# Presentation: 708539

## Federal Supply Schedules for  Services

**Including the Mysteries of the Service Contract Act (SCA)**

## Welcome and Introduction

**Welcome and Introduction**

**General Information**

**Challenges / Issues**

**Looking Forward**

**1**

## FSS 621 I Professional and Allied Healthcare Staffing Services

- Provides customers with “on site” staffing options
- 58 general categories of healthcare occupations
- Further broken down into sub-categories(approximately 150 total)
- Sold commercially at hourly rates

## FSS 621 I Professional and Allied Healthcare Staffing Services

|  FY 2004  |  FY 2005  |  FY 2006  |  FY 2007  |
| --- | --- | --- | --- |
|  |  |  |  |
| $205.2  | $328.4  | $392.9  | $351.6  |
|  |  |  |  |
| 67% VA | 46% VA | 44% VA | 48% VA |
| 33% OGA | 54% OGA | 56% OGA | 52% OGA |

**FSS 621 I Professional and Allied Healthcare Staffing Services**

## FSS 621 I Professional and Allied Healthcare Staffing Services

|  |  FY 2004  |  FY 2005  |  FY 2006  |  FY 2007  |
| --- | --- | --- | --- | --- |
| Nursing |  $     44.5  |  $     88.9  |  $   107.9  |  $     89.2  |
| LPN / NP / PA |  $     19.2  |  $     32.2  |  $     36.1  |  $     26.3  |
| MA / CNA / Surg Tech |  $       7.4  |  $     19.2  |  $     25.9  |  $     24.6  |
| Radiological Technology |  $     12.1  |  $     17.9  |  $     18.1  |  $     34.2  |

**FSS 621 I Professional and Allied Healthcare Staffing Services**

## FSS 621 I Professional and Allied Healthcare Staffing Services

|  |  FY 2004  |  FY 2005  |  FY 2006  |  FY 2007  |
| --- | --- | --- | --- | --- |
| Internal Med |  $     20.5  |  $     22.2  |  $     24.2  |  $     23.1  |
| Radiologist |  $     18.0  |  $     23.3  |  $     27.7  |  $     22.7  |
| General Family Practice |  $       9.1  |  $     16.4  |  $     19.5  |  $     15.7  |
| Pharmacist |  $       8.7  |  $     12.1  |  $     18.8  |  $     15.2  |
| Pharm Tech |  $     14.0  |  $     11.8  |  $     13.6  |  $     11.5  |
| ER |  $       7.4  |  $     13.6  |  $     15.9  |  $     14.5  |

**FSS 621 I Professional and Allied Healthcare Staffing Services**

## FSS 621 I Professional and Allied Healthcare Staffing Services

|  |  FY 2004  |  FY 2005  |  FY 2006  |  FY 2007  |
| --- | --- | --- | --- | --- |
| Anesthesiologist |  $       6.2  |  $       8.3  |  $     11.3  |  $     10.7  |
| Psych / Counseling |  $       7.7  |  $     10.7  |  $     12.6  |  $     13.1  |
| CRNA |  $       6.2  |  $       8.8  |  $     12.4  |  $       8.9  |
| Laboratory |  $       3.8  |  $       5.9  |  $       7.7  |  $       5.7  |
| Dental |  $       0.9  |  $       2.2  |  $       2.8  |  $       2.4  |
| Other Professionals |  $     16.5  |  $     26.1  |  $     28.0  |  $     22.9  |
| Other Allied |  $       3.0  |  $       8.8  |  $     10.4  |  $     10.9  |

**FSS 621 I Professional and Allied Healthcare Staffing Services**

## General Issues:
SCA / FLSA requirements
Initial determination of application
Procuring agency contracting officer
Ultimate authority of application
US Department of Labor (US DoL)
GSA Policy

- SCA / FLSA requirements
- Initial determination of application
- Procuring agency contracting officer
- Ultimate authority of application
- US Department of Labor (US DoL)
- GSA Policy

**FSS 621 I Professional and Allied Healthcare Staffing Services**

**Notes:**
The McNamara-O’Hara Service Contract (SCA) and the Fair Labor Standard Act (FLSA) requires contractors and subcontractors performing Federal contracts covered by the statutes to observe minimum wage and safety and health standards. 

## Most Federal service contracts in excess of $2,500 must contain the labor standards clauses and:
Minimum monetary wages and fringe benefits determined by the Secretary of Labor
Record keeping - Posting requirements
Safety and health provisions (29 CFR 1925)
Statement of rates paid to Federal employees

**Most Federal service contracts in excess of $2,500 must contain the labor standards clauses and:**
- Minimum monetary wages and fringe benefits determined by the Secretary of Labor
- Record keeping - Posting requirements
- Safety and health provisions (29 CFR 1925)
- Statement of rates paid to Federal employees

**Notes:**
Most Federal service contracts in excess of $2,500 must contain the labor standards clauses and:

Minimum monetary wages and fringe benefits determined by the Secretary of Labor
Record keeping - Posting requirements
Safety and health provisions (29 CFR 1925)
Statement of rates paid to Federal employees

## General Issues:
Definition of Service Contract 
Principal purpose
Definition of Service Employee(29 CFR Part  541)  
2005 Event

- Definition of Service Contract
- Principal purpose
- Definition of Service Employee(29 CFR Part  541)
**2005 Event**

**FSS 621 I Professional and Allied Healthcare Staffing Services**

**Notes:**
“Service contract” means any Government contract, the principal purpose of which is to furnish services in the United States through the use of service employees, except as exempted under section 7 of the Act (41 U.S.C. 356; see 22.1003-3 and 22.1003-4), or any subcontract at any tier hereunder. 
“Service employee” means any person engaged in the performance of a service contract other than any person employed in a bona fide executive, administrative, or professional capacity, as those terms are defined in 29 CFR Part 541. The term “service employee” includes all such persons regardless of any contractual relationship that may be alleged to exist between a contractor or subcontractor and such persons 
2005 Event
Pharmacists under 29 CFR 541 applies to FLSA which flows down to SCA

WH Publication 1281 Revised August 23, 2004
Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees Final Rule

Twofold criteria – not only does the primary duty test need to be met 1.)  employee must perform work requiring advanced knowledge
The advanced knowledge must be in a field of science or learning
  advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction, 

but the salary basis also needs to be met.  (541.600)

Practice of law or medicine

## 
3 General Categories
High-level professionals (Physicians)
Mid-level professionals (Pharmacists, RN’s)
Lower-level professionals(Nursing Assistants, Dental Assistants)

**3 General Categories**
- High-level professionals (Physicians)
- Mid-level professionals (Pharmacists, RN’s)
- Lower-level professionals(Nursing Assistants, Dental Assistants)

**Challenges**

**Notes:**
1.  High-level professionals (Physicians) practice of law or medicine 
2.  (mid-level professionals).  Uncertainty exists as to whether certain classes of mid-level professional healthcare workers (e.g., pharmacists, registered nurses and Certified Registered Nurse Anesthetists) qualify for a professional exemption.  Some of these categories of professionals are listed on the wage determination issued by DoL.  Employees in these categories clearly meet the threshold criteria for the professional employee exemption but may lose that exemption because the standard commercial practice in private industry is to pay employees an an hourly instead of a salary basis.  

3 (low-level professionals).  Schedule 621 I covers lower-level professional healthcare workers (e.g. Surgical Technologist, Pharmacy Aide, etc) that should be covered by the SCA that may or may not be classified on a wage determination.  DoL issues wage determinations by State and County resulting in hundreds of individual wage determinations nationwide.  Wage determinations only cover 7 remaining categories of healthcare occupations and do not cover all categories within the scope of Schedule 621 I.

In Summary:  It is in the best interest of the Government to address these issues at the FSS schedule level in order to provide the highest level of customer support and put in place compliant, cost effective contracts.  This approach, among other things, will ensure compliance with applicable labor laws, promote consistency in application and interpretation of such laws, promote fair and equal treatment of contractors, streamline FSS contract award and administration, enhance use of Schedule 621 I by standardizing  processes and procedures for implementing the SCA, and reduce claims and resulting costs.

## Concept:
Identify commercial occupations
Requirements of SCA Incorporated at the National Level
Incorporate DoL Wage Determinations (WD) into FSS at national contract level
Update wages annually on FY
All Orders, BPAs and Option Periods
Cross walk commercial occupations to SCA Occupational Index Codes

- Identify commercial occupations
- Requirements of SCA Incorporated at the National Level
- Incorporate DoL Wage Determinations (WD) into FSS at national contract level
- Update wages annually on FY
- All Orders, BPAs and Option Periods
- Cross walk commercial occupations to SCA Occupational Index Codes

**Solutions**

**Notes:**
SCA issues of 22.1007 requirement to obtain WD 

22.1007  Requirement to obtain wage determinations. 
The contracting officer shall obtain wage determinations for the following service contracts: 

(a) Each new solicitation and contract in excess of $2,500. 
(b) Each contract modification which brings the contract above $2,500 and— 
(1) Extends the existing contract pursuant to an option clause or otherwise; or 
(2) Changes the scope of the contract whereby labor requirements are affected significantly. 

(c) Each multiple year contract in excess of $2,500 upon— 
(1) Annual anniversary date if the contract is subject to annual appropriations; or 
(2) Biennial anniversary date if the contract is not subject to annual appropriations and its proposed term exceeds 2 years—unless otherwise advised by the Wage and Hour Division. 

22.1008  Procedures for obtaining wage determinations. 

## FSS 621 I Incorporates SCA

- July 2006 – Industry Meeting
- October 1, 2006 – SCA Clauses Incorporated
- January 1, 2007 – US DoL WD’s incorporated into FSS nationwide
- February 2007 – Disaster Recovery Incorporated
- October 1, 2007 – US DoL WD’s updated for Fiscal Year 2007 / Parallel Categories Identified

## The Challenges of Where We Have Been

**Industry**
- Updating Systems
- Pricing
**Educating Customers**
- Resistance
**Identifying Parallel Categories**

**Notes:**
What happens when a CO does not include a WD

Price adjustments addressed

## Lessons Learned

- Educating Customers
- Price Adjustments
- Timing of Orders
- Consistency

## What is Next?

**December 2006 Federal Acquisition Regulation (FAR) Changes **
- Effective February 12, 2007
- Labor Hours and Time and Materials Contracts Defined as Commercial Items
- Additional Guidance

**Notes:**
The new rule effective Feb 12, 2007 makes some long awaited changes to T&M and LH contracting.  The most notable is that T&M and LH contracts can now legitimately be used for commercial services.  The procedures for commercial services differ slightly from those for noncommercial services

## Time and Materials /  Labor Hour Contracts Defined

**Time and Material (T&M) Contract**
- Time
- Material
**Labor Hour (LH) Contract**
- No Material

**Notes:**
Government agrees to pay the contractor for time spent based on preestablished fixed hourly labor rates and material purchased in support of the requirements

LH No Materials

## T&M /  LH Contracts vs.Fixed Price Contracts

**Fixed Price**
- Preferred
- Risk on Contractor
- FSS 621 I Supported
**T&M / LH Contract**
- Risk on Government
- “Best Efforts” Concept

**Notes:**
Some people believe that T&M and LH contracts offer little or now incentive for cost control, labor efficiency or delivery of a completed service.  In contrast to a fixed price contract, such a contract requires only that the contractor uses it’s best efforts to provide the services at the stated price.  With these types of contracts the contractor is not on the hook to delver a final product, only that it delivers the hours.  We often see this when agencies use this type of contract as a replacement for effectively defining requirements.  

## Proposed Changes to the Basic FSS Contract

**Determination and Finding**
**Issue a Change**
- Add New SIN/SIN(s)
- Contract Support Items
- Other Direct Costs
- Cancel Noncompliant Contracts

## Proposed Changes to the Basic FSS Contract

**Materials Defined**
- Direct Materials
- Subcontracts for Supplies
- Incidental Services
- Other Direct Costs
- Applicable Indirect Costs

**Notes:**
Incidental Services for which there is not a labor category specified in the contract

## Proposed Changes to the Basic FSS Contract

**Materials **
- Meet the FAR definition of Commercial Item
- Significant Change in How Supporting Materials are Made Available under FSS

## Proposed Changes to the Basic FSS Contract

**Contract Support Items (CSI)**
- Materials Used in Ordinary Course of Business
**Other Direct Costs**
- Priced CSI

## Proposed Changes to the Basic FSS Contract

**Priced ODC Line Items Preferred**
- Commercial Items
- Potential for Open Market
- Indirect Costs
**Inspection and Acceptance**

**Notes:**
It would be in the best interest of your firm to have all Contract Support Items priced on your basic FSS because if the value of the CSI exceeds the micro purchase threshold competition requirements 

MAS rates are normally inclusive of all direct and indirect costs.  It may be appropriate to reimburse a contractor at a fixed amount allocated on a prorated basis.

Inspection and Acceptance – New rule permits the government to test all services and require reperformance of work that did not conform to the order.

When reperformed it will be done less a % for profit.  

## Proposed Elements of a T&M / LH Orders Under FSS

**Determination and Finding**
- Market Research
- Why Work Can Not be Estimated
- Action Plan to Move to Fixed Price in the Future
**Follow Ordering Procedures in FAR 8.4**
- Include a Ceiling Price in Order
- Contractor Exceeds Ceiling at Own Risk
- Should not Exceed 3 years

## Contractor to Notify When it Hits 85% of the Ceiling Amount
Incentive Fees

- Incentive Fees

**Proposed Elements of a ****T&M / LH Orders Under FSS**

**Notes:**
T&M and LH contracts lend themselves to an award or incentive fee as long as that award or incentive fee is based solely on factors other than cost

## US Department of Labor Contact

**Steve Hill**
***312-569-7220***
***Hill.Steven@dol.gov***

## FSS Service – Point of Contacts

**Help Desk**
***708-786-7722******helpdesk.fss621i@va.gov***

## FSS Service – Point of Contacts

**Dore Fessler**
- Assistant Director, Medical Services
- (708) 786-5223
**Darlene McGary**
- Schedule Manager
- 621 II – Medical Laboratory Testing and Analysis
- 66 III – Cost-Per-Test
- (708) 786-5246
**Linda Smith**
- Schedule Manager
- 621 I – Professional and Allied Healthcare Staffing
- Teleradiology Initiative
- (708) 786-5194

- Questions and
- Open Discussion

## Thank You!

**Thank You!**