Subpart 37.5
Management Oversight of Service Contracts
FAR Subpart 37.5 requires agencies and contracting officials to establish and maintain robust oversight of service contracts to ensure compliance, performance, and the proper distinction between contractor and governmental roles.
Overview
FAR Subpart 37.5 establishes the requirements for management oversight of service contracts within federal agencies. Its purpose is to ensure that agencies maintain effective oversight and management of service contracts to achieve mission objectives, prevent waste, and avoid inappropriate reliance on contractors for inherently governmental functions. The subpart defines key terms, outlines exclusions, and assigns specific responsibilities to agency heads and contracting officials for the proper administration and oversight of service contracts.
Key Rules
- Scope and Definitions
- Clarifies the applicability of the subpart and defines key terms related to management oversight of service contracts.
- Exclusions
- Identifies types of contracts or situations that are not subject to the requirements of this subpart.
- Agency-Head Responsibilities
- Assigns agency heads the duty to ensure effective management and oversight systems are in place for service contracts.
- Contracting Officials’ Responsibilities
- Requires contracting officials to implement oversight practices, monitor contractor performance, and ensure compliance with agency policies and federal regulations.
Responsibilities
- Contracting Officers: Must monitor contractor performance, ensure contract requirements are met, and avoid inappropriate reliance on contractors for inherently governmental functions.
- Contractors: Must comply with contract terms and cooperate with oversight activities.
- Agencies: Must establish and maintain oversight systems, assign responsibilities, and ensure compliance with federal policies.
Practical Implications
- This subpart exists to prevent misuse of service contracts and ensure that agencies retain control over mission-critical functions.
- It impacts daily contracting by requiring structured oversight, clear assignment of responsibilities, and regular performance monitoring.
- Common pitfalls include inadequate oversight, failure to distinguish between contractor and governmental roles, and insufficient documentation of oversight activities.