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Nanook

Exceeding DoL SCA Wage Determination

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Facts: 8(a) sole source Contract at a facility with clearance requirements and limited labor pool. Contracting Officer, having done required due diligence and fair and reasonable determinations, wants to exceed the DoL established SCA wage determination. Despite contacting the DoL SCA Wage Determination Office and getting their assurance that it was permissible and they would email supporting guidance, nothing has been sent (note - not being critical of them; people get busy). Looking for any written guidance or regulation, internal to DoL or otherwise, that would support exceeding the WD. Thanks in advance.

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From FAR 22.1001, Definitions: “Wage determination” means a determination of minimum wages or fringe benefits made under 41 U.S.C. 6703 or 6707© applicable to the employment in a given locality of one or more classes of service employees.

It's a minimum and shouldn't require any approval to exceed the rates set forth within.

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Styrene,

Thanks for the reply. I concur wholeheartedly but this is Round 2 and DCAA pushed back during Round 1. Thus, I was hoping DoL would send me their guidance and why I'm looking for something 'more.' Thanks again.

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Am I understanding correctly that DCAA is using the wage determination rates as the basis for reasonableness of the rates? Oy! Is that coming from the Supervisory Auditor in the office?

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Nanook,

Please explain how DCAA is "pushing back". Is DCAA conducting price negotiations?

As far as I know, DCAA can only recommend and it is the Contracting Officer who negoatiates price. Unless I'm missing something, DCAA's "findings" can be overridden .. or (at worst) escalated for adjudication.

Hope this helps.

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Nanook, just to be clear, is the contracting officer wanting to require offerors to propose higher rates than those listed in the WD? If so, has the contracting officer identified what those higher rates are and how were they derived?

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All - thanks for the comments and insight. This is not a case of being on the side of right - clearly, the Contracting Officer can and will prevail but we all know how painful that can be, and how much time and effort is spent in the process. I'm still kinda hoping that some can put their fingers on the DoL-promised guidance...while I doubt it is dispositive, I'm hoping it provides some regulatory basis beyond the FAR.

Retreadfed - short answer - non-competitive follow-on (all I's dotted and T's crossed). So, yes....the desire is to attract and retain people with suitable clearances in an area where demand for these employees far exceeds supply.

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Did you consider this found at the end of every SCA

REQUEST FOR AUTHORIZATION OF ADDITIONAL CLASSIFICATION AND WAGE RATE {Standard Form

1444 (SF 1444)}

Conformance Process:

The contracting officer shall require that any class of service employee which is

not listed herein and which is to be employed under the contract (i.e., the work to

be performed is not performed by any classification listed in the wage

determination), be classified by the contractor so as to provide a reasonable

relationship (i.e., appropriate level of skill comparison) between such unlisted

classifications and the classifications listed in the wage determination. Such

conformed classes of employees shall be paid the monetary wages and furnished the

fringe benefits as are determined. Such conforming process shall be initiated by

the contractor prior to the performance of contract work by such unlisted class(es)

of employees. The conformed classification, wage rate, and/or fringe benefits shall

be retroactive to the commencement date of the contract. {See Section 4.6 ©(vi)}

When multiple wage determinations are included in a contract, a separate SF 1444

should be prepared for each wage determination to which a class(es) is to be

conformed.

The process for preparing a conformance request is as follows:

1) When preparing the bid, the contractor identifies the need for a conformed

occupation(s) and computes a proposed rate(s).

2) After contract award, the contractor prepares a written report listing in order

proposed classification title(s), a Federal grade equivalency (FGE) for each

proposed classification(s), job description(s), and rationale for proposed wage

rate(s), including information regarding the agreement or disagreement of the

authorized representative of the employees involved, or where there is no authorized

representative, the employees themselves. This report should be submitted to the

contracting officer no later than 30 days after such unlisted class(es) of employees

performs any contract work.

3) The contracting officer reviews the proposed action and promptly submits a report

of the action, together with the agency's recommendations and pertinent

information including the position of the contractor and the employees, to the Wage

and Hour Division, Employment Standards Administration, U.S. Department of Labor,

for review. (See section 4.6(B )(2) of Regulations 29 CFR Part 4).

4) Within 30 days of receipt, the Wage and Hour Division approves, modifies, or

disapproves the action via transmittal to the agency contracting officer, or

notifies the contracting officer that additional time will be required to process

the request.

5) The contracting officer transmits the Wage and Hour decision to the contractor.

6) The contractor informs the affected employees.

Information required by the Regulations must be submitted on SF 1444 or bond paper.

When preparing a conformance request, the "Service Contract Act Directory of

Occupations" (the Directory) should be used to compare job definitions to insure

that duties requested are not performed by a classification already listed in the

wage determination. Remember, it is not the job title, but the required tasks that

determine whether a class is included in an established wage determination.

Conformances may not be used to artificially split, combine, or subdivide

classifications listed in the wage determination.

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C Culham - thank you. Even DoL indicates this isn't necessary because: 1) there's an existing WD, and 2) we're looking to exceed the WD. I appreciate you looking out for me,

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Nanook - By recent experience I assisted another on almost the same question. Their response from DOL was pretty much the same as you got but when it came for the rubber to meet the road DOL expressed that the contractor should follow the conformance route.

From my view here is what I see as the clarifying issues. DOL will do a special wage determination per the SF98 request process. But should that process still result in a wage/benefit that is less than even you think is appropriate as the agency (in concert with the contractor) then it seems the conformance process initiated by the contractor is the option that is left.

Again based less on a complete study of the DOL processes and more on a experience that occurred in the last year.

I will be interested if you ever hear back from DOL.

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If the existing labor pool is being compensated at higher rates than the rates in the SCA decision, and that's what it takes to retain the personnel with the requisite skill sets and clearances, the contractor ought to be able to justify that and the KO should be able to agree that this is necessary and reasonable.

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Nanook, you said this is a follow on contract. Is the current contractor paying its employees wages that are higher than the applicable WD? If not, is the contractor having turn over problems and if so is this impacting contract performance? If the answer to these questions is "no", why do you want the government to pay more for these services?

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Retreadfed - Currently paying higher than the WD because exactly that - turn over which is adversely affecting performance. CO/KO and contractor all in agreement. Issue is NOT is this in the govt's best interest OR whether it's permissible. Sole issue is whether there is any written guidance affirmatively supporting this (Note - not an absence of written guidance not otherwise prohibiting it). Thanks

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Nanook,

Are you asking for written guidance affirmatively supporting a contractor's right to pay wages higher than the wage determination?

Or are you asking for written guidance affirmatively supporting a contracting officer's right to find a price reasonable when based on those higher wages?

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ji20874,

I did not very well articulate what I was hoping to locate - here it is: because DoL gave me an assurance that exceeding their WD was permissible AND they would send me their guidance supporting that position, that DoL guidance is ideally what I am looking for. The two variations of your framing of my question have both been very thoroughly answered (thanks to everyone who replied). Also, for people just jumping on this thread and preparing to hit send on their advice, akin to, 'Well, why don't you just ask DoL?' - I have repeatedly talked with their office and gotten assurances they would email me the document (they won't give out their email addresses), to no avail. Thanks all.

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Ji, the way I am reading this, Nanoook is looking for something that tells him he can require contractors to pay more than the SCA minimums. He does need to clarify this. Further, it is not clear why he thinks he needs to find this guidance unless he is worried about DCAA following DCAA policy and reporting him to the IG for the auditor's idea that paying more than the minimums is wasting government money. In this regard, I once had a situation where DCAA questioned wages paid by a contractor in accordance with a WD because the auditor throught the WD wages were too high.

From reading everything he has written, I don't see what the problem is as the contractor is already paying more than the required minimums. If what the contractor is paying is not enough to retain employees, there is nothing wrong with the contractor paying more.

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Retreadfed - you have it precisely. The concern is not whether it properly can be done - it's doing the advance work so that, should DCAA disagree with the KO/CO (nawwww, we've never seen that happen) and turn it over to the IG, there is DoL's own document and guidance, the keepers of SCA Wage Determinations, supporting its permissibility. Thanks

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For goodness sakes, Nanook, where does it say that the contractor must pay its employees the rates in the wage decision? Those are considered the minimums per FAR 22.1002-1. Of course, the DCAA is probably going to "question" any difference. It will be up to the contractor to justify why the pay higher than the minimum. Has there been any discussion with the auditor? If so, by whom - contractor? -your office? Quit worrying about getting permission to exceed the minimum. Document why it is necessary and move on.

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Nanook, are you a U.S. government employee or a contractor employee? Please forgive me if you've already said. If you're a U.S. government employee, are you a contracting officer or contract specialist, or are you a contracting officer's representative?

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Vern - no disrespect but I'm going to end this thread. It's taken a turn to issues that had no bearing on my initial question. While I respect and appreciate everyone's input, I was just hoping that someone might have the DoL guidance I couldn't get from their SCA office and I know that the WDs are minimums which can be exceeded when justified properly. If anyone wants to continue this discussion, they are more than welcome to. P.S. Recently left the government and now work for a contractor.

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Nanook, before you check out, for my on edification, is the DCAA pushback against your company paying more than the WD minimums? In other words, are they questioning that practice? I now work on the contractor side and if this is the case, we might see more of it.

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Retreadfed - Yes, and that's why I was trying to get as much supporting information in advance. Again, not that it's not permissible or that the KO/CO won't win; this is round 2 and DCAA pushed back hard on round 1.

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Facts: 8(a) sole source Contract at a facility with clearance requirements and limited labor pool. Contracting Officer, having done required due diligence and fair and reasonable determinations, wants to exceed the DoL established SCA wage determination. Despite contacting the DoL SCA Wage Determination Office and getting their assurance that it was permissible and they would email supporting guidance, nothing has been sent (note - not being critical of them; people get busy). Looking for any written guidance or regulation, internal to DoL or otherwise, that would support exceeding the WD. Thanks in advance.

If there is such "guidance" from DoL about paying more than the minimum wage -- other than to say merely that it's permissible to do so, which I think everyone knows -- I can't find it.

The SCA minimum wage is supposed to be based on the "prevailing" wage in the locality. Here is how DoL says it determines the prevailing wage:

Wage determinations are developed based on available data showing the rates that are prevailing in a specific locality. Where a single rate is paid to a majority (more than 50%) of the workers in a classification of service employees engaged in similar work in a particular locality, that rate is determined to prevail. When information is used from the Bureau of Labor Statistics (BLS) or other surveys, statistical measurements of central tendency (median) and the average (mean) are considered reliable indicators of the prevailing rate. Which of these statistical measurements will be applied in a given case will be determined after a careful analysis of the overall survey, separate classification data, patterns existing between survey periods, and the way separate classification data interrelate. Use of the median is the general rule. However, the mean may be used in situations where, after analysis, it is determined that the median is not a reliable indicator.

In addition, some occupational rates on the wage determination may be taken directly from the Non-Appropriated Fund schedule, Federal Wage System schedule, or the General Schedule "white collar" pay scales. Finally, several methodologies were developed to aid the analyst in developing rates for classes where no survey data exists.

There is more information about it at the DoL website:

I think that a contractor proposing to pay more than the prevailing wage in the performance locality should expect resistance or at least some questions from someone or other in the government. If a contractor wants to argue that it must pay more than the prevailing wage in order to retain a capable workforce, it must make an argument with evidence that the kinds of workers it needs to perform are making more than the prevailing wage in the labor market at issue. It is not enough to say that it is permissible to pay more. Everybody knows that, or should. The contractor must argue, with evidence, that it is necessary to pay more in order for it to perform at the level expected by the government. If you haven't presented such evidence, then I'm not surprised the DCAA is questioning your proposed costs or finding them unsupported.

If the government won't agree to a price that includes higher than minimum wages, but you agree to take the contract anyway, then the government's refusal will not be a defense against default or complaints about poor performance.

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