QA_(Second_Set)_for_Solicitation_Number_19KS7018Q0021.docx

Second Set of Questions and Answers for Solicitation Number 19KS7018Q0021 Janitorial Services

Q1) Is contractor obligated to comply with all applicable Korean rules and regulations including Korean Labor Standard Act?

A1) Please see Section 1, 7.0 of the Solicitation.

Q2) Is there any waiver of Korean laws and regulations to non-US firm?

Korean government determined min hourly wage of KW7,530 for FY 2018 (1 Jan through31 Dec 2018). Must this mandatory min hourly wage be reflected in labor cost proposal?

A2) Please see Section 1, 7.0 of the Solicitation.

Q3) Is any offeror’s proposed hourly wage less than KW7,530 per working hour for FY 2018 or KW1,573,770 for monthly salary of 209 hours disqualified in evaluation and eliminated for further award consideration?

A3) All aspects of an offer must comply with the solicitation requirements to include all applicable U.S. and host country laws and regulations.

Q4) The current government/administration has publically vowed to increase the minimum hourly wage to KW10,000 (KW2,090,000 a month ) by 2020 and the minimum hourly wage for FY 2019 shall be announced around July 2018. Increases of this size for the minimum hourly wage are above and beyond any offeror’s control/best forecast. However to be compliant with 5152.222-4034 Korean Labor Law, an offeror must subsequently pay at the minimum hourly wage or higher. Accordingly, in multiple period contracts such as this solicitation covers, the provision of an equitable adjustment due to unforeseeable circumstances (including this example of the minimum hourly wage increase) will be essential. There is precedent, for example the Public Procurement Service (조달청), Korean government agency responsible for government-wide contracts including ones for ROK MND (국방부) accepts equitable adjustment requests to cope with government mandated salary adjustments, such as a change to the minimum hourly wage, for multiple period contracts. Is such an equitable adjustment provision be included in the contract arising from this solicitation? Or contractor can claim this adjustment when min hourly wage increases during POP?

A4) The solicitation and resultant contract will not include any type of price adjustment clause. Therefore, prospective offerors must review the solicitation requirements and terms and conditions and include any projected inflation as well as wage increases in their pricing assumptions to develop their firm fixed prices for the base year and each option year. Offerors are further advised there shall be no adjustments to these firm fixed prices after contract award.

Q5) If the answer to Question 3 regarding the inclusion of an equitable adjustment provision is “No”, then in order to ensure an ability to comply with the Korean Labor Law (and meet the expected increase in the minimum hourly wage) any offeror must forecast a minimum hourly rate increase percentage for the period FY 2019 through FY 2023 (last option year of this contract). On the basis of government statements of intent to date this would require at least a 15% increase for both FY 2019 and FY 2020 to meet the stated goal of KW10,000 per hour or KW2,090,000 per month by 2020, anybody cannot make forecast of min hourly wage increase in the future and contractor shall be found in violation of Korean labor laws if proper percentage is not factored in for years to come. Is there any recourse to circumvent this happening on government side?

A5) Please see answer to Question 4.