FAR 26.503—Definitions.
Plain-English Summary
FAR 26.503 is the definitions section for this subpart, and it establishes the meaning of the terms that control how the subpart is applied in federal contracting. It defines controlled substance, conviction, criminal drug statute, employee, directly engaged, and individual. These definitions matter because they determine who is covered by the subpart’s drug-free workplace requirements, what kinds of drug-related conduct trigger consequences, and when a contractor is treated as an individual rather than an organization. In practice, the definitions set the scope for compliance obligations, certification statements, workplace policies, and any enforcement or remedy actions tied to drug-related violations. The section is especially important for contractors because the reach of the rules depends on whether a person is a covered employee and whether a contractor qualifies as an individual with no more than one employee. For contracting officers and agencies, these definitions are the threshold for deciding when the subpart applies and how broadly to interpret contractor responsibilities.
Key Rules
Controlled substance scope
A controlled substance is any substance listed in schedules I through V of the Controlled Substances Act and further identified in 21 CFR 1308.11 through 1308.15. This definition is broad and ties the subpart to federal drug-control classifications rather than informal or state-only lists.
Conviction includes pleas
A conviction includes a finding of guilt, a plea of nolo contendere, or the imposition of sentence, or both, by a judicial body responsible for enforcing Federal or State criminal drug laws. This means a contractor cannot avoid the definition simply because the case ended in a plea rather than a trial verdict.
Criminal drug statute definition
A criminal drug statute is any Federal or non-Federal criminal law involving the manufacture, distribution, dispensing, possession, or use of a controlled substance. The definition is not limited to federal offenses and can include state or local criminal drug laws.
Employee coverage standard
An employee is any contractor employee directly engaged in performing work under a Government contract. The term expressly includes all direct-cost employees and any other contract employee whose role has more than a minimal impact or involvement in contract performance.
Directly engaged is broad
The phrase directly engaged is intentionally expansive and captures not only workers charged directly to the contract, but also other personnel whose involvement is more than minimal. This prevents contractors from narrowing coverage by classifying workers as indirect if their work materially affects contract performance.
Individual contractor exception
An individual means an offeror or contractor with no more than one employee, including the offeror or contractor personally. This definition is important because it distinguishes sole proprietors or similarly small entities from organizations with multiple employees.
Responsibilities
Contracting Officer
Use these definitions to determine whether the subpart applies, whether a contractor’s personnel are covered employees, and whether the contractor qualifies as an individual. Apply the terms consistently when evaluating compliance, certifications, or any drug-related contract issues.
Contractor
Identify which workers are covered employees, understand that direct-cost and other materially involved personnel are included, and assess whether the business is an individual with no more than one employee. Use the definitions to build accurate internal compliance procedures and reporting practices.
Offeror
Determine at the proposal stage whether the entity is an individual and whether any personnel who will perform the contract are covered employees. Ensure representations and compliance planning reflect the broad definitions in this subpart.
Agency
Apply the definitions uniformly across procurements and enforcement actions under the subpart. Ensure internal guidance and contract administration practices align with the defined scope of controlled substances, convictions, criminal drug statutes, and covered employees.
Practical Implications
These definitions control who is covered, so small wording differences can change compliance obligations significantly.
Contractors should not assume only direct labor is covered; the definition of directly engaged can pull in other personnel with more than minimal involvement.
A plea of nolo contendere can count as a conviction for purposes of this subpart, which is a common compliance trap.
The term criminal drug statute includes non-federal laws, so state-level drug offenses may still matter under the subpart.
Businesses with only one employee, including the owner, should verify whether they qualify as an individual before applying organizational compliance procedures.
Official Regulatory Text
As used in this subpart- Controlled substance means a controlled substance in schedules I through V of section 202 of the Controlled Substances Act ( 21 U.S.C. 812 ), and as further defined in regulation at 21 CFR1308.11–1308.15. Conviction means a finding of guilt (including a plea of nolo contendere) or imposition of sentence, or both, by any judicial body charged with the responsibility to determine violations of the Federal or State criminal drug statutes. Criminal drug statute means a Federal or non-Federal criminal statute involving the manufacture, distribution, dispensing, possession, or use of any controlled substance. Employee means an employee of a contractor directly engaged in the performance of work under a Government contract. "Directly engaged" is defined to include all direct cost employees and any other contract employee who has other than a minimal impact or involvement in contract performance. Individual means an offeror/contractor that has no more than one employee including the offeror/contractor.