3EPA
Classification No.:
Addressee
1901.1A
Approval Date:
4/14/94
EPA ORDER - USE OF CONTRACTOR SERVICES TO AVOID
IMPROPER CONTRACTOR RELATIONSHIPS
1.	PURPOSE. This Transmittal issues EPA Order 1901.1A - Use of
Contractor Services to Avoid Improper Contractor Relationships.
2.	EXPLANATION. This Order provides guidance for Agency employees
to avoid improper contractor relationships in performing contract
management activities.
3.	SUPERSESSION.	EPA Order 1900.1- Use of Contractor
Services.
4.	FILING INSTRUCTIONS. File the attached in a three-ring binder
established for the Agency Directives System.
Ac „	_	„	nch
Originator
EPA Form 1315-12(5-86)
Management and Organization Division
Office of Administration and Resources Management

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lassification No.:
.pproval Date:
1901.1A
4/14/94
USE OF CONTRACTOR SERVICES TO
AVOID IMPROPER CONTRACTING RELATIONSHIPS
1.	PURPOSE. This Order is designed to assist Agency employees to
avoid improper contractor relationships in performing contract
management activities.
2.	BACKGROUND. Past contract management problems identified by
the Office of the Inspector General and the General Accounting
Office have indicated that Agency contracts were not always
administered in accordance with applicable laws, regulations, and
policies. They also identified cases in which insufficient
controls were established to preclude fraud, waste and abuse, and
conflicts of interest, and to safeguard Agency assets.
The Federal Acquisition Regulation (FAR) prohibits personal
services contracts unless specifically authorized by statute.
Personal services contracts circumvent civil service laws, which
require the government to obtain its employees by direct hire in
accordance with Office of Management and Budget ceilings, and
inappropriately augment Agency staff without proper legislative
review.
3.	RESPONSIBILITIES. Contracting Officers (COs) , Project Officers
(POs), Delivery Order Officers (DOOs), Delivery Order Project
Officers (DOPOs) , Work Assignment Managers (WAMs) , Remedial Project
Managers (RPMs) , On-Scene Coordinators (OSCs), Task Managers (TMs) ,
and all other EPA employees are responsible for ensuring that
personal services relationships between Government employees and
contractor personnel are avoided.
4.	DEFINITION. A personal services contract is a contract which,
by its terms or as administered, results in contractor personnel
being subject to relatively continuous supervision and direct
control by a Government official or employee. A personal services
contract is characterized by the employer-employee relationship it
creates between the Government and the contractor's personnel.
These contracts make the contractor personnel appear, in effect, to
be Government employees.
Attached is a list of examples of personal services, which are
provided to further clarify some of these prohibited activities.
(Appendix A)

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EPA ORDER
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5. ASSESSING THE NATURE OF A CONTRACT. FAR Part 37.104(d)
provides the following descriptive elements to be used as a guide
in assessing whether a proposed contract is personal in nature.
These elements can also be used as a guide to determine if the way
in which a contract is administered creates a personal services
contract.
An improper contract relationship may exist if:
a.	Contractor performance is done on site.
b.	Contractor's principal tools and equipment are furnished
by the Government.
c.	Contractor's services are applied directly to the integral
effort of agencies or an organizational subpart in furtherance of
an assigned function or mission.
d.	Comparable services, meeting comparable needs, are
performed in the same or similar agencies using civil service
personnel.
e.	The need for the type of service provided by. the
contractor can reasonably be expected to last beyond one year.
f.	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--
(1)	Adequately protect tfre Government's interest;
(2)	Retain control of the function involved; or
(3)	Retain full personal responsibility for the functior
in a duly authorized Federal officer or employee.
Note: all of these elements need not be present to have an
improper personal services contract. Additionally, having all of
these elements present does not necessarily mean that an improper
personal services contract exists. The key element is whether the
Government exercises continuous supervision and control over the
contractor personnel performing the contract. Each situation must
be reviewed and a determination made on a case-by-case basis.
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EPA ORDER
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As in any contract situation, Agency employees should contact
the CO for advice and guidance whenever they have questions
regarding relationships with contractor personnel. Agency
employees may also contact the Contracts Law Branch, Office of
General Counsel (OGC) for further guidance. Agency employees who
believe that a personal services contract exists should immediately
notify the CO.
6. PRINCIPLES FOR MANAGING A CONTRACT.
a.	The CO is responsible for determining, prior to award,
that the contract does not involve the procurement of personal
services. Even though supervision by Government employees is not
directly required by the terms of the contract, a personal services
contract may evolve through improper contract management. Agency
employees who believe that, through improper contract management,
a contract has evolved into a personal services contract should
immediately notify the CO. The CO will investigate these
situations and take appropriate action to ensure that contracts are
managed to maintain proper contractual relationships.
b.	Technical management of a contractor's performance
generally relates to the manner in which authorized EPA employees
provide work direction to the contractor. Exchange of information
of a technical nature is not prohibited. Appropriate technical
direction is the clarification of ambiguous technical requirements
to ensure efficient and effective contractor performance. Proper
technical direction is not supervision or assignment of tasks to
contractor personnel. In managing the contract, the following
principles should be observed:
(1) Interaction with Contractor Personnel
(a) All contractors:
(i)	The contract shall govern contract
performance. This can best be accomplished with a well-defined
statement of work (SOW), including SOWs in work assignments (WAs),
technical direction documents (TDDs), or delivery orders (DOs),
which reference the authority of the contract.
(ii)	The PO shall notify the CO immediately
if there is a need to change the contract so that the CO can issue
a contract modification.
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EPA ORDER
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(iii)	Unless otherwise provided in the
contract, all work will be initiated by the issuance of WAs or DOs
signed by the CO or if provided, by TDDs signed by the PO. These
will be issued to the contractor's official point(s) of contact as
shown in the contract, e.g., Project or Program Manager (PM) or
Site Manager (SM). Any communication to the contractor's point of
contact shall come from the EPA CO, PO, or his/her authorized
designees, e.g., WAMs, DOOs, DOPOs, RPMs, OSCs, or TMs. Other EPA
employees may not assign tasks unless they have specific authority
to do so. Note: TDDs may only be used to initiate work in
contracts requiring a fully-dedicated contractor team and as
limited by the contract.
(iv)	Technical direction shall be issued in
writing from the PO or authorized designee (with a copy to the CO)
to the contractor's point(s) of contact. If provided orally, the
technical direction must be confirmed in writing within five (5)
calendar days. Technical direction shall not be used to initiate
work or to change WAs or TDDs or the contract. Agency employees
shall not give instructions separately to individual contractor
personnel.
(v)	The PO or designee may authorize
meetings with the contractor's point (s) of contact for the purposes
of exchanging technical information among contractor personnel and
EPA employees or assisting in contract performance, e.g., to
discuss the status or progress of effort under a WA or DO.
Exceptions to the prohibition against direct interaction between an
Agency employee and contractor personnel include: 1) a Government
employee's contacts to the various Agency hotlines and helplines to
request and receive information ahd literature regarding the
Agency's media programs, 2) requests by Government employees for
technical assistance and ADP user support services where the
technical assistance is mandated and monitored under an existing
contract, and 3) participation in discussions at professional
meetings attended by both Government employees and contractor
personnel, which are not in connection with the performance of a
contract.
Examples of ADP user support services are Personal Computer/Local
Area Network (PC/LAN) troubleshooting support, software support, PC
training, data recovery assistance, and disk archiving and other
similar automated data processing (ADP) support as defined in a
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EPA ORDER
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specific contract. These technical services are rendered and the
contract administered through established ADP support offices such
as the Washington Information Center (WIC).
(vi)	Agency employees must not intervene
in a contractor's hiring, firing, or promoting of contractor
personnel; assigning particular employees to specific tasks; or
rewarding individual contractor personnel. Evaluation of
contractor performance, whether positive or negative, shall be
provided through the award fee process, if applicable, or through
the EPA PO to the contractor point (s) of contact. Evaluation shall
relate to the timeliness or quality of deliverables or services
provided, and shall not be directed at the performance of
individual contractor personnel.
(vii)	Agency employees shall not ask
contractors to hire in a "holding pattern, " individuals who may be
candidates for Agency positions, pending completion of competitive
civil service procedures.
(viii)	Agency contracts shall not require or
permit contractors to purchase supplies or services for use by EPA
employees unless specifically required by a contract for its
performance.
(ix)	All requests for corrective or
follow-up actions by contractors shall be directed from the EPA PO
or authorized designee to the contractor point(s) of contact.
Similarly, contractor personnel must operate through the
contractor's point of contact to obtain any information needed to
complete the work.
(x)	Agency employees shall prepare
appropriate documentation for the record of meetings, trips, and
telephone conversations relating to the contract.
(b) Contractors working in EPA facilities only:
(i)	Agency employees must avoid situa-
tions in which one EPA on-site contractor provides support to
another EPA on-site contractor, except when the contract requires
such support to be furnished (e.g., janitorial services or security
services). Similarly, Agency employees shall avoid situations in
which one EPA on-site contractor provides oversight for another EPA
on-site contractor.
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(ii)	Agency employees shall not routinely
provide contractor personnel with copies of EPA internal admini-
strative or other correspondence, except when it affects the
conditions of the facility in which the contractor's personnel are
working (e.g., scheduled repair work to be performed or building
closings).
(iii)	Agency employees shall not provide
contractor personnel with access to facsimile machines, photo-
copiers, computers, or file rooms where the Agency receives,
copies, or stores sensitive or confidential information unless
appropriate safeguards are in place to ensure adequate protection
of this information. These safeguards include security clearances,
signed confidentiality statements, and others. Sensitive or
confidential information includes information protected under the
Trade Secrets Act or Privacy Act, confidential business
information, management sensitive information, and enforcement
sensitive information. An example of acceptable access after the
appropriate safeguards are in place is the EPA Secure
Telecommunications Center, which processes cables to the EPA from
the State Department secure network, for which contractor personnel
have security clearances. CBI may not be given to contractor
personnel under any circumstances unless there is authority for
such disclosure and the procedures under 40 C.F.R. Part 2, Subpart
B have been followed.
(2) Identification of Contractor Personnel
(a) All contractors:
(i)	At all times, it shall be readily
apparent which organization employs an individual. Agency security
offices must require contractor personnel to display appropriate
badges that identify them as contractor personnel. The employing
organization should also be identified. These requirements shall
be included in all contracts that may create situations in which
contractor personnel could be mistaken for EPA employees, e.g.,
advisory and assistance services contracts, hotline/helpline
contracts, community meeting tasks, or field work tasks under
Superfund contracts.
(ii)	In all points of contact, e.g., during
meetings, on Agency systems such as voicemail or electronic mail
(d-mail or e-mail), Agency officials must require contractor
personnel to identify themselves as such and their employing
organization.
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(iii) Agency security offices shall ensure
that contractor personnel do not have unlimited access to EPA
office areas.
(b) Contractors working in EPA facilities only:
(i)	In official telephone directories and
listings, contractor listings shall be shown in a type-face
different from that used for Agency employees, in separate
listings, with special codes, designated by use of asterisks or
parentheses, or in some other manner that distinguishes contractor
personnel from EPA employees.
(ii)	Contractor personnel subject to the
Service Contract Act shall wear company-issued uniforms, in
accordance with their company policies, e.g., moving contractors,
security guards, janitorial workers, etc.
(3) Attendance at EPA Functions and Meetings
All contractors:
(a)	Agency employees shall not allow con-
tractor personnel to attend EPA functions, staff meetings,
committees, or activities, including holiday parties, except as
described in (b) below.
(b)	Agency employees shall not allow contractor
personnel to attend EPA meetings or conferences (including
conference calls) unless required for contract performance, as
documented in the contract's statement of work or in a specific WA,
TDD, or DO. ;
(c)	The CO, PO, or authorized designee shall
notify the contractor point(s) of contact through authorized
technical direction of the need for attendance by contractor
personnel. Attendance must be restricted to specific tasks as
defined in the SOW and limited to the portion of the session in
which the contractor's performance is directly required.
Contractor personnel shall never attend meetings as the official
representative of an EPA organization. Contractor participation is
generally appropriate when the contractor is serving in an advisory
or resource capacity, such as performing research or data
gathering. Contractors may also act as facilitators for EPA
Quality Action Team sessions under contracts for Total Quality
Management implementation.
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EPA ORDER
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(4)	Contractor Employee Conduct
All contractors:
(a)	Agency employees shall not be responsible for
resolving contractor personnel's business or personnel matters.
Contractor personnel must be directed to their point (s) of contact
for resolution of these issues in accordance with the contractor's
policies.
(b)	Agency employees shall not provide contractor
personnel with direction for performance of work products or
assignments. Contractor personnel must operate through their
point (s) of contact to obtain any direction needed to complete work
products or assignments.
(5)	Space
Contractors working in EPA facilities only:
(a)	To the extent possible, EPA employees shall be
physically located in separate areas from contractor personnel; the
contractor's areas shall be identified as such.
(b)	In cases in which both EPA employees and
contractor personnel must occupy or use a general area, there must
be physical separation and identification of space.
(c)	EPA shall arrange schedules and set priorities
for the use of any common equipment by both contractor personnel
and Agency employees.
(d)	EPA may provide furniture, PCs, software,
documentation, telephones, voicemail and other equipment to
contractor personnel working in EPA facilities when specified in
the contract.
7. ADDITIONAL GUIDANCE.
a. As in any contract situation, Agency employees should
contact the CO and Contracts Law Branch, OGC for advice and
guidance as required on a case-by-case basis.
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EPA ORDER	1900.1A
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b. For further information on this subject, Agency employees
should contact the Procurement Policy Branch, Office of Acquisition
Management.
Dnathan Z. Cannon
Apsistantl Administrator
for Administration and
Resources Management
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EPA ORDER
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APPENDIX A
Examples of Prohibited Personal Services
1.	An EPA employee routinely gives instructions and directions
directly to contractor personnel.
2.	An EPA employee recommends/requests/refuses to have specific
contractor personnel assigned to work on a delivery order or work
assignment.
3.	There is a change in the fields of a database to be main-
tained by the contractor. An EPA employee instructs a contractor
employee on how to perform the changes, rather than having a
contract-authorized official issue a written technical direction
and/or contract modification for the changes. This would be sent
to the contractor point (s) of contact for subsequent instruction to
the contractor personnel.
4.	An EPA employee suggests promotion, a bonus or other
performance award for certain contractor personnel.
5.	An EPA employee sits in on an interview for potential
contractor employees and offers suggestions on whom to hire.
6.	An EPA employee invites contractor personnel to attend an EPA
staff meeting or other EPA session not related to contract work
performance.
7.	An EPA employee enters a contractor's work area when no
contractor supervisor is present. The EPA employee has specific
requirements he/she wants accomplished and directs contractor
personnel to redirect efforts to the new assignment.
8.	An EPA employee directly requests contractor personnel to
prepare a special report (not otherwise required by the contract)
from a database that the contractor employee maintains.
9.	A contractor employee participates as a member of the EPA
committee planning an EPA award ceremony.
10.	An EPA employee is an EEO counsellor. A contractor employee
complains of mistreatment from contractor management. The EEO
counsellor pursues the complaint.
A1

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