FAR 22.1103—Policy, procedures, and solicitation provision.
Plain-English Summary
FAR 22.1103 implements the policy that professional employees on covered federal contracts must be compensated fairly and properly. It tells contracting officers when to include the solicitation provision at 52.222-46, Evaluation of Compensation for Professional Employees, and explains the threshold and scope for doing so: negotiated contracts expected to exceed $900,000 that will require meaningful numbers of professional employees. The section also describes what offerors must submit—a total compensation plan covering proposed salaries and fringe benefits for professional employees—and what supporting information should accompany that plan, such as recognized national and regional compensation surveys and studies from public, private, and professional organizations. Finally, it warns that unrealistically low compensation plans may be evaluated adversely in source selection. In practice, this section is meant to help agencies assess whether an offeror’s staffing and pay approach is realistic, sustainable, and likely to support successful performance without underpaying professional staff.
Key Rules
Use the provision when covered
The contracting officer must insert FAR 52.222-46 in solicitations for negotiated contracts expected to exceed $900,000 when the work will require meaningful numbers of professional employees. If either the dollar threshold or the professional-employee staffing condition is not met, this provision is not required under this section.
Professional pay must be fair
The policy underlying the section is that professional employees should be compensated fairly and properly. This is not just a formality; it is intended to ensure the government evaluates whether the proposed compensation structure is realistic for the labor market and the work to be performed.
Offerors must submit a total compensation plan
Offerors must provide a plan showing proposed salaries and fringe benefits for professional employees who will work on the contract. The plan is evaluated as part of the proposal, so it should be complete, internally consistent, and tied to the staffing approach.
Supporting data should justify the plan
Offerors should support their compensation plan with relevant compensation surveys and studies, including recognized national and regional data and information from professional, public, and private organizations. The supporting material should demonstrate that the proposed compensation is grounded in market reality.
Low compensation can hurt the evaluation
Plans that show unrealistically low compensation for professional employees may be evaluated adversely. The section does not automatically reject such proposals, but it gives the government a basis to treat weak compensation as a negative factor in award decisions.
Responsibilities
Contracting Officer
Determine whether the solicitation is for a negotiated contract expected to exceed $900,000 and whether meaningful numbers of professional employees will be required. If so, insert FAR 52.222-46 and evaluate offerors’ compensation plans as part of the source selection process.
Offeror/Contractor
Prepare and submit a total compensation plan for professional employees, including proposed salaries and fringe benefits, and provide supporting compensation data that justifies the proposed structure. Ensure the plan is credible, market-based, and aligned with the staffing approach.
Agency/Source Selection Team
Review the compensation plan and supporting information to assess whether the proposed compensation is realistic and whether it indicates a sound approach to recruiting and retaining professional staff for contract performance.
Practical Implications
This section often affects pricing and staffing strategy because labor rates for professional employees must be defensible, not just low enough to win. Contractors should expect scrutiny of salary and fringe assumptions, especially on technical, engineering, scientific, and other professional-service procurements.
A common pitfall is submitting a bare-bones compensation plan with little or no market support. That can lead evaluators to view the proposal as risky or unrealistic, even if the price is otherwise competitive.
Contracting officers should be careful to apply the provision only when the solicitation is for a negotiated contract above the threshold and the work will involve meaningful numbers of professional employees. Overuse or underuse can create evaluation problems and protest risk.
Offerors should align compensation with the actual labor market for the required professionals, not just with internal historical rates. Using credible surveys and studies helps show that the plan is sustainable and supports performance.
Because the provision is an evaluation tool rather than a strict wage-setting rule, the key practical issue is source-selection risk: a weak compensation plan may not disqualify an offeror, but it can reduce the chance of award.
Official Regulatory Text
All professional employees shall be compensated fairly and properly. Accordingly, the contracting officer shall insert the provision at 52.222-46 , Evaluation of Compensation for Professional Employees, in solicitations for negotiated contracts when the contract amount is expected to exceed $900,000 and services are to be provided which will require meaningful numbers of professional employees. This provision requires that offerors submit for evaluation a total compensation plan setting forth proposed salaries and fringe benefits for professional employees working on the contract. Supporting information will include data, such as recognized national and regional compensation surveys and studies of professional, public and private organizations, used in establishing the total compensation structure. Plans indicating unrealistically low professional employee compensation may be assessed adversely as one of the factors considered in making an award.