> Date:    Fri, 4 Oct 2013 13:18:29 -0700
> From:    stephanie cole <[log in to unmask]>
> Subject: Re: Pay rates
> 
> Ok so I am showing my ignorance here but........are you saying that state and federal govt. says how much you are allowed to pay employees and how much profit you can make? Is this "free market"? I don't have much business training but this doesn't sound right. Is this just for archaeology or research firms or all small businesses?  Wow I had no idea maybe we as a group need to start trying to change these rules so that we may all be able to better pay our bills and keep our businesses open. 
> 
> Stephanie Cole,  MA, RPA

The vast majority of federal contracts are issued under the Service Contract Act (SCA) of the Department of Labor.  SCA contracts require contractors to pay wage determinations that the DOL has determined for the location where the work is being performed.  The DOL maintains a website were you can look up the rates by state and county - www.wdol.gov/.  SCA rates are higher than the rates CRM firms are typically paying - they can be anything from a dollar or two an hour more to several dollars an hour more - particularly if a project is in a urbanized area.  SCA contractors are also required to pay a Health & Welfare benefit to non-benefited employees - that is currently $3.81 per hour, so in combination the SCA pay rate and H&W benefit adds up to a significant pay increase over current wages being paid in the industry.  If you are working on a federal SCA contract you are supposed to be paid that rate.  

Federal and state government agencies will dictate how much percentage can be charged as profit.  They also dictate what elements of your overhead costs are "dis-allowed" as determined by the Federal Acquisition Regs.  There are a number of cost elements that FAR disallows.  If an element is disallowed, then you have to remove that from your overhead percentage.  Most notably, FAR disallows interest as a operating expense.  So, if you are borrowing money at 5% to pay your field costs until you get paid by the agency and your profit is 8%, you're only making the 3% difference because you can't charge the interest as an operating cost.  That 3% profit assumes nothing goes wrong on the job (i.e. if it stays on budget) - most archaeological projects run into something that takes more time than budgeted, especially if you are trying to do good archaeology.  

JW Joseph, PhD, RPA