What Is a Severable Services Contract

Chapter 8 of the DoD Financial Management Regulations, Volume 3, provides more detailed information on the start of work on contracts. In this context, we conclude that paragraph (a) of sections 2410a or 253l does not limit all separable service contracts to 1 year. It is a fundamental canon of the legal construct that “[t]he law is adopted as a whole and not in parts or sections, and that it is animated by a general purpose and intention. Therefore, each part or section, in conjunction with any other part or section, should be designed in such a way as to produce a harmonious whole. 2A Sutherland, Statutes & Statutory Construction, 46:05 to 154 (6th ed. 2000). See also United States v. Cleveland Indians Baseball Company, 532 U.S. 200, 217-18 (2001). When Articles (a) and (b) of Articles 2410a and 253l are read together, it is clear that they were intended to ensure contractual flexibility in the use of budgetary resources. Each paragraph (a) contains the granting of authority to organizations to provide divisible services in fiscal years of up to 1 year. Each paragraph (b) authorizes organizations to allocate their resources to contracts approved under paragraph (a) in such a way as to constitute an exception to the rule of bona fide requirements. The reference in subsection (b) to `funds made available for a financial year` as a type of fund that can be committed in this way clearly shows that the sections cover contracts financed by annual appropriations.

There is no indication that these provisions were intended to introduce new restrictions on the Agency`s power to use multiannual or annual funds to finance severable service contracts with a duration of more than 1 year. `The fact that the contract covers part of two financial years does not necessarily mean that payments under that contract are intended for allocation between the two financial years concerned on the basis of the services actually provided during each financial year. The general rule is that the appropriations for the financial year in force at the time of the conclusion of the contract are charged against the payments of the contract, even if the performance of the contract may extend until the following financial year. Our interpretation of sections 2410a and 253l is also consistent with FASA`s stated objective of “revising and streamlining the federal government`s procurement laws to reduce red tape. and improve the efficiency and effectiveness of the laws that govern how the government receives goods and services. S. Rep. No. 103-259, p. 1 (1994). To interpret Sections 2410a and 253l as limiting separable service contracts funded by multi-year or annual funds that exceed fiscal years to 1 year, we would have to conclude that, although Congress removed a burden, it was intended to create a restriction on detachable service contracts from FASA agencies to which agencies were not previously subject.

18 According to Harvey le Pooka, the word “frammis” refers to “something that, in reality, has no idea what it does or what it is used for. but you want to make others feel like he`s doing it. The word was coined by The Three Stooges, and for some, it`s a more literate form of the word “widget.” (E-mail to “Newsgroups: it.cultura.linguistica.inglese” of 28. January 2003, groups.google.com/groups?q=frammis+word&hl=en&lr =&ie=UTF8&selm=TXrZ9.54710%24YG2.1568240%40twister1.libero.it&rnum=1). (BACK) See also 35 Comp. Gen. 319 (1955), supplemented by B-125444, 16 February 1956 (Garden and window cleaning services). The second issue you raised concerned the financing of an inseparable service contract. Inseparable services represent a specific and complete task or a single company with a defined end product that cannot be subdivided for a separate service.

Non-separable services must be fully funded by funds in progress at the time of award, although the service may extend to future years. Inseparable service contracts cannot be financed gradually. As a final reflection, there is a fairly simple test that is often useful for determining whether a particular service is separable or inseparable. Suppose that half of a service contract is executed in one fiscal year and half in the next fiscal year. Suppose the contract is terminated at the end of the first fiscal year and not renewed. What do you have? In the case of a window cleaning contract, you have half of your windows clean, an advantage that is not diminished by the fact that the other half is still dirty. What you paid for the first half of the year was not wasted. These services are clearly separable. Let us now consider a contract to conduct a study and prepare a final report, as in 65 Comp. 741st General (1986). If this contract is terminated halfway, you have essentially nothing. The partial results of an incomplete study, while they may be beneficial in an ethereal sense, don`t do you very well if what you needed was the full study and report.

Or let`s say the contract is to fix a broken Frammis.18 If the repairs aren`t completed, it`s certain that work has been done, but you still don`t have a working Frammis. These last two examples are inseparable. A 1981 decision applied the above principles to agreements entered into by the Small Business Administration (SBA) with private organizations to provide technical and management support to enterprises receiving support under the Small Business Act. The typical agreement spanned a calendar year and exceeded the fiscal year limits. Under the agreement, payment could only be made for completed tasks, and SBA was not required to contract or award all contracts to a specific contractor. The question was whether the “contract” was recorded in the period in which it was performed. The Comptroller General stated that the services in question were clearly separable and that the agreement was not really a contract because he did not have a mutual obligation. Consequently, the SBA did not establish a contractual obligation until it placed a final order and could only charge each financial year with commitments entered into during that financial year.

60 Comp. Genesis 219 (1981). The principles were developed in 61 Comp. Gen. 184 (1981). This answer is based on the information provided. We recommend that you discuss this with your contracting and finance team, the program manager and/or the legal department. The distinction appears to stem from the distinction inherent in 5 U.S.C. § 3109, which allows agencies to procure services from experts or consultants through (personal) employment or contract (not personally). B-174226, above.

However, in the context of the application of the bona fide needs rule, the distinction is not particularly useful, since it is still necessary to examine the nature of the services at issue in the present case. In other words, characterizing services as personal or non-personal does not provide you with an automatic response. In fact, some of the more recent cases have merely examined the nature of the work without describing it as personal or impersonal, which would have added nothing to the analysis. Z.B. 50 Comp. Gene. 589 (1971) (lawyers` fees incurred under the Criminal Justice Act, to the detriment of funds in effect at the time of appointment); B-224702, 5 August 1987 (Legal Services Contract considered separable because it consisted primarily of clerical tasks and did not require a final report or final product). The second law, 41 U.S.C Section 253l (hereinafter Section 253l), applies to separable service contracts entered into by civilian executive agencies. Congress enacted Section 253l of the Federal Procurement Rationalization Act of 1994 (FASA).