FAR 37.502—Exclusions.
Plain-English Summary
FAR 37.502 explains what services are excluded from the requirements of FAR Subpart 37.5, which governs inherently governmental functions and related service-contract controls. This section identifies specific categories of work that are outside the subpart’s coverage: services obtained through personnel appointments and advisory committees, personal service contracts authorized by statute, construction as defined in FAR 2.101, and services obtained through interagency agreements when the work is performed by in-house Federal employees. It also excludes services acquired under contracts below the simplified acquisition threshold and services that are incidental to supply contracts. In practice, the section tells contracting personnel when the special rules in Subpart 37.5 do not apply, while still emphasizing that sound management and contract administration are expected regardless of the acquisition method. The practical significance is that agencies must correctly classify the acquisition before applying Subpart 37.5, because misclassification can lead to using the wrong procurement approach or overlooking needed oversight.
Key Rules
Personnel and advisory exclusions
Services obtained through personnel appointments and advisory committees are outside the scope of this subpart. These are treated as Federal staffing or advisory mechanisms rather than service acquisitions subject to Subpart 37.5.
Statutory personal services
Personal service contracts authorized by statute are excluded. The key limitation is that the contract must be specifically authorized by law; otherwise, the exclusion does not apply.
Construction is excluded
Construction, as defined in FAR 2.101, is not covered by this subpart. Contracting officers should not apply Subpart 37.5 requirements to construction acquisitions simply because they involve labor or on-site performance.
Interagency work by Federal employees
Services obtained through interagency agreements are excluded when the work is actually performed by in-house Federal employees. The exclusion depends on the performance source, not just the agreement vehicle.
Below-threshold services excluded
Services acquired under contracts below the simplified acquisition threshold are excluded from the subpart’s requirements. Even so, agencies should still use appropriate acquisition planning and oversight.
Incidental services under supply contracts
Services that are incidental to supply contracts are also excluded. The focus remains on the supply acquisition, with the service component treated as secondary for purposes of this subpart.
Good management still applies
Even when an exclusion applies, agencies should use good management practices and contract administration techniques. The exclusion removes Subpart 37.5 requirements, but it does not eliminate the need for prudent oversight.
Responsibilities
Contracting Officer
Determine whether the acquisition falls within one of the listed exclusions before applying Subpart 37.5. Ensure the contract type, dollar value, and performance arrangement are correctly characterized, and still apply sound acquisition planning and administration even when the subpart does not apply.
Agency
Use the proper personnel, statutory, construction, interagency, or procurement vehicle for the work being acquired. Maintain management controls so excluded acquisitions are still handled responsibly and in accordance with applicable law and policy.
Contractor
Perform only the work authorized by the contract or agreement and understand that exclusion from Subpart 37.5 does not reduce other contractual obligations. Contractors should not assume that an excluded acquisition means less oversight or fewer performance expectations.
Program/Requirements Office
Help identify whether the requirement is truly a service acquisition covered by Subpart 37.5 or one of the listed exclusions. Provide accurate descriptions of the work so the contracting officer can select the correct acquisition method.
Practical Implications
The first day-to-day issue is classification: before applying Subpart 37.5, the contracting team must confirm whether the requirement is actually excluded. A mistake here can cause the agency to use the wrong acquisition framework.
The simplified acquisition threshold matters because small service buys are outside this subpart, but they still require disciplined buying practices. Do not treat the exclusion as a license for weak documentation or poor oversight.
Interagency agreements require special attention to who is doing the work. If Federal employees are performing the services in-house, Subpart 37.5 does not apply; if not, the analysis may change.
Incidental services under supply contracts can be overlooked because the primary acquisition is for supplies. Contracting officers should document why the service component is incidental and not a separate service acquisition.
The final sentence is important operationally: exclusions do not eliminate the need for good management. Agencies should still monitor performance, manage risk, and ensure the acquisition is structured and administered appropriately.
Official Regulatory Text
(a) This subpart does not apply to services that are- (1) Obtained through personnel appointments and advisory committees; (2) Obtained through personal service contracts authorized by statute; (3) For construction as defined in 2.101 ; or (4) Obtained through interagency agreements where the work is being performed by in-house Federal employees. (b) Services obtained under contracts below the simplified acquisition threshold and services incidental to supply contracts also are excluded from the requirements of this subpart. However, good management practices and contract administration techniques should be used regardless of the contracting method.