237.104

Personal services contracts.

(b) Also see 237.104(S-70)(b) for additional authority required by Defense activities for use of 5 U.S.C. 3109.

(S-70) Procurement of the personal services of experts or consultants.

(a) Scope. This subsection sets forth policy and procedures for the procurement by contract, pursuant to 5 U.S.C. 3109, of the personal services of individual experts or consultants (including stenographic reporting services) from individuals and from firms, regardless of the terms of contract arrangements or whether with an individual expert or consultant or a firm employing such individuals. This subsection does not govern employment of individual experts or consultants by excepted appointment: The requirements for such employment are set forth in the Federal Personnel Manual, Chapter 304, "Employment of Experts and Consultants" and the regulations of the respective Departments. In addition, this subsection does not govern policy and procedures for advisory committees and their membership; the requirements for ad

visory committees are set forth t OMB Circular A-63, "Review of Feder al Advisory Committees". Expert a consultant services as used in this subsection involve personal services contracts issued pursuant to 5 U.S.C. 310 and may also involve "consulting" services subject to FAR 37.2 and 237.270 of this supplement.

(b) Statutory authority.

(1) Authority for the procurement by contract of the personal services of experts and consultants is found in i U.S.C. 3109, as implemented by annual appropriation acts or by other legisla tion. Most contracts for expert or con sultant services are executed by the Departments pursuant to the author ity contained in the General Prov sions of the Annual Department of Defense Appropriation Act.

(i) 5 U.S.C. 3109 provides:

(a) For the purpose of this section(1) "Agency" has the meaning given it by section 5721 of this title; and

(2) "Appropriation" includes funds made available by statute under section 849 of Title 31.

(b) When authorized by an appropriation or other statute, the head of an agency may procure by contract the temporary (not excess of 1 year) or intermittent services f experts or consultants or an organization thereof, including stenographic reporting services. Services procured under this se tion are without regard to

(1) The provisions of this title governing appointment in the competitive service; (2) Chapter 51 and Subchapter III Chapter 53 of this title; and

(3) Section 5 of Title 41, except in the case of stenographic reporting services by an or ganization. However, an agency subject to Chapter 51 of Subchapter III of Chapter 53 of this title may pay a rate for services under this section in excess of the daily equivalent of the highest rate payable under section 5332 of this title only wher specifically authorized by the appropriation or other statute authorizing the procure ment of the services.

(ii) Typical of the language which is enacted each year in the General Pro visions of the Department of Defense Appropriation Act implementing U.S.C. 3109 in section 703 of the Act of December 21, 1979 (Pub. L. 96-154; 93 Stat. 1139), which provides:

During the current fiscal year, the Secre tary of Defense and the Secretaries of the Army, Navy and Air Force, respectively, if

they should deem it advantageous to the national defense, and if in their opinions the existing facilities of the Department of Defense are inadequate, are authorized to procure services in accordance with section 3109 of Title 5, United States Code, under regulations prescribed by the Secretary of Defense, and to pay in connection therewith travel expenses of individuals, including actual transportation and per diem in lieu of subsistence while traveling from their homes or places of business to official duty stations and return as may be authorized by law: Provided, that such contracts may be renewed annually.

(2) Contracts with individuals or firms for the personal services of experts or consultants are usually negotiated on a sole source basis under the authority of 10 U.S.C. 2304(c)(1), as implemented by FAR 6.302-1.

(c) Definition of experts and consult

ants.

(1) The terms "experts" and "consultants" shall include those persons who are exceptionally qualified, by education or by experience, in a particular field to perform some specialized service. For the purpose of this subsection, an "expert" is an individual who is a recognized professional or highly skilled practitioner normally used to perform an operating function rather than to provide advisory or consulting services. A "consultant" is an individual who primarily serves in an advisory capacity in a particular field, rather than in the performance or supervision of an operating function (or functions). Depending on how they are used individuals may be either experts or consultants.

(2) Stenographic reporting services by individuals is included in the term "expert or consultant services" for purposes of procurement by contract under this subsection.

(d) Policy. The proper use of experts and consultants is a legitimate and economical way to improve Government services and operations. Activities of the Departments can be strengthened by utilizing the highly specialized knowledge and skills of such individuals. However, the personal services of experts and consultants shall not be used to perform duties which can be performed by regular employees, to fill positions which call for full-time continuing employees, or to circum

vent competitive civil service procedures and Classification Act pay limits.

(e) Limitations on use of expert or consultant authority. Obtaining the personal services of individual experts or consultants by contract, pursuant to 5 U.S.C. 3109, is subject to the following limitations:

(1) The employment of individual experts or consultants shall be by contract only when the services required cannot be obtained by excepted appointment in accordance with personnel regulations.

(2) The nature of the duties to be performed must be temporary (not more than one year) or intermittent (not cumulatively more than 130 days in one year). Accordingly, no contract shall be entered into for longer than one year at a time.

(3) Procurement of the services must be advantageous to the national defense.

(4) Such services shall not be used when existing facilities of the particular Department are adequate or when personnel with the necessary skills can be obtained through normal civil service appointment procedures.

(5) Procurement of such services by contract shall not be used as a means of circumventing manpower space ceilings.

(6) Preference shall not be given to former Government employees per se. (7) Consultant services shall not under any circumstances be used to specifically aid in influencing or enacting legislation.

(f) Contracts crossing fiscal years. Because the implementing appropriation act authorizing the procurement of expert and consultant services expires and must be renewed each fiscal year, a contract under this authority shall not cross fiscal years-even in cases where funds could properly be obligated to a contract calling for serv ices in parts of two fiscal years-unless it calls for an end product which cannot feasibly be subdivided for separate performances in each fiscal year. No contract shall cross fiscal years unless authorized to do so in accordance with 237.104(S-70)(g). This paragraph shall apply equally to personal

services contracts with individuals and with firms.

(g) Authorization to enter into contracts: "Determinations and findings”. (1) All contracts to be entered into pursuant to 5 U.S.C. 3109 for the personal services of experts or consultants must be authorized in writing by a Determinations and Findings (D&F) signed in accordance with Departmental regulations. Ordinarily each contract shall be separately authorized. However, when the determinations can appropriately be made with respect to a class of contracts, the authorizing official may issue blanket authority for that class of contracts by signing a class D&F.

(2) Each D&F shall authorize a contract or class of contracts to be entered into during a stated period not to exceed one year, which ordinarily shall be within one fiscal year. A D&F may be issued during one fiscal year to authorize a contract or class of contracts to be entered into during the following fiscal year, provided the determinations are reasonably expected

to hold true at the time the contract

or contracts are to be entered into and provided that either the D&F is made contingent upon enactment of implementing legislation or implementing legislation of the next fiscal year has already been enacted.

(3) Each D&F shall contain the following:

(i) A brief description of the services authorized to be procured, including for individual D&Fs the estimated time of performance and the estimated cost;

(ii) A determination by the authorizing official with respect to the particular contract or class of contracts that: (A) The duties to be performed are of a temporary or intermittent nature; (B) Procurement of the services is advantageous to the national defense; (C) The existing facilities of his Department are inadequate to furnish the services;

(D) It is not feasible to obtain personnel with the necessary skills through normal civil service appoint ment procedures;

(E) A nonpersonal services contract is not practicable; and,

(F) Any other determination required by applicable statutes has been made;

(iii) A citation of statutory authority, namely 5 U.S.C. 3109 and (except where (vii) below, is applicable) appropriate implementing legislation; the latter may be the current annual Department of Defense Appropriation Act, a current temporary Department of Defense appropriation enactment. or other appropriate legislation:

(iv) A grant of authority to procure the required services and, if desired to extend the contract;

(v) The condition that the necessary funds must be available for obligation.

(vi) The condition that no contract may be entered into for longer than one year at a time;

(vii) An added condition, in cases where the D&F covers a period for which implementing legislation has not yet been enacted, that at the time the procurement is entered into there must be in effect a law authorizing the procurement pursuant to 5 U.S.C. 3109 and requiring no further Secretarial action than that required by the implementing legislation current at the time the D&F is issued;

tion to contract across fiscal years (see (viii) Where appropriate, authoriza237.104-(S-70)(f)), and in such cases, where the implementing authority cited is annual legislation, an added condition that in the event the implementing authority is not renewed for the following fiscal year the contracting officer shall terminate the contract in accordance with its terms; and (ix) The date of expiration of the authority granted by the D&F.

(h) Requests for determinations and findings. Requests for authorization to procure the personal services of experts or consultants/pursuant to 5 U.S.C. 3109, whether from individuals or from firms, must contain statements required by Departmental regulations to support the determinations. The responsibilities of the various organizational levels in the Departments with respect to requests for D&Ps are also set forth in Departmental regula

tions.

(1) Contracts with individual experts or consultants.

(1) Method and amount of payment. The contract may provide for compenation at rate for time actually worked e.g., amount per day, per week, per nonth, etc.) or it may provide for perormance of a specific task at a fixed price, or it may provide for nominal ompensation. The amount or rate of ayment will be determined on a caseby-case basis, taking into account among any other relevant factors) he relative importance of the duties o be performed, the stature of the inividual in his specialized field, compaable pay positions under the Classifiation Act or other Federal pay sysems, rates paid by private employers, nd rates previously paid other exerts or consultants for similar work. Compensation for personal services is ubject to the limitation in 237.104-(S(0)(1).

(2) Benefits. When an individual xpert or consultant is furnishing peronal services and the contract proides for a regularly scheduled tour of uty during each administrative work week, the contract shall also provide hat the contractor will be accorded he same paid annual and sick leave enefits as those to which he would be ntitled under Departmental personel regulations if he were employed by xcepted appointment during the eriod of the contract. The contract ay also provide for similar benefits e.g., paid holidays, paid administrave leave), but these shall in no event xceed those to which the individual ould be entitled under excepted apointment. No benefits shall be acorded the contractor which are not pecifically provided for in the written ontract. The contracting officer shall ffect necessary coordination with the ognizant civilian personnel office.

(3) Taxes. When the individual is to ender personal services, the compenation generally is subject to FICA Social Security), FUTA (Unemploynent), and federal income withholding ax. It may also be necessary to report r withhold state income tax under 5 J.S.C. 84b. The contracting officer hall take appropriate steps in coordiiation with the cognizant civilian peronnel office to have deductions and eports made where required by law.

(4) Conflict of interest. The contracting officer shall ensure that individual experts or consultants who are to render personal services under contract familiarize themselves with Executive Order 11222, May 8, 1965, "Prescribing Standards of Ethical Conduct for Government Officers and Employees", 30 FR 6469 (1965), and that they comply with it and with Departmental regulations implementing

it.

(5) Administrative treatment. Individual experts or consultants who are to render personal services under contract are charged against personnel ceilings in the same way as experts and consultants employed by excepted appointment. Also, the cognizant civilian personnel office must maintain certain records on individual experts and consultants who render personal services. Therefore, the contracting officer shall effect necessary coordination with the cognizant civilian personnel office before award of a contract for personal services and may also designate the appropriate personnel office as his representative for the purpose of administering contract provisions relating to benefits, obtaining necessary data from the contractor for tax withholding purposes, and administering applicable conflict of interest provisions.

(j) Contracts with firms for expert or consultant services. When contracts with firms for the services of specified individual experts or consultants are considered to be personal services contracts (see FAR 37.104), payment for the services of each expert or consultant is subject to the guidelines in 237.104(S-70)(i) and the limitations in 237.104(S-70)(e). Contracts with firms for consulting or other management support services, where those services are nonpersonal in nature, are not entered into pursuant to the authority of this subsection and should not specifically address individual compensation by the firm or with any other rights or obligations as between the firm and these individuals, but should deal only with rights and obligations as between the Government and the firm.

(k) Contracts for stenographic reporting services.

(1) Stenographic reporting services normally are provided by regular civilian employees appointed under the usual civil service procedures. However, under certain circumstances these services may be procured by contract from individuals or firms (pursuant to 5 U.S.C. 3109, if personal) as where there are variable requirements or insufficient qualified personnel, and necessity or economy to the Government demand.

(2) Such contracts shall normally be written on an end-product basis and payment made according to delivered items (e.g., number of copies of transcript, words per page, etc.), and the contractor ordinarily shall be required to furnish the necessary materials (typewriter, paper, bindings, etc.).

(3) Contracts for stenographic reporting services may be considered to be for nonpersonal services, and therefore not subject to the provisions of this subsection, Provided that:

(i) They are written in accordance with (b) above;

(ii) They do not involve ordinary. day-to-day stenographic or secretarial services;

(iii) They do not involve direct or indirect Government supervision of contractor employees; and

(iv) They involve temporary or intermittent requirements.

(1) Limitation on payment for personal services.

(1) When the personal services of individual experts or consultants are being procured pursuant to 5 U.S.C. 3109, payment of the services of each expert or consultant shall not exceed the highest rate fixed by the Classification Act pay schedules for grade GS-15 or, in the case of professional engineering services primarily involving research and development or professional services involving physical or natural sciences or medicine, the highest rate payable to a GS-18. In addition, the contract may provide for such per diem and travel expenses as would be authorized for a Government employee, including actual transportation and per diem in lieu of subsistence while the expert or consultant is traveling between his home or place of business and his official duty station.

(2) If a fixed-price contract which is predominantly for nonpersonal services also includes personal services, the requirements of (a) above are applica ble to the personal services if it is feasible and practicable to price them separately.

(m) Modification of contracts. When supplemental agreements or change orders are required which substantially change the basis upon which the D&F was made, such as to revise substantially the scope of work or time limitations, or to apply additional funds, authorization shall be requested in the same way as authorization to procure the services by contract in the first place.

(n) Extension of contracts.

(1) A contract may provide for extension-for a maximum of one year each time-by written notification to the contractor from the contracting officer.

(2) A contract shall not be extended unless either a new D&F has been

issued, or the D&F authorizing the original contract (or a prior extension) has not yet expired and specifically authorizes the extension, or an unexpired class D&F covering that type of contract is in effect, (also see 237.104(S-70)(1)).

(3) Extension of a contract legally creates a new contract; therefore, extension of a contract is improper unless all the requirements and limitations of this subsection have been complied with.

(S-71) Acquisition of personal direct health care services.

(a) Scope. This subsection sets forth policy and procedures for the acquisition by contract, pursuant to 10 U.S.C. 1091, of the personal direct health care services from individuals or firms. (Nothing in this subsection precludes the acquisition by contract of nonpersonal health care services or applies to such services.)

(b) Definition of direct health care services. Direct health care services are those services provided by health care providers who participate in clinical patient care and services. Some examples of direct health care providers for the purpose of this subsection are nurses, radiology technicians, dental hygienists, and medical technologists.