Vendor Questions and Gov Responses_RFI 2_SSPARS Reacq FY26.docx

Vendor Questions & Government Responses 10 August 2023 Market Research Solid-State Phased Array Radar System (SSPARS) Fiscal Year 2026 Reacquisition Level 1 Operations & Maintenance RFI No. 2

1. We understand that if a multiemployer defined benefit pension plan has unfunded vested benefits allocable to a contractor (employer), the plan will likely assess a withdrawal liability should the contractor no longer participate in the pension plan or upon conclusion of a Government contract (such as SSPARS) when there is a new successor contractor. The previous and present SSPARS contracts include Service Contract Labor Standards mandatory wage determination requirements based on several collective bargaining agreements with multiple unions that provide pension benefits under these multiemployer pension plans. The withdrawal liabilities resulting from these multiemployer pension plans represent a very significant contractor financial risk (in the millions of dollars) since they cannot be quantified in advance due to a number of variables including the overall funding status of the particular plan and the changing Pension Benefit Guaranty Corporation (PBGC) regulatory environment.

· We understand the prior SSPARS incumbent contractor was assessed a significant withdrawal liability when they lost the previous SSPARS contract competition.

· Since offerors will be unable to accurately estimate this withdrawal liability, would the Government consider establishing a separate cost-reimbursement CLIN with the amount determined during contract closeout?

· Should the Government not provide offerors a cost-reimbursement CLIN, where should Offerors include these withdrawal liability costs in their fixed-price proposals?

GOVERNMENT RESPONSE:

The Government will not establish a separate cost-reimbursement CLIN for Pension Withdrawal Liabilities as these are not Bona Fide Fringe Benefits. Pension withdrawal liability is not an allowable cost. The Government will only pay allowable costs IAW FAR 52.222-43 – Fair Labor Standards Act and Service Contract Labor Standards-Price Adjustment.

Offerors which submit a proposal in response to a government solicitation should consider inclusion of this item within its proposed profit of its total cost proposal.

2. Long-term employees at RAF Fylingdales are subject to United Kingdom (UK) taxes that are significantly greater than taxes that they would pay for the same salary in United States taxes. Are employees at RAF Fylingdales required to be Tax Equalized (compensated) for the difference between UK taxes and United States taxes?

GOVERNMENT RESPONSE:

A contractor should consider the tax situation of its employees when preparing its proposal. Taxes paid by the contractor may be a reimbursable expense, but taxes paid by their employees is not. This is a business decision, and the Government is not responsible for providing offerors business or legal advice.