DATE:           October 17, 2017

TO:                Procurement Directors/Contracting Officers

FROM:          Chief
                      Contract and Financial Assistance Policy Division
                      Office of Policy
                      Office of Acquisition Management

SUBJECT:     Employee Benefits Cost Study

SUMMARY: The purpose of Acquisition Letter (AL) 2018-02 is to communicate the revisions to the contractual requirements related to the employee benefits cost study, and require Contracting Officers to modify contracts, as appropriate. The revisions reflect recommendations approved by the Deputy Secretary under the Regulatory Reform Initiative.

The Deputy Secretary approved Benefit Cost Study recommendations are as follows:

i. Develop geographic adjustment factors and improve the current methodology for comparison of contractor health costs to the industry.

ii. Eliminate current contractor reporting requirement that is automatically invoked when the results of the benefits cost study exceeds the established threshold. DOE will not require a corrective action plan in those situations where the deviation is statistically insignificant or where it is not in the best interest of the Department due to extenuating circumstances such as higher costs driven by remote locations, high risk nature of the work, other business drivers (for example, analysis of benefit plan design indicates corrective action plan is not necessary, or because the deviation is not significant).

Questions concerning this policy flash should be directed to Robert M. Myers, Director, Contractor Human Resources Policy Division (MA-612) at or (202) 287-1584.