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2800 S. Shirlington Rd. Suite 350, Arlington, VA 22206 703.379.9311 AFSC.com Salary Data & Contract Pricing Methods 16 October 2013 The information contained in this document is confidential and proprietary. © AFSC 2013
Agenda The information contained in this document is confidential and proprietary. © AFSC 2013 1 Armed Forces Service Corporation Federal contracting 101 Role of salaries in contract prices Salary data Determining the right salary Simple average model Pros & Cons Example Weighted average model Pros & Cons Example Availability optimized/weighted model Pros & Cons Impacts on proposal evaluation
Armed Forces Services Corporation (AFSC) The information contained in this document is confidential and proprietary. © AFSC 2013 2 AFSC was founded in 1879 as a nonprofit organization to care for surviving spouses from The Battle of Little Big Horn. AFSC supports military quality-of-life services and programs including: Recovery Care Coordination New Parent Support Psychological Resiliency Suicide Prevention Substance Abuse Identification & Treatment Domestic & Sexual Assault Prevention Family Outreach & Advocacy Transition Support & Veteran Employment AFSC is headquartered in Arlington, VA with personnel located in 40 States, and eight (8) countries. Our workforce is approximately 1/3 veterans, 1/3 military families, and 1/3 civilians.
Federal Contracting 101 The information contained in this document is confidential and proprietary. © AFSC 2013 3 Product vs. Service Contracts Product contracts are for items, such as tanks, airplanes, seatbelts or paper. Service contracts are for services, such as medical services, consulting, dining hall services or printing. IDIQ vs. Purchase Orders Indefinite Delivery/Indefinite Quantity (IDIQ) contracts are an agreement between the government and some limited set of commercial companies (from a single company to hundreds of companies) for a class of product or service. Purchase Order contracts are stand-alone contracts with a single prime contractor for a specific product or service. Evaluation Methods Lowest-Priced Technically-Acceptable (LPTA) method awards a contract to the lowest-priced company that meets some minimal level of technical capability. Trade-Offs method allows the government to make trade-offs between capabilities and price in order to select the best company for the job.
Role of Salaries in Contract Pricing The information contained in this document is confidential and proprietary. © AFSC 2013 4 For Service Contracts labor is the primary factor in price. Salaries alone account for 40% to 60% of the total price. Salaries can influence the evaluation of your companys proposal (particularly under a tradeoff evaluation method). The government usually wants companies to explain: How they plan to ensure hiring qualified personnel; How they plan to retain qualified personnel; and When hiring professional personnel, to justify the compensation levels. It is essential to AFSCs business that we set the correct salary levels so that we can: 1.Win the contract; and 2.Perform the work with quality personnel. Salaries Benefits Overhead G&A Profit Other
Salary Data The information contained in this document is confidential and proprietary. © AFSC 2013 5 Salary data can be found from many sources which do not always agree. Different sources reflect different: Levels of qualification (i.e., education and/or experience); Geographic regions or boundaries; and/or Underlying reporting (i.e., self-reported vs. company reported). Salary data must be legally defendable. AFSC uses as many sources as we can when establishing our salary levels We use a of couple different models of combining this data into a single salary point Salary Point Government Data Bureau of Labor Statistics Department of Labor USAJobs.com Corporate Data Current AFSC Salaries Competitor Company Job Listings Public Data Salary.com Indeed.com Payscale.com Purchased Data Economic Modeling Specialists, Inc. Careerbuilder Compensation Tool Careerbuilder Supply & Demand Data
Determining the Right Salary The information contained in this document is confidential and proprietary. © AFSC 2013 6 AFSC concentrates on five (5) aspects of salary data: 1.Occupations with the required skill sets 2.Minimum education levels 3.Minimum experience requirements 4.Labor availability 5.Location Modeling the available salary data sometimes requires assumptions such as: Equivalencies between salary percentiles and levels of experience 10 th percentile 0-1 years experience 90 th percentile 10+ years of experience Skill sets required by a contract may not match a particular occupation Contractor personnel shall possess, at a minimum, the following: knowledge of U.S. postsecondary education, Soldier development programs, and career guidance and planning techniques. Contractor personnel performing education counseling services shall possess a bachelors degree from a college or university that is accredited by a national or regional accrediting agency recognized by the U.S. Department of Education. The degree shall include or be supplemented by at least 24 semester hours in one or a combination of the following: Tests and Measurement, Adult Education, Guidance and Counseling, Career Planning, and Occupational Information and minimum of one year of relevant experience.
Simple Average Model The information contained in this document is confidential and proprietary. © AFSC 2013 7 Applies best when the government asks for a common occupation. Under a simple average model, we research the occupation across the various data sources, adjust for experience levels and location, and then average the results of the various data sources. Easily researched Easily explained Quick! PROS CONS Not very good for non-standard skill sets (i.e., not a common occupation) Does not address the availability of the occupation or skill set in each location
Simple Average Example The information contained in this document is confidential and proprietary. © AFSC 2013 8 Contract Requirement: The Contractors Certified Strength & Conditioning Trainers shall have obtained certification as athletic trainers by the Board of Certification for Athletic Trainers, and shall be licensed to practice in the applicable State. Data SourceOccupation Title Minimum Education Minimum Experience Median Salary EMSIAthletic TrainerBachelorsNone Specified$46,384 CB Talent Compensation Athletic Trainer Bachelors None Specified$45,500 Salary.comAthletic Trainer Bachelors + Certification None Specified$36,691 BLSAthletic TrainerNone Specified $42,090 Average Median Salary$42,666
Weighted Average Model The information contained in this document is confidential and proprietary. © AFSC 2013 9 Applies best when the government asks for a skill set (as opposed to an occupation) under an LPTA evaluation methodology. Under a weighted average model, we research the occupations that have skills required across the various data sources, adjust for experience levels and location, and then weight each occupation based on the requirement for each occupations skills. Easily researched Not too difficult to explain Allows the construction of an occupation Allows some flexibility in hiring PROS CONS Requires some large assumptions about the weighting of each skill set Does not address the availability of the occupation or skill set in each location
Weighted Average Example The information contained in this document is confidential and proprietary. © AFSC 2013 10 Contract Requirement: Personnel supporting tasks in PWS shall have a degree in behavioral health or social services; have extended knowledge about substance abuse program, suicide prevention programs, and the risk reduction programs; have experience at the level; understand military command structure; and have project management, data and program analysis experience. Required Skill or Background Data SourceSource Occupation Title Median Occupation Salary Mean Skill Salary Skill %Proposed Salary Management/ Program Analyst CB Talent Comp Management/Program Analyst $108,115 40% $106,625 NurseEMSIRegistered Nurse $82,686 $89,08630% NurseSalary.comClinical Nurse Specialist $98,511 NurseSalary.comStaff Nurse - RN $86,062 ORSA/Data Analyst CB Talent Comp Operations Research Analyst $99,667 $127,88620% ORSA/Data AnalystEMSI Operations Research Analyst $156,104 Program Management EMSI Medical & Health Service Managers $103,189 $110,76210% Program Management Salary.com Chemical Dependency Director $104,334 Program Management Salary.com Sub. Abuse Center Director (Hosp.) $125,185 Program Management Salary.comProgram Manager $110,338
Availability Optimized / Weighted Model The information contained in this document is confidential and proprietary. © AFSC 2013 11 Applies best when the government asks for a skill set (as opposed to an occupation) under a trade-off evaluation method. These are actually a class of models – with different factors used depending on what types of skills are required, the locations involved, and the availability of those skills in each location. Can be a simple average where we optimize for lowest total contract price depending on the prevalence of each qualified occupation in each location (i.e. hire a Nurse in one place and a Social worker in another). Can included a weighted average were the weights are optimized for availability Allows the construction of an occupation Incorporates the availability of skill sets into the development – has impacts on feasibility of delivery Allows ghosting of competitor methodologies PROS CONS Very difficult to explain
Impacts on Proposal Evaluation The information contained in this document is confidential and proprietary. © AFSC 2013 12 AFSC has been developing and using these salary determination methods over the last two years, and we believe it has had an impact on how some of the government contracting agencies we work with evaluate proposals. Examples: A suite of IDIQs (~$100 Million) that we deal with frequently have started including the following language in solicitations: Offeror shall address its approach to attract, recruit, and retain a highly qualified workforce including details with regard to compensation plans (salary and benefits). Another contracting office we work with regularly has begun to include FAR clause 52.222-46. This clause is required by the FAR in certain cases, but it is not normally included. It requires proposals to include a plan detailing compensation (i.e., salaries) for professional employees. We have had our compensation plans identified as a strength in several proposals over the past year.
Questions The information contained in this document is confidential and proprietary. © AFSC 2013 13
2800 S. Shirlington Rd. Suite 350, Arlington, VA 22206 703.379.9311 AFSC.com The information contained in this document is confidential and proprietary. © AFSC 2013
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