MA

Federal Labor Rates: Anything New with VETS 2

Published: May 22, 2018

General Government ServicesGSAInformation Technology

Brief overview of GSA VETS 2 labor rate data with comparisons to VETS vendors and labor rate data.

Awarded in October 2017, GSA’s Veterans Technology Services 2 (VETS 2) is the follow-on to the VETS Government-wide Acquisition Contract (GWAC) that provides customized Information Technology (IT) services and IT services-based solutions. After the Government Accounting Office (GAO) dismissed multiple protests, GSA announced in late February 2018 that all 70 Service-Disabled Veteran Owned Small Business (SDVOSB) vendors’ awarded contracts were available for ordering.

Deltek’s Federal Labor Pricing team recently released a VETS 2 Comparative Rate Analysis (CRA)* based on the labor rates released by GSA for all 70 vendors, and has identified a few differences between the original and follow-on program rates. 

Incumbent Vendors’ Rates

Of the 44 vendors on the original VETS GWAC, 13 were awarded VETS 2 contracts.  More than two-thirds of the incumbents were in the top 25 VETS vendors –including three in the Top 10 - based on FPDS reported VETS spending since 2007.   Reported spending during that time for VETS was more than $2B, of which 29% was obligated to the 13 incumbents.

Many times, pricing analysts will analyze competitors’ rate escalation and government site - contractor site differences in an attempt to determine competitor overhead and fees to derive wrap rates.  In the case of VETS and VETS 2, the rate escalation for vendors is standard - 1.95% for VETS and 1.73% for VETS 2 – because they were defined by the government based on the Bureau of Labor Statistics (BLS) Employment Cost Index (ECI).

However, the Government site and contractor site differentials vary widely, not only from vendor to vendor, but also from the original and newly awarded contracts, as the following chart indicates:

VETS FPDS Spending Rank

Common VETS/VETS 2 Contractors

VETS 1 SITE DIFFERENTIAL

VETS 2 SITE DIFFERENTIAL

4

CENTURIA CORPORATION

9.09%

7.40%

7

INNOVATIVE MANAGEMENT CONCEPTS, INC.

14.27%

3.36%

8

VETERAN ENGINEERING & TECHNOLOGY LLC

7.4% - 16.66%

6.25%

16

METTERS INDUSTRIES, INC

9 - 15%

12.40%

18

CONSTELLATION WEST

8%

8.75%

19

HMS TECHNOLOGIES INC

18%

7.53%

20

C2 SOLUTIONS GROUP INC

33%

5.25%

21

VETSAMERICA BUSINESS CONSULTING INC

10%

8.00%

23

MILVETS SYSTEMS TECHNOLOGY, INC

13.45%

1.57%

29

ADVANCED FACILITY MANAGEMENT SERVICES, INC.

10.87%

10.00%

31

PENOBSCOT BAY MEDICAL ASSOCIATES

17.65%

8.65%

33

PROFESSIONAL SOLUTIONS1, LLC

10%

0.00%

42

MANDEX, INC.

N/A

10.75%

Most incumbent vendors’ ratios decreased.  This may be due to the incumbent reducing rates to get more competitive to win more awards on VETS 2 than were awarded on VETS. 

Differences in Labor Categories

Labor categories are similar from VETS to VETS 2; however, as there were 98 labor categories on VETS, there are now 31 categories, each with 4 levels (Junior, Journeyman, Senior, SME), on VETS 2.  Since there are not any specific qualifications (education/experience) provided to distinguish levels, it would be difficult to try to compare the categories from VETS to VETS 2.  A secret security clearance is required for each of the VETS 2 categories while that was not a requirement of VETS.

Direct Labor rate ranges (high/low) were provided by the government for each labor category and each category level.  The VETS 2 CRA provides minimum, average and maximum rates for each labor category.  The chart below is a sample from the VETS 2 Labor Rate Analysis and illustrates 2018-2019 data.  The CRA provides analysis for each level of all 31 categories for each year from 2018-2023. 

 

VETS 2 Rate Data 2018-2019

 

Contractor Site

Government Site

VETS 2 Labor Categories

Minimum

Average

Maximum

Minimum

Average

Maximum

Journeyman Business Intelligence Analyst

64.48

82.18

104.78

64.34

76.30

93.46

Journeyman Computer and Information Research Scientist

88.21

109.11

140.11

88.07

101.25

124.66

Journeyman Computer and Information Systems Manager

106.00

134.37

166.46

105.35

124.78

152.40

Journeyman Computer Hardware Engineer

86.08

105.87

135.38

84.79

98.23

120.44

Average vendor rates of the incumbent vendors of VETS decreased between VETS labor categories and the VETS 2 categories.  As mentioned above, labor category comparisons of the two programs would be difficult, but a decrease in average rates would indicate the incumbents trying to become more competitive and winning more business on VETS 2.

 

2016-2017 Average Rate

2018 -2019 Average Rate

 

Contractor

Government

Contractor

Government

CENTURIA CORPORATION

128.80

117.09

103.05

95.94

INNOVATIVE MANAGEMENT CONCEPTS, INC.

90.56

77.63

92.34

89.32

VETERAN ENGINEERING & TECHNOLOGY LLC

98.77

88.66

101.07

95.13

METTERS INDUSTRIES, INC

123.14

109.28

119.60

106.40

CONSTELLATION WEST

114.03

105.58

97.74

89.88

HMS TECHNOLOGIES INC

120.77

102.35

100.80

93.75

C2 SOLUTIONS GROUP INC

138.15

103.87

93.78

89.10

VETSAMERICA BUSINESS CONSULTING INC

133.33

121.21

110.25

105.00

MILVETS SYSTEMS TECHNOLOGY INC

111.13

97.97

95.78

94.29

ADVANCED FACILITY MANAGEMENT SERVICES, INC.

145.30

131.04

103.50

94.08

PENBAY SOLUTIONS LLC

150.90

128.81

96.72

89.13

PROFESSIONAL SOLUTIONS1 LLC

102.61

93.25

83.44

83.44

The chart below is a sample from the VETS 2 Labor Rate Analysis and illustrates 2018-2019 data.  The analysis provides this data for all levels of 31 categories for each year from 2018-2023. The GovWin IQ VETS 2 Labor Rate Analysis also provides average vendor rates for all categories.   The chart below illustrates data for four vendors from 2018-2019 and 2019-2020.

 

2018 -2019 Average Rate

2019 - 2020 Average Rate

VETS 2 VENDORS

Contractor

Government

Contractor

Government

ABLEVETS LLC

 $    119.26

 $         109.18

 $     121.32

 $       111.07

ADVANCED FACILITY MANAGEMENT SERVICES, INC.

 $    103.50

 $           94.08

 $     105.29

 $         95.71

ALL POINTS LOGISTICS LLC

 $      83.10

 $           79.27

 $       84.53

 $         80.64

ALLIANT SB CTA LLC

 $    104.23

 $           93.38

 $     106.03

 $         95.00

The CRA provides this data for all seventy vendors from 2018–2023.  While the VETS 2 categories are somewhat different than the VETS categories and require a Secret clearance, the average rates from vendor to vendor overall seem to have decreased.   Labor rate data for more than 1,000 federal programs is available through the GovWin IQ Federal Labor Rates solution.

* More than 86,000 rates were compiled for the VETS 2 CRA and sorted to detail vendor average rates as well as labor category minimum, average and maximum rates. The 0.75% contract access fee has also been added to the labor rates released by the government for each vendor.