Administration Contract Act (SCA) Value Alteration (Aviation based armed forces Viewpoint).


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Diagram. Organization Labor Advisors Price Adjustment Resources (Air Force) SCA Price Adjustment SCA Price Adjustment Elements SCA Price Adjustment Sample Questions. Office Labor Advisors. . . Organization Labor Advisors (cont\'d). Office Labor Advisors (cont\'d). Organization Labor Advisors (cont\'d). Regular citizen Contracting Agencies (cont\'d).
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Benefit Contract Act (SCA) Price Adjustment (Air Force Perspective) Add Briefer Info Here Air Force Labor Advisors Office SAF/AQCK [insert date]

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Overview Agency Labor Advisors Price Adjustment Resources (Air Force) SCA Price Adjustment SCA Price Adjustment Elements SCA Price Adjustment Sample Questions

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Agency Labor Advisors

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Agency Labor Advisors (cont\'d)

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Agency Labor Advisors (cont\'d)

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Agency Labor Advisors (cont\'d) Civilian Contracting Agencies (cont\'d)

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Overview Agency Labor Advisors Price Adjustment Resources (Air Force) SCA Price Adjustment SCA Price Adjustment Elements SCA Price Adjustment Sample Questions

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Price Adjustment Resources AF Labor Advisor Public Website http://ww3.safaq.hq.af.mil/contracting/

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Price Adjustment Resources (cont\'d) What we\'re examining today Jul 09

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July 2009

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Overview Agency Labor Advisors Price Adjustment Resources (Air Force) SCA Price Adjustment SCA Price Adjustment Elements SCA Price Adjustment Sample Questions

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SCA Price Adjustment What is the Federal Acquisition Regulation (FAR) legally binding power for permitting a Service Contract Act (SCA) work value change? FAR 52.222-43, Fair Labor Standards Act and Service Contract Act - Price Adjustment (Multiple Year and Option Contracts) (Nov 2006) (a) This provision applies to both contracts subject to zone winning pay judgments and contracts subject to aggregate haggling understandings . (b) The Contractor warrants that the costs in this agreement do exclude any recompense for any possibility to take care of expanded expenses for which change is given under this proviso … . FAR 52.222-43 gives the power to modify the agreement cost for SCA-secured work; this proviso must be incorporated into firm-settled cost contracts or work hour contracts Note: highlighting utilized all through this instructions is accommodated accentuation and does not show up in the real FAR content

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SCA Price Adjustment (cont\'d) FAR 52.222-43 (cont\'d) (d) The agreement cost or contract unit cost work rates will be conformed to mirror the Contractor\'s genuine increment or abatement in material wages and incidental advantages to the degree that the expansion is made to consent to or the decline is intentionally made by the Contractor as an aftereffect of: (1) The Department of Labor wage assurance pertinent on the commemoration date of the numerous year contract, or toward the start of the recharging choice period. Temporary worker must give genuine finance information Contracting Officer ascertains the contrast between the sum paid by the Contractor and the new Wage Determination (WD) The period secured by the change starts with the date the new WD is required by the terms of the agreement – not the date of the WD

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SCA Price Adjustment (cont\'d) FAR 52.222-43(d)(1) (cont\'d) For instance, the earlier year wage assurance required a lowest pay permitted by law rate of $4.00 every hour. The Contractor paid $4.10. The new wage assurance builds the base rate to $4.50 every hour. Regardless of the possibility that the Contractor deliberately expands the rate to $4.75 every hour, the permissible value modification is $.40 every hour If the Contractor pays more than the WD rates, the conformity depends on what the Contractor ACTUALLY paid- - NOT on the past WD rates Previous WD hourly rate: $4.00/hr Contractor real: $4.10/hr New WD hourly rate: $4.50/hr Adjustment: $.40/hr (4.50/hr - $4.10/hr)

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SCA Price Adjustment (cont\'d) What is permitted in the SCA work value alteration under FAR 52.222-43? (e) Any modification will be constrained to increments or reductions in wages and incidental advantages … , and the going with increments or abatements in government managed savings and unemployment charges and laborers\' pay protection, yet should not generally incorporate any sum for general and managerial costs, overhead, or benefit . Certain assessment increments must "accompany" (be brought about by) the WD increment. The condition gives no help from duty increments from different causes or assessment increments on a Contractor\'s aggregate finance

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SCA Price Adjustment (cont\'d) General count of cost alteration New the lowest pay permitted by law or potentially Health and Welfare (H&W) Minus (- ) real wage/H&W paid in past contract period Plus (+) change in finance charges and specialists comp (on measure of increment, just) Equals (=) the cost conformity Remember: no overhead (OH), general and authoritative (G&A) or benefit permitted under the power of FAR 52.222-43(e) $15.00 (new wage) 14.50 (previous wage paid) .50 (wage increment) + .08 (H&W increment) + .12 (change in duties) $ .70/hr (cost modification)

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SCA Price Adjustment (cont\'d) Two Price Adjustment Methods Forward Pricing Method Contractor asserts a change in light of the anticipated effect of another or reconsidered WD The projection utilizes the worker hours as a part of the earlier contract time frame figuring in any known or anticipated that progressions would contract degree or work drive Actual Cost Method If the case has been postponed until after the alteration time frame is over, by either an affirmed expansion to the 30-day prerequisite for documenting or by deferral in contract change, the Contractor ought to utilize real representative hours filled in as the reason for the case Most SCA work cost alterations are done utilizing the Forward Pricing Method

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Overview Agency Labor Advisors Price Adjustment Resources (Air Force) SCA Price Adjustment SCA Price Adjustment Elements SCA Price Adjustment Sample Questions

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Price Adjustment Elements Adjustment of wages Contractor gives real wage rate data paid in the past contract execution period Contracting Officer computes the distinction to the new WD rate from the genuine rate already paid by the Contractor (not really the same as the base rate required by the past WD) FAR 52.222-43(d)(1) particularly expresses that the Government\'s conformity will be founded on what the Contractor really paid (if it was in any event the past WD\'s base)

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Price Adjustment Elements (cont\'d) Adjustment of Health & Welfare (H&W) Contractor might be required to give information supporting the real premiums paid in past period If the H&W increment is paid specifically to representatives, it is viewed as assessable wages . The Contractor will bring about a going with cost in FICA, WCI and potentially FUTA and SUTA If H&W is paid to an outsider supplier, Contractor acquires no expansion in finance charges so no FICA or WCI conformity is expected on the H&W increment FICA and WCI modification are expected on the H&W sum when H&W is paid specifically to the representatives. No FICA or WCI change is expected on H&W sum on the off chance that it is paid into a protection arrange.

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Price Adjustment Elements (cont\'d) Adjustment of Vacation An excursion conformity is just suitable if the modified WD changed the get-away advantage or qualification criteria (if, for example, the old WD expressed "one week paid get-away following 1 year of administration" and the new WD states "two weeks paid get-away following 1 year of administration") No modification is allowed only on the grounds that an individual representative\'s status has expanded his/her privilege Vacation hours required by the WD might be incorporated into the claim (applying the time-based compensation and H&W increment to the get-away hours) Typical hours/year: Productive Hrs: 1,920 Vacation: 80 Holidays: 80 Vacation required by the WD is found in the notes taking after the WD orders (or in the CBA)

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Price Adjustment Elements (cont\'d) Adjustment of Holidays When the reexamined WD builds the quantity of required occasions, the Contractor may for the most part claim an alteration for the expanded cost The modification is the SCA the lowest pay permitted by law rate times the quantity of expanded occasion hours (for the most part, eight hours for every each new occasion for a full-time worker) Holiday hours required by the WD might be incorporated into the case (applying the every hour wage and H&W increment to the occasion hours) The aggregate number of occasions required by the WD is found in the notes taking after the WD characterizations (or in the CBA)

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Price Adjustment Elements (cont\'d) Adjustment of Unemployment Taxes The Federal Unemployment Tax Act (FUTA) and State Unemployment Tax Act (SUTA) installments are ordinarily not influenced by a WD amendment Unemployment duties are paid by Contractors on wages up to a particular yearly roof or top The current FUTA rate of .8% is just paid on wages up to a top of $7,000 ($56/yr); Contractors ought to have incorporated this in their underlying offers SUTA tops shift by state, yet just 14 states utilize tops surpassing $20,000. Rates fluctuate by state and by business, yet the greatest SUTA rate is 5.4% SUTA sites can be come to through http://www.americanpayroll.org/individuals/stateui )

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Sample information on SUTA bases Source: http://www.americanpayroll.org/individuals/stateui

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Price Adjustment Elements (cont\'d) Adjustment of Unemployment Taxes (cont\'d) Since yearly worker compensation for the most part surpass the tops in many states without respect to the reexamined WD, normally no extra FUTA or SUTA is required- - the Contractor is as of now paying the most extreme assessment The agreement cost is not balanced for changes in the FUTA or SUTA rate ; if a modification is justified, the present rates apply Contracting Officer confirms the appropriate SUTA rate by asking for reasonable documentation from the Contractor or reaching the significant state business charge office If an alteration is expected, it is just for the FUTA/SUTA percent rate times the wage rate differential

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Price Adjustment Elements (cont\'d) No conformity is permitted on General and Administrative (G&A) costs, overhead and

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