Due to the extensive time it is taking the government to process security clearances, there is apparently a big shortage of Top Secret/SCI contractor personnel. As soon as our contractor gets someone cleared, they are hired away by a competing contractor for more money. The attrition rate is about 40%. The contractor wants us to create a new CLIN just for SCI cleared workers and another CLIN to allow the paying of a signing bonus if the worker agrees to stay one year after getting the bonus.

This is an IDIQ contract with fixed hourly rates. The workers fall under the Service Contract Act but get substantially more than the wage determinations due to a union contract. The suggested SCI premium has been suggested at about $5 an hour. This would leave the worker at about $9 an hour above the area wage determination.

Has anyone out there had any IDIQ contracts that paid extra for clearances or paid signing bonuses? I thought bonuses were taboo but in searching the DAD I don't see any prohibition in there.

My big problem is in determining what is a fair and reasonable price? The government program manager is so frustrated in getting workers that he would probably be willing to pay almost anything to get them.

Can anyone give me any advice?

By joel hoffman on Tuesday, July 31, 2001 - 09:34 am:

At first glance, it appears that the Contractor wants the Government to pay a premium on a fixed price contract in order for the Contractor to achieve performance, already required and paid for at an agreed price.

Is this appropriate or should the Government terminate the contract and re-open competition? happy sails! joel hoffman

By ji20874 on Tuesday, July 31, 2001 - 02:33 pm:

Joel is right -- if you were still in the pre-solicitation or solicitation stage, this would be a fair question -- but since your contract is already awarded, your contractor needs to perform to the contract -- if it fails, you can t4d and recompete, and maybe the winning contractor will quote reasonable prices considering all the circumstances. But if yours is a sole-source contract, you might restructure the contract in lieu of default, but be certain to record the negative past performance information -- this is vitally important...

By Eric Ottinger on Tuesday, July 31, 2001 - 02:46 pm:

All,

Noting that this is an ID/IQ contract, did the contractor have reason to anticipate that so much of the work would require SCI clearances?

If the actual requirement for personnel with SCI clearances is much greater than the parties anticipated, I would be inclined to handle this as a change. SCI clearances are scarce.

Eric

By Anon2U on Tuesday, July 31, 2001 - 02:50 pm:

The contractor did an outstanding job on the contract for 4 years. We did a bi-lateral modification changing the requirement from TS to TS with SCI due to a new congressional mandate. The contractor nor we saw any problem. They wanted a small admin fee to process the SCI paperwork which is extensive and we gave it to them. Everyone was happy until the first batch of workers got their SCI clearances. Other contractors immediately cannibalized them for their contracts. We are in the position of not being able to get enough workers approved fast enough.

Yes the contractor agreed to the terms of the mod but I am not blaming the contractor for a problem the government has created for itself. We are trying to come to a mutual solution. The proposed increases and bonuses are the government program manager's idea not the contractor's. I just need to know if anyone else has had the problem, solutions found, and if anyone has calculated a fair increase for a SCI clearance.

We can debate the idea of us paying extra for a free clearance but that does not solve the problem that we have a shortage of workers who can get the clearances and thier value goes up when they do.

By joel hoffman on Tuesday, July 31, 2001 - 03:19 pm:

Anon2U, being that this was the result of a "change", I have sympathy for the contractor. I could justify some consideration due to the "unforseeable impact" of the new security requirement. happy sails! joel

By Anonymous on Wednesday, August 01, 2001 - 01:34 am:

I know none of this is of your making, but jump in the big pot and turn up the heat seems to be the best government wide description of this process.

So, here we have the government creating a scarce commodity, mandating its use (possibly beyond any absolutely logical requirement), and then talking about whether to pay the piper when contractors are fighting in the scarce market! The real solution is speed up the process (difficult) or cut the demand (now politically sensitive).

Think a minute. You pay, the contractor pays more, someone else's contract then gets in the same jam. It is really rather amusing.

By Anon3 on Wednesday, September 05, 2001 - 03:27 pm:

Sorry to jump in at such a late date, but I wanted to assure that any "extra" pay is not against the Wage Rates demanded by the SCA. (If so, then the bonus gets lost at the next Option period due to the SCA reg, unless you have a special agreement w/ the contractor.)

In a situation like you have mentioned, I have put in a bonus to the contractor if he keeps his turnover rate below a certain level. (You could scale the bonus, so that the lower the turnover, the more bonus earned.) This allows the contractor to spend the money as he sees fit (either in extra pay, or benes to the employees), and gets the contractor to be a partner in the effort, rather than just a pass thru vehicle.

By Anon2U on Wednesday, September 05, 2001 - 04:02 pm:

Thanks for the suggestions but it seems the program office has lost interest in pushing the issue now so lets just close the thread.