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I want to run this by the forum to get a check on my reading of the new Executive Order issued on April 27, requiring federal contractors and subcontractors to pay a minimum wage of $15 per hour to workers on a range of covered contracts for procuring services and construction. It supersedes the 2014 Obama EO that is implemented at FAR Subpart 22.19. That rule only applies to contracts covered by the Service Contract Act (for services) and the Davis Bacon Act (for construction)(see 22.903, "Applicability"). I read the new EO as applying to all contracts for services, including SCA and DBA-covered contracts. This would be an expansion to the current coverage. I base this on section 8 which defines covered contracts as (A) contracts for services or construction, or (B) contracts for services covered by the SCA, or others at (C) and (D). The only other requirement is that it applies to contacts covered by the FLSA, which frankly applies to almost everything. Here's my problem: several law firms have sent out alerts on the new EO, but none of them have noted the expansion that I am reading in it. Since SCA-covered services are a subset of all possible contracts for services, it would seem this is worth a comment. How does anyone here read the coverage of the new EO? Executive Order on Increasing the Minimum Wage for Federal Contractors _ The White House.pdf

I could use some clarification. I am having trouble finding documentation on if this would be true or not. We have an existing contract that the customer added the clause in to and stating it only applies to the new CLINS added to the contract, and not the entire contract (the supplies portion).

I've been handed a recently awarded GSA schedule contract, 00 CORP, which has some labor categories which are mapped to wage determination occupations. The documentation refers to to the wage determination 2015-4281, which is for Alexandria, Virginia. It does not refer to a revision number. The revision number in place now is #16, and it was in place a few days ago at the start of the schedule contract. I'm wondering how to interpret this when revisions #17 and #18 come along. Presumably they will have higher wages and H&W benefits. What will be the impact on the schedule labor rates? For example, Accounting Clerk I now has a wage of $19.10 and $4.22 in H&W. If in revision #17 this goes to $20.00 and $5.00, what is the impact on the schedule rate?

Simple question I am having the toughest time finding the answer too. As a Contracting Officer, and as a Contractor acting in a contract specialist support role, I have seen employees working under federal contracts offered a small amount of schedule flexibility within their standard 40 hour work week. Let me throw out a quick scenario to get to my point: Sally is providing basic administrative support under a services contract managed by the VA. This services contract is subject to the SCA and all employees under this contract are non-exempt. This is a FFP Labor Hour contract to which Sally is working 100% remotely and has pre-coordinated her core work hours with her Government Lead. There have been a few occasions through performance of the contract where Sally had short medical appointments that fell within her core hours. On those occasions, her Government Lead has simply allowed her to record her actual time worked for the day she had an appointment (6 hours), then work additional time (typically 30 min or so a day) throughout the week to make up for her missed time. All actual time is reported as worked and at the end of the week, every week, Sally works her scheduled 40 hours. No more / no less. Is there anything wrong with the above scenario? Are there any overtime implications if a Non-Exempt employees works slightly over an 8 hour day to make up for missed time? Does it end up being a wash if it all levels out to the standard 40 hour work week? I ask because the above presented scenario seems to play out wildly different from agency to agency / COR to COR / etc... This almost seems like a gray "no big deal" area that no one really concerns themselves with because it happens so infrequently. However, it's not a big deal...until it becomes a big deal to someone and the only person adversely affected always ends up being the employee. I'm just wondering if there is some actual legal guidance on this scenario that I've missed, or if this will always be more of a handshake type of understanding. Thanks.

Guidance on SCA/DOL Applicability The agency I work for has a general rule of thumb when assigning acquisition packages received that contain both supplies (SUP) and services (SVC) elements. The way they decide which team it gets assigned too is by looking if SVC component is more than $2,500.00 (SCA applicability threshold). If it is higher then it goes to the SVC team and if less, then it goes to the SUP team. I done some research and provided it below: Thoughts? Am I close or way of the mark? Resource for Determination: The Department of Labor (DOL) provides many resources to make these decisions. The best one I have found is located at the link below: https://www.dol.gov/whd/foh/ This is the Field Operations Handbook (FOH), which was updates in 2016, to help when making these decisions in accordance with federal law and DOL guidance. The link below is for chapter 14 that provides this guidance for the SCA: https://www.dol.gov/whd/FOH/FOH_Ch14.pdf At section 14a01 it states: “The SCA (41 USC 351, et seq.) applies to every contract entered into by the U.S. or the District of Columbia (DC), the principal purpose of which is to furnish services in the U.S. through the use of service employees. Contractors performing on such federal service contracts in excess of $2,500.00 must observe minimum monetary wage and safety and health standards and maintain certain records. Service employees on covered contracts in excess of $2,500.00 must be paid not less than the monetary wages and fringe benefits contained in wage determinations issued by the DOL for the contract work. Such wage and fringe benefit determinations may reflect what has been determined to be prevailing in the locality or may reflect the wage rates and fringe benefits contained in the predecessor contractor’s collective bargaining agreement (CBA), if any, pursuant to section 4(c) of the SCA. See 29 CFR 4.” (Emphasis Added) The definition of Principal is below (Marriam-Webster): most important, consequential, or influential The definition of Purpose is below (Marriam-Webster): something set up as an object or end to be attained From these definitions we can reasonably assume that “the principal purpose” means “the most important end to be obtained.” At section 14d13 the FOH speaks to the applicability of the SCA when services and other items are to be obtained under a single contract: “The SCA applies only where a contract as a whole is principally for the furnishing of services, as opposed to line items for specific work in a contract. The SCA reference to bid specification refers to the advertised specifications in a solicitation for bids rather than a separate line item or work requirement within a contract. See 29 CFR 4.132.” (Emphasis Added) The CFR reference is below: § 4.132 Services and other items to be furnished under a single contract. If the principal purpose of a contract is to furnish services through the use of service employees within the meaning of the Act, the contract to furnish such services is not removed from the Act's coverage merely because, as a matter of convenience in procurement, the service specifications are combined in a single contract document with specifications for the procurement of different or unrelated items. In such case, the Act would apply to service specifications but would not apply to any specifications subject to the Walsh-Healey Act or to the Davis-Bacon Act. With respect to contracts which contain separate specifications for the furnishing of services and construction activity, see § 4.116(c). Section 14d13 and 29 CFR 4.132 clearly state that the SCA’s applicability for a contract that contains both services and supplies is based on the “principal purpose” or “the most important end to be obtained.” Dollar value is not consulted for applicability.

Agency forgot to include a wage determination in a concessions contract until several years into contract. Agency finally added the WD at DOL request. DOL seeking back wages from contractor. Contractor intends to seek equitable adjustment from Agency. We cannot find precedent for how an equitable adjustment would work in a concessions contract. Contractor earns a modest management fee as FFP % of sales and remits a similar size fee to Agency. Any ideas? Let me know if you need additional facts. And thanks for any insight you all may have for us!

Have upcoming recompete of a five year (Base + four 1-year OPs) FFP commercial service requirement subject to Service Contract Labor Standards (SCLS) so Contractors have right of first refusal (Non-Displacement of Qualified Workers). We just need bodies to do the work as opposed to new solutions so with that being said both current and I think preceding contracts went LPTA and thinking the same for the recompete as there is nothing really to tradeoff. Issue although not really an issue for me personally but is that I'm told some of these Contractors due to the WD positions in which they occupy have not received a pay raise in five to ten years as Wage Determination (WD) rates have remained static for numerous positions. Yet this requirement supports a somewhat remote facility so while there is turnover / attrition it's not at the rate you'd expect and instead it is usually an awkward environment as these Contractors work alongside Feds in some instances. Historically and practically, all the competitive SCLS requirements I've done have been FFP & LPTA in which the Offerors just propose the current WD rate for the SCLS covered employees for all PoPs (i.e. Base and OPs). However, for non-competitive SCLS requirements I've done (i.e. 8(a) direct source), it was acceptable for the Offeror to propose modest (1% - 2%) escalation to hourly rates each PoP. Like honestly and in at least in my experience thus far, it's like you only see no salary escalations as an across the board rule of thumb in competitive procurements subject to SCLS, the Contractor employees of which usually make way less than Professional Services employees, but I digress. Anyways, I've scoured the threads here concerning permissibility of proposing increases from the WD rates in the Base and OPs, and the verdict seems like a hung jury. However, this thread (http://www.wifcon.com/discussion/index.php?/topic/1750-service-contract-act-escalation-and-cost-reimbursement-solicitation/) brought a GAO case ( to my attention whereby GAO raised no objection to Offerors proposing COLAs for SCLS covered employees per RFP instructions "to propose realistic prices that allowed for increases for things such as cost of living" and even went so far as to say an Offeror who didn't and instead choose to rely on future WD increases resulted in a Government evaluation on an unequal / apples and oranges basis that should be resolved during discussions with that one Offeror (at least that's how I'm interpreting it --> reference p.11-12). While this GAO case was for a FP IDIQ, it was a tradeoff procurement in which the RFP stated price would be evaluated for realism and reasonableness. Interestingly enough, the protest was sustained because GAO agreed the Government evaluated it as if it was a LPTA procurement. My initial thought was then why wouldn't it be permissible for my RFP instructions to otherwise mimic the RFP language from this GAO case i.e. state that proposed pricing for base and OPs must reflect any planned increases necessary to achieve say for example Offerors' recruitment and retention policies e.g. a COLA? But then since there is no need for me to conduct a price realism analysis and since my procurement is LPTA, the difference between the winner and losers could potentially come down to who proposed the lowest COLA, if the winning Offeror even thinks there is a need to propose one. I could see the incumbent doing this, and I don't see how I'd evaluate as technically unacceptable given the aforementioned historical turnover / attrition background. Then I thought well while I've never seen a RFQ or RFP state a maximum escalation rate at which the Government would consider reasonable, but what if instead I had a RFQ/RFP term or cost/price evaluation instructions/process state any escalation above a certain % will not be considered fair and reasonable. I know competition usually takes care of the issue of overinflated escalation, but again this isn't a competitive Professional Services circumstances or tradeoff procurement where you'd typically still see escalation proposed. Given how competitive LPTA SCLS requirements are responded to by Offerors, I don't see this as unduly restrictive or unfair. And I am well aware this doesn't guarantee or require that the Contractor will actually pay its employees these escalated rates above the WD. Anyone want to provide an opinion on this and how the proposing of 0% escalation in SCLS procurements is fair and reasonable to both Gov and Contractor when some positions don't see hourly rate increases for multiple years on revised WDs in combination with the historical background of the SCA that was to ensure "prevailing" wage rates and fringe benefits were paid by the Gov. to service Contractor employees. Just trying to get some insight for the resources here. Thanks in advance.

I'm looking at a RFP. The Gov't wants to buy labor on an IDIQ basis anywhere in the US. One CLIN equals one labor category. The Gov't is seeking a single hourly rate per CLIN. A few wage determinations have been included in the RFP, but nowhere near all of them for the entire country. To help focus, let's say Manhattan is not covered by any of the wage determinations in the RFP. After award of the IDIQ, how would the SCA rules apply if the Gov't wants to buy labor in Manhattan?

We won a SCA FFP contract for the maintenance of some sensitive equipment where the RFP stated that the hours of operation where going to be from 8:00am to 4:30pm. We have been performing for the past 2 years without issues. As a matter of convenience - at contract start up- we agreed with the COR (I KNOW) to establish two shifts one from 6:00am to 2:00pm and another one from 2:00pm to 10:00pm. Now the customer wants to change the hours of the contract from 10:00pm to 6:00am. We notify the CO that we will comply but that we will request equitable adjustment. The CO came back saying that DOL notify them that since there is no differentials on price in the SCA rates whether the work is performed on day or night we were not entitled to adjustment. Is this correct? I believe that the DOL argument would have be true if the RFP initially stated that the hours of the contract may vary according to customer needs. However since this was not the case I believe that this would be a material change on the contract terms requiring an equitable adjustment. We have already contacted our lawyers how ever I would like to hear different opinions. Thanks

This is my first post, but I've read with interest a number of threads discussing similar issues. I'm excited to hear your feedback on this. I understand that 52.222-43 requires the contractor to warrant that wage escalations in the proposal do not include an allowance for adjustments that would automatically be made under -43 to compensate for revised Wage Determinations. 1. My general question is: under this FAR, when would I be allowed to escalate wages, and when would I be allowed to submit a proposal with flat wages? I'm thinking the answer turns on whether or not the wages proposed are at the minimum allowed under the Wage Determinations. For example, if I submit a proposal where my fully burdened wages are based on minimum wages under WDs, then I could submit flat rates for option years, and rely on the automatic adjustment scheme in -43 to increase wages if/as they rise due to DOL revisions to WDs. If I submit a proposal where filling a position will require a premium over the minimum allowed under DOL WDs, then I would need to escalate wages if I anticipate it becoming more expensive to fill the position each year. If I do not escalate wages in my proposal, and my base year wages are above any new revisions to the WDs, then -43 doesn't provide me with an automatic adjustment each year. Does this conform to your views on the way -43 operates? A few follow-up questions. 2a. If I submit flat wages for the option years, and rely on -43 to compensate for rising labor costs, could an agency have any basis for rejecting my proposal on "realism"? Is it unrealistic to rely on revisions to WDs for price adjustments necessary to fill positions? Maybe I need to note that reliance in the bid to be clear? 2b. If the answer to 2a is "yes", then do you interpret -43 differently? For example, would it be allowable to base my fully burdened rates on the minimum wages allowed under DOL WDs, and still escalate wages, knowing that since I'm already at minimum wages, they would need to be revised each year? Such escalations would seem to include an allowance for the adjustments provided for in -43, but maybe we could warrant that our escalations aren't based on expected changes in the WDs, per se, but instead, we promise the escalations are based on "realism" or some other need to escalate wages, like for general retention purposes, for performance incentives, etc.? It seems to me that even if I have alternative explanations for my wage escalations, if I'm already working from the minimum wages allowed under WDs, my escalations are necessarily including some allowance for revisions to the WDs, and would therefore contravene the purpose of -43, or perhaps violate it altogether. 3. If I am above the minimum WDs amount, and I do not escalate, I imagine there could be a basis for rejecting my proposal based on realism. But if it weren't rejected for realism, would I have an alternative means for adjusting wages annually on renewals? Would equitable or economic price adjustments only be available if specifically allowed in the contract, or in your experience, does this depend on the Contract Officer, to be determined on a case-by-case basis? Thank you in advance for your contributions. I've read a number of different interpretations of -43. Some departments seem to believe this doesn't allow for any wage escalations at all (although it clearly does) and some departments seem to think it's unrealistic to not escalate wages (even though FAR -43 provides an automatic scheme for adjusting wages).

Good afternoon, Mr. Edwards: First, let me thank you in advance, for your assistance. This site is wonderful for getting another perspective on all things Federal Government contracting. Here is my question: Recently, the Department of Labor has been conducting an audit of the Service Contract Act to ensure we have been following appropriate procedures (i.e. paying correct wage and health and welfare). Last week, we received an amendment to modify a Blanket Purchase Agreement (BPA) through an amendment that retroactively incorporates the Wage Determination schedules for 2011 and 2012. What they are attempting to do is force our customer to have us sign the amendment so that we would be responsible for the wage differences and health and welfare from the inception of the contract. I have done a quick calculation and for the number of hours that we have put into the BPA calls, it would add up to a very large number. We would have never priced the contract as we did if this was an SCA contract and we stand to lose a significant amount of dollars if we were to accept this retroactively. Can you please tell me what recourse we may have. Thank you very much!

Good day! My question is about selecting the correct labor law to apply to a subcontractor. If the subcontractor is performing a "service" on a DBA construction site, employs no laborers, mechanics, apprentices, trainees or helpers, is the work subject to the Service Contract Act or Davis Bacon Act? Anxiously awaiting your response!