With new law vendor benefits factor into contracts

Under the fiscal 2008 omnibus appropriations law, agencies now must get more detailed information on contractors' health and retirement benefits when hosting public/private competitions for government work.

Each proposal an agency receives must include information on the cost for health and retirement benefits for the prime contractor's and the subcontractor's employees, according to a Feb. 20 memo from Paul Denett, administrator of the Office of Federal Procurement Policy.

To ensure the requirements are applied uniformly, agency officials must ensure a contractor's proposals include statements on:
  • Whether employees of the prime contractor and all subcontractors have employer-sponsored health insurance.
  • The proposed amounts for direct labor costs for each year of the proposal, which must include prime contractor and subcontracting employees' salaries and wages.
  • How much the contractor has contributed to the premium or subscription share of the health benefit plans.
  • How much the contractor has contributed to retirement benefits for each year included in the proposal.

The requirements apply to competitions that are publicly announced on or after Dec. 26, Denett writes.

Signed Dec. 26, the appropriations law, which includes the new regulations on competitive sourcing, also temporarily halts agencies from migrating their human resources management work to a federal shared-service center or a private company under the HR Line of Business. The HRLOB covers competitions that involve an upgrade to the next major release of an agency's current HR management system or migrating to a modernized system.

To minimize disruptions to agencies' migrations, Denett wrote that OFPP is preparing a report to Congress and the Government Accountability Office, as required in the legislation, on the HRLOB's impact on federal employees, the role of private contractors, an estimate of savings, transition costs and a guide for evaluating the benefits of the HRLOB.

Matthew Weigelt writes for Federal Computer Week, an 1105 Government Information Group publication.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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