Policy, procedures, and solicitation provision
Offerors on negotiated contracts over $750,000 with significant professional services must submit a realistic, data-supported compensation plan, or risk adverse evaluation.
Overview
FAR 22.1103 establishes the policy and procedures for ensuring fair and proper compensation of professional employees under government contracts. It requires contracting officers to include the provision at 52.222-46, Evaluation of Compensation for Professional Employees, in solicitations for negotiated contracts expected to exceed $750,000 where significant numbers of professional employees will be engaged. Offerors must submit a total compensation plan detailing proposed salaries and fringe benefits, supported by recognized compensation data. Unrealistically low compensation plans may negatively impact an offeror's chance of award.
Key Rules
- Fair Compensation Requirement
- All professional employees must be compensated fairly and properly under government contracts.
- Solicitation Provision Requirement
- Contracting officers must insert FAR 52.222-46 in solicitations for negotiated contracts over $750,000 involving significant professional services.
- Compensation Plan Submission
- Offerors must submit a total compensation plan, including proposed salaries and fringe benefits, supported by recognized compensation surveys or studies.
- Evaluation of Compensation Plans
- Compensation plans with unrealistically low salaries or benefits may be evaluated negatively during source selection.
Responsibilities
- Contracting Officers: Ensure the required provision is included in applicable solicitations and evaluate compensation plans as part of source selection.
- Contractors/Offerors: Prepare and submit a comprehensive, data-supported compensation plan for professional employees.
- Agencies: Oversee compliance with compensation policy and ensure fair labor practices.
Practical Implications
- This section ensures professional employees are not underpaid on federal contracts, promoting fair labor standards.
- Contractors must invest in market research and compensation benchmarking to remain competitive and compliant.
- Failure to provide realistic compensation plans can result in adverse evaluation and loss of contract opportunities.