The loaded hourly labor rates attached below include wages, overhead, general and administrative expenses, and profit for work performed in the continental United States. They apply only to time and materials and labor-hour orders. They include the 0.75 percent contract access fee.
What you should do
Ordering contracting officers can use these ceiling labor rates to estimate the total cost of the order, and the Independent Government Cost Estimate (IGCE). You must determine:
- Whether the total price for the order is fair and reasonable given the requirements of each order;
- The appropriate level of effort and mix of labor to perform the task; and
- The appropriate contract type.
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Contract pricing and competition
All contract holders must be provided a fair opportunity to be considered for all orders in accordance with Federal Acquisition Regulation (FAR) 16.505 unless an exception applies. Exceptions include an urgent need, a follow-on, and a minimum guarantee with an industry partner (the full list of exceptions is in FAR 16.505(b)(2)(i)). You must document exceptions.
If you allow adequate price competition, generally you do not need any more information to determine whether the cost or price is reasonable. You can find guidelines on adequate price competition in FAR 15.403-1(c)(1). Employ the cost and price negotiation policies provided in the FAR 15.4 and use your agency’s policies as you see fit.
A 2009 memo from the Office of Federal Procurement Policy, Increasing Competition and Structuring Contracts for the Best Results (PDF, 173 KB, 10/27/2009), recommends that contracting officers avoid noncompetitive, cost-reimbursement, labor-hour, and time-and-materials contracts as a way to increase competition and avoid overpaying for critical IT systems.
If you are issuing a time-and-materials order, use the time-and-materials provision in your agency's policies to specify whether hourly labor rates are separate, blended, or a combination of separate and blended. The ordering contracting officer should outline this information in the request for quotations (RFQ) or request for proposals (RFP).
Work performed outside the US
The Department of State's Office of Allowances publishes quarterly reports that will help you price work to be performed abroad, including:
- Cost of living
- Per diem rate maximums
- Quarters allowances
- Hardship differentials
- Danger pay allowances