Assessing the Effectiveness of Professional Employee Compensation Evaluations in DOD Service Contracts

Abstract

Today's military relies on contractors, chiefly contracted services, at all levels "strategically, operationally, and tactically" to execute its mission more than it has at any other point in the history of the United States. Over the last decade, the DoD has consistently obligated the majority of its annual budget towards contracted services. One commonality across these service contracts is the inclusion of professional employees in the performance of many of these contracts. Over the same time period, the DoD has realized a protest loss rate of 50% at the U.S. Court of Federal Claims and of 43% at the Government Accountability Office related to the evaluation of compensation for professional employees. The purpose of this research is to conduct the first comprehensive analysis of the protest decisions to determine if a pattern of evaluations errors exists and to deepen the DoD's understanding of the influencing factors that must be considered. The research identifies three distinct areas in which the DoD consistently erred in evaluations: (1) The evaluation was either inadequately documented or never conducted, (2) the data relied upon did not provide a meaningful basis to evaluate compensation, and (3) the analysis compared incorrect data from salary surveys. The research provides several actionable recommendations which may help decrease protest losses including the use of the Streamlined Professional Employee Compensation Tool for Employee Realism (SPECTER).