Re: labor hour contracts and effort reporting systems Herbert B. Chermside 19 May 2004 08:08 EST

During over 20 years as Director of Sponsored Programs, our institution
attempted to never take an agreement subject to A-21 (prime or flow-down)
that required time in hours.  For many federal contract proposals, where
A-21 is FAR 31.3, we were specific that federal regulations required effort
to be measured in % effort.  We did provide clearly marked estimates of
hours, and convert to % effort using an internally developed
conversion.  We stated that this is merely for the guidance of the Contract
Officers for making comparisons.  Only a few times did we have to provide
verbal guidance to Contract Officers; those had no experience with FAR
31.3, and learned quickly.  We were explicit that we budget, record and
charge using % effort.

See http://www.research.vcu.edu/OSPA_Guidelines/ProductiveHours.htm
This conversion is weak because it starts with an assumption of 40 hours
per week as a measure of 100% effort.  It assumes that the worker will use
all of the allowed sick leave, which few do.  But it is better than
nothing.  It might be strengthened if there were reasonable measures of how
many hours a week made up actual 100% effort, but informal surveys I have
taken show ranges from 50 to 85 hours, and little consistency other than
the observation that MD's with clinical duties generally put in longer work
weeks.

As we measured all faculty effort in %effort, we had to do more explanation
for some other sponsors.  Generally they could be made to understand.

Often when we did have to deal with hourly measures we limited the
application to those on the hourly payroll, who do time sheets anyway, and
to non-exempt classified (state civil service, excluding faculty) who must
record and be given comp time or overtime (seldom allowed by the sponsor,
but explicitly contracted for in some cases) for over 40 hours a
week.  Your institution may have more employees who work by hours than by %
effort.

There is no simple solution.  But in general we found that the nature of
projects undertaken by a university could better discussed in % effort than
hours, anyway.  One way to cast this was to discuss accomplishing the goals
of the project rather than the precise hours of effort.

So my answer is less how to do it, and more how to budget/propose to avoid
doing it.

And however you do it, you need to make sure that your labor rates, rather
than some externally imposed ones, are used.

Chuck

At 05:32 PM 5/18/2004, you wrote:
>do any of the universities out there agree to fixed labor hour
>contracts, keep time sheets, and/or have an over/under account for fixed
>labor rate contracts  AND  if you do, how does this reconcile with the
>effort reporting system you have in place to comply with the
>requirements of A-21?
>
>In plainer english -  a labor rate contract has established
>(negotiated) fixed labor rates per category of personnel - such as
>senior research engineer, subject matter expert, technician I,
>admin-clerical etc.  These rates are used for budgeting purposes and are
>intended to be used for billing purposes regardless of the  labor hour
>rate an employee actually incurs.  Sometimes the rate is low and
>sometimes high thus the need to track this in an over/under account.
>More and more sponsors are requesting that we use labor rates for
>billing and not just for budget estimates but it gets complicated when
>you try to reconcile it to a monthly or quarterly after-the-fact effort
>reporting system and not all schools are set up to keep time sheets.
>
>Anyone got any ideas?  Thanks.
>
>
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Herbert B. Chermside, CRA
Special Asst. to VP-Research
Virginia Commonwealth University
PO BOX 980568
Richmond, VA  23298-0568
Voice:  804-827-6036
Fax     804-828-2051
e-mail xxxxxx@vcu.edu

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