Overview
This section establishes the foundational terminology for FAR Part 37, defining the scope of service contracts and the specific labor categories and pricing mechanisms used in their execution. It primarily distinguishes service-based efforts from supply-based acquisitions and provides a methodology for calculating labor rates when uncompensated overtime is involved.
Key Rules
- Service Contract Criteria: Defined as a contract where the primary purpose is the performance of identifiable tasks rather than the delivery of a physical end item.
- Nonpersonal Services: Mandates that contractor personnel must not be subject to the supervision or control typically found in a government-employee relationship.
- Uncompensated Overtime (UCO) Calculation: Establishes a specific formula to normalize labor rates: (Hourly Rate for a 40-hour week × 40) ÷ (Total Proposed Hours).
- UCO Scope: Applies exclusively to employees exempt from the Fair Labor Standards Act (FLSA) who work more than 40 hours per week without additional pay.
- Broad Application: Lists nine specific categories ranging from routine maintenance and housekeeping to specialized architect-engineering and research and development services.
Practical Implications
- Contracting Officers use these definitions to ensure that service contracts do not inadvertently become "personal services contracts," which would violate civil service laws regarding the proper supervision of federal employees.
- The adjusted hourly rate formula allows the government to perform "apples-to-apples" price evaluations when competing contractors propose different work-week structures (e.g., one bidder proposing a standard 40-hour week versus another proposing a 45-hour week for the same salary).