ID03120087 SoleSource.doc

SOLE SOURCE JUSTIFICATION

1. Description of Supplies: The Defense Contract Audit Agency (DCAA) has a requirement to purchase 2012 compensation reports to enable and facilitate the DCAA audit of contractor compensation systems and related claimed contractor compensation costs.

2. Authority: Action using simplified acquisition procedures FAR 13.106-1(b)(1): For purchases not exceeding the simplified acquisition threshold (SAT), contracting officers may solicit from one source if the contracting officer determines that the circumstances of the contract action deem only one source reasonably available (e.g. urgency, exclusive licensing agreements, brand name, or industrial mobilization)

3. Reasons for Authority Cited: The proposed contractor’s unique qualifications and the nature of the acquisition justifies use of other than full and open competition. Under General Order 12-87 dated September 11, 1987, Defense Logistics Agency transferred its Executive Agent responsibilities for reviewing contractor employee Compensation System Reviews (CSRs) to DCAA. One of the most important audit steps in CSRs is the determination of the appropriate salary and wage survey data used to benchmark contractor compensation levels in order to determine reasonableness. Absent an appropriate survey used by the contractor, auditors require a readily available source of survey data. Towers Watson’s (formerly Watson Wyatt) data is updated annually and only by renewal of the subscription can DCAA auditors have access to the latest survey data. DCAA has subscribed to these survey reports for over 20 years.

The information contained in the Towers Watson reports is used by DCAA’s auditors in making a determination of the reasonableness of a contractor’s employee compensation, in accordance with FAR 31.205‑6. The FAR provides that compensation can be determined reasonable by comparison to the compensation practices of other firms of the same size, in the same industry, in the same geographic area, and engaged in similar non-Government work under comparable circumstances. The Towers Watson U.S. survey reports satisfy all the FAR listed criteria. Towers Watson Data Services conducts more than 25 annual compensation benefits and policies and practices surveys on all aspects of pay encompassing more than 2,000 individual jobs. The Towers Watson surveys consist of U.S. Survey reports by job level or by job family, policies and practices and periodic references.

More specific information on each of the surveys follows:

U.S. Survey Reports by Job Level

Survey Report on Top Management Compensation – The report features in-depth analyses of executive pay reported by company size for an extensive array of industry categories and geographic areas. The report contains more than 125 executive positions with data presentations provided at both the corporate and division levels. An industry analysis is presented for 163 individual industry classifications; within each industry category, data is presented by company size with as many as nine size groups provided for the heavily populated industry samples. Information is provided for 145 metropolitan areas, states and state groups. It allows comparison by compensation elements, i.e., salaries, bonuses, other cash compensation and total cash compensation. Also, included is extensive information on long-term incentive programs, including the value of stock options granted within the participating organizations’ last fiscal year. The top management survey information is compiled from one of the largest databases of its kind. The current database includes information from 1,531 organizations encompassing 2,275 locations that provided data on 15,338 senior level employees.

Survey Report on Middle Management Compensation – It allows middle management pay comparisons to other contractors of the same size, same industry, and the same area. This report contains over 225 middle management positions in a wide variety of functional areas; with more than 280 metro areas, states, and state groups; with more than 125 industry classifications. Separate presentations are provided for both For-Profit and Not-For Profit organizations. It allows comparison by compensation elements (salaries, salary ranges, bonuses). The middle management survey information is compiled from one of the largest databases of its kind. The current database includes survey responses of 863 organizations encompassing 8,684 locations that provided data on 118,642 managers.

Survey Report on Supervisory Management Compensation – It allows supervisory management pay comparisons to other contractors in the same geographic area, same industry, and same size. The report provides detailed survey data for more than 160 supervisory positions with data for each reported at three levels of responsibility for a total of more than 500 individual jobs. It provides information on more than 150 metro areas, states, and state groups; with more than 98 industry classifications (including for-profit and not-for profit). It allows comparison by compensation elements (salaries, salary ranges, bonuses). The supervisory management survey information is compiled from one of the largest databases of its kind. The current database includes survey responses from 821 organizations encompassing 5,142 locations that provided data on 98,158 supervisors.

Survey Report on Professional Administrative Services Personnel Compensation – It allows professional administrative pay comparisons to other contractors in the same geographic area, same industry, and same size. This report provides pay data for over 130 exempt non-management, administrative positions with data for most reported at multiple levels of responsibility and experience for a total of more than 300 individual jobs. It provides information for more than 155 geographic areas including 104 metropolitan and consolidated metropolitan areas. An industry analysis is presented for more than 130 individual industry classifications. Separate presentations are provided for both For-Profit and Not-For-Profit organizations; analysis by organization size is also presented for each published position. It allows comparison by cash compensation elements (salaries, salary ranges, bonuses). The professional personnel survey information is compiled from one of the largest databases of its kind. The current data base includes survey responses from 846 organizations encompassing 5,271 locations that provided data on 197,631 employees.

Survey on Professional Specialized Services Personnel Compensation – It allows professional technical pay comparisons to other contractors in the same geographic area, same industry, and same size. The report provides pay data for over 130 exempt non-management technical positions with data for most reported at multiple levels of responsibility and for a total of over 365 individual jobs. It provides information for a total of 157 geographic areas including 102 metropolitan and consolidated metropolitan areas, with more than 100 industry classifications; and several organization size groups. It allows comparison by cash compensation elements (salaries, salary ranges, bonuses). Separate presentations are provided for both For-Profit and Not-For-Profit organizations; analysis by organization size is also presented for each published position. The professional personnel survey information is compiled from one of the largest databases of its kind. The current database includes information from 3,097 organizations that provided data on 169,394 employees.

Survey Report on Technical and Skilled Trades Personnel Compensation – It allows technical and skilled trades personnel pay comparisons to other contractors in the same geographic area, same industry, and same size. The report provides detailed survey data for 140 (primarily) nonexempt technical, skilled and semi-skilled position titles. Data for most positions are reported at multiple levels of responsibility for a total of more than 340 individual jobs. It provides information for more than 190 metropolitan areas, states and state groups. An industry analysis is presented for more than 100 individual industry classifications. Separate presentations are provided for both For-Profit and Not-For-Profit organizations. Analysis by organization size is provided for each published position. It allows comparison by cash compensation elements (salaries, salary ranges, bonuses) and total cash compensation. The technical and skilled trade survey information is compiled from one of the largest databases of its kind. The current database includes information from 845 organization encompassing 7,140 locations that provided data on 410,444 employees.

Survey Report on Office Personnel Compensation – It allows office personnel pay comparisons to other contractors in the same geographic area, same industry, and same size. The report contains more than 170 (primarily) nonexempt office personnel positions/levels; with more than 220 metro areas, states, and state groups; with more than 135 individual industry classifications (including for-profit and not-for-profit), and several organization size groups. It allows comparison by cash compensation elements (salaries, salary ranges, bonuses). The office personnel survey information is compiled from one of the largest databases of its kind. The current database includes survey responses from 923 organizations encompassing 7,432 locations that provided data on 339,565 employees.

U.S. Survey Reports by Job Family, Policies & Practices & Periodic References

Survey on Employee Benefit Polices & Practices – This survey report includes information used to determine how a benefit plan compares to other companies in a competitive marketplace. The database from which the report is produced includes the responses from 406 organizations reporting on over 1.9 million employees. Benefit elements reported on include the overall prevalence of a complete list of benefits as well as details on the coverage provided (deductibles, maximums, copayments, coverage levels, etc.). Data are broken down by geographic area, industry classification and organization size.

Survey Report on Board of Directors Compensation, Policies & Practices – This report provides detailed information on what is being provided inside (employee) and outside (non-employee) board members for regular board service and committee work. Annual fees, retainers and total compensation data for regular board service reported separately for a dozen major industry categories, within each industry category, information is presented by company size with as many as 10 size group presentations provided for the more heavily populated industry categories. Fee, retainer and total compensation information for service on eight different committees with the data reported by industry category. Data on board size reported by industry sector and company size includes the total number of directors on the board as well as the number of inside (employee) and outside directors. The database upon which the report is compiled includes information on over 630 boards.

Survey Report on Severance Policies & Practices – This report provides detailed information on severance plan policies and practices including: (i) average duration of severance salary paid, broken down by organization type and size, industry sector, geographic region, job level and length of service, (ii) prevalence of organizations planning to alter their current severance pay plan in the next 12 months, (iii) changes to severance pay formula determined at service milestones, (iv) prevalence of employer paid medical benefits for displaced employees, broken down by organization type and size, industry sector, geographic region, job level and length of service, and (v) prevalence of severance policy outplacement programs. Separate presentations are provided for both For-Profit and Not-For-Profit organizations.

Survey Report on Accounting & Finance Personnel Compensation – This report provides detailed survey data for over 165 positions/levels within the job function. Included is a complete hierarchy ranging from the CFO to entry-level accounting clerk. It provides information for more than 190 metropolitan areas, states and state groups. An industry analysis is presented for more than 170 individual industry classifications. Separate presentations are provided for both For-Profit and Not-For-Profit organizations. The data is also presented by organization size on a national basis. And, for key executive positions, the data is reported by organization size within geographic area or industry. Complete coverage of cash compensation is provided, including extensive analyses of salaries, bonuses, other cash compensation and total cash compensation. The database includes information from 5,724 organizations that provided data on 117,567 employees.

Survey Report on Engineering, Design & Drafting Personnel Compensation – This report provides detailed survey data for more than 300 positions/levels, representing a complete top-to-bottom hierarchy. It provides information for more than 200 metropolitan areas, states and state groups. An industry analysis is presented for more than 120 individual industry classifications. Separate presentations are provided for both For-Profit and Not-For-Profit organizations. The data is also presented by organization size on a national basis. And, for key executive positions, the data is reported by organization size within geographic area or industry. Complete coverage of cash compensation is provided, including extensive analyses of salaries, bonuses, other cash compensation and total cash compensation. The database includes information from 876 organizations in 3,249 locations that provided data on 100,354 incumbents.

Survey Report on Human Resources Personnel Compensation – This report covers the entire spectrum of jobs within the HR function, ranging from Top HR Executive to entry-level HR assistants. In total, more than 190 positions/levels are included. It provides information for more than 180 metropolitan areas, states and state groups. An industry analysis is presented for more than 150 individual industry classifications. Separate presentations are provided for both For-Profit and Not-For-Profit organizations. The data is also presented by organization size on a national basis. And, for key executive positions, the data is reported by organization size within geographic area or industry. Complete coverage of cash compensation is provided, including extensive analyses of salaries, bonuses, other cash compensation and total cash compensation. The database includes information from 4,699 organizations that provided data on 82,946 HR employees.

Survey Report on Information Technology & e-Commerce Personnel Compensation – This report provides survey data for more than 290 positions/levels within the IT function, ranging from senior executives to entry-level trainees. It provides information for more than 165 metropolitan areas, states and state groups. An industry analysis is presented for more than 130 individual industry classifications. Separate presentations are provided for both For-Profit and Not-For-Profit organizations. The data is also presented by organization size on a national basis. And, for key executive positions, the data is reported by organization size within geographic area or industry. Complete coverage of cash compensation is provided, including extensive analyses of salaries, bonuses, other cash compensation and total cash compensation. The database includes the responses of 4,280 organizations that provided data on 170,597 incumbents.

Survey Report on Logistics & Materials Management Personnel Compensation – This report covers more than 165 positions/levels, ranging from senior executives to entry-level trainees. It provides information for more than 200 metropolitan areas, states and state groups. An industry analysis is presented for more than 120 individual industry classifications. Separate presentations are provided for both For-Profit and Not-For-Profit organizations. The data is also presented by organization size on a national basis. And, for key executive positions, the data is reported by organization size within geographic area or industry. Complete coverage of cash compensation is provided, including extensive analyses of salaries, bonuses, other cash compensation and total cash compensation. The database includes information from 7,413 organizations that provided data on 235,483 employees.

Concluding Comments:

We know of no other single source for the specifications and standards information provided by Towers Watson Data Services. The proposed contractor’s unique qualifications and the nature of the acquisition dictate use of the authority. We have considered the Towers Watson (formerly Watson Wyatt) reputation for collecting data; their expertise in job evaluation and job analysis; the names of the companies contributing data; the size of the companies contributing data and the geographical location of the source data; the extent that the data is based on job titles and job descriptions; and the number of years that the survey reports have existed. There are other sources of compensation surveys, but no sole source that meets our requirements for performing compensation audits to determine the reasonableness of compensation in accordance with the FAR 31.205‑6.

4. Actions to Increase Competition: DCAA will continue to conduct market research for any new publications that are being offered to determine if they meet the agency’s needs.

5. Market Research: We know of no other single source for the specifications and standards information provided by Towers Watson Data Services. We have considered the Towers Watson reputation for collecting data; their expertise in job evaluation and job analysis; the names of the companies contributing data; the size of the companies contributing data and the geographical location of the source data; the extent that the data is based on job titles and job descriptions; and the number of years that the survey reports have existed. There are other sources of compensation surveys, but no sole source that meets our requirements for performing compensation audits to determine the reasonableness of compensation in accordance with the FAR 31.205‑6.

6. Procurement History:

Purchase order or contract number: GS03T11DSC7015, GS03T10DSM0803, HQ0423-08-C-6000, HQ0423-07-C-6005, W91QV1-09-P-0466.

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