FAR Part 37 Flashcards
Service Contracting
Part 37
Service Contracting
Overview of FAR Part 37 - Service Contracting
Purpose: Establishes policies and procedures for acquiring services by
contract (FAR 37.000).
Key Sections:
37.1 Service Contracts—General
37.2 Advisory and Assistance Services
37.3 Dismantling, Demolition, or Removal of Improvements
37.4 Nonpersonal Health Care Services
37.5 Management Oversight of Service Contracts
37.6 Performance-Based Acquisition
Part 37 - Service Contracting
Subpart 37.1 - Service Contracts—General
Purpose: Provides general policies and procedures for service
contracts (FAR 37.101).
Key Features:
Defines service contracts and their unique characteristics (FAR 37.102).
Emphasizes the importance of clear, performance-based work statements (FAR 37.103).
Part 37 - Service Contracting
Subpart 37.2 - Advisory and Assistance Services
Purpose: Establishes policies for acquiring advisory and assistance
services (FAR 37.201).
Key Features:
Criteria for selecting advisory and assistance services (FAR 37.202).
Guidelines for managing and overseeing these services to ensure effectiveness (FAR 37.203)
Part 37 - Service Contracting
Subpart 37.3 - Dismantling, Demolition, or Removal of Improvements
Purpose: Provides guidelines for contracts involving dismantling, demolition, or removal of improvements (FAR 37.301).
Key Features:
Procedures for planning and executing these types of contracts (FAR 37.302).
Safety and environmental considerations to ensure compliance and minimize risks (FAR 37.303).
Part 37 - Service Contracting
Subpart 37.4 - Nonpersonal Health Care Services
Purpose: Establishes policies for acquiring nonpersonal health care
services (FAR 37.401).
Key Features:
Defines nonpersonal health care services and their application in federal
contracts (FAR 37.402).
Guidelines for ensuring quality and compliance in health care service contracts (FAR 37.403).
Part 37 - Service Contracting
Subpart 37.5 - Management Oversight of Service Contracts
Purpose: Provides guidelines for the management and oversight of
service contracts (FAR 37.501).
Key Features:
Policies for effective oversight and management of service contracts to ensure
performance (FAR 37.502).
Procedures for monitoring and evaluating contractor performance (FAR 37.503).
Part 37 - Service Contracting
Subpart 37.6 - Performance-Based Acquisition
Purpose: Promotes the use of performance-based acquisition (PBA)
methods for service contracts (FAR 37.601).
Key Features:
Criteria for developing performance work statements and quality assurance plans
(FAR 37.602).
Benefits of using PBA to achieve better performance and value (FAR 37.603).
Performance-based acquisition is the
preferred method for acquiring services.
Use performance-based acquisition methods
to the maximum extent practicable, except for architect-engineer, construction, utility
services, or services that are incidental to supply purchases.
Policy for Performance-Based Acquisition
The order of precedence is:
1 A firm-fixed price performance-based contract or task order
2 A performance-based contract or task order that is not firm-fixed price
3 A contract or task order that is not performance-based
“Personal”and”Nonperonal” Services
Personal services contract
A contract under which the personnel rendering the services are subject, either by the contract’s terms or by the manner of its administration, to the supervision and control usually prevailing in relationships between the government and its employees
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.
Agencies shall not award personal services contracts unless specifically authorized by statute (e.g., 5 U.S.C.3109) to do so.
Contract Extensions
In order to avoid negotiation of short extensions to
existing contracts, the contracting officer may include an option clause at 52.217-8 in solicitations and contracts which will enable the government to require
continued performance of any services within the limits and at the rates specified in the contract.
The Service Contract Labor Standards
statute
provides for minimum wages and fringe benefits as well as other conditions of
work under certain types of service contracts.
Advisory and assistance services
Those services provided under contract by nongovernmental sources to support or improve organizational policy development, decision-making, management and administration, program and/or project management and administration, or research and development activities
The furnishing of professional advice or assistance rendered to improve the effectiveness of federal management processes or procedures (including those of an engineering and technical nature)
Agencies may contract for advisory and assistance services to:
Obtain outside points of view to avoid limited judgment
Obtain advice on developments in industry, university, or foundation research
Obtain the opinions, special knowledge, or skills of noted experts
Develop alternative solutions to complex issues
Support and improve the operation of organizations
Ensure efficient or effective operation of managerial or hardware systems
Contracts for dismantling, demolition, or removal of improvements are subject
to either the Service
Contract Labor Standards statute (Service Contract Act)
or the Construction Wage Rate Requirements
statute (Davis-Bacon Act).
If the contract is solely for dismantling, demolition, or removal of improvements, the Service Contract Labor Standards statute applies unless further work which will result in the
construction, alteration, or repair of a public building or public work at that location is contemplated.
Key Elements of Performance-BasedContracts
Performance-based contracts for services shall include:
A performance work statement
(PWS)
Measurable performance standards and method of
assessing performance
Performance
incentives, where appropriate
NONPERSONAL SERVICES CONTRACT:
A contract under which the personnel rendering the services are not subject, either by the contract’s terms or by the manner of its administration, to the supervision and control usually prevailing in relationships between the government and its employees.
SERVICE CONTRACT:
A contract that directly engages the time and effort of a contractor whose primary purpose is to perform an identifiable task rather than to furnish an end item of supply.
A service contract may be either a nonpersonal or personal contract.
Agencies shall generally rely on the private sector for commercial services. Agencies shall not award a contract for the performance of an inherently governmental function.
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 proceduresrequired 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.
An employer-employee relationship under a service contract occurs when,
as a result of either the contract’s terms or the manner of its administration during performance, contractor personnel are subject to the relatively continuous supervision and control of a government officer or employee.
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?
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.
The sporadic, unauthorized supervision of only one of many 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.
The following descriptive elements should be used as a guide in assessing whether a proposed contract is personal in nature:
Performance on the government’s site;
Principal tools and equipment furnished by the government;
Services are applied directly to the integral effort of agencies or an organizational subpart in furtherance of an assigned function or mission;
Comparable services meeting comparable needs are performed in the same or similar agencies using civil service personnel;
The need for the type of service provided can reasonably be expected to last beyond one year; and
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
Adequately
protect
government’s interest;
the
Retain control of the function involved; or
duly authorized federal officer or employee.
Retain full personal responsibility for the function supported in
The head of an executive agency, except NASA,
may contract for severable services for a period that begins in one fiscal year and ends in the next fiscal year if the term does not exceed one year.
Award of contracts for recurring and continuing service requirements are often delayed due to circumstances beyond the control of contracting officers. Examples of circumstances causing such delays are
bid protests and alleged mistakes in bid.
To avoid negotiation of short extensions to existing contracts, the contracting officer may include an option clause at FAR 52.217-8 in solicitations and contracts that will enable the government to require continued performance of any services within the limits and at the rates specified in the contract.
However, these rates may be adjusted only because of revisions to prevailing labor rates provided by the Secretary of Labor. The option provision may be exercised more than once, but the total extension of performance thereunder shall not exceed six months.
Contracting officers must ensure that the uncompensated overtime
in contracts to acquire services based on the number of hours provided will not degrade the level of technical expertise required to fulfill the government’s requirements.
When acquiring these services, contracting officers must conduct a risk assessment and evaluate, for award on that basis, any proposals received that reflect factors such as unrealistically low labor rates or unbalanced distribution of uncompensated overtime among skill levels and its use in key technical positions.
The acquisition of advisory and assistance
services
is a legitimate way to
improve government services and operations
Accordingly, advisory and assistance services may be used at all organizational levels to
help managers achieve maximum effectiveness or economy in their operations.
Examples of appropriate uses include obtaining outside points of view to avoid limited judgment on critical issues; obtaining advice regarding developments in industry, university, or foundation research; and obtaining the opinions, special knowledge, or skills of noted experts. It is also useful to enhance the understanding of and develop alternative solutions to complex issues.
From a managerial perspective it can support and improve the operation of organizations or ensure more efficient or effective operation of managerial or hardware systems.
Contracts for dismantling, demolition, or removal of improvements are subject to either the Service Contract Labor Standards statute (formerly Service Contract Act) or the Construction Wage Rate Requirements statute (formerly Davis-Bacon Act).
If the contract is solely for dismantling, demolition, or removal of improvements, the Service Contract Labor Standards statute applies unless further work that will result in the construction, alteration, or repair of a public building or public work at that location is contemplated.
If such further construction work is intended, even though by separate contract, then the Construction Wage Rate Requirements statute applies to the contract for dismantling, demolition, or removal.
