Not true. Billable labor rates are negotiated with the customer. The actual pay that an employee gets is based on market rates and the perceived value of the employee. The one may influence the other.
You can pay your people whatever you want, but the gov will only pay your people what the DCMA says they are worth. If you pay higher, it comes out of profit (which is also metered by the DCMA) or some other source.
Source: A own a R&D engineering company that works for the DoD and IC.
I can pay a EE PhD $400k/year but the DoD will "only" pay me back around $175k for this person's time. I have to make up the difference.
Hence, for defense contractors, we "only" pay what the DCMA will let us charge.
In order, what matters are: tickets, experience, degrees, certs
It is extremely difficult to negotiate labor rates above a certain threshold; the government contracting officers can and will just refuse if they think you are demanding above-market rates. Sometimes you can justify some overage, but it's not easy, and it's not negotiated on a per-project basis.
Sure it is. The government is the customer, and the rates they will pay absolutely drive the rate the contracting company is willing to pay their engineers.
Defense contracting is a very different vehicle from any other. Source -- I am a DOD contract software engineer.
