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When dealing with high-risk training services (shooting instructors), how do you prevent the race to the bottom for wages contractors pay their employees? Is there an evaluation factor, maybe somewhere in "Staffing sub-factor" in the technical factor, that you can evaluate the contractor's plan to attract and retain talent? I know it's highly subjective, and probably susceptible to a protest, but as a result of having to use wage determination rates, it makes it rather difficult to incentivize contractors pay their employees more because most are focused on price. If a Wage Determination says, $21, how do we write it to incentivize contractors to pay their employees more money? I do state that the Government will be doing a best value and technical is more important than price, but there is still a race to the bottom in wages.

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This sounds like you are worried about the trade-off process, but could you require the instructor be key personnel and heavily consider key personnels' qualifications?  Are there objective measures (certifications, confirmed enemy kills, amount of taxidermy in residence) which correspond with a good shooting instructor?

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Guest Vern Edwards

As long as cost or price is an evaluation factor in source selection, no matter what its relative importance, offerors will try to reduce performance costs, which includes wages and fringe benefits. They will do that because they believe they must minimize costs (1) in order to win and (2) in order to ensure a profit. There is no way to prevent this except for the agency to set the actual wages that the contractors must to pay. That approach is madness under current rules for competition.

The bottom line is that the Competition in Contracting Act is a bad law when it comes to buying professional services. 

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Not sure about all the particulars of your requirement or not so I can't say for certain if the provision 52.222-46 would apply, but if it didn't, you may want to still fold some of that verbiage into a management plan evaluation to determine if the offeror's compensation program reflects a clear understanding of the requirements and then in execution hold the KTR to delivering the caliber of personnel that you're looking for. 

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Guest Vern Edwards

Won't make a difference. Offerors will expect the government to be on a budget and seeking to save money. The largest single cost element In a service contract is wages and fringes and the indirects applied to them. The only way to be sure that proposed wage levels will be adequate would be to have some idea in mind about what wages should be and then either state them in the solicitation or conduct discussions and negotiate them. It's feasible, but difficult, and requires lots of research and documentation.

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Vern or anyone else:

Has is been your experience that agencies acquire a reputation in this area?  I have only worked for two employers in this field: One federal agency which seemed biased to the more highly rated and more expensive proposal (at the margin) and a local transit authority which is biased to the lower priced proposal (at the margin).  I think many of our proposers had us figured out and acted accordingly.

Underlying question: Can proposers be trained to not to do this via positive reinforcement (awarding to higher rated higher priced proposals)?   

Follow-up questions: Is this problem dwarfed by incumbency bias?  That is the more common complaint I receive from proposers . . .

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Guest PepeTheFrog
On 9/30/2016 at 6:02 PM, Don Mansfield said:

How about stating in the solicitation: "all evaluation factors other than cost or price, when combined, are significantly more important than cost or price".

In addition, ask for a detailed breakdown of the individual cost elements, i.e. labor rates, fringe, indirect, etc. State that the Government will calculate the "average weighted labor rate" (or something that approximates what the the vendor will pay the employees) using the following formula XYZ. State that the Government will use these calculations in a ___ realism assessment, and maybe add that those which are more than XX% below the average will be automatically tossed out.

Does anyone think this scheme is a protest problem, assuming it's explained upfront, with all the formulas, cutoffs, benchmarks, etc. made crystal-clear and explicit?

On 9/30/2016 at 3:24 PM, NavyBuyer said:

doing a best value

The Government will be conducting a "tradeoff," not a "best value." LPTA procedures also seek the best value-- see FAR 15.101 and 15.101-2(a). That's one reason why the Government can conduct discussions (negotiate, tell the vendor to sharpen its pencil, including the vendor which is currently the LPTA) when using LPTA procedures.

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Pepe, you are correct, nice catch. I used a phrase associated with LPTA and should have realized what I said, but didn't; much like not confusing cost and price or quote and proposal. It will be a tradeoff, where technical will be more important than price.

Shooting instructor's have become a dime-a-dozen in the past decade thanks to the GWOT. Once these guys get hired, and can now pad their resume as an Instructor with this particular course, they jump ship for the higher paying jobs down range, or quit after the re-compete because each year their wages get drugged down as a result of the Department of Labor and Wage Determinations. There was a period for awhile where many shooters were coming home and taking these jobs because the overseas jobs were diminishing; however, with an uptick recently in contractors down range, the target market of shooters we want to attract to be heading back over overseas.

I like the idea of trying to create language which helps guide contractors to what dollar per hour they should be paying their employees, but I am not sure my chain of command will go for it. It won't be the first time I have crafted up some far fetching evaluation factors (admittedly I lost the battle with legal). 

Or, do you think going to the DoL and trying to get a new labor category created and setting the rate that way could help? Is that an unrealistic idea?

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Guest PepeTheFrog

PepeTheFrog thinks fighting the chain of command will be much easier and faster than creating a new labor category at the Department of Labor.

It's lamentable that the risk-averse frogs reflexively shut down the useful, realistic ideas of thoughtful frogs. All you can do is state your case convincingly and demand a good explanation if the idea gets rejected. Legal provides opinions, advice, and guidance. Your actual chain of command can follow or not follow legal advice, although PepeTheFrog knows that leaders who are willing to even consider going against legal are like unicorns.

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15 minutes ago, NavyBuyer said:

Shooting instructor's have become a dime-a-dozen in the past decade thanks to the GWOT. Once these guys get hired, and can now pad their resume as an Instructor with this particular course, they jump ship for the higher paying jobs down range, or quit after the re-compete because each year their wages get drugged down as a result of the Department of Labor and Wage Determinations. There was a period for awhile where many shooters were coming home and taking these jobs because the overseas jobs were diminishing; however, with an uptick recently in contractors down range, the target market of shooters we want to attract to be heading back over overseas.

(Emphasis added above)

Sounds like your issue isn't just with labor rates, but also with the inability to discriminate between levels of technical competence amongst shooting instructors...

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Not entirely true, but I do think it is reasonable to expect that with the higher wage it will bring in a higher level of caliber employee in the industry.

Picture you are in your mid 30's and have for almost half your life been fighting the GWOT. If you can make $250k overseas or $45k stateside, what would you take based upon the lifestyle you are used to? Further, would you take that knowing that in four or five years you may be out of a job or having to work at a lower rate because your 2% escalation in wages are now above the WD rates and so you will have to come back a few thousand a year when the next contract comes around to retain a job? Having done PSD work downrange, I can tell you these guys care more about money and the excitement the lifestyle brings than the security of being home. Even the guys in the lower echelon of the work are making $150k. So even the "newer" shooters, who meet the minimum requirements, are able to take this Instructor rating and use it to get the higher paying jobs.

For a recent example of this, read up on the Army's latest contract for SERE and 19 instructors out of 29 not showing up to work once the new contract date started.

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