When can personal service contracts be allowed?

Personal service contracts are a unique category of contracts that involve a high degree of personal involvement and government oversight. The correct answer being that they are allowed if specifically authorized by statute reflects the legal and regulatory framework that governs such contracts.

Under federal acquisition regulations, personal service contracts are typically prohibited unless there is explicit statutory authority permitting their use. This is because these types of contracts can create an employer-employee relationship, which can lead to significant issues regarding government accountability and fiscal responsibility. Thus, without statutory authorization, agencies may not enter into personal service contracts, aligning with the principle that such arrangements should not establish a permanent government employee role without due process.

The other options, while related to contracting considerations, do not directly align with the legal requirements governing personal service contracts. The necessity for government use or the availability of funding are not valid grounds on their own without the statutory authorization. Additionally, there is no threshold in contract value like $2 million that specifically justifies a personal service contract; rather, the contract must adhere to the regulatory directives that require statutory backing to ensure compliance and accountability.