholds stated in

include in the technical proposal inChapter 4-10.

structions a statement requiring that (a) It is the responsibility of the pro

the offeror present a detailed outline of gram office to obtain written approval

its proposed ADP system security profrom OIRM on proposed ADP acquisi

gram which complies with the requiretions which exceed the thresholds stat

ments of the statement of work and ap ed in Exhibit 4-10-A of Chapter 4-10

plicable portions of Part 6, ADP Sysprior to submitting the request for con

tems Security, of the HHS IRM Mantract to the contracting activity.

ual. (b) The OIRM approval document

(3) The contracting officer shall in(delegation of procurement authority

clude a special provision reading sub(DPA)) is to be attached to the request

stantially as follows in all applicable for contract when it is submitted by

solicitations and resultant contracts: the program office to the contracting activity. The contracting activity shall

The Contractor agrees to comply with the not issue a solicitation based on the re

ADP system security requirements set forth quest for contract until a properly exe

in the system of work and applicable por

tions of Part 6, ADP Systems Security, of cuted approval document (DPA) is ob

the HHS IRM Manual. The Contractor furtained.

ther agrees to include this provision in any (49 FR 14023, Apr. 9, 1984, as amended at 53

subcontract awarded pursuant to this prime FR 43208, Oct. 26, 1988)


(4) The contracting officer shall en339.7002 ADP systems security.

sure that a properly executed certifi(a) Program responsibilities. Whenever cation confirming that the offerors a proposed contract action requires the comply with the necessary security redesign, development, maintenance, or quirements is attached to the technical use of an ADP system or the use of evaluation report received from the ADP resources, the program office is evaluation panel before proceeding

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