Protest challenging the compensation terms of a USAID Personal Services Contract is denied. The protester alleged that the compensation terms violated USAID’s regulations because they did not include locality pay. But USAID’s regulations do not specifically require locality pay, government employees in foreign countries are not eligible for locality pay, and the USAID contracting officer had discretion to set the contract’s compensation terms.
The U.S. Agency for International Development is authorized to issued Personal Service Contracts, which create an employer-employee relationship between the agency and the contractor. USAID issued a solicitation for a PSC, seeking a contractor to serve abroad as an executive officer in USAID missions. The contractor would be compensated at the GS-15 level without locality pay.
A prospective offeror, William Schaeffer filed a protest, challenging the solicitation’s compensation terms. Schaeffer contended that under USAID’s acquisition regulations, a personal services contractor must be compensated based on the market value of the position in the United States. Schaeffer argued there is no U.S. location where the market value of the GS pay rate would not include locality pay. Thus, he concluded, the solicitation’s omission of locality pay violated USAID’s regulations.
GAO was not convinced. USAID’s regulations do not require that salaries match the position’s market value in the U.S. Rather, they only require that salaries are “based on”—that is, derived from—the U.S. market value. Additionally, the Office of Personnel Management has made clear that GS employees in foreign countries are not eligible for locality pay. Moreover, USAID’s regulations provide that final determination of the reasonableness of a PSC salary is within the contracting officer’s discretion. Accordingly, there was nothing unreasonable about the solicitation’s compensation terms.
William Schaeffer represents himself. The government is represented by John B. Alumbaugh of the U.S. Agency for International Development. GAO attorneys Heather Weiner and Jennifer D. Westfall-McGrail participated in the preparation of the decision