Employee vacation time situation

[lostinthesauce]

Good morning, all!

I handle Job Corps Center contracts.  We compete companies capable of running the center, top to bottom, for multi-year option contracts.  Recently, the topic of vacation time came up with regard to a new contract being awarded to a successor contractor versus what is owed by the predecessor contractor.

Currently, when a contract is awarded to a non-incumbent, the incumbent contractor pays the employee vacation time earned but unused as a part of the final paycheck received.  Title 29, Part 4 of the CFR, Section 4.173 indicates that the vacation accrual continues, as long as their is no break in service.  The contractor by whom a worker is employed at the time the vacation right vests (i.e. on the employee's anniversary date of employment) must provide the full benefit required by the Wage Determination which is applicable on that date, whether or not it is the predecessor or the successor contractor.

Two questions come up from a potential bidder.

1) Will the successor contract be entitled to a list of incumbent service employees required to be provided by the CO/incumbent contractor at the time of transition (along with names, date of hire, and position) along with a listing of active employees vacation utilized in the current year?  I am inclined to say yes, of course, as this is key information in the administration of the contract.  This would be provided after award.

2) Will DOL modify new contracts that are awarded to the non-incumbent with funding to absorb the unknown vacation balances to be assumed and paid out under the new contract?  This is where things become uncertain.  Vested vacation will be paid out under the predecessor contract.  For those employees without a break in service whose vacation time is NOT yet vested, their vacation will vest after the successor assumes control via the new contract.  Because we cannot release information to a bidder prior to award, this limits the potential successor contractor's ability to calculate potential vacation benefit costs into their proposal.  With that said, they may not be aware of what vacation will vest after they transition and take control of the center.  This has been a difficult one to answer, because I cannot find anything in any regulation (even internally) that outlines this process  other than to say that the successor is responsible to pay out vacation that vests after they take control of the center.

Does anyone have any analysis on either of these topics to offer?

 

Thanks!

 

[ji20874]

You should not answer these questions.  You should answer questions regarding the solicitation and work requirement.

Re: 1) No, do not be inclined to say yes.  If you cannot point specifically to the solicitation provision or contract clause that specifically answers the question, you should not attempt an answer.  You might say simply that the Government's obligations are described in the solicitation.

Re: 2) A prospective offeror can hire advisers to help it put together its bid.  You should stay out of this.  You might say simply that the Government's obligations are described in the solicitation.

[Voyager]

You are encountering something in a one-off situation that the Department of Energy has institutionalized.  DOE solicits clauses for this sort of thing, and only applies them to cost reimbursement contracts - two factors it sounds like might not be the case for you.  At DOE, they are known as “Contractor Human Resource Management (CHRM)” clauses.

Since it sounds like you have a FP contract without CHRM clauses to govern this, I suggest you do the following for the immediate problem.  Search your RFP and your local clause database for the language your offerors are seeking that provides vested leave.  If it’s in your RFP, great - carefully point it out in the Q&A.  If it’s in your clause database but not your RFP, dig a little deeper and learn what prescribing policy or regulation controls it.  Read that for your own knowledge.  Then follow ji28074’s advice above, at 2).

[lostinthesauce]

Thank you both for the thoughtful responses!  Voyager: I think the fact that DOL was using cost reimbursement contracts before may be the issue spurring these questions.  We generally award contracts to a well known pool of companies, as this is a niche, and they are all used to cost reimbursement contracts.  DOL is shifting to FFP, and it is causing some pains for the contractors because they have not had to deal with this before.

[C Culham]

20 hours ago, lostinthesauce said:

Will the successor contract be entitled to a list of incumbent service employees required to be provided by the CO/incumbent contractor at the time of transition (along with names, date of hire, and position) along with a listing of active employees vacation utilized in the current year? 

It is my belief that the answer is Yes as the government is required to obtain such a list and provide it to the contractor and subcontractors as by read of your original post the Job Corps Center(s) is a Federal facility.   Reference FAR 52.222-41 (n) which reads as follows -

 (n) Seniority list. Not less than 10 days prior to completion of any contract being performed at a Federal facility where service employees may be retained in the performance of the succeeding contract and subject to a wage determination which contains vacation or other benefit provisions based upon length of service with a Contractor (predecessor) or successor (29 CFR 4.173), the incumbent Prime Contractor shall furnish the Contracting Officer a certified list of the names of all service employees on the Contractor’s or subcontractor’s payroll during the last month of contract performance. Such list shall also contain anniversary dates of employment on the contract either with the current or predecessor Contractors of each such service employee. The Contracting Officer shall turn over such list to the successor Contractor at the commencement of the succeeding contract.

20 hours ago, lostinthesauce said:

Will DOL modify new contracts that are awarded to the non-incumbent with funding to absorb the unknown vacation balances to be assumed and paid out under the new contract? 

From my view this is a matter of contract pricing.   If I were the non-incumbent I dang sure would be looking at all possible cost factors that would effect my pricing.  Vested vacation time, while not the best analogy, is like trying to guess at what the price of gallon of gas will be during performance of work.

[ji20874]

Even though the answer to 1) is likely YES, I still would not say YES as the answer.  Rather, I would say something like "see para. (h) of FAR 52.222-41 included in the solicitation."

[lostinthesauce]

C Culham amazing response and thank you so much for the FAR Citation!

 

ji20874, fair point.

[ji20874]

lost,

You must take care to never answer such as this in your situation without pointing to the solicitation.  Always point to the solicitation if possible.  Off-the-cuff answers can cause trouble.