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  • Question

    Can the Prime contractor delegate submission of a Compensation Plan for Professional Employees to a subcontractor?


    Answer

    We must make an assumption that your question is asking if the Prime contractor can flow down to a subcontractor the provision found at FAR 52.222-46 -- Evaluation of Compensation for Professional Employees.  See also FAR 22.1103 prescription for use.

    The FAR Matrix at FAR 52.301 Solicitation provisions and contract clauses (Matrix) identifies provisions and clauses that are required to be included in Prime contracts, required when applicable, or optional.  The FAR clause or provision itself usually states if the clause is required to flow down, required when applicable, or optional flow down.  Per the provision and clause itself, the Prime contractor may be required to flow down the entire clause or the substance of the clause.  Some FAR provisions and clauses are silent with respect to flow down.

    Since Prime Contractors are responsible for the actions of their subcontractors, and the Prime Contractor is responsible for the entire contract, they may need to flow down FAR provisions and clauses to their subcontractors/suppliers that are not mandatory flow down per the FAR to ensure the Prime can meet its proposal compliance obligations.

    The provision found at FAR 52.222-46 -- Evaluation of Compensation for Professional Employees, if applicable per FAR 22.1103, requires Offerors, as part of their proposals, to submit a total compensation plan setting forth salaries and fringe benefits proposed for the professional employees who will work under the contract.   This requirement does not distinguish between Prime and Subcontractor “professional employees who will work under the contract,” but states:  submit a total compensation plan for the professional employees who will work under the contract.  (See also FAR 22.1103 prescription for use of FAR 52.222.46).

    Although the provision at FAR 52.222-46 is silent with respect to flow down, there is nothing that prevents the Prime contractor from creating their own special provisions and clauses to define the terms and conditions associated with its subcontractor’ proposal submission requirements and performing work under a government contract.

    If the subcontractor to the Prime is providing or contributing to the provision of a [meaningful number – see FAR 22.1103] of professional employees who will work under the contract, the only way for the PRIME to be compliant with FAR 52.222-46 is to address compliance with FAR 52.222-46 with the subcontractor.   The Prime contractor can direct the subcontractor to submit its total compensation plan setting forth salaries and fringe benefits proposed for the subcontractor professional employees who will work under the contract directly to the Prime for evaluation, or the Prime can direct the subcontractor to submit the subcontractor’s total compensation plan directly to the government PCO for evaluation to protect any proprietary rate and salary information.

    The Government will evaluate the Prime’s total compensation plan, to include the Prime’s evaluation of the subcontractor’s submitted compensation plan (if submitted by the subcontractor directly to the Prime), for professional employees proposed by the subcontractor to assure that it reflects a sound management approach and understanding of the contract requirements. This evaluation will include an assessment of the offeror’s ability to provide uninterrupted high-quality work. The professional compensation proposed will be considered in terms of its impact upon recruiting and retention, its realism, and its consistency with a total plan for compensation. Supporting information will include data, such as recognized national and regional compensation surveys and studies of professional, public and private organizations, used in establishing the total compensation structure.

    If the subcontractor is directed by the Prime to submit directly to the PCO, the PCO will include the subcontractor direct-submit total compensation plan in its evaluation of the Prime’s total compensation plan.

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