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Requirement to pay current SCA wage rates when the contracting officer doesn't incorporate the new/updated WD into the contract


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I have stated nothing but facts, and have drawn my conclusion (opinion) from valid premises.

  • If a wage determination is omitted from a contract covered by the SCA, the matter must be resolved pursuant to the procedure specified in FAR 22.1015 and 29 CFR 4.5(c).
  • The wage determination was omitted from the contract.
  • The matter must be resolved pursuant to the procedure prescribed by FAR 22.1015 and 29 CFR 4.5(c).

Why isn't my conclusion fact? Where's my error?

The procedure specified in FAR 22.1015 and 29 CFR 4.5(c) does not entail incorporation of the WD by operation of law. Moreover, incorporation of a WD by operation of law would deny the contractor the equitable adjustment provided for in FAR 22.1015 and 29 CFR 4.5(c). As pointed out by the Claims Court, in applying the Christian Doctrine a board or court cannot violate properly promulgated regulations.

 

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@Vern Edwards @Don Mansfield

I quoted this before from Call Henry, Inc v United States, 855 F.3d 1348, 1351 n.1 (Fed. Cir. 2017).  I realize that it does not quote 52.222-41 specifically but it seems to encompass all "mandatory"  SCA clauses. 

"Although not outcome determinative in this case, there is some confusion regarding which FAR price adjustment provisions and contract clauses apply to this dispute. Because this contract was entered into on April 23, 2003, the contract is governed by the FAR provisions and clauses that were in effect on that date. Accordingly, Call Henry's NASA contract is governed by the clauses and provisions in effect as of April 23, 2003. 48 C.F.R. §§ 1.108(d) ; BearingPoint, Inc. v. United States, 77 Fed.Cl. 189, 193–94 (2007).
Pursuant to the Christian doctrine, the mandatory SCA clauses applicable to this contract are incorporated by reference, as those clauses reflect congressionally enacted, deeply ingrained procurement policy. G.L. Christian & Assocs. v. United States, 312 F.2d 418, 426 (Ct. Cl. 1963) ; General Eng'g & Mach. Works v. O'Keefe, 991 F.2d 775, 779-780 (Fed. Cir. 1993); John Cibinic, Jr. , James F. Nagle & Ralph C. Nash, Jr. , Administration of Government Contracts 23-24 (5th ed. 2016)."

Remember this was prior to Solara which I have also quoted and provided in the thread.  Solara changed the view of Christian at least in the CBCA view.   In Solara the CBCA decided "...The SCA clause cannot just be read into the contract under the Christian doctrine..." 

So  I think (but not sure as I have not gone back and read every one of my posts) and as Vern has recently stated (again I think) here is the deal.   SCA must first be determined to apply to the contract for Christian then to be used as a concept (hell I can't figure out what to call it but I know it is not in the FAR) to further decide on SCA obligations required of the contractor.

Example - SCA clauses in a contract but an agency does not update the wage determinations as required by SCA, Christian then applies as a concept.

Example - SCA never determined to be applicable to the contract at award.   Christian does not apply as a concept or at least not yet so (re)determined by a court, administrative or otherwise. 

Then what about the solicitation stage.  I did one quick search and found this right off the bat.   https://www.gao.gov/products/b-190505-1

All said and borrowing from and rewording a Vern post here is how I see it - 

 SCA applies when it is inserted by appropriate clause in a contract by a CO, or by the DOL due to investigative/enforcement action, not before. 

If for a SCA contract  a CO should have inserted a new WD, but didn't or won't, the DOL can require its inclusion. When inserted at which point the contractor must pay back wages due and may submit a claim for an equitable adjustment, maybe IAW FAR 52.222-43 at (f) and/or IAW FAR 22.1015.  A contractor has a duty to pay the required SCA wage even if the CO hasn’t done their job of inserting a new wage determination. IAW FAR 52.222-41 at (c) .

Bottomline - If I were a contractor I would get affirmation at the get go as to whether SCA applies to a proposed or awarded contract, either by noting that SCA (one of the required clauses) is in the solicitation contract or if not and I wonder I would ask in the solicitation stage and reconfirm at the award stage.  If I did not agree with the answer provided in the latter situation I would contact the USDOL for assistance and final determination of the CO's opinion.

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9 hours ago, Vern Edwards said:

The procedure specified in FAR 22.1015 and 29 CFR 4.5(c) does not entail incorporation of the WD by operation of law. Moreover, incorporation of a WD by operation of law would deny the contractor the equitable adjustment provided for in FAR 22.1015 and 29 CFR 4.5(c). As pointed out by the Claims Court, in applying the Christian Doctrine a board or court cannot violate properly promulgated regulations.

Wouldn't this also apply to the incorporation of FAR 52.222-41? FAR 22.1015 states:

Quote

the contracting officer, within 30 days of notification by the Department of Labor, shall include in the contract the clause at 52.222-41 and any applicable wage determination issued by the Administrator.

 

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3 hours ago, C Culham said:

Example - SCA clauses in a contract but an agency does not update the wage determinations as required by SCA, Christian then applies as a concept.

 

3 hours ago, C Culham said:

A contractor has a duty to pay the required SCA wage even if the CO hasn’t done their job of inserting a new wage determination. IAW FAR 52.222-41 at (c) .

Your opinion differs from that of the DOL per the reference I previously provided the link to at: https://www.dol.gov/sites/dolgov/files/WHD/legacy/files/Tab14.pdf

“◊ The general public may also access the WDOL website at no cost to obtain available wage determinations for INFORMATION PURPOSES ONLY. The contracting agency is required to incorporate the applicable wage determination(s) into the contract. Thus, only those wage determinations inserted into the contract at award, or by modification, are applicable.”

“Multi-Year Procurement
◊ In the case of multi-year contracts subject to annual fiscal appropriations of Congress, the contracting agency must obtain a new wage determination each year for use on the anniversary date of the contract. 29 C.F.R. §§ 4.4(a)(1) and 4.145(a).
◊ If the multi-year contract is not subject to annual fiscal appropriations, the contracting agency must obtain a new wage determination and apply it to the contract at least every two years, on the biennial anniversary date of the contract. SCA§ 4(d), recodified at 41 U.S.C. § 6707(d), and 29 C.F.R. § 4.145(b).”

The OP’s firm has requested the KO to update the applicable wage determination but the KO said he/she was too busy…

And: from “52.222-41 at (c)” :  paragraph (c) says that employees shall be paid the wages and fringe benefit “…as specified in any wage determination attached to this contract.

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@C Culhamand @Don Mansfield Whew! The format of this discussion forum is driving me crazy. Typing into these little boxes is maddening.

Okay, so I have to respond to both Carl and Don. But I'm going to ignore anyone else who addresses me right now, because I've got real work to do.

I will take Don first and address Carl in a separate post.

@Don Mansfield

You keep asking about the applicability of the Christian Doctrine (CD) to the SCA clause because you want to show that if it applies to the clause it would be inconsistent not to apply it to a WD. That's your Socratic questioning approach. I'm not sure how it would be inconsistent, and you have made no demonstration in that regard, but since you have quoted the ASBCA, Spectrum American Contractors, ASBCA No. 33039, 87-2 BCA P 19864, May 4, 1987, so will I, from a 1994 decision, BellSouth Communications Systems, Inc., ASBCA 45955, 94-3 BCA P 27231, September 27, 1994:

Quote

The Government argues that the “Christian Doctrine” requires us to read into the contract at award the Davis-Bacon Act clauses and wage determinations that were later added by Modification P00065. We disagree. The Davis-Bacon Act is not self-implementing. A determination must be made by the Government that a particular contract is covered by the Act before that contract is subject to the Act. See Universities Research Association, Inc. v. Coutu, 450 U.S. 754, 784 n. 38 (1981). Before award, the contracting officer determined that the BellSouth contract was not covered by the Act. That determination was made in good faith, it was concurred in by DOL, and was not reversed until three years later. In these circumstances, the Christian Doctrine is not applicable. 

Well, the Service Contract Act is also not self-implementing. It, too, requires a determination that a particular contract is covered by the Act before that contract is subject to the Act. So if you rely on BCA decisions, there you go. It appears that at least in some circumstances the CD would not apply to FAR 52.222-41.

But in fairness to you and to me, I warned everyone earlier in this thread that board and court decisions about application of the CD in particular cases are all over the map. And my researches confirm me in that belief. I think it's one thing if in the case law we find a clear line of reasoning and decision. Then it makes sense to point that line out to others. While it's clear to me under that some tribunals would apply the CD to WDs and others would not, I have not found a clear line of reasoning and decision. Thus, I am in no position to assert one proposition or another. We can only argue among ourselves to no conclusion.

You asked me if I think that the CD applies to FAR 52.222-41. I demurred, but I will admit that I think it very likely. As for WDs, the Grade-Way decision on which I have relied, and which stated that the CD does not apply to WDs, and stated why, has not been overruled by the Federal Circuit and has been referred to by the Federal Circuit as recently as 2018. It was called "narrow." See K-Con, Inc. v. Sec'y of the Army, 908 F.3d 719, Nov. 5, 2018. Since it hasn't been overruled, and since its reasoning makes sense to me, I'm sticking with it.

In any case, as Joel has pointed out several times, 52.222-41 is in the OP's contract. Which brings me to Carl's proposition:

3 hours ago, C Culham said:

A contractor has a duty to pay the required SCA wage even if the CO hasn’t done their job of inserting a new wage determination. IAW FAR 52.222-41 at (c) .

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26 minutes ago, Vern Edwards said:

Which brings me to Carl's proposition:

Which is wrong, per the wording at paragraph (c).

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4 hours ago, C Culham said:

A contractor has a duty to pay the required SCA wage even if the CO hasn’t done their job of inserting a new wage determination. IAW FAR 52.222-41 at (c) .

@C CulhamSo, if I understand you rightly, if a new wage determination applies, but has not been added to the contract, the contractor is obligated to find it and comply with it, notwithstanding FAR 52.222-41(c), which states:

Quote

Compensation. 

(1) Each service employee employed in the performance of this contract by the Contractor or any subcontractor shall be paid not less than the minimum monetary wages and shall be furnished fringe benefits in accordance with the wages and fringe benefits determined by the Secretary of Labor, or authorized representative, as specified in any wage determination attached to this contract.

Emphasis added.

Do I understand you correctly?

FAR 52.222-41(c) does not say that, so you must have inferred it from something you see in that clause paragraph or something you have seen elsewhere. FAR Subpart 22.10 does not say that. 29 CFR Part 4 does not say that. So where does it come from?

I have searched the decisions of the Department of Labor Administrative Review Board (ARB). There have been 440 decisions about the SCA; 284 of them mention wage determinations. I have not found one that confirms the truth of the proposition that a contractor must pay in accordance with a wage determination that has not been attached to the contract. (Though there may be such a decision and I simply have not seen it.)

I have read two Briefing Papers by practicing attorneys: The Service Contract Act, BP 90-7, by Ginsberg, Abrahams, and English, June 1990, and Complying with the Service Contract Act, BP 01-09, by Donohue and Goddard, Jr., August, 2001. Neither states that a contractor has a duty to comply with a new wage determination before added to the contract by the CO. The latter states: "A contractor must comply with the wage determination originally included in its contract unless and until the CO modifies the contract to include a new or revised wage determination."

The exception is when a new WD will implement a new collective bargaining agreement.

Carl, I am not yet saying that you are wrong, but I am questioning what you said. I, too, have believed it. But I now question the truth of it. And I would like a simple statement from you about why you think it's true. You don't need to quote a bunch of stuff. Just say why you think it's true. But respond as you see fit.

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49 minutes ago, Vern Edwards said:

Do I understand you correctly?

Yes.  Why?  Its not a "new" determination.  It is a revised.  The WD keeps it same number.  

I too can not find other reference but I would bet USDOL, as a result of investigation/enforcement would require the revised wage, if revised, be paid.

Also we all continue to overlook the "shall" required of a CO.   I just will say if a CO does not do a shall with regard to any contract requirement a contractor is off the hook!  I think not.

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2 hours ago, joel hoffman said:

Your opinion

Yes but you are quoting other than contract requirements.   In my view it is just advice not imperative.

 

1 hour ago, joel hoffman said:

Which is wrong, per the wording at paragraph (c).

See my response to Vern.

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21 minutes ago, C Culham said:

Why?  Its not a "new" determination.  It is a revised.  The WD keeps it same number.  

But the "revised" determination is different, right? Even though it may have the same number (although given a new revision number and date), it's not the one that's attached to the contract until the CO attaches it. Right?

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2 hours ago, Vern Edwards said:

But

Thinking of it this way...

52.222-41 requires a WD be attached.   (c)(3) says compensation shall be subject to adjustment, right?    2 year contract revision issued by DOL, contractor ye shall comply.

Now to 52.222-43 which says nothing about the revised WD having to be with the mod , right?  Option or anniversary date contractor ye shall comply.

 

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14 hours ago, Vern Edwards said:

Interesting. Thanks.

52.222-43 (f) says in part:

“(f) The Contractor shall notify the Contracting Officer of any increase claimed under this clause within 30 days after receiving a new wage determination unless this notification period is extended in writing by the Contracting Officer...”

The clauses at FAR 52.222-41 and -43 are both in the contract per the prescription for the -43 clause at FAR 22.1006. One must read both clauses together. The -43 clause doesn’t negate 52.222-41 (c) (“in any wage determination attached to this contract.”). 

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19 hours ago, C Culham said:

Also we all continue to overlook the "shall" required of a CO.   I just will say if a CO does not do a shall with regard to any contract requirement a contractor is off the hook!  I think not.

This is a contract administration issue. The contractor would be responsible for paying its employees and for back pay within the effective period of the new wage determination. But the contract as well as the DOL’s literature say that the required pay and fringe benefits are to be attached to the contract.

However, it can’t be properly and timely reimbursed until the KO modifies to contract to incorporate the rates and the parties both act to adjust the price.

A PCO has a duty to actively administer a service contract or appoint an ACO and/or trained and qualified COR to administer and make arrangements to obtain updated wage determinations for their service contracts.

To answer Carl’s question, our Original Poster’s  company has done their part:

“In this case, we asked the CO if he was going to issue a mod to incorporate the new WD. and the answer we received (verbally) was basically that they are too busy and won’t be issuing mods to incorporate new WDs.

Then, he/she performed some additional research.  They have further  questions and valid concerns about liability for voluntarily incurring increased costs without government direction and without a contract modification to cover the increased costs.

Then the OP initiated this thread, seeking answers to the company’s questions and concerns.

Finally, the OP has engaged legal advice, while we are debating what the actual contract requires the government and contractor to do, and whether the contractor must comply with a “for information only” wage determination that it can see online and that the KO refuses to modify the contract to include and adjust the price for any increased cost…

I’d say that the OP has done their part, so far.

 

Edited by joel hoffman
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38 minutes ago, joel hoffman said:

But the contract as well as the DOL’s literature say that the required pay and fringe benefits are to be attached to the contract.

However, it can’t be properly and timely reimbursed until the KO modifies to contract to incorporate the rates and the parties both act to adjust the price.

I do not think this is in keeping with the Sotera decision posted previously in this thread.   As a matter of good contract  hygiene it might be the the way to go but I believe the decision was clear if SCA is in the contract, and not the most current wage determination revision, the contractor is entitled to reimbursement.   

 

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The contractor is performing the contract and has engaged legal help. 

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16 minutes ago, Vern Edwards said:

Carl's mind is made up.

No my mind is not made up so please do not attempt to speak for me.  Thanks.   

With each and every post I read and research.   I will however move on because this is a similar case to statements I made about SCA sometime ago where in fact my documented discussions with DOL supported my view.

I will simply say this and then move on.   

If a CO fails to include a new wage determination revision in a contract modification to extend an option the contractor is not relieved of having to pay the rates in that revision.  DOL would tell them so.

PS - I have answered every one of your questions, as usual.  You however have not.  So much for good dialog to unravel premises made but not supported.  You it would seem are the one who has their mind made up, but I will leave it to you to confirm so or not.  So Vern what say you?

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A very current example.   Where is this wording does DOL say the contract must be modified to make the EO applicable.  Taken from a SCA wage determination.

If the contract is entered into on or  |With certain exceptions Executive Order    |
|after January 30 2022 or the         |14026 applies to the contract.              |
|contract is renewed or extended (e.g. |The contractor must pay all covered workers |
|an option is exercised) on or after    |at least $15.00 per hour (or the applicable |
|January 30 2022:                      |wage rate listed on this wage determination|
|                                       |if it is higher) for all hours spent        |
|                                       |performing on the contract in 2022. 
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27 minutes ago, C Culham said:

No my mind is not made up so please do not attempt to speak for me. 

I didn't speak for you. I spoke about you.

We have arrived at the point of reaching for extreme interpretations, e.g., the "revised" WD is not "new."  I see no point in continuing to argue endlessly with mania. But I will say that if you had gone to law school you would have been one relentlessly and frighteningly facile, drag-me-to-hell, better-call-Saul attorney, and I mean that as a compliment (of sorts).

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1 hour ago, Vern Edwards said:

Joel, you are now that lamp post you once mentioned. Carl's mind is made up. Move on. There's nothing more to see here.

I agree. My last post wasn’t meant to be an argument, merely a comment concerning what the contractor is currently doing. It’s shameful. The Contractor shouldn’t have to submit an REA or a Claim to get reimbursed because the KO won’t do his job. 

I’m done debating. 

Edited by joel hoffman
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