B-75089, JULY 26, 1948, 28 COMP. GEN. 50

B-75089: Jul 26, 1948

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SPECIFICALLY EXEMPTING FROM THE ADVERTISING FOR BIDS REQUIREMENT THE PROCUREMENT OF THOSE SERVICES WHICH ARE TO BE PERFORMED BY THE CONTRACTOR IN PERSON AND WHICH ARE OF A TECHNICAL AND PROFESSIONAL NATURE. THE CONTRACT SERVICES OF PART TIME AND INTERMITTENT PHYSICIANS AND DENTISTS OF THE PUBLIC HEALTH SERVICE WHO DO NOT PERFORM THEIR WORK UNDER THE SUPERVISION AND CONTROL OF GOVERNMENT OFFICERS ARE NONPERSONAL IN NATURE. ARE NOT MATTERS WITH WHICH THIS OFFICE IS CONCERNED. ARE MATTERS SOLELY BETWEEN THE CONTRACTING OFFICE AND THE CONTRACTOR. WITHHOLDING TAX REQUIREMENTS ARE NOT FOR APPLICATION WHERE THERE DOES NOT EXIST THE RELATIONSHIP OF EMPLOYER AND EMPLOYEE. A FINAL DETERMINATION OF SUCH MATTERS IS PROPERLY WITHIN THE JURISDICTION OF THE TREASURY DEPARTMENT.

B-75089, JULY 26, 1948, 28 COMP. GEN. 50

PART TIME AND INTERMITTENT PHYSICIANS AND DENTISTS OF THE PUBLIC HEALTH SERVICE THE PART TIME AND INTERMITTENT SERVICES OF PHYSICIANS AND DENTISTS MAY BE PROCURED BY THE PUBLIC HEALTH SERVICE WITHOUT ADVERTISING IN VIEW OF THE PROVISIONS OF SECTION 3709, REVISED STATUTES, AS AMENDED BY SECTION 9 OF THE ADMINISTRATIVE EXPENSE STATUTE OF AUGUST 2, 1946, SPECIFICALLY EXEMPTING FROM THE ADVERTISING FOR BIDS REQUIREMENT THE PROCUREMENT OF THOSE SERVICES WHICH ARE TO BE PERFORMED BY THE CONTRACTOR IN PERSON AND WHICH ARE OF A TECHNICAL AND PROFESSIONAL NATURE. THE CONTRACT SERVICES OF PART TIME AND INTERMITTENT PHYSICIANS AND DENTISTS OF THE PUBLIC HEALTH SERVICE WHO DO NOT PERFORM THEIR WORK UNDER THE SUPERVISION AND CONTROL OF GOVERNMENT OFFICERS ARE NONPERSONAL IN NATURE, AND OATHS OF OFFICE AND OTHER PAPERS USUALLY REQUIRED FROM GOVERNMENT EMPLOYEES NEED NOT BE OBTAINED FROM SUCH CONTRACTING PHYSICIANS AND DENTISTS. THE TIME AND METHOD OF PAYMENT OF THE AMOUNT AGREED TO BE PAID UNDER CONTRACTS FOR THE NONPERSONAL SERVICES OF PART TIME AND INTERMITTENT PHYSICIANS AND DENTISTS, IN THE ABSENCE OF A CONTROLLING STATUTORY PROVISION, ARE NOT MATTERS WITH WHICH THIS OFFICE IS CONCERNED, BUT, RATHER, ARE MATTERS SOLELY BETWEEN THE CONTRACTING OFFICE AND THE CONTRACTOR. GENERALLY, WITHHOLDING TAX REQUIREMENTS ARE NOT FOR APPLICATION WHERE THERE DOES NOT EXIST THE RELATIONSHIP OF EMPLOYER AND EMPLOYEE, AS IN THE CASE OF PART TIME AND INTERMITTENT PHYSICIANS AND DENTISTS SERVING UNDER NONPERSONAL SERVICE CONTRACTS WITH THE PUBLIC HEALTH SERVICE, ESPECIALLY WHERE SUCH CONTRACTORS ALSO FURNISH THEIR OWN OFFICE SPACE, EQUIPMENT, AND SUPPLIES; HOWEVER, A FINAL DETERMINATION OF SUCH MATTERS IS PROPERLY WITHIN THE JURISDICTION OF THE TREASURY DEPARTMENT, BUREAU OF INTERNAL REVENUE. THE PURPOSE OF THE PROVISION IN THE 1948 APPROPRIATION OF THE PUBLIC HEALTH SERVICE, FIXING A MAXIMUM RATE OF $35 PER DIEM FOR INDIVIDUALS PERFORMING TEMPORARY SERVICES AS AUTHORIZED BY SECTION 15 OF THE ADMINISTRATIVE EXPENSE STATUTE OF AUGUST 2, 1946, WAS TO LOWER THE MAXIMUM SALARY RATE LIMITATION IMPOSED BY SECTION 15 UPON PERSONAL SERVICE CONTRACTS--- AS DISTINGUISHED FROM NONPERSONAL SERVICE CONTRACTS--- AND NOT TO IMPOSE A LIMITATION UPON NONPERSONAL SERVICE CONTRACTS WITH PART TIME AND INTERMITTENT PHYSICIANS AND DENTISTS.

ACTING COMPTROLLER GENERAL YATES TO THE FEDERAL SECURITY ADMINISTRATOR, JULY 26, 1948:

THERE HAS BEEN CONSIDERED YOUR LETTER OF APRIL 1, 1948, REQUESTING DECISION RESPECTING THE MATTER OF PROCURING THE SERVICES OF DOCTORS AND DENTISTS BY CONTRACT ON A PART-TIME AND INTERMITTENT BASIS FOR THE PURPOSE OF CARRYING OUT THE FUNCTIONS VESTED BY LAW IN THE PUBLIC HEALTH SERVICE PURSUANT TO THE PROVISIONS OF THE PUBLIC HEALTH SERVICE ACT OF JULY 1, 1944, 58 STAT. 682.

YOUR LETTER SETS FORTH IN DETAIL THE PARTICULAR TYPES OF EMPLOYMENT CONTEMPLATED FOR SUCH PERSONNEL, WHICH BRIEFLY MAY BE SUMMARIZED AS FOLLOWS:

TYPE I. PART-TIME PHYSICIANS WHO, IN ADDITION TO PROFESSIONAL VISITS TO HOSPITALS AND STATIONS WHEN CALLED, TREAT PATIENTS IN THEIR OWN OFFICES, USING THEIR OWN SUPPLIES AND EQUIPMENT.

TYPE II. PART-TIME PHYSICIANS WHO SERVE AS MEDICAL OFFICERS AT U.S. IMMIGRATION STATIONS, AND IN THAT CAPACITY CONDUCT PHYSICAL AND MENTAL EXAMINATIONS OF ALIENS; TREAT DETAINED SICK ALIENS AND ADMINISTER PREVENTIVE VACCINES, SERUMS, AND TOXINS. LIKE TYPE I PHYSICIANS, THESE PHYSICIANS USE THEIR OWN OFFICE SPACE, EQUIPMENT AND SUPPLIES IN FURNISHING SUCH SERVICES.

TYPE III. PART-TIME LOCAL PHYSICIANS WHO CONDUCT PHYSICAL EXAMINATIONS AND IMMUNIZATION OF INMATES OF PENAL INSTITUTIONS; PERFORM DUTIES IN CONNECTION WITH TREATMENT OF BEDFAST PATIENTS, AND RENDER SERVICE IN THE OUT-PATIENT DEPARTMENT. THESE PHYSICIANS ARE ON CALL FOR ADDITIONAL DUTIES AT ANY TIME.

TYPE IV. ATTENDING SPECIALISTS WHO VISIT HOSPITALS OR STATIONS ON AN "ON CALL" BASIS AND WHO PERFORM OPERATIONS AND GIVE CONSULTATIONS ON A SPECIFIC FEE BASIS IN ACCORDANCE WITH AN ESTABLISHED FEE SCHEDULE.

TYPE V. LOCAL PHYSICIANS AT QUARANTINE STATIONS WHO INSPECT AIRCRAFT AND EXAMINE ALIENS ON A SPECIFIC FEE BASIS FOR EACH TYPE OF SERVICE.

TYPE VI. LOCAL DENTISTS WHO RENDER DENTAL CARE AND TREATMENT TO BENEFICIARIES OF THE SERVICE IN AREAS WHERE THE DEMAND FOR SUCH CARE AND TREATMENT DOES NOT WARRANT THE ASSIGNMENT OF A FULL-TIME DENTAL OFFICER. SUCH DENTISTS, TO BE PAID ON A SPECIFIC FEE BASIS, FURNISH THEIR OWN EQUIPMENT, SUPPLIES, AND MATERIALS, IN RENDERING SUCH SERVICE.

WITH RESPECT TO THE ABOVE-ENUMERATED TYPES OF EMPLOYMENT, DECISION IS REQUESTED UPON QUESTIONS SET OUT IN YOUR LETTER, AS FOLLOWS:

1. MAY THE PUBLIC HEALTH SERVICE CONTRACT FOR THE SERVICES OUTLINED ABOVE WITHOUT REGARD TO ADVERTISING PURSUANT TO SECTION 3709 OF THE REVISED STATUTES, AS AMENDED?

2.IF THE ANSWER TO QUESTION 1 IS IN THE AFFIRMATIVE, WOULD SUCH CONTRACTS WITH PHYSICIANS AND DENTISTS BE CONSIDERED NONPERSONAL SERVICE CONTRACTS?

3. IF THE ANSWER TO QUESTION 1 IS IN THE AFFIRMATIVE, MUST THE OATH OF OFFICE AND OTHER PAPERS USUALLY REQUIRED FROM AN EMPLOYEE BE OBTAINED FROM THE CONTRACTOR?

IF THE ANSWER TO QUESTION 1 IS IN THE AFFIRMATIVE, WOULD THERE BE ANY OBJECTION TO THE PUBLIC HEALTH SERVICE CONTRACTING FOR THESE SERVICES AS FOLLOWS:

A. IN CASES I, II, AND III, ON AN ANNUAL BASIS AT A FIXED SUM AGREED UPON PAYABLE IN 12 MONTHLY INSTALLMENTS?

B. IN CASES IV, V AND VI, AT SPECIFIC FEES, IN ACCORDANCE WITH A FEE SCHEDULE?

5. IN ALL CASES WOULD SUCH PAYMENTS BE SUBJECT TO THE WITHHOLDING TAX?

6. IF THE ANSWER TO QUESTION 1 IS IN THE AFFIRMATIVE, WOULD THE $35.00 LIMITATION IN PUBLIC LAW 165, 79TH CONGRESS BE APPLICABLE TO THE SERVICES OUTLINED HEREIN, FOR WHICH WE DESIRE TO CONTRACT?

IN DECISION OF MARCH 15, 1946, 25 COMP. GEN. 642, REFERRED TO IN YOUR LETTER, IT WAS RECOGNIZED THAT PURSUANT TO THE PROVISIONS OF THE SAID PUBLIC HEALTH SERVICE ACT OF 1944, THERE EXISTS BASIC AUTHORITY TO PROCURE THE PART-TIME AND INTERMITTENT SERVICES OF PHYSICIANS, EITHER ON A PER ANNUM BASIS UNDER REGULAR SCHEDULE A APPOINTMENTS, ON A FEE BASIS, OR BY CONTRACT UNDER A COMBINATION PER ANNUM SALARY BASIS AND SUPPLEMENTAL FEE BASIS. THAT CONCLUSION IS FOR APPLICATION LIKEWISE TO THE PROCUREMENT OF PART-TIME OR INTERMITTENT SERVICES OF DENTISTS. CONSEQUENTLY, SINCE SECTION 9 OF PUBLIC LAW 600, 60 STAT. 809, AMENDS SECTION 3709 OF THE REVISED STATUTES TO PROVIDE SPECIFICALLY THAT ADVERTISING IS NOT REQUIRED WHEN THE SERVICES SOUGHT TO BE OBTAINED BY CONTRACT ARE REQUIRED TO BE PERFORMED BY THE CONTRACTOR IN PERSON AND ARE OF A TECHNICAL AND PROFESSIONAL NATURE, IT CLEARLY APPEARS THAT ADVERTISING WOULD NOT BE REQUIRED IN SUCH INSTANCES. ACCORDINGLY, QUESTION 1 IS ANSWERED IN THE AFFIRMATIVE.

WITH RESPECT TO THE MATTER OF "PERSONAL SERVICE" CONTRACTS AND "NONPERSONAL SERVICE CONTRACTS," IT WAS STATED IN DECISION OF NOVEMBER 28, 1944, 24 COMP. GEN. 414, AT PAGE 417, AS FOLLOWS:

AGREEMENTS WITH INDIVIDUALS FOR PERSONAL SERVICES AS DISTINGUISHED FROM NONPERSONAL SERVICES HAVE BEEN DISCUSSED IN NUMEROUS DECISIONS OF THIS OFFICE, AND THE DISTINCTION PLAINLY WAS DRAWN IN 23 COMP. GEN. 425, 429, BETWEEN "PERSONS AUTHORIZED TO BE AND WHO ARE EMPLOYED UNDER AN INSTRUMENT DESIGNATED AS A "CONTRACT" AND WHO PERFORM THEIR WORK UNDER THE SUPERVISION AND CONTROL OF GOVERNMENT OFFICERS" AND "CONTRACTORS ENGAGED-- - NOT EMPLOYED--- ON OTHER THAN A PERSONAL SERVICE BASIS (GENERALLY THOSE WHO DO NOT PERFORM THEIR WORK UNDER THE SUPERVISION AND CONTROL OF THE GOVERNMENT).' AN INDIVIDUAL CONTRACTING HIS SERVICES UNDER SECTION 9 OF THE MILITARY APPROPRIATION ACT OF 1944 RENDERS HIMSELF SUBJECT TO THE CONTINUOUS SUPERVISION AND CONTROL OF HIS OFFICIAL SUPERIORS DURING THE PERIOD OF HIS CONTRACT, WHILE AN INDIVIDUAL CONTRACTING WITH THE GOVERNMENT TO PREPARE AND DELIVER A LECTURE OR A SERIES OF LECTURES ON DEFINITE DATES OWES NO DUTY TO THE GOVERNMENT OTHER THAN SPECIFIC PERFORMANCE UNDER THE CONTRACT, THE WHOLE TRANSACTION BEING, IN FACT, CLOSELY ANALOGOUS TO THE PRODUCTION AND DELIVERY OF A TANGIBLE ARTICLE PURSUANT TO CONTRACT OF SALE.

IN ACCORDANCE WITH THE CRITERION SET FORTH IN THE ABOVE-QUOTED PORTION OF THE DECISION OF NOVEMBER 28, 1944, IT CLEARLY APPEARS THAT CONTRACTS FOR THE PART-TIME OR INTERMITTENT SERVICES OF PHYSICIANS AND DENTISTS, AS REFERRED TO IN YOUR LETTER, ARE "NONPERSONAL SERVICE" CONTRACTS, AND, AS SUCH, ARE TO BE DISTINGUISHED FRM THE USUAL EMPLOYMENT AGREEMENT FOR PERSONAL SERVICES RENDERED UNDER THE SUPERVISION AND CONTROL OF THE GOVERNMENT. ACCORDINGLY, QUESTION 2 IS ANSWERED IN THE AFFIRMATIVE.

IN LINE WITH THE STATEMENTS MADE IN ANSWER TO QUESTION 2, QUESTION 3 IS ANSWERED, GENERALLY, IN THE NEGATIVE.

THE TIME AND METHOD OF PAYMENT OF THE AMOUNT AGREED UPON UNDER A CONTRACT FOR NONPERSONAL SERVICES SUCH AS CONTEMPLATED IN YOUR LETTER, IN THE ABSENCE OF A CONTROLLING STATUTORY PROVISION, IS NOT A MATTER WITH WHICH THIS OFFICE IS CONCERNED, BUT, RATHER, IS A MATTER SOLELY BETWEEN THE CONTRACTING OFFICE AND THE PARTICULAR PERSON WHOSE SERVICES ARE SOUGHT TO BE OBTAINED. BOTH SUBDIVISIONS OF QUESTION 4 ARE ANSWERED ACCORDINGLY.

WITH RESPECT TO QUESTION 5, IT MAY BE STATED GENERALLY THAT WHERE THERE DOES NOT EXIST THE RELATIONSHIP OF EMPLOYER AND EMPLOYEE, IT WOULD APPEAR THAT THE WITHHOLDING TAX REQUIREMENT IS NOT FOR APPLICATION. ESPECIALLY WOULD THIS APPEAR TO BE TRUE IN THOSE INSTANCES WHERE THE DOCTORS AND DENTISTS FURNISH, IN ADDITION TO THEIR PROFESSIONAL SERVICES, THEIR OFFICE SPACE, EQUIPMENT AND SUPPLIES. HOWEVER, A FINAL DETERMINATION OF SUCH MATTER PROPERLY IS WITHIN THE JURISDICTION OF THE TREASURY DEPARTMENT, BUREAU OF INTERNAL REVENUE.

THE LABOR-FEDERAL SECURITY APPROPRIATION ACT, 1948, 61 STAT. 260, 267, UNDER THE HEADING " PUBLIC HEALTH SERVICE" PROVIDES, IN PART, AS FOLLOWS:

FOR NECESSARY EXPENSES IN CARRYING OUT THE PUBLIC HEALTH SERVICE ACT, AS AMENDED, * * * TEMPORARY SERVICES AS AUTHORIZED BY SECTION 15 OF THE ACT OF AUGUST 2, 1946 ( PUBLIC LAW 600), BUT, IN THE CASE OF STENOGRAPHIC REPORTING ON A FEE BASIS WITHOUT REGARD TO THE LIMITATION ON RATES IN SUCH SECTION AND, IN THE CASE OF ALL OTHER SERVICES, AT RATES NOT IN EXCESS OF $35 PER DIEM FOR INDIVIDUALS * * *.

SECTION 15 OF PUBLIC LAW 600 (60 STAT. 806, 810) REFERRED TO IN THAT APPROPRIATION ACT PROVIDES:

THE HEAD OF ANY DEPARTMENT, WHEN AUTHORIZED IN AN APPROPRIATION OR OTHER ACT, MAY PROCURE THE TEMPORARY (NOT IN EXCESS OF ONE YEAR) OR INTERMITTENT SERVICES OF EXPERTS OR CONSULTANTS OR ORGANIZATIONS THEREOF, INCLUDING STENOGRAPHIC REPORTING SERVICES, BY CONTRACT, AND IN SUCH CASES SUCH SERVICE SHALL BE WITHOUT REGARD TO THE CIVIL-SERVICE AND CLASSIFICATION LAWS (BUT AS TO AGENCIES SUBJECT TO THE CLASSIFICATION ACT AT RATES NOT IN EXCESS OF THE PER DIEM EQUIVALENT OF THE HIGHEST RATE PAYABLE UNDER THE CLASSIFICATION ACT, UNLESS OTHER RATES ARE SPECIFICALLY PROVIDED IN THE APPROPRIATION OR OTHER LAW) AND, EXCEPT IN THE CASE OF STENOGRAPHIC REPORTING SERVICES BY ORGANIZATIONS, WITHOUT REGARD TO SECTION 3709, REVISED STATUTES, AS AMENDED BY THIS ACT.

IT IS SETTLED THAT THE SALARY RATE LIMITATION CONTAINED IN SECTION 15 OF PUBLIC LAW 600, SUPRA, HAS NO APPLICATION TO NONPERSONAL SERVICE CONTRACTS. 26 COMP. GEN. 188; ID. 442. IN THAT CONNECTION IT WILL BE NOTED THAT THE ABOVE-QUOTED PROVISION OF THE LABOR-FEDERAL SECURITY APPROPRIATION ACT, 1948, SPECIFICALLY EXEMPTS FROM THE SALARY LIMITATION CONTAINED IN SAID SECTION 15 NONPERSONAL SERVICE CONTRACTS FOR STENOGRAPHIC REPORTING SERVICE ON A FEE BASIS, WHEREAS A SALARY LIMITATION OF $35 PER DIEM IS PLACED UPON PAYMENT TO INDIVIDUALS EMPLOYED PURSUANT TO THE PROVISIONS OF SECTION 15 OF PUBLIC LAW 600. FROM THE FOREGOING, IT WOULD APPEAR THAT THE PURPOSE OF THE SAID APPROPRIATION PROVISION, IN CONSONANCE WITH THE HOLDING IN THE CITED DECISIONS, WAS TO EXEMPT NONPERSONAL SERVICE CONTRACTS FROM THE SAID SALARY LIMITATION OF SECTION 15 AND TO PLACE A DEFINITE SALARY LIMITATION UPON PERSONAL SERVICE CONTRACTS WITH INDIVIDUALS WHICH, IN FACT, IS LOWER THAN THE MAXIMUM SALARY LIMITATION IMPOSED BY SECTION 15 AND TO PLACE A DEFINITE SALARY LIMITATION UPON PERSONAL SERVICE CONTRACTS WITH INDIVIDUALS WHICH, IN FACT, IS LOWER THAN THE MAXIMUM SALARY LIMITATION IMPOSED BY SECTION 15 OF PUBLIC LAW 600. CONSEQUENTLY, IT REASONABLY APPEARS THAT NONPERSONAL SERVICE CONTRACTS SUCH AS REFERRED TO IN YOUR LETTER, ALTHOUGH WITH INDIVIDUALS, ARE NOT SUBJECT TO THE $35 PER DIEM SALARY LIMITATION CONTAINED IN THE QUOTED PORTION OF THE 1948 APPROPRIATION ACT. IT WILL BE NOTED THAT THE APPROPRIATION FOR THE PUBLIC HEALTH SERVICE FOR THE FISCAL YEAR 1949, PUBLIC LAW 639, 80TH CONGRESS, 62 STAT. 394, 399, OMITS ANY SALARY LIMITATION UPON RATES PAYABLE FOR SERVICES AS COVERED BY THE PROVISIONS OF SECTION 15 OF THE PUBLIC LAW 600. HENCE, UNDER THAT APPROPRIATION NONPERSONAL SERVICE CONTRACTS SUCH AS HERE INVOLVED WOULD NOT BE SUBJECT TO ANY STATUTORY LIMITATION UPON PER DIEM RATE PAYABLE THEREUNDER. QUESTION 6 IS ANSWERED ACCORDINGLY.