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Hot Tips from the SCA Nuts & Bolts Webinar

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Updated 03/17/2023

Last week Mary Holmes of BOOST LLC and Nichole Atallah of PilieroMazza PLLC educated their webinar audience on SCA Compliance, Sick Time (as it pertains to FAR 52.222-43) and Common Challenges in complying with FAR 52.222-43 and SCA Health and Welfare as a whole.

While we encourage you to view the webinar in its entirety (which you can do here) we have compiled several of the takeaways for your perusal below, most of which pertains to SCA Health and Welfare and FAR 52.222-43.

Who is a ‘Service Employee’?

  • Any person who is actively working in performance of a service pursuant to a contract covered by the SCA Health and Welfare (unless they qualify or exemption as bona fide executive, administrative, or professional employees under the FLSA)
  • Independent Contractors* ARE included (including janitorial staff, health staff, security staff, etc.) *Independent Contractors are also required to be paid the SCA prevailing wage and fringe benefits. If you can classify someone as an independent contractor, you may be able to cash out the SCA benefits as long as they are appropriately dispersed to the contractor as expected.

Agency vs. Contracts Responsibility

Agency

Contractor
Determine if SCA applies (DOL has final say) READ everything carefully
Must incorporate FAR 52.222-41 (or 42) Choose the correct labor classification
Everything must be IN the contract Notify all employees and give them documentation of classifications
Area Wide Wage Determinations (WD) must be updated at each change and at least every 2 years Pay at least the required hours, at the appropriate rates and benefits
Do not determine your own WD, use resources like sam.beta.gov or you could risk a price adjustment Maintain records of all hour worked and all pay records

 

SCA Health & Welfare

  • Paid in addition to wages listed in the Wage Determination
  • Could be paid either as cash or as bona fide benefits at the employer’s discretion
  • Must be listed separately on pay records
  • Applies to both Part-Time and Full-Time employees
  • DOL increases H&W annually, however, employees are not entitled to an automatic increase unless there is a revision to the contract (but the contractor is entitled to a price adjustment)

 

Sick Leave

  • Applies to employees performing on or in connection with a contract governed by the Executive Order whose wages are governed by the SCA, DBA, or Fair Labor Standards Act
  • Accrued as follows: 1 hour per every 30 hours worked in connection with the contract
  • Contractors can provide 7 days of paid sick leave at the beginning of the accrual year instead of based on hours worked
  • Not required to pay out accrued unused sick leave at the time of job separation
  • Sick leave can not count against H&W benefits

 

You can get more detail, as well as information on vacation and holidays, leave, bidding a CBA Wage Determination, DOL enforcement, Price Adjustments, FAR 52.222-43 and more in the full presentation.

If you’d like to have a more in-depth conversation regarding your specific needs as they pertain to contract bidding and working on contracts within the SCA umbrella, let’s schedule a chat. The professionals at BOOST provide knowledgeable insight into the most unique government contracting situations.

 

 

How to Price Labor for Your GovCon

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If you’re bidding on any government contract these days, whether it’s a Firm Fixed Price or Cost Plus, there is almost always a requirement to demonstrate and justify how your labor rates were developed.  Many companies may end up bidding existing employee rates (that’s fine, but may not be the smartest approach), or using free online sources such as salary.com.  We recommend a few better approaches to refine and really sharpen the bid rates. Note here that there is, of course, a cost to obtaining good data.  Good data paves the way for good analysis, and, in learning how to price labor for your Govcon, good analysis is everything.

Here are BOOST’s top three tips to develop and bid smart labor rates (that you can justify to the government and intelligently execute):

  1. Access: Get access to labor survey databases. This can be costly, but there are options for buying reports or gaining access. Options include: using cost-sharing with other partners buying a license directly with companies such as Economic Research Institute (ERI), Mercer, Western Management Group, proprietary survey tools from BOOST etc,. These depend on their cost and your usage.  Do not rely on free sites such as salary.com or LinkedIn. It’s possible to review them and perhaps use them as a way to triangulate, but they should not be used as primary sources of information to justify your rates. More than anything, these sources service as an initial pricing point for your labor, but how to price labor for your Govcon may vary from this data for any number of reasons.
  2. Research: Use government sources such as the Department of Labor Bureau of Labor Statistics data tables. This isn’t the most accurate way to define your rates, but it can provide a good range to compare to the other data sources and provide fidelity. Additionally, peruse GS Pay rates and add them into your analysis.  Use these resources with caution. They’re not as refined as the commercially developed salary databases mentioned above, but sometimes the government does require you to bid within these ranges, meaning you have a set spectrum within which you can determine how to price labor for your Govcon.
  3. Collaborate: Get your subcontractors on data calls. When developing labor rates, you’re often required to request rate data calls from your subcontractors. Without knowing their rates, or how they’ll fit into the equation, you won’t be properly able to price labor for your Govcon.
    This does two things –

1. Ensures that you’re performing a proper subcontractor rate analysis as a part of the FAR requirements.

2. Provides actual data points from various companies in the scope of the contract/work to be performed.

In a way, this is actual live market data, that you can use to compare and refine your rates.  This is an often-overlooked strategy because it’s very time-sensitive, but it’s one of the best ways to price labor for your Govcon.  Furthermore, you don’t usually get the data in enough time to make actual pricing comparisons and decisions on your rates.  This is why a proper timeline and pricing schedule must be implemented. That’s a story for another day!

Pricing is a monster all on its own, but with these smart tips you can start to tame the beast. The pricing experts at BOOST are experienced in helping to support your strategic pricing needs. Contact us today to better prepare and price your proposals.

Easy Tips for Competitive Data Gathering

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As small business contractors, we know how tough it is to get daily operations up and running; let alone set up a proposal shop and to go after business.  Most often, it’s a one-person shop, hunting and gathering crumbs in the govcon jungle. This can obviously be very overwhelming and wasteful as time passes, but there are some quick and easy ways to be a bit smarter about planning your bids.

This industry, as we all know, is quite cutthroat, not just in price/rates, but also in partnerships/performance.  If you’re in the right place at the right time (read: right team/right contract), you can suddenly find yourself on a meteoric path to growth. However, most often you’re just trying to get a few contract full-time equivalents (FTEs) here and there until you get enough past performance or a wonderful set-aside contract drops into your view.

There are some ways you can make some intelligent bid/no bid decisions, and also sharpen your proposal approaches.  We recommend some free (elbow grease required) sources below:

  1. Free government sources
    1. Bureau of Labor Statistics – Includes cost of living tables, economic indicators, fringe and tax data. If you don’t study macro-economic trends, you could be missing the pulse of the market.
    2. DoL website – Also contains wage rate tables for Service Contract Act, by location. This can give you a good idea about how to modify and/or plan for benefits plans for nonexempt contracts. This can be a huge risk if not accounted for.
    3. GSA website – Includes various schedule rates and top-line data for companies, can be a good starting point to compare and contract. Sometimes the RFP requires you to bid in these ranges, so it’s good to have these as data points to triangulate your bid rates.
  1. Government funding/budget data
    1. Usaspending.gov – This website contains spending charts where you may find very useful trend information. It’s a good research site.
    2. Federal Procurement Data System – fpds.gov – direct source to get previous contract funding/obligation data, by company, by contract. This can be very useful to obtain trends and do some back of the envelope analysis.
    3. FBO.gov – may contain past government contract info, interested vendors, industry day info, etc.
    4. Industry Days – These are potential opportunities to attend in person or dial in. Ideal for intelligence gathering.
    5. Small Business Administration – sba.gov. This website contains some good information on how to gather competitive data and has a few tools to help gather free research.
  1. General Websites
    1. Glassdoor – employee reviews, can indicate benefits across companies, morale, contract headcount, job descriptions.
    2. LinkedIn – resume descriptions, contract sites, recruiting notes
    3. Corporate websites – often post job listings and sometimes provide benefits info. Read the annual reports for public companies; you can see trends within the financial reports and project out a feasible G&A rate for most of these companies.

 

Data gathering may be snore-inducing for some, but we have the connections to those who thrive on this type of hunting and pecking. If you would like an introduction or a roadmap to your best strategies for data capture, email BOOST. [email protected]