Labor Costs in DoD Contracts.
ARMY PROCUREMENT RESEARCH OFFICE FORT LEE VA
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As efforts increase to better control weapon systems costs, recent concern has focused on the cost of defense contractor employee compensation salary and fringe benefits. Since labor-based costs are a significant part of total contract costs, assuring that the labor-based costs are reasonable has become a higher priority. The objectives were to determine if the current methods used to monitor and control contractor labor costs are effective and if defense contractor employees receive excessive compensation when compared to their commercial counterparts and if so, recommend corrective action. In addition to reviewing current methods used to monitor and control labor costs, a comprehensive survey was attempted to obtain compensation data from defense contractors and compare that data with data compiled by the Bureau of Labor Statistics in order to determine if defense contractor employees are excessively compensated. DLA has primary responsibility for monitoring and controlling contractor compensation costs. However, DLAs methods are being completely revised, and it would be inappropriate to base policy changes on a system that will be extensively changed. The attempted compensation survey ran into many obstacles and had to be abandoned. On a more positive note the Army is doing and excellent job of controlling and monitoring contractor employee compensation at the Government-Owned Contractor-Operated GOCO Army Ammunition plants.
- Personnel Management and Labor Relations
- Logistics, Military Facilities and Supplies