PSC Association
The Personal Services Contractor Association strives to advocate for and provide support to the hundreds of U.S. Personal Services Contractors (USPSCs) that work tirelessly to deliver humanitarian assistance and advance sustainable development worldwide on behalf of USAID.
EMPLOYMENT STATUS
1. Are USPSCs government employees?
Yes, USPSCs are government employees for all purposes except programs administered by the Office of Personnel Management (OPM). Personal services contracts establish an employer-employee relationship between USAID and the contractor. USPSCs have income taxes withheld by USAID and receive W-2s from the Agency. Programs administered by OPM include the Federal government’s health insurance, life insurance, and retirement benefits provided to members of the Civil Service and Foreign Service (i.e., direct-hire personnel). OPM also manages an awards program for direct-hire personnel across the U.S. government; USAID has an additional awards program in which USPSCs do participate, however.
2. What is the difference between USPSCs and third-party contractors?
There are a number of differences between USPSCs and third-party contractors. The two hiring mechanisms are often conflated as simply “contractors,” which is misleading. USPSCs are government employees and third-party contractors are not. Third-party contractors are instead employed by a company the Agency has contracted to provide their services. USPSCs can perform nearly all inherently government functions, but third-party contractors may not. Overseas, USPSCs are almost always under Chief of Mission authority, whereas third-party contractors often are not. Both types of contractors can obtain security clearances and USAID badges.
3. Can USPSCs perform “inherently governmental functions”? Are there any duties that USPSCs are prohibited from performing?
As employees of the Federal government, USPSCs may perform most inherently governmental functions. Appendix D of 48 CFR 7 states that USPSCs “may be delegated or assigned any authority, duty or responsibility delegable to U.S. citizen direct-hire employees (USDHs)” with the exception of three specific roles: 1) USPSCs may not supervise USDHs, although exceptions can be made for limited periods of time; 2) USPSCs can represent USAID “except that communications that reflect a final policy, planning or budget decision of the agency must be cleared by a USDH employee;” and 3) USPSCs can participate in personnel selection but may not make the final decision in that process. USPSCs can now more easily receive warrants (and thus sign contracts on behalf of the U.S. government) in the same manner as direct-hire personnel; this was previously a fourth limitation on USPSCs but has been eliminated.
4. Can USPSCs apply for positions limited to “status eligible” employees?
No. Currently, no mechanism exists for USPSCs to “convert” to direct-hire status except to apply to such positions that are open to the general public.
5. Do USPSCs need to pay state and federal income taxes?
Yes, all USPSCs are subject to income taxes and Social Security withholdings (FICA), including those posted overseas. As U.S. government employees, USPSCs are not eligible for the Foreign Earned Income Exclusion. If you are a USPSC posted overseas and are not a resident of the District of Columbia for tax purposes, you must complete Form D4-A to ensure that DC income taxes are not withheld from your paycheck.
6. Can USPSCs donate to state or federal political campaigns and political parties?
The Federal Election Commission (FEC) has ruled that a provision of the Federal Election Campaign Act of 1972 makes it a crime for any person who has a contract with any agency of federal government to make a contribution to any candidate for federal office (i.e., President/Vice President, Senate, and the House of Representative) or any political party or committee that is involved in federal elections. This ruling is currently being challenged by three USPSCs in federal court on the grounds that it violates both the Equal Protection Clause of the Constitution and the First Amendment’s guarantee to freedom of speech. There is no prohibition on USPSCs donating to state-level political campaigns, however.
7. Are USPSCs permitted to engage in political activity?
USPSCs, like direct-hire personnel, must comply with the Hatch Act, which places restrictions on political activity by Federal employees. For more information on policies regarding the political activity of USAID employees, see ADS 157.3.9. USPSCs serving overseas must comply with additional limitations on their political activities as outlined in 3 FAM 4123.3.
8. Are USPSCs permitted to engage in outside employment?
Yes, but USPSCs should consult an Agency ethics official before proceeding. USPSCs must comply with the Standards of Ethical Conduct for Employees of the Executive Branch (5 CFR 2635), including Subpart F, which covers seeking other employment.
9. Are USPSCs eligible for Agency awards?
Yes, USPSCs are eligible for individual and group non-monetary awards per ADS 491.3.1 and AIDAR Appendix D. USPSCs are also eligible for certain monetary incentive awards per AAPD 16-03.
10. Do USPSCs need a DUNS number? Do USPSCs need to register with SAM?
Yes, if the position is based in the United States. M/OAA introducted a new requirement in mid-2015 for USPSCs signing new contracts to obtain a DUNS number and register with SAM. The System of Award Management (SAM) tracks parties prohibited from receiving U.S. government business. A contracting officer is required to perform a SAM search before issuing a PSC contract, and thus USPSCs are required to register with SAM prior to signing their contracts. Please note that, despite it being PII, the address provided to SAM is searchable online due to transparency laws for Federal government contracting.
SALARY & BENEFITS
11. How are USPSC salaries determined?
Salary ranges for USPSC positions are determined by the General Schedule (GS) grade(s) to which the position has been classified. USPSCs are not, however, considered GS employees. GS pay tables can be found on the OPM website. For example, if a DC-based position is advertised at the GS-13 level, the salary range is limited to $89,924 to $116,901 per year. Where a USPSC will fall in that range is determined primarily by his or her recent salary history. Only base salary is considered for the purposes of determining a USPSC’s salary history. The contracting officer (CO) or executive officer (EXO) has broad authority and discretion in determining USPSC salaries.
12. What benefits are USPSCs eligible for?
USPSCs are generally eligible for a range of benefits including: contributions toward health and life insurance premiums; pay comparability adjustments (i.e., annual adjustments to the GS scale and locality pay tables) if/when enacted; worker’s compensation; annual leave and sick leave; pre-tax 401(k) contributions; medical evacuation coverage; and transit benefits (DC-based PSCs only). USPSCs posted or traveling overseas are also eligible for the following: temporary lodging allowance, living quarters allowance, post allowance, supplemental post allowance, education allowance, educational travel, post differential, payments during evacuation/authorized departure, and danger pay.
13. I used to be a direct-hire employee of the U.S. government. Can I count my prior service towards my annual leave accrual rate?
Yes, prior Federal service with the U.S. government (including civilian and military service) can be credited towards the years of service requirements for annual leave accrual rates.
14. Are USPSCs eligible for worker’s compensation (FECA)?
Yes, the Federal Employees’ Compensation Act provides federal employees injured in the performance of duty with workers’ compensation benefits. FECA is managed by the Office of Workers’ Compensation Programs (OCWP) at the Department of Labor, not the Office of Personnel Management, and thus USPSCs are covered.
15. Are USPSCs eligible for health insurance?
USPSCs are not eligible to participate in the Federal Employees Health Benefits (FEHB) program managed by OPM, unless they are a retired direct-hire employee of the U.S. government or the spouse of a current or retired direct-hire employee of the U.S. government. Instead, USPSCs are entitled to reimbursement of 72% of the actual cost his/her annual health insurance premiums, up to a limit of $7,226 per year for individuals and $20,339 per year for USPSCs with families covered by the policy. Group health insurance plans are offered to U.S.-based and overseas USPSCs by Bowman Gaskins, but USPSCs are also free to choose their own provider and policy. Reimbursement is received by submitting an SF-1034 and is charged against the PSC contract.
16. Are USPSCs eligible for dental or vision insurance reimbursement?
No, USPSCs are not eligible for dental or vision insurance reimbursement. If the PSC’s health insurance plan includes dental and/or vision coverage, USAID will likely request a breakdown of premium to exlcude from reimbursement the portion for those benefits.
17. Are USPSCs eligible for life insurance?
USPSCs are not eligible to participate in the life insurance program managed by OPM unless they are a retired direct-hire employee of the U.S. government or the spouse of a current or retired direct-hire employee of the U.S. government. Instead, USPSCs are entitled to reimbursement of 50% of the actual cost of his/her life insurance premiums, up to a limit of $500 per year.
18. Are USPSCs eligible for long-term care insurance?
USPSCs are not eligible to participate in the Federal Long Term Care Insurance Program (FLTCIP), which is managed by OPM, unless they are a retired direct-hire employee of the U.S. government or the spouse of a current or retired direct-hire employee of the U.S. government. PSC contracts do not provide any reimbursement for long-term care insurance premiums.
19. Are USPSCs eligible for retirement benefits?
USPSCs are not eligible to contribute to retirement services managed by OPM (i.e., TSP). Instead, USPSCs may make pre-tax contributions to a 401(k), but will not receive any matching contributions from the Agency. USPSCs who are retired direct-hire employees of the U.S. government may collect retirement benefits from OPM-managed programs when they are eligible, however.
20. Are USPSCs eligible for maternity/paternity leave?
USPSCs may utilize their annual and sick leave to take time off in conjunction with the birth of a new child or adoption of a child. USPSCs may request from their CO/EXO advanced sick leave up to the amount they would earn in one year or over the life of the contract, whichever is less. USPSCs may also request leave without pay (LWOP) from their CO/EXO.
21. Are USPSCs eligible for FMLA?
Yes. USAID's General Counsel (GC) has determined that U.S.-based USPSCs are covered by the Family Medical Leave Act (FMLA). USPSCs based overseas are covered by Agency policy per AAPD 15-02.
22. Are USPSCs eligible for training?
Yes, USPSCs are generally eligible for training. ADS 458.3.2 states that USPSCs can participate in training if the Office of Human Resources, Training and Education Division (OHR/TE) determines it “to be advantageous to the U.S. Government.” Missions, bureaus, and offices often develop their own training policies or guidelines, which may specify what types of training USPSCs may take and/or how often.
23. Are USPSCs eligible for services provided by USAID’s Staff Care Center?
Yes, all USAID employees, regardless of hiring mechanism or place of employment, are eligible to access the services of the Staff Care Center, both in-person and remotely.
24. Are USPSCs eligible for the transit benefit?
Yes, DC-based USPSCs are eligible for the transit benefit. To apply, submit the completed a515-1 form to your AMS Officer.
25. Does time as a USPSC count as eligible public service for the Public Service Loan Forgiveness Program?
Yes, work as a USPSC for USAID counts as eligible public service for the Public Service Loan Forgiveness Program (PSLF). This is not the same as the loan repayment benefit that direct-hires may be eligible for. Rather, the PSLF is a program through which borrowers can qualify for student loan forgiveness following 120 on-time payments while working full-time at a qualifying public service organization, which includes both the government and tax-exempt non-profit organizations.
OVERSEAS ASSIGNMENT & TRAVEL
26. Are USPSCs eligible for Diplomatic Passports?
Yes, USPSCs (and their authorized dependents) assigned overseas are entitled to Diplomatic Passports. In addition, DC-based and intermittent USPSCs that travel overseas frequently may be authorized a Diplomatic Passport.
27. Are USPSCs eligible for diplomatic titles?
The assignment of diplomatic titles is managed by Department of State’s Overseas Civil Service Assignment Unit in the Bureau of Human Resources (HR/CDA/T&R). No law or regulation prohibits the assignment of full diplomatic titles to USPSCs and the assignment of diplomatic titles varies by post. One exception is that USPSCs cannot be notified as consular staff. ADS 155.3.1.2 states that “U.S. citizen and third country national PSC employees are notified to the host government A&T [administrative and technical] personnel, unless USAID bilateral or other arrangement provides for notification with diplomatic agent status.” In addition, the Foreign Affairs Handbook (3 FAH-1 H-2438.1-2) permits A&T staff to receive full diplomatic titles for security reasons. Diplomatic titles are requested by EXO/HR at post to USAID/Washington using form DS-1474.
28. Are USPSCs eligible for danger pay and post differential?
Yes, USPSCs are eligible for danger pay and post differential in the same manner as direct-hire personnel. The cost should be included in the USPSC’s contract.
29. Are USPSCs eligible for Overseas Comparability Pay?
No, Overseas Comparability Pay applies only to members of the Foreign Service.
30. Are USPSCs posted overseas eligible for home leave?
Yes, USPSCs posted overseas are eligible for home leave in accordance with AAPD 06-11. As a general rule, USPSCs who have served overseas at the same post for 24 months and have a commitment to return are eligible for 30 paid work days of home leave. In addition, USPSCs who complete 12 months of service at a qualifying post (namely Iraq, Afghanistan, or Pakistan) are eligible for 10 paid works days of CPC home leave. CPC home leave is in addition to the regular home leave USPSCs may be eligible for as described above. Home leave must always be taken in the United States, its territories, or possessions.
31. Are USPSCs posted overseas eligible for housing?
Yes, USPSCs posted overseas are eligible for government-provided housing in the same manner as direct-hires, unless the PSCs are resident hires (i.e., locally recruited by the mission). Housing costs are paid for through ICASS.
32. Are USPSCs posted overseas eligible for a shipping and storage allowance?
Yes, USPSCs posted overseas are generally eligible for shipping and storage allowances in the same manner as direct-hires. Shipping costs should be included in the USPSC’s travel authorizations for deployment to and return from post.
33. Are USPSCs posted overseas eligible for a consumables allowance?
Yes, USPSCs are generally entitled to a consumables allowance if assigned to a post deemed eligible for the allowance by the Department of State. The cost of the allowance should be included in the USPSC’s assignment-to-post travel authorization.
34. Are USPSCs posted overseas eligible for the Foreign Transfer Allowance or the Home Service Transfer Allowance?
No, only direct-hire personnel may apply for the Foreign Transfer Allowance and the Home Service Transfer Allowance.
35. Are USPSCs eligible to use of the APO/DPO and/or pouch service?
Yes, USPSCs are generally eligible to use the APO/DPO (or equivalent) and pouch service in the same manner as direct-hire personnel. Each post will have specific guidance on limitations regarding how these services may be used (e.g., liquids and batteries are often forbidden).
36. Are USPSCs eligible to use commissaries and PXs?
Yes, USPSCs are eligible to use commissaries run by employee associations in the same manner as direct-hire personnel. Commissaries and post exchanges (PXs) operated by the Department of Defense may also grant access to USPSCs, though policies will vary by post.
37. Can USPSCs serve as duty officers?
There is no regulation that prevents USPSCs from serving as duty officers, though actual practice will vary by post.
38. Can USPSCs change their home of record?
USPSCs can change their home of record, albeit it with some restrictions. USPSCs posted overseas can typically designate an overseas location as their home of record for the purposes of shipping their household effects (HHE), but must maintain a home of record in the U.S. for tax purposes. The home of record cannot be changed within one month of the end of a USPSC’s tour overseas, however.
Frequently Asked Questions