When a solicitation contains FAR 52.222-46, Evaluation of Compensation for Professional Employees, offerors are required to submit a written plan for compensating their proposed staff that are not covered by the Service Contract Labor Standards Act as part of their proposals. If you don’t include it when this clause is in the RFP, you may be found to be noncompliant and your proposal disqualified before it even reaches the evaluators.
So, what is the government looking for in this Plan? FAR 52.222-46 actually contains some pretty specific requirements for meeting this requirement:
- “…submit a total compensation plan setting forth salaries and fringe benefits proposed for the professional employees who will work under the contract. The Government will evaluate the plan to assure that it reflects a sound management approach and understanding of the contract requirements.”
So, first the plan must include the salaries and fringe benefits proposed for the professional employees who will work under the contract and for which your price proposal is based on. The salary rates or ranges must take into account differences in skills, the complexity of various disciplines, and professional job difficulty. What you’ll need to do in the plan is clearly show how you determined what the salaries (or range of salaries) should be for the type and level of expertise you are proposing, at the location in which they will be performing the effort. You should show some comparable rates that have been developed by nationally recognized experts who regularly conduct salary surveys throughout the country (such as Salarie.com, payscale.com, and indeed.com/salaries). Look for information on the specific locations of performance. Are any of them remote, maybe requiring a commute of more than an hour each way? Is there a shortage of technical expertise in a particular labor category that will require you to relocate someone to work there – and will you be able to keep them working for you once they are there? Talk about how you’re going to bridge this gap and make it worthwhile for these valuable employees to make that trip for a couple of years.
- “The professional compensation proposed will be considered in terms of its impact upon recruiting and retention, its realism and its consistency…”
The Government wants to make sure that the proposed salaries will actually allow the contractor to recruit (in a timely fashion, not after six months of desperate searching and candidates who “almost” meet the requirements), hire, and retain (for at least a couple of years) the expertise needed to perform all of the contract requirements. So the ability to keep your employees happy is essential. What goes a long way to keeping professional level expertise is the benefits, such as health insurance not only for the employees and their families, paid time off, and tuition assistance. You’ll need to describe these vary specifically in your Plan, naming the insurance company(ies), specifying when, how and how much paid time off they will earn, and describing the types of additional benefits you offer and the rules for earning those benefits.
- “This evaluation will include an assessment of the offeror’s ability to provide uninterrupted high-quality work.”
A constantly revolving door means loss of continuity in the services being provided, and constantly going through learning curves as new employees come on board. If the salaries are too low, newly hired individuals will probably start looking for new positions within six months of arrival when they figure out that the cost of living in the area means they are losing money on the position they just started. Then the whole process starts again, probably with the same results. It also means the positions may be vacant for significant periods of time as the company tries to find individuals desperate enough to take the position – and who may well be less than desirable employees as far as quality of work and work ethics.
FAR 52.222-46 spells out why this is so important to the government: “The Government is concerned with the quality and stability of the work force to be employed on this contract…. Failure to comply with these provisions may constitute sufficient cause to justify rejection of a proposal.” Providing sound justification is especially important if you are proposing rates that are lower than those paid by the incumbent. And let’s face it, you need to know if you’ll be able to hire and retain the expertise you will need for successful contract performance.