SmBiz owner

4 minutes ago, Jamaal Valentine said:

 Was this question presented to the contracting office? What did they say?

No. The RFP is not out yet and we are trying to decide whether we should approach the KO to inquire about the OCI possibility. I just happen to work for a company in one of those situations and know another company in the other situation. I'm simply trying to understand if either of us run the risk of our connection to the client being seen as a conflict. I'm not sure if this question is too basic or too complex.

Regarding scenario #1, I did a google search and found language about close relationships (spouse, parent/child) with Gov't clients being an issue. So does that mean a cousin, uncle, or other more distant relationship would be viewed as no problem?

Regarding scenario #2, this is a common situation where a company does pre-marketing with a client organization. The President has a few beers with his Navy buddy and learns everything he can about the future opportunity. Is that fair that he has privileged access because of his good friend? Would a competitor who loses to Company Y have any grounds to protest the award if they feel the personal relationship gave them an unfair advantage?

5 minutes ago, Vern Edwards said:

Don't be silly, SmBiz owner. Your inquiry here about such a matter is foolish. Consult a government contracts attorney. Don't ask strangers at a website.

 

Seriously? From my observation, the majority of posts on this website are from people trying to understand the convoluted and complex aspects of government contracting. If all of the legal / contractual questions were removed from this website, I don't think it would have a reason to exist. I thought the point was for those with less knowledge to seek guidance from those who have more insight. If we had a government contracts attorney, I wouldn't be wasting my time on this forum. As a small business, we are simply trying to understand something we have not experienced previously. Excuse me if my question to all of you strangers on this website was inappropriate.

Two scenarios – both involving small businesses considering a future RFP (not yet released).

1. Company X is considering a bid on a Navy RFP and the company President is a cousin of the Government PM. Their relationship is purely personal and no business is discussed when they communicate.

    

2. Company Y is considering a bid on the same RFP and the President of company Y is a good friend of the Government PM. They served together in Iraq and the President and the PM have met regularly to discuss company capabilities and the Government's future needs. 

    

Do either or both of these situations represent a conflict of interest that would require disclosure as part of the bidding process (assuming the future RFP includes a OCI clause)? If unclear, how and when could each company obtain a ruling before the RFP hits the street?

Charge the staffing fee to overhead. Don't charge it direct. There is no requirement to charge the staffing fee as a direct cost. Treat it is an indirect recruitment cost.

Hope this helps.

Our entire annual recruiting budget is less than $10K. Paying a ~$20K recruiting fee for each candidate (for 4-6 potential new hires) is a bit outside of our budget. Maybe we should increase our recruiting budget to $120K next year... I'll take a look a what that does to our overhead rate.

I'm not sure I understand that. You would hire the staffing company and they would employ the candidates for six to nine months pending their approval by the government? You would pay the staffing company for the candidates' work at an hourly rate, from which they would take their fee and pay the candidate? After six to nine months you would hire the candidates yourselves and the relationship with the staffing company would end? Is that right?

As noted, the candidate must be approved by the client before showing up at the client site - regardless of whether we hire them, a subcontractor hires them, or a staffing agency hires them. Government approval must precede hiring. The rate charged by the staffing firm would include the candidate pay along with the fee and whatever fringe/OH charged by the staffing agency. Yes to your final question. After the 6-9 month "trial period" - assuming the candidate is viable, he/she would become our employee and the relationship with the staffing agency ends.

SmBiz, is your contract subject to the Service Contract Act, and if it is, will the people hired by the temp agency be service employees?

Our contract is not subject to SCA.

I wasn’t sure where to post this question, but thought this was a good place to start. First, let me describe our situation.

· We are a small business with a CPFF contract

· All staff members are at the Client site

· Contract requires Client approval of all new personnel (sometimes done via resume review – sometimes direct interview of candidate)

· All positions require a security clearance and fairly unique skills (i.e., difficult to fill positions)

· Contract includes a Consent to Subcontract clause

· We have several large business subcontractors

· We have had difficulty filling several positions and our large biz subs have failed also

Since we (and our subs) cannot fill open positions, we have considered using a staffing agency. A typical headhunter fee is 20% of the first year salary. Paying $20K for a $100K employee is not affordable – much less when you multiply that times 4 or 5 positions.

Several staffing companies have offered an alternative approach which they assure us they do for other government contractors. They will employ the candidate for 6-9 months at a certain rate after which the candidate comes to work for our company. During that 6-9 month period, the company earns their fee through the hourly rate – meaning the fee is absorbed as a direct cost, not indirect. The problem is that the new hire is not our employee. Our invoices clearly indicate each employee by name and employer (with appropriate indirects and fees), so the individual’s employer would be clearly visible to the client. We have no desire to do anything underhanded or deceptive - we just need a way to fill these positions. Headhunters have huge databases and recruiting methods that even our large business subs cannot duplicate.

So, the question is – can we use a staffing agency in our situation, and if so, how?

An obvious answer is to add them as a subcontractor. But that is a process that takes a significant amount of time and effort (and is discouraged by our client – especially approaching the end of the fiscal year).

The staffing agencies say they “do this often” with other companies without being considered a subcontractor. They use a Professional Services Agreement (PSA) or Master Services Agreement (MSA) rather than a full-blown subcontract. But I suspect they are filling positions that may be internal company positions or roles on Fixed Price contracts or other contracts that do not require subcontracting consent.

There are employees and subcons. Is there a third category that can be utilized in the environment I describe above?