People love to call things “personal services” when they aren’t. The real question is whether the arrangement creates an employer-employee relationship. If nobody in the Government is supervising the contractor’s people day-to-day, it’s almost certainly non-personal. Here’s how to tell the difference and why it matters.
A personal services contract creates an employer-employee relationship between the Government and the contractor’s personnel. That’s the whole test. The tricky part is knowing what that actually looks like in practice.
The Government generally cannot award personal services contracts. If you need someone to show up every day, take direction from a Government supervisor, and do work that looks exactly like what a Government employee would do, you should be hiring that person, not contracting for them.
Personal services contracts circumvent the civil service laws. They bypass competitive hiring, the merit system, pay grades, and all the protections that exist when the Government brings someone on as an employee. If you need an employee, go through OPM and the hiring process. Don’t use the contracting system as a workaround.
There are narrow statutory exceptions. Certain agencies like DoD can award personal services contracts for specific purposes (like healthcare professionals under 10 U.S.C. 129b). But unless you’re in one of those lanes, the default answer is: you can’t do it.
FAR 37.104(d) lays out the factors. No single factor is conclusive; it’s the totality of the arrangement. Here are the ones that matter most in practice:
Here’s where people get it wrong: just because a contractor is providing a “service” doesn’t make it “personal services.”
People hear “personal services” and think it means any service performed by a person. It doesn’t. You can have a contractor providing IT support, janitorial services, engineering analysis, or logistics support. All of those involve people performing services. None of them are inherently personal services.
The same work can be personal or non-personal depending entirely on how it’s structured. The distinction is in the relationship, not the task.
Here are two scenarios involving the exact same service (administrative support) to show how the structure changes the classification.
Scenario: The unit needs admin help. A contractor employee sits at a Government desk and takes daily direction from the flight commander. The commander assigns tasks throughout the day, reprioritizes work on the fly, approves time off, and evaluates performance informally. The contractor employee attends staff meetings as a “team member.”
Why it’s personal: Government supervisor controls the work and manages the individual. The contractor employee is functionally indistinguishable from a GS employee. The contract exists because the unit couldn’t get a billet filled.
Scenario: The unit needs admin help. They contract with a company to provide administrative support services. The company assigns its own people, manages their schedules, and has an on-site project manager who takes tasking from the Government COR. The deliverable is completed administrative work product (processed travel orders, updated trackers, filed documents), not the individual’s time.
Why it’s non-personal: The company manages its people. The Government evaluates the work product, not the individual’s day. Contractor personnel aren’t supervised by Government employees.
If a requirement crosses your desk and it looks like personal services, you have options.
The goal isn’t to kill requirements. It’s to structure them correctly so the Government gets what it needs without creating an illegal employment arrangement. Most personal services problems can be fixed by restructuring, not by canceling the buy.
When reviewing a services requirement, watch for these patterns. Any one of them alone doesn’t seal the deal, but if you’re checking multiple boxes, you need to take a harder look.
The same type of work can be personal or non-personal depending on how it’s structured. These comparisons show what makes the difference across common service types.
A contractor “IT specialist” reports to the Government comm squadron each morning. The Government NCOIC assigns help desk tickets, sets the priority order, tells them which office to visit first, and approves time off. The contractor attends the Monday staff meeting and is listed on the section’s duty roster.
Why: Government supervisor controls daily work assignments, schedule, and leave. The contractor is functioning as a GS employee in everything but name.
The base contracts with an IT company to provide help desk and desktop support. The company assigns its own technicians, manages their schedules, and has a site lead who coordinates with the Government COR. The deliverable is measured by response times and resolution rates, not by who shows up or when.
Why: The company manages its people. The Government evaluates the company’s performance against contract metrics, not individual employees’ daily work.
A contractor admin sits at the front desk of a Government office. The flight commander assigns them tasks throughout the day, reprioritizes their work, reviews it in real-time, and informally evaluates their performance. The contract was created because the unit lost its GS-0303 billet and couldn’t get it filled through HR.
Why: Direct Government supervision. The contract exists specifically to fill a vacancy that should have been a hire. The contractor is indistinguishable from the GS employee who used to sit there.
The unit contracts for administrative support services. The contractor company provides staff and a project manager. The COR provides task orders for specific work products: process these travel vouchers, maintain these trackers, update these spreadsheets. The company decides who does what and manages its own people’s schedules.
Why: The Government defines what needs to get done. The company decides how its people get it done. No Government supervisor is managing contractor employees.
A contractor engineer is embedded in the Government program office. The program manager assigns them to specific projects, includes them in internal program reviews, and directs their day-to-day priorities alongside the GS engineers. Their work product is mixed in with Government personnel’s output with no clear distinction.
Why: The contractor is doing the same work, under the same supervision, alongside GS employees. The Government is directing the individual, not managing a contract deliverable.
The program office contracts for an independent technical assessment of a weapons system. The contractor company assigns its own team, conducts the analysis under its own project management, and delivers a written report with findings and recommendations. The Government reviews the report, not the individual engineers’ daily activities.
Why: Clear deliverable. The company manages its own team. Government oversight is focused on the quality of the product, not supervision of the people.
A Government security manager assigns individual contractor guards to specific posts, changes their shifts, handles complaints about their performance directly, and approves their leave. The guards wear Government-issued badges and are treated as part of the security forces team.
Why: The Government is managing these individuals like employees: shift assignments, leave, performance oversight of individuals. The contractor company is just the payroll mechanism.
The installation contracts for security services. The contract specifies which entry control points need coverage and during what hours. The security company assigns its own guards, manages the schedule and shift rotations, and has an on-site supervisor. If a guard doesn’t perform, the COR raises it with the company, not with the individual guard.
Why: The Government defines the requirement (these gates, these hours). The company figures out staffing. Performance issues go through the company, not directly to the individual.
A Government facility manager tells the contractor janitor which rooms to clean, in what order, and inspects their work room by room. The facility manager sets their start time, tells them when to take breaks, and sends them home when the work is done. The janitor’s company has no on-site presence.
Why: Day-to-day direction of the individual. The Government is acting as the supervisor, not the company. The arrangement looks identical to having an in-house custodian.
The base contracts for custodial services with performance standards: floors cleaned nightly, restrooms stocked and sanitized twice daily, trash removed by 0600. The company sends its crew, manages the schedule, and has a quality control inspector who checks the work. The COR does periodic quality assurance checks against the contract standards.
Why: The Government defined the outcome (clean facility to these standards). The company manages how it gets done. Government oversight is through the COR checking contract performance, not supervising individuals.
A military treatment facility contracts for physicians and nurses to provide patient care. The contractor physicians are integrated into clinical teams, follow Government clinical protocols, and work under the direction of the chief of medical staff for patient care decisions. This looks exactly like an employer-employee relationship because it is one.
Why it’s okay: DoD has specific statutory authority for personal services contracts for healthcare under 10 U.S.C. 129b. The contract must cite this authority and comply with the additional requirements in DFARS 237.104. This is one of the few areas where personal services contracts are explicitly authorized.
Across all of these examples, the line between personal and non-personal comes down to the same few things:
The FAR, case law, and policy guidance on personal vs. non-personal services. If you want to go deeper, these are the authoritative sources.
The primary FAR section. Defines personal services, lists the factors for determining an employer-employee relationship, and explains when personal services contracts are authorized.
Open FAR 37.104Definitions for “personal services contract” and “non-personal services contract.” Short but important for understanding the baseline distinction the FAR draws.
Open FAR 37.101The full subpart covering service contracts. Includes the personal services rules plus general policy, performance-based contracting, and advisory and assistance services.
Open FAR Subpart 37.1DoD-specific guidance and statutory authorities for personal services contracts, including healthcare, advisory services, and specific program authorities under 10 U.S.C.
Open DFARS 237.104The statute that authorizes DoD to enter personal services contracts for certain functions, most notably healthcare. This is the foundation for most DoD personal services exceptions.
Open 10 USC 129bThe civil service law that governs when agencies can hire experts and consultants. This intersects with personal services when agencies try to use contracts instead of appointments.
Open 5 USC 3109