A contractor’s element of compensation is considered unreasonable if it exceeds the survey data by 10 percent. Each allowable element of compensation is benchmarked within a job class or grade to survey data. The evaluation of a fringe benefit element is made at the total payroll level. When some jobs within a class or grade cannot be benchmarked (e.g. low number of jobs, unique jobs), the non-benchmarked jobs are to be considered unreasonable by the same degree as the benchmarked jobs. All individual elements (wages and salaries, bonuses, etc) are each subject to tests and considered unreasonable when they exceed 10 percent of survey results. The procedures are illustrated in the exhibit presented below.

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