Request By:
Ms. Deborah Weeks
Office of Equal Opportunity Contract Compliance
Department of Finance
Capitol Annex
Frankfort, Kentucky 40601
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
On behalf of the Department of Finance, you request our opinion as to whether or not KRS 45.550 embraces personal service contracts? You say that the language in the statute does not specifically state that personal service contracts exceeding $250,000.00 will be monitored, however, you note that the term vendor is used and all contracts let by state government are considered vendor contracts.
KRS 45.550 is the title statute of the Act known as the Kentucky Equal Employment Opportunity Act of 1978. The Act is spread over KRS 45.560 to 45.640. It was enacted in 1978, Ch. 130.
Since KRS 45.560 is a definitional statute, we must look to it as the central point of analysis. See
Wohrley Inc. v. Com., Dept. of Rev., Ky., 495 S.W.2d 173 (1973). The statute reads in part:
As used in KRS 45.570 to 45.640, unless the context requires otherwise:
(1) "Contract" means any binding legal relationship between the Commonwealth of Kentucky and a contractor for supplies and services, including construction, or for the use of Commonwealth property, in which the parties, respectively, do not stand in the relationship of employer and employe.
(2) "Contractor" means any prime contractor holding a contract with the Commonwealth of Kentucky government, and shall include subcontractors when the context so indicates.
The key approach here is that the contracts involved in the subject act involve contracts between the Commonwealth of Kentucky and a contractor, who supplies goods and services, including construction. Thus there is no direct relationship of employer and employe as between the state and the person engaging in "services". There is no contract between the state and the person performing "services". To put it simply, the contractor procures the "services" or hires the labor.
This view is buttressed by the definition of "personal service contract" , as defined in the personal service contracts legislation, KRS 45.705 to 45.720, first enacted also in 1978, Ch. 212. KRS 45.700(1)(d) reads, as amended in 1982:
(1) As used in KRS 45.705 to 45.720:
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(d) "Personal service contract" means an agreement whereby an individual, firm, partnership or corporation is to perform certain duties, professional or otherwise for a specified period of time for a price agreed upon, which are exempted from competitive bidding pursuant to KRS 45.360. This definition does not apply to agreements with public utilities, foster care parents, medicaid providers, individuals performing homemaker services, transit authorities, agreements between a state agency and a state college or university, agreements between a state agency and an area development district, agreements between a state agency and a community action agency, agreements between a state agency and a mental health/mental retardation board, agreements between a state agency and another state agency and agreements between a state agency and a political subdivision.
Under KRS 45.700(1)(d), a "personal service contract" involves a direct relationship between the state and the individual or corporation who is to furnish his, her, or its personal services. The contract extends between the state to the contracting party furnishing the services, i.e., performing certain duties, professional or otherwise.