Can an award program cover both regular Federal employees and contract employees?
No. Employees of outside contractors may not receive direct payments from the Federal Government. Their employment, including pay, rewards, and discipline, must be handled by their employer, who is the contractor, not the Government. We are aware that in some situations, Federal employees and contract employees work side-by-side as members of the same overall work teams. In such cases, it might be desirable to use procurement flexibilities to set up a parallel awards program for the contract employees, which the contractor would be required to fund and administer. Under the terms of the contract, the Government could make additional payments to the contractor according to performance-related criteria specified in the contract, to provide the funds which the contractor would then distribute to the contract employees. Setting up and operating such a program would have to conform to procurement regulations, limitations, and requirements. Personal services contracts could also be written to allow for performance-contingent payments. The key issue is that such payments to individuals, whether under personal services or non-personal services contracts, would not be made under the awards authorities in title 5, United States Code.