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I've incorporated into contracts revised DOL wage determinations when exercising an option. This has resulted in a slight increase to the hourly labor rates. However, I'm required to exercise an option (option 3) on a contract, but the contractor has provided a revised collective bargaining agreement (CBA) with new rates. Am I allowed (or required) to increase the new option's labor rates as a result of a collective bargaining agreement?

To provide some background, there was no CBA when the agency awarded the contract. The contractor presented to the agency its first CBA about 1 1/2 years after the contract had been awarded (midway through option 1 of the contract). A revised CBA was used to revise the labor rates when the agency exercised option 2. I'll be exercising option 3 this month, but I'm not sure about the CBA. Are we required to honor it? FAR 22.1008-2 discusses CBAs in the context of predecessor and successor contractors, but we're not ready to compete the requirement yet. We still have two options left on it.

The option price is worth close to $500k, and the CBA revision adds nearly $30k to that price (for the option year). Seems like a lot.

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I believe you can request a wage determination that is based on the CBA. When I contracted for telecommunications services with phone companies whose employees were covered by a bargaining agreement, I requested new WDs based on the current CBA.

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Rios – I would read 29 CFR 4.4 and possibly 4.1 and then I would do what 4.4 says – “Any questions regarding timeliness or applicability of collective bargaining agreements must be referred to the Department of Labor for resolution.” Then I would use this website http://www.dol.gov/whd/contact_us.htm to start running the gauntlet to find a DOL person that could help me. In the end as I struggled to get the answer I would remember that DOL enforces SCA and their word is final and I would attempt to get the “right” answer from them to avoid and confusion and conflicts with the contractor later.

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When discussing predecessor contracts and successor contracts in terms of the Service Contract Act, could the base period of performance of an existing contract be considered the predecessor contract? Or does the term specifically apply only to a previous contract award? I'm attempting to make sense of FAR 22.1010 and 22.1012-2( b ) and ( c ).

I'm interpreting the requirement to honor a CBA as follows: The contractor's employees did not have a CBA when we awarded the contract, so I don't think we were required to honor the rates when they presented the CBA contract several months after award (which the previous CO did). However, since there was a CBA in effect at the time we exercised the first option, then there may be a statutory requirement to honor the new CBA rates at the time we exercise the option. Can someone weigh in?

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22.1012-2( b ) cites "...a modification as specified in 22.1007(b)". Look at (B)(1): "...extends the existing contract pursuant to an option clause or otherwise".

A new or changed CBA isn't effective under Section 4© of the Act "...if notice of the terms of the new or changed collective bargaining agreement is received by the contracting agency after award of a successor contract or a modification as specified in 22.1007(B)." My surmise is (correct me if I'm wrong), that the rate increase you refer to is contained in a multiple-year CBA, and that you have had notice of its terms prior to making an "award" of a modification exercising an option or making an extension.

If you did receive notice of the terms of the new or changed CBA after award of the modification exercising an option or making an extension, then, in accordance with 22.1012-2 ( c ), I believe you must have made the 22.1010 notification before the limitations in 22.1012-2 (b ) will apply.

If the limitations do apply, how they apply depends on your fact situation. The language is pretty convoluted - charting the phrases against your facts can help.

I hope this helps. It's not based on any special expertise.

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  • FAR 52.222-41(t) cedes jurisdiction over "Disputes concerning labor standards" to DOL (in lieu of the Disputes clause) and cites DOL "procedures for resolving disputes concerning labor standards requirements", 29 CFR Parts 4, 6 and 8.
  • 29 CFR 4.4( c )(4) says that any questions regarding timeliness or applicability of collective bargaining agreements must be referred to DOL for resolution, but doesn't specify how or with whom to initiate resolution. Any specifics in Part 4 appear to relate to issues not associated with timeliness, such as changing Wage Determinations and things like questions about substantial interest, substantial variance and arms-length negotiations proceedings. Apparently resolutions of such items are made by "a request... submitted in writing to the Administrator, Wage and Hour Division, Employment Standards Administration, U.S. Department of Labor, Washington, DC 20210". Apparently nothing more formal, and no address or subdivision more specific than that is required.
  • Part 6 seems to pertain to enforcement actions instituted by the Associate Solicitor for Fair Labor Standards or a Regional Solicitor and is heard before an Administrative Law Judge. Part 8 refers solely to appeals concerning questions of law and fact from final decisions of the Administrator and Administrative Law Judges.
  • Tecom, Inc., the case provided by Retreadfed, is an appeal of a COFD on a claim (presumably pursuant to the contract Dispute clause).

We (we're a contractor) have a fact situation highly analogous to that described in Tecom, Inc. Our CO, having failed to provide the FAR 22.1010 Notification to Interested parties, has unilaterally exercised the agency's 52.217-8 six-month extension, but has declared our successor-CBA untimely and has declined to incorporate it into the contract. We have not filed a claim/requested a COFD.

Can anyone clarify what our next procedural step should be in order to request relief? The CFR seems (to me) to mandate just a "written request" to the DOL Administrator at the catch-all address above. But we're far more familiar with the claims process under the FAR Disputes clause, and Tecom seems to have been able to proceed that way despite DOL jurisdiction over SCA matters. Any insight or perspective is appreciated.

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Giving a short answer, the CDA gives a contractor the right to file a claim relating to a contract. A government contracting officer is given the power to resolve contractor claims except claims or disputes relating to "penalties or forfeitures prescribed by statute or regulation that another Federal agency is specifically authorized to administer, settle, or determine." A price adjustment under the terms of a contract is not a claim or dispute regarding penalties or forfeitures. Therefore, the CDA applies to these disputes for a price adjustment.

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Do I understand correctly that that this is essentially a dispute for price adjustment at this point, rather than an issue of timeliness or applicability of a CBA? The CO's position is that the CBA is inapplicable due to untimeliness. The proposal for price adjustment occurs within 30 days of the contractor "receiving" the CBA/Wage Determination. If the CO won't complete that process and incorporate it into the contract, there's no trigger for the price adjustment until applicability is resolved. Or am I just over-thinking this?

And 52.222-41 ( t ) doesn't supersede this principle that the CDA applies to disputes for price adjustment except claims or disputes relating to "penalties..." etc.?

I'm sorry to be obtuse, and I don't mean to beat a dead horse. You're obviously correct or Tecom wouldn't be an ASBCA case. I would just like to have a little better fundamental grasp of this if possible.

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Price adjustments due to updated CBAs for fixed price contracts are addressed in 52.222-43. If properly updated, the CBA applies by operation of law. Thus, the contractor does not have to wait for DoL to issue a new WD for the CBA to apply. Because a dispute concerning a contractor's right to a price adjustment relates to the parties' rights and obligations under the terms of a contract, i.e., 52.222-43, and not to a dispute regarding fines or penalties that DoL is given authority to impose, the proper means of resolving the dispute is under the CDA and the Disputes clause of the FAR 52.233-1.

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