Are Your GSA Labor Categories Setting you up for Failure?

October 27, 2020

Many contractors start to panic when they receive a notice from the General Services Administration (GSA) that it is time for a Contractor Assessment or Office of Inspector General (OIG) Audit. Service contractors have the added stress of ensuring all personnel who performed the work meet the minimum labor category requirements. Labor qualification compliance is a critical area of financial risk during a contractor assessment or audit. Below are some of the most common labor category problems Aronson encounters and best practices to address them:

(1) Lack of education and experience substitutions (or inconsistent substitutions)

GSA considers the use of unqualified personnel on a GSA Schedule task order an overcharge, and the associated damages can add up quickly. Without substitutions incorporated into your GSA Schedule contract, you lose flexibility in placing staff into positions. There may be a skilled professional on your team who does not have a degree but has over 20 years of experience. Without using substitutions, this individual would not qualify for any position on the GSA contract that requires a degree. Substitutions allowing additional experience to replace education would allow this professional to be placed in a position requiring a degree. Implementing a standard substitution methodology is an important way to expand your pool of qualified resources.

(2) Use of overly specific requirements that can unnecessarily exclude otherwise qualified people

Position descriptions that include overly specific requirements, such as a particular degree or type of work experience, are often problematic. In an audit or assessment, GSA will review a sampling of resumes for personnel performing the work to confirm they meet or exceed the minimum education and experience requirements. For example, if your contract requires a Software Developer to have a Bachelors Degree in Computer Science but the individual has a Bachelors in Graphic Design, this person is unqualified. The same applies for specific types of work experience. If the resume does not demonstrate the required experience, the individual is deemed unqualified. Avoid arguing semantics with GSA. If it doesn’t actually matter, don’t require it!

(3) Accepting requirement waivers from the ordering agency to place an unqualified person

Ordering agencies may offer to provide you with a letter waiving the GSA Schedule contract requirements for personnel they want to perform the work. GSA will identify any personnel covered by this “waiver” as unqualified because the ordering agency cannot waive the requirements of the GSA Schedule contract. The labor qualifications are determined at the GSA Schedule contract level and only the GSA Contracting Officer can approve any revisions to service descriptions. If your substitution methodology can’t make it work, consider alternatives such as adding new labor categories or using the Order Level Materials (OLM) Special Item Number (SIN).

Don’t forget, the use of underqualified personnel on GSA task orders is an overcharge. You will be responsible for the difference between the rate charged and the rate for which the person qualifies. Do not wait until it is too late! If you find your GSA contract needs updates, contract Aronson’s team of GSA experts to develop a labor category qualification strategy that protects your company.