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DOECPA

Cost Realism

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I was reviewing Decision B-277849.2 B-277849.3 and I noticed that the Government provided the incumbent contractors Exempt average labor rate for the use of Offeror's in developing their Cost Proposals and Transition Plans.  I'm assuming this was a competition for a follow on cost type professional support services contract.  In order to insure continuity in a program is it permissible to have Offerors cite a percentage of Incumbent Employees they will hire and reconcile their proposed rates (Mix of new and hired incumbents) with the  Government provided incumbent Exempt average labor rate.  Of course, I expect the proposed rates would fall within the Offeror's Total Compensation Plan.  Thank You

Edited by bob7947
I added a link to the decision.

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...is it permissible to [1] have Offerors cite a percentage of Incumbent Employees they will hire and [2] reconcile their proposed rates (Mix of new and hired incumbents) with the  Government provided incumbent Exempt average labor rate[?]

Yes and yes. It is permissible because there is no prohibition against it in law, regulation, or decision.

Edited by Vern Edwards
To change impermissible to permissible.

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I'm not certain I understand the impermissible part of your answer but it sounds like your opinion is that its permissible for the Government to request that Offerors address a percentage of professionals they intend to retain and is also permissible for the Government to include the average labor rate of the incumbent professional workforce (taken from incumbent  contractor's most recent invoice submittal) i.e Average Incumbent Exempt Workforce at $43.17 per hour.

Assuming that Offeror propose 75% Incumbent Capture and 25 % New Employee Hires may I ask them to reconcile in the Cost Narrative the proposed rates with the Incumbent Rate and New Hire Rate blended together.  I further assume they would use a salary survey data like the BLS SOC to get the new hire rate.

 

Thanks All

 

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My mistake. I meant permissible, but typed impermissible. Sorry.

My answer(s) to your initial question(s) is yes ( are yes and yes). The Government can ask an offeror to provide that information and may use it in the way you propose when making its cost realism determination.

My answer to your newer question is yes, for the same reason: I know of nothing that prohibits.

 

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Please - One More Question.

I doubt that an Incumbent Contractor or Incumbent Contractors would be very happy about the Average CY 2016 Exempt Direct Labor Rate getting published in a solicitation.  Is this rate proprietary?  We would not be giving out specific labor rates for single labor classifications. - perhaps an average Engineering/Scientific Rate and an average Computer Engineering/Computer Scientist Rate.  Thank You

 

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