EP 1180-1-1
1 Aug 01
necessarily determinative.
3-3. Service Employee.
a. The Act covers service contracts only where "service employees" will be used in performing the
services to be procured through the contract. Section 8(b) of the Act defines "service employee" as
follows:
The term service employee means any person engaged in the performance of a contract
entered into by the United States and not exempted under Section 7, whether negotiated
or advertised, the principal purpose of which is to furnish services in the United States
(other than any person employed in a bona fide executive, administrative, or professional
capacity, as those terms are defined in part 541 of Title 29, Code of Federal Regulations,
as of July 30, 1976, and any subsequent revision of those regulations); and shall include
all such persons regardless of any contractual relationship that may be alleged to exist
between a contractor or subcontractor and such persons.
b. The Act's coverage does not extend to contracts for services to be performed exclusively by
persons who are bona fide executive, administrative, or professional personnel as defined by 29 CFR
541. For example, a contract for medical services furnished exclusively by professional personnel is not
an SCA-covered contract. Regulatory guidance in section 4.113 of 29 CFR Part 4 further states that
service contracts to be performed essentially by such exempt personnel with the use of service employees
being only a minor factor in the contract's performance are not covered by the SCA (see, for example,
discussion in paragraphs 3-12 and 3-13 of this pamphlet).
c. In contrast, service contracts involving a significant or substantial use of service employees with
some use of bona fide executive, administrative, or professional personnel in the contract's performance
are SCA-covered contracts. For example, contracts for drafting or data processing services are often
performed by drafters, computer operators, or other service employees and are subject to the Act even
though the work of such employees may be performed under the direction and supervision of bona fide
executive, professional, or administrative personnel.
3-4. Geographic Scope of the Act.
a. The Act covers contract services furnished in the United States, which is defined as any of the 50
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