Jump to content

Ratio of key personnel to non-key personnel on contracts


FLContracts

Recommended Posts

I wanted to open up a discussion on the appropriate ratio of key personnel to non-key personnel on contracts. Recently, I've been debating this issue with our Tech Code office. They want to require approximately 15 key personnel, which works out to be around 50% of the total contract staff. However, in my experience, the general rule of thumb is to have 3-4 key personnel, or around 10% of total contract staff. Contract Type is CPFF LOE

I've argued that specifying too many key personnel creates an administrative burden and unnecessary costs for Govt. Having fewer key  allows contractors more flexibility to optimize resources, workloads, and respond to changing needs over long contracts. It also encourages contractors to innovate solutions requiring less management oversight, as opposed to just assigning more managers. Additionally, with fewer siloed key positions, expertise and knowledge can be more widely shared throughout the contract company.

Of course, each contract and situation is different regarding how many key personnel are truly essential. But in general, I've found that limiting key personnel to ~10% of staff strikes the right balance between ensuring proper oversight while still allowing flexibility and innovation. I'm curious to hear others' perspectives on appropriate key personnel ratios. Do those percentages seem reasonable? What ratios have you seen successfully work on contracts? I welcome any thoughts or experiences!

Link to comment
Share on other sites

Depends upon the nature and type of work, contract pricing methodology (e.g.,Cost,FFP, FPI, etc),  size, complexity, extent of specialization vs. routine employees and supervision, etc. 

Do you have a representative sample scenario?

You said Level of effort - Cost plus fixed fee. Can many different persons qualify for the various technical or management positions?

What are you evaluating regarding key personnel for and why? What is the purpose for designating and evaluating key personnel? Are they discriminators between firms?  Etc.

Link to comment
Share on other sites

6 hours ago, FLContracts said:

Tech Code office. They want to require approximately 15 key personnel, which works out to be around 50% of the total contract staff.

What is the written function of the Tech Code office? What is the rationale for its requirement in this case? Are they governed by written procedures? Is their requirement consistent with the written procedure? What executive level management function do they report to? Is that office required to comply some applicable government specifications or regulations or contract provision related to this decision? 

Link to comment
Share on other sites

I made a small edit due to a typo.

Obviously it depends on the requirement but in my case its truly a CPFF LOE Engineering contract. 
 

The Tech Code is very old school and like maintaining a sense of familiarity. I have scrutinize the necessity of mandating a higher number of key personnel, especially in the context of a straightforward CPFF LOE contract. The nature of the contract, focusing on providing scientific, engineering, and technical services in support of a specific systems, doesn't inherently warrant a high ratio of key personnel. There is NO contractual requirement for a specific number of key personnel or supervision required on this requirement. The Tech code approach seems to lean towards a more traditional mindset, favoring familiarity over the potential benefits of a leaner and more flexible workforce. With a competitive procurement valued at around $40M, it's worth considering whether this requirement might unintentionally restrict competition and disproportionately favor the incumbent.

They have asked for DOD memos or guidance that supports reducing key personnel. Im just curios if there is any goof reference docs or readings on this. I can’t seem to find it anywhere.

 

Link to comment
Share on other sites

What are the differences between key contract personnel and non-key personnel duties and job responsibilities ? What do they do that non-key personnel can’t or don’t do???

Link to comment
Share on other sites

38 minutes ago, Retreadfed said:

Piggy-backing on Joel's questions, why do you want to have key personnel at all?  What is so magical about designating someone as a key person?

More piggy-backing.  Critical to the posed question is are the key personnel at any ratio or number essential to the carrying out of the work of the project?   The answer is more important than subscribing to a set ratio.

The discussion has generated another thought on my part.   Using the measure of a $40M  procurement I wondered if key personnel would be a static number throughout contract performance?  Then I wondered about the ability as detailed within the solicitation/contract where the contractor and the government evaluate the necessity and accomplishments of key personnel (they are a deliverable of sorts are they not if a key personnel clause demands them) and provide the ability to adjust, by mutual agreement, the number of key personnel throughout contract performance.  Such a term in the award contract would give the ability to both the contractor and government the ability raise the necessity of the number of key personnel.   Diversion of key personnel is generally allows (with government consent) via the boiler plate clauses that can be found so the departure with my thought that diversion or otherwise removal of key personnel was an anticipated event based on the work.   Afterall if the work was being accomplished by the government itself I would imagine adjustments in personnel, including those that a key, would be a given.

Link to comment
Share on other sites

In response to the question of how many key personnel are needed, I appreciate the input, and I agree that having around 2-3 key personnel might be sufficient for this particular CPFF LOE contract. A Program Manager to oversee operations and ensure seamless communication with the Government, along with 1 or 2 Senior Engineers well-versed in the systems, could cover the essential aspects of the contract.

 

On a broader note, I share a common concern with many in the community about the potential administrative burden and unnecessary costs associated with a high number of key personnel. It begs the question: where can we find guidance on advocating for a reduction in key personnel in the Request for Proposal (RFP)? I've been searching for resources such as DOD memos, DAU (Defense Acquisition University) classes, or GAO (Government Accountability Office) case studies that address strategies for streamlining key personnel. It would be immensely valuable for me to give a training or guidance on this matter for our department. If anyone has come across relevant references or training opportunities, I would greatly appreciate any insights or recommendations

Link to comment
Share on other sites

1 hour ago, FLContracts said:

If anyone has come across relevant references or training opportunities, I would greatly appreciate any insights or recommendations

None specific sorry.   I do wonder.  CPFF risk of performance does lie with, in general terms, the government.   Yet, makes me wonder if the real entity(ies) to ask your question of is the contractors on any instant procurement.   Simple example - In your proposal please indicate the number of key personnel you propose, credentials required of the personnel and their function(s) and how your make up of key personnel will alleviate risk of non-performance.  

Link to comment
Share on other sites

Carl Culham’s suggestion is excellent.  A variation of that is first stating your goals with use of key personnel - effective management of overall operations, seamless communications with the government, expert and intimate knowledge of government systems, avoidance of essential personnel turnover, etc.  Then instruct offerors to describe how they will achieve those through such means as designating personnel as key.  You could also include another goal is minimizing the government's administrative cost.  As Joel and Retreadfed states, you may not also need key designations at all by carefully describing your objectives and concerns and allow offerors to describe how they will achieve those

If your Tech Code is concerned with staff turnover, you can also include that also as an objective.  Ask offerors how they can comply and factor that in with past performance.  

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
×
  • Create New...