Evaluation of Compensation for Professional Employees
Offerors must submit a realistic, well-supported compensation plan for professional employees, or risk proposal rejection due to concerns about workforce quality and contract performance.
Overview
FAR 52.222-46 requires offerors for certain service contracts to submit a detailed total compensation plan for professional employees as part of their proposal. The provision aims to ensure that professional employees are fairly and properly compensated, preventing a decline in service quality due to inadequate salaries or fringe benefits. The Government evaluates these compensation plans to ensure they reflect a sound management approach, support recruitment and retention, and are realistic and consistent with industry standards. Compensation plans proposing lower pay than predecessor contracts are scrutinized for their impact on program continuity and workforce quality. Unrealistically low compensation may be grounds for proposal rejection.
Key Rules
- Submission of Total Compensation Plan
- Offerors must submit a comprehensive plan detailing salaries and fringe benefits for professional employees.
- Evaluation Criteria
- The Government assesses the plan for sound management, realism, ability to recruit/retain qualified staff, and consistency with industry data.
- Comparison to Predecessor Contracts
- Proposals with lower compensation than previous contracts are evaluated for potential negative impacts on continuity and quality.
- Consequences of Noncompliance
- Failure to provide an adequate compensation plan may result in proposal rejection.
Responsibilities
- Contracting Officers: Must evaluate compensation plans for adequacy, realism, and alignment with contract requirements.
- Contractors: Must prepare and submit a detailed, realistic compensation plan supported by industry data.
- Agencies: Oversee the evaluation process and ensure compliance with compensation standards.
Practical Implications
- This provision exists to maintain high-quality professional services by preventing a "race to the bottom" in compensation.
- Contractors must invest effort in benchmarking and justifying their compensation structures.
- Common pitfalls include proposing unrealistically low salaries or failing to provide supporting data, both of which can lead to proposal rejection.