FAR 22.1016—Statement of equivalent rates for Federal hires.
Plain-English Summary
FAR 22.1016 explains how to prepare the "Statement of Equivalent Rates for Federal Hires" required by the clause at FAR 52.222-42. This statement tells bidders or offerors what wage rates and fringe benefits the contracting activity would pay to comparable service employees if federal pay systems applied, specifically under the General Schedule for white-collar employees and the Wage Board system for blue-collar employees. The section also gives the method for computing those equivalent rates, including how to derive hourly rates for blue-collar workers and white-collar workers, and it notes that local civilian personnel offices can help obtain the needed grade and salary information. In practice, this requirement gives contractors a benchmark for understanding the government’s internal labor costs for comparable work, which supports transparency and helps frame wage determinations in service contracts subject to the Service Contract Labor Standards. It does not set the contractor’s required wages by itself, but it is an important informational statement that must be accurate and based on the proper federal pay references.
Key Rules
Provide equivalent federal rates
The statement must list the wage rates and fringe benefits the contracting activity would pay to the various classes of service employees expected to work under the contract if the General Schedule or Wage Board systems applied. The statement is tied to the clause at FAR 52.222-42 and is meant to show comparable federal pay for the anticipated labor categories.
Use blue-collar wage board rates
For blue-collar employees, the wage rate is the basic hourly rate for each class. The regulation specifies Wage Board pay schedule step two for nonsupervisory service employees and step three for supervisory service employees.
Use white-collar general schedule rates
For white-collar employees, the equivalent rate must be expressed as an hourly rate for each class. The rate is calculated by dividing the General Schedule step one biweekly rate by 80.
Include fringe benefits
The statement must cover not only wage rates but also fringe benefits that would be paid by the contracting activity to comparable employees. This ensures the comparison reflects total compensation, not just base pay.
Use local personnel data
Local civilian personnel offices may assist in determining the appropriate grade and salary data. This helps ensure the statement is based on current, locally relevant federal pay information.
Responsibilities
Contracting Officer / Contracting Activity
Prepare and include the statement required by FAR 52.222-42 using the correct federal pay references and computation methods. Ensure the statement identifies the wage rates and fringe benefits for the service employee classes expected under the contract.
Local Civilian Personnel Office
Provide assistance in determining the applicable grade, salary, and pay schedule data needed to compute equivalent rates. Support the contracting activity with accurate local federal pay information.
Contractor / Offeror
Review the statement as part of the solicitation or contract package to understand the government’s benchmark for comparable federal labor costs. Use it as informational context when pricing and staffing the contract, but do not treat it as a substitute for applicable wage determinations or contract labor requirements.
Practical Implications
This statement is mainly an informational pricing and transparency tool, but it must be computed correctly because it becomes part of the contract’s labor-related documentation.
A common pitfall is confusing these equivalent federal rates with the actual wage determination required under the Service Contract Labor Standards; they are related but not the same thing.
Another frequent mistake is using the wrong pay basis: blue-collar rates come from Wage Board schedules, while white-collar rates come from General Schedule step one divided by 80.
Contracting staff should verify whether the employees expected under the contract are supervisory or nonsupervisory, because the Wage Board step used differs by category.
Contractors should treat the statement as a reference point for understanding federal labor costs and staffing assumptions, especially when evaluating whether the solicitation’s labor mix is realistic.
Official Regulatory Text
(a) The statement required under the clause at 52.222-42 , Statement of Equivalent Rates for Federal Hires, (see 22.1006 (b)) shall set forth those wage rates and fringe benefits that would be paid by the contracting activity to the various classes of service employees expected to be utilized under the contract if 5 U.S.C.5332 (General Schedule-white collar) and/or 5 U.S.C.5341 (Wage Board-blue collar) were applicable. (b) Procedures for computation of these rates are as follows: (1) Wages paid blue collar employees shall be the basic hourly rate for each class. The rate shall be Wage Board pay schedule step two for nonsupervisory service employees and step three for supervisory service employees. (2) Wages paid white collar employees shall be an hourly rate for each class. The rate shall be obtained by dividing the general pay schedule step one biweekly rate by 80. (3) Local civilian personnel offices can assist in determining and providing grade and salary data.