Q.  Can we invoice the same individual at different labor rates?

A.  It depends on the type of contract.  For cost type contracts, the answer is no because individuals are billed at actual rates plus indirect costs and fee.  For fixed price work, the answer is yes since the price is fixed and cost does not matter.  For time and material or labor hour contracts, the answer is usually yes with a qualifier.

If the individual meets the requirements for each labor category specified in the contract (e.g. education, experience, skills) then they should be able to bill at the labor categories they worked.  This is particularly true if the proposed and contracted rates were based on commercial-like rates such as catalogue, market rates, etc.  When labor rates are based on cost buildups (i.e. average actual rates of categories of labor plus indirect costs and fee) then an individual (say, technician) billing at a higher rate (say, senior engineer) can raise some eyebrows if the negative impact to the government is significant.  For example, if the technician’s salary was included in the technician salary pool when hourly rates were proposed then billing at higher engineering rates would expose a contractor to the contention the proposed engineering rates were too high due to the fact the lower cost technician was not included in the pool of salary.  Be prepared to respond.  Of course the opposite circumstance (e.g. when high salary engineers bill at lower technician rates) would be less worrisome to the government.

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