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Agency forgot to include a wage determination in a concessions contract until several years into contract. Agency finally added the WD at DOL request. DOL seeking back wages from contractor. Contractor intends to seek equitable adjustment from Agency. We cannot find precedent for how an equitable adjustment would work in a concessions contract. Contractor earns a modest management fee as FFP % of sales and remits a similar size fee to Agency. Any ideas? Let me know if you need additional facts. And thanks for any insight you all may have for us!
Have upcoming recompete of a five year (Base + four 1-year OPs) FFP commercial service requirement subject to Service Contract Labor Standards (SCLS) so Contractors have right of first refusal (Non-Displacement of Qualified Workers). We just need bodies to do the work as opposed to new solutions so with that being said both current and I think preceding contracts went LPTA and thinking the same for the recompete as there is nothing really to tradeoff. Issue although not really an issue for me personally but is that I'm told some of these Contractors due to the WD positions in which they occupy have not received a pay raise in five to ten years as Wage Determination (WD) rates have remained static for numerous positions. Yet this requirement supports a somewhat remote facility so while there is turnover / attrition it's not at the rate you'd expect and instead it is usually an awkward environment as these Contractors work alongside Feds in some instances. Historically and practically, all the competitive SCLS requirements I've done have been FFP & LPTA in which the Offerors just propose the current WD rate for the SCLS covered employees for all PoPs (i.e. Base and OPs). However, for non-competitive SCLS requirements I've done (i.e. 8(a) direct source), it was acceptable for the Offeror to propose modest (1% - 2%) escalation to hourly rates each PoP. Like honestly and in at least in my experience thus far, it's like you only see no salary escalations as an across the board rule of thumb in competitive procurements subject to SCLS, the Contractor employees of which usually make way less than Professional Services employees, but I digress. Anyways, I've scoured the threads here concerning permissibility of proposing increases from the WD rates in the Base and OPs, and the verdict seems like a hung jury. However, this thread (http://www.wifcon.com/discussion/index.php?/topic/1750-service-contract-act-escalation-and-cost-reimbursement-solicitation/) brought a GAO case ( to my attention whereby GAO raised no objection to Offerors proposing COLAs for SCLS covered employees per RFP instructions "to propose realistic prices that allowed for increases for things such as cost of living" and even went so far as to say an Offeror who didn't and instead choose to rely on future WD increases resulted in a Government evaluation on an unequal / apples and oranges basis that should be resolved during discussions with that one Offeror (at least that's how I'm interpreting it --> reference p.11-12). While this GAO case was for a FP IDIQ, it was a tradeoff procurement in which the RFP stated price would be evaluated for realism and reasonableness. Interestingly enough, the protest was sustained because GAO agreed the Government evaluated it as if it was a LPTA procurement. My initial thought was then why wouldn't it be permissible for my RFP instructions to otherwise mimic the RFP language from this GAO case i.e. state that proposed pricing for base and OPs must reflect any planned increases necessary to achieve say for example Offerors' recruitment and retention policies e.g. a COLA? But then since there is no need for me to conduct a price realism analysis and since my procurement is LPTA, the difference between the winner and losers could potentially come down to who proposed the lowest COLA, if the winning Offeror even thinks there is a need to propose one. I could see the incumbent doing this, and I don't see how I'd evaluate as technically unacceptable given the aforementioned historical turnover / attrition background. Then I thought well while I've never seen a RFQ or RFP state a maximum escalation rate at which the Government would consider reasonable, but what if instead I had a RFQ/RFP term or cost/price evaluation instructions/process state any escalation above a certain % will not be considered fair and reasonable. I know competition usually takes care of the issue of overinflated escalation, but again this isn't a competitive Professional Services circumstances or tradeoff procurement where you'd typically still see escalation proposed. Given how competitive LPTA SCLS requirements are responded to by Offerors, I don't see this as unduly restrictive or unfair. And I am well aware this doesn't guarantee or require that the Contractor will actually pay its employees these escalated rates above the WD. Anyone want to provide an opinion on this and how the proposing of 0% escalation in SCLS procurements is fair and reasonable to both Gov and Contractor when some positions don't see hourly rate increases for multiple years on revised WDs in combination with the historical background of the SCA that was to ensure "prevailing" wage rates and fringe benefits were paid by the Gov. to service Contractor employees. Just trying to get some insight for the resources here. Thanks in advance.
Situation: Currently managing an IDIQ contract for Base Operation support. The contract as a separate IDIQ CLIN for Task Order. The Navy is issuing a Task Order this month with the current DB wage determination but the actual labor will not start until Oct 2014. The award was issued this FY for the ordering of long lead ODC/materials. - We added a condition in our proposal stating that if DoL modifies the current wage determination we are entitled to an adjustment. The contract type is FFP. - Navy said that in conversation with DoL, since this is a FFP contract they are not allowed to update the modified wage determination, if one is issued in FY 15. - Here is where I am struggling: FAR 22.404-6(c )(3) states is an effective wage modification is received by the CO, after award (that will be the case here), that the CO shall follow 22.404-6(B )(5). FAR 22.404-6(B )(5) states that if received after award the CO shall modify the contract to incorporate the wage determination retroactive. However, FAR 22.404-12(B ) if contract with option, the CO the wage determination incorporated into the contract at the exercise of the option - the WD will be effective for the complete period of performance. Additionally, DoL website state that once awarded the modification can not be incorporate. One final reference, DoL Memorandum No. 157, clarifies the application of Davis Bacon. Sorry for the long winded, but is the CO authorized not to change the Task Order even if when the option is exercised and a new wage determination is incorporated (modified). Thanks for the guidance.
Good afternoon, Mr. Edwards: First, let me thank you in advance, for your assistance. This site is wonderful for getting another perspective on all things Federal Government contracting. Here is my question: Recently, the Department of Labor has been conducting an audit of the Service Contract Act to ensure we have been following appropriate procedures (i.e. paying correct wage and health and welfare). Last week, we received an amendment to modify a Blanket Purchase Agreement (BPA) through an amendment that retroactively incorporates the Wage Determination schedules for 2011 and 2012. What they are attempting to do is force our customer to have us sign the amendment so that we would be responsible for the wage differences and health and welfare from the inception of the contract. I have done a quick calculation and for the number of hours that we have put into the BPA calls, it would add up to a very large number. We would have never priced the contract as we did if this was an SCA contract and we stand to lose a significant amount of dollars if we were to accept this retroactively. Can you please tell me what recourse we may have. Thank you very much!