Hiring Incumbent Employees At Low Labor Rates–What Could Go Wrong?

A company bidding to replace an incumbent service contractor cannot presume incumbent workers will take major pay cuts without setting itself up for a potentially successful protest.

FAR 22.12 generally requires successor service contractors to give a right of first refusal to qualified employees under the previous contract. And even when these nondisplacement rules don’t apply, many offerors’ proposals tout their efforts to retain incumbent employees. But asking incumbent employees to take significant pay cuts–and expecting them to accept–is unreasonable and can torpedo a proposal. Case in point: GAO sustained a protest recently against an awardee who had proposed high retention rate of incumbent workers, but lower pay for those positions.

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Task Order Labor Categories Don’t Match Schedule Contract; GAO Sustains Protest

The GAO sustained a protest of the award of a GSA Schedule task order because the labor categories awarded under the task order were outside the scope of the awardee’s underlying GSA Schedule contract.

In a recent bid protest decision, the GAO held that the awardee’s GSA Schedule labor category–management analyst–did not align with the task order solicitation’s requirement for research analysts, general consultants, and legal administrative specialists.  As a result, the task order award was improper.

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