Is Construction Considered a Service?

For this question, a sensible application of common sense will provide consistently good results.

I would not agree that "clause prescriptions that say 'include in contracts for services' are applied appropiately to construction contracts".

For what purpose do you seek to classify it?

I think this is important to know so that clause prescriptions that say "include in contracts for services" are applied appropiately to construction contracts.

have you examined the FAR Clause Matrix to see what clauses apply to construction?

The FAR contract classification system was created to permit the use of standard contract clauses. Under that system, construction is a unique type defined in FAR 2.101, and is not a service contract as defined in FAR 37.101. Under NAICS, construction and services are separately classified. In goods/services classification systems, construction is classified as a service.

For what purpose do you seek to classify it?

1. To ensure the appropriate clauses are included in solicitations and awards. (If construction is a subset of services, then perhaps you need to check the construction AND service columns in the Clause Matrix). Although based on Vern's post this seems to not be the case.

2. A co-worker argued with me that construction is a service, and I was leaning more towards not a service, so i was looking for more info on the topic (since my research in the FAR provided evidence for both determinations).

3. For my own sanity (No one has yet been able to explain the contradictory evidence in my initial post. I don't understand why the FAR is not more clear that contruction is NOT a subset of services, and is its own separate category).

1. To ensure the appropriate clauses are included in solicitations and awards. (If construction is a subset of services, then perhaps you need to check the construction AND service columns in the Clause Matrix). Although based on Vern's post this seems to not be the case.

2. A co-worker argued with me that construction is a service, and I was leaning more towards not a service, so i was looking for more info on the topic (since my research in the FAR provided evidence for both determinations).

3. For my own sanity (No one has yet been able to explain the contradictory evidence in my initial post. I don't understand why the FAR is not more clear that contruction is NOT a subset of services, and is its own separate category).

I assume that you are clear on number 1 and 2? As far as 3, why should the FAR make that clarification? What problem would it solve?

I assume that you are clear on number 1 and 2? As far as 3, why should the FAR make that clarification? What problem would it solve?

What problem would it solve? It would solve the problem of confusion due to inconsistancy.

There are countless clauses whose prescription say "include in all solicitations and contracts for the acquisition of services". Then there are clauses like 52.237-1, whose prescription in FAR 37.110(a) says “The contracting officer shall insert the provision at 52.237-1, Site Visit, in solicitations for services to be performed on Government installations, unless the solicitation is for construction". Since the FAR specifically excludes construction from being applicable in 37.110(a) [a clause for SERVICES], then wouldn't by inference all clauses that say "include in all solicitations and contracts for services" without any sort of construction exclusion, need to be included in Construction? That's what you are left to assume due to the inconsistancy in determinations. It at the very least brings up questions, which led me to post about the topic.

If the FAR clearly and consistantly defined that construction was not a service, then there would be no need to specifically exclude construction within the prescription for 52.237-1, and there would be no doubt that clauses specifically for use in service contracts are not to be used in construction contracts.

It's just needlessly inconsistant.

I need to agree with aordway that the FAR should be more clear and better guidance provided to the field. I have complained about this since I was a newby. We now have an even less experienced staff. Some less then 5 years from college but many are direct hires from industry that come with a high pay grade and no Government experience. They struggle with the FAR and its conflicting guidance that requires constant debate on this website. .

I see. So what specific change would you propose? What specific words would you add to which specific sections?

BTW, what agency do you work for (if you don't mind saying)?

If the contract is not for building, altering or repairing improvements on real property, then the contract is not for construction. Period. See the definition of construction in FAR 2.101. The definition is neither vague nor ambiguous, and I don't understand all the confusion.

I see. So what specific change would you propose? What specific words would you add to which specific sections?

BTW, what agency do you work for (if you don't mind saying)?

Very simple:

The definition of "service" in FAR 37.101 is ammended to say "Construction is not considered a service". As it stands, the definition of a service is "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", and construction definitely fits within this definition if that were all you were going to go on. The definition then lists SOME examples of services. Construction is not on that list, but it is not an exaustive list (therefore, it is still unclear). So by looking at the definition of services only, you do not have enough information to determine construction is not a service. If you update that definition, the problem is essentially solved.

Alternatively (or in addition to), you update the beggining of FAR 36 (perhaps 36.101), or the definition of construction in 2.101, to state "construction does not fall under the definition of services".

And for good measure, I would change the ambigous sentences I mentioned in my initial post. For example, I would change FAR 13.000 from saying “This part prescribes policies and procedures for the acquisition of supplies and services, including construction" to “This part prescribes policies and procedures for the acquisition of supplies, services, and construction." See how much clearer that would be?

P.S. I work for the Army, and as you can surmise, our office deos VERY FEW construction contracts. Hence I was looking to learn more about them.

Vern:

I agree that the definition of construction is very clear. That's not the issue. The issue is that the definition of services in 37.101 is written such that construction could fit under that definition as well. Therefore construction could be considered a specific subset of services due to the wide open services definition. Like how a square is a rectangle by definition, but a rectangle is not a square. As the construction and services definitions are currently written, construction could be considered services, but general services could not be considered construction. And then to add insult to injury, FAR 13.00 and 37.110(a) are not worded in a way so that construction is clearly considered separate from services. They are worded in a way that suggests construction is a type of services. Again, needlessly inconsistent and unclear.

aordway,

You wrote: "There are countless clauses whose prescription say "include in all solicitations and contracts for the acquisition of services"." Can you give an example of a prescription like this?

Vern:

I agree that the definition of construction is very clear. That's not the issue. The issue is that the definition of services in 37.101 is written such that construction could fit under that definition as well. Therefore construction could be considered a specific subset of services due to the wide open services definition. Like how a square is a rectangle by definition, but a rectangle is not a square. As the construction and services definitions are currently written, construction could be considered services, but general services could not be considered construction. And then to add insult to injury, FAR 13.00 and 37.110(a) are not worded in a way so that construction is clearly considered separate from services. They are worded in a way that suggests construction is a type of services. Again, needlessly inconsistent and unclear.

You will never get absolute clarity in a rulebook written over the course of almost 70 years (since 1947) and by many different people, with many different backgrounds and levels of linguistic skill, in many different circumstances. (For what it's worth, I complain, too.) Common parlance adds to the confusion. See RORE, Inc., GAO Dec. B-410759, 2015 WL 1040445, February 6, 2015:

RORE, Inc., of San Diego, California, protests the Department of the Navy's decision to exclude RORE's proposal from phase 2 of the competition under request for proposals (RFP) No. N62473–14–R–0004, issued by the Naval Facilities Engineering Command (NAVFAC) Southwest, for construction services.

Emphasis added. It is professionally naive to think that you could ever get absolute clarity, and it's pointless to complain about the inconsistencies, vagueness, and ambiguity. As pros, our job is to deal with it and make it seem easy.

We're pros, you and I, and we know that reading and interpreting statutes, regulations, and contracts is a professional art. There are rules about how such interpretations should be made. You have to learn them, and you can do that by reading books, in this case, books such as Reading Law: The Interpretation of Legal Texts, by Scalia and Garner (2012) and An Introduction to Statutory Interpretation and the Legislative Process, by Mikva and Lane (1997). It is an art, though, not a science, and reasonable people can and will disagree. Moreover, there are a lot of unreasonable people and people who will argue for the sheer fun (or perverse pleasure) of arguing.

The locution, "services, including construction" or "services (including construction)" appear about 19 times in the FAR itself. They also appear in some FAR supplements. That's because construction is a service in a general sense; you are hiring someone to do something for you; you are not buying a building. However, construction is distinguished from services in the general sense by its special definition.

Now, as pros, you and I are familiar with the "canon" of interpretation that Scalia and Garner call the "whole-text" canon:

Perhaps no interpretive fault is more common than the failure to follow the whole-text canon, which calls on the judicial interpreter to consider the entire text, in view of its structure and of the physical and logical relation of its many parts. Sir Edward Coke explained the canon in 1628: "t is the most natural and genuine exposition of a statute to construe one part of the statute by another part of the same statute, for that best expresseth the meaning of the makers." Coke added: "If any section [of a law] be intricate, obscure, or doubtful, the proper mode of discovering its true meaning is by comparing it with the other sections, and finding out the sense of one clause by the words or obvious intent of the other."

The same rule applies to regulations and contracts. See Department of the Army-Reconsideration, GAO Dec. B-401472.2, 2009 CPD ¶ 250, December 7, 2009:

We find no merit to the Army's arguments, which would render meaningless the specific language of FAR sect. 17.207(f) that requires that an option be evaluated as part of the initial competition. The Army's interpretation of this clause would either ignore the first requirement under FAR sect. 17.207(f) or deem it to be satisfied when the second requirement is met-that is, render one of the two parts of the clause meaningless. Such an interpretation would be inconsistent with the fundamental principle that statutes and regulations must be read and interpreted as a whole, thereby giving effect to all provisions. See Sea Box, Inc., B–291056, Oct. 31, 2002, 2002 CPD ¶ 181 at 3.

See also Alliant Enterprise JV, LLC, GAO Dec. B-410352.4, 2015 CPD ¶ 82, February 25, 2015:

[W]e find no merit in AEJV's argument that the amendment introduces an ambiguity into the RFQ. An ambiguity exists if a solicitation term is susceptible to more than one reasonable interpretation that is consistent with the solicitation, when read as a whole, Poly–Pacific Techs., Inc., B–293925.3, May 16, 2005, 2005 CPD ¶100 at 3, and AEJV's interpretation of Amendment 5 is not a reasonable one.

Consider your example of rectangle and square. A rectangle is quadrilateral with four right angles. So is a square. But a square is a quadrilateral that has sides of equal length. If you and I are talking geometry and I use the word rectangle, it would not be clear whether I was including squares unless the context of the discussion made it clear that when I say "rectangle" I mean quadrilaterals other than squares. Can context help us interpret services with respect to construction?

You're concerned about the proper use of solicitation provisions and contract clauses. Let's consider FAR 46.304:

46.304 Fixed-price service contracts.

The contracting officer shall insert the clause at 52.246-4, Inspection of Services—Fixed-Price, in solicitations and contracts for services, or supplies that involve the furnishing of services, when a fixed-price contract is contemplated and the contract amount is expected to exceed the simplified acquisition threshold. The contracting officer may insert the clause in such solicitations and contracts when the contract amount is expected to be at or below the simplified acquisition threshold and inclusion is in the Government’s interest.

The prescription does not exclude construction. Should you include that clause in a construction contract? Considered in context of the FAR as a whole, the answer is clearly no, because (1) FAR prescribes a different inspection clause for construction and so it would not make sense to include both inspection clauses in a construction contract, and (2) based on the text of 52.246-4, it would not be adequate or appropriate for a construction contract.

I don't mean to bloviate. Forgive me if I've told you what you already know. Maybe you just wanted to vent. If so, I'm sorry.

Otherwise, you and I are contracting pros. The FAR is our regulation and we are expected to interpret it. We have to interpret it as it comes to us, not as we would like it to be. That's our job. That's our special expertise. Others in our organization look to us for interpretations. That's why agencies have to have people like us. No point in complaining about our book (except to vent, which I do, too, sometimes). Most of its authors are dead or retired. I think we should take pride in our special expertise and develop it fully.

If you like, cite a clause for services with respect to which you think there is confusion about whether it should be included in construction contracts, and we'll see if we can sort it out using the "whole-text" canon.

Vern,

Thanks for the thoughtful and detailed response. You make very good points. My initial question was indeed about figuring out which side of the fence construction fell under (services or not services), but once that was answered, the conversation did delve into a bit of complaining and a bit of justifying my initial confusion. Sometimes in the search for "why", you just have to leave it at "it just wasn't written perfectly" and call it a day. I'll take your advice and run with it. I appreciate the conversation!

From Part 2

“Construction” means construction, alteration, or repair (including dredging, excavating, and painting) of buildings, structures, or other real property. For purposes of this definition, the terms “buildings, structures, or other real property” include, but are not limited to, improvements of all types, such as bridges, dams, plants, highways, parkways, streets, subways, tunnels, sewers, mains, power lines, cemeteries, pumping stations, railways, airport facilities, terminals, docks, piers, wharves, ways, lighthouses, buoys, jetties, breakwaters, levees, canals, and channels. Construction does not include the manufacture, production, furnishing, construction, alteration, repair, processing, or assembling of vessels, aircraft, or other kinds of personal property (except that for use in Subpart 22.5, see definition at 22.502).

From Part 37

“Service contract” means 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.

Pretty much sums it up for me. Not a service.

P.S. The Site Visit clause for construction is 52.236-27.

j-dude, why isn't construction performance of an identifiable task?

Why isn't delivering a stapler the performance of an identifiable task? It takes people to make a stapler. But buying a stapler is a commodity, not a service -- and buying the erection of a building is construction, not a service. It really is simple [well, sometimes it is hard to tell the difference, but that is the exception, not the rule -- the rule is simple].

I'm with the crowd that doesn't think this is a difficult issue.

buying the erection of a building is construction, not a service.

That's correct if you're talking in the context of FAR. But in other contexts, construction is considered a service.

The World Trade Organization considers construction a service ("construction services")

https://www.wto.org/english/tratop_e/serv_e/construction_e/construction_e.htm.

The Organization for Economic Co-operation and Development (OEDC) considers it a service

http://www.oecd.org/trade/services-trade/41707878.pdf

Some states, counties, and cities have divisions or departments of "construction services."

Many construction companies advertise that they offer "construction services."

See "Protecting Owners from Subcontractor Extra-Work Claims," by John Colangelo, in Construction Lawyer (Jan. 1989):

[C]onstruction contracts are outside the ambit of the Uniform Commercial Code's Statute of Frauds, sec. 2-201, since construction is a service, not ‘goods' under U.C.C. sec. 2-105.

I understand - I'm talking within the context of the FAR -- that's what this whole string is about...

I understand - I'm talking within the context of the FAR -- that's what this whole string is about...

I agree. The question concerned whether a construction contract is also a FAR service contract to include the service contract clauses (I am assuming that the OP is referring to those clauses prescribed for service contracts) in addition to the clauses prescribed for construction contracts. in the FAR matrix, there are clauses prescribed for service contracts that are not applicable to construction contracts. There are some that are checked for both, where applicable.

What's really interesting is that "construction" is defined in FAR Part 2, and that definition applies throughout the FAR. FAR does not define "construction contract."

FAR defines "supplies" in Part 2, and that definition applies throughout FAR. It does not define "supplies contract" or "supply contract".

FAR defines "service contract" (not services per se) in FAR 37.101, and that definition applies only in FAR Part 37. The only other definition of "service contract" in FAR is in 22.001.

FAR does not define "service" or "services", per se, despite the fact that the word is used throughout the FAR. For example, FAR 7.502, "Applicability," says:

The requirements of this subpart apply to all contracts for services. This subpart does not apply to services obtained through either personnel appointments, advisory committees, or personal services contracts issued under statutory authority.

So, what are services?

Does the term have to mean the same thing regardless of context? Does it mean the same thing in 41 USC 111 & 41 USC 131 as it means in 10 USC 2330? Does it mean the same thing in 10 USC 2330a as it does in these other references? Why limit yourself to just the word, "services"? Why look solely at the word, when sometimes it is the phrase that is defined, like "advisory and assistance services" (10 USC 2212), "installation support services" (10 USC 2679) or "supplies and services (including construction)" (used throughout Titles 10 & 41 and often not defined at all). Can't a "service contract" for purposes of the prevailing wage provisions of the Service Contract Act mean something different than a contract that includes the provision of services?

Does the term have to mean the same thing regardless of context?

No, of course not. But "service" should mean something. Right? What's a service? FAR 1.108(a) says that if FAR does not define a term, it has the "common dictionary meaning." Well, one of my dictionaries defines "service" (n.) as follows:

1.

a. Work that is done for others as an occupation or business: has done service for us as a consultant.

b. The performance of work or duties for a superior or as a servant: found the butler's service to be excellent.

c. An act or a variety of work done for others, especially for pay: offers a superior service to that of his competitors; provides full catering services.

2.

a. Assistance; help: was of great service to him during his illness.

b. An act of assistance or benefit; a favor: My friend did me a service in fixing the door.

3.

a. The serving of food or the manner in which it is served: The service was good, but the food was lousy.

b. A set of dishes or utensils: a silver tea service.

4.

a. Employment in duties or work for another, as for a government: has been in the company's service for 15 years.

b. A government branch or department and its employees: the diplomatic service.

c. A department or branch of a hospital staff that provides specified patient care:the anesthesiology service.

5.

a. The armed forces of a nation: joined the service right after college.

b. A branch of the armed forces of a nation.

6.

a. The installation, maintenance, or repairs provided or guaranteed by a dealer or manufacturer: a dealer with full parts and service.

b. The provision to the public of something, especially a utility: a town without sewer service.

c. The system or equipment used to provide something to the public: The electrical service was damaged in the storm.

7. Sports

a. The right of serving in many court games.

b. A serve: Her first service hit the net.

8. A religious rite or formal ceremony: held services in the evening; a memorial service.

9. Copulation with a female animal. Used of male animals, especially studs.

10. Law The serving of a legal process, such as a summons or court order.

11. The material, such as cord, used in binding or wrapping rope.

12. An answering service.

Another dictionary defines "service" as follows:

1. the occupation or condition of a servant

2. 1. employment, esp. public employment: diplomatic service

   2. a branch or department of this, including its personnel; specif., the armed forces, as army, navy, or air force

3. 1. work done for a master or feudal lord

   2. work done or duty performed for another or others: repair service, public service

4. the serving of God, as through good works, prayer, etc.

5. 1. public worship

   2. any religious ceremony: the marriage service

   3. a similar, but nonreligious, ceremony, as for a burial or marriage: graveside services

   4. a musical setting for a religious service

6. 1. an act giving assistance or advantage to another

   2. the result of this; benefit; advantage

   3. friendly help; also, professional aid or attention: the fee for his services

7. the act or manner of serving food: a restaurant noted for its fine service

8. a set of utensils or articles used in serving: silver tea service

9. a system or method of providing people with the use of something, as electric power, water, transportation, mail delivery, etc.

10. installation, maintenance, repairs, etc., provided by a dealer or manufacturer to purchasers of equipment

11. the act or manner of serving the ball in tennis, etc., or one's turn to serve

12. ARCHAIC devotion, as of a lover to his lady

13. ANIMAL HUSBANDRY the act of bringing a male animal to copulate with a female

14. LAW notification of legal action, as by the serving of a writ

15. NAUT. any material, as wire, used in serving (ropes, etc.)

Which of those do you like for FAR 7.502? How about FAR 37.601 and 37.602? Do we get a choice? Is there a criterion of choice? Must we take the first one, on grounds of lexical statistics? Or can we chose any that seems okay in context? Do those contexts require different definitions? Does it matter? If I hire a contractor to develop a new launch vehicle and provide four prototypes for testing purposes, do I have a service contract, a supply contract, or both? Have you ever awarded such a contract? If so, how did you classify it?

Do any of those help us to understand what we buy when we buy services, so we can think about the issues to be resolved and the terms to be specified?

Doesn't it seem curious that there is no definition of service or services when services account for the largest share of annual obligations? No? Are they simply anything that is not supplies or construction?

Vern wrote:

But "service" should mean something. Right?

...

Which of those do you like for FAR 7.502?

He had lots of other great questions in his post, but I found his question relating to FAR Subpart 7.5 particularly intriguing. The Subpart is concerned with “inherently governmental functions.” While by its terms FAR 7.502 limits the applicability of the subpart to “all contracts for services,” the policy expressed in FAR 7.503(a) is expressed broadly: “Contracts shall not be used for the performance of inherently governmental functions."

So, consider a couple hypotheticals. Should I not worry about FAR Subpart 7.5 if I can buy a book (or subscription for regular updates to a book), call it a supply, and then tell all my State Department employees to just abide by the recommendations in that book and its updates? See FAR 7.503( c )(4) (“determination of foreign policy”). Should I not worry about FAR Subpart 7.5 if I can characterize software as a supply, buy some artificial intelligence software that (assume for sake of argument) was able to actually direct and control Federal employees? See FAR 7.503( c )(7) (“direction and control of Federal employees”). (Note that in both my examples, the “content" of the book or software is either not completely known or is subject to change following purchase.)

In other words, for purposes of FAR 7.502, I would offer that among the many potential definitions of the word, “services,” a broad one would probably best reflect the intent of the drafters of the Subpart (or of the OMB Circular, what have you). (Don’t get me wrong. I’m not saying it would not be a colorable argument to use a narrower definition of services to limit the reach of the Subpart; but for me, the better interpretation is the broader one.)

No, the narrow interpretation is better. Any interpretation that turns a book purchase into a service contract is a faulty interpretation of the FAR generally and a faulty application of FAR Subpart 7.5 particularly.

jj:

“Better” in what sense? The various dictionary definitions that Vern provided certainly permitted a “service” to not be mutually exclusive to a supply. What makes the interpretation “faulty”? Is it faulty because the drafters of the rules on inherently governmental functions already knew what “services” were, that it has a singular meaning, and certainly could not have meant to include something that could also be characterized as a supply?

Better in a sense that it makes sense.

Faulty in a sense that it isn't helpful or productive.

Part of our professional expertise is being able to discern between a service and a supply (and construction). To be practical, a definition used in the workplace has to help in this discernment. If the definition being considered is not helpful in this discernment, then it isn't a useful definition.

Why does it "make sense" that the government can delegate to a contractor the performance of an inherently governmental function if it does so through something that we characterize as a contract for supplies? Would your answer change if my hypothetical had emphasized more the "subscription service" aspect of the book and its updates?

I will now think of the animal husbandry interpretation when we procure consulting services for Noise and Vibration analyses.

Thank you, Vern.

No. A subscription for a periodical is treated as a supply contract -- always, I hope. And a supply contract is never covered by FAR Subpart 7.5.

I cannot see how the Government could delegate to a contractor the performance of an inherently governmental function through the issuance of a supply contract.

But I'm intrigued -- are you suggesting that a Government agency's decision to follow a certain practice fromthe private sector as explained and updated in a periodical could mean the Government has delegated its inherently governmental responsibility to the perodical publisher? For example, a decision by the State Department to follow the recommendations in the JOURNAL OF THE FRIENDS OF IRELAND (I'm making this up) in matters affecting Ireland, in connection with a subscription to the periodical, could somehow be a violation of FAR Subpart 7.5? My thought is that it might be a poor agency decision, but the contract for the purchase the subscription is wholly outside FAR Subpart 7.5. [This assumes the periodical is a real bona fide periodical, with other subscribers in the marketplace -- the nefarious and sinister implications of imagining a phony periodical contract as a cover for payments to a non-Governmental organization to establish policy, well, isn't that the realm of novels?]

I will now think of the animal husbandry interpretation when we procure consulting services for Noise and Vibration analyses.

Thank you, Vern.

You're welcome! I almost said something about it in the earlier post, but then decided that it was better to be discrete.

I understand - I'm talking within the context of the FAR -- that's what this whole string is about...

ji20874:

I posted #22 to show you that a "whole string" is about whatever the participants want to talk about, regardless of the OP's original intentions. Your ongoing participation with Jacques (who is out to lunch on the whole subscription thing) has helped me prove my point.

I think FAR Subpart 7.5 is about "implementing" for contracting folk a portion of OMB Circular A-76's discussion of inherently governmental functions, which, in turn, implements the FAIR Act and other laws. Pub. L. 110-417, sec. 321(a)(2)(C ) basically calls on OMB to develop a single consistent definition of "inherently governmental functions" and provides that such functions "should only be performed by officers or employees of the Federal Government or members of the Armed Forces." Under Pub. L. 111-117, sec. 743(e)(2)(C ), agency heads shall ensure that the agency is not using contractor employees to perform inherently governmental functions.

I don't see anything in these statutes or in the Circular to suggest that the Government can abdicate its responsibility to perform inherently government functions through government employees EXERCISING DISCRETION, even if it could do so through a contract that is characterized as a contract for supplies.

JJ20874 seems to take issue with the plausibility of my specific hypothetical. That's fine. Assume for sake of argument that it is possible to take away the exercise of discretion of government employees, and that what is placed in its stead is not a contractor (or contractor employee) performing a service contract under FAR Part 37, but a decision-making "tool" (really, decision-making system or tool where the use of the tool's results are made mandatory) that changes over time without Government control we characterize as a supply (based on authorities entirely outside the context of FAR Subpart 7.5 and the authorities to which it relates). How does a narrow interpretation of FAR 7.502's language, "contracts for services," help contracting officers advise others about the restrictions related to contracting out inherently governmental functions?

I asked, "How does a narrow interpretation of FAR 7.502's language, 'contract for services,' help contracting officers advise others about the restrictions related to contracting out inherently governmental functions." A reasonable answer to that question might focus on practicalities, rather than on whether or not FAR Subpart 7.5 is a complete statement of the rules relating to contracting out. For instance, one might reasonably conclude the risk of a false negative under the current rule/interpretation is smaller than the risk of a false positive a broader applicability statement (or a broader interpretation of that applicability statement).

None of this changes, however, the actual source prohibition on contracting out inherently governmental functions, whether you view the source of that prohibition to be in statute or the Circular.

A reasonable answer would be based on not only the words in FAR, but also the intent behind the policy. There is a massive, and I mean massive, literature -- official, scholarly, and journalistic -- that explains that intent. The answer is that COs must not award contracts that would require private sector firms do work with their personnel that is supposed to be done only by government personnel. Look at the examples in FAR 7.503( c ). Don't award any contract for that kind of work.

Period. Game over. End of story.

You are smothering yourself under faulty inference, wild conjecture, clutched straws, and fantastic misinterpretation. Take a deep breath, and come back to Earth.

Vern, I admit my hypotheticals may not be particularly realistic, but you haven't identified an improper inference or what language I am misinterpreting. I'm not clear from your Post #36 on what, if any, significance you assign to the language in FAR 7.502 ("The requirements of this subpart apply to all contracts for services").

Edit: It may not really matter to me what the answer is to the applicability of FAR Subpart 7.5 is for purposes of my hypotheticals. FAR 7.103(s) requires the agency head or designee to prescribe procedures for ensuring "that no purchase request is initiated or contract entered into that would result in the performance of an inherently governmental function by a contractor." Obviously this language does not use the word, "services" or the phrase "contracts for services." In other words, even if FAR 7.502 allows a CO to effectively ignore Subpart 7.5 when awarding a contract for a supply, FAR 7.103(s) doesn't allow the Government to ignore the rules prohibiting contracting out inherently governmental functions.

What is forbidden by FAR 7.503 is contracting for performance of an inherently government function by contractor personnel. But your hypotheticals are not about that. They are about contracting for procedures and tools to be used by government personnel to perform inherently governmental functions_._

You seem to think that a CO will violate FAR 7.503 if he awards a contract for books describing procedures that government personnel will follow when performing inherently governmental functions or for tools that they will use. But a contract for the purchase of books or tools is not a contract for the performance of a function. So I don't get the connection between your hypotheticals and the issue that I thought was at hand. It's not the realism of your hypotheticals that I question; it's their relevance.

Your line of reasoning is very hard to follow.

It's not the realism of your hypotheticals that I question; it's their relevance.

Fair enough. I was trying to eliminate the government employee’s exercise of discretion, so that the regularly updated books or the AI software was not a TOOL, but was effectively displacing the employee’s exercise of discretion. I obviously wasn’t successful.

So, coming at it from a different tact, if the cashier function were an inherently governmental one, and the government bought self-service checkout machines that effectively eliminated the need for cashiers, would the contract for the delivery of the checkout machines be consistent with outsourcing rules? I suspect those who believe it is would emphasize that the contractor is not performing the function, the machine is.

So, coming at it from a different tact, if the cashier function were an inherently governmental one, and the government bought self-service checkout machines that effectively eliminated the need for cashiers, would the contract for the delivery of the checkout machines be consistent with outsourcing rules? I suspect those who believe it is would emphasize that the contractor is not performing the function, the machine is.

I hope I'm not being tactless in pointing out that you are taking a different tack.

FAR Subpart 7.5 does not require that government personnel exercise discretion or do it properly. What it does is prohibit agencies from contracting out inherently governmental functions in which government personnel must exercise discretion. If government personnel are doing the work, then FAR has nothing to say about whether they actually exercise discretion or how they go about it. It is a contracting regulation.

In the case of your hypo of a contract for self-service checkout machines, I think the answer would depend on who would be overseeing their use. If the contractor were only delivering, installing, and maintaining them, and government personnel were overseeing their use, then I don't think there would be a problem. But if contractor personnel were overseeing their use, then I think you would have a service contract that violates FAR 7.503.

I think this thread has lost steam, don't you? I'm moving on.

This is my first post so bear with me.

It appears that the councils suggest that the Government only contracts for either supplies or services (see FAR 2.101 definition of Acquisition). I can't readily think of anything that doesn't fall neatly into one of those categories but that's a separate discussion. Clearly, FAR 2.101 appears to define construction as a service. With that as my foundation - here is the "so what?":

I don't have an issue with clause selections as stated but seemingly unsupported by some. What I do feel is a reasonable workforce concern or at least topic of discussion/training is determining things like statutory applications such as 10 USC 2410a. Does the statutory exemption apply to construction? The example project I will provide is a painting project to paint...let's say, 20 facilities starting in Sep and ending 300 days or so later. I have more issues but will leave it at this for now and check on the responses.

Thanks in advance!

Here is 10 USC 2410a:

(a) Authority.—

(1) The Secretary of Defense, the Secretary of a military department, or the Secretary of Homeland Security with respect to the Coast Guard when it is not operating as a service in the Navy, may enter into a contract for a purpose described in paragraph (2) for a period that begins in one fiscal year and ends in the next fiscal year if (without regard to any option to extend the period of the contract) the contract period does not exceed one year.

(2) The purpose of a contract described in this paragraph is as follows:

(A) The procurement of severable services.

( B ) The lease of real or personal property, including the maintenance of such property when contracted for as part of the lease agreement.

( b ) Obligation of Funds.— Funds made available for a fiscal year may be obligated for the total amount of a contract entered into under the authority of subsection (a).

You say the painting job is a "project." Game over. A painting project is not a severable service and painting is not a lease of real or personal property. You said nothing about the painting project being maintenance of real or personal property being contracted for as part of a lease.

And the councils do not in any way suggest that the government contracts only for supplies and services.

Vern,

First, thank you for taking the time. Not trying to be dense, but what is it in the term "project" that makes it "Game over."? What if I called it a painting service, would that change anything? I will do the leg work and research it if you can help guide the discussion. Perhaps, because I failed by not mentioning that this is painting of real property, using fiscal year funds, specifically for repair work as defined in DFARS 222.402-70(d)(1).

More, importantly I would like to know how and where I can determine that a painting project is not a severable service. I get that severable service is a fiscal law issue and I have read some relevant informational/regulatory guides but can't find one that addressed construction explicitly or otherwise. They use the term services and I haven't found anything that precludes construction from being a service and in fact I have found plenty that suggests construction is a service. Additionally, I can only find bona fide case law on materials (supplies) and services. In my experience, services come in two flavors 1) entire (non-severable), and 2) severable

One of my original questions still stands - does 10 USC 2410a apply to construction? If not, why not?

NOTE: DFARS 222.402-70 further discusses the fact that some contract work can be characterized as construction as a service.

The example yopu provided is for a project to paint 20 buildings. Read Part 22 as well as your citation to DFARS 222.402-70 Installation support contracts. Painting of facilities is considered construction for application of the labor laws for construction, including the Davis-Bacon Wage rates.

The example project I will provide is a painting project to paint...let's say, 20 facilities starting in Sep and ending 300 days or so later. I have more issues but will leave it at this for now and check on the responses.

Thanks in advance!

First, this discusses work to be done under a facilities support contract.

Secondly, DOL and DoD worked out those detailed standards for painting as a small effort that is all or part of an individual "service call":

(1) Individual service calls or orders which will require a total of 32 or more

work-hours to perform shall be considered to be repair work subject to the Construction Wage Rate Requirements.

• (2) Individual service calls or orders which will require less than 32 work-hours

to perform shall be considered to be maintenance subject to the Service Contract Labor Standards.

• (3) Painting work of 200 square feet or more to be performed under an individual service call or order shall be considered to be subject to the Construction

Wage Rate Requirements statute regardless of the total work-hours required.

I don't see how you would issue a service call to your contractor to paint 20 buildings. A contract to paint 20 buildings that required painting when you awarded it in one fiscal year is a bonafide need of that fiscal year. Why would that be any different than the thousands of other routine repair projects awarded at FY year end?

10 USC 2410a applies only to severable services.

Let's assume for the purpose of our discussion that painting is a service. Services are considered to be either "entire" (non-severable) or "severable."

A service is entire when it is a one-time job that will be paid for upon completion or through progress payments.

A service is severable when it is continuing and recurring and will be paid for periodically -- weekly, monthly, etc.

Construction work, like all projects, entails completion of a job with a beginning and an ending. If considered a service, it is a service entire.

Construction contracts do not call for work that is continuing and recurring. Unlike an annual janitorial services contract, under which the contractor cleans the same restroom again and again in the course of a period of performance and the government pays by the month, a construction contract requires the contractor to build the restroom once and complete the job by a specified date, and the government pays upon completion or through progress payments.

Thus, 10 USC 2410a does not apply to construction.

If my explanation of the difference between services that are entire and services that are severable is not enough for you, go to www.gao.gov., download the Red Book, Volume I, and read pages 5-23 through 5-28, which explain in great detail. See also Severable Services Contracts, GAO Dec. B-317636, 2009 CPD ¶ 89, April 21, 2009.

Please allow me to compliment you on your thoughtfully constructed and well-written posts. I wish others would take the same pains. Apparently, some people are not capable.

Maybe I can simplify the question so that it is in harmony with the original posting header.

1. Can anyone demonstrate if construction is considered a service?
2. If it is a service would/could 10 USC 2410a apply?

NOTE: Being new here I started by reading the Terms of Use of the site and Bob has some sage advice in stating that the purpose of this site is at least in part for the edification of the community at large and posters should post citations to laws, regulations, and decisions to help facilitate learning. This will help separate the chaff from the wheat.

Joel,

Thanks. I am familiar with those references as well as the Prevailing Wage Resource Book itself. I think I poorly explained what information I was seeking. I really wanted to find out if the project as I defined it (construction) is also considered a service for purposes of apply a statutory exception such as 10 USC 2410a. Simply suggesting that the described painting project is not a severable service has closed the deal for me and I want more information as to "why". I am limiting inserting my own suppositions because I don't want to derail the question at hand and start talking about any specifics while neglecting the original question. I would like to resolve one issue before moving on to the next when possible (e.g. types of services, but still 100% service - A&E, R&D, Advisory and Assistance, Utilities, Sustenance/Food Service, Construction, etc.). A quadrilateral can be one or more of a few things, but those things, square, rectangle, trapezoid are still quadrilaterals and don't have to be mutual exclusive. I am wondering is construction is a service in a similar thought process. If it is a service I assume it could be entire (non-severable) or severable. If it is severable 10 USC 2410a could apply.

Vern,

Thank you for your kind words, it truly means a lot to have you say that. I have re-read the cited Red Book passages and I was confident in my understanding until page 5-28 (583) and the window cleaning service scenario. If I get 10 buildings painted I have half of my project completed which is of some value, which lends credence to severable.

Personally, I was of the opinion that yes construction is a service, and it is service entire so 10 USC 2410a does not apply and the Defense Departments have to follow the bona fide fiscal rules laid out in DoD Financial Management Reg 7000.14-R Vol 11a para 020510, which basically state performance has to start within 90 days - in other words if you write a contract Sep 30th performance usually should start before the calendar year ends.

Unless I have clearly missed the mark, I am settling under the auspices that the describe painting project is an entire "nonseverable" construction service.

Thank you all for your patience and contributions. I will continue to monitor in case you have any additional recommended reading.

Jamaal:

You should also read the U.S. Army Judge Advocate General's 2014 Fiscal Law Deskbook, Chapter 3, pages 3-15 through 3-19 and 3-20. On page 3-20 it says: "Contracts for construction are considered similar to non-severable service contracts."

http://www.loc.gov/rr/frd/Military_Law/pdf/fiscal-law-deskbook_2014.pdf

As for the GAO's page 5-28 comment about the window cleaning, it seems to me that window cleaning by its nature is continuing and recurring. If we consider the painting of a facllity as continuing and recurring, then maybe your 20 facility painting project is severable. But is it a service or is it 20 separate construction projects under one contract? If the painting is procured as ongoing "maintenance," then maybe 10 USC 2410a does apply.

As to your question whether anyone can demonstrate that construction is not a service, the posts that precede yours went into the matter in considerable detail. I think it's the best any of us can do.

Jaamal – Within the context of the FAR I do not think I can demonstrate that construction is a service. Why? FAR Part 2, FAR Part 36 and FAR Part 22.4 lay the frame work to establish construction as a separate and specific category of Federal acquisition that is given special consideration and treatment that mimic customary practices of the construction industry. The definition established by the principles of the FAR are further supported by the North American Industrial Classification System where Construction is covered under a separate Sector (number 23).

As such the FAR draws the line, yes sometimes blurry, as to what is construction by FAR definition and what is service, again by FAR definition.

As has been stated in the thread there could be the situation when the line so blurred that it creates a dilemma as to what a specific acquisition is and whether specific fiscal principles apply or not but I would offer such an instance would be very rare considering the history of Federal acquisition and designation of construction versus service standards.

The references provided already in this thread help provide the historic view that keeps construction as it is in Federal acquisition.

C Culham:

Just when I thought everything was hashed out pretty well you lured me in with the golden ticket (definition of service(s)).

Can you provide the reference to the FAR definition of a service (not service contract) or were you stating that the definition is implied by the FAR principles you mentioned?

I am aware of FAR 2.101 - "Aquisition", which states services include construction.

For those in the Air Force AFI 63-138, Aquisition of Services para 1.2.1.4 and 1.2.1.8 don't help either. It basically says construction is a service but don't apply these rules unless...

Jamaal - In a word, implied.

The question is not whether construction is a service in economists' terms. It is. The question is whether construction is a service in terms of the FAR. It is not.

Regulations must be read and interpreted as a whole.

Got it. I read, for understanding, every reference each poster provided so you weren't casting your pearls before swine. I learned a lot.

Attempt at contracting humor: The canons of construction deemed construction is not a service.

Jamaal, you are a breath of fresh air. I sure hope you work for the government. But whether you do or not, you have earned a free berth at The FAR Bootcamp (assuming you haven't attended already). The executive director will be in touch through Bob. Welcome to Bob's site.

Vern

Thank you very much. I do work for the Government, and I have not attended the FAR Bootcamp.

I am very appreciative...I am sure my co-workers are too because now they don't have to deal with my constant campaigning to go.

Jamaal - Of little consequence but an added comment all the same admitting that my library of qualified references is not as plentiful as others...but it is interesting to read the definitions of the words “construction” and “service” in the varied dictionaries one can find.

Vern – I wonder if you have now thrown Jamaal into the world of reading, understanding, and appreciating all the aspects of standards of conduct and conflict of interest that apply to a Federal employee? I guess time will tell.

Carl:

I'm not sure what you are alluding to, but I have no contract with the government that includes the Gratuities clause, and even if I did my offer of a free berth in the Bootcamp would not violate the terms of that clause, since I did not make the offer with the intent of obtaining a contract or favorable treatment under a contract, and I've got maybe 1,000 witnesses to that effect.

However, I encourage Jamaal to check with his ethics officer before accepting my gift, and I encourage you to call an IG or the Department of Justice if you think that my gift is a violation of the law. Really, Carl, I urge you.

Vern: I am alluding to 5 CFR 2635.203 and 5 CFR 2635.204 that may apply regardless of whether you have a contract or any other intentions.

Your advice to Jamaal is sound to run your offer by the appropriate ethics official. As to your impertinent encouragement to me I will just write that off to a veiled attempt to once again pick a fight which is of no interest to me all the way around.

Mr. Culham:

Thank you.

I want to point out to you and to others that I made the offer to Jamaal before I knew that he was a government employee. (I hoped he was one, because we need people like him in government.) I made the offer with no intention of improperly influencing him or of selling him anything. I think that post was the first in which I have ever mentioned the Bootcamp myself or even acknowledged my involvement with it. I also want to point out that I have made gifts or awarded prizes here before, usually books. And I have spoken at many government and private conferences without charge, not even for travel expenses, and I have given free training berths to people who wanted the training but couldn't afford it or whose organization couldn't afford it.

As for the "impertinent encouragement," I didn't mean it to be impertinent. I meant it sincerely. If you (or anyone else) thinks that I have done something unethical or illegal I encourage you to report it. I think it is your duty to do so.

As for picking a fight with you, why bother? But I have to defend myself against your sly accusation. All you needed to do in Post # 56 was advise Jamaal to check with his ethics official. Had you done that I would have told Jamaal that you were absolutely right and I would have urged him to do so myself. Direct address to me in that post was unnecessary, and it was undesirable then and in the future. It is clear that you wanted to score a point. Well, you did. Thanks to you I won't be offering any more freebees here: books, training, or anything else. Well done, Carl. Mission accomplished.

Vern....My post was not intended as sly and apologize you took it that way. Rather it was intended as both a nudge and with a smile so to speak with regard how posts on WIFCON always lead to something new that is not connected to the original post.

And as I indicated you do want a fight because now you blame me for your failure to consider prudent actions. That is in a word and pardon me, crap. For it were me and I had a way to offer items in form of prizes in a contest I would. As noted your first offering here in this thread as to what appears to be a "gift" which gets to what I will call the borderline. So in the end blame yourself for a usual bait and over reaction.

Carl

Thank you again, Mr. Culham.

Jamaal:

Carl was correct in mentioning that an agency ethics officer might consider Vern's offer as a gift.

However, viewing the discussion as it occurred, I would consider it falling under an exception to a gift "a gift motivated solely by . . . personal friendship" which would exempt it as a gift.

Here is the Office of Government Ethics site and I have it linked to Invitations From Outside Sources

The government will derive a huge benefit from your attendance and at no cost to the government--except maybe travel and the days of your attendance. Check with you Agency Ethics Official. If they have any questions, please ask them to contact me.