Overview
This section establishes the federal policy that professional employees must be compensated fairly and outlines the specific requirements for contracting officers to evaluate offerors' compensation plans in high-value service acquisitions.
Key Rules
- Mandatory Provision: Contracting officers must insert FAR 52.222-46, Evaluation of Compensation for Professional Employees, in applicable solicitations.
- Applicability Thresholds: The rule applies to negotiated contracts exceeding $900,000 where the services require "meaningful numbers" of professional employees.
- Total Compensation Plan: Offerors are required to submit a plan detailing proposed salaries and fringe benefits for professional staff.
- Supporting Evidence: Offerors must provide data to justify their compensation structure, such as recognized national or regional compensation surveys and studies from public or private organizations.
- Negative Evaluation Factor: Proposals with unrealistically low compensation levels may be assessed adversely, as they indicate a risk to contract performance and talent retention.
Practical Implications
- Contractors cannot effectively use a "low-ball" strategy regarding professional salaries to win awards, as significantly undercutting market rates is flagged as a performance risk during the evaluation.
- To remain competitive and compliant, firms must benchmark their pay scales against objective industry data (like Mercer, Radford, or BLS surveys) and be prepared to defend their compensation strategy to the government.