The Importance of Labor Categories for Government Contractors
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Labor categories are the foundation of services for government contractors and define the qualifications (e.g. education, experience, and certification) necessary to perform the work. Labor categories form the basis of pricing, proposals, and invoices. Errors in labor categories cause issues with billing rates, profitability, and contract compliance. We'll discuss blended labor rates and the importance of maintaining a labor category matrix. Learning Objectives 1. Describe the characteristics of labor categories 2. List ways to perform salary surveys 3. Explain the billing compliance of labor categories 4. Define labor category matrix
The Importance of Labor Categories for Government Contractors
- 1. Copyright 息 2014-2022 Left Brain Professionals Inc. The Importance of Labor Categories for Government Contractors
- 2. Copyright 息 2014-2022 Left Brain Professionals Inc. We Know Government Contract Accounting
- 3. Who We Are Left Brain Professionals is a boutique accounting firm that serves government contractors. We specialize in accounting systems and strategic services.
- 4. Copyright 息 2014-2022 Left Brain Professionals Inc. Our Practice Areas ACCOUNTING SYSTEMS Accounting System Design & Implementation Monthly Support Packages STRATEGIC SERVICES DCAA Audit Support CFO & Controller Services
- 5. Our Team Robert E. Jones Principal GovCon Accounting Advisor CPA, CPCM, NCMA Fellow Steven Bressler GovCon Accounting Associate Steve@LeftBrainPro.com Robert@LeftBrainPro.com Copyright 息 2014-2022 Left Brain Professionals Inc. Suzanne@LeftBrainPro.com Suzanne Camden Sr. GovCon Accounting Advisor CPCM, NCMA Fellow
- 6. Learning Objectives Copyright 息 2014-2022 Left Brain Professionals Inc. Describe the characteristics of labor categories List ways to perform salary surveys Explain the billing compliance of labor categories Define labor category matrix
- 7. Poll Copyright 息 2014-2022 Left Brain Professionals Inc. What percentage of your contracts have defined labor categories? A. 0% B. 1% to 25% C. 26% to 50% D. 51% to 75% E. 76% to 100%
- 8. Copyright 息 2014-2022 Left Brain Professionals Inc. Characteristics of Labor Categories Labor categories are defined in terms of tasks plus three qualifications: Education Experience Certification Employees must meet the minimum qualifications in order to qualify for the labor category or must be assigned another category
- 9. Copyright 息 2014-2022 Left Brain Professionals Inc. Education Often listed as a type of degree (e.g. AS, BA, MS) in specific fields (e.g. electrical engineering, RF engineering) or satisifed through a certain number years of experience.
- 10. Copyright 息 2014-2022 Left Brain Professionals Inc. Experience Usually listed in years and may be a substitute for a degree. Minimum experience may be offset by a degree.
- 11. Copyright 息 2014-2022 Left Brain Professionals Inc. Certification Usually listed a multiple options (e.g. Certifed Network Engineer, Microsoft Certified Systems Engineer) and often optional. Certification may also be used to offset education or experience. Be sure to read the alternate language as it varies from contract-to-contract.
- 12. Copyright 息 2014-2022 Left Brain Professionals Inc. Sample Labor Categories
- 13. Copyright 息 2014-2022 Left Brain Professionals Inc. Sample Labor Categories
- 14. Copyright 息 2014-2022 Left Brain Professionals Inc. Sample Labor Categories
- 15. Copyright 息 2014-2022 Left Brain Professionals Inc. Sample Labor Categories
- 16. Copyright 息 2014-2022 Left Brain Professionals Inc. Non-Standard Labor Categories An "Engineer 1" is not an "Engineer 1" is not an "Engineer 1."
- 17. Poll Copyright 息 2014-2022 Left Brain Professionals Inc. Which of the following is not a factor in defining labor categories? A. Certification B. Salary C. Experience D. Education
- 18. Copyright 息 2014-2022 Left Brain Professionals Inc. Labor Category Billing Compliance Generally can invoice only proposed and approved labor categories No "bait and switch" No use of unapproved or unqualified labor categories
- 19. Copyright 息 2014-2022 Left Brain Professionals Inc. Billing Compliance Fixed Price Most flexible Labor category must match the type of work Must be exact if "Level of Effort" or defined staffing Person and labor category must be sufficient to complete the work.
- 20. Copyright 息 2014-2022 Left Brain Professionals Inc. Billing Compliance T&M Must much awarded labor category Employee must meet minimum requirements of the invoiced labor category
- 21. Copyright 息 2014-2022 Left Brain Professionals Inc. Billing Compliance Cost-Type Must much awarded labor category Employee must meet minimum requirements of the invoiced labor category
- 22. Copyright 息 2014-2022 Left Brain Professionals Inc. Labor Category Matrix Definition of labor categories across all contracts Mapping of employees across all contracts
- 23. Poll Copyright 息 2014-2022 Left Brain Professionals Inc. Do you have a labor category matrix for your organization? A. Yes B. No C. I dont know
- 24. Copyright 息 2014-2022 Left Brain Professionals Inc. Salary Surveys Two biggest issues with labor categories Finding complete and reliable data Labor categories are not standardized
- 25. Copyright 息 2014-2022 Left Brain Professionals Inc. Salary Surveys What is considered compensation and how is it presented Base Salary Bonus Health Benefits Paid Absences Retirement & Profit Sharing Often presented as a range, discretionary, or the details simply are not available
- 26. Copyright 息 2014-2022 Left Brain Professionals Inc. Salary Surveys Complicating Factors Business Size Geographic Location Intangible Benefits Remote Work Flexible Schedule Office Atmosphere
- 27. Copyright 息 2014-2022 Left Brain Professionals Inc. Salary Surveys Sources of Data Employment Sites Indeed Glass Door Salary Sites & Consultants Payscale.com Salary.com Bluewhale Society for Human Resource Management (SHRM)
- 28. Copyright 息 2014-2022 Left Brain Professionals Inc. Salary Surveys Sources of Data Society for Human Resource Management (SHRM) Industry Associations Board of Certified Safety Professionals Actuarials National Athletic Trainers Associations Indirectly through price Research such as GSA's CALC tool* *This is price info but can be helpful in hiring and pricing a new position.
- 29. Poll Copyright 息 2014-2022 Left Brain Professionals Inc. How much help do you need with labor categories? A. A lot B. Just a little C. None, I've got this
- 30. Copyright 息 2014-2022 Left Brain Professionals Inc.
- 31. Connect with us Download the presentation Left Brain Professionals Inc. @LeftBrainPro Email us Support@LeftBrainPro.com @LeftBrainPro Left Brain Pro LeftBrainPro LeftBrainPro.com/Presentations www.LeftBrainPro.com/presentations
- 32. Copyright 息 2014-2022 Left Brain Professionals Inc. Watch Our Videos
- 33. Copyright 息 2014-2022 Left Brain Professionals Inc. For information on our upcoming webinars, visit us at LeftBrainPro.com/events for more details.