Can Any Local Business Use Government Contracted Employees?
The Secret to a Lean and Mean Government Contract Bid
The United States federal government is one of the largest consumers of products and services in the world. Many small businesses have cashed in on this lucrative market while others have shied away from this arena because it just seemed too complicated to jump in.
If you have considered bidding on government contracted jobs and felt that it was too complicated to be profitable, I have good news for you. There is a little-known secret to making your bids lean and mean and that’s important in today’s business environment.
The Davis Bacon Acts of 1931 stipulates that contractors must pay the prevailing local wages and benefits on all public works projects. Many small business owners see this as prohibitive in providing competitive bids on government contracts. That puts quite a load on small business owners because the fringe portion of wages can account for as much as 30 percent of the cost of hourly workers.
By paying out the fringe benefits to workers in a managed contractor plan, the cost to you company to comply with Davis Bacon can be greatly reduced. Consider this:
1. When you use a managed contractor plan, you can save on payroll costs while at the same time reducing your tax burden.
2. You can submit more competitive bids by separating wages from benefits.
3. Managed contractor plans out-source administration for fringe benefits, lowering cost to company.
4. Managed contractor plans actually increase the amounts employees can save for retirement.
5. Managed contractor plans ensure compliance with state and federal regulations, keeping your attention on your business and not on red tape.
In short, using a managed contractor plan may prove to be the edge you need to successfully contracting with the federal government. Feel free to contact the Davis Bacon Pension Plan authority for more information.
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