FedSubK Feature: Service Contract Labor Standards (SCLS) - Payment of Wages and Fringe Benefits (Part 3 of 3)
Updated: May 4, 2024
In this last installment of our three-part series on the Service Contract Labor Standards (SCLS, formerly known as the Service Contract Act (or SCA)), we are going to talk about the payment of fringe benefits and recordkeeping. This is an area where there is much discussion related to what constitutes an employee’s wage versus a fringe benefit payment, what constitutes a “fringe benefit”, and the timing or frequency of payments. Fringe benefits are separate from wages and salary and must be tracked as such.
Knowledge Baseline. For this topic, keep in mind–
- SCLS applies to contracts entered into by the U.S. or the District of Columbia (DC), the principal purpose of which is to furnish services in the U.S. through the use of service employees.
- Contractors performing on Federal service contracts in excess of $2,500 must observe minimum monetary wage and safety and health standards, and maintain certain records. (These are known as “covered contracts”.)
- Service employees on covered contracts must be paid not less than the monetary wages and fringe benefits contained in wage determinations issued by the Department of Labor (DOL) Wage and Hour Division (WHD) for the contract work. Wage determinations will be incorporated as a material part of the contract to ensure compliance.
- DOL wage and fringe benefit determinations may reflect what has been determined to be prevailing in the locality or may reflect the wage rates and fringe benefits contained in the predecessor contractor’s collective bargaining agreement (CBA), if any, as allowable under the SCLS.
- DOL wage and fringe benefit determinations also apply to subcontractors at all tiers.
- The SCLS makes no distinction, with respect to its compensation provisions, between temporary, part-time, and full-time employees, and the wage determination minimum monetary wages and fringe benefits apply equally to such service employees engaged in SCLS-covered work, absent an express limitation.
Payment of Wages
Specific things to keep in mind that apply to the payment of wages are:
- Monetary wages specified under the SCLS must be paid to employees promptly and in no event later than one (1) pay period following the end of the regular pay period in which such wages were earned or accrued.
- The duration of a pay period under the SCLS may not be longer than semi-monthly.
- Wages must be paid free and clear and without subsequent rebate, or kickback on any account, except deductions permitted by law.
- If participation in a fringe benefit plan requires a contribution from the employee’s wages, whether through payroll deduction or otherwise, the employee’s concurrence is necessary before such payroll deduction can be made.
- The contractor must comply with the highest of all applicable wage requirements. Executive Order 14026 Minimum Wage states that contractors must pay the highest of all applicable rates (federal minimum wage, state minimum wage, or DOL wage determination). NOTE: Compliance with one law does not excuse non-compliance with another law.
Contractors cannot offset an amount of fringe benefits paid in excess of the fringe benefits required under a wage determination in order to satisfy its minimum monetary wage obligations, (see also info on payment of fringe benefits below).
Example: The employee was paid $2.36 more in wages per hour and the employer credited that wage payment toward its fringe benefit obligation, in violation of the SCLS.
Wage Determination/Hr: Employee Paid/Hr:
Wage $10.25 Wage $12.61
Fringe $ 4.80 Fringe $ 2.44
Total $15.05 Total $15.05
The contractor still owes the employee the difference between the fringe in the wage determination ($4.80) and the fringe benefit paid ($2.44) for each hour worked.
Employees That Do Work Subject to Different Rates. Employees must be paid either (1) the highest rate for all hours worked; unless (2) the employer’s payroll records or other affirmative proof shows periods spent in each class of work.
Work on SCLS-covered and Non-SCLS-covered Contracts in the Same Workweek.
If such a contractor has employees who spend a portion but not all of their workweek in performing work on SCLS-covered contracts, it is necessary to accurately identify in its records, or by other means, those periods when SCLS-covered work and non-SCLS-covered work was performed. When contractors are not exclusively engaged in SCLS-covered contract work, and there are adequate records segregating the periods in which work was performed between SCLS-covered and non-SCLS-covered work, the SCLS wage rate does not need to be paid for hours spent on non-SCLS-covered work. However, in the absence of such records, all employees working in the establishment or department where such covered work is performed shall be presumed to have worked on or in connection with the contract during the period of its performance, unless affirmative proof to the contrary is provided. Similarly, in the absence of such records, an employee performing any work on or in connection with the contract in a workweek shall be presumed to have continued to perform such work throughout the workweek, unless affirmative proof to the contrary is presented.
How are Hours Computed? The computation of hours is determined under the FLSA pursuant to 19 CFR Part 785 (link: https://www.ecfr.gov/current/title-29/subtitle-B/chapter-V/subchapter-B/part-785). Hours included must count all periods in which the employee is “suffered or permitted” to work. Hours subject to the SCLS wage determination are those performed on SCLS-covered contracts. Employees must be paid for all work, including work that is unauthorized such as working through a lunch or starting work early. While this may violate company policy, the employer may discipline the employee in accordance with such policy but cannot withhold wages for the time worked.
Payment of Fringe Benefits
It is the contractor’s responsibility to satisfy the fringe benefit obligations set forth in an SCLS wage determination for all occupations listed. The fringe benefits will be specified in the applicable wage determination included in the contract documents. In the wage determination, fringe benefits information is found following the list of SCLS-covered job titles and wages.
Example:
Fringe benefits must be paid in cash per hour or put toward a bona fide fringe benefit plan. Specific things to keep in mind related to the payment of fringe benefits are:
- Any administrative costs (e.g., recordkeeping costs associated with payroll administration) directly incurred by a contractor in providing fringe benefit plans are considered business expenses of the firm and not contributions made on behalf of the employees. As such, administrative costs cannot be credited toward meeting the fringe benefit obligations of the applicable wage determination.
- However, the cost incurred by a Contractor’s insurance carrier (or third-party trust fund) in its administration and delivery of benefits to covered employees can be credited toward the Contractor’s fringe benefit obligations required by an SCLS wage determination. However, adequate recordkeeping is required to show the costs incurred and credited.
- No contribution toward fringe benefits made by employees, or deducted from their wages, may be included or used by an employer in satisfying any part of any fringe benefit obligation.
- Fringe benefit obligations may be discharged by furnishing any equivalent combination of cash or bona fide fringe benefits.
- The terms “equivalent fringe benefit” and “cash equivalent” mean equal in terms of monetary cost to the Contractor.
- Contractors may choose the fringe benefits to be provided, whether an employee accepts or refuses the fringe benefits offered. If an employee desires cash payments or benefits other than those chosen by the Contractor, it must be resolved as part of the employer-employee relationship.
- If a Contractor furnishes a lesser amount of the fringe benefit than called for by the applicable wage determination, the Contractor must furnish the employee with the difference between the amount stated in the wage determination and the actual cost of the fringe benefit provided. This difference can be made up in cash to the employee, or furnish equivalent benefits, or a combination thereof. Cash payments in lieu of fringe benefits must be paid on a regular pay date.
- Stop loss insurance payments that provide coverage in the event that claims paid from an unfunded self-insured plan exceed specified limits both in the individual and the aggregate can be credited against the fringe benefit obligations.
- Contractors may not take credit for any benefit required by federal, state, or local law such as workers’ compensation, unemployment compensation, and social security contributions as a fringe benefit payment.
For contracts subject to a wage determination with fIxed cost per employee health and welfare, paid vacation, and holiday benefits, service employees employed by a single employer are entitled to fringe benefit payments only up to a maximum of 40 hours per week, regardless of the number of contracts on which they work, unless otherwise specified by the applicable wage determination. However, service employees who work for a single employer on multiple contracts which may have other requirements, such as collectively bargained fringe benefits or an “average cost” health and welfare fringe benefit, may be entitled to fringe benefit payments in excess of 40 hours per week. (Dantran, Inc. v. U.S. DOL, 171 F.3d 58 (1st Cir. 1999).)
For fringe benefit requirements under successor contracts, the terms of the Collective Bargaining Agreement (CBA) will dictate eligibility requirements and the amount and extent of such fringe benefits. Since a successor contractor’s obligations are governed by the terms of the CBA, any interpretation of the wage and fringe benefit provisions of the CBA where they are unclear must be based on the intent of the parties, provided that such interpretation does not violate the law. A contractor that is not a signatory to the CBA does not need to provide the specific fringe benefits stipulated in the CBA, but can provide any equivalent combinations of fringe benefits or by making equivalent or differential payments in cash.
What is a “Bona Fide Fringe Benefit Plan”? To be considered “bona fide” for SCLS purposes, a fringe benefit plan, fund, or program must constitute a legally enforceable obligation which meets certain criteria. The plan, fund, or program must be compliant with the Employment Retirement Income Security Act (ERISA), laws and regulations enforced by the Internal Revenue Service (IRS), and state insurance laws, and contributions must be made irrevocably to a trustee or third person pursuant to an insurance agreement, trust, or other funded arrangement. The primary purpose of a fringe benefit plan under the SCLS must be to provide systematically for the payment of benefits to employees on account of death, disability, advanced age, retirement, illness, medical expenses, hospitalization, supplemental employment benefits, and the like. While not specifically identified in the regulations, supplemental unemployment plans and prepaid legal plans are considered bona fide fringe benefits for purposes of the SCLS. Bona fide fringe benefits must also be communicated in writing to employees and contain a definite formula for determining the amount of contribution and benefits provided to constitute a legally enforceable obligation. Payments into bona fide fringe benefits plans must be made no less often than quarterly.
NOTE: Unfunded, self-insured fringe benefit plans under which a contractor allegedly makes out-of-pocket payments to provide benefits for employees as costs are incurred, rather than making irrevocable contributions to a trust or other funded arrangements, are not normally considered bona fide plans or equivalent benefits except for plans to provide paid vacation and holiday fringe benefits. Under certain conditions, a contractor may request approval by the Administrator of an unfunded self-insured plan in order to allow credit for payments under such a plan in meeting the fringe benefit requirements of the SCLS. The purpose of seeking advance approval is to avoid situations involving unfunded plans where monies allegedly allocated by a contractor to provide fringe benefits are used for other purposes or are recouped without actually furnishing any benefits. This procedure is not intended to prohibit self-insured plans where irrevocable payments are made pursuant to a trust or other funded arrangement and other conditions are met.
Vacation Fringe Benefits. Vacation fringe benefits count as a fixed cost fringe benefit and are vested and become due after the employee’s 12-month anniversary date of employment. These benefits do not need to be paid immediately after the anniversary but the entire vacation amount must be made available to the employee before (1) the next anniversary date; (2) the completion of the contract; or (3) the employee terminates employment, whichever occurs first. Payout of unused vacation fringe benefits should be made in cash. Wage determinations may require an accrual of vacation fringe benefits.
Example: Joe starts work on 7/01/2017. His 12-month anniversary is 6/20/2018. On 7/1/2018, Joe is entitled to vacation fringe benefits.
Holiday Fringe Benefits. Employees are entitled to holiday pay if they work in the holiday workweek, even if not all days are worked. A paid holiday can be traded for another day off if this is communicated to the employee. An employee is not entitled to holiday pay if the holiday is not named in the wage determination, such as a government-proclaimed closure, etc.
Part-Time Employees and Fringe Benefits. Part-time employees are entitled to a proportionate amount of fringe benefits. For example, a part-time employee who works 20 hours per week is eligible for a one-half week of vacation and one-half day of holiday pay but must receive the full amount of health and welfare fringe benefit.
Recordkeeping
Contractors must record and retain wage and fringe benefits payment records for three (3) years from the completion of the work containing the following information:
- Name, address, and social security number of each employee;
- Correct classification(s);
- Rate(s) of monetary wages paid and fringe benefits provided;
- Rate(s) of fringe benefits paid in lieu thereof;
- Total daily and weekly compensation of each employee;
- Number of daily and weekly hours worked by each employee;
- Any deductions, rebates, or refunds from the total daily or weekly compensation of each employee;
- List of monetary wages and fringe benefits for those classes of service employees not included in the wage determination attached to the contract but for which such wage rates or fringe benefits have been conformed (if applicable);
- List of predecessor contractor’s employees which had been furnished to the contractor (if applicable).
When health and welfare fringe payments are made in cash, this must be noted on payroll separately (i.e., separate base hourly rate and separately stated cash for fringe benefits). Bona Fide Fringe Benefit Plan payments must also be noted separately. These details should also be listed on the employee's pay stub.
Employee Notifications.
Each employee working on an SCLS-covered contract must be notified of the wage rates and fringe benefits required to be paid for work performed on the contract. WH Publication 1313 (as found on the DOL Wage and Hour Division website) and the applicable wage determination should be used for this purpose. The notice can be delivered to each employee or posted in a prominent and accessible place at the worksite, per SCLS guidance.
Where Can I Find Out More? Here are a few great references for service contractors to have at hand in case the need arises:
DOL’s WHD Compliance Assistance Webpage: https://www.dol.gov/agencies/whd/compliance-assistance
DOL McNamara-O’Hara Service Contract Act (SCA) site:
https://www.dol.gov/agencies/whd/government-contracts/service-contracts
Frequently Asked Questions on SCLS (SCA):
https://www.dol.gov/agencies/whd/government-contracts/service-contracts/faq
Fair Labor Standards Act (FLSA):
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The FAR Overhaul: Long-Deferred Maintenance on the Government's Procurement Highway
If you’ve ever worked in federal procurement — as a contracting professional, program manager, small business, prime, sub, or advisor — you’ve probably had this moment:
You’re doing your best to follow the rules…and suddenly you hit a clause, a cross-reference, or a requirement that feels like it came out of nowhere.
That’s because the Federal Acquisition Regulation (FAR) isn’t just a set of rules. It’s a highway system. A massive, heavily traveled road network that’s been patched, expanded, and rerouted for decades — and in many areas, it’s operating with years of deferred maintenance.
Let’s talk about what that really means using the highway analogy to explain why the Revolutionary FAR Overhaul isn't as "revolutionary" as some might think.
The FAR is like a Well-Traveled Federal Highway
The FAR is the main road that nearly every federal acquisition travels on. And like any highway system:
- Everyone uses it
- Everyone depends on it
- And over time, it’s been modified in ways that made sense in the moment… but created complexity later
If you look at any highway on Google Maps it shows a rather clean route. FAR, we were taught, was set up to be the same way: requirements, procedures, clauses, and guidance. But once you’re actually “driving” that road? Well, you realize the terrain is full of twists and turns. It's more complicated than you realized.
Hidden Guardrails: The Rules You Don’t See Until You Need Them
Some of the FAR’s most critical compliance safeguards are like guardrails buried under weeds or snow. They’re there for a reason: to prevent waste, protect fairness, ensure accountability. But they’re not always easy to spot. In practice, you often discover them when someone asks:
“Did you document that?”
“Where’s your justification?”
“Why didn’t you compete this?”
“Which clause applies here?”
That’s when you realize the guardrails were present the whole time — just not visible.
Guardrails are added all the time or in the process of being fixed (via rulemaking). But all that construction can clog up traffic and make the time for arrival (contract award) continually recalculate.
Hazards & Risks: Potholes, Speed Traps, and Fog
Now add in the hazards:
- Potholes = ambiguity and unclear language
- Fog = inconsistent interpretation across offices and agencies
- Construction zones = evolving policy updates, executive orders, and new mandates
- Speed traps = protests, audits, IG scrutiny, and compliance reviews
And these hazards hit different people differently. The same stretch of FAR may feel smooth to one team and treacherous to another. That’s not because the people are bad at driving — it’s because the road is uneven.
Side Roads & Gray Areas: The Detours Everyone Knows About
Then there are the side roads. Some are official alternate routes: simplified acquisition procedures, flexibilities, exceptions, and FAR “shortcuts” that exist for good reasons. Those are the routes people take because they’ve always taken them. Indicators might be hearing yourself or your peer say --
“We’ve always done it this way.”
“That’s how the last CO handled it.”
“This should be faster.”
“It’ll probably be fine.”
Side roads aren’t automatically wrong. But they come with risks, Eventually someone asks, “Why did you go that way instead of the main route?”
Others are the gray areas -- the gravel roads and roads only the locals (experienced COs/KOs) know. Those routes have to be navigated very carefully and even the best driver can have issues even if there is less traffic. Many times they beat those on the highway to their destination, but it's only because they know where all the seen and unseen hazards are from their years driving that route.
So What Is the FAR Overhaul, Really?
Here’s the key point:
✅ It is NOT building a new road.
✅ It is NOT bulldozing the FAR and replacing it.
✅ It IS road maintenance -- the kind that should've been done years ago.
And when you have decades of deferred maintenance, it takes a lot of work to make that road appear to be what it was all along.
But that's not "revolutionary". That's finally doing the work you've been putting off because you couldn't get to it.
The County (in this case, the FAR Council, being the governing body over the FAR and its contents) could always do a little better job at maintenance than they do. But their budget and resources are low and their workload demands are very high (just take a look at the FAR Open Case Report). Sometimes it takes a new Sheriff In town (a new Administration) driving down the highway see what those too close to it should have been aware of all along. Layers upon layers of deferred maintenance.
The FAR Overhaul is best understood as freshening up the same highway.
- Clearing overgrowth = outdated and redundant material and non-regulatory clutter.
- Improving signage = clarity and usability.
- Standardizing merges and exits = better consistency and flow.
- Removing obsolete detours = non-regulatory clutter, outdated terminology, and rules that no longer serve their purpose.
And a bonus is the updated maps available for your travels (FAR Companion and Practitioner Albums)
The destination isn’t changing. But the route is FAR more functional -- see how I did that. ;)
Why This Metaphor Matters
When people hear the word “overhaul,” they often assume “Everything is changing.” But what this effort really signals is “We are fixing the road we’ve been driving on for decades.” That’s important because procurement has become more complex, acquisition timelines are under pressure, and both agencies and industry need guidance that is easier to understand, apply, and defend.
If the FAR Overhaul is the same old FAR highway with better pavement, clearer signs, fewer surprises, and, hopefully, less time lost in detours, fewer compliance collisions, and a smoother drive for everyone. The biggest difference is that now all travelers know what the locals knew all along. How to get from point A to point B in less time using an updated road system and map.
Safe travels on the FAR Highway in 2026!
The FAR Is a Highway System… and the Revolutionary FAR Overhaul Is Long-Overdue Road Work
Contract Types and Contract Vehicles: The Difference Matters
Nuances matter in Federal Contracting. Those who haven't lived the Federal Contracting experience day in and day out may believe it's minor details that don't make a difference. They don't pick up on the nuances.
For those that have lived it from behind the walls of an agency know how those nuances can make a difference between how you are perceived building relationships with primes, potential team members and, most importantly, agency decision-makers.
One nuance -- Contract Types and Contract Vehicles.
Contract TYPES are defined by the pricing structure and risk ratio between the parties. They are:
✅️ Firm-Fixed-Price (FFP) to include FFP with Economic Price Adjustment (FFP w/EPA), Prospective Price Determination, Fixed-Ceiling Priced Contracts with Retroactive Price Redetermination, and those with a Level-of-Effort term (FFP-LOE).
✅️ Cost Reimbursement (or "Cost-Plus" ("CP")) to include cost sharing, Cost-Plus-Fixed-Fee (CPFF), Award Fee (CPAF), and Incentive Fee (CPIF).
✅️ Time-and-Materials (T&M) with materials on a fixed-price or cost-reimbursement basis.
✅️ Labor-Hour (L-H).
Contract VEHICLES provide the performance and administrative structure for the Contract Type. Those are:
✅️ Definitive Contracts are for specific stand-alone project(s) that fall above the Simplified Acquisition Threshold (SAT).
✅️ Indefinite Delivery Vehicles (IDVs) include Indefinite Delivery Indefinite Quantity contracts (IDIQs), Definitely Quantity, and Requirements vehicles. They include, but are NOT exclusively, governmentwide (GWACs), agency-specific, or GSA Multiple Award Schedules (MAS).
➡️➡️ Under the IDV umbrella falls task orders (services) & delivery orders (products) and specific instructions for who can order and how.
✅️ Agreements such as Basic Agreements, Basic Ordering Agreements (BOAs), and Blanket Purchase Agreements (BPAs).
➡️ ➡️ They are most often an umbrella for calls / orders (agencies call them both of these things even where FAR / RFO is specific, so it is easy to get confused), but don't have to be.
✅️ Purchase Orders (POs) (actions that fall under SAT).
✅️ Letter Contracts.
Yea, I know. FAR (even the RFO) lumps them all together as "Contract Types" in Part 16. But none stand alone. In my opinion, the FAR rewriters blew their chance to clarify this important piece of the procurement puzzle. For example:
▶️ IDIQs for services may include the ability to issue multiple types of task orders like fixed-priced, cost, T&M, and L-H under them, or only one type.
▶️ Definitive contract vehicles can be any contract type or combination thereof (hybrid) as indicated in the contract line items (CLINs) and for which terms and conditions are included.
Bottom line is -- There is not a complete understanding of a contract vehicle without defining its contract type(s).
If you see folks lumping TYPES and VEHICLES together in a discussion without explaining the difference, you know they aren't familiar with the nuances of this part of the FAR / RFO.
Follow those that are and have. Visit fedsubk.com and Expand your Federal Contracting knowledge today.
There are nuances in every FAR / RFO Part, including Part 16. We talk about why it is important to know and understand them in this marketplace.
FedSubK Feature: Be Seen! Why Your SBS Profile is So Important
UPDATED November 2025 to incorporate changes from the SBA Dynamic Small Business Search (DSBS) to the new SBA Small Business Search (SBS)
I’ve posted on LinkedIn a lot recently about ways to be seen as a little fish in the big pond that is the Federal marketplace. Every GovCon consultant has a take on the best entry points with agencies. My take is there is only one place small businesses MUST put their best foot forward to be quickly and easily seen by Federal buyers for potential opportunities and influence small business set-asides.
The Small Business Administration (SBA) Small Business Search (SBS) is THE PLACE you must be on your A-game.
The Small Business Search (SBS) is a database in which SBA houses information on the current pool of certificated small businesses. Presently, small businesses that do not have certifications or are self-certified, may also create a profile in this database. The SBS is used by contracting officers, small business specialists, large prime contractors, and other small businesses looking for teaming partners to find small businesses that can help meet Federal requirements and identify businesses that can help the Government (or a prime contractor) meet its small business goals. SBS is one of the first--and often only--sources used in market research by agencies to determine the numbers of small businesses able to provide products or services by North American Industry Classification System (NAICS) code.
You can see why this might be an important place to pay attention to, eh?
Businesses have forgotten about the SBS in the last few years because SAM.gov no longer sends small business registrants directly to SBS at the end of their registration to complete the profile like it used to. I HUGE bummer. Businesses now must wait for their SAM.gov registration to be activated, then they can establish an SBA SBS account, claim their entity record, and fill in their company profile in the SBS system. Federal buyers are looking for detailed information from SBS to use as part of their market research efforts.
SBS isn’t only for market research.
Even more importantly, the SBS shows Federal buyers the status of any pending certification applications for the purpose of determining whether you are eligible to compete for a set-aside action. For example, an Economically Disadvantaged Woman Owned Small Business (EDWOSB) can still submit an offer for an WOSB set-aside even with a pending application for certification showing in the SBS. Contracting Officers often use SBS as a source to confirm the socioeconomic certification status and 8(a) program participation along with SAM.gov.
While MySBA Certifications automatically sends socioeconomic certification status to SAM.gov and updates the requisite reps and certs to reflect the correct socioeconomic status, recently it has taken weeks for that migration to occur. WOSBs and EDWOSBs have reported not seeing their correct socioeconomic status reflected in their SAM entity record.
Businesses should always check their SAM entity record to ensure that the proper status is shown within a reasonable time after receipt of an active certification status; usually within 14 business days. If the record is not accurately reflected, you can contact answerdesk@sba.gov or the SBA socioeconomic program under which your business was certified for assistance. If a Contracting Officer says that your SAM record does not reflect the status claimed, ask the Contracting Officer to check SBS for the more accurate information because of these delays.
So now let’s talk about BEING SEEN in SBS and walk through each part of the registration.
Understanding how to maximize the fields in SBS is how you can make the best possible first impression so that Federal buyers want to learn more about YOU!
The Key Words
Often businesses pluck these from thin air and over-generalized based on what they think the Government wants to see. Key words need to reflect and incorporate aspects of your primary NAICS, secondary NAICS, and what you can provide under those NAICS. If you use key words that don’t reflect your primary NAICS, you’ll leave the Government scratching their head about you. They won’t understand the message you’re sending about your company. Be consistent and specific with key words while tying into your NAICS codes in order to leave the best impression. You have 500 characters -- use them wisely.
The Website
Be sure that you include the URL for any website you have. Make it be more than a landing page. It needs to tell your story. It needs to include information about your company, what you sell, past customers, and products or solutions you provide. And most of all, it must be polished. Scrub your site hard for formatting, typos, grammatical errors, etc. Acquisition personnel using the SBS will often quickly click on the site to see just how polished it is. When it looks good, they get the impression you know your stuff and pay attention to details.
The Capabilities Narrative
This is the written equivalent of your elevator pitch. This section should include all the things you’d include in that two-minute speech. Hit hard on what your company specialized in and its core product or service areas. Show the business’s focus and avoid being all over the map by overpromising on the breadth of work the business performs.
Near the end of the capabilities narrative, list any socioeconomic certifications Why not lead with it? Because that certification is only part of your business, and it alone does not get you interest from the Contracting Officer. End with that information so the Contracting Officer can easily see it in a quick query and get your business into their market research counts.
Lastly, identify any government contract vehicle or GSA Schedule your company may hold. If you can catch their eye that you have an existing GSA Schedule or your business participates in the 8(a) program, you’ll get counted and likely get a look in terms of the Contracting Officer wanting to know more. If they need to meet a socioeconomic goal, they can see quickly. You’re helping the Contracting Officer do their job. They LOVE that! (And made another great first impression!)
SBS now also includes a field to add a link to your online capabilities statement. Use it!
“Extras” You Should Never Skip
Performance History
I cannot say this enough…if you history doing work for any Government or quasi-Government entity at any level -- Federal, State, or Local level -- list them! Don’t play the “they’ll see that when I propose” game. Showing performance history—even if it is minimal or commercial and not Government--helps. How? It proves the viability of the business and the size and types of projects you’ve completed. Those goes a long way to determining eligibility of the business based on performance on same / similar work of a same / similar dollar value (“Rule of Two” stuff – you can read more about that here).
Review Your Profile
Go out to the SBS site and use the filters for your NAICS, business name, geographic location, and business types. Make sure your show up and see how your profile measures up to your competitors. Look at their records and see what they included that you haven’t. Use the good ideas of others, but don’t plagiarize. Contracting Officers will see that and that won’t look good for either of you.
Keep Evolving
Your SBS isn’t something that you can just set and forget either. Make reviewing your profile in SBS something you do when you renew your SAM.gov registration every year. If something major changes in your business focus, NAICS, or socioeconomic status, make associated changes in SBS.
What GovCon doesn't always talk about -- The SBS Influence
When doing market research and trying to determine if an acquisition should be set-aside for small businesses, the Government is not only counting about the numbers of small businesses that claim they can do the work under a NAICS code in SBS. They are analyzing your SBS profile to see if your business could be one of the "... two or more responsible small business concerns that are competitive in terms of fair market prices, quality, and delivery" and they have “…a reasonable expectation of obtaining an offer…” from you. (There’s that pesky “Rule of Two” again.)
In other words, based on what they see, could you submit a proposal likely to win? And how does a Contracting Officer determine that? Simply put... the your answers to everything we just covered.
Completing your profile helps tip the market research scales toward a small businesses set-aside and possibly a specific socioeconomic set-aside. If you're all over the map in your SBS narrative, the Government will not consider you viable eligible contractor towards that “Rule of Two” and could possible choose to go another way with their acquisition strategy, away from a small business set-aside. Or worse, they set it aside but remember your name from the market research as one of the businesses that didn’t make their initial market analysis cut.
Influence where you can! SBS is the place where you have a lot of influence!
Have I convinced you to get out there and create or update your SBS profile yet?
While the system is no longer got the word "Dynamic" in the title, don't forget its meaning. Life is dynamic, business is dynamic, and your SBS profile should still be dynamic, too. Get it completed ASAP. You can’t afford not to.
Remember again, SBS IS WHERE FEDERAL BUYERS GO TO FIND SMALL BUSINESSES and where other small businesses go to find teaming partners and subcontractors.
Get out there, GET NOTICED, BE SEEN, and STAY DYNAMIC!
(former title: FedSubK Feature: Be A Dynamic Small Business!)
