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By Nick Wakeman

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Nick Wakeman

Fear and loathing over proposal to give competitive advantage to higher-paying contractors

A proposal to give more weight in contracting decisions to companies that pay better has raised the ire of many readers.

The idea being floated by the Obama administration seems to be particularly scary for small businesses owners. Reader comments also are expressing frustration over a lack of understanding about how the procurement process works.

One commenter lamented the difficulty for contracting officers to determine best value. “So far the only solution has been best value means lowest cost,” the commenter said.

Many of the comments focused on the negative impact the proposal will have on small businesses. This is a “terribly destructive idea for small business and anyone starting a new business,” said one commenter.

Others pointed out that the pressure to control costs often lands heaviest on salaries, but that competitive pressures, not government requirements, are the best way to determine salaries.

“Economics 101 told most of us that industry will cover its costs or go out of business,” said M from Reston, Va.
There was a sprinkling of sarcasm as well. “Great Idea!” said one.

“Behold! An administration that is fundamentally at odds with the very marketplace. Odd, isn't it?” said Steve from Chantilly, Va.

There also was a voice of reason: “Before anyone blows a gasket, the article says that the Obama Administration is ‘considering’ this idea and that they have sought and received input from informed sources within the government. As far as I can tell nothing has been done yet.” 

Emotions likely will continue to run high until the proposal is either finalized and everyone learns to live with it or it dies a quiet death. So join the debate. 

Posted by Nick Wakeman on Mar 01, 2010 at 9:43 AM

Reader Comments

Mon, Apr 5, 2010 Larry Fairfax

The whole idea of using salaries as an award criteria is truly laughable. It continues to show the absolute stupidity of this Administration and the total lack of understanding of marketplace economics. Try having the government use the "Best Value" award criteria and move away from lowest price. Lowest price encourages and promotes shell companies, joint ventures, and other bid strategies promoting poor salaries, poor performance, and more cost to the American taxpayer in the end. You'll see decent salaries. You don't need an Ivy League degree or MBA to figure this out. Ask any farmer with a high-school degree. This used to be part of the American DNA. It has been and is continually being eroded by the dumbass elitist and their impaired and inbred offspring.

Mon, Mar 29, 2010 Anonymous CEO Washington DC

As a CEO and business owner that takes great pride in the outstanding benefits, fair salaries, and mature corporate support (backoffice) my company provides, it is criminal to be beaten time after time by shell companies with horrendous benefits and zero corporate maturity that NEVER is considered by the majority of Government organizations when reviewing proposals. Nearly 95% of the time its LOWEST COST only. I strongly encourage all Government decision makers to at least have some sort of understanding of the entire package that a responsive employer brings...and which begets happy, motivated employees for the long haul. Not just some low-baller. Well, at least a person can dream!

Fri, Mar 5, 2010 Michael Lent

Consideration of this policy is hardly a surprise. The president's procurement reform strategy, from its original unveiling last March, was based on assumptions that included: contractors make excessive profit, and, contractors' (high) prices reflected poorly managed, or even padded, overhead costs. Since profit margin and cost burdens are more abstract and obscured to the customer and policy-makers (even if visible to contracting officers and auditors and contract administrators), it is no surprise that the administration thought some more direct labor could be fit in with no problem. With so much social engineering already built into federal procurement, e.g., the spectrum of set-asides, and, some direct labor-related regs, this was bound to happen. And the so-called "blended workforce," bursting with former feds, begs the question of equity and fairness, in some minds. So industry needs to take a deep breath and get ready for this potential policy. But one can only wonder what it will do to bidding strategies and government proposal evaluation schemes, and, the salary dimension of the real labor market for contractors.

Wed, Mar 3, 2010 K Springfield

As far as I have learned during my 40 years of service there are no "informed government sources" all rely on facts from someone else

Wed, Mar 3, 2010

The destruction of the Bourgeois....

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