Request for Review of Consultant Services Vouchers

T. C. Associates, Inc. performed contract for the National Center for Productivity and Quality of Working Life, for which it submitted two vouchers totaling $7,675 to the General Services Administration (GSA), the provider of administrative support to the Center. GSA questioned whether the contract created an employer/employee relationship. The Center was authorized to obtain consultant services at a rate up to that of GS-18, until its planned expiration at the end of fiscal year 1978. The Center's contract with T. C. Associates specified a number of consultative functions to be performed in the Center's offices, using its files and documents. This raised the question with GSA of whether the contracting firm's president, who actually performed the work, was functioning as a Center employee. Toward the Center's termination, attrition took a heavy toll among the employees, during which period T. C. Associates kept the Center's financial affairs in order. Where services are obtained by contract, the question of contractor personnel functioning as employees can be resolved by examining their supervision. Federal supervision of contractor's employees amounts to a procurement of services in avoidance of civil service requirements. A test, the "Pellerzi Standards," is used to analyze supervision of contractor employees according to six criteria. Without proof of contractor supervision, the Pellerzi Standards become the test. Since the contractor provided its own employee supervision, the prohibited employer/employee relationship did not occur. Some ambiguity remains about the exercise of the supervisory role as to certain functions, but because of the termination of the agency and the difficulty of collecting evidence, GAO has decided to overlook these matters and has approved payment of the vouchers involved. In examining the performance of this contract, GAO discovered that some managerial and decision-making functions were relinquished by the Center to the contractor in violation of Office of Management and Budget rules, but that finding has no direct bearing on this decision.