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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
JAN 2 T 1992
MEMORANDUM
SUBJECT: Super fund Guidance, on the Appl.i.cabfelCty and^f '"• f
Incorporation of the Davis, Bacon";/and^Sei3yic|r«JJ>
Contract Acts into Superfund
*4~J*>1
,~*0. ^%-ht/
FROM:
TO:
David J. O'Connor, Director
Procurement and Contracts Managemen
>J<^U>
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ADDRESSEES
PCMD HQ:
O6C:
ERD HQ:
CORAS:
GAD:
Region 1:
Region 2:
Region 3:
Region 4:
Region 5:
Region 6:
Region 7:
Region 8:
Region 9:
Region 10:
ERU:
ERT:
Belle Davis
Pat Patterson
Bill wilfong
Ika Joiner
Tom Doherty
Steve Luftig
Joan Barnes, Director
Bruce Feldman
Fred Meadows
Don Berger
Merrill S. Hohman
Robert Goetzl
Ted Riverso
Richard Salkie
Bruce Sprageu
George Pavlou
Helen Beggun
Dennis Carney
Kenneth Kryszczun
Frank Snock
Catherine Mastroperi
Doug Lair
Robert Jourdan
William McBride
Jane singley
Pat Bamford
Ross Powers
John Kelley
Carl Edlund
Charles Gazda
Stanley Spivey
JoAnn Woods
John Helvig
Bob Morby
Mary Melton
John Geidt
Diane Shannon
Michael Schulz
Martha Niademus
Terry Brubaker
David Jones
Tom Warner
Donald White
James Everts
Phillip Millam
Don Larsen
Rose Powers
John Gilbert
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*
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*
SUPERFUND GUIDANCE
DAVIS BACON ACT/SERVICE CONTRACT ACT
AND
RELATED BONDING
January 1992
f
HEADQUARTERS LIBRARY
Ef'VIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
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January 1992
Table of Contents
Explanation ii
1.0 Purpose 1
2.0 Applicability 1
3.0 Definitions 1
3.1 Construction I
3.2 Service 2
4.0 Background 3
4.1 Davis-Bacon Act (DBA) 3
4.2 Service Contract Act (SCA) 4
5.0 Superfund Program. 5
6.0 Procurement History of Removal and
Remedial Contracts 5
7.0 Determinations of DBA/SCA Applicability 7
7.l Determinations Applicable to DBA 7
7.2 Determinations Applicable to SCA 3
8.0 DBA Requirements 9
8.1 Acquisition Planning for DBA 9
8.2 Procedures for Requesting DBA
Wage Determinations 9
8.3 Procedures for Incorporating DBA
into Remedial & Removal Contracts 11
8.4 DBA Compliance 20
8.5 Interagency Coordination for DBA 27
9.0 SCA Requirements ;.- . 27
9.1 SCA in Removal Program Contracts. 30
9.2 SCA in Remedial Program Contracts 30
9.3 SCA in Remedial.Program Subcontracts 31
9.4 SCA Removal & Remedial Action Compliance.31
10.0 Performance and Payment Bonds 32
10.1 Construction Contracts 33
10.2 Service 35
10.3 Bonding Specific to Remedial Actions 36
10.4 Bonding specific to Removal Actions 37
11.0 DBA/SCA & Bonding Requirements Under IGAs 40
12.0 DBA/SCA & Bonding Requirements Under CAs.. 40
12.1 Background 40
12.2 DBA/SCA and Bonding Under CAs .40
12.3 DBA Applicability 41
12.4 SCA Applicability. 42
12.5 Implementation of DBA 42
12.6 Bonding 42
12.7 Applicability of Attachments to CAs 43
List of Attachments 44
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EXPLANATION
This document contains the Agency guidance on the
applicability, incorporation and use of the Davis Bacon Act (DBA)
Provisions and Service Contract Act (SCA) in all Superfund
contracts, cooperative agreements (CA), and interagency
agreements (IAG).
Current Superfund contracts and solicitations should be
modified to include the applicable provisions of this document.
Likewise, these provisions should be included in current
cooperative agreements and interagency agreements. Additionally,
the provisions of this guidance applies to future Superfund
contracts, grants, cooperative agreements and interagency
agreements. As implementation plans are developed under the
Agency's Long-term Contracting Strategy, revisions to this
document specifically related to new contracts, may be required
and will be the responsibility of PCMD.
This guidance document addresses the issues associated with
the Davis Bacon Act (DBA) and Service Contract Act (SCA)
processes, the mechanics of implementing the DBA and SCA labor
standards, and provides procedures for implementation. Unless
otherwise specified, the procedures apply equally to EPA
Superfund Removal and Remedial Actions under EPA contracts.
Areas specifically related to cooperative agreements and
interagency agreements are addressed separately under Section 12
herein. Special attention to that section is recommended since
not all provisions of this document will apply if EPA is not the
lead in the Superfund action.
ii
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1.0 Purpose
The purpose of this document is to provide guidance to
Agency personnel in the application of the Davis-Bacon and the
Service Contract Acts and related bonding requirements to EPA
Superfund contracts, cooperative agreements, and interagency
agreements.
2.0 Applicability
This guidance is applicable to current and future EPA
superfund removal and remedial contracts, cooperative
agreements, and interagency agreements and replaces the interim
guidance issued jointly on July 18, 1990, by PCMD and OERR as
ERB Directive No. AP 90-17. Section 12 herein addresses in
detail the applicability of the FAR and this guidance to
cooperative agreements and interagency agreements. It should be
noted that applicability may vary, depending upon which agency
(other Federal agencies, state and local governments or Indian
tribes) takes the lead in the cleanup activity. Modifications to
this document required as a result of the implementation of the
Agency's Long-Term Contracting Strategy or as required by changes
in statutes and/or Federal and Agency regulations will be the
responsibility of PCMD.
3.0 Definitions
For the purposes of this document the following terms are
defined.
3.1 Construction
"Construction" means the actual construction,
or repair (including dredging, excavating, and Painting) of
buildings, structures or other real property. The terms
"building, structures, or other real property" include but
are not limited to improvements, of all types such as
bridges, dams, plants, highways, parkways, streets, subways,
tunnels, sewers, mains, power lines, cemeteries, pumping
stations, railways, airport facilities, terminals, docks,
piers, wharves, ways, lighthouses, buoys, jetties,
breakwaters, levees, canals, and channels. Construction
does not include the manufacture, production, furnishing,
construction alteration, repair, processing, or assembling
of vessels, aircraft, or other kinds of personal property.
"Construction" also means the dismantling or demolition
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of buildings, ground improvements and other real property
structures and for the removal of such structures or
portions of them if this work will result in the
construction, alteration, or repair of a public building or
public work at that location. If such further construction
(as defined above) work is intended, even though by separate
contract, which will be funded in whole or in part with
Federal funds, the the Davis-Bacon Act applies to the
contract or subcontract for dismantling, demolition or
removal.
Generally, work of a dismantling or demolition nature
at Superfund sites will be associated with work classified
as "construction11 and therefore, subject to the Davis-Bacon
and Miller Acts.
3.2 Service
A service contract is the acquisition of the time
and effort of a contractor whose primary purpose is to
perform an identifiable task rather than to furnish an end
item of supply (labor associated with the acquisition of
supplies is covered under the Walsh-Healey Public Contracts
Act). A service contract may be either a "personal services
contract" or a "nonpersonal services contract." Personal
Services contracts are characterized by the
employer-employee relationship it creates between the
Government and the contractor's personnel. The Government
is required by civil service laws to hire under competitive
appointment unless Congress specifically authorizes the
acquisition of personal services by contract. Thus,
"personal services" contracts are in violation of the laws
unless specifically authorized by Congress. Services
referred to in this document refer entirely to contracts for
services of a nonpersonal nature.
Some examples of the type of work related to Superfund
sites which are properly classified as services include:
a) Maintenance, overhaul, repair, servicing,
rehabilitation, salvage, modernization or
modification of supplies, systems, or equipment.
b) Routine recurring maintenance of real property.
c) Advisory and assistance services (however, special
provisions not covered in this document apply).
d) Refuse removal.
e) Operation of Government-owned equipment facilities
and, system.
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f) Communications services.
h) Transportation and related services.
i) Disposal.
Additionally, dismantling, demolition or removal of
improvements may be classified as services if the contract
is solely for dismantling, demolition or removal of
improvements, unless further work which will result in the
construction, alteration or repair of a public building or
public work at that location is contemplated. Generally,
such work at Superfund sites will be will be associated with
work classified as "construction" and therefore, subject to
the Davis-Bacon and Miller Acts.
4.0 Background
Before proceeding further, it may be helpful to understand
the history behind the establishment and enactment of both the
Davis-Bacon Act (DBA) and the Service Contract Act (SCA).
Clearly, hazardous waste cleanup/mitigation was not
considered when laws, such as the DBA, SCA and the Miller Act,
governing construction and services were enacted. Likewise, when
the Armed Services Procurement Regulations, the Federal
Procurement Regulations, the Defense Acquisition Regulations, the
Federal Acquisition Regulations (FAR), and the Defense Federal
Acquisition Regulations (DFAR) evolved, types of contracts and
related labor provisions did not consider the unique requirements
of hazardous waste cleanup/mitigation. Consequently,
environmental work was either considered services or construction
and Superfund contracts did not initially include the commingling
of labor provisions.
4.1 Davis-Bacon Act (DBA)
The DBA, as amended, is a prevailing wage law for the
benefit of construction workers. It was enacted in 1931 for
the purpose of protecting communities and workers from
economic disruption caused by outside contractors
underbidding local wage levels to obtain federal
construction contracts.
The Act requires the Secretary of Labor to predetermine
the prevailing wage rates to be paid before award of
contracts in excess of $2,000 for construction of all types
of public works and requires that these rates be included in
the advertised contract requirements. Additionally, the Act
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includes certain remedies for the Government, including
termination and debaraent, for contractor violations.
The Act was subsequently amended to include the
definition of "prevailing wages" the basic hourly rate of
pay and any contributions for bona fide benefits. In
addition, the requirements of the Act have been extended to
some 60 "related" statutes—of which CERCLA is one—to
ensure labor standards coverage on construction projects
assisted with federal funds through instruments such as
grants and loans.
Any construction contract exceeding $2000 for the
actual construction, alteration and/or repair, including
painting and decorating, of a public building or public
work, financed in whole or in part from Federal funds,
requires the incorporation of DBA wage determinations.
4.2 Service Contract Act (SCA)
Congress adopted the McNamara-O'Hara Service Contract
Act of 1965 for the purpose of preventing the exploitation
of the "poorest" and "most marginal" workers in America,
required workers employed by Government contractors be paid
a minimum wage, and provided certain minimum benefits
determined by the Secretary of Labor. Since its inception,
the Act's scope has been extended to include protection of
not just "marginal" workers but some university researchers
and specialists in high technology industries as well.
5.0 Superfund Program
CERCLA, as amended by SARA, commonly known as "Superfund",
sets forth the Agency's mission and responsibility for managing
cleanup and enforcement activities of hazardous waste sites that
threaten human health or the environment. The "Superfund" Act
covers emergency removal and remedial action activities and
assistance to state and local governments through cooperative
agreement*. EPA also accomplishes some Superfund cleanup
activities through Interagency agreements. Removal Actions are
currently accomplished under the Removal Program by the issuance
of delivery orders (DO) under Emergency Response Cleanup Services
Contracts (ERCS) and site-specific contracts. ERCS contracts are
defined as being more critical in nature, the cleanup effort is
limited to $2.0M, and must be completed within one year (unless
certain waivers are obtained). Remedial actions are currently
accomplished under the Remedial Program's Alternative Remedial
Contract Strategy (ARCS) contracts. The ARCS contracts are not
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as time critical and are actions consistent with a permanent
remedy taken instead of, or in addition to, a Removal Action.
Remedial Actions generally are also much longer in duration than
the Removal Actions.
6.0 Procurement History of Removal and Remedial Contracts
Since their inception, the removal action contracts, more
recently, ERGS contracts, have been considered strictly service
type contracts and contain provisions for utilization of SCA wage
determination rates. Unlike ERCS contracts, ARCS contracts are
Architect and Engineering (A&E) contracts, incorporating A&E
provisions. Hazardous waste cleanup is accomplished by
subcontracts awarded by the prime A&E contractor. ARCS contracts
include activities such as: remedial investigations (RI) of the
nature and extent of the contamination, feasibility studies (FS)
of alternative remedies, remedial design (RD) of the selected
remedial alternatives, award of remedial action (RA) subcontracts
for purposes of executing the selected remedial action, and other
related activities such as community relations.
Since inception of the ARCS contracts, the DBA labor
provisions have not been applied to the prime A&E contract and
have been incorporated only as flow-down provisions. It was
envisioned that the special subcontracting pool would primarily
be utilized for construction activities in the remediation of a
site and handled through a subcontract issued by the prime
contractor. Most ARCS contracts contain a special clause
requiring that all subcontracts awarded under the special
subcontracting pool contain all clauses that would be required if
the Government had awarded the subcontracts as prime contracts.
Although this contract language is somewhat unclear as to which
clauses are intented to apply and may be subject to
interpretation, under this provision, the Davis-Bacon Act and
Service Contract Act are intended to flow down to the subcontract
as applicable depending upon the nature of the work being
performed under the subcontract, since ARCS contracts are A-E
service contracts, the DBA does not apply to the prime contractor
unless the prime performs the construction work itself. FAR
22.403-1 states that any contract in excess of $2,000 to which the
United States is a party for construction, alteration or repair
of public works or public buildings within the U. S. shall
contain a clause that no laborer or mechanic employed directly
upon the site of the work shall be paid less than the prevailing
wage rates as determined by the Secretary of Labor. This
guidance is intended clarifies the applicability of the DBA to
construction work under remedial actions under the ARCS
contracts.
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The A&E contracts under the Remedial Program have not
typically utilized SCA labor standards. The Agency determined,
in accordance with 29 CFR, Section 4.111, that "if the principal.
purpose is to provide something other than services of the
character contemplated by the Service Contract Act and any such
services which may be performed are only incidental to
performance of a contract for another purpose, the Service
Contract Act does not apply." The SCA labor provisions were not
initially incorporated into the prime contract because the
services envisioned to be acquired through the special
subcontracting pool were considered incidental to the
professional services being acquired from the ARCS contractors,
and consequently not covered by SCA.
29 CFR, Section 4.111 further states relative to the
"principal purpose" as criterion for SCA determinations: "Whether
the principal purpose of a particular contract is the furnishing
of services through the use of service employees is largely a
question to be determined on the basis of all the facts in each
particular case. Even where tangible items of substantial value
are important elements of the subject matter of the contract, the
facts may show that they are of secondary import to the
furnishing of services in the particular case.11 Consequently,
well drilling and lab services, if not the principal purpose of
the work assignment under an RI/FS, or an RD could be considered
incidental and the SCA labor provisions would not apply.
For example, if it is envisioned that the prime contractor,
in the performance of an RI/FS or an RO work assignment, needed
to acquire well drilling services in order to collect data, the
subcontract would be considered incidental to the professional
activity which is the principal purpose of the work assignment,
and therefore, the SCA labor provisions would be determined not
applicable.
However, as the Remedial Program has evolved and as work has
progressed under the ARCS contracts, we have seen that it is
possible to require services through the special subcontracting
pool which are not considered incidental to the professional
services being acquired from the ARCS contractor under RA work
assignments. In that case, SCA labor provisions would apply.
For example, if a subcontract for transportation and
disposal (T&D) services is found to be required at the site and
is necessary to continue remediation at the site, these Tip
services would be acquired through the special subcontracting
pool, and probably the SCA labor provisions would apply..
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The nature of the work being accomplished in both the
Removal and Remedial Programs has evolved over the life of the
ERGS and ARCS contracts and the Agency must now reconsider the
applicable and appropriate labor standards. As such, this
document will provide the necessary guidance with which to make
an appropriate determinations relative to the DBA and SCA under
Superfund contracts, and cooperative agreements.
7.0 Determinations of DBA and/or SCA Applicability
For assistance in determining whether to apply DBA and/or
SCA labor provisions into Superfund contracts, a decision-making
flowchart has been provided as Attachment A-l to this guidance.
Also included in Attachment A-l are definitions and examples to
assist Agency personnel in determining which wage rate
determinations are applicable to a given activity.
7.1 Determinations Applicable to the Davis-Bacon Act
The DBA applies to contracts for construction that
exceed $2000 and are for the actual construction, alteration
and/or repair, including painting and decorating, of a
public building or public work and to which the United
States or the District of Columbia is a party" (Attachment
B-l). The Federal Acquisition Regulations (FAR) implement
the DBA statutes in Part 22.4, Labor Standards for Contracts
Involving Construction.
FAR Part 22.402, Applicability, paragraph (b)
Nonconstruction contracts involving some construction work
(Attachment B-2), provides that the provisions of the DBA
apply to construction work performed as part of a
nonconstruction contract if:
l)The construction work is to be performed on a public
building or public work;
2) The contract contains specific requirements for a
substantial amount of construction work. (The word
"substantial" relates to the type and quantity of
construction work to be performed and not merely to the
total value of construction work as compared to the
total value of the contract); and
3) The construction work is physically or functionally
separate from, and is capable of being performed on a
segregable basis from, the other work required by the
contract. [48 CFR 22.402(b)]
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In these instances, instead of awarding separate
contracts or delivery orders (in the case of the ERGS
contracts) for construction work subject to the DBA and for
services of a different type to be performed by service
employees subject to the SCA, the contracting officer (CO)
may include separate wage rate determinations for both types
of work under a single contract or delivery order. Although
the ERCS contracts are service contracts, the Agency has
determined that individual delivery orders may contain
elements of construction activity that can be segregable and
substantial enough to justify the application of DBA wage
determinations. DBA wage determinations are applicable to
those labor categories engaged in any portion of the
construction activity and SCA wage determinations applicable
to the service-related work.
The ARCS contracts, through the prime A&E contractor,
have historically applied DBA wage determinations to their
remedial action subcontracts. The application of DBA under
the Remedial Program ARCS contracts and subcontracts) does
not change substantially under this guidance; however this
guidance sets forth procedures for incorporating, as
applicable, SCA into ARCS subcontracts and also provides
guidance on DBA compliance.
7.2 Determinations Applicable to the Service contract Act
The Service Contract Act applies to Federal Government
contracts or any subcontract performed in the United States
in excess of $2,500 which has as its principal purpose the
furnishing of services through the use of service employees.
A service employee is any person engaged in the performance
of a covered service (other than a any person engaged in a
bona fida executive, administrative, or professional
capacity as those terms are defined in 29 CRT 541).
Additional information on this exclusion (including
definitions) and implementation of the statutes can be
found in 29 CFR Part 4, Attachment B-3.
The DOL has developed the "SCA Directory of
Occupations" which contains standard job titles and
descriptions for many commonly utilized service employee
occupations. Because this Directory contains standardized
language, it provides a means for more effective
communication between contractors and contracting agencies.
Due to the length of this directory, only a portion of this
document has been reproduced to provide you with the type of
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information contained in the directory along with ordering
information (Attachment B-4). A complete version is 'held at
EPA Headquarters. Refer to Attachment All for the person
to contact.
8.0 Davis-Bacon Act (DBA) Requirements
8.1 Acquisition Planning for DBA Wage Determinations
The Government, and any prime contractors or team
subcontractors, in the process of developing solicitations,
shall identify, to the extent possible, the appropriate DBA
wage determination applicable thereto prior to issuance of a
solicitation and/or bid opening. This advanced planning is
critical to allow time not only for a technical review of
the DBA labor classifications by the CO and the OSC/RPM
and/or Project Officer (PO) but for requests, as necessary,
for special (project) or additional DBA wage determinations
in the absence of a published wage determination applicable
to the work being performed.
8.2 Procedures For Requesting DBA Prevailing Wage
Determinations
A DBA prevailing wage determination is the listing of
wage rates and fringe benefit rates for each classification
of laborers and mechanics that DOL has determined to be
prevailing in a given area for a particular type of
construction effort. The DBA requires that the minimum wage
determined by DOL be paid to various classes of laborers and
mechanics employed under contracts applicable to the DBA.
There are two types of DBA wage determinations,
general wage determinations (also know as area wage
determinations) and project determinations. Refer to
Attachment B-6 for further explanation of DBA general and
project wage determinations.
General wage determinations are published in the DOL
publication entitled "General Wage Determination Issued
Under the Davis-Bacon and Related Acts, with a notice in the
Federal Register. These published general wage
determinations reflect those rates determined by DOL's wage
and Hour Division to be prevailing in a specific geographic
area for any contemplated type of construction. General
wage determinations are usually issued whenever the wage
patterns for a given location, for a particular type of
construction, are well settled and it appears there will be
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a. recurring need for predetermined rates. If a contracting
agency has a proposed construction project to which a
general wage determination exists and is applicable, the
published determination may be used without consulting the
DOL.
The other type of wage determination is referred to as
a project wage determination and is usually requested for
"one time11, short duration projects where a general wage
determination does not exist. Project wage determinations
are issued at the specific request of a contracting agency
and are applicable to the "named" project only. The "named"
project being the specific construction project under which
the application for a project wage determination is made. A
project wage determination is valid for 180 calendar days
from the date of issuance. If the contract is not awarded
during the 180 calendar days, the wage determination may not
be used unless authorization is obtained from the DOL.
Otherwise, a new project wage determination must be
requested. Project wage determinations are requested by the
CO for the Federal agency administering the contract on a
DOL SF 308 entitled "Request for Determination and Response
to Request." (A sample SF 308 is contained in Attachment
B-6.)
Additional DBA wage classifications must be requested
if any laborer or mechanic is to be employed in a
classification that is not listed in the DBA wage
determination applicable to the contract. The CO, pursuant
to FAR 52.222*6, Davis-Bacon Act, shall require that the
contractor submit to the CO, Standard Form 1444, Request for
Authorization of Additional Classification and Rate (FAR
22.406-3). Accompanying this form should be the proposed
additional labor classification and the contractor's
proposed minimum wage rate including applicable fringe
benefits.
The CO shall approve a request for an additional
classification and corresponding wage rate and fringe
benefits only when all the criteria outlined in FAR 52.222-6
(b)(1) is met. All requests must be submitted to DOL which
has final approval authority. If there is a dispute on
classifications between the contractor and the contracting
officer, the issue must be referred to DOL for final
determination.
Refer to Attachment B-6 for more detailed information
on general and project wage determinations.
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8.3 Procedures for Incorporating the DBA into Remedial and
Removal Program Contacts
As a reference guide for interpreting a DBA general
wage determination schedule, refer to Attachment B-5.
8.3.1 Determining the Proper Schedule(s) of DBA Rates
In both the Remedial and Removal Program
contracts, a determination must be made as to which of
the DBA schedules, or combination of schedules, is the
most appropriate for the work being performed. In the
Remedial Program, the determination is made at the
subcontract level and in the Removal Program the
determination is made at the prime contract level. All
schedules are incorporated into the prime ERCS
contracts by attachment. For site-specific removal
program contracts, a determination of which schedules
apply is made on a case-by-case basis and the
applicable wage determination incorporated into the
contract by attachment..
In using the DBA wage rate determinations, a
determination must be made as to the proper schedule of
wage rates appropriate for the work being performed
(FAR 22.404-2). The DBA wage determinations contain
four (4) wage rate schedules as .follows:
(1) Building
(2) Residential
(3) Highway
(4) Heavy [Includes construction projects not
properly classified in any of the above three
schedules and is of a catch-all nature (such
as water and sewer lines, dams, flood
control, dredging, etc.)]
When the nature of a project is not clear, it is
necessary to look at additional factors, with primary
consideration given to locally established area
practices. If there is any doubt as to the proper
application of wage rate schedules to the types of
construction involved, the CO may contact the DOL point
of contact from the Wage and Hour Division provided in
Attachment A-5 to this guidance.
A special clause pertaining to the selection of
the appropriate DBA wage rate schedule has been
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developed for all ERCS prime contracts entitled,
"Schedule for Davis-Bacon Act Wage Determinations" (See
Attachment A-3).
Since circumstances may arise that do not allow
for a clear or literal interpretation of a particular
wage rate schedule, DOL has published Memoranda 130 and
131 to be used as additional guidance in selecting the
proper wage rate schedule (Attachment B-7).
8.3.2 Procedures for Incorporating DBA Labor
Provision Clauses Into the Prime
Contracts
DBA and other associated labor FAR clauses as
delineated in Attachment A-2 for the Remedial Program
and Attachment A-3 for the Removal Program should be
incorporated into the prime contract.
Because the nature and type of contracts issued
under the Remedial (A&E professional services) and
Removal (service contracts with elements of
construction) Programs are different, you will see in
Attachments A-2 and A-3 that the incorporation of the
DBA clauses in full text or by reference differs
depending on the prime contract. The requirement for
certain of the DBA clauses to be incorporated in full
text can be found in Attachment B-l, CFR Title 29, Part
5.5, paragraph (a), "Contract provisions and related
matters."
Because the ARCS prime contractor does not
perform any of the cleanup work itself, the
required DBA clauses and associated labor
provision FAR are incorporated by reference with
specific flow-down provisions to construction
subcontracts. The ERCS prime contractor does
perform some or all of the cleanup work itself (or
may subcontract it), the required DBA clauses and
other associated labor provision FAR clauses are
either incorporated in full text or by reference
as specified in the FAR. Here too, Attachment A-3
contains specific (in full text or by reference)
flow-down provisions to subcontracts that are
determined to have substantial and segregable
elements of construction activity.
8.3.3 Procedures for Incorporating DBA Wage
Determinations into Remedial Program Contracts
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Since the ARCS contracts are A&E contracts', the
actual DBA wage determinations are not incorporated
into the prime contract but rather into any
construction subcontracts issued by the prime in
performance of a particular work assignment (WA). Refer
to Section 3.0 herein for a definition of
"construction" and "services". If a WA is issued which
requires the prime contractor to issue a subcontract
primarily for construction, then the applicable DBA
wage determinations must be incorporated into the
construction subcontract in full text regardless of the
dollar value of the subcontract. While DBA is
applicable at the prime contract level only to
contracts exceeding $2,000, the DBA applies to all
subcontracts where the principle purpose of the
contract is for construction.
A special clause has been developed and should be
incorporated into all ARCS prime contracts (Attachment
A-2) instructing the prime contractor as to its
responsibilities under the DBA when issuing a
construction subcontract. When developing
solicitations for construction subcontracts, the prime
contractor should identify the applicable DBA Wage
Determination from the "General Wage Determinations
issued under Davis-Bacon and Related Acts." The prime
contractor should notify the EPA CO of the wage
determinations it intends to use in the subcontract
prior to issuance of the solicitation and/or prior to
bid/proposal receipt. If the prime contractor does not
have access to the "General Wage Determinations",the
prime contractor should request that the EPA CO provide
the applicable Wage Determination. If the DBA wage
determinations are not available to the subcontractor,
then the subcontractor must initiate a request to the
prime contractor and the prime would forward the
request to the CO. Refer to the clause entitled
"Davis-Bacon Act Wage Determinations for ARCS
subcontracts", Attachment A-2.
In instances where a published DBA wage
determination does not contain the labor classification
that is applicable to the work being performed and/or
for the location at which the work is being performed,
a wage determination will have to be requested from the
Department of Labor for that specific project. The
prime contractor should provide the EPA CO with
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January 1992
sufficient notice for him/her to request a project wage
determination from the Department of Labor. The prime
contractor should forward to the CO SF303, "Request for
Determination and Response to Request", with the
classifications of labor for which wage determinations
are required. The EPA CO should verify that the
information contained on the SF308 is complete, that
there is not an existing published wage determination
covering the requested labor classification, and verify
the labor classifications requested with the Project
Officer and RPM prior to forwarding the SF308 to the
Department of Labor.
The DBA wage determinations incorporated into the
subcontract are fixed for the life of that subcontract
unless the period of performance of the subcontract is
extended or there are period of performance options in
the subcontract which are exercised. Should the period
of performance of the subcontract be extended or an
option exercised, DBA wage determinations will need to
be adjusted to reflect the current wage determination.
Exercise of an option or extension of the period of
performance of the subcontract is viewed as a new
contract for purposes of the application of DBA
provisions, and therefore, the DBA wage determination
must be updated accordingly to remain in compliance
with the DBA requirements.
8.3.4'Procedures for Incorporating DBA Wage
Determinations into Removal Program
Contracts
All ERCS zone and regional prime contracts,
including site specific contracts (if there is
substantial and segregable construction work), should
include as an attachment the DBA wage rate
determinations applicable by state (specific areas are
broken down by counties) for all localities to be
covered under the contract. The statute requires that
these schedules be copied and directly incorporated
into the contract document and not simply incorporated
by reference. As of the date this guidance was issued,
each of the ten EPA Regional offices had a copy of the
current DBA Wage Rate Determination Schedule. Each EPA
region is encouraged to maintain a subscription to the
DBA Wage Determination Schedules so that revisions are
received as published. Refer to Attachment A-4 for the
list of Headquarters and Regional points of contact for
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January 1992 .
DBA Wage Determinations. This list contains the names
and locations of those people currently holding-and
maintaining a copy of the DBA Wage Determinations.
The DBA wage determination incorporated into the
prime contract is fixed for the life of the contract
except when the period of performance of the contract
is extended (by exercise of an option or otherwise).
In this case, the DBA wage determination will need to
be adjusted to reflect the current wage determination
schedule. Should a delivery order period of
performance extend beyond the contract period, the
current, applicable DBA wage determination must be
updated accordingly to remain in compliance with the
DBA requirements. ERGS contracts generally contain a
provision allowing a period of 90 days after the
expiration of the contract to complete the work under
existing DOS. During this period, the wage
determination would need to be updated if a revision
has been issued since the inception of the contract or
the last exercised option period.
(a) Use of the "Multiplier"
In accordance with the requirements of the
DBA, a contractor may not pay any DBA classes of
laborers less than the prevailing wages contained
in a particular wage determination. Unlike SCA
wage determinations, prevailing DBA wage
determinations are published to a level as small
as a particular county, city, town, village or
civil subdivision of the State in which the work
is to be performed. As such, contract
negotiations for each and every DBA labor category
proposed would not be practicable. Additionally,
the geographic area each contract covers is
usually too extensive to make it practical to
negotiate a fully loaded (including all indirects,
fringe benefits, and profit) fixed or provisional
labor rate for every possible direct labor
category. A practical approach to this problem is
the negotiation of a fixed or provisional
multiplier. A multiplier is a percentage which is
applied to the DBA wage determination rate which
includes the contractor,s indirect costs, fringe
benefits, and profit. Thus, the rate becomes,
"fully loaded." Negotiation of a multiplier is
recommended regardless of whether or not it
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January 1992
applies to "fixed" or "provisional"" DBA labor
rates. The use of a multiplier will eliminate the
need to negotiate DBA wage rates by DO. Further,
the use of a multiplier provides consistency
across all DOs thereby facilitating the process of
DO definitization upon DO completion and contract
closeout. Whenever possible, it is recommended
that the multiplier be fixed or a ceiling
negotiated. By doing this, the site costs can
more accurately be estimated and the DO order
definitization process is simplified.
In order to negotiate -a multiplier, the
contractor will be required to supply a cost
element breakdown (fringe benefits, payroll taxes,
overhead, general and administrative expenses, and
profit) to support the proposed multiplier. The
importance of obtaining and maintaining this
breakdown of labor rates cannot be overemphasized
since it will be required in the event of an
applicable DBA increase. The multiplier will be
used to compute total direct labor costs by
applying the negotiated multiplier to the DBA base
wage rate. In cases where the contractor's fringe
contained in the multiplier is less than the DBA
required fringe, the contractor is required to pay
the employee the difference in cash equivalency.
Refer to Attachment A-3 for the Section B prime
contract clause entitled "DBA Fixed Labor Rates
and Use of a Negotiated "Multiplier11".
(c) The Removal Cost Management System (ROMS)
This section addresses the use of the RCMS in
cost tracking and estimating DBA labor rates. The
RCMS is only used with the Removal Program
(generally, only ERCS and cost-type site specific)
contracts.
Prior to issuance of a solicitation, all
possible DBA labor categories should be listed in
Section B of the solicitation. In order to utilize
the Removal Cost Management System (RCMS) for DBA
labor categories, specific contract line item
numbers (CLINs) have been assigned to those labor
categories within the RCMS. Accordingly, the RCMS
is capable of segregating costs associated with
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DBA labor categories as separate and distinct from
those costs associated with SCA labor categories.
The RCMS is currently under revision and
includes a five digit CLIN number for each
corresponding labor category. The revision to the
ROMS accommodates DBA as well as SCA wage
determinations and is configured in such a way as
to allow differentiation between DBA and SCA
CLINs. The revised CLIN listing is included
herein as Attachment A-6. Revised listings will
be distributed by PCMD as new items are added.
It is important to use only the contract line
items from the master CLIN list, not only for
national consistency, but to enable the data from
the National Data Base of ERCS costs which is
maintained by ERT, Edison to be utilized. This
cost data will be invaluable in the delivery order
definitization process and may be useful in
conducting price analyses under new requirements.
(c) Incorporating DBA Provisions into ERCS
Delivery Orders
For all procurements involving the issuance
of delivery orders (DO), input into the RCMS of
the actual DBA wage rate schedules, if DBA is
applicable to the DO, will not occur until a DO is
issued. A special clause has been developed
(Attachment A-3) entitled "Contractor Submission
of DBA Wage Rate and Fringe Benefit Disk11. The
contractor will be required to supply the On-Scene
Coordinator (OSC) with the applicable DBA rates on
a computer disk using spreadsheet (preferably
LOTUS) software to be input into the RCMS for
cost tracking and estimating purposes.
At the outset of each DO, there may be a
period of assessment (see following section)
during which time the OSC, CO, DPO or PO, and the
contractor evaluate the planned site work and
determine, to the extent possible, whether there
is a potential for DBA construction activity. The
DBA construction activity will be segregated from
the other DO tasks for purposes of DBA wage rate
determinations. The CO has the responsibility for
making the final determination of the activity
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January 1992
under a given DO that is applicable to the DBA.
Refer to Attachment A-l for assistance in
determining the applicability of the DBA to the
DO.
Written documentation relative to DBA/SCA
determinations is crucial for supporting the
decisions made. A copy of this documentation, if
prepared by the OSC, should be forwarded to the
CO. This documentation is important for audits,
compliance reviews, Congressional reviews, etc.,
and may be included in the DO itself, the DO
statement of work, or as a separate document in
the file. Determinations will not always be
clearly one way or the other. The CO has the
responsibility for making the final determination
based upon the facts, the interpretation of those
facts, and the circumstances under which the
determination was made.
If after the assessment period, it is
determined that there will in fact be construction
activity that is segregable and substantial enough
to require the application of the DBA provisions,
the OSC should notify the contractor of such
activity. The contractor will be required to
submit a DBA rate disk before work at the site is
performed which would include labor applicable to
DBA rates. For verification and compliance
purposes, the daily cost reports should be
reviewed by the OSC for proper rate charges.
It is the the ultimate responsibility of
the CO to assure that the proper wage
determination is being used.
(d) Determining Applicable Rates During an
Emergency
Due to the nature of the Removal Program, it
is necessary to make a distinction between
emergency removal actions which must be responded
to within a matter of hours and days and other
actions that are not as time critical.
If the OSC determines that the initial site
work requires an emergency response within hours
or days due to an unexpected event such as a train
derailment, plant explosions, etc., then that work
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January 1992
nay be accommodated under Service Contract Act
(SCA) provisions until the situation is initially
stabilized. The statement of work for the DO
should include a statement to that effect and -also
should state that the SCA provisions apply to that
specific portion of the work. In the event that
the above type of emergency situation occurs
during the course of a DO, the SCA provisions
would also apply until the situation is
stabilized.
In both situations, the OSC is required to
prepare documentation supporting the determination
of the type of emergency response and
applicability of SCA provisions. This
documentation may be contained in the initial
delivery order, as an attachment to the delivery
order, or as a separate document. It is recognized
that in an emergency situation, this documentation
may not be prepared until the situation is
stabilized.
Once the emergency situation has been
stabilized, a decision on the applicability of the
Service Contract Act or Davis-Bacon Act (DBA),
based on the nature of the work, must be made for
the remainder of the effort. That is, if there is
substantial and segregable construction activity,
that portion of the work is subject to the
Davis-Bacon Act. In that event, the statement of
work should be further modified by the CO to
incorporate DBA provisions once the initial
stabilization is complete. Once the DO is issued,
only the CO may modify the DO.
(e) Accommodating DBA/SCA During an Assessment
Period
For DOs where an emergency response (within
hours or days) is not required at the outset,
there may be a period of assessment and planning
relative to making DBA and/or SCA determinations.
The assessment period should, to the extent
possible, result in an understanding between the
Contractor and the Government as to the framework
under which the Contractor will operate during the
course of the DO. The work performed during the
assessment period may be handled under SCA
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January 1992
provisions unless it is clear from the outset that
DBA applies. The duration of the assessment
period will vary depending on the nature and
complexity of the work but should be as short as
possible under the circumstances. The CO and osc
will determine the amount of time reasonably
necessary to make the required assessment and DBA
and/or SCA determinations.
8.4 DBA Compliance
Whether the DBA labor provisions are incorporated
into the prime contract (ERCS) or into the subcontract
(ARCS), it is the Agency's responsibility to ensure
compliance with DOL's standards and regulations as set
forth in Attachment B-l, 29 CFR, Part 5, Labor
Standards Provisions Applicable to Contracts Covering
Federally financed and Assisted Construction. Early
and complete labor compliance inspections are essential
to the development of a sound compliance program on all
proj ects.
Compliance involves the review of weekly payroll
records from both the prime and the subcontractor,
conducting onsite inspections and employee interviews
as necessary and, where required, taking corrective
action which might include suspending payments,
terminating contracts and calculating liquidated
damages, and beginning debarment proceedings.
Each CO is responsible for determining the
frequency of the compliance checks. Considerations in
determining the frequency might include the period of
performance and the contractor's history* Attachment
A-7 includes a chart delineating the various roles and
responsibilities relative to compliance with DBA labor
provisions. The chart segregates the roles and
responsibilities by program (Remedial and Removal) so
it is clear which person(s) are responsible for various
segments of the labor standards compliance.
Detailed information on compliance is available
in Attachment B-8 which includes specific
responsibilities for DBA compliance under the Removal
and Remedial Programs.
8.4.1 Voluntary Compliance
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January 1992
Before any circumstance is treated as a
violation, every reasonable effort should be made
to obtain the contractors voluntary compliance.
In situations where the violation is not willful,
voluntary restitution by the contractor or
subcontractor may remedy the situation of
noncompliance. Such situations may be due to a
misinterpretation of the labor standards, a valid
dispute as to their meaning or application, or
simple human error in the calculation of wage
payments which cannot be considered willful
negligence.
8.4.2 Compliance Inspection
The CO is responsible for determining the
frequency with which inspections should be made to
ensure compliance with the DBA labor standards and
for conducting the compliance inspection itself.
Under certain circumstances it might be
appropriate to request the assistance of the
RPM/OSC in conducting the inspection. Such
instances might include assuring that posters are
in place at the site, contractor employee and/or
interviews. Attachment A-8 is recommended for
notifying the contractor that the RMP/OSC may be
delegated some of this responsibility.
The CO should assure that the contractor
understands the purpose of the compliance reviews,
what records will be required, and when specific
reviews will be conducted. A written notification
[in addition to the letter(s) in Attachment A-8]
should be sent to the contractor sufficiently in
advance to assure that the records and contractor
personnel are available.
There is a distinction that needs to be
highlighted between investigations (conducted by
DOL or the Agency), which are concerned with a
specific allegation(s) of wrongdoing, and
compliance inspection (the responsibility of the
CO), which are conducted routinely as a matter of
good contract management to assure that applicable
procedures are being followed relative to labor
matters without any allegations of improper
actions. Because of this difference,
investigations are necessarily much more thorough
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January 1992
in that they are designed either to dispel the
allegations made, or to assemble concrete evidence
upon which administrative action, or even criminal
action, could be taken.
Specifically, the compliance checks include:
1) Appropriateness of labor classifications,
rates of pay and fringe benefit rates;
2) Verification of the types and
classifications of vork performed;
3) Verification of the requirement to post
DBA posters at the site;
4) Ensuring that payroll records are being
submitted on time from both the prime and the
subcontractor;
5) Ensuring that the payroll records are
complete and correct and comparing these
records with the daily time sheets and logs;
and,
6) Conducting interviews with contractor
employees and then comparing the information
received with what what was actually recorded
on the employee's time card. The Interview
forms can be found in FAR Part 53, Labor
Standards Interview, SF 1445, and Labor
Standards Investigation Summary Sheet, SF
1446.
DOL does not conduct compliance reviews
on a routine basis. DOL has undertaken this
task only when requested to do so by the
Agency on a special-case basis.
8.4.3 Payroll Records Review
The contractor must submit to the co
weekly, for each week in which any contract
work is performed which is applicable to the
DBA, a copy of all certified payrolls. Each
payroll submitted must be accompanied by a
"Statement of Compliance" signed by the
contractor [29 CFR, Part 5, 5.5 (a)(ii)(B)].
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January 1992 •
There is no mandatory prescribed format for
payroll record submissions; however, the DOL
Form WH347 is available for this purpose. At
the very least, the following information
must be provided in these weekly payroll
submissions:
1) The employee,s full name, address,
and social security number;
2) The employee,s classification;
3) Hourly wage rate and overtime hourly
rate;
4) The daily and weekly hours worked in
each; classification, including
actual overtime hours worked;
5) The itemized deductions made and the
purpose of those deductions; and,
6) The net wages paid.
Certain employees, at various times, may
perform work during a single payroll period
in different work classifications which may
require different wage rates. In such
circumstances, the employee must receive
wages of not less than the rate specified in
the wage rate determination for the
classification which describes each type of
work performed. Contractors must keep
accurate records of such periods of work, and
ensure that the employee is paid at the
correct rate for periods of work performed in
each classification.
The objective of specifying the purpose
of a deduction and the amount withheld is to
assure compliance with the Copeland
"Anti-Kickback11 Act and DOL regulations, 29
CFR Part 3. Therefore, the combining of
payroll deductions on the payroll form
without proper identification is not
permitted unless supplemental data specifying
the purpose and amount of each deduction is
attached to the payroll when submitted.
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January 1992
It is the responsibility of the CO to
conduct periodic DBA compliance reviews of
both the prime and subcontractor payroll
records. This DBA requirement not only
places an additional burden on those involved
with the placement and management of
Superfund contracts, but also presents a
storage problem in terms of retaining payroll
records.
8.4.4 Reporting Requirements to DOL
In addition to the above, the Secretary
of Labor requires "Enforcement Reports" and
"Semi-annual Enforcement Reports". Refer to
Attachment A-11 for the name of the
Headquarters person responsible for complying
with these DOL reporting requirements. All
matters concerning investigations, corrective
action not taken on noncompliance issues
etc., should be reported to this individual.
(d) Corrective Action
The CO should notify the contractor
and/or subcontractor, in writing, of any
discrepancies found during compliance reviews
and make recommendations for corrective
action. The contractor is required to
promptly submit an amended or supplemental
payroll record showing the corrective action
taken. If necessary, payments may be
withheld until discrepancies have been
corrected. In that event, the CO should
notify, in writing, the person responsible
for approving invoices for payment to approve
the invoice with the amount specified by the
CO as being withheld. The contract file
should be documented accordingly. The
responsibility and ultimate authority for
withholding rests with the CO.
(f) Subcontract Consent
One of the most opportune times for
providing guidance to prime contractors
relative to DBA/SCA provisions is at the time
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January 1992 "
the contractor requests consent to
subcontract. Once the CO grants consent to
subcontract, the CO should forward a letter
to the contractor notifying the contractor of
its responsibilities for ensuring full and
impartial enforcement of labor standards in
the administration of the subcontract. Refer
to FAR 44.2 for subcontract consent
provisions.
Two sample notification letters, with
attachments, have been developed notifying
the prime contractor of its and its
subcontractor's DBA compliance
responsibilities. Attachment A-8 includes
separate sample letters for the Removal and
Remedial Program contracts.
(g) Role of OSC/RFM/PO in Compliance
The ultimate responsibility for
compliance rests with the CO even though the
prime contractor may review subcontractor
payroll records and has some oversight
responsibilities.
Under the ARCS contracts,a separate
meeting may be scheduled by the EPA CO prior
to the prime conducting its preconstruction
conference to review the prime's compliance
program. The EPA Project Officer (PO) and
the Remedial Project Manager (RPM) should
attend this meeting.
Under the Removal Actions, the EPA CO
should notify the prime contractor of its
responsibilities under the Davis-Bacon Labor
Act at the post award conference.
Under both Remedial Actions and Removal
Actions, at the time of subcontract consent
(if required), the EPA CO should notify the
prime contractor, in writing, of its and its
subcontractor's obligations under the
Davis-Bacon Act. (Refer to Attachment A-8).
The prime's compliance program must
include the following responsibilities:
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January 1992
1)Receipt and review of payrolls weekly
from the subcontractor to assure
compliance with Davis-Bacon labor
requirements; and,
2) Performance of on-site compliance
checks to ensure that the subcontractor
and any lower-tier subcontractor(s) are
complying with labor standard practices,
as follows:
- Ensuring that the subcontractor has
prominently posted at the job site
the DBA schedule of wage
determinations and any amendments to
it;
- Interviewing workers periodically for
proper classifications and appropriate
wages;
- Observing, recording and notifying the
CO of any apparent or perceived
disproportionate ratio of laborers,
helpers, and apprentices to
j ourneymen; and,
d) Notifying the CO of any apparent or
suspected violations of the labor
standards provisions.
The prime contractor is required to
forward to the EPA CO on a weekly basis,.
for both its employees and that of its
subcontractors, originals of payroll records,
employe interviews and, daily records
documenting labor mixes. The CO may need the
help of the PO, RPM and/or OSC in conducting
compliance reviews due to the technical
nature of the work being performed and the
requirement to distinguish between the
various tasks as to the applicable labor wage
determinations to assure that contractor
employees are being paid the proper wages.
Therefore, under certain circumstances, it
may be in the best interest of the Government
for the EPA CO to delegate to the OSC, PO or
RPM the responsibility for monitoring some of
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January 1992 •
on-site compliance activities delineated
below. This should be accomplished by mutual
agreement between the CO and the person to
whom the responsibility is delegated and each
case will need to be considered on its own
merits. Factors to be considered in
delegating this responsibility could include
staffing and workload, travel time and travel
budget, and the frequency with which that
person is on site. Examples of compliance
activities which might be delegated are:
1} Verifying that wage rates and posters are
prominently displayed at the site;
2) Witnessing interviews of workers by the
prime contractor;
3) Reviewing documentation of labor mix at
the site;
4) Notifying the EPA contracting
any concerns
officer of
8.5 Interagency Coordination for DBA Labor Standards
In cooperation with the DDL, a list of EPA
regional COs has been developed and forwarded to DOL to
assist in their investigations of Superfund
contractors. Likewise, a list of DOL regional wage
specialists designated for each of EPA,s ten Regions
(DOL Regions correspond to EPA Regions) has been
provided to assist Agency personnel in the
incorporation of applicable wage determinations. Both
lists are provided as Attachment A-5 to this guidance.
Additionally, DOL has provided a list of "Typical
Questions and Answers on the Use of Davis-Bacon Wage
Determinations" that are included as Attachment B-9 and
will provide additional guidance in making DBA versus
SCA determinations.
9.0 Service Contract Act (SCA) Requirements in the Remedial and
Removal Programs
This section address the incorporation of the SCA labor
provisions into the Remedial and the Removal Actions. The
majority of the SCA compliance and enforcement
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January 1992
responsibility rests with the DOL and not directly with the
contracting agency as with the DBA provisions.
The Service Contract Act (SCA), 29 CFR, Part 4,
Sections 2(a) (Attachment B-3), defines the payment of
minimum compensation based on wages and fringe benefits
prevailing in the locality, for application to a class or
classes of service employees in the performance of any
contract in excess of $2500 which is subject to the
provisions of the SCA. Section 4(c) of the Act provides
that a successor contractor or subcontractor shall pay not
less than the wages and fringe benefits provided for in a
collective bargaining agreement under the predecessor
contract.
The Act requires that the minimum wages and fringe
benefits (as specified in the applicable DOL SCA wage
determination) for service employees under service contracts
be includes solicitations and contracts by attachment. SCA
wage determinations establish minimum rates of pay for the
various classes, and minimum fringe benefits prevailing in
the locality where the work is to be performed.
Utilizing the flowchart in Attachment A-l will assist
the CO in determining whether SCA is applicable to a
particular work assignment under a removal or remedial
contract. To have benefit of another perspective, refer to
the memorandum in Attachment A-9, "Applicability of the
Service Contract Act."
Also, refer to Attachment B-1O for the SCA wage
determination request procedures. The Service Contract Act
Directory of Occupations (Attachment B-4) contains the
standard job titles and definitions (descriptions) for many
commonly utilized service employee occupations and should be
consulted to the maximum extent possible in listing service
employee classes on the SF98/98a.
The CO prepares and submits to DOL a SF98/98a
with all anticipated labor categories for the areas in which
the work is expected to be done. The SF98s must be submitted
not less than sixty (60) and not more than one hundred and
twenty (120) days prior to issuance of an RFP/IFB (FAR
22.1008-7). it is important to consider this time in
acquisition planning since, historically, DOL has not
responded favorably to requests to expedite SCA wage
determinations. The SCA wage determinations must be updated
when exercising an option or contract extension or for each
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January 1992 .
biennial anniversary date of a multi-year contract not
subject to annual fiscal appropriations of the Congress. By
incorporating the SCA wage determination into the prime
contract, there is no need for the prime contractor to
submit a SF/98/98a prior to the issuance of an Invitation
For Bid (IFB) or Request For Proposal (RFP) for a
subcontract thereby eliminating a timely step in the award
process.
If the CO is aware that contract performance involves a
class of service employee not included in the wage
determination/ the CO must require the contractor to
classify the unlisted labor class so that a reasonable
relationship can be made (i.e., appropriate level of skill
comparison) between the unlisted labor class and those labor
classes contained in the wage determination. This is
referred to as "conforming procedure" and must be initiated
prior to any work being performed by the unlisted class(s)
of labor. The contractor must submit SF 1444, Request for
Authorization of Additional Classification and Rate to the
CO for review who then forwards the SF 1444 to the DOL,s
Wage and Hour Division. Refer to Attachment B-2, FAR Part
22.1019, for a more detailed explanation of the SF 1444
procedures.
When granting subcontract consent, the CO by separate
transmittal, should notify the prime contractor as to their
subcontractors responsibilities relative to payment of the
rates specified in the applicable SCA wage determination.
Additionally, the CO must obtain a preaward clearance in
accordance with FAR 22.805, for subcontracts of $1M or more
(excluding construction) prior to granting consent to
subcontract. This preaward clearance is relative to
affirmative action requirements. Additional information
found in FAR 22.805(a)(6). Attachment A-12 is a list of the
regional representatives for the Office of Federal Contract
Compliance Programs.
The prime contractor must notify the CO when the
subcontract award was made and the CO shall then prepare and
forward to DOL,s Wage and Hour Division a SF99, "Notice of
Award" in accordance with FAR 22.1017. The CO should also
forward a letter to the contractor notifying the contractor
of its responsibilities for ensuring full and impartial
enforcement of labor standards in the administration of the
subcontract. A samples of the letter to the contractor and
the attached subcontractor letter is found at Attachment A-8
to this guidance.
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January 1992
9.1 Procedures for Incorporating SCA
Removal Program Contracts
Provisions into the
Since the Removal Program contracts are considered
service contracts, they have historically incorporated the
SCA labor provisions into the prime contracts with the
appropriate flow-down clauses to subcontractors.
Incorporation of the SCA labor provision clauses and
the SCA wage determinations is essentially the same process
as that described above. The Removal Program has developed a
master CLIN list for all SCA labor categories used in their
contracts. Refer to Attachment A-10 for the SCA master
CLIN list.
9.2 Procedures for Incorporating SCA Labor Provisions
into Remedial Program Contracts
The Remedial Program contracts, being professional
service A&E contracts, have not typically incorporated the
SCA labor provisions. Due to the evolution of the work
under the Remedial Program and the potential for awarding a
remedial action subcontract for which the primary work is
appropriately classified as services, SCA provisions
now be incorporated into all prime A&E contracts with the
appropriate flow-down provisions for subcontractors for
which the primary purpose is services.
Incorporating the SCA labor provisions involves the
incorporation of both the applicable FAR SCA clause as well
as the appropriate SCA wage determination specific to a
particular contract. The prime contract should contain the
SCA clause, FAR 52.222-41, and the Contract Work Hours and
Safety Standards Act-Overtime Hours Worked clause, FAR
52.222-4, by reference, with flow-down provisions to
subcontracts for services.
It is recommended that the SCA labor provisions, its
affiliated clauses, and the SCA wage determination, if
applicable, be incorporated into all prime remedial
contracts by means of a bilateral agreement. In the event
that a bilateral agreement cannot be reached, the CO should
unilaterally incorporate all the SCA labor provisions,
affiliated clauses and wage determinations citing statutory
requirements.
Attachment A-2, "Remedial Program Contract Clauses for
both SCA and DBA Labor Provisions" contains the appropriate
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January 1992
SCA clause with flow-down provisions as well as some special
provision "H" clauses specifically addressing subcontracts
issued applicable to the SCA subcontracts.
The Remedial Program contracting Officers may find it
helpful to consult the most current SCA wage determination
in the ERCS contracts since many of the categories used may
be the same.
9.3 Remedial Program Subcontracts Applicable to SCA
Requirements
This section applies to instances where the SCA wage
determination has not been incorporated into the prime
contract.
When the prime contractor determines that a subcontract
under a Remedial Action is for a service subject to the
requirements of the SCA, the prime contractor is required to
forward a SF98/98a, "Notice of Intention to Make a Service
Contract and Response to Notice", to the CO. The CO should
review the SF98/98a and ensure that the classifications
requested are consistent with the work to be performed and
then forward the SF98/98a to the DOL,s Wage and Hour
Division. The applicable wage determination issued by DOL
should be incorporated into the RFP/IFB for which it was
intended and should be incorporated into the subsequent
contract documents. The contracting officer may need to
discuss with the OSC/RPM and/or PO whether, from a technical
standpoint, the proposed labor is reasonable for the type of
services required.
Again, because of the time required to obtain an SCA
wage determinations, acquisition planning is important.
Upon receipt of the SCA wage determination, the CO must
forward a copy to the contractor.
If, however, the prime A&E contractor issues a service
contract with elements of construction, then the question
and final determination of the DBA and Miller Act
applicability would be the same as outlined in the Removal
Program above. The test of substantial and seareaable
construction activity must be made to determine whether the
DBA applies.
9.4 SCA Compliance Responsibility under the Remedial and
Removal Programs
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January 1992
As previously mentioned, since the enforcement
responsibility for SCA labor provisions rests primarily with
the DOL, the compliance responsibilities of the contracting
agency are much less than under the DBA regulations.' There
are no requirements for the contractor/subcontractor to
submit weekly payroll records as was the case under the DBA.
The CO is responsible for the following:
1) assuring that application has been made for the SCA wage
determination and that it is included in the contract
along with the applicable contract clauses
2) the DOL poster, Publication WH 1313, provided at
the time the SCA wage determination is issued, is
prominently posted at the contractor's worksite
3) ensuring that the wage determination is available for
their review at the job site.
4} ensuring that the wage determination is applicable
to the statement of work and that the contractor's
service employees are classified in accordance with
those classifications contained in the wage
determination
5) ensuring that the contractor is complying with
the overtime payments.
6) taking such action as may be necessary in accordance with
FAR 22.1407 in the event of noncompliance by the
contractor.
The CO is not precluded from requesting a review of the
contractors payroll records if it is necessary to ensure
compliance with the wage determination and overtime
payments.
10.0 Performance and Payment Bonds Under Removal and Remedial
Actions
This section addresses only performance and payment bonds as
they relate to EPA Removal and Remedial Actions under
CERCLA, as amended by SARA. Information on bid bonds is included
in FAR 28.101 and information on bonding under Superfund
Cooperative Agreements and Interagency Agreements is included
herein in Sections 11 and 12.
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January 1992
While bonding is required for prime construction contracts
(the Miller Act) and bonding is not required for service
contracts, performance and payment bonds may be permitted under
service contracts (in accordance with FAR 28.103-1 and -2) when
it is determined by the contracting officer to be in the best
interest of the Government.
Bonding requirements are discussed separately below for
service and construction contracts and specific bonding
requirements under Remedial Actions (ARCS contracts) and the
Removal Actions (ERCS and Site-specific contracts) are also
addressed separately; however, it is important at this point to
recognize that there are fundamental differences in the contracts
under the two programs which may require different handling of
bonds. ARCS contracts are A-E Service Contracts under which the
prime contractor does not perform any of the actual cleanup work
and must, in accordance with the terms and conditions of the
contract, subcontract for this effort. These subcontracts
generally are awarded as construction subcontracts. ERCS
contracts are service contracts under which the contractor
performs all or a substantial portion of the cleanup work itself
and may subcontract for the balance of the work. While a
substantial amount of the cleanup work generally is classified as
"service" work, there may be substantial and segregable amounts
of work classified as "construction" work. Site-specific Removal
Actions may be either accomplished under either service or
construction contracts and there may be substantial and
segregable elements of construction under the Site-specific
service contracts. Where there are substantial and segregable
portions of construction which exceed $25,000 under either the
ARCS, ERCS, or Site-specific contracts, the Miller Act applies
to that portion of the work.
EPA is often required to provide documentation and
justification for cleanup costs during Cost Recovery actions;
therefore, documentation on bonding decisions is extremely
important, particularly if direct costs are involved.
Additionally, it is important to recognize that there may be the
adverse effect of limiting competition if bonding requirements
are imposed.
10.1 Construction Contracts
The requirement for bonding under construction
contracts is covered by the Miller Act (40 U.S.C. 270a-270f)
which requires performance bonds for construction $25,000
except that the contracting officer may waive performance
bond requirements for work to be performed in a foreign
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January 1992
country. FAR 28.102-2 permits the CO to reduce the amount
of the performance bond to less than 100% of the contract
price. The actual amount of the performance bond is
determined by the CO by evaluating the risks associated with
the project and the resulting need to protect the
Government's interests. Required amounts for payment bonds
is also addressed in FAR 28.102-2.
With respect to civilian agencies the Miller Act
applies to all fixed-price and cost-reimbursement type
construction contracts exceeding $25,000. Therefore, no
distinction is made in this document between fixed-price and
cost-type contracts for the purpose of addressing
performance and payment bonds under Removal and Remedial
Actions. Under cost-reimbursement contracts, the Government
assumes a substantial portion of the risk by virtue of the
type of contract; therefore, it may be appropriate to reduce
the amount of bonding required. The United States must be
named as the obligee on the bond even if the CO determines
that the bond may be secured by the subcontractor rather
than the prime contractor.
The purposes of the Miller Act are to:
1) assure the Government that its projects
will be completed by the prime contractor (performance
bond); and,
2) assure payments to certain subcontractors
and suppliers of labor and material under federal
projects (payment bonds).
The ultimate decision on bonding is the responsibility
of the Contracting Officer and should be well documented in
the contract file.
10.1.1 Performance Bonds
FAR 28*102-2 states that the penal amount of
performance bonds shall be 100 percent of the original
contract price unless the contracting officer
determines that a lesser amount would be adequate for
protection of the Government. That determination
should be based upon, and consistent with, the type of
contract, the estimated cost of the construction
activity, and the risk involved. The CO has the
latitude to determine that the dollar amount of the
performance bond will be "zero" based on the
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January 1992•
circumstances associated with the Removal or Remedial
Action. The net effect of making such a determination
is that there is no performance bond.
10.1.2 Payment Bonds
Payment bonds are required for construction
exceeding $25,000. The required amount of payment bonds
is specified in FAR 28.102-2 which also states that
bonds are required to be furnished by the contractor
prior to beginning construction work.
10.2 Service Contracts
10.2.1 Performance Bonds
As stated above, the Miller Act does not apply to
contract the principal purpose of which is the provision of
service (it should be noted that the Miller Act would apply
if there is substantial and segregable construction
exceeding $25,000 under a service contract); however, other
types of performance and payment bonds may be required under
service contracts when it is determined by the CO to be in
the best interest of the Government. As in construction
contracts, the prime contractor should furnish the bond
unless it is determined by the prime contractor and
consented to by the CO to be in the best interest of the
Government to allow the subcontractor to obtain the bond.
In that case, the same advance agreement and documentation
is required as for construction contracts.
FAR 28.103 provides specific information on bonds under
service contracts; however, some instances in which a
performance bond under a service contract may be warranted
are as follows:
1) Government property or funds are to be provided the
contractor for use in performing the contract or as partial
compensation (as in retention of salvaged material).
2) A contractor sells assets to or merges with another
concern, and the Government, after recognizing the latter
concern as the successor in interest, desire assurance that
it is financially capable.
3) Substantial progress payments are made before
delivery of end items starts.
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January 1992
4) Contracts are for dismantling, demolition, or
removal of improvements when no subsequent construction work
is anticipated.
The amount of the performance bond under a service
contract is determined by the contracting officer and is
based upon the particular circumstances and the risk
involved.
10.2.2 Payment Bonds
Payment bonds are required under service contracts
only when performance bonds are required. Refer to FAR
28.103-3. for more information on payment bonds under
service contracts.
10.3 Bonding Requirements Specific to Remedial
Actions
Remedial actions may be accomplished under the
Alternative Remedial Contracting Strategy Contracts (ARCS)
contracts which are professional service A6E type contracts.
When it has been determined that construction activities
comprise a substantial and segregable portion of the work to
be performed and the estimated cost of the work exceeds
$25,000, the CO must make a determination of the appropriate
level of bonding required.
10.3.1 Performance Bonds
When contractors are required to furnish bonds for
construction activities, the United States must be
named as the obligee. As stated above, the CO may
determine, based upon the circumstances and the risk,
that the dollar amount of the performance bond is zero.
Because of the unusual nature of the ARCS
contracts, the Agency believes it may be appropriate to
allow the subcontractor to provide the bond, naming the
United States as the obligee, in lieu of the ARCS prime
contractor. In some instances the prime contractor may
obtain the bonds but, in addition, require its
subcontractor to post a performance bond. In this
case, any bonding requirements placed on the
subcontractor by the prime contractor normally will be
the decision of the prime contractor in accordance with
industry practice.
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January 1992
The request for subcontract consent should
contain information on bonding of the subcontractor
including how the cost of bonding the subcontractor is
to be treated (i.e., direct or indirect cost). If the
cost is to be treated as an indirect cost, the request
for subcontract consent need not provide any further
information on the bonding of the subcontractor. If
the cost is to be treated as a direct cost the request
for subcontract consent should include the reason why
the subcontractor is being required to post a
performance bond and the cost to the Government for the
bond.
After mutual agreement is reached between the
contractor and the CO to allow the subcontractor to
provide the performance bond, the United States must be
named as the obligee. Allowing the subcontractor to
provide the bond does not change the privity between
the prime contractor and the subcontractor and the
prime is not merely acting as a purchasing agent for
the Government. Additionally, the CO should assure
that the clauses in Attachment A-2 are included in the
prime contract. These clauses require that the
subcontract include all of the appropriate clauses
which would have been included had the Government
awarded the subcontract as a prime contract.
10.3.2 Payment Bonds
The Miller Act requirements relative to payment
bonds under the ARCS contracts are the same as for
performance bonds except that the required amount of
the payment bond is different (refer to 10.1.2).
10.3.3 Site Specific Remedial Contracts Awarded by EPA
When the Agency decides to award a site specific
remedial action contract, the CO should follow the
procedures established below for site specific removal
contracts.
10.3.4 Contract Clauses
Refer to Attachment A-2 for Remedial Action
(ARCS) contract clauses.
10.4 Bonding Requirements Specific to
Removal Actions
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January 1992
Removal Actions are accomplished either by delivery
order issued under an ERGS contract or as a separate,
site-specific contract.
10.4.1 Performance Bonds
Where there are substantial and segregable
portions of construction which exceeds $25,000 under
the ERCS contracts, the Miller Act applies to that
portion of the work. Since cleanup work is
accomplished under the ERCS contracts only under
delivery orders, the Miller Act applies to the prime
contractor at the delivery order level and only for
that portion of the work which is considered to be
substantial and segregable construction.
Site-specific removal contracts may be either
construction or service with substantial and segregable
elements of construction. Site-specific contracts with
no substantial and segregable elements of construction
are not subject to Miller Act bonding requirements but
other bonding may be permitted if determined in the
best interest of the Government (refer to 10.2 above
for bonding under service contracts)
The Miller Act vests in the CO the discretion to
decide the dollar amount of the performance bond that
is adequate for the protection of the Government. That
determination should be based upon, and consistent -
with, the type of contract,the estimated cost of the
construction activity, and the risk to the Government.
As stated above, the CO has the latitude to determine
that the dollar amount of the performance bond will be
"zero" and the net effect of making such a
determination is that there is no performance bond.
It is recognized that, in Removal Program cost
reimbursement-type contracts, the risk to the
Government may be minimal and the cost of obtaining
bonding may increase the cost of the removal.
Therefore, the CD's decision on the amount of bonding
required should be fully documented in the contract
file. This decision should address the associated
risk, the cost, and other factors relevant to the
decision. Although determinations on bonding are the
responsibility of the CO, some of the information upon
which to base this decision generally will need to be
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January 1992"
obtained from the OSC. Sound contract management
practices dictates that such decisions be discussed
with the OSC and/or PO/DPO.
The ERGS prime contractor generally performs a
substantial portion of the cleanup work itself and may
subcontract for that portion which it does not perform
itself. Subcontracts may be either construction or
service contracts and service contracts may contain
substantial and segregable elements of construction.
Any bonding of subcontractors normally will be the
decision of the prime contractor in accordance with
industry practice.
As stated above, in some instances the prime
contractor may require that its subcontractor post a
performance bond. Any bonding requirements placed on
the subcontractor by the prime contractor normally will
be the decision of the prime contractor in accordance
with industry practice. The request for subcontract
consent should include information on bonding of the
subcontractor including information on how the cost of
bonding the subcontractor is to be treated (i.e.,
direct or indirect cost). If the cost is to be treated
as an indirect cost, the request for subcontract
consent need not provide any further information on the
bonding of the subcontractor. If the cost is to be
treated as a direct cost, the request for subcontract
consent should include the reason why the subcontractor
is being required to post a performance bond and the
cost to the Government for the bond. Again, the
considerations on bonding should be well documented by
the CO in the contract file. Performance bonds
required of subcontractors normally will name the prime
contractor as obligee.
If a mutual agreement is reached between the
contractor and the CO to allow the subcontractor to
post the performance bond rather than the prime
contractor, the bond must name the United states as the
obligee and there should be an advance written
agreement between the contractor and the CO stating
that the privity of contract between the prime and
subcontractor is not affected by the agreement on
bonding (i.e., the obligations and
responsibilities of each does not change).
10.4.2 Payment Bonds
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11.0
ranuary 1992
The requirements relative to payment bonds under
the ERCS and site specific removal contracts are the
same as for performance bonds except that the required
amount of the payment bonds is different (see 10.2.1)
10.4.3 Contract Clauses
Refer to Attachment A-3 for the bonding clauses
applicable under the Removal Program.
DBA/SCA and Bonding Requirements Under EPA Superfund
Interagency Agreements (IA6)
ZAGs are generally between EPA and the U. S. Army Corp of
Engineers or the Bureau of Reclamation. There are no unique
issues that have been identified requiring treatment different
from that already provided herein. However, it should be noted
that Superfund monies transferred to either the U. S. Army Corp
of Engineers or the Bureau of Reclamation would be expended in
accordance with their respective Agency regulations, consistent
with the FAR or OFAR as applicable, in accomplishing the
requirements of the IA6.
12.0 DBA/SCA and Bonding under Superfund Cooperative Agreements
This section contains the Agency's guidance on the
applicability of the Davis-Bacon Act for recipients undertaking
Remedial Action work under {CERCLA Section 104} Cooperative
Agreements and discusses the applicability of other Sections
within this guidance for recipient*. Compliance with DBA
provisions is required by EPA's regulation 40 CFR Part 35 Subpart
O. The recipient is responsible for implementing the Davis-Bacon
Act since it conducts the procurement instead of EPA.
12.1 Background
In accordance with Sections 104 (d)(1) and 105 (a)(8)
of CERCLA, EPA provides an opportunity for States, Political
Subdivisions thereof, and Indian Tribes to participate in
the Superfund program by awarding cooperative agreements to
qualified recipients, usually States, to provide funding for
State-lead response actions. For a fund-financed State-lead
Remedial Action, EPA may enter into a Cooperative Agreement
with the State by providing the appropriate Federal funds
for the State to conduct the clean-up activity. In most
cases, the State would hire contractors to perform the work,
i.e., procurement under Cooperative Agreement assistance
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January 1992 •
agreements. Superfund Cooperative Agreements are covered
under EPA's regulation 40 CFR Part 35, Subpart 0,
"Superfund Cooperative Agreements and Superfund State
Contracts For Superfund Response Actions" (commonly referred
to as Subpart O). Subpart 0 delineates the requirements
States, local governments, and Indian tribe governmental
counterparts must follow.
12.2 Recipient Responsibilities
Recipients of Cooperative Agreements must include DBA
provisions [Section 35.6595(b)(4) of Subpart O] in each
contract for construction (as defined by the Secretary of
Labor in 29 CFR Part 50), and to ensure that their
contractors include DBA in all of their subcontracts which
include work subject to DBA requirements.
EPA will periodically review the recipient's
implementation of these procurement requirements.
12.3 Determination of DBA Applicability
The DBA applies to contracts for construction that
exceed $2,000 and are for actual construction, alteration,
and/or repair, including painting and decorating, of a
public building or public work, that is financed in whole or
in part from Federal funds (see Attachment B-l).
The DBA applies to construction work performed as part
of a nonconstruetion contract if:
o The construction work is to be performed on a public
building or public work;
o The contract contains specific requirements for a
substantial amount of construction work exceeding the
$2,000 threshold for application of DBA (the word
"substantial" relates to the type and quantity of
construction work to be performed and not merely to the
total value of construction work as compared to the
total value of the contract); and
o The construction work is physically and functionally
separate from, and is capable of being performed on a
segregable basis from the other work required by the
contract.
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January 1992
In these instances, in lieu of awarding separate
contracts for construction work subject to the DBA and for
worJc not covered by DBA, the recipient may include separate
wage rate determinations for both types of work under a
single contract.
12.4 SCA Applicability
In cases where the DBA clearly does not apply to the
contract, the recipient is to follow applicable State and
local laws concerning the appropriate wage rates to use.
It is not appropriate for the recipient of a Superfund
Cooperative Agreement to use the Service Contract Act (SCA),
as discussed in other Sections of this guidance. The SCA is
not applicable to States, Political Subdivisions, or Indian
Tribes even when such contracting uses Federal funds. The
SCA is applicable to direct Federal procurement of a
contractor, and not procurement of a contractor under a
cooperative agreement. Therefore, the specific discussions
on applying the SCA in other Sections of this guidance will
not be appropriate for recipient use in the case of a State
performing procurement under a Superfund Cooperative
Agreement.
12.5 Implementation of DBA
To assist recipients in their implementation of the DBA
(and other labor provisions), the Agency developed EPA Form
5720-4, "Labor Standards Provisions for Federally Assisted
Construction Contracts." This guidance contains the
appropriate provisions from the Department of Labor's
regulations for implementation of the DBA (and other labor
requirements). Recipients are required to include this
publication in all contracts and subcontracts for
construction as defined by the Secretary of Labor in 29 CFR
Part 5.
The recipient of a cooperative agreement is responsible
for implementing the Davis-Bacon Act the same as if EPA was
conducting the procurement. Recipients will find the
information in Sections 8 and 9 herein helpful in
implementing the DBA. Recipients will need to determine who
the equivalent State/Local governmental and Indian tribe
counterparts are for EPA terms such as CO, WA, OSC, RPM,
etc., and substitute them accordingly.
12.6 Bonding
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January 1992
Recipients of cooperative agreements will find the
discussion on bonding requirements helpful. However,
recipients of cooperative agreements should use the
performance bond requirements as defined in Subpart 0 and
Part 31 to determine bonding requirements for work performed
under Cooperative Agreements. As stated in these
regulations, recipients should direct any requests for
alternative bonding requirements to the EPA Regional Award
Official for consideration and approval*
12.7 Applicability of Attachments to CAs
Provided below is a listing of the attachments to this
guidance and their appropriateness for CA recipient use.
A-l Can be used for informational purposes in assisting
recipients in criteria determinations relative to
their own State/local wage rates.
A-2 Not applicable
A-3 Not applicable
A-4 Not applicable
A-5 Not applicable
A-6 Not Applicable
A-7 Not applicable
A-8 Informational use only
A-9 Informational use only
A-10 Not applicable
A-11 Not applicable
A-12 Applicable
B-l Applicable
B-2 Informational use only
B-3 Not applicable
B-4 Not applicable
B-5 Applicable
B-6 Applicable
B-7 Informational use only
B-8 Informational use only
B-9 Applicable
B-10 Not applicable
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January 1992
Attachments
The attachments to this document are separated into two
parts. Part A contains decision trees, forms, lists of
compliance responsibilities, etc., that are specific to Superfund
contracts. Part B contains regulatory and statutory documents,
such as the Federal Acquisition Regulation (FAR) and the Code of
Federal Regulations (CFR), pertaining to the various labor
standards discussed in this guidance and are included primarily
as reference material.
A-l Decision Tree-DBA/SCA
Applicability
A-2 ARCS Contract Clauses
for DBA/SCA
A-3 ERCS 6 Site-specific
Clauses for DBA/SCA
A"4 Location of DBA General
Wage Determinations
A-5 EPA/DOL Points of Contact
for DBA
A-6 CLIN List for ERCS DBA
Labor Categories
A-7 Roles and Responsibilities
A-8 Sample Letters to Prime
Contractors on DBA
A-9 Memo from David J. O'Connor
re Applicability of SCA
A-10 ERCS SCA CLIN
Labor Categories
A-11 SPA HQ Points of Contact
for DBA Wage Determinations
and CLIN Listings
A-12 DOL Regional Representatives,
Office of Federal Contract
Compliance Programs
B-l CRT, Title 29, Part 5
Labor Standards
B-2 FAR Part 22, Labor Laws
B-3 CRF, Title 29, Part 4,
Labor Standards for
Service contracts
B-3a CRF, Title 29, Part 4
Labor Standard
Definitions
B-4 SCA Directory of
Occupations
B-5 Interpretation Guide for
DBA General Wage
Determinat ions
B-6 Procedures for Requesting
DBA Wage Determinations
B-7 DOL Memo 130 and 131
B-8 Labor standards
Compliance
B-9 Questions & Answers on
DBA Wage Determinations
B-10 SCA Wage Determination
Request Procedures
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ATTACHMENT A-l
DECISION TREE
FOR MAKING DBA/8CA APPLICABILITY DETERMINATIONS
This attachment contains a systemized and logical approach,
by means of a decision tree, to making DBA and SCA determinations
of applicability. Decision Tree I is specifically designed to
accommodate DBA and SCA determinations within the Removal program
while Decision Tree II is specifically designed for Remedial
program determinations. Examples of typical Superfund work
(construction and service type) are also provided to assist those
persons involved in this DBA and SCA decision making process.
-------
Attachment A-l
Decision Tree For 8CA/DBA Applicability
and
Examples of superfund Services/Construction
The purpose of this document is to provide those persons in
a position of making DBA and/or SCA determinations with a
systemized and logical approach to those decisions. The decision
trees and examples of typical Superfund work which might be
appropriately classified as services or construction may be
helpful in making such determinations. In making these types of
determinations, the following information should be used together
with the information provided in the Agency guidance document
under Sections 7, 10 and 11.
Z. Decision Tree For Use ID Applying DBA and/or SCA Labor
Standards To Superfund Remedial and Removal Contracts
Decision Tree I contains information applicable to the
Removal Program. Decision Tree II contains information that is
applicable to the Remedial Program. These decision trees
illustrate the steps in the decision-making process under
contracts for construction, services, or service contracts with
elements of construction.
ZZ. Examples of Superfund services/construction Work
Some definitions of the terms "substantial11 and "segregable"
are provided as a guide to assist in determining whether a
service contract contains elements of construction activity that
are substantial and segregable enough to require the application
of the DBA labor provisions. Additionally, some examples of
typical construction, service, and service with elements of
construction type of activities are included below.
Typical construction activities at Superfund sites may
include:
o Construction of permanent water treatment system
o Excavating, consolidating, capping of contaminated sol,
backfilling, regarding, and reseeding of excavated
area.
o Construction of a water distribution system
o Installation of a security fence/warming signs (When
this is the only action to be performed at the site.)
A service activity can be performed by either professional
or non-professional personnel. Typical service activities at
Superfund sites may include:
o Maintenance, overhaul, repair, servicing,
rehabilitation, salvage, modernization, or modification
of supplies, systems, or equipment.
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o Routine recurring maintenance of real property
o Construction or repair of personal property
o Consulting services
o Engineering and technical services
o Operation of government-owned equipment, facilities,
and systems
o Transportation and related services
o Research and development
o Chemical testing and analysis
o Data collection, procession, and analysis
o Exploratory drilling (other that as part of
construction) i.e. installation of monitoring wells
o Geological field surveys and testing
o Laboratory analysis
o Landscaping (other than as part of construction)
o Surveying and mapping services (not directly related to
construction)
o Transportation of property or personnel
o Solid waste removal
o Tree planting, thinning, and clearing of timber or
brush
o Dismantling, demolition or removal of improvements (As
stated in 29 CFR 4.115, "dismantling, demolition, or
removal" are exempted from SCA and fall under DBA when
it appears such activity at the site is contemplated,
the Davis Bacon Act is considered inapplicable."
o Installation of transportable treatment unites (i.e.
incinerator units, pugmill systems, water treatment
plants).
In order to make a determination of DBA applicability under
a service contract that contains elements of construction
activity, an understanding of the terms "Substantial" and
"Segregable" is necessary.
Substantial; The contract contains specific requirements for
substantial amounts of .construction work, or it is ascartainable
at the contract date that a substantial amount of construction
work will be necessary for the performance of the contract.
Seoreoable; Such construction work is physically and
functionally separate from and, as a practical matter, is capable
of being performed on a segregated basis from the other work
required by the contract.
Three examples will illustrate substantial and segregable:
1. In an action that calls for the removal and disposal of
drums of hazardous waste, the contract/delivery order is
principally for service (removal and disposal). However,
site set-up requires some incidental construction activities
such as electrical hook-up, construction of stairs for the
command post, clearing and construction of access road, etc.
These activities are not substantial relative to the overall
-------
scope of the action.
2. In an action that calls for excavation and off-site disposal
of contaminated soil, the principal purpose of the
contract/delivery order is service (removal of soil though
transportation and disposal). The excavation and staging of
the soil is an activity which is substantial, and can be
functionally separated from the transportation and disposal.
3. In an action that calls for excavation and on-site
incineration of the contaminated soil, the principal purpose
of the contract/delivery order is still service (treatment
of contaminated soil). In this case, excavation is
substantial, but as a practical matter may not be segregable
from the incineration of the soil if the activity is
continuous and is to be performed by the same contractor
employees. However, if the two activities are phased, or if
the excavated material is to be temporarily contained, the
incineration is then capable of being segregated from the
excavation and should be treated accordingly.
Under Remedial Program contracts, the role of the A/E firm
is expected to be one of oversight of the chosen remediation
where the end product can be either construction, service, or a
combination of both. *
Some typical types of remedial contract activities could be:
1. construction —Example: Soil excavation and backfill
2. Services —Example: Leachate collection and of-site
transportation and disposal.
3. Construction with elements of services —Example:
Construction of a groundwater treatment plant with a
follow-up option for operation and maintenance
services.
4. Services with elements of construction —Example:
Transportation and Disposal of contaminated soil where
the excavation and loading of the waste would be
considered construction.
-------
Decison Making Flowchart
(Removals Only)
OSC preparres Initial delivery order or modification
identifying any planned construction activities*
OSC notes on D.O. and proceed*
with SCA rates.
If planned construction is involved,
is the principal purpose of the D.O.:
concurs wfth
wtttffWUhiwft.
(CHOOSE ONE)
OR
OR
Dismantling, removal, or demolition
Providing services with elements of construction
YES
Is there further federally funded or
federally assisted construction an-
ticipated that tone* Incidental to the
dismantling, removal, or demoBtion.
Are the elements of construction work
segregate? Can they be pnyslcaBy or
functionaly separated from other work
required under the P.O.?
SiBA rates/provisions
pply to the entire P.O.
. j
NO
NO
V YES
YES*
SCA rates/provisions
SCA rates/provisions
apply to entire D.O.
DBA rates/provisions apply
to these activities only.
Are the segregaWe construction
elements substantial when they
are considered In addition to an
jther construction actMtes under
theD.O.?
SCA rates/provisions
apply to entire D.O.
DBA rates/provisions apply
to these activities only.
OSC sends D.O. to PO and CO
for review and concurrence.
CS reviews and agrees
toUQ.
ERCS submits rate disk for DBA-
Identified activities within 10 days
or prior to mobUzation data estab-
lished by the OSC.
OSC begins work using RCMS
to track DBA/SCA rates separately.
CO/PO review and approve rate disk
•Planned oonstfuctlon activities are thosAWtifchtto
Construction is defined in Attachment A of this guf"
-------
pr- -«
= CO
O
!
2
O
O
g
I
i
3
O
fe
-------
ATTACHMENT A-2
REMEDIAL PROGRAM CONTRACT CLAUSES
FOR DBA AMD 8CA LABOR PROVISIONS
This attachment focuses on Section H - Special Contract
requirements and Section I - Contract Clauses relative to the
incorporation of DBA and SCA labor provisions. These clauses
have been specially developed to accommodate the Superfund work
within the Remedial program.
-------
Attachment A-2
REMEDIAL PROGRAM CLAUSES PERTAINING TO THE SERVICE CONTRACT ACT
1. The following special provision clauses should be incorporated
substantially the same into all ARCS prime contracts in full
text.
H-XX, REQUIREMENT TO SUBMIT NOTICE (SF98/98A)
Upon receipt of a work assignment the contractor shall
review the Statement of Work and determine whether the principal
purpose of the subcontract is for services other than those
incidental to performance of professional services. If the
principal purpose of the contract is for services the resultant
subcontract must be a subcontract for services and the Service
Contract Act (SCA) will be applicable, in accordance with clause
FAR 52.222-41, Service Contract of 1965, as amended. The
contractor shall complete and submit to the Contracting Officer
an SF 98/98a "Notice of Intention to Make a Service Contract and
Response to Notice/Attachment A". The contractor shall complete
the SF 98/98a in accordance with the instructions on the SF98 and
FAR Section 22.1008-2. The contractor may obtain SF98/98As from
the Contracting Officer. The contractor shall submit the Notice
to the Contracting Officer at least 75 days prior to issuance of
an invitation to bid or request for proposal. The Contacting
Officer will forward the properly completed SF98/982A to
Department of Labor, Wage and Hour Division. Wage and Hour
Division will take one of the following actions: (a) Issue and
attach the applicable wage determination(s); (b) indicate that no
wage determination is in effect for the locality or contract
performance; (c) Indicate that the service contract is not
applicable; or (d) return the Notice for additional information.
If it is not possible to submit the Notice 75 days prior to
issuance of invitation to bid or request for proposal the
contractor should contact the contracting officer for further
guidance.
H-XX, NOTICE OF AWARD
Within 10 days after the contractor awards a subcontract for
services, it shall complete and submit to the contracting officer
a Standard Form 99, Notice of Award of Contract.
H-XX, NOTIFICATION TO SUBCONTRACTOR AND EMPLOYEES
The contractor shall ensure that the subcontractor is aware
of the labor standards requirements and its responsibilities
under these requirements.
At time of award the contractor shall furnish the
subcontractor the Department of Labor Publication WH-1313, Notice
to Employees Working on Government Contracts, (obtainable from
the Contracting Officer) for posting at a prominent and
- 1 -
-------
Attachment A-2
accessible place at the worksite before contractor performance
begins.
2. The following Section I clause should be incorporated, into
all ARCS prime contracts.
I.XX Clauses Incorporated by Reference
In accordance with FAR 52.252-2 the following clauses are
hereby incorporated by reference. These clauses have the same
force and effect as if they were provided in full text. Upon
request, the CO will make the full text available.
52.222-41 MAY 1989 Service Contract Act of
1965-As Amended
52.222-43 MAY 1989 Fair Labor Standards Act and
Service Contract Act-Price
Adjustment (Multiple Year
and Option Contracts)
The prime contractor is required to flow down the above
clause, either by reference or in full text, in all subcontracts
issued in performance of work under this prime contract when the
principal purpose of the contract is for services..
REMEDIAL PROGRAM CLAUSES PERTAINING TO THE DAVIS-BACON ACT AND
THE MILLER ACT
1. The following special provision clause shall be incorporated
into all ARCS prime contracts:
Section H
H.XX, Davis-Bacon Act (DBA) Wage Determinations for ARCS
Subcontracts
When developing solicitations for construction subcontracts
exceeding $2,000, the prime contractor shall identify the
applicable DBA Wage Determination from the "General Wage
Determinations issued under Davis-Bacon and Related Acts" which
are issued by the Department of Labor and available through the
Government Printing Office (see FAR 22.404(3)). The prime
contractor shall notify the EPA Contracting Officer of the
appropriate wage determinations to be used prior to issuance of
the solicitation and/or prior to bid/proposal receipt. The prime
contractor should request the EPA Contracting Officer to provide
the applicable Wage Determination if the prime does not have
access to the "General Wage Determinations".
In instances where a published wage determination does not
exist that is applicable to the work being performed and/or for
the location at which the work is being performed, a project wage
- 2 -
-------
Attachment A-2
determination will have to be requested from the Department of
Labor. The prime contractor shall provide the EPA Contracting
Officer with sufficient notice for him/her to request a project
wage determination from the Department of Labor (see FAR 22.404-
3). The prime contractor should forward an SF308, "Request for
Determination and Response to Request", with the classifications
of labor identified. The EPA Contracting Officer will verify
that the information contained on the SF308 is complete and
verify the labor classifications requested with the Project
Officer and RPM prior to forwarding the SF308 to the Department
of Labor.
H.XX, Performance and Payment Bonds
The Miller Act applies to substantial and segregable
construction exceeding $25,000 under this contract. The
contractor shall furnish payment and performance bonds with the
United States named as the obligee in amounts to be specified by
the Contracting Officer. Upon request of the prime contractor
and with the consent of the contracting officer, the performance
bond may be provided by the subcontractor.
In all cases, the Contracting Officer has the latitude to
determine that the dollar amount of the Miller Act performance
bond shall be "zero".
2. The following Section I clauses should be incorporated
- into all ARCS prime contracts.
H. XX Advance Agreement on Bonding
The Miller Act requires that the prime contractor obtain
performance and payment bonds on substantial and segregable
construction exceeding $25,000 under this contract. When
requested by the prime contractor and approved by the contracting
officer, the prime contractor may be permitted to fulfill this
requirement by requiring that the subcontractor furnish the bonds
with the United States named as the obligee on the bond. In that
event, it is hereby mutually agreed that there is no intent for
the prime contractor to merely act as the Government's purchasing
agent and that this contract shall not be construed as a
facilities management contract. It is further agreed that the
privity of contract between the prime and the subcontractor and
the responsibilities of each is not affected in any way by
permitting the subcontractor to provide Miller Act bonds in lieu
of the prime contractor.
3. The following Section I clauses should be incorporated into
all ARCS prime contracts in full text.
52.222-4
MAR 1986 CONTRACT WORK HOURS AND
- 3 -
-------
Attachment A-2
SAFETY STANDARDS ACT - OVERTIME
COMPENSATION
52.222-6 FEE 1988 DAVIS BACON ACT
52.222-7 FEB 1988 WITHHOLDING OF FUNDS
52.222-8 FEB 1988 PAYROLLS AND BASIC RECORDS
52.222-9 FEB 1988 APPRENTICES AND TRAINEES
52.222-10 FEB 1988 COMPLIANCE WITH COPELAND ACT
REQUIREMENTS
52.222-11 FEB 1988 SUBCONTRACTS (LABOR STANDARDS)
52.222-12 FEB 1988 CONTRACT TERMINATION-DEBARMENT
52.222-13 FEB 1988 COMPLIANCE WITH DAVIS BACON
AND RELATED ACT REGULATIONS
52.222-14 FEB 1988 DISPUTES CONCERNING LABOR
STANDARDS
The prime contractor is required to flow down and include
the above Section I clauses in full text into all subcontracts
(and any lower tier subcontracts), awarded in performance of the
work under the prime contract.
I.XX, Clauses Incorporated by Reference
In accordance with FAR 52.252-2 the following additional
clauses are hereby incorporated by reference. These clauses have
the same force and effect as if they were provided in full text.
Upon request, the CO will make the full text available.
52.222-15
52.222-16
52.222-27
52.225-5
52.227-4
52.228-2
52.236-18
FEB
FEB
APR
APR
APR
APR
APR
1988
1988
1984
1984
1984
1984
1984
52.236-19 APR 1984
CERTIFICATION OF ELIGIBILITY
APPROVAL OF WAGE RATES
AFFIRMATIVE ACTION COMPLIANCE
REQUIREMENTS FOR CONSTRUCTION
BUY AMERICAN ACT-CONSTRUCTION
MATERIALS
PATENT INDEMNITY-CONSTRUCTION
CONTRACTS
ADDITIONAL BOND SECURITY
WORK OVERSIGHT IN COST-
REIMBURSEMENT CONSTRUCTION
CONTRACTS
ORGANIZATION AND DIRECTION OF
THE WORK
The prime contractor is required to flow down and include
the above Section I clauses by reference into all subcontracts
(and any lower tier subcontracts), as applicable, issued in
performance of the delivery order requirements.
- 4 -
-------
-------
ATTACHMENT A-3
REMOVAL PROGRAM CONTRACT CLAUSES
FOR DBA AND 8CA LABOR PROVISIONS
This attachment focuses on Section H - Special Contract
requirements and Section I - Contract Clauses relative to the
incorporation of DBA and SCA labor provisions. These clauses
have been specially developed to accommodate the Superfund work
within the Removal program.
-------
Attachment A-3
REMOVAL PROGRAM CLAUSES PERTAINING TO THE DAVIS-BACON ACT
AND THE MILLER ACT
1. The following Section B clause should be incorporated
substantially the same into all ERCS prime contracts and
site-specific contracts, as appropriate:
Section B
B.XX, DBA Fixed Labor Rates and Use of a Negotiated "Multiplier"
In accordance with FAR 52.222-6, Davis Bacon Act, every contract
in excess of $2,000 to which the United States or the District of
Columbia is a party, for construction, alteration, and/or repair,
including painting and decorating, of public buildings or public
works of the United States, and which requires or involves the
employment of mechanics and/or laborers shall contain the DBA
minimum wage determination schedules (Refer to Section J herein)
to be paid various classes of laborers. The DBA wage
determination schedules attached hereto have been developed by the
Secretary of Labor and represent the prevailing wages for the
corresponding classes of laborers and mechanics employed on
projects of a character similar to the contract work in the
county, city, town, village, or civil subdivision of the State in
which the work is to be performed. The contractor may not pay
those various classes of laborers less than the prevailing wage
and applicable fringe benefit contained in the attached DBA wage
determination schedule.
The EPA has determined that where there are substantial and
segregable elements of construction under Emergency Response
Cleanup Services (ERCS) contract delivery orders or site-specific
contracts, the DBA applies to that portion of the work.
Since DBA prevailing wage rates are particular to individual
geographic areas, it is was not practicable to negotiate a fixed
labor rate for every DBA labor category. Therefore, under this
contract the contractor is required to pay covered employees not
less than the prevailing wage rate and fringe benefits as
reflected in the DBA wage determination and to compensate the
contractor for its indirect costs and salary increases, the fixed
multipliers applicable to DBA wages which were negotiated for the
base year and each option year as follows. These fixed
multipliers shall remain fixed for the periods stated below and
are applicable to all delivery orders issued under the contract.
Contract Period Negotiated Fixed Multiplier
Base Year
Option Year 1
Insert negotiated %
Insert negotiated %
MM "I MM.
-------
Attachment A-3
The fixed multipliers above include a (insert number)% annual
escalation factor to account for wage and fringe benefits cost
increases in the option years. Notwithstanding FAR 52.222-43(d)
and (e), the contractor shall not be allowed increases for option
periods unless it can be demonstrated that future DOL wage
determinations increases exceed the annual percentage specified
above.
2. The following Section H clauses should be incorporated,
substantially the same into all ERGS prime contract and
site-specific contracts as appropriate:
H.XX Schedule for Davis Bacon Act (DBA) Wage Determinations
In compliance with DBA, the Contracting Officer hereby
designates the use of the "Residential, Building, Heavy and/or
Highway Project Wage Determination Schedules" under this contract.
Individual delivery orders shall specify which schedule is
applicable to that particular delivery order. The schedules are
listed by state and are found in Section J of this contract. The
contractor shall contact the contracting officer for additional
required classifications/categories.
In instances where a published wage determination does not
exist that is applicable to the work being performed and/or for
the location at which the work is being performed, a project wage
determination will have to be requested from the Department of
Labor. The prime contractor shall provide the EPA contracting
officer with sufficient notice for him/her to request a project
wage determination from the Department of Labor (see FAR
22.404-3). The prime contractor should forward an SF308 ,
"Request for Determination and Response to Request" (obtainable
from the contracting officer), with the classifications of labor
identified.
H.XX, Davis-Bacon Act (DBA) Wage Determinations for Subcontracts
When developing solicitations for construction subcontracts
exceeding $2,000, the prime contractor shall identify and insert
the applicable DBA Wage Determination from the "General Wage
Determinations issued under Davis-Bacon and Related Acts" which
are issued by the Department of Labor. In instances where a
published wage determination does not exist that is applicable to
the work being performed and/or for the location at which the work
is being performed, a project wage determination will have to be
requested from the Department of Labor. The prime contractor
shall provide the EPA Contracting Officer with sufficient notice
for him/her to request a project wage determination from the
Department of Labor (see FAR 22.404- 3). The prime contractor
- 2 -
-------
Attachment A-3
should forward an SF308, "Request for Determination and Response
to Request", with the classifications of labor identified. •
H.XX Contractor Submission of DBA Wage Rate and Fringe
Benefit Disk
For all contracts requiring the use of the Removal Cost
Management System (RCMS) and to which the DBA applies, input into
the RCMS of the actual DBA wage rate schedules is required. The
contractor is required to supply the On-Scene Coordinator (OSC)
with the applicable DBA rates on a microcomputer disk (either
3-1/2" or 5" as specified by the OSC) with applicable DBA rates
using spreadsheet software, preferably LOTUS.
At the outset of each DO, there will be a period of
assessment during which the CO, PO, and the contractor will
evaluate the planned site work and determine, to the extent
possible, whether there is substantial and segregable
construction to which the DBA applies. In the event of an
emergency response, this assessment period may take place once the
situation is stabilized. The CO has the responsibility for
making the final determination of DBA applicability.
H.XX, Performance Bonds (ERCS Contracts)
The Miller Act applies to substantial and segregable
construction exceeding $25,000 under this contract. The
contractor shall furnish performance bonds with the United States
named as the obligee in amounts to be specified by the Contracting
Officer. Bonds shall be provided by the prime contractor at the
delivery order level. With the consent of the Contracting Officer,
the performance bond may be provided by the subcontractor. In all
cases, the Contracting Officer may determine that the dollar
amount of the Miller Act performance bond shall be "zero".
H.XX, Performance Bonds (Site-Specific Contracts)
The Miller Act applies to substantial and segregable
construction exceeding $25,000 under this contract. The
contractor shall furnish performance bonds with the United States
named as the obligee in amounts to be specified by the Contracting
Officer. Bonds shall be provided before work begins under a
construction contract or before work begins whenever there is
segregable and substantial construction work under a service
contract, with the consent of the Contracting Officer, the
performance bond may be provided by the subcontractor. In all
cases, the Contracting Officer may determine that the dollar
amount of the Miller Act performance bond shall be "zero".
-------
Attachment A-3
H. XX Advance Agreement on Performance Bonds
When requested by the prime contractor and approved by the
Contracting Officer, the prime contractor may be permitted to
fulfill the performance bond requirement by requiring that the
subcontractor furnish the bonds with the United States named as
the obligee on the bond. In that event, it is hereby mutually
agreed that there is no intent for the prime contractor to merely
act as the Government's purchasing agent and that this contract
shall not be construed as a facilities management contract. It is
further agreed that the privity of contract between the prime and
the subcontractor or the responsibilities of each is not affected
in any way by permitting the subcontractor to provide Miller Act
bonds in lieu of the prime contractor.
H.XX Payment Bonds (ERGS Contract)
The Miller Act applies to substantial and segregable
construction exceeding $25,000 under this contract. The
contractor shall furnish payment bonds at the delivery order level
with the United States named as the obligee in amounts to be
specified by the Contracting Officer. The prime contractor may
not fulfill the payment bond requirement by requiring the
subcontractor to provide the bond.
The penal sum of the payment bond shall equal:
(a) 50 percent of the amount of the substantial and
segregable construction activity if the construction activity
is not more than $1 million;
(b) 40 percent of the amount of the substantial and
segregable construction activity if the construction activity
is more than $1 million; or
(c) $2-1/2 million if the amount of the substantial
and segregable construction activity is more than $5 million.
3. The following clauses should be incorporated as applicable
into Section I in full text:
52.222-4 MAR 1986 CONTRACT WORK HOURS AND SAFETY
STANDARDS ACT - OVERTIME COMPENSATION
52.222-6 FEB 1988 DAVIS BACON ACT
52.222-7 FEB 1988 WITHHOLDING OF FUNDS
52.222-8 FEB 1988 PAYROLLS AND BASIC RECORDS
52.222-10 FEB 1988 APPRENTICES AND TRAINEES
52.222-10 FEB 1988 COMPLIANCE WITH COPELAND ACT
REQUIREMENTS
- 4 -
-------
Attachment A-3
52.222-11
52.222-12
52.222-13
52.222-14
FEE 1988 SUBCONTRACTS (LABOR STANDARDS)
FEB 1988 CONTRACT TERMINATION-DEBARMENT
FEB 1988 COMPLIANCE WITH DAVIS BACON AND
RELATED ACT REGULATIONS
FEB 1988 DISPUTES CONCERNING LABOR STANDARDS
The prime contractor is required to flow down and include
these same clauses into all subcontracts (and any lower tier
subcontracts) in full text.
4. The following clauses should be incorporated as applicable by
reference.
I.XX Clauses Incorporated by Reference
In accordance with FAR 52.252-2, the following clauses are
hereby incorporated into the contract by reference with the same
force and effect as if they were provided in full text. Upon
request, the contracting officer will make their full text
available.
52.222-15 APR 1984
52.222-16 APR 1984
52.222-27 APR 1984
52.225-5
52.227-4
52.228-2
52.236-18
APR 1984
APR 1984
APR 1984
APR 1984
52.236-19 APR 1984
CERTIFICATE OF ELIGIBILITY
CONTRACTS
APPROVAL OF WAGE RATES
AFFIRMATIVE ACTION COMPLIANCE
REQUIREMENTS FOR CONSTRUCTION
BUY AMERICAN ACT-CONSTRUCTION MATERIALS
PATENT INDEMNITY-CONSTRUCTION CONTRACTS
ADDITIONAL BOND SECURITY
WORK OVERSIGHT IN COST-REIMBURSEMENT
CONSTRUCTION CONTRACTS
ORGANIZATIONAL NO DIRECTION OF THE WORK
The prime contractor is required to flow down and include
these same clauses into all subcontracts (and any lower tier
subcontracts).
5. The following clauses should be inserted substantially the
same in site-specific contracts and ERCS contracts, as applicable.
L.XX, DBA Fixed Labor Rates and Use of a Negotiated "Multiplier"
- 5 -
-------
Attachment A-3
In accordance with FAR 52.222*6, Davis Bacon Act, every
contract in excess of $2,000 to which the United States or the
District of Columbia is a party, for construction, alteration,
and/or repair, including painting and decorating, of public
buildings or public works of the United States, and which requires
or involves the employment of mechanics and/or laborers shall
contain the DBA minimum wage determination schedules (refer to
Section J herein) to be paid various classes of laborers. The DBA
wage determination schedules attached hereto have been developed
by the Secretary of Labor and represent the prevailing wages for
the corresponding classes of laborers and mechanics employed on
projects of a character similar to the contract work in the
county, city, town, village, or civil subdivision of the State in
which the work is to be performed. The contractor may not pay
those various classes of laborers less than the prevailing wage
and applicable fringe benefit contained in the attached DBA wage
determination schedule. The EPA has determined that where there
are substantial and segregable elements of construction under
Emergency Response Cleanup Services (ERCS) contract delivery
orders or site-specific contracts, the DBA applies to that portion
of the work.
Since DBA prevailing wage rates are particular to individual
geographic areas below the State level, it is not practicable to
negotiate a fixed labor rate for every DBA labor category.
Therefore, the offerer is required to propose a fixed or
provisional multiplier for the base year and each option year.
The use of a multiplier will eliminate the need to negotiate DBA
wage rates by delivery order (DO).
Additionally, the offerer is be required to supply a cost
element breakdown (e.g., fringe benefits, payroll taxes, overhead,
general and administrative expenses, and profit), by year, to
support its proposed multiplier. A multiplier will be negotiated
for the base year and each option year. The proposed fixed
multiplier should be expressed as a percentage of the DBA rate
(labor plus fringe, benefits) and submitted in the following
format:
Contractor: (Insert Contractor Name)
Contract Period Negotiated Multiplier
Base Year
Option Year 1
Option Year 2
Option Year 3
(Insert proposed fixed %)
it
it
- 6 -
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ATTACHMENT A-4
LOCATION OF DBA GENERAL WAGE DETERMINATIONS
HEADQUARTERS AND REGIONAL OFFICES
This attachment provides the headquarters and regional
points of contact, their corresponding address and phone number
for those persons charged with maintaining the general wage
determinations issued under the Davis Bacon Act.
-------
Attachment A-4
Page 1 of 2
The General Wage Determination Issued under Davi,s Bacon Act for
construction contracts are kept and maintained current at the
following locations:
SPA Headquarter? Volumes I, II, 6 III
Procurement and Contracts Management Division Document
Distribution Unit *
Fair Child Building - 3rd floor
499 South Capital street, sw, Washington, DC
Contact: Martha Burtoff FTS 382-3240
Region I. Boston Volume I
Planning and Management Division,Purchasing
John F. Kennedy Federal Building
Boston, MA 02203
Contact: Cathv Ivanoski FTS 835-3726
Region II. New YorJc Volume I
Facilities and Administrative Management
Branch, Contracts Section
Jacob K. Jevitz Federal Building
26 Federal Plaza - 9th floor
Nev York, NY 10278
Contact: Ravin Weaver FTS 264-2376
aeaion in. Philadelphia
Superfund Finance Management Section
841 Chestnut Building
Philadelphia, PA 19107
Contact: Annmarie Knorr FTS 597-6167
Region IV. Atlanta Volum« I
Deputy Assistant Regional Administrator
Contract Negotiation and Management Section
345 Courtland street, NE - Room 420
Atlanta, GA 30365
Contact: Ana Foster FTS 257-7292
Region V. Chicago Volume II
Assistant Regional Administrator for Planning Management
Contracts Section 5M-CC-TUB 4
230 South Dearborn Street
Chicago, XL 60604
Contact: Lucy Martinez FTS a§6-5868
Region VT./Kansas City issues Zone SF Contracts,,)
Region VII. Kansas City, KS Volume II
Comptroller Branch
contracts Office
726 Minnesota Ave
Kansas City, KS 66101
Contract: Delia Downer FTS 27§-7S68
-------
Attachment A-4
Page 2 of 2
Region VIII. Denver
Grants Management Branch
Contracts Office
999 18th Street
One Denver Place
Denver, CO 80202-2405
Contact: Clvde LoSasao
-2-
volume III
ITS 330-1893
Region IX. San Francisco Volume III
No subscription to publication maintained.
Region X. Seattle Volume III
Water Management Section
Grants Administration Section
1200 Sixth Avenue - 14th floor
Seattle, WA 98101
Contact: Oddvar K» Aurdal FTS 399-2954
Second subscription maintained at Library.
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ATTACHMENT A-5
EPA AMD DOL POINT OF CONTACT LIST
FOR QUESTIONS ON DBA WAGE DETERMINATIONS AND GENERAL GUIDANCE
This attachment was developed to facilitate problem
resolution and assist in the gathering and sharing of information
between the EPA and the Department of Labor (DOL) by providing a
list of both EPA and DOL points of contact. These persons have
been identified as a starting point for those people in need of
information relative to the application and compliance of DBA
labor provisions and wage determinations.
-------
Attachment A-5
Page 1 of 4.
POINT OF CONTACT LIST FOR EPA AND DOL
EPA REGIONAL CONTRACTING PERSONNEL
Region I
Hilary Kelley (PCC-228)
Chief, Superfund Contracts
U. S. EPA Region I
Comptroller
Boston, HA 02203
FTS No. 835-4880
Comm. No. (617) 565-4880
Region II
Phyllis Cutts
Contracting Officer
U. S. EPA Region II
26 Federal Plaza (Room 937)
New York, NY 10278
FTS No. 264-2252
Comm. NO. (212) 264-2252
Region III
Annmarie Knorr (3PM32)
Contracting Specialist
U. S. EPA Region III
841 Chestnut Street
Philadelphia, PA 19107
FTS NO. 597-6167
Comm No. 597-6167
Region IV
Cedrick Walker
Contracting Officer
U. S. EPA Region IV, 4th Fl.
345 courtland street, N.E.
Atlanta, GA 30365
FTS No. 257-7292
Comm. NO. (404) 347-7292
Region VI
Brenda Durden (6M-FP)
Contracting Officer
EPA Region VI
1445 Ross Avenue-Suite 1200
Dallas, TX 75202-2773
FTS NO. 255-6510
Comm. No. (214) 655-6510
Region VII
Alma Eaves (CMPT)
Contracting Officer
U. S. EPA Region VII
726 Minnesota Avenue
Kansas City, KS 66101
FTS NO. 276-7212
Comm. NO. (913) 551-7212
Region VIII
Heidi Ernst (8PM-GM)
Contracting Officer
U. S. EPA Region VIII
999 18th Stree, Suite 500
One Denver Place
Denver, CO 80202-2405
FTS No. 330-1619
Comm. No. (303) 293-1619
Region IX
Dee Morrrison (P-7-2)
Contracting Officer
U. S. EPA Region IX
75 Hawthrone Street
San Francisco, CA 94105
FTS No. 484-1692
Comm. NO. (415) 744-1692
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Attachment A-5
Page 2 of 4
Region V
Pat Bamford (5-MCC)
Chief, Contracts Section
U.S. EPA-Region V
230 South Dearborn Street
Chicago, IL 60604
FTS No. 886-2400
Conm. No. (312) 886-5868
Region Z
D. J. Lovelady (MD-104)
Contracting Officer
U.S. EPA-Region X
1200 Sixth Avenue
Seattle, WA 98101
FTS NO. 399-1770
Conn. NO. (206) 553-1770
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Attachment A-
Page 3 of 4
DOL Regional Wag* specialists
April 11, 1991
LOCATION
POINT OF CONTACT
PHONE NUMBER
Headquarters Enforcement
REGION I - Boston
REGION II - New York
REGION III - Philadelphia
REGION IV - Atlanta
REGION V - Chicago
REGION VI - Dallas
REGION VII - Kansas City
REGION VIII - Denver
REGION IX - San Francisco
REGION X - Seattle
Government Contracts
Janet Boyda
Irving Mil joiner
George Durbin
George Holt
Gerald Iverson
Randy O'Neal
Robert Henze
Art Kerschner, Jr.
Richard Cheung
Warren Murphy
Tel.
Tel.
FTS
Tel.
FTS
Tel.
FTS
Tel.
FTS
Tel.
FTS
Tel.
FTS
Tel.
FTS
Tel.
FTS
Tel.
FTS
Tel.
FTS
#202-523-7541
#617-565-2092
835-2095
#212-337-2020
660-2020
#215-596-0104
596-0104
#404-347-2929
257-2929
#312-353-88^P
353-8848
#214-767-6884
729-6884
#816-426-5387
867-5387
#303-844-5302
564-5302
#415-995-5416
484-6977
#206-442-1914
399-1914
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ATTACHMENT A-5
Page 4 of 4
Employment Standards
Administration
Wag* and Hour Division
One congress Street
llth Floor
Boston, Massachusetts 02114
ATTNi Regional wags
specialist
Employment Standards
Administration
Wage and Hour Division
201 VariOc street, Room 750
New York, New York 10014
ATTNi Regional wage
Specialist
Employment standards
Adainistration
wage and Hour Division
Gateway Building, ROOM 15230
3535 Market Street
Philadelphia, PA 19104
ATTHi Regional wags
Specialist
Employment standards
Administration
Wage and Hour Division
1375 Peachtree street, N.E.,
Room 664
Atlanta, Georgia 30367
ATTN: Regional wage
specialist
Employment Standards
Administration
wage and Hour Division
Federal Building, Suite.800
525 Griffin street
Dallas, Texas 75202*5007
ATTMt Regional Wage
Specialist
Employment Standards
Administration
wage and Hour Division
Federal Office Building
Suite 2000
911 Walnut Street
Kansas City, Missouri 64106
ATT*i Regional wage
Specialist
Employment Standards
Adainistration
Wags and Hour Division
Federal Office Building
Suits 1490
1961 Stout Street
Denver, Colorado 80294
AfTMt Regional Wags
Specialist
Eaployaent Standards
Adainistration
Wage and Hour Division
71 Stevenson Street, Suite 930
San Francisco, CA 94105
ATTVt Rsgional wags
specialist
Employment Standards
Administration
Wage and Hour Division
230 South Dearborn Street,
Room 820
Chicago, Illinois 60604
ATTMs Regional Wags
Specialist
Employment standards
Adainistration
Wags and Hour Division
1111 Third Avenue, suite 615
Seattle, Washington 99101
ATTVt Rsgional wags
specialist
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-------
ATTACHMENT A-6
CLIN ASSIGNMENTS FOR ERGS DBA LABOR CATEGORIES
This attachment provides the CLIN assignments being utilized
thus far for any DBA labor categories within the Removal program.
-------
ATTACHMENT A-6
Page 1 of 1
CLIN Assignments For ERGS DBA Labor Categories
DBA CLIN LABOR CATEGORY
600
6O1
602
603
604
605
606
607
608
609
610
611
CARPENTERS
CEMENT MASONS
DIVERS
DIVERS TENDER
ELECTRICIANS (Traffic Signalization;
IRONWORKERS
IRRIGATION & LANDSCAPE CONSTRUCTION
PLUMBERS
LABORERS
POWER EQUIPMENT OPERATORS
TRUCK DRIVERS
LINE CONSTRUCTION
Page 1
of
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ATTACHMENT A-7
ROLES AMD RESPONSIBILITIES MATRIX
FOR COMPLIANCE AND ADMINISTRATION OF LABOR STANDARDS
This attachment provides a simple matrix designed to assist
those removal and remedial personnel in determining when and who
in the procurement process is responsible for DBA/SCA wage
determination initiation, review and final decision.
Additionally, the matrix cites those persons responsible for
various aspects of the DBA compliance program at both the prime
and subcontract levels.
Included as part of this attachment is:
- A certification form to be used during on-site compliance
checks
- Copy of DOL publication WH 1321, "Notice to Employees
Working on Federal and Federally Financed Construction
Projects11, that must be posted at the site
- Labor Standards Interview, SF 1445 (OMB Form)
- Labor Standards Interview, GSA Form 3017 (Optional Form)
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Attachment A-7
Page 1 of 6
ROLES AND RESPONSIBILITIES
FOR
COMPLIANCE WITH DBA/SCA LABOR STANDARDS
FOR WAGE DETERMINATION (WD) REQUESTS
INITIATE
REMOVAL CONTRACTS:
Preaward:
LABOR CATEGORIES PO
DETER. SCA/DBA PO
FORWARD TO DOL
INCORP. CONTRACT
Post Award:
DETER. SCA/DBA
IDENTIFY WD
OSC
APPLICABLE DBA
WAGE DETERMINATION
SCHEDULE OSC
REVIEW
CO
CO
PO/CO
PO/CO
FINAL DECISION
EPA CO
EPA CO
EPA CO
EPA CO
EPA CO
EPA CO
REMEDIAL CONTRACTS:
LABOR CATEGORIES PRIME
DETER. SCA/DBA PRIME
FORWARD TO DOL
INCORP. SUBK PRIME
PO/RPM
PO/CO
EPA CO
EPA CO
EPA CO
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Attachment A-7
Page 2 of 6
FOR COMPLIANCE OVERSIGHT
NOTICE TO KR'S
OF OBLIGATIONS
PRECONSTRUCTION
CONFERENCES
PAYROLLS
REMOVAL
EPA CO TO PRIME
NOT APPLICABLE
EPA CO/CS
ONSITE
INSPECTIONS
AND
INTERVIEWS
(See Attached Forms)
CORRECTIVE
ACTION
OSC OR
REPRESENTATIVE
CC: PO, CO/CS
COMPLAINTS
WITHHOLDING/
SUSPENSION OF
PAYMENTS AND
TERMINATIONS
LIQUIDATED
DAMAGES, ETC.
NOTES:
EPA CO
(NOTICE BY OSC
THRU PO)
EPA CO/
HQ COMPLIANCE
EPA CO/
HQ COMPLIANCE
EPA CO
HQ COMPLIANCE
REMEDIAL
EPA CO TO PRIME WITH
DIRECTION ON SUBK
PRIME (RPM/RPO MAY
ATTEND) CC: MINUTES
TO EPA CO (See Note 1)
PRIME, EPA CO/CS (See
Note 2)
PRIME WITH RPM/RPO
(See Note 2)
CC: CO/CS
EPA CO NOTICE TO PRIME
TO NOTIFY SUBK
EPA CO/HQ COMPLIANCE
EPA CO/HQ COMPLIANCE
OF SUBK PAYMENTS
REQ. BY PRIME
EPA CO DIRECTION TO
PRIME
(1) EPA CO, PO and RPM will have a separate meeting with the
Prime prior to the preconstruction meeting to review DBA
compliance requirements.
(2) If delegated responsibility by the CO, the prime contractor
retains responsibility to ensure compliance by construction
subcontractor with labor standards. EPA RPM/RPO will participate
in on-site inspections including interviews to ensure compliance.
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Attachment A-7
Page 3 of 6
CERTIFICATION OF DBA POSTINGS AT CONTRACTOR'S FIELD OFFICE
I certify that on this day, , I have witnessed
(Insert Date)
that the documents listed below are posted in the contractor's
field office and are available to their employees, in full view
and in conspicuous places, and in compliance with the Davis-Bacon
Act requirements:
1. Applicable wage determinations for all job
classifications used in the performance of work on this
site as contained in contract No. and?
(Insert Contract No.)
2. All applicable Department of Labor required posters as
follows:
- WH Publication 1321 "Notice To Employees Working
On Federally Financed Construction Projects"
- Equal Employment Opportunity Poster stating,
"Equal Opportunity is the Law"
OSC/RPM/RPO Name (Please Print) Signature Date
Note: The contracting officer is ultimately responsible for
compliance. Coordination between the OSC/RPM/RPO is
required in conducting reviews and completing this
certification.
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Attachment A-7
Page 4 of 6
NOTICE
TO AH
EMPLOYEES
V\forking on Federal or Federally
Financed Construction Projects
MINIMUM
WAGES
OVERTIME
APPRENTICES
PROPER
BfiY
You must be paid not less than the wage rate
in the schedule posted with this Notice for the
kind of work you perform.
You must be paid not less than one and one-half
times your basic rate of pay for all hours worked
over 40 a week. There are some exceptions.
Apprentice rates apply only to apprentices
property registered under approved Federal or
State apprenticeship programs.
If you do not receive proper pay, contact the
Contracting Officer listed below:
or you may contact the nearest office of the
Wage and Hour Division, U.S. Department of
Labor. The Wage and Hour Division has offices
in several hundred communities throughout the
country. They are listed in the U.S. Government
section of most telephone directories under
U.S. Department of Labor
Employment Standards Administration
in
13U
19M
Emptoytrarrt Stmdirdi
AdfMfelittWttQft
V*gt and Hour OMrian
-------
Attachment A-/
Page 5 of 6
LABOR STANOARDSONTEflVlCW
FORM
OMB NO
OONTMACT
NMC OF OPLOVBI
WAOCMAIf
OOVOUWONKaWUMOUMWOAVT
VES
AM YOU MO AT IBWT TM AM) A MM/ TCH OVBTTME HOUNIr
ran r
) IT TM K*I8> WMK
MWtT QBXJCnOM OT>«< TWW TAOS MB 40CML IBUVTV AM MMX ROIVQUM MVt
WWT (MTC fVMWCO NW THAT?
«H»T TOOL* 00 *OU MR
on YOU MOM wane ON TNB mauccr /nwwor
i HA.W MM> TW MKM AW eenw IT re
TO TW KIT OP Wf
a m
AW MOT (T
a
AHi WAOI HATH AM) f U»IM IMPW
Km UM IY MYHOLLCHKXDI
riHTMMYHOU.I»TAt
MTIOFQWCK
MMWCMBKBMt
-------
cm
•:
Employee Interviews:
tent of Interview*; Tl« conduct at tin-
__, yi:e interviews ii essential tu the carry-
ing ,iill »l 4 SuCCt»sful iilvcSligaiilM. Thus*
interviews sliuitlU cow 4 sufficient number
oi employees ig wrve is a duck against
(lie employer's records and the substance
at ilte violations alleged. The interviews
should also co»«r a number of employee*
in various job daiufk^ciuns on the protect
jnd. where appropriate, should include
Conner employees.
Confidentialify: Information obtained from
persons involved in ijbwr compliance
investigations is exempt from disclosure
under the Freedom of Information Act try
virtue uf ihe exemption contained la (bX?)
(I» thereof. Siwh information may also be
prot««ed under tlie Privacy Act of 1974
upon Compliance with the provisions of
Scheduling of Interviews: Interviews con-
ducted *t the jobsite should be arranged to
as to cause the least inconvenience to both
the employer end the employee. Interviews
conducted elsewhere shall to scheduled
during the employee's nonwoik hours and
at his convenience. Cut should to tikta to
scheduling interviews to allow adequate
lime for their conduct and the schedule
should to rigidly adhered to.
. of Interviews: Present employees
interviewed on the joMte, pro*
[ the interview can be conducted with
the necessary degree of privacy. If the ele-
ments of Tear or intimidation are present.
ihe interview should to conducted it the
employee's residence or some other mu-
tually agreeable place.
Interviews with Comptataaats: An early
step in most investigations will to «later*
view with the complainant contacted la
such * nutter a* not to compromise the
complainant's Identity. To avaed such
compromise, in many cam it * dssfesbt*
that the interview with the coaielaipaat to
conducted at a place other thaatto jobs**.
In some case*, the comptalat wal to ia
sufficient detail as to nepte la* eetacatly
of such an interview and la (Boat csase aa
explanation to that effect shoaU to la>
eluded in the case file.
MeJ ImesTogatories: If pofj&te. a former
employee; should be interviewed la person.
but if such proves to to inconvenient, us*
of the mails may be retorted to. When the
mai method is utilised. carefully prepared
interrogatories, to which short answers
may to given, should to used. In ail cases,
every attempt should to made to have a
pejamtl interview with the mail method
bbflBed only when such is not possible.
Privacy of Interviews: All interviews should
he conducted in the strictest privacy. Em*
pioyees shall nut to interviewed in the
presence of any other person.
Employee Statements:
Written Statements Unneceaary: Employee
statements which merely cunflrm infarrna-
lion in the employer's records and tlu nut
indicate i violation where none has been
otherwise alleged, need not be recorded.
Nutations of the interviews showing name.
dale, and place when they wen held
should to prepared for the case tie in such
situations with the comment "No addi-
tional information obtained" or a similar
statement appended thereto.
_ ____ f To preserve
the confidential nature of the employee
statements, each should to put on a
separate sheet or sheets of paper. Repeti-
tive statements by various employees coo*
ceraing the SUM facts need not to pre-
pared. but a comment listing the names of
the additional employees should to placed
in the investigative fDe. Signed statements
should to obtained when information given
by an employe* is pertinent to proof of a
violation. As an example, signed statements
should always to takea in the four cases set
forth below:
Infocaiatioa coBcenttBg prftftr^iiT of
cnptoyiMnt when such inform at hot
is retsstag from, or poeaoty fahtfled to.
the employer's records;
or other "ttckback**
activity involving employees tohtg
faces* 10 rethtqujeh pan of (hear
PtftlMttt IflfOffltttlOn wwfflBH-anaWIIJ HI
actual or potential controversy with tto
^i^UH_ t m --* -* ------
of a gtvea vtotailoo is dhdoasd; aad
Attachment A-7
Page 6 of 6
Structure of Written Sialemcfii:
Tto opening paragraph of each em-
ployee's statement should amtam
the following identifying information;
project number: name of employer:
name and address of employee; status
aa present or former employee; jnd
place and dale of interview.
The body of the statement should con-
tain the job classification under which
the employe* is working and » brief
description of the exact duties per-
formed, tools used, frequency of use
of such tools, place when work is ptr-
fumed, the period of employment,
starting and quitting times, daily. ^»g
weekly hours worked, the employee s
rat* of pay. the wages received, and
the manner in which the working time
is recorded and by whom. Those
matters involved in in* allegation or
(Uegations concerning which the em-
ploye* can to expected to to able to
termsh information and any UMteide-
ttaa involved with -kick-back" activity
should to covered. Any further essen-
tial' information concerning th* ac-
curacy or adequacy of the employer's
records should also to dealt with in
the utenteot
of dfet State*****: The infer-
given by aa employ** should to
panahnsed in a coads* and dear matter
woJe clearly reflecting the intent of the
employee giving th* information. The first
person form should to used. That is, the
iiiaamui should reflect that it is th* em-
ployee preparing it A final line must
always to added stating that die employee
ha* read tto foregoing statement and that
» the
r« of ocheW hfoflMtiOai
•VeaVV mUGQtUi (BiaawettliiU tO I&9
it accatatehr nflects his intent The state-
meat should to signed by the employee
aaa wvateMu by the InvesrJgstor- Each
aad every change hi me statement must to
fastaaad by che miptojee as to is the
author, tf me statement a longer than
OB* page, each page must to initialed or
taior mould always bear in mtad that his function is to
aacertam and report to hk attperion die facts concerning
a given Investigstion, not to take ades either with the
employer or employee involved. In accordance with that
duly, employees should not to ghwa, or allowed access
10. tto employer s records esad* avaaaUe to th* toveati-
ptor. Aa aa example of this, aa euiutoyea should not to
shown copies of the houn worked aad wages paid with
regard to him. but should to questioned regarding the
wap* paid and houn worked and his answcn compered
*ith tto employer's records. An investigator may inform
employee* as to how the wage* and overtime is com-
puted, but should not express aa opinion as to whether
or not wages an due, or encourage law suits by an em-
ployee or group of employees with rapid to the subject
mailer of the investigation.
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-------
ATTACHMENT A-8
SAMPLE NOTIFICATION LETTERS TO PRIME CONTRACTORS
REGARDING COMPLIANCE OBLIGATIONS UNDER DBA/SCA
The purpose of this attachment is to provide sample letters
to Superfund prime and subcontractors relative to their
responsibilities for DBA and/or SCA labor provisions. It is
incumbent upon EPA contracting officers to inform the .contractor
of the applicable labor standards contained in their contracts
and to reiterate the contractor's responsibilities relative to
any labor standards.
Although the contract contains the specific labor standard
provisions and, cites both statutory and regulatory requirements,
these sample letters serve as a reminder to the contractor to
familiarize itself with its specific contract and subcontract
requirements.
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Attachment A-8
Page 1 of 20
SAMPLE LABOR STANDARDS NOTIFICATION
LETTER TO ARCS CONTRACTOR
[Insert Date]
[Insert Address of
ARCS Prime Contractor]
Subject: Contract No.
Contractor's Responsibility Under The Equal Employment
Opportunity (EEO) And Labor Standards Clauses
Dear [Insert addressee's name]:
This letter is issued to restate and emphasize your
responsibilities, and subsequently the responsibilities of any
subcontract you may award under this contract, relative to the
EEO and labor standards clauses incorporated into the subject
contract. Pursuant to the terms and conditions of the contract,
you are hereby reminded that notice of subcontract award must be
provided to the EPA contracting officer within 5 working days of
award. This will allow sufficient time for EPA to notify the
Department of Labor's Office of Federal Contract Compliance
Programs (OFCCP) in accordance with FAR 22.804-2(c) to verify the
subcontractor's eligibility for award within the requirements of
Executive Order 11246.
As the prime contractor, you are responsible for ensuring
the full and impartial enforcement of labor standards in the
administration of any future subcontracts that may be awarded
under the subject contract. Accordingly, [Insert ARCS prime
contractor] shall:
(1) Ensure that the subcontractor and any lower-tier
subcontractors are informed, before commencement of work, of
their obligations under the EEO and labor standards clauses
of the subcontract. A letter should be sent to the
subcontractor (copy attached) informing it of the EEO and
labor standards clauses, the wage determination requirements
of the subcontract and, of the subcontractor's, and any
lower-tier subcontractors', responsibilities under the
subcontract. If [Insert ARCS prime contractor] already has
.developed a notification letter similar to the one attached
herein, it may be used as long as all points are addressed.
These requirements should also be discussed at the
preconstruetion conference.
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Attachment A-8
Page 2 of 20
(2) Receive and review payrolls weekly from the subcontractor
and any lower-tier subcontractors to ensure compliance with
the Davis Bacon Act (DBA) labor requirements in accordance
with FAR 22.406-6, "Payrolls and Statements". [Insert ARCS
prime contractor] will be required to forward the originals
of the payrolls to the EPA contracting officer when
requesting payments relative to this subcontract. Any
inquiries to the Department of Labor shall be forwarded
through the EPA contracting officer.
(3) Perform on-site compliance checks to ensure that the
subcontractor and any lower-tier subcontractors are
complying with labor standard practices, in accordance with
FAR 22.406-7, "Compliance Checks", as follows:
(i) see that the subcontractor has prominently posted at
the job site the required EEO and "Notice to Employees
Working on Federal or Federally Funded Construction
Projects" (WH Publication 1321) posters as well as the
applicable wage determinations, and any amendments to them;
(ii) interview workers periodically for proper labor
classifications and correct wages;
(iii) observe, record and report to the contracting officer
any disproportionate ratio of laborers, helpers, and
apprentices to journeymen; and,
(iv) report violations of the labor standard provisions to
the contracting officer.
Documentation of labor interviews and on-site inspections,
as necessary, will be forwarded to the EPA contracting
officer with the weekly payroll records. Any violation
which [Insert Arcs prime contractor] cannot rectify
immediately should be brought to the attention of the EPA
contracting officer.
The EPA contracting officer shall be copied on all
correspondence between (Insert ARCS prime'contractor] and the
subcontractor relative to the labor standards requirements under
the prime and subcontracts. Copies of the SF1413, "Statement and
Acknowledgement", submitted for subcontractors shall also be
forwarded to the EPA contracting officer. [Insert ARCS prime
contractor] is required to submit to the EPA contracting officer
within 14 days after award of the subcontract, and 14 days after
any subsequently awarded subcontract, a completed SF 1413. For
each subcontract, the SF 1413 shall contain the names and
addresses of all subcontractors, a description of the work to be
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Attachment A-8
Page 3 of 20
performed by each and, the subcontractors signed and dated
acknowledgement that the clauses set forth in paragraph (a) of
this form have been incorporated into the subcontract.
Prior to final payment for work performed under the subject
subcontract, the EPA contracting officer shall ensure that full
and impartial enforcement of the labor standards has been made in
the administration of this subcontract. To accomplish this, it
will be necessary for the Agency to conduct periodic interviews
with your employees and those of your subcontractors. The
contracting officer may delegate this responsibility to the
Remedial Program Manager (RPM).
If there are any questions, please do not hesitate to call
me.
Sincerely,
Contracting Officer
cc: [Project OfficerJ/EPA
Attachment: Sample Subcontractor Notification Letter
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Attachment A-8
Page 4 of 20
ATTACHMENT TO ARCS PRIME CONTRACTOR LETTER
SAMPLE NOTIFICATION LETTER TO ARCS SUBCONTRACTOR
[Insert Date]
[Insert Address of
ARCS Subcontractor]
Subject: Subcontract No.
Notification of Subcontractor's Responsibility Under
The Equal Employment Opportunity (EEO) And Labor
Standards Clauses
Dear [Insert Addressee]:
The above referenced contract is subject to the Equal
Opportunity clause (FAR 52.222-26) under Section of this
contract. Pursuant to this clause, you agree not to discriminate
against any employee, or applicant for employment because of
race, color, religion, sex, or national origin, and to be subject
to affirmative action program requirements. The requirements of
the Equal Opportunity clause are binding and must be included in
every subcontract or purchase order that is not exempted by the
rules, regulations, or orders of the Secretary of Labor issued
under Executive Order 11246, as amended. Your careful review of
the clause is required and steps taken to ensure full compliance
with the terms and conditions as set forth in the Equal
Opportunity clause.
The Equal Opportunity clause requires that the standard
Equal Employment.Opportunity poster, "Equal Opportunity is the
Law" be displayed "in conspicuous places available to employees
and applicants for employment." Lower-tier subcontractors must
similarly display the Equal Employment Opportunity poster.
Attached is a copy of the poster.
Additionally, pursuant to the terms and conditions of the
subject contract, you are required to comply with the labor
standards clauses for construction contained therein. These
provisions must be incorporated into all subcontracts. The
following specific procedures and forms have been developed for
purposes of implementing and ensuring compliance with and
administration of these labor standards clauses.
Davis Bacon Act (DBA Labor Standards:
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Attachment A-8
Page 5 of 20
1. Labor classifications
The Davis-Bacon Act (DBA) [40 U.S.C.-276a-a(7)] requires
that all laborers and mechanics employed or working upon the site
will be paid the full amount of wages and bona fide fringe
benefits (or cash equivalent thereof), not less often than once a
week. The wages shall be computed at rates not less than those
contained in the wage determination [except for Apprentices and
Trainees (FAR 52.222-9)] of the Secretary of Labor, which is
attached and made a part of the subject contract, for the
classification of work actually performed. The DBA clause is
incorporated in full text in the subject contract and includes
provisions, instructions and requirements for; (1) compensation
to laborers and mechanics performing work in more than one
classification and; (2) criteria for obtaining approval of
laborers and mechanics not listed in the wage determination but
employed in performance of the contract (additional
classifications).
2. Posting wage rates and related information
Attached to this letter are copies of the Notice to
Employees Working on Federal and Federally Financed Construction
Projects, WH Publication 1321. You are required to display this
poster along with the contract wage determinations in one or more
prominent locations a the job site where they can easily be seen
by all laborers and mechanics on the first day of work. They
shall remain posted and in legible condition for the duration of
the contract work. Any additional classifications and rates
approved after issuance of the original decision shall be
similarly posted.
3. Wages
Pursuant to Title 29, Part 5 of the Code of Federal
Regulations, "the term "wages" means the basic hourly rate of
pay; any contribution irrevocably made by a contractor or
subcontractor to a trustee or to a third person pursuant to a
bona fide fringe benefit fund, plan, or program; and the rate of
costs to the contractor or subcontractor which may be reasonably
anticipated in providing bona fide fringe 'benefits to laborers
and mechanics pursuant to an enforceable commitment to carry out
a financially responsible plan of program, which was communicated
in writing to the laborers and mechanics affected.1* The fringe
benefits enumerated in the DBA do not include benefits required
by other Federal, state or local law." In the event you are not
a participant in an approved fringe benefit plan, direct cash
payments shall be made to employees in the amounts equal to the
prescribed benefits.
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Attachment A-8
Page 6 of 20 •
4. Apprentices
The wage decision incorporated in the subject contract does
not contain any apprentice classifications and corresponding wage
rates. Prior to employing any apprentices on the project,
written evidence must be submitted showing that your (or your
subcontractors) apprentice program is registered with a State
apprenticeship agency which is approved and recognized by the
U.S. Bureau of Apprenticeship and Training, or in the absence of
such a State agency, with aforesaid U.S. Bureau. Also, you are
required to submit evidence showing the allowable ratio of
apprentices to journeymen, the registration of each apprentice
under the approved program, and the proper wage rates to be paid
such employees in the area of the project.
5. Payrolls and Statements of Compliance
Laborers and mechanics must be paid on a weekly basis and
you are required to submit to the undersigned within 7 days after
such payment, a copy of your weekly payroll. Each payroll shall
contain names of all laborers and mechanics who performed any
work at the site, their classifications, hours worked each day,
total hours each week, hourly rates of pay, fringe benefits,
total gross pay, deductions from wages, and net amounts of wages
actually received by employees. Permanent home addresses of
employees are to be furnished with the first payroll on which
each employee's name appear. This may be accomplished by
including the addresses on the payroll or by a separate listing
attached to the payroll. Enclosed is a sample payroll form WH-
347, which has been developed by the Department of Labor for
contractor's optional use. When properly executed, this form
will satisfy the requirements of the contract for submission of
payroll data and statements of compliance. Instructions
governing the use (WH-347, Inst.) are attached. A supply of this
form may be purchased from the Government Printing Office for a
nominal amount, or you may use the enclosed form as a guide when
obtaining a supply by other means. You are responsible for the
proper submission of payrolls for any and all subcontractors of
any tier and for insuring that laborers and mechanics on the
contract work are properly paid.
6. Records Retention
The subject contract contains a special contract requirement
clause, (refer to clause number), which requires you to retain
and make available those records specified in FAR Subpart
4.703(b)(l) "Contractor Records Retention" and 52.215-2
"Audit-Negotiation", for a period of ten (10) years after final
payment under the contract. The Contractor is responsible for
-------
Attachment A-8
Page 7 of 20
insuring that such records are maintained by all subcontractors
and for making their records available for inspection during the
ten-year period.
7. Subcontracts
In accordance with FAR clause 52.222-11, Subcontracts (Labor
Standards), incorporated into the subject contract, you are
required to submit to this office within 14 days after award of
the contract, and 14 days after any subsequently awarded
subcontract, a completed Statement and Acknowledgement Form (SF
1413). For each subcontract, the SF 1413 shall contain the names
and addresses of all subcontractors, a description of the work to
be performed by each and, the subcontractors signed and dated
acknowledgement that the clauses set forth in paragraph (a) of
this form have been incorporated into the subcontract. Copies of
Standard Form 1413, statement and Acknowledgment, are enclosed
for this purpose. A copy of this letter together with a set of
the attached forms may be furnished to all subcontractors.
8. Contract Work Hours and Safety Standards Act:
This Act requires that all laborers and mechanics (including
watchmen and guards) must receive time and one-half for all hours
of work in excess of 40 hours per week, and it also provides that
laborers and mechanics shall not be required to work in
surroundings or under working conditions which are unsanitary,
hazardous, or dangerous to their health or safety.
9. Copeland (Anti-Kickback) Act:
This Act makes it a criminal offense for any person to
induce, by force, intimidation, threat of procuring dismissal
from employment, or otherwise, any person employed in the
construction or repair of public buildings or public works,
financed in whole or in part by the United States, to give up any
part of the compensation to which that person is entitled under a
contract of employment. The Copeland Act also requires a weekly
statement of compliance from each contractor and subcontractor
with respect to the wages paid each employee during the preceding
week. Unless payrolls are submitted on Form WH-347 cited above,
or similar form containing the combined payroll data and
statements with respect to wages paid, each weekly payroll must
be accompanied by a separate Statement of Compliance. In
executing the statement, that portion set aside for a description
of permissible deductions must be completed by listing the types
and amounts of deductions, unless this information is clearly
shown on the face of the payroll, in which case the statement may
be completed by inserting the following: "See Deductions column
-------
Attachment A-8
Page 8 of 20 •
in the attached payroll, which is incorporated in and made a part
of this statement". The Statement of Compliance should be
identified with the same payroll number as the payroll for which
it is attached.
10. Summer Employees
The wage decision in your contract does not contain any
special classifications and rates for summer employees. However,
the Department of Labor permits the temporary summer employment
of students at rates lower than the journeyman's rate pursuant to
a bona fide Youth Opportunity Program. Prior to such employment,
written data must be submitted to this office (for approval and
submission to the Department of Labor) showing the proposed
classifications and rates, evidence of participation in a bona
fide Youth Opportunity Program, and, where applicable, data
showing that labor and management have agreed to this practice.
11. Employee Interviews
You are hereby notified that periodic interviews will be
conducted in accordance with the compliance requirements under
the DBA with your employees by representatives of this company as
well as representatives of the Environmental Protection Agency
(EPA). The EPA contracting officer may delegate this
responsibility to the EPA Remedial Program Manager (RPM).
The labor provisions discussed herein are set forth in full
text in Department of Labor Regulations, Parts 3, 4 and 5 (Title
29 of the Code of Federal Regulations, Subtitle A). If there are
any questions regarding the labor standards clauses of this
contract, please do not hesitate to call me.
Sincerely,
Contracting Officer
Attachments: (1) WH Publication 1321
(2) Payroll Form WH-347
(3) statement and Acknowledgement Form SF 1413
(4) EEO Poster
cc: EPA Remedial Project Manager
EPA Project Officer
-------
Attachment A-8
Page 9 of 20 •
SAMPLE LABOR STANDARDS NOTIFICATION LETTER
TO ERCS AND/OR SITE SPECIFIC CONTRACTORS
[Insert Date]
[Insert Address of
ERCS Prime Contractor]
Subject: Contract No. ? Notification of Contractor's
Responsibility Under The Equal Employment Opportunity (EEO),
Service Contract Act (SCA) and Davis Bacon Act (DBA) Labor
Standards clauses
Dear [Insert Addressee]:
The above referenced contract is subject to the Equal
Opportunity clause (FAR 52.222-26) under section of
this contract. Pursuant to this clause, you agree not to
discriminate against any employee, or applicant for employment
because of race, color, religion, sex, or national origin, and to
be subject to affirmative action program requirements. The
requirements of the Equal Opportunity clause are binding and must
be included in "every subcontract or purchase order that is not
exempted by the rules, regulations, or orders of the Secretary of
Labor issued under Executive Order 11246, as amended." Your
careful review of the clause is required and steps taken to
ensure full compliance with the terms and conditions as set forth
in the Equal Opportunity clause.
The Equal Opportunity clause requires that the standard
Equal Employment Opportunity poster, "Equal Opportunity is the
Law" be displayed "in conspicuous places available to employees
and applicants for employment." Lower-tier subcontractors must
similarly display the Equal Employment Opportunity poster.
Attachment A-8
Page 9 of 20
Attached is a copy of the poster.
Additionally, pursuant to the terms and conditions of the
subject contract, you are required to comply with the labor
standards clauses for services and construction contained
therein. These provisions must be incorporated into all
subcontracts. The following specific procedures and forms have
been developed for purposes of implementing and ensuring
compliance with and administration of these labor standards
clauses.
Davis Bacon Act (DBA Labor Standards:
-------
Attachment A-8
Page 10 of 20-
1. Labor classifications
The Davis-Bacon Act (DBA) [40 U.S.C,-276a-a(7)] requires
that all laborers and mechanics employed or working upon the site
will be paid the full amount of wages and bona fide fringe
benefits (or cash equivalent thereof), not less often than once a
week. The wages shall be computed at rates not less than those
contained in the wage determination [except for Apprentices and
Trainees (FAR 52.222-9)] of the Secretary of Labor, which is
attached and made a part of the subject contract, for the
classification of work actually performed. The DBA clause is
incorporated in full text in the subject contract and includes
provisions, instructions and requirements for; (1) compensation
to laborers and mechanics performing work in more than one
classification and; (2) criteria for obtaining approval of
laborers and mechanics not listed in the wage determination but
employed in performance of the contract (additional
classifications).
2. Posting wage rates and related information
Attached to this letter are copies of the Notice to
Employees Working on Federal and Federally Financed Construction
Projects, WK Publication 1321. You are required to display this
poster along with the contract wage determinations in one or more
prominent locations a the job site where they can easily be seen
by all laborers and mechanics on the first day of work. They
shall remain posted and in legible condition for the duration of
the contract work. Any additional classifications and rates
approved after issuance of the original decision shall be
similarly posted.
3. Wages
Pursuant to Title 29, Part 5 of the Code of Federal
Regulations, "the term "wages" means the basic hourly rate of
pay; any contribution irrevocably made by a contractor or
subcontractor to a trustee or to a third person pursuant to a
bona fide fringe benefit fund, plan, or program; and the rate of
costs to the contractor or subcontractor which may be reasonably
anticipated in providing bona fide fringe benefits to laborers
and mechanics pursuant to an enforceable commitment to carry out
a financially responsible plan of program, which was communicated
in writing to the laborers and mechanics affected." The fringe
benefits enumerated in the DBA do not include benefits required
by other Federal, State or local law." In the event you are not
a participant in an approved fringe benefit plan, direct cash
payments shall be made to employees in the amounts equal to the
prescribed benefits.
-------
Attachment A-8
Page 11 of 20
4. Apprentices
The wage decision incorporated in the subject contract does
not contain any apprentice classifications and corresponding wage
rates. Prior to employing any apprentices on the project,
written evidence must be submitted showing that your (or your
subcontractors) apprentice program is registered with a State
apprenticeship agency which is approved and recognized by the
U.S. Bureau of Apprenticeship and Training, or in the absence of
such a State agency, with aforesaid U.S. Bureau. Also, you are
required to submit evidence showing the allowable ratio of
apprentices to journeymen, the registration of each apprentice
under the approved program, and the proper wage rates to be paid
such employees in the area of the project.
5. Payrolls and Statements of Compliance
Laborers and mechanics must be paid on a weekly basis and
you are required to submit to the EPA contracting Officer within
7 days after such payment, a copy of your weekly payroll. Each
payroll shall contain names of all laborers and mechanics who
performed any work at the site, their classifications, hours
worked each day, total hours each week, hourly rates of pay,
fringe benefits, total gross pay, deductions from wages, and net
amounts of wages actually received by employees. Permanent home
addresses of employees are to be furnished with the first payroll
on which each employee's name appear. This may be accomplished
by including the addresses on the payroll or by a separate
listing attached to the payroll. Enclosed is a sample payroll
form WH- 347, which has been developed by the Department of Labor
for contractor's optional use. When properly executed, this form
will satisfy the requirements of the contract for submission of
payroll data and statements of compliance. Instructions
governing the use (WH-347, Inst.) are attached. A supply of this
form may be purchased from the Government Printing Office for a
nominal amount, or you may use the enclosed form as a guide when
obtaining a supply by other means. You are responsible for the
proper submission of payrolls for any and all subcontractors of
any tier and for insuring that laborers and mechanics on the
contract work are properly paid.
6. Records Retention
The subject contract contains a special contract requirement
clause, (insert clause number), which requires you to retain and
make available those records specified in FAR Subpart 4.703(b)(l)
"Contractor Records Retention" and 52.215-2 "Audit-Negotiation",
for a period of ten (10) years after final payment under the
contract. The Contractor is responsible for insuring that such
-------
Attachment A-9
Page 12 of 20
records are maintained by all subcontractors and for making their
records available for inspection during the ten year period.
7. Subcontracts
In accordance with FAR clause 52.222-11, Subcontracts
(Labor Standards), incorporated into the subject contract, you
are required to submit to this office within 14 days after award
of the contract, and 14 days after any subsequently awarded
subcontract, a completed Statement and Acknowledgement Form (SF
1413). For each subcontract, the SF 1413 shall contain the names
and addresses of all subcontractors, a description of the work to
be performed by each and, the subcontractors signed and dated
acknowledgement that the clauses set forth in paragraph (a) of
this form have been incorporated into the subcontract. Copies of
Standard Form 1413, Statement and Acknowledgment, are enclosed
for this purpose. A copy of this letter together with a set of
the attached forms may be furnished to all subcontractors.
8. Contract Work Hours and Safety Standards Act
This Act requires that all laborers and mechanics (including
watchmen and guards) must receive time and one-half for all hours
of work in excess of 40 hours per week, and it also provides that
laborers and mechanics shall not be required to work in
surroundings or under working conditions which are unsanitary,
hazardous, or dangerous to their health or safety.
9. Copeland (Anti-Kickback) Act:
This Act makes it a criminal offense for any person to
induce, by force, intimidation, threat of procuring dismissal
from employment, or otherwise, any person employed in the
construction or repair of public buildings or public works,
financed in whole or in part by the United States, to give up any
part of the compensation to which that person is entitled under a
contract of employment. The Copeland Act also requires a weekly
statement of compliance from each contractor and subcontractor
with respect to the wages paid each employee during the preceding
week. Unless payrolls are submitted on Form WH-347 cited above,
or similar form containing the combined payroll data and
statements with respect to wages paid, each weekly payroll must
be accompanied by a separate Statement of Compliance. In
executing the statement, that portion set aside for a description
of permissible deductions must be completed by listing the types
and amounts of deductions, unless this information is clearly
shown on the face of the payroll, in which case the statement may
be completed by inserting the following: "See Deductions column
in the attached payroll, which is incorporated in and made a part
-------
Attachment A-8
Page 13 of 20
of this statement". The Statement of Compliance should be
identified with the same payroll number as the payroll for which
it is attached.
10. Summer Employees
The wage decision in your contract does not contain any
special classifications and rates for summer employees. However,
the Department of Labor permits the temporary summer employment
of students at rates lower than the journeyman's rate pursuant to
a bona fide Youth Opportunity Program. Prior to such employment,
written data must be submitted to this office (for approval and
submission to the Department of Labor) showing the proposed
classifications and rates, evidence of participation in a bona
fide Youth Opportunity Program, and, where applicable, data
showing that labor and management have agreed to this practice.
11. Employee Interviews
You are hereby notified that periodic interviews will be
conducted in accordance with the compliance requirements under
the DBA with you employees by representatives of this company as
well as representatives from the Environmental Protection Agency
(EPA). The EPA contracting officer may delegate this
responsibility to the EPA On-Scene Coordinator (OSC).
The labor provisions discussed herein are set forth in full
text in Department of Labor Regulations, Parts 3, 4 and 5 (Title
29 of the Code of Federal Regulations, Subtitle A). If there are
any questions regarding the labor standards clauses of this
contract, please do not hesitate to call me.
Sincerely,
Contracting Officer
Attachments: (1) WH Publication 1321
(2) Payroll Form WH-347
(3) Statement and Acknowledgement Form SF 1413
(4) EEO Poster
cc: EPA On-Scene Coordinator
EPA Project Officer
-------
Attachment A-8
Page 14 of 20
NOTICE
TO ALL
EMPLOYEES
Wbrking on Federal or Federally
Financed Construction Projects
MINIMUM
WAGES
OVERTIME
APPRENTICES
PROPER
BUY
You must be paid not less than the wage rate
in the schedule posted with this Notice for the
kind of work you perform.
You must be paid not less than one and one-half
times your basic rate of pay for all hours worked
over 40 a week. There are some exceptions.
Apprentice rates apply only to apprentices
properly registered under approved Federal or
State apprenticeship programs.
If you do not receive proper pay, contact the
Contracting Officer listed below:
or you may contact the nearest office of the
Wage and Hour Division. U.S. Department of
Labor. The Wage and Hour Division has offices
in several hundred communities throughout the
country. They are listed in the U.S. Government
section of most telephone directories under
U.S. Department of Labor
Employment Standards Administration
Emptoyr
Wl Publication 1111
JasiiMrjr 19W
-------
Attachment A-8
Page 15 of 20
LABOR STAMDARDSJNTERV1EW
FORM*
OMB NO. 9000-0060
NMK OF MUME CONTMCnM
I Oft JMȣFCMV
NMK OF EWLOVEK
WMtMfl
NAME ««* AM MM
DO WU WORK W» IMUM PER BWT
YES NO
po *ou WOM OWBI « HOUM
£ YOU MK> *T LEMT1M MB A WULF PM (WOtTM HOUWT
WHAT oaucnoM anei THUH TMOI AW IOCWL •cuvrr AM IMDI man VOUH MYT
WHAT Mil/nMWar WM1MATT
tWMT IDOL* DO WU IflR
IOD YOU MOM «OW ON TMS mOJKT P^MHKT
t NAM ««0 n« MO« «w CBTTW rrio •• oaMEer TO nc nr cv HV
'TIME
a to
a m
mi »y MYHOU. CMKKJH
a tit
I JUS
JOtTRlE
-------
Employee Interviews:
Attachment A-8
Page 16 of 20
lent of Interviews: TIic conduct ut" em-
F-y<:« interviews it essential lu the carry-
ing out id 4 successful investigation. Those
interview* sliuuid cover j sufficient number
oi employees to serve as a check against
(lie employer's records and Iht substance
01 the violations alleged. The interviews
should also cover j number of cmploym
in various job classifications on the project
and. where appropriate. should include
fanner employees.
Confident ialiry: information obtained from
persons involved « labor uumpiiaaca
investigations is exempt from disciosum
under the Freedom of Information Actty
virtue of the exemption contained in (bX?)
(l» thereof. Such information may also be
protected under the Privacy Act of 1974
upon compliance with the provisions of
Scheduling of Interviews: latsrriews coa-
ducted at IB* jobsite should be arranged so
at to cause the lean inconvenience to both
the employer and Utt employee. Interview*
conducted elsewhere dull be scheduled
duriiif tii* employee's nenwork noun and
at hit convenience. Can should be taken la
scheduling interviews to allow adequate
tiim for their conduct and the schedule
should be nsjidly adhered to.
«*f Intel VISWK Present employees
be interviewed on the jobsn*. pro-
the interview caa be conducted with
the necessary degree of privacy. If the eto>
meatt of fear or intimidation ait present.
the interview should be conducted at the
employee's residence or some other mu-
tually agreeable place.
A* early
step in moat iavesttgations wtt1 be sa inter-
view with the crmpUiaaat conducted tai
such, a matter aa not to compioHUai tlH
complainant's identity. To avoM seca
,^_^——^fl^^^i^— t— ^K^^M. ^A^^M tt) IA J^^^^KB^I^
coroproRuas, u many cases it • otsniose
that th* interview with th* ccaasaauat be
conducted at a plaee other thaala* joaaU.
sufficient detail aa to neget
of such an interview aad to
explanation to that effect saaaM be
eluded in the case fue.
Maal in^taffoajntnnaa* If poanvaiv a
employee should ba interviewed la ncnoa,
but If such pro*** to ba inconvenient, uai
of the mails may be resorted to. Whta the
mai method is utilised. careAilly prapand
interrofatortet, to which short anawan
may be given, should ba used, in all cases.
emny attempt should ba made to have a
interview with the mai method
only when such is not possible.
Privacy of Interview*: All interviews should
he conducted in the strictest privacy, tnv
ptoyees shall mil be interviewed in the
presence of any other persun.
Employee Statements:
Written Slatemenis Unnecessary: Employee
statements witkh merely confirm informa-
tion in the employer's records and do mx
indicate a violation when none has been
otherwise alleged, need not be recorded.
Nutations of the interviews showing name.
date, and place when they were held
should be prepared for the case tTJe in such
situations with the comment "No addi-
tional information obtained" or a similar
statement appended thereto.
vWlRMi 9ttH8MaVI MeJC8*BBB»ty I TO pfHeaffvW
th* confidential nature of the employee
statements, each should ba put on a
separate sheet or sheets of paper. Repeti-
tive statements by various employees con-
caning the same facts need not be pre-
pared, but a comment listing the names of
the additional employees should be placed
in the investigative file. Signed statements
should be obtained when information given
by aa employee is pertinent to proof of a
violation. As aa example, signed statements
should always be taken in the four cases sat
forth below:
Ii
•••ww^H^waaBaaiar eBaPaaBaa eBe^4a *^Aae!aBfcaMFs4Vaaaj
is missing from, or poeaMy faWflad to.
the employer's records:
Slnsctun of Written Statement:
The opening paragraph of each em-
Ptoyees statement mould aWa,n
the following idemifyfa, information:
project number; name of employer
«we and address «f employ..; «,„
*s present or former employee: .ind
Ptee and date of interview.
Ze? S^ 2* """a*" «"ou»d con-
h?±S^fleilte'iundw^
aaJaSS^ V*1** "* * *«tf
forced ^L, ** <*** duli« Ptr-
fcraied. tools used, frequency of use
±2f I*-"'*• wh«~ ™* ?iS
^Jtd. the o«iod of employment.
»tt"tog and qu,tting times, daily, end
*•••> hours worked, the empily«,
""»fW. the wig., n^VlJd
*a manner in which the workin. tta.
« rewoed and by whoW. Th«
•"Mrs involved in the attention «
sssr^1*^*
P"y*a can be expected to ba able to
SiS*!*** ** «"/ intimida!
2^^*^^fck*S-ttarS
*"«^eor.»d. Aay ftjnher esa»
I™ •"onnattoa concerning the ac-
re^L 9L23U* * *• •"•'oyer'l
"•»* *otifcl also be dealt Vi^ta
li
activity Javohnag
forced lo "
""•BOB* pan of (hear
actual or potential tunm^ais> with the
of a gtveo violation* is Ihrlaafraad
of tae Staaaawat: The infer-
by aa employee should be
r— i bi a vont'fse and dear matter
whaa dearly reflecting the intent of the
employee giving the information. The first
form should ba mad. That is, the
— should reflect that it is the em-
. r-«P*ftof it- A Anal Una must
always ba added stating (bat the employee
hat mad th* foregomg statement and that
reflects his intent, The stata-
ba signed by the employee
by *a Investigator. Each
, -,-a « th* statement must be
inttBaai by th* miuio»* as he i the
later should always bear to mtod that hH function is to
aacenato aad naort to his svaarion the facts concerning
a given investigation, not to take ados either with the
employer or employee tovvhed. In accordance with that
duty, emetoyees should not be given, or allowed access
to. tae emeeoyer s recorda nude avstaeaet to the urveart-
gator. Assaex*«ptiofthls.aasraBeo|esshQuldBotbe
m±^^^ ^~-—i—^ ^f «fc. - Ih^AA^ M*A«a»Ajl «nei ^B^aiekei aieilet Miliai
snovn copM or CM noun vonuMi IMI w^jn pwi wiin
regard to him. but should ba questioned regarding the
wages paid and hours worked and his answers compared
with the employer's records. An investigator may inform
employees as to how the wages aad overtime is com-
puted, but should net express aa opinion as to whether
or not wages an due, or encourage law suits by an em-
ployee or group of employee* with regard to the subject
flutter of the investigation.
-------
Attachment A-8
Page 17 of 20
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-------
53303-WH-347
Attachment A-8
Page 18 of 20
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-------
Attachment A-8
Page 20 of 20
STATEMENT AND ACKNOWLEDGMENT
FORM ApPtOvCO OM8 NO.
•000-0014
PgD'iC 'BOOMing Durden tor this collection of 'nlormation is estimated to J»erage .19 nours per response, including Ine !i">« tor
reviewing instructions, searching existing dill sources. gathering ma maintaining mt am needed, ana comoietmg and re»i««vmg ">e
collection ol mformiiion. Send comments regarding this Durden eilimile or any Otner KDecl ol IliS coneciion ol inlormmon, inciua
-------
-------
ATTACHMENT A-9
MEMORANDUM FROM DAVID J. O'CONNOR ON THE APPLICABILITY
OF THE SERVICE CONTRACT ACT (sea)
This memorandum, dated April 26, 1988, assesses the
applicability of the SCA to certain EPA contracts and includes
various case studies as supporting-background-and documentation.
-------
ATTACHMENT A-9
• Page 1 of 7
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, O.C. 20460
APR 261988
OFFICE OP
ADMINISTRATION
AND RESOURCES
MANAGEMENT
MEMORANDUM
SUBJECT: Applicability of the Service Contract Act
FROM: David J. O'Connor, Director
Procurement and Contracts Management Division
TO: See List of Addressees
I have attached for your information and use a copy of
Tony Beyer's memorandum assessing the applicability of the Service
Contract Act to certain EPA contracts. According to Department of
Labor regulations, the Act is applicable to contracts foe services
that involve the use of service employees to a significant or
substantial extent. In close cases involving a decision on
significant use of service employees, the Department of Labor
should be consulted.
Please reproduce copies of Tony's memorandum and distribute
to all contract specialists in your organization.
Thank you for your cooperation.
Attachment
LIST OF ADDRESSEES
Sallyanne Harper
Paul Martin
Donald Hambric
Rosemarie Nance
Pat Patterson
Bill Topping
Mark Walker
William Wilfong
William Bailey, CINN
Douglas Richmond, RTP
Regional Contracting Officers
-------
Attachment A-9
Page 2 of 7
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C, 20460
March 26, 1988
MEMORANDUM
SUBJECT: Applicability of Service Contract Act
FROM: Anthony G. Beyer
Attorney-Advisor_
OGC/RTP (MD-33)
TO: Vicki Presnell
Contract Specialist .V
Branch C, CMD/RTP (MD*-33)
Of
OZNCMAI. COUNSEL.
£er your oral inquiry of March 25, 1988, you hava asked
for an assessment of Radian Corporation's objection to the inclu-
sion of the Service Contract Act Clause in an EPA contract to be
awarded for the performance of sampling and analysis of nonnethane
organic compounds (NMOC) and certain toxic compounds in the am-
bient air. Radian's technical proposal reveals that 72% of the
services will be performed by professional laboratory personnel
whose work requires professional chemistry, etc. degrees. Radian
has proposed other direct labor consisting of one (1) secretary
and four to five (4-5) laboratory technicians who will perforr. the
remaining 28% of direct labor consisting of operating computers,
running technical equipment such as a high vacuum rack, and man-
ipulating scientific data to support the professional laboratory
personnel in writing up the results of their scientific work.
Radian has objected to the inclusion of the Service
Contract Act clause because the contract is not to be performed
by fifty per cent (50%) or more "service employees" subject to
the Act fie. the technicians and secretary account for 28% of the
work to be performed.) Radian cites a Villanova Law Review article
published in 1984 entitled "The Service Contract Act of 1965: Ti-e
to Revise or Repeal" by Beverly Hall Burns, Esquire.(Vol. 29,
p. 435.) The author cites the Department of Labor's regulation
implementing the Service Contract Act at 29 C~R 4.113 for the
proposition that " a revised definition of contracts subject to
the Act [includes] an exemption for contracts for services which
are not performed principally by 'service employees'" Id. at 474.
(See attachment #1.) In explaining the import of 29 C~?. 4.112,
the author continues...
Previously, where service employees performed more than
a minor part of the contract, the contract was deemed to
come within the coverage of the Act. The new regula-
tions restrict the application of the Act by providing
that service workers must contribute a majority of the
performance of the contract. (Smphasis in original.)
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Attachment A-9
Page 3 of 7
-2-
footnote #234. 29 CFR 4.113{a)(3). In close cases.
or where one cannot predict whether service employees
will contribute the majority of tir.a for performance,
other factors must be considered. Id. Those factors
include "the nature of the contract work, the type of
work performed by service employees, how integral the
work performed by the service employees is to the con-
tract and the total number of service employees to be
employed on the contract. Id...(Emphasis supplied.)
Although the quoted Law Review article, does- not mention a 50%-
rule of thumb expressly, RadiaH asserts that the underlined
language in footnote f234 means that the Service Contract Act
is not applicable unless non-exempt service employees (such as
the Radian laboratory technicians) perform more than 50% of .the
work under the contract.
QUESTION PRESENTED
Is the Service Contract Act applicable only where the
contract to be performed requires non-exempt service employees
to perform more than 5C% of the direct labor under the contract?
AIISWER
No. The regulations implementing the Service Contract Act,
as interpreted by Department of Labor officials responsible for
administration of Service Contract Act matters co not support the
asserted 50%-rule in determining, tha applicability of the Act.
Additionally, the SCA regulations require consultation
with the Department of Labor in close cases.. On March 25, 198S,
SCA Department of Labor Officials considered the facts presented
above and concluded that the Service Contract Act was applicable
to the contract because the 28% was. considered a "significant
use of service employees" within the factors specified in the
SCA regulations at 29 CFR 4.113(a)(3) and (a)(4).
DISCUSSION
In explaining the SCA regulation at 29 CFR 4.113 {a} C! ..
the author of the Viilanova Law Review articla cited by^Radi.-.r.
erroneously introduces h«r own determinative test of SCA^appli-
cability with tha phrase:
:er service employees will con-
^ ^^ f^ ± ^ ,„. fc« jf »~ -^ «• »* IP •••«•• ^»™ ^ ^ ^ — - --__-_- _ — _™ _____ _ v __ ^
tribute the majority of tirr.a for performance ?" A close reading
of 29 CFR 4.113(a)(3) and (a) (4) discloses that^ the implementing
regulations contain no such "majority of time" 'test, ncr any
reference to a 50% rule of thumb test advocated by ?.adian:
-------
Attachment A-9
, Page 4 of 7
•P- "I «*
29 CFR, 4.113U) (3) . .. the Department of Labor does not
require application of the Act to any contract for ser-
vices which is performed essentially by bona fide ex-
ecutive, administrative or professional employees, with
the use of service employees being only a minor factor in
the performance of the contract. However, the Act would
apply to a contract for services which may involve the use
of service employees to a significant or substantial ex-
tent even though ther.e is some use-of bona-fide-executive,
administrative, or professional employees in the perfor-
mance of the contract... (Imphasis supplied.)
4.113(a)(4) In close cases involving a decision as to
whether a contract will involve a significant use of
service employees, the Department of Labor should be
consulted, since such situations require consideration
of other factors such as the nature of the contract
work, the type of work performed by service employees,
how necessary the work is to contract performance,- the
amount of work performed by service employees vis-a-vis
professional employees, and the total number of service
employees employeed on the contract. (Emphasis supplied.)
From the above, it is clear that the SCA implementing regulations
do not contain a "majority of time" test nor a 50% rule of thumb
test as advocated by Radian.
A phone call to Mr. Thomas Obert of the Department of
Labor's SCA Division (F7S 523-7541) on March 25, 1988, resulted
in consultative discussion of the facts of the instant procurement.
Mr. Obert's opinion was that 28% of the contract performance rep-
resented a significant use of servica contract employees and that
therefore the Act should be made applicable to the contract. .Mr.
Obert stated that in some instances "he Department of Labor has
concluded that a significant use of service employees is present
where ten out of ons-hundred employees are non-exempt service
employees whereas another instance of tsn out of or.e-thousani
would be deemed not to be significant, (ie.l'i)
Mr. Obert did acknowledge'that 29 C??> 541.3 (d) provides
that the term "bona fide professional capacity" :-eans any employee:
(<£) Who does not devote more than 20 percent of his
hours worked in the workweek to activities which are
not an essential part of and necessarily incident to
s:h3 performance of [professional activities] describee
in paragraphs (a) through (c) of this section....
I expla. .ed to Mr. Obert that this section of the SCA regulation
-------
Attachment A-9
Page 5 of 7
ijm jt m^
had previously (circa., 1979) been citad as a good —.iV'-c^-thinab
by prior Department of Labor officials in determining the
applicability of the Service Contract Act. Mr. Obert indicated
that while the inferred 20%-test night have been a good test of
applicability, the consultative provisions of 29 c~X 4.1i3(a)(4),
supra, have been found to work much r?.ore efficiently in achieving
a consistent application of the Act. -
-------
Attachment A-9
Page 6 of 7 j
1983-84}
THE SERVICE CONTRACT ACT OF 1965: TIME TO
REVISE OR REPEAL
BEVERLY HAU. BURNS!
L INTRODUCTION
/•"1ONGRESS adopted the Service Contract Act of 1965 (the Act),1
V^with the laudable purpose of preventing the exploitation of the
"poorest" and "most marginal" workers in America: (he service em-
ployees who performed such tasks as washing laundry, preparing and
serving meals, and doing the janitorial work for government facili-
ties.2 This purpose was to be realized by requiring that federal service
workers employed by independent federal contractors be paid a mini-
mum wage and provided certain minimum benefits determined by
the'Secretary of Labor (the Secretary).3 Eighteen yean of adminis-
tration by the Department of Labor (Labor Department, or DOL)
and two. congressional amendments have buried the Act's goals under
an 'avalanche of confusion and chaos. The protections of the Act
have been extended far beyond the imaginable scope of Congress*
original intent. For example, the Act today includes within its ambit
ta£ protection not just "marginal" workers but some university re-
•searchers and specialists in high technology industries as well.4 The
•Service Contract Act, a remedial statute aimed at Axing problems
that may never have existed, stands'as a paradigm of good intentions
t Member, Miller. Canficld. Paddock & Stone, Detroit. Michigan. Bu^, Michi-
; gan State University, 1967; J.D., University of Michigan Law School. 1979.
Research, for this study was financed by a grant frvm the Carthage Foundation
•-• to the'Wharton School Industrial Research Unit, University of Pennsylvania, for
L. No. 89-286. 79 S,«. 1034 (codified a,
amended at 41 U.S.C §§ 331-358 (1976)).
2 Srt Oumitkt Hnrmtt •* to •Smut Gunnel Att »/ 1363, At AmauM, Bffort
Conf.. l« Sea. 43 (J973) (itaiement of Robert J. Connerton. General Counsel. La-
boren' International Union of North America) [hereinafter cited at ij"0"rt't*'
SJp); H.R. R£f. NO. 948, 89th Con£ l« S««. 2 (1963); S. REH No 798. 89th
ConfT lit Sea. 2.«*«W« 1965 U.S. Coot CONC, 4 Ao. Ntws 3737, 3737 For a
full discussion of the problems which have been faced in definm j the scope of occu-
pations covered by the Act. see notei 35-67 and accompanying text «yfc .
3. -StfvlkConiract Act of 1965. § 2(a)(l)-(4) (codified as amended at
-------
Attachment A-9
Page 7 of 7
474
VILLANOVA LAW REVIEW [Vol. 29: p. 435
*•• •
» v
i
principally for the provision gf services.*30 \ The new regulation
quires that the provision of services be not merely a principal pur
Ijhe contract, but rather Uu principal purpose." \
empis irom tne Act's coverage the incidental service components of
contracts involving the purchase or lease of computer and high tech*
nology equipment by the federal government.*32
^Hie second aspect of the revised definition of contracts subject to
the Aft is an exemption for contracts for services which are not per-
formed principally by "service employees."'33 Previously, where serv-
ice employees performed more than a minor part of the contract, the
contract was deemed to come within the coverage of the Act. The
new regulations restrict the application of the Act by providing that-
service workers must contribute a majority of the performance of the-
contract.*3**^
ic regulations attempt to clarify ambiguities in the '
erage by the Act of contracts for repair and maintenance of i
ment equipment.33* In somewhat conclusory fashion, the guidelines:^
state that contracts for the rexnanufaeture of equipment are excluded^
from the Service Contract Act and that contracts, for repair are ir
eluded.73* While the provisions do provide some examples of such.-lj
230. Labor Standards, atfr* note 222, at 49,742 (commentary to revised"^
regulations).
; -.:*': 231. Id. at 49,777,49,78344 (to be codified at 29 CF.R. §§ 4.110-4,111) (if:
"ices are "only incidental 10 the performance of a contract for another purpose, the~i
Act does not apply"). . •/:'
',:• 232. Stt 1941 Ottmfti fftmnnji, nfrt note 6. at 673 (siatement of Eben S. Tit-
dale. Acting Director of Public Affairs, Scientific Apparatus Maker* Association).
•^where "principal purpose" of contract is to supply product, not perform servioa>
SCA should not apply). Stt »U» Labor Standards, nfr* note 222, at 49,742-743 (com-;
meniary on revised rules).
233. Labor Standards, mfr* note 222; at 49.777-78 (to be codified at 29 CF.R.
§§4-110,4.113).
234. Id. at 49.776 (to be codified at 29 CF.R. § 4.1t3(a)(3)). In close cases, or
where one cannot predict whether service employees will contribute the majority of
time for performance, other factors must be considered. Id. Those factors include
"the nature of the contract work, the type of work performed by service employees,
how integral the work performed by the service employees is to the contract and the
total number of service employees to be employed on the contract." 14.
233. Id. at 49,780 (to be codified at 29 CF.R. § 4.117). The purpose of this
revision is to eliminate the previous overlap in coverage of the Service Contract Act
and the Walsh-Healey Act. Id. •'
236. Id. (to be codified at 29 CF.R. § 4.117(b)(l)(3)). Remanufacture includes
the "major overhaul of an item, piece of equipment, or material which is degraded or
inoperable" or the "major modification of an item, piece of equipment, or material
which is wholly or partially obsolete." Id. (to be codifed at 29 CF.R. § 4.117(b)(l)>
(2)). "Remanufacturing does not include the repair of damaged or broken equip-
ment which does not require a complete teardown. overhaul and rebuild." Id. (to be
codified at 29 CF.R. § «• > >7(b)(3)).
-------
ATTACHMENT A-10
CLIN ASSIGNMENTS FOR BROS 8CA LABOR CATEGORIES
This attachment provides the CLIN assignments for any SCA
labor categories within the Removal program.
-------
rtj.IACKrinLMi A-1G
Page 1 of 1
CLIN ASSIGNMENTS FOR 'ERGS SCA LABOR CATEGORIES
PERSONNEL MASTER CUN LIST
OLD NEW
CLIN* CLINf OESC
001
002
;, *•:••:"••., '. ...
005
013
003/004
006
. f
010
008
011
018
009
007
<»',- -
015
014
022
017
016
:'••$$?•• .-• •••.'•-
Supervisor-Response Manager
Supervisor-Foreman
^W^^f^^^^^^^^^^^Mt'^-^^if.^K^ "•-•-•' 'i:* ' • *». - •
Field Staff-Equipment Operator
Field Staff-Reid Clerk/Typist
Held Staff-Laborer/Cleanup Tech
ReW Start-Laborer /Concrete '
Field Staff-Truck Driver
^>fs*-i. v>* >
•• ->*v.~lV.s -I l,*\w '" " ^,"~ ,
SpeciaJty-Carpenter
Spedaity-Electrician
Specialty-Explosives
SpedaltHron Worker
Specialty-Lab Technician
Specialty-Mason (Finisher)
Specialty-Mechanic
Specialty-Pipe Fitter
Specialty-Pipe Setter
Specialty-Plumber
Specialty-Welder •- *-
>,-" -^.'•.ys^^^^!^^f^^^f»'^^?-y't ^;,->, /: ^~ -
Technical-Chemist / Organic
TAr>hnir>>«l_r'h*m!«t / P>4/rW~
1 VUIIUMU— vimnial / UrVUW
Tecnrucaj-cnojineer / cnerntcai
T-nf^r-lrt—l CMj.lfl.AAtf | ^Ujll
F ecnrucai— engineer / CMI
TechnteaMSeotogist
Technlcal-Hydrogeologist
^ • < ' ln«4 LJ>M«flu«Zflh*IC^Af«k«h«
Tecnnicai-ina nygenisvsafeiy
.V-s -H -.^^ / ?*"> -
Management-Program Manager
Management-Program Audttor
Managemem-T&D Coordinator
Management-Secretary
"• ",'~ ' ' ' ..•':. ' -' •"' • ' .. '- •
Surcharges-E)9iosives
Surcharges-Level A
Surcharges-Level B
Surcharges-Level C
Surcharges-Level 0
-------
ATTACHMENT A-11
DESIGNATION LIST (POINTS OF CONTACT FOR PERSONS REFERENCED
IN THIS GUIDANCE DOCUMENT)
This attachment provides the points of contacts, addresses
and phone numbers for those persons mentioned in the guidance
document as having the responsibility for maintaining the SCA
Directory of Occupations, DBA enforcement and semiannual
enforcement reporting requirements to DOL and updating,
maintaining and assigning new DBA CLINs.
-------
ATTACHMENT A-11
Page 1 of 1
Designation Hat - Point of Contact
ddress
Gill Florance
EPA Headquarters
Procurement & Policy Staff
PM-214F
FTS 260-1943
Responsible For
(1) Maintaining a current
version of the SCA Directory
of occupations and can provide
ordering information
(2) DBA Enforcement and Semi-
Annual. Enforcement reporting
requirements in accordance
with DOL compliance procedures
Dave Younger
EPA Headquarters
Emergency Response Branch
Contract Mngt. Section
PM-214F
FTS 260-3108
(1) Point of contact for DBA
contract line item number
(CLIN) listing
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ATTACHMENT 'A-12
DOL REPRESENTATIVES IN THE OFFICE OF
FEDERAL CONTRACT COMPLIANCE PROGRAMS (OFCCP)
This attachment contains a comprehensive list, updated as of
April 1991, of the OFCCP regional pre-award managers who are
responsible for affirmative action and equal employment
opportunity clearance requests. The list includes the names,
addresses and telephone numbers of each DOL regional
representative.
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-ATTACHMENT A-12
PAGE 1 Of 14
APRIL 1991
OPCCP'B REGIONAL DISTRICT AMD AREA OFFICES
ADDRESSES AMD TELEPHONE LISTINGS
REGION I - BOSTON
(Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont)
REGIONAL OFFICE
Ms. Brenda Joyce
Regional Director for OFCCP/E8A
U.S. Department of Labor
one congress Street, llth Floor
Boston, Massachusetts 02114
(617) 565-2055 - 8/835-2055
BOSTON DISTRICT OFFICE
Mr. Paul Smith
District Director for OFCCP/ESA
U.S. Department of Labor
John W. McCormack
P.O. & courthouse Bldg. Rm. aio
Boston, Massachusetts 02109
(617) 223-9792 - 8/223-9792
Mr. B. William Richardson
District Director for OFCCP/ESA
U.S. Department of Labor
Wm. R. Cotter, Federal Bldg.
135 High Street, Room 311
Hartford, Connecticut 06103
(203) 240-4277 - 8/244-4277
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ATTACHMENT 12
PAGE 2 Of 14
REGION II - NEW YORK
(New Jersey, New York, Puerto Rico, Virgin Islands)
REGIONAL OFFICE
Ms. Garner MoCulloch
Regional Director for OFCCP/ESA
U.S. Department of Labor
201 Varick Street, Room 750
New York, New York 10014
(212) 337-2007 - 8/660-2007
NSW YORK DISTRICT OFFICE
Mr. Harold M. Busch
District Director for OFCCP/BSA
U.S. Department of Labor
26 Federal Plaza, Rm. 36-116
York, New York 10278
) 264-8165 - 8/264-7742
NO. NEW JERSEY DISTRICT OFFICE
Mr. Paul A. Cash, Jr.
District Director for OFCCP/ESA
U.S. Department of Labor
Diamond Head Bldg. Rm. 102
200 Sheffield Street
Mountainside, N.J. 07092
(201) 645-6014 - 8/341-6014
BUFFALO DISTRICT OFFICE
Mr. Garland Sweeney
District Director for OFCCP/ESA
U.S. Department of Labor
Jackson Bldg. Room 609
220 Delaware Avenue
Buffalo, New York, 14202
(716) 846-5065 - 8/437-5065
[STRICT OFFICE
Ms. Severle J. Lessley
District Director for OFCCP/ESA
U.S. Department of Labor
825 East Gate Blvd. Rm. 202
Garden City, New York 11530
(516) 227-3104 - 8/721-1104
SO. NEW JERSEY DISTRICT OFFICE
Mr. Rudolph Henderson
District Director for OFCCP/ESA
U.S. Department of Labor
3131 Princeton Pike
Building 5, Room 216
Lawrenoeville, N.J. 08648
(609) 989-2380 - 8/483-2380
CARIBBEAN DISTRICT
Mr. Edwin 8. Rivera
District Director for OFCCP/ESA
U.S. Department of Labor
New San Juan Office Bldg.
159 Chardon Ave., Rm. 103
Hato Rey, Puerto Rico 00918
(809) 766-5939 - 8/498-5939
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ATTACHMENT 12
PAGE 3 Of 14
REGION III - PHILADELPHIA
(Delaware, District of Columbia, Maryland, Pennsylvania, Virginia, West
Virginia)
REGIONAL OFFICE
Mr. Joseph DuBray
Regional Director
for OFCCP/E8A
U.S. Department of Labor
Gateway Building, Room 15340
3535 Market Street
Philadelphia, Pennsylvania 19104
(215) 596-6168 - 8/596-6168
BALTIMORE DISTRICT OFFICE
MS. Jacqueline Bell
District Director for OFCCP/BSA
U.S. Department of Labor
Fallen Federal Building
31 Hopkins Plaia, Suite 922
Baltimore, Maryland 21201
(301) 962-3572 - 8/922-3572
RICHMOND DISTRICT OFFICE
Mr. Willie Thomas
District Director for OFCCP/BSA
U.S. Department of Labor
Federal Bldg. Rm. 7004
400 North 8th Street
Richmond, Virginia 23240
(804) 771*2136 - 8/925-2136
PHILADELPHIA DISTRICT OFFICE
Ms. Virginia L. Harper
District Director for OFCCP/BSA
U.S. Department of Labor
105 South 7th Street
Liberty square, 5th Floor
Philadelphia, PA 19106
(215) 597-4121 - 8/597-4121
WASHINGTON DISTRICT OFFICE
Mr. James Melvin
District Director for OFCCP/E8A
U.S. Department of Labor
Reporters' Bldg., suite 203
300 - 7th Street, S.W.
Washington, D.C. 20407
(202) 401-8807 - 8/441-8807
PITTSBURGH DISTRICT OFFICE
Mr. W. Woodrow Gil11land
District Director for OFCCP/BSA
U.S. Department of Labor
Federal Building, Room 2012
1000 Liberty Avenue
Pittsburgh, Pennsylvania 15222
(412) 644-6330 - 8/722-6330
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ATTACHMENT 12
PAGE 4 Of 14
REGION IV - ATLANTA
(Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, south
Carolina, Tennessee)
REGIONAL OFFICE
Ms. Carol A. Gaudin
Regional Director for OFCCP/BSA
U.S. Department of Labor
1375 Peachtree street, N.B., Suite 678
Atlanta, Georgia 30367
(404) 347-4211 - 8/257-4211
ATLANTA DISTRICT OFFICE
Ms. Mary Fagan
District Director for OFCCP/BSA
U.S. Department of Labor
1375 Peachtree Street, N.B.
Suite 672
lanta, Georgia 30367
04) 347-4707 - 8/257-4707
BIRMINGHAM DISTRICT OFFICE
Mr. Clarence L. Brown
District Director for OFCCP/BSA
U.S. Department of Labor
2015 2nd Avenue, North, Rm. 202
Birmingham, Alabama 35203
(205) 731-0820 - 8/229-0820
JACKSON ARBA OFFICE
Mr. Warren E. Cox
Assistant District Director
for OFCCP/B8A
U.S. Department of Labor
Jackson Mall, suite 340
300 Woodrow Wilson Boulevard
Jackson, Mississippi 39213
(601) 965-4668 - 8/490-4668
JACKSONVILLE DISTRICT OFFICE
Ms. Alice Webster
District Director for OFCCP/B8A
U.S. Department of Labor
1851 Executive Center Drive
Suite 201
Jacksonville, Florida 32207
(904) 791-3073 - 8/946-3073
MIAMI AREA OFFICE
Mr. Bernard Michaels
Assistant District Director
for OFCCP/E8A
U.S. Department of Labor
111 N.W. 183rd St., Km. 500
Miami, Florida 33169
(305) 652-0232 - 8/821-1232
OPLAMOO AREA OFFICE
Mr. Victor Martinei
Assistant District Director
for OFCCP/E8A
U.S. Department of Labor
Federal Building, Suite 100
80 N. Bughey Avenue
Orlando, Florida 32801
(407) 648-6181 - 8/820-6181
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'ATTACHMENT 12
PAGE S Of 14
REGION IV - ATLANTA (Continued1
(Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, south
Carolina, Tennessee)
CHARLOTTE DISTRICT OFFICE
Mr. Curtis L. Simms
District Director for OFCCP/ESA
U.S. Department of Labor
Mart office Bldg. Rm. BB—401
800 Briar creek Road
Charlotte, North Carolina 28205
(704) 371-6113 - 8/672-6113
COLOMBIA AREA OFFICE
Mr. Edwin Odom
Assistant District Director
U.S. Department of Labor
Strom Thurmond Federal Building
1835 Assembly Street, Suite 608
Columbia, South Carolina 29201
(803) 765-5244 - 8/677-5244
RALEIGH AREA OFFICE
Mr. Jerome (leathers
Assistant District Director
for OFCCP/ESA
U.S. Department of Labor
Century P.O. Bldg., suite 313
300 Payetteville street Mall
Raleigh, North Carolina 27601
(919) 856-4058 - 8/672-4058
NASHVILLE DISTRICT OFFICE
Larry E. Stanley
District Director for OFCCP/ESA
U.S. Department of Labor
293 Plus Park Boulevard
suite 120
Nashville, Tennessee 37217
(615) 781-5395 - 8/355-5395
Mr. Frederick w. Norton
Assistant District Director
for OFCCP/BSA
U.S. Department of Labor
Federal Office Building
167 Main Street, Suite 101
Memphis, Tennessee 38103
(901) 544*3458 - 8/222-3458
LOUISVILLE DISTRICT OFFICE
Mr. Joseph Kredens
District Director for OFCCP/ESA
U.S. Department of Labor
Heybura Bldg. Suite 1600
332 West Broadway
Louisville, Kentucky 40202
(502) 582-6275 - 8/352-6275
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ATTACHMENT 12
6 Of 14
REGION V - CHICAGO
(Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin)
REGIONAL OFFICE
Mr. Halcolm Holliman
Regional Director for OFCCP/B8A
U.S. Department of Labor
Klucznski Federal Building, ROOM 570
230 south Dearborn street
Chicago, Illinois 60604
(312) 353-0335 - 8/353-0335
CHICAGO DISTRICT OFFICE
Mr. James R. Turner, Jr.
District Director for OFCCP/ESA
U.S. Department of Labor
230 8. Dearborn Street, Rm. 434
icago, Illinois 60604
12) 353-0806 - 8/353-0806
CLEVELAND DISTRICT OFFICE
Mr. Charles B. Duffy
District Director for OFCCP/ESA
U.S. Department of Labor
55 Brieview Plaza, Rm. 520
Cleveland, Ohio 44114
(216) 522-7472 - 8/942-7472
INDIANAPOLIS DISTRICT OFFICE
Mr. Philip Stepteau
District Director for OFCCP/ESA
for OFCCP/E8A
U.S. Department of Labor
2506 ffillowbrook Parkway
Room 250
Indianapolis, Indiana 46205
(317) 252-4701 - 8/336-4701
COLUMBUS DISTRICT OFFICE
Mr. Ledrev F. Farrow
District Director for OFCCP/ESA
U.S. Department of Labor
200 North High street, Rm. 409
COlUmbUS, Ohio 43215-2488
(614) 469-5831 - 8/943-5831
DETROIT DISTRICT OFFICE
Ms. Ann Harrell
District Director for OFCCP/BSA
U.S. Department of Labor
Patrick V. McHamara Federal Bldg.
477 Michigan Avenue, Rm. 1065
Detroit, Michigan 48226
(313) 226-3728 - 8/226-3728
ORAMD RAPIDS AREA OFFICE
Ms. Bettina Doiier-Liadsey
Assistant District Director
for OFCCP/BSA
U.S. Department of Labor
Morthbrook Office Park
2920 Fuller Avenue, M.E.
Suite 102
Grand Rapids, Michigan 49505
(616) 456-2166 - 8/372-2166
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ATTACHMENT 12
PAGE 7 of 14
REGION V - CHICAGO (continued)
(Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin)
MILWAUKEE DISTRICT OFFICE
Mr. Robert Potter
District Director for OFCCP/ESA
U.S. Department of Labor
Reuse Federal Plaza, Suite 1115
310 W. Wisconsin
Milwaukee, Wisconsin 53203
(414) 291-3821 - 8/362-3821
MINNEAPOLIS AREA OFFICE
Mr. Robert Running
Assistant District Director
for OFCCP/ESA
U.S. Department of Labor
Bridgeplace Bldg. RB. 102
220 Second Street South
Minneapolis, Minnesota 55401
(612) 370-3177 - 8/333-3183
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ATTACHMENT 12
PAG* 8 Of 14
REGION VI - DALLAS
(Arkansas, Louisiana, New Mexico, Oklahoma, Texas)
REGIONAL OFFICE
Mr. Joe Garcia
Regional Director for OFCCP/BSA
U.S. Department of Labor
525 South Griffin street
Federal Building, Room 840
Dallas, Texas 75202
(214) 767-4771 - 8/729-2806
HOUSTON DISTRICT OFFICE
Ms. Lois Jimmerson
District Director for OFCCF/E8A
U.S. Department of Labor
2320 La Branch, ROOM 1007
Houston, Texas 77004
(713) 750-1800 - 8/526-6800
Mr. Ellis R. Moody
District Director for OFCCP/BSA
U.S. Department of Labor
701 Loyola Avenue, Rm. 13029
New Orleans, Louisiana 70113
(504) 589-6575 - 8/229-6575
DALLAS DISTRICT OFFICE
Mr. Joseph F. Nash
District Director for OFCCP/E8A
U.S. Department of Labor
525 So. Griffin St., RBI. 512
Dallas, Texas 75202-5007
(214) 767-2911 - 8/729-2911
SAN ANTONIO DISTRICT OFFICE
Mr. Lorensa Garaa
Assistant District Director
for OFCCP/BSA
U.S. Department of Labor
800 Dolorosa St., Suite 200
San Antonio, Texas 78207
(512) 229-5835 - 8/730-5835
TUL8A DISTRICT OFFICB
Mr. Perry Palmer
District Director
U.S. Department of Labor
51 Yale Building, Room 304
5110 south Yale
Tulaa, Oklahoma 74135
(918) 581-7745 - 8/745-7745
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ATTACHMENT 12'
PAGE 9 Of 14
REGION VI - DALLAS (Continued)
(Arkansas/ Louisiana, New Mexico, Oklahoma, Texas)
ALBUQUERQUE DISTRICT OFFICE
Mr. Robert J. Gnidsiejko
District Director for OFCCP/BSA
U.S. Department of Labor
Rosenwald Bldg., Suite 14
320 Central Avenue, 8.W.
Albuquerque, New Mexico 87103
(505) 766-3906 - 8/474-3906
LITTLE ROCK AREA OFFICE
Mr. Joel Maltbia
Assistant District Director
for OFCCP/E8A
U.S. Department of Labor
Savers Federal Building
320 W. Capitol St., Suite 611
Little Rock, Arkansas 72201
(501) 378-5436 - 8/740-5436
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ATTACHMENT 12
PAGE 10 of 14
REGION VII - KANSAS CITY
(lova, Kansas, Missouri, Nebraska)
REGIONAL OFFICE
Ms. Betty B. Robinson
Regional Director for OFCCP/B8A
U.S. Department of Labor
Federal Office Building
911 walnut Street, ROOM 2011
Kansas City, Missouri 64106
(816) 426-5384 - 8/867-5384
KAH8AS CITY DISTRICT OFFICE
Mr. Al Rudd
District Director for OFCCP/E8A
J.S. Department of Labor
01 Walnut Street, suite 201
Kansas City, Missouri 64106
(816) 374-6035 - 8/758-6035
Ms. Shirley Oderkirk
District Director for OFCCF/E8A
U.S. Department of Labor
106 8. 15th Street, Rm. 808
Omaha, Nebraska 68102
(402) 221-3381 - 8/864-3381
ST. LOUIS DISTRICT OFFICB
Mr. Duane J. Orapperhaus
District Director for OFCCP/E8A
U.S. Department of Labor
1222 Spruce Street, Rm. 10.207
St. Louis, Missouri 63103
(314) 539-6394 8/262-6394
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ATTACHMENT 12
PAGE 11 Of 14
REGION VIII - DENVER
(Colorado, Montana, North Dakota, South Dakota, Utah, Wyoming)
REGIONAL OFFICE
Ms. Irene Mee
Regional Director for OFCCP/E8A
U.S. Department of Labor
Federal Office Building
1961 Stout Street, Room 1480
Denver, Colorado 80294
(303) 844-5011 - 8/564-5011
SALT LAKE CITY DISTRICT OFFICE
Mr. Joseph Gallegos
District Director for OFCCP/ESA
U.S. Department of Labor
10 West Broadway, Suite 305
Salt Lake City, Utah 84101
(801) 524-4470 - 8/588-4470
DISTRICT OPFIC1
Mr. Dennis J. Santistevan
District Director for OFCCP/ESA
U.S. Department of Labor
1244 Speer Boulevard, Rm. 620
Denver, Colorado 80204-3584
(303) 844-4481 * 8/564-4481
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ATTACHMENT 12
PAGE 12 Of 14
REGION IX - SAM FRANCISCO
(Arizona, California, Guam, Hawaii, Nevada)
REGIONAL OFFICE
Ms. Helen Haaae
Regional Director for OPCCP/E8A
U.S. Department of Labor
71 Stevenson Street, Suite 910
San Francisco, California 94105
(415) 744-6640 - 8/484-6640
LOS ANGELES DISTRICT OFFICE
Mr. Angel Luevano
District Director for OFCCP/ESA
U.S. Department of Labor
3660 Wilshire Boulevard
Suite 602
Los Angeles, California 90010
13) 252-7542 - 8/983-7542
SANTA ANA AREA OFFICE
Mr. Frank J. Galas
Assistant District Director
for OFCCP/ESA
U.S. Department of Labor
34 civic Center Plasa
Suite 712, P.O. Box 12800
Santa Ana, California 92712
(714) 836-2784 - 8/799-2784
DISTRICT OFFICE
SAM JOSE DISTRICT OFFICE
•* k
Mr. Arthur c. oros
District Director for OFCCP/ESA
U.S. Department of Labor
280 8. First street
Suite 390
San Jose, California 95113
(408) 291-7384 - 8/466-7384
HAWAII AREA OFFICE
Mr. Edgar A. Collins
District Director for OFCCP/ESA
U.S. Department of Labor
1401 Lakeside Dr., suite 702
Oakland, California 94612
(415) 273-4055 - 8/536-4055
Mr. Darvell L. Fortson
Assistant District Director
for OFCCP/ESA
U.S. Department of Labor
300 Ala Moana Blvd., Rm. 7326
Post Office Box 50149
Honolulu, Hawaii 96850
(808) 541-2933 - 8/551-2933
YAH HUTS DISTRICT OFFICE
Mr. Roseoe B. Ballard
District Director for OFCCP/ESA
U.S. Department of Labor
14546 Hamlin Street, Suite 220
van Buys, California 91411
(818) 904-6285 - 8/983-6285
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ATTACHMENT 12*
PAGE 13 Of 14
REGION IX - SAM FRANCISCO (Continued)
(Arizona, California, Guam, Hawaii, Nevada)
8AK FRANCISCO DISTRICT OFFICE
Ms. Myrn R. stratton
District Director for OPCCP/BSA
U.S. Department of Labor
211 Main Street, Suite 328
San Francisco, California 94105
(415) 744-6630 -8/484-6630
PHOENIX AREA OFFICE
Mr. Joseph A. Franco, III
Assistant District Director
for OFCCP/ESA
U.S. Department of Labor
3221 H. 16th Street, Suite 303
Phoenix, Arizona 85016
(602) 640-2960 - 8/261-2960
SAM DIEGO AREA OFFICE
Mr. Albert C. Padilla
Assistant District Director for OFCCP/ESA
U.S. Department of Labor
5675 Ruffin Road, Suite 320
San Diego, California 92123-3378
(619) 557-6489 - 8/895-6489
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ATTACHMENT 12
PAGE 14 Of 14
REGION X - SEATTLE
(Alaska, Idaho, Oregon, Washington)
REGIONAL OFPICB
NX. John Chaekett
Regional Director for OFCCF/BSA
U.S. Department of Labor
lill Third Avenue, Suit* 610
Seattle, Washington 98101-3212
(206) 442-4508 - 8/399-4508
PORTLAND DISTRICT OFFICE
v * 4
€
Mr. George H. Fisher
District Director for OFCCP/E8A
U.S. Department of Labor
ederal Office Building
11 south West Columbia Street
ite 1020
Portland, Oregon 97204
(503) 326-4112 - 8/423-4112
SEATTLE DISTRICT OFFICE
Ms. Constance F. Moorehead
District Director for OFCCP/E8A
U.S. Department of Labor
Federal Office Building
1111 Third Avenue, Suite 745
Seattle, Washington 98101
(206) 442-7182 - 8/399-7182
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B-i
Regulations, Part 5:
Labor Standards Provisions
•Applicable to Contracts Covering
Federally Financed and
Assisted Construction
Title 29, Part 5 of the
Code of Federal Regulations
U. S. Department of Labor
Employment Standards Administration
Wage and Hour Division
WH Publication 1244
(Revised October 1986)
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Attachment B-i
Page 1 of 14
PART 5— LAftOR STANDAtOS KOVf.
SIGNS AFPUCAWJ TO CON-
riuas COVERING PHWLAUY H-
NANCED AND ASSJSTID CON-
STRUCT10N (AISO LAlOf STAND*
AIDS PROVISIONS AmiCAILE TO
NONCONSTRUCTION CONTRACTS
SUBJECT TO THE CONTIACT
WORK HOURS AND SAFETY
STANDARDS ACT)
Sec.
5. l Purpose and scope.
$.2 Definitions.
5.3-5.4 [Reserved)
5.5 Contract provision* and related mat-
ters.
5.6 Enforcement.
5.7 Reports to the Secretary of Labor.
5,8 Liquidated damages under the Contract
Work Hours and Safety Standards Act.
5.9 Suspension of funds.
5.10 Restitution, criminal action.
5.11 Disputes concerning payment of
wages.
5.12 Debannent proceedings.
Sec.
5.13 Rulings and interpretations.
5.14 Variations, tolerances, and exemptions
from Parti 1 and 3 of this subtitle and
this pan.
5.15 Limitations, variations, tolerances.
and exemptions under the Contract
Work Hours and Safety Standards Act
5.1« Training plans approved or recognised
by the Department of Labor prior to
August 20. 1079.
5.17 Withdrawal of approval of a training
program.
Act
5.20 Scope and significant* of this subpart
5.21 [Reserved]
5.22 Effect of the Davis-Bacon fringe bene-
fit* provisions.
5.23 The statutory provisions.
6.24 The basic hourly rate of pay.
8,28 Rate of contribution or cost for fringe
benefits.
5.26 "* • ' contribution irrevocably made •
* * to a trustee or to a third person".
5.37 "••* fund, plan, or program."
5.38 Unfunded plans.
5.30 Specific fringe benefits.
5.30 Types of wage determinations.
5.31 Meeting wage
tions.
5.32 Overtime payments.
AuTwarrr 40 VAC. 276a-276a-7: 40
UAC. 376e; 40 UAC. 327-412: Reorganfra-
tlon Flan No. 14 of 1090.8 UAC. Appendix:
5 UAC, 301: and the statutes listed in sec-
tion 5.1(a) of this part.
Sotmcc 48 PR 19541. Apr. 20.10*1. unless
otherwise noted.
wWSW^W*
Acts
•ltd RSHCftwCJ
SOUICE 48 fit 10840. Apr. 30.1083. unless
otherwise noted.
18.1 Purpose and scope,
The regulations contained in thi8
part are promulgated under the au-
thority conferred upon the Secretary
of Labor by Reorganization Plan No.
14 of 1950 and the Copeland-Act In
order to coordinate the administration
and enforcement of the' labor stand-
ards provisions of each of the follow-
ing acts by the Federal agencies re-
sponsible for their administration and
of such additional statutes as may
from time to time confer upon- the
Secretary of Labor additional duties
and responsibilities similar to those
conferred upon the Secretary of Labor
under Reorganization Plan No. 14 of
1950:
1. The Davis-Bacon Act (sec. 1-7, 46 Stat.
1949, as amended; Pub. L. 74-403. 40 UAC.
276a-276a-7)
2. Copeland Act (40 UAC. 276c).
3. The Contract Work Hours and Safety
Standards Act (40 UAC. 327-332).
4. National Bousing Act (sec. 212 added to
c. 847, 46 Stat. 1246. by sec. 14. S3 Stat. 807;
12 UAC. 1715C and repeatedly amended).' -
5. Housing Act of 1980 (college bousing)
(amended by Housing Act of 1989 to add
labor provisions. 73 Stat 681; 12 UAC.
1749a(f)).
6. Housing Act of 1989 (sec. 401(f) of the
Housing Act of 1980 as amended by Pub. L.
86-372. 73 Stat. 681; 12 UAC. 1701q(cX3)).
7. Commercial Fisheries Research and De-
velopment Act of 1964 (sec. 7. 78 Stat 100:
16 UAC. 770e.
10. National Foundation on the Arts and
Humanities Act of 1068 (sec. 8(k>. 79 Stat
848 as amended; 20 UAC. 954.
14. Indian Health Care Improvement Act
(sec 303.
16. Comprehensive Employment and
Training Act of 1073 (see. 608. 87 Stat 880.
706 by 88 Stat 1846: 30
VAC. 08ft also sec. 604. W Stat 1844; 20
VAC. 064(bXl».
17. State and Local Fiscal Assistance Act
of 1072 (see. 13KaX6). 86 Slat 033; 11
VAC. 1246UX6)).
18. Federal Water Pollution Control Act
(sec. 813 of see. 2. 88 Stat 104: 33 VAC.
1173).
10. Veterans Nursing Home Care Act of
1084 (78 Stat 003, as amended; 18 VAC.
5036(aX8)).
30. Postal Reorganisation Act (sec.
410fbX4XC): 84 Stat 738 as amended: 30
UAC. 410(bX4XC». -
31. National Visitors Center Facilities Act
of 1088 (see. 110. 33 Stat 48; 40 UAC. 808).
33. Appalachian Regional Development
Act of 1088 (see. 402. 70 Stat 21: 40 VAC.
App.402).
33. Health Services Research. Health j
Ustlcs, and Medical Libraries Act of f
(sec. 107. see sec. 308(hX2) thereof. 88 i
370. at amended by 00 Stat 378; 42 VAC.
242m(hX2)).
24. Hospital Survey and Construction Act.
as amended by the Hospital and Medical Fa-
cilities Amendments of 1964 (sec. 60S(aX5).
78 Stat. 453; 42 UAC. 201eiaX5)).
25. Health Professions Educational Assist-
ance Act (sec. 303(0). 00 Stat. 2294; 42 UAC.
293* gX 1X0; also sec. 308s, 90 Stat. 2298.
42 UAC. 293a(cX7».
26. Nurse Training Act of 1964 (sec.
MHaXIXC). 89 Stat. 384: 42 UAC.
296a(bX5».
27. Heart Disease, Cancer, and Stroke
Amendments of 1965 (sec. 904. as added by
sec. 2. 79 Stat. 928: 42 UAC. 209d(bX4».
28. Safe Drinking Water Act (sec. 2(a) see
sec. 1450e thereof. 88 Stat. 1691: 42 UAC.
. 29...National Health-Planning and Re-
sources Act (sec. 4. see sec. 1604(bxixH), 86
Stat. 2261; 42 UAC. 300o-3(bXlXH)).
30. UA Housing Act of 1937. as amended
and recertified (88 Stat 667; 42 UAC.
1437J).
31. Demonstration Cities and Metropoli-
tan Development Act of 1066 (sees. 110. 311.
803, 1003. 80 Stat. 1299. 1370, 1277, 1384: 43
UAC. 3310; 12 UAC. 1715C; 42 UAC.
1437J).
32. Slum clearance program: Housing Act
of 1040 (sec. 109. 63 Stat 410. as amended;
42 UAC. 1469).
33. Farm housing: Housing Act of 1064
(adds sec. 9l6(f) to Housing Act of 1049 by
sec. 803.78 Stat 707; 42 UAC. I486(f)).
34. Housing Act of 1061 (sec. 707. added
sec. 007. 70 Stat 406, as amended: 43 U
1800C-3).
38. Defense Housing and Community Fa-
cilities and Services Act of 1081 (sec. 310. 68
Stat 307: 42 UAC. 18021).
36. Special Health Revenue Sharing Act
of 1078 (see. 303. see sec. 223. 88 Stat 640,
734; 42 UAC. 8310,1440(g».
47. Developmentafly Disabled Asslstaiw
and Bill of Rights Act (sec. 136(4). 89 Stat
488: 43 UAC. 6043(4): title I, see. 111. 80
Stat 401; 43 UAC. 6083(bX10».
48. National Energy f>nif*rvsflnn
Act (sac. 313, 03 Stat 3384: 43 UAC. 6371J)
40. Public Works Employment Act of 1070
(sec. 100. 80 Stat 1001; 43 UAC. 6708: also
see. 308. 00 Stat 1008:43 UAC. 6738).
80. Energy Conservation and Production
Act (sec. 4Sl(h). 00 Stat 1168; 43 UAC.
6881(bU.
-------
I 5.1 {
-------
S 5.2 (m)
Attachment B-i
page 3 of 14
work of a trade), as distinguished from
mental or managerial. The term "la-
borer" or "mechanic" Includes appren-
tices, trainees, helpers, and. In the case
of contracts subject to the Contract
Work Hours and Safety Standards
Act. watchmen or guards. The term
does not apply to workers whose
duties are primarily administrative.
executive, or clerical, rather than
manual. Persons employed in a bona
fide executive, administrative, or pro-
fessional capacity as defined in Part
541 of this title are not deemed to be
laborers or mechanics. Working fore-
men who devote more than 20 percent
of their time during a workweek to
mechanic or laborer duties, and who
do not meet the criteria of Part 541,
are laborers and mechanics for the
time so spent.
(n) The terms apprentice and train-
ee are defined as follows:
(1) "Apprentice" means (i) a person
employed and individually registered
in a bona fide apprenticeship program
registered with the UB. Department
of Labor, Employment and Training
Administration. Bureau of Apprentice-
ship and Training, or with a State Ap-
prenticeship Agency recognized by the
Bureau, or "Trainee" means a person regis-
tered and receiving on-the-job training
in a construction occupation under a
program which has been approved in
advance by the U.S. Department of
Labor, Employment and Training Ad-
ministration, as meeting its standards
for on-the-job training programs and.
which has been so certified by that
Administration.
(3) These provisions do not apply to
"apprentices" and "trainees" em-
ployed on projects subject to 23 U.8.C.
113 who are enrolled in programs
which have been certified by the Sec-
retary of Transportation in accord-
ance with 23 U.S.C. 113(cX
(o) Every person performing the
duties of a laborer or mechanic in the
construction, prosecution, completion.
or repair of a public building or public
work, or building or work financed in
whole or in pan by loans, grants, or
guarantees from the United States la
"employed" regardless of any contrac-
tual relationship alleged to exist be-
tween the contractor and such person.
(p) The term "wages" means the
basic hourly rate of pay. any contribu-
tion irrevocably made by a contractor
or subcontractor to a trustee or to a
third person pursuant to a bona fide
fringe benefit fund, plan, or program:
and the rate of costs to the contractor
or subcontractor which may be reason-
ably anticipated in providing bona fide
fringe benefits to laborers and me-
chanics pursuant to an enforceable
commitment to carry out a financially
responsible plan of program, which
was communicated in writing to the la-
borers and mechanics affected. .The
fringe benefits enumerated in the
Davis-Bacon Act Include medical or
hospital care, pensions on retirement
or death, compensation for injuries or
illness resulting from occupational ac-
tivity, or insurance to provide any of
the foregoing; unemployment benefits:
life insurance, disability Insurance.
sickness Insurance, or accident insur-
ance; vacation or holiday pay: defray-
ing costs of apprenticeship or other
similar programs; or other bona fide
fringe benefits. Fringe benefits do not
include benefits required by other
Federal, State, or local law.
(q) The term "wage determination-'-
Includes the original decision and any
subsequent decisions modifying, super-
seding, correcting, or otherwise chang-
ing the provisions of the original deci-
sion. The application of the wage de-
termination shall be in accordance
with the provisions of 11.8 of this
title.
(48 FR 19541. Apr. ». IBM. «• amended at
48 Fit 50313, NOT. 1.1M3]
N5J-&.4 HUsemdl
Contract prortaiotu and related Mat-
The Agency head shall cause or
require the contracting officer to
insert In full In any contract in excess
of $2.000 which is entered into for the
actual construction, alteration and/or
repair, including painting and decorat-
ing, of a public building or public
work, or building or work financed in
whole or in part from Federal funds or
in accordance with guarantees of a
Federal agency or financed from funds
obtained by pledge of any contract of
a Federal agency to make a loan, grant
or annual contribution (except where
a different meaning is expressly indi-
cated), and which is subject to the
labor standards provisions of any of
the acts listed in 15.1. the following
clauses (or any modifications thereof
to meet the particular needs of the
agency. Provided, That such modifica-
tions are first approved by the Depart-
ment of Labor):
(1) Minimum impel (1) All laborers
and mechanics employed or working
upon the site of the work (or under
the United States Housing Act of 1937
or under the Housing Act of 1M9 In
the construction or development of
the project), will be paid uncondition-
ally and not less often than once a
week, and without subsequent deduc-
tion or rebate on any account (except
such payroll deductions M are permit-
ted by regulations issued by the Secre-
tary of Labor under the Copeland Act
(29 CFR Part 3)). the full amount of
wages and bona fide fringe benefits (or
cash equivalents thereof) due at time
of payment computed jat rates not
than those contained in the wage
termination of the Secretary of
which is attached hereto and made a
part hereof, regardless of any contrac-
tual relationship which may be alleged
to exist between the contractor and
such laborers and mechanics.
Contributions made or costs reason-
ably anticipated for bona fide fringe
benefits under section HbX2> of the
Davis-Bacon Act on behalf of laborers
or mechanics are considered wages
paid to such laborers or mechanics,
subject to the provisions of paragraph
(axixiv) of this section: also, regular
contributions made or costs incurred
for more than a weekly period (but
not less often than quarterly) under
plans, funds, or programs which cover
the • particular -weekly period, are
deemed to be constructively made or
incurred during such weekly period.
Such laborers and mechanics shall be
paid the appropriate wage rate and
fringe benefits on the wage determina-
tion for the classification of work actu-
ally performed, without regard to skill.
except as provided in |S.5(a)(4). La-
borers or mechanics performing work
in more than one classification may be
compensated at the rate specified for
each classification for the time actual-
ly worked therein: Provided, That the
employer's payroll records accurately
set forth the time spent in each classi^
fication in which work is perform
The wage determination (inclu
any additional classification and wage
rates conformed under paragraph
(axixii) of this section) and the
Davis-Bacon poster (WH-1321) shall
be posted at all times by the contrac-
tor and Its subcontractors at the site
of the work in a prominent and acces-
sible place where it can be easily seen
by the workers.
(UXA) The contracting officer shall
requfca that any clan of laborers or
mechanics which is not listed in the
wage determination and which Is to be
employed under the contract shall be
classified in confonnance with the
wage determination. The contracting
officer shall approve an additional
classification and wage rate and fringe
benefits therefor only when the fol-
lowing criteria have been met:
(I) The work to be performed by the
classification requested Is not per-
formed by a classification in the wage
(*> The classification to utilized in
the area by the construction industry;
(J) The proposed wage rate, includ-
ing any bona fide fringe benefits.
i a reasonable relationship to the
rates contained in the wage de-
ination.
(B) If the contractor and the labor-
ers if* myhanf*1? to be employed
tlie classification (If known), or
representatives, and the contracting
officer agree on the classification and
wage rate (including the amount desig-
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S 5.5
Attacmnent B-l
Page 4 of 14
nated lor fringe benefits where appro-
priate), a report of the action taken
ihaU be sent by the contracting officer
the Administrator of the Wage and
our Division, Employment Standards
Administration, U.S. Department of
Labor. Washington, D.C. 30210. The
Administrator, or an authorized repre-
sentative, will approve, modify, or dis-
approve every additional classification
action within 30 days of receipt and so
advise the contracting officer or will
notify the contracting officer within
the 30-day period that additional time
is necessary.
(C> In the event the contractor, the
laborers or mechanics to be employed
in the classification or their represent-
atives, and the contracting officer do
not agree on the proposed classifica-
tion and wage rate (including the
amount designated for fringe benefits,
where appropriate), the contracting
officer shall refer the questions, in-
cluding the views of all interested par-
ties and the recommendation of the
contracting officer, to the Administra-
tor for determination. The Adminis-
trator, or an authorized representa-
tive, will issue a determination within
30 days of receipt and so advise the
contracting officer or will notify the
contracting officer within the 30-day
period that additional time is neces-
sary.
(D) The wage rate (including fringe
benefits where appropriate) deter-
mined pursuant to subparagrapbs
or (C) of this paragraph, shall
to all workers performing work
classification under this con-
tract from the first day on which work
is performed in the classification.
(ill) Whenever the minium wage
rate prescribed in the contract for a
class of laborers or mechanics includes
a fringe benefit which is not expressed
as an hourly rate, the contractor shall
either pay the benefit as stated in the
wage determination or shall pay an-
other bona fide fringe benefit or an
hourly-cash equivalent thereof.
(iv) if the contractor does not mate
payments to a trustee or other third
person, the contractor may consider as
part of the wages of any laborer or
mechanic the amount of any costs rea-
sonably anticipated in providing bona
fide fringe benefits under a plan or
program. Provided, That the Secxe-
tary of Labor has found, upon the
written request of the contractor, that
the applicable standards of the Davis-
Bacon Act have been met. The Secre-
tary of Labor may require the contrac-
tor to set aside in a separate account
assets for the meeting of obligations
under the plan or program.
(2) Withholding. The (write in name
of Federal Agency or the loan or grant
recipient) shall upon its own action or
upon written request of an authorised
representative of the Department of
withhold or cause to be with-
the contractor under this
or any other Federal contract
with the same prime contractor, or
any other federally-assisted contract
subject to Davis-Bacon prevailing
wage requirements, which is held by
the same prime contractor, so much of
the accrued payments or'advances as
may be considered necessary to pay la-
borers and mechanics, including., ap-
prentices, trainees, and helpers.' em-
ployed by the contractor or any sub-
contractor the full amount of wages
required by the contract. In the event
of failure to pay any laborer or me-
chanic, including any apprentice.
trainee, or helper, employed or work-
ing on the site of the work (or under
the United States Housing Act of 1937
or under the Housing Act of 1949 in
the construction or development of
the project), all or pan of the wages
required by the contract, the (Agency)
may, after written notice to the con-
tractor, sponsor, applicant, or owner.
take such action as may be necessary
to cause the suspension of any further
payment, advance, or guarantee of
funds until such violations have
ceased.
(3) Payroll* and bane record*. (1)
Payrolls and basic records relating
thereto shall be maintained by the
contractor during the course of the
work and preserved for a period of
three years thereafter for all laborers
and mechanics working at the site of
the work (or under the United States
Housing Act' of 1937, or under the
Housing Act of 1949, in the construc-
tion or development of the project).
Such records shall contain the name.
address, and social security number of
each such worker, his or her correct
classification, hourly rates of wages
paid (Including rates of contributions
or costs anticipated for bona fide
fringe benefits or cash equivalents
thereof of the types described In sec-
tion KbHSXB) of the Davis-Bacon
Act), dally and weekly number of
hours worked, deductions made and
actual wages paid Whenever the Sec-
retary of Labor has found under 29
CFR 8.6(aXlXiv> that the wages of
any laborer or mechanic Include the
amount of any costs reasonably antici-
pated in providing benefits under a
plan or program described in section
KbX2XB> of the Davis-Bacon Act. the
contractor shall Tn»'p«yln records
which show that the commitment to
provide such benefits is enforceable.
that the plan or program Is financially
responsible, and that the plan or pro-
gram has been communicated in writ-
ing to the laborers or mechanics af-
fected, and records which show the
costs anticipated or the actual cost in-
curred In providing such benefits. Con-
tractors employing apprentices or
trainees under approved programs
shall maintain written evidence of the
registration of apprenticeship pro-
grams and certification of trainee pro-
grams, the registration of the appren-
tices and trainees, and the ratios and
wage rates prescribed in the applicable
programs.
(I1XA) The contractor shall submit
weekly for each week In which any
contract work Is performed a copy of
all payrolls to the (write in name of
appropriate Federal .agency) If the
agency is a party to the contract, but
if the agency is not such a party, the
contractor will submit the payrolls to
the applicant, sponsor, or owner, as
the case may be, for transmission to
the (write in name of agency). The
payrolls submitted shall' set out accu-
rately and completely all of the infor-
mation required to be maintained
under { 5.5(a)(3)(i) of Regulations, 29
CFR Part 5. This information may be
submitted in any form desired. Option-
al Form WH-347 is available for this
purpose and may be purchased from
the Superintendent of Documents
(Federal Stock Number 029-005-
00014-1). U.S. Government Printing
Office, Washington. D.C. 20402.The
prime contractor is responsible for the
submission of copies of payrolls by all
subcontractors.
(B) Each payroll submitted shall be
accompanied by a "Statement of Com-
pliance." signed by the contractor or
subcontractor or his or her agent who
pays or supervises the payment of the
persons employed under the contract
and shall certify the following:
(1) That the payroll for the payroll
period contains the Information re-
quired to be maintained under
|S.5(a)(3)(i) of Regulations. 39 CFR
Part 5 and that such information is
correct and complete:
(D That each laborer or mechanic
(Including each helper, apprentice.
and trainee) employed on the contract
during the payroll period has been
paid the full weekly wages earned,
without rebate, either directly or indi-
rectly, and that no deductions have
been made either directly or indirectly
from the full wages earned, other than
permissible deductions as set forth in
Regulations, 29 CFR Part 3;
<3) That each laborer or mechanic
has been paid not less than the appli-
cable wage rates and fringe benefits or
cash equivalents for the classification
of work performed, as specified in the
applicable wage determination incor-
porated into the contract.
(C) The weekly submission of a
properly executed certification set
forth on the reverse side of Optional
Form WH-347 shall satisfy the re-
quirement for submission of the
"Statement of Compliance" required
by paragraph (aX3Xii)(B) of this sec-
-------
I 5.5 (a)(3)(iii)
Attachment B-l
Page 5 of 14
subcontractor fails to submit the re-
quired records or to make them avail-
able, the Federal agency may. after
written notice to the contractor, spon-
sor, applicant, or owner, take such
action as may be necessary to cause
the suspension of any further pay-
ment, advance, or guarantee of funds.
Furthermore, failure to submit the re-
quired records upon request or to
make such records available may be
grounds for debarment action pursu-
ant to 29 CFR S.12.
(4) Apprentices and trainees—(i) Ap-
prentices. Apprentices will be permit-
ted to work at less than the predeter-
mined rate for the work they per-
formed when they are employed pur-
suant to and individually registered in
a, bona fide apprenticeship program
registered with the VS. Department
of Labor. Employment and Training
Administration, Bureau of Apprentice-
ship and Training, or with a State Ap-
prenticeship Agency recognized by the
Bureau, or if a person is employed in
his or her first 90 days of probationary
employment as an apprentice in such
an apprenticeship program, who is not
individually registered in the program.
but who has been certified by the
Bureau of Apprenticeship and Train-
ing or a State Apprenticeship Agency
(where appropriate) to be eligible for
probationary employment as an ap-
prentice. The allowable ratio of ap-
prentices to journeymen on the job
site in any craft classification shall not
be greater than the ratio permitted to
the contractor as to the entire work
force under the registered program.
Any worker listed on a payroll at an
apprentice wage rate, who Is not regis-
tered or otherwise employed as stated
above, shall be paid not less than the
applicable wage rate on the wage de-
termination for the classification of
work actually performed. In addition,
any apprentice performing work on
the Job site in excess of the ratio per-
mitted under the registered program
shall be paid not less than the applica-
ble wage rate on the wage determina-
tion for the work actually performed.
Where a contractor Is performing con-\
struction on a project In a locality
other than that in which Its program
is registered, the ratios and wage rates
(expressed in percentages of the jour-
neyman's hourly rate) specified in the
contractor's or subcontractor's regis-
tered program shall be observed.
Every apprentice must be paid at not
less than the rate specified In the reg-
istered program for the apprentice's
level of progress, expressed as a per-
centage of the journeymen hourly rate
specified in the applicable wage deter-
mination. Apprentices shall be paid
fringe benefits in accordance with the
provisions of the apprenticeship pro-
gram. If the apprenticeship, program
does not specify fringe benefits, ap-
prentices must be paid the full amount
of fringe benefits listed on the wage
determination for the applicable clas-
sification. If the Administrator deter-
mines that a different practice pre-
vails for the applicable apprentice
classification, fringes shall be paid in
accordance with* that determination.
In the event the Bureau of Appren-
ticeship and Training, or a State Ap-
prenticeship Agency recognized by the
Bureau, withdraws approval of an ap-
prenticeship program, the contractor
will no longer be permitted to utilize
apprentices at less than the applicable
predetermined rate for the work per-
formed until an acceptable program is
approved.
(il) Trainees. Except as provided In
29 CFR 5.16. trainees will not be per-
mitted to work at less than the prede-
termined rate for the work performed
unless they are employed pursuant to
and Individually registered In a pro-
gram which has received prior approv-
al, evidenced by formal certification
by the U.S. Department of Labor. Em-
ployment and Training Administra-
tion. The ratio of trainees to journey-
men on the job site shall not be great'
er than permitted under the plan ap-
proved by the Employment and Train-
Ing Administration. Every trainee
must be paid at not less than the rate
specified In the approved program for
the trainee's level of progress, ex-
pressed as a percentage of the jour-
neyman hourly rate specified In the
applicable wage determination. Train-
ees shall be paid fringe benefits in ac-
cordance with the provisions of the
trainee program. If the trainee pro-
gram does not mention fringe benefits,
trainees shall be paid the full amount
of fringe benefits listed on the wage
determination unless the Administra-
tor of the Wage and Hour Division de-
termines that there is an apprentice-
ship program associated with the cor-
responding- journeyman wage rate on
the wage determination which pro-
vides for less than full fringe benefits
for apprentices. Any employee listed
on the payroll at a trainee rate who is
not registered and participating in a
training plan approved by the Employ-..
ment •**<* Training Administration
shall be paid not less than the applica-
ble wage rate on the wage determina-
tion for the classification of work actu-
ally performed. In addition, any train-
ee performing work on the job site in
excess of the ratio permitted under
the registered program shall be paid
not less than the applicable wage rate
on the wage determination for the
work actually performed. In the event
the Employment and Training Admin-
istration withdraws approval of a
training program, the contractor will
no longer be permitted to utilize train-
ees at less than the applicable prede-
termined rate for the work performed
until an acceptable program is ap-
proved.
(ill) Soitol employment opportunity.
The utilization of apprentices, trainees
and journeymen under this part shall
be in conformity with the equal em-
ployment opportunity requirements of
Executive Order 11246. as
and 2» CFR Part SO.
(5) Compliance with Copeland
requirements. The contractor
comply with the requirements of
CFR Part 3. which are incorpora
by reference in this contract.
(6) Subcontracts. The contractor or
subcontractor shall insert in any sub-
contracts the clauses contained in 29
CFR 5.5
-------
Page 6 of 14
paragraph, the terms "laborers" and
"mechanics" include watchmen and
guards. /
(1) Overtime requirements. No con-
tractor or subcontractor contracting
for any part of the contact work
which may require or involve the em-
ployment of laborers or /mechanics
shall require or permit any such labor-
er or mechanic In any workweek in
which he or she is employed on such
work to work in excess of forty hours
in such workweek unless such laborer
or mechanic receives compensation at
a rate not less than one and one-half
times the basic rate of pay for all
hours worked in excess of forty hours
In such workweek.
(2) Violation; liability for unpaid
wages; liquidated damages. In the
event of any violation of the clause set
forth in paragraph (b)(l) of this sec-
tion the contractor and any subcon-
tractor responsible therefor shall be
liable for the unpaid wages. In addi-
tion, such contractor and subcontrac-
tor shall be liable to the United States
(in the case of work done under con-
tract for the District of Columbia or a
territory, to such District or to such
territory), for liquidated damages.
Such liquidated damages shall be com-
puted with respect to each individual
laborer or mechanic. Including watch-
men and guards, employed in violation
of the clause set forth In paragraph
(bXD of this section, in the sum of $10
for each calendar day on which such
individual was required or permitted
work in excess of the standard
orkweek of forty hours without pay-
ment of the overtime wages required
by the clause set forth in paragraph
of this section.
(3) Withholding for unpaid wage*
and liquidated damage*. The (write in
the name of the Federal agency or the
loan or grant recipient) shall upon its
own action or upon written request of
an authorized representative of the
Department of Labor withhold or
cause to be withheld, from any
moneys payable on account of work
performed by the contractor or sub-
contractor under any such contract or
any other Federal contract with the
same prime contractor, or any other
federally-assisted contract subject to
the Contract Work Hours and Safety
Standards Act, which is held by the
same prime contractor, such sums as
may be determined to be necessary to
satisfy any liabilities of such contrac-
tor or subcontractor for unpaid wages
and liquidated damages as provided in
the clause set forth in paragraph
(bx 2) of this section.
(4) Subcontracts. The contractor or
subcontractor shall insert in any sub-
contracts the clauses set forth In para-
graph (bXl) through (4) of this sec-
tion and also a clause requiring the
subcontractors to include these clauses
any lower tier subcontracts. The
contractor shall be responsible
compliance by any subcontractor
or lower tier subcontractor with the
clauses set forth in paragraphs (bMl)
through (4) of this section.
(O In addition to the clauses con-
tained in paragraph (b), in any con-
tract subject only to the Contract
Work Hours and Safety Standards Act
and not to any of the other statutes
cited in I S.I. the Agency Head shall
cause or require the contracting offi-
cer to insert a clause requiring that
the contractor or subcontractor shall
maintain payrolls and basic payroll
records during the course of the work
and shall preserve them for a period
of three years from the completion of
the contract for all laborers and me-
chanics, including guards and watch-
men, working on the contract. Such
records shall contain the name and ad-
dress of each such employee, social se-
curity number, correct classifications.
hourly rates of wages paid, dally and
weekly number of hours-worked,'de-
ductions made, and actual wages paid.
Further, the Agency Head shall cause
or require the contracting officer to
insert in any such contract a clause
providing that the records to be main-
tained under this paragraph shall be
made available by the contractor or
subcontractor for inspection, copying.
or transcription by authorized repre-
sentaLves of the (write the name of
agency) and the Department of Labor,
and the contractor or subcontractor
will permit such representatives to
interview employees during working
hours on the job.
(The information collection, ncordkeeping,
and reporting requirement* 'KnUined in the
following paragraph* of this section were
approved by the Office of Management and
Budget:
(•M1XWB)
(IM1NM
(c)
[48 PR IM40. Apr. 29. 1063. u amended at
51 PR 12368. Apr. 9,19661
B 5.6 Enforcement
(axi) It shall be the responsibility of
the Federal 'agency to ascertain
whether the clauses required by f 5.5
have been Inserted in the contracts
subject to the labor standards provi-
sions of the Acts contained in { S.I.
Agencies which do not directly enter
into such contracts shall promulgate
the necessary regulations or proce-
dures to require the recipient of the
Federal assistance to inset in its con-
tracts the provisions of I S.S. No pay-
ment, advance, grant, loan, or guaran-
tee of funds shall be approved by the
Federal agency unless the agency In-
sures that the clauses required by § 5.5
and the appropriate- wage determina-
tion of the Secretary of Labor are con-
tained in such contracts. Furthermore.
no payment, advance, grant, loan, or
guarantee of funds shall be approved
by the Federal agency after the begin-
ning of construction unless there is on
file with the agency a certification by
the contractor that the contractor and
its subcontractors have complied with
the provisions of § 5.5 or unless there
is on file with the agency a certifica-
tion by the contractor that there is a
substantial dispute with respect to the
required provisions.
(2) Payrolls and Statements of Com-
pliance submitted pursuant to
{ 5.5
-------
§ 5.6 (a)(5)
Attachment B-l
Pag* 7 of 14
identity, shall not be disclosed In Any
manner to anyone other than Federal
officials without the prior consent of
the employee.
Disclosure of employee statements
shall be governed by the provisions of
the "Freedom of Information Act" (5
U.S.C. 552. see 29 CFR Part 70) and
the "Privacy Act of 1874" (5 U.S.C.
5S2a>.
(b) The Administrator shall cause to
be made such investigations as deemed
necessary, in order to obtain compli-
ance with the labor standards provi-
sions of the applicable statutes listed
in {5.1. or to affirm or reject the rec-
ommendations by the Agency Head
with respect to labor standards mat-
ters arising under the statutes listed in
15.1. Federal agencies, contractors,
subcontractors, sponsors, applicants,
or owners shall cooperate with any au-
thorized representative of the Depart-
ment of Labor in the inspection of
records, in interviews with workers.
and In all other aspects of the investi-
gations. The findings of such an inves-
tigation, including amounts found due,
may not be altered or reduced without
the approval of the Department of
Labor. Where the underpayments dis-
closed by such an investigation total
$1.000 or more, where there is reason
to believe that the violations are ag-
gravated or willful for. in the case of
the Davis-Bacon Act. that the contrac-
tor has disregarded it* obligations to
employees and subcontractors), or
where liquidated damages may be as-
sessed under the Contract Work Hours
and Safety Standards Act. the Depart-
ment of Labor will furnish the Federal
agency an enforcement report detail-
ing the labor standards violations dis-
closed by the investigation and any
action taken by the contractor to cor-
rect the violative practices, including
any payment of back wages. In other
circumstances, the Federal agency will
be furnished a letter of notification
summarizing the findings of the inves-
tigation.
85.7 Reports to the Secretary of Labor.
(a) Enforcement report*. (1) Where
underpayments by a contractor or sub-
contractor total less than $1,000, and
where then is no reason to believe
that the violations are aggravated or
willful (or. in the case of the Davis-
Bacon Act that the contractor has dis-
regarded its obligations to employees
and subcontractors), and where resti-
tution has been effected and future
compliance assured, the Federal
agency need not submit its investiga-
tive findings and recommendations to
the Administrator, unless the investi-
gation was made at the request of the
Department of Labor. In the latter
caw. the Federal agency shall submit
a factual summary report detailing
any violations Including any data on
the amount of restitution paid, the
number of workers who received resti-
tution, liquidated damages assessed
under the Contract Work Hours and
Safety Standards Act. corrective meas-
ures taken (such as "letters .-of
notice"), and any information that
may be necessary to review any recom-
mendations for an appropriate adjust-
ment in liquidated damages under
|5.8.
(2) Where underpayments by a con-
tractor or subcontractor total $1,000
or more, or where there is reason to
believe that the violations are aggra-
vated or willful (or, in the case of Uie
Davis-Bacon Act. that the contractor
has disregarded its obligations to em-
ployees and subcontractors), the Fed-
eral agency shall furnish within 80
days after completion of Its investiga-
tion. a detailed enforcement. report. to
the Administrator.
(b> Semi-annual enforcement re-
port*. To assist the Secretary in fulfill-
ing the responsibilities 'under Reorga-
nization Plan No. 14 of 1950. Federal
agencies shall furnish to the Adminis-
trator by April 30 and October 31 of
each '""'^Tiitir year •*'T<**mTT"fl re-
ports on compliance with and enforce-
ment of the labor standards provisions
of the Davis-Bacon Act and its related
acts covering the periods of October 1
through March 31 and April 1 through
September 90. respectively. Such re-
ports shall be prepared in the manner
prescribed In memoranda Issued to
Federal agencies by the Administrator.
This report has been cleared in accord-
ance with FPMR 101-11.11 and as-
signed interagency report control
number 14I3-DOL-8A.
(c) Additional information, Upon re-
quest, the Agency Head «*i«ii transmit
to the JLitmtiMjftritof "vh information
available to the Agency with respect
to contractors and subcontractors,
their contact*, and the nature of the
contract work as the Administrator
may ftod necessary for the perform-
ance of his or her duties with respect
to the labor standards provisions re-
ferred to in this part.
(d) Contract termination. Where a
contract is terminated by reason of
violations of the labor standards provi-
sions of the statutes listed in 15.1. a
report shall be submitted promptly to
the Administrator and to the Comp-
troller General (if the contract is sub-
ject to the Davis-Bacon Act), giving
the nam* and address of the contrac-
tor or subcontractor whose right to
proceed has been terminated, and the
name an*) address of the contractor or
subcontractor, if any. who is to com-
plete the. work, the amount and
number of the contract, and the de-
scription of the work to be performed.
0&$ UquWatad damage* under the Con-
tract Work Houn and Safety Stand-
ard* Act
(a) The Contract Work Houn and
Safety Standards Act requires that la-
borers or mechanics shall be paid
wages at a rate not less than one and
one-half times the basic rate of pa;
for all hours worked in excess of fort1
hours in any workweek. In the even
of violation of this provision, the con
tractor and any subcontractor shall be
liable for the unpaid wages and in ad-
rUtion for liquidated damages, comput-
ed with respect to each laborer or me-
chanic employed in violation of the
Act in the amount of $10 for each cal-
endar day in the workweek on which
such individual was required or per-
mitted to work in excess of forty hours
without payment of required overtime
wages. Any contractor of subcontrac-
tor aggrieved by the withholding of
liquidated damages shall have the
right to appeal to the head of the
agency of the United States (or the
territory of District of Columbia, as
appropriate) for which- the contract
work was performed or for which fi-
nancial assistance was provided.
(b) findings and recommendations
of the Armey Head. The Agency Head
has the authority to review the admin-
istrativev determination of liquidated
damages- and to issue a final order af-
firming the •determination. It is not
necessary to seek the concurrence of
the Administrator but the Administra-
tor shall be advised of the action
taken. Whenever the Agency Head
finds that a sum of liquidated damages
administratively determined to be due
is incorrect or that the contractor or
subcontractor violated inadverten
the provisions of the Act notwith-
standing the exercise of due care upon
the part of the contractor or subcon-
tractor involved, and the amount of
the liquidated lamages computed for
the contract is in excess of $500, the
Agency Head may make recommenda-
tions to the Secretary that an appro-
priate adjustment in liquidated dam-
ages be made or that the contractor or
subcontractor bei relieved of liability
for such liquidated damages. Such
findings with respect to liquidated
damages shall Intlude findings with
respect to any wage underpayments
for which the liquidated damages are
determined.
(c) The recommendations of the
Agency Head for adjustment or relief
from liquidated dkmages under para-
graph (a) of this section shall be re-
viewed by the Administrator or an au-
thorized representative who shall issue
an order concurring In the recommen-
dations, partially concurring in the
recommendations, or rejecting the rec-
ommendations, and the reasons there-
for. The order shall be the final deci-
sion of the Department of Labor.
unless a petition for review is filed
pursuant to Part 7 of this title, and
the Wage Appeal! Board in its discre-
tion reviews such decision and order;
or, with respect to contracts subject to
the Service Contract Act, unless peti-,,
tion for review is filed pursuant to
Part 8 of this title, and the Board of
Service Contract; Appeals in its discre-
tion reviews such decision and order.
a
•
-------
§ 5.8 (dl
Attachment B-l
Page 8 of 14
(d) Whenever the Agency Head finds
tfiat a sum of liquidated damages ad-
ministratively determined to be due
under section I0 of this section al-
leging the existence of a factual dis-
pute, the Administrator shall examine
the information submitted. If the Ad-
ministrator determines that there is a
relevant issue of fact, the Administra-
tor shall refer the case to the Chief
Administrative Law Judge in accord-
ance with paragraph (b)(3) of this sec-
tion. If the Administrator determines
that there is no relevant issue of fact,
the Administrator shall so rule and
advise the contractor and
subcontractors) (if any) accordingly.
(3) If the contractor and/or
subcontractors) desire review of the
ruling issued by the Administrator
under paragraph (cXl) or (2) of this
section, the contractor and/or
subcontractors) shall file a petition
for review thereof with the Wage Ap-
peals Board within 30 days of the date
of the ruling, with a copy thereof the
Administrator. The petition for review
shall be filed in accordance with Pan
7 of this title.
(d) If a timely response to the Ad-
ministrator's findings or ruling is not
made or a timely petition for review is
not filed, the Administrator's findings
and/or ruling shall be final, except
that with respect to debarment under
the Davis-Bacon Act. the Administra-
tor shall advise the Comptroller Gen-
eral of the Administrator's recommen-
dation in accordance with |S.12(a)U).
If a timely response or petition for
review is filed, the findings and/or
ruling of the Administrator shall be
inoperative unless and until the deci-
sion is upheld by the Administrative
Law Judge or the Wage Appeals
Board.
0 5.12 Debannent proceeding*.
(aXl) Whenever any contractor or
subcontractor is found by the Secre-
tary of Labor to be in aggravated or
willful violation of the labor standards
provisions of any of the applicable
statutes listed in 15.1 other than the
Davis-Bacon Act, such contractor or
subcontractor or any firm, corpora-
tion, partnership, or association in
Trtilch such contractor or subcontrac-
tor has a substantial Interest shall be
ineligible for a period not to exceed 3
yean (from the date of publication by
the Comptroller General of the name
or names of said contractor or subcon-
tractor on the Ineligible list as provid-
ed below) to receive any contracts or
subcontracts subject to any of the
statutes listed in I S.I.
(2) In cases arising under contracts
covered by the Davis-Bacon Act. the
Administrator shall transmit to the
Comptroller Genera] the names of the
contractors or subcontractors and
their responsible officers, if any (and
-------
§ 5.12(a)(2)
Attachment B-l
Pag* 9 of 14
any firms in which the contractors or
subcontractors are known to have an
interest), who have been found to
have disregarded their obligations to
employees, and the recommendation
of the Secretary of Labor or author-
ized representative regarding debar-
ment. The Comptroller General will
distribute a list to all Federal agencies
giving the names of such ineligible
person or firms, who shall be Ineligible
to be awarded any contract or subcon-
tract of the United States or the Dis-
trict of Columbia and any contract or
subcontract subject to the labor stand-
ards provisions of the statutes listed in
{5.1.
(b)(l) in addition to cases under
which debarment action Is initiated
pursuant to 15.11. whenever as a
result of an investigation conducted by
the Federal agency or the Department
of Labor, and where the Administrator
finds reasonable cause to believe that
a contractor or subcontractor has com-
mitted willful or aggravated violations
of the labor standards provisions of
any of the statutes listed in |9.1
(other than the Davis-Bacon Act), or
has committed violations of the Davis-
Bacon Act which constitute a disre-
gard of its obligations to employees or
subcontractors under section 3(a)
thereof, the Administrator shall notify
by registered or certified mail to the
last known address, the contractor or
subcontractor and its responsible offi-
cers, if any (and any firms in which
the contractor or subcontractor are
known to have a substantial interest),
of the finding. The Administrator
shall afford such contractor or subcon-
tractor and any other parties notified
an opportunity for a hearing as to
whether debarment action should be
taken under paragraph (a)(l) of this
section or section 3(a) of the Davis-
Bacon Act. The Administrator shall
furnish to those notified a summary of
the investigative findings. If the con-
tractor or subcontractor or any other
parties notified wish to request a hear-
ing as to whether debarment action
should be taken, such a request shall
be made by letter postmarked within
30 days of the date of the letter from
the Administrator, and shall set forth
any findings which are in dispute and
the reasons therefor, Including any af-
firmative defenses to be raised. Upon
receipt of such request for a hearing,
the Administrator shall refer the case
to the Chief Administrative Law Judge
by Order of Reference, to which shall
be attached a copy of the letter from
the Administrator and the response
thereto, for designation of an Adminis-
trative Law Judge to conduct such
hearings as may be necessary to deter-
mine the matters in dispute. In consid-
ering debarment under any of the
statutes listed in | S.I other than the
Davis-Bacon Act. the Administrative
Law Judge shall issue an order con-
cerning whether the contractor or sub-
contractor is to be debarred in accord-
ance with paragraph <2) of this section.
(c) Any person or firm debarred
under |5.12(a)(l) may in writing re-
quest removal from the debarment list
after six months from the date of pub-
lication by the Comptroller General .of.
such person or firm's name on the in-
eligible list. Such -a request should be
directed to the Administrator of the
Wage and Hour Division, Employment
Standards Administration. U.S. De-
partment of Labor. Washington. D.C.
20210, and shall contain a full expla-
nation of the reasons why such person
or firm should be removed from the
ineligible list. In cases where the con-
tractor or subcontractor failed to
make full restitution to all underpaid
employees, a request for removal will
not be considered until such underpay-
ments are made. In all other cases, the
Administrator will examine the facts
and circumstances surrounding the
violative practices which caused the
debarment. and Issue a decision as to
whether or not such person or firm
has demonstrated a current responsi-
bility to comply with the labor stand-
ards provisions of the statutes listed in
15.1. and therefore should be removed
from the ineligible list. Among the fac-
tors to be considered in reaching such
a decision are the severity of the viola-
tions, the contractor or subcontrac-
tor's attitude towards compliance, and
the past compliance history of the
firm. In no case will such removal be
effected unless the Administrator de-
termines after an investigation that
such person or firm Is in compliance
with the labor standards provisions ap-
plicable to Federal contracts and Fed-
erally assisted construction work sub-
ject to any of the applicable statutes
listed in I S.I and other labor statutes
providing wage protection, such as the
Service Contract Act. the Walsh-
Healey Public Contracts Act. and the
Fair Labor Standards Act. If the re-
quest for removal is denied, the person
or firm may petition for review by the.
Wage Appeals Board pursuant to 29
CFR Part 7.
(dXl) Section 3(a) of the Davis-
Bacon Act provides that for a period
of three yean from date of publication*
on the ineligible list, no contract shall
be awarded to any persona or firms
placed on the list as a result of a find-
ing by the Comptroller General that
such persons or firms have disregard-
ed obligations to employees and sul
contractors under that* Act, and
ther. that no contract shall be a
ed to "any firm, corporation, partner
ship, or association in which such per-
sons or firms have an interest." Para-
graph (a)Q> of this section similarly
provides that for a period not to
exceed three years from date of publi-
cation on the ineligible list, no con-
tract subject to any of the statutes
listed in $ 5.1 shall be awarded to any
contractor or subcontractor on the in-
eligible list pursuant to that para-
graph, or to "any firm, corporation.
partnership, or association" in which
such contractor or subcontractor has a
"substantial interest." A finding as to
whether persons or firms whose names
appear on the ineligible list have an
. interest, (or a substantial interest, as
appropriate) In any other firm, corpo-
ration, partnership, or association,
may be made through investigation,
hearing, or otherwise.
(2Xi) The Administrator, on his/her
own motion or after receipt of a re-
quest for a determination pursuant to
paragraph (d)(3) of this section may
make a finding on the Issue of interest
(or substantial Interest, as appropri-
ate).
(11) If the Administrator determines
that there may be an interest (or sub-
stantial interest, as appropriate), but
finds that there is insufficient evi-
dence to render a final ruling thereon,
the Administrator may refer the issue
to the Chief Administrative Law Judge
In accordance with paragraph (dX4) of
this section.
(iii) If the Administrator finds that
no interest (or substantial interest, as
appropriate) exists, or that there is
not sufficient Information to warrant
the initiation of an investigation, the
requesting party, if any, will be so no-
tified and no further action taken.
(IvXA) If the Administrator finds
that an interest (or substantial inter-
est, as appropriate) exists, the person
or firm affected will be notified of the
Administrator's finding (by certified
mail to the last known address), which
shall include the reasons therefor, and
such person or firm shall be afforded
an opportunity to request that a hear-
ing be held to render a decision on the
issue.
.(B) Such person or firm shall have
20 days from the date of the Adminis-
trator's ruling to request a hearing. A
detailed statement of the reasons why
the Administrator's ruling is in error,
including facts alleged to be in dis-
pute, if any, shall be submitted with
the request for a hearing.
(C) If no hearing is requested within
the time mentioned in paragraph
(dX2XlvXB) of this section, the Ad-
ministrator's finding shall be final and
the Administrator shall so notify the
Comptroller General. If a hearing is
requested, the ruling of the Adminis-
trator shall be inoperative unless and
until the administrative law judge or
-------
6 5.12(J)(2)(iv)(c)
10
Attachment B-l
Page 10 of 14
the Wage Appeals Board issues an
er that there is an interest (or sub-
itial interest, as appropriate).
A request for a determination
of Interest (or substantial Interest, as
appropriate), may be made by any in-
terested party, including contractors
or prospective contractors and associa-
tions of contractor's representatives of
employees, and interested Govern-
ment agencies. Such a request shall be
submitted in writing to the Adminis-
trator, Wage and Hour Division. Em-
ployment Standards Administration.
U.S. Department of Labor, Washing-
ton. D.C. 20210.
(il) The request shall include a state-
ment setting forth in detail why the
petitioner believes that a person or
firm whose name appears on the de-
barred bidden list has an interest (or
a substantial interest, as appropriate)
in any firm, corporation, partnership,
or association which is seeking or has
been awarded a contract of the United
States or the District of Columbia, or
which is subject to any of the statutes
listed in I S.I. No particular form is
prescribed for the submission of a re-
quest under this section.
(4) Referral to the Chief Administra-
tive Law Judge. The Administrator, on
his/her own motion under paragraph
(d)(2)(ii) of this section or upon a re-
quest for hearing where the Adminis-
trator determines that relevant facts
«n dispute, will by order refer the
to the Chief Administrative Law
e, for designation of an Adminis-
trative Law Judge who shall conduct
such hearings as may be necessary to
render a decision solely on the issue of
interest (or substantial Interest, as ap-
propriate). Such proceedings shall be
conducted in accordance with the pro-
cedures set forth at 29 CFR Pan 6.
(5) Referral to the Wage Appealt
Board, If the person or firm affected
requests a hearing and the Adminis-
trator determines that relevant facts
are not in dispute, the Administrator
will refer the issue and the record
compiled thereon to the Wage Appeals
Board to render a decision solely on
the issue of interest (or substantial in-
terest, as appropriate). Such proceed-
ing shall be conducted in accordance
with the procedures set forth at 29
CFR Part 7.
(48 PR 19841, Apr. 29. 1989, at amended at
48 FR 50313. Nov. 1.1983]
9 5.13 Ruling! and Interpretations.
All questions relating to the applica-
tion and interpretation of wage deter-
minations (including the classifica-
tions therein) issued pursuant to Part
1 of this subtitle, of the rules con-
tained in this part and in Parts i and
of the labor standards provl-
I of any of the statutes listed in
„ "shall be referred to the Adminis-
trator for appropriate ruling or inter-
pretation. The rulings and Interpreta-
tions shall be authoritative and those
under the Davis-Bacon Act may be
relied upon as provided for in section
10 of the Portal-to-Portal -Act of 1947
(29 U.S.C. 259). Requests for such rul-
ings and interpretations should be .ad-
dressed to the Administrator. Wage
and Hour Division. Employment
Standards Administration. U.S. De-
partment of Labor, Washington, D.C.
20210.
05.14 Vartationi, tolerance*, and exemp-
tion* from Paru 1 and 3 of thi* aubtltle
and thi* part
The Secretary of Labor may make
variations, tolerances, and exemptions
from the regulatory requirements of
this part and those of Parts 1 and 3 of
this subtitle whenever the Secretary
finds that such action is necessary and
proper in the public interest"or to pre-
vent injustice and undue hardship.
Variations, tolerances, and exemptions
may not be made from the statutory
requirements of any of the statutes
listed in 15.1 unless the statute specif-
ically provides such authority.
05.15 Limitation*, variation* tolerance*.
and exemption* under the Contract
Work Hour* and Safety Standard* Act
(a) General Upon his or her own ini-
tiative or upon the request of any Fed-
eral agency, the Secretary of Labor
may provide under section 105 of the
Contract Work Hours and Safety
Standards Act reasonable limitations
and allow variations, tolerances, and
exemptions to and from any or all pro-
visions of that Act whenever the Sec-
retary finds such action to be neces-
sary and proper in the public interest
to prevent Injustice, or undue hard-
ship, or to avoid serious impairment of
the conduct of Government business.
Any request for such action by the
Secretary shall be submitted in writ-
Ing, and shall set forth the reasons for
which the request is made.
(b) Exemption* Pursuant to section
105 of the Contract Work Hours and
Safety Standards Act. the following
rltimfi of contract are found exempt
from all provisions of that Act in order
to prevent injustice, undue hardship,
or serious impairment of Government
business:
(1) Contracts of S2.000.00 or less.
(2) Purchases and contracts other
than construction contracts in the ag-
gregate amount of $2,600.00 or less. In
arriving at the aggregate amount in-
volved, there must be included all
property and services which would
properly be grouped together in a
single transaction and which would be
included in a single advertisement for
bids if the procurement were being ef-
fected by formal advertising.
(3) Contract work performed In a
workplace within a foreign country or
within territory under the Jurisdiction
of the United States other than the
following: A State of the United
States; the District of Columbia;
Puerto Rico: the Virgin Islands; Outer
Continental Shelf lands defined in the
Outer Continental Shelf Lands Act
(ch. 345. 67 Stat. 462): American
Samoa; Guam: Wake Island; Enlwetok
Atoll: Kwajalein Atoll; and Johnston
Island.
(4) Agreements entered into by or on
behalf of the Commodity. Credit Cor-
poration providing for the storing in
or handling by commercial warehouses
of wheat, corn, oats, barley, rye. grain
sorghums, soybeans, flaxseed. rice.
naval stores, tobacco, peanuts, dry
beans, seeds, cotton, and wool.
(S) Sales of surplus power by the
Tennessee Valley Authority to States,
counties, municipalities, cooperative
organization of citizens or farmers.
corporations and other individuals
pursuant to section 10 of the Tennes-
see Valley Authority Act of 1933 (16
UJ3,C:8311).
(c) Tolerances. (1) The "basic rate of
pay" under section 102 of the Contract
Work Hours and Safety Standards Act
may be computed as an hourly equiva-
lent to the rate on which time-and-
one-half overtime compensation may
be computed and paid under section 7
of the Fair Labor Standards Act of
1938, as amended (29 U.S.C. 207), as
interpreted in Part 778 of this title.
This tolerance is found to be necessary
and proper in the public Interest in
order to prevent undue hardship.
(2) Concerning the tolerance provid-
ed In paragraph (CXI) of this section.
the provisions of section 7 of the
Fair Labor Standards Act and { 778.7
of this title should be noted. Under
these provisions, payments for occa-
sional periods when no work is per-
formed, due to vacations, and similar
causes are excludable from the "regu-
lar rate" under the Fair Labor Stand-
ards Act. Such payments, therefore,
are also excludable from the "basic
rate" under the Contract Work Hours
and Safety Standards Act.
(3) See 15.8(c) providing a tolerance
subdelegating authority to the heads
of agencies to make appropriate ad-
justments in the assessment of liqui-
dated damages totaling $500 or less
under specified circumstances.
(4X1) Time spent in an organized
program of related, supplemental in-
struction by laborers or mechanics em-
ployed under bona fide apprenticeship
or training programs may be excluded
from working time if the criteria pre-
-scrlbed in paragraphs (c)(4)(ii) and
' (111) of this section are met.
(11) The apprentice or trainee comes
within the definition contained In
15.2(n).
(ill) The time in question does not
involve productive work or perform-
ance of the apprentice's or trainee's
regular duties.
(d) Variationt.il) In the event of
failure or refusal of the contractor or
any subcontractor to comply with
overtime pay requirements of the Con-
tract Work Hours and Safety Stand-
ards Act, if the funds withheld by Fed-
eral agencies for the violations are not
sufficient to pay fully both the unpaid
-------
§ 5.15 (d)(I)
ti
Page 11 of 14
wages due laborers and mechanics and
the liquidated damages due the United
States, the available funds shall be
used first to compensate the laborers
and mechanics for the wages to which
they are entitled (or an equitable por-
tion thereof when the funds are not
adequate for this purpose); and the
balance, if any, shall be used for the
payment of liquidated damages.
<2) In the performance of any con-
tract entered into pursuant to the pro*
visions of 38 U.S.C. 620 to provide
nursing home care of veterans, no con*
tractor or subcontractor under such
contract shall be deemed in violation
of section 102 of the Contract Work
Hours and Safety Standards Act by
virtue of failure to pay the overtime
wages required by such section for
work in excess of 40 hours in the work-
week to any individual employed by an
establishment which is an institution
primarily engaged in the care of the
sick, the aged, or the mentally ill or
defective who reside on the premises
if. pursuant to an agreement or under-
standing arrived at between the em-
ployer and the employee before per-
formance of the work, a work period
of 14 consecutive days is accepted in
lieu of the workweek of 7 consecutive
days for the purpose of overtime com-
pensation and if such individual re-
ceives compensation for employment
in excess of 8 hours in any workday
and in excess of 80 hours in such 14-
day period at a rate not less than IVfc
times the regular rate at which the In-
dividual is employed, computed-in ac-
cordance with the requirements of the
Pair Labor Standards Act of 1938, as
amended.
(3) Any contractor or subcontractor
performing on a government contract
the principal purpose of which is the
furnishing of fire fighting or suppres-
sion and related services, snail not be
deemed to be in violation of Section
102 of the Contract Work Hour and
Safety Standards Act for failing to pay
the overtime compensation required
by section 102 of the Act in accordance
with the basic rate of pay as defined la
paragraph (cXl) of this section, to any
pilot or copilot of a fixed-wing or
rotary-wing aircraft employed on such
contract if:
(i) Pursuant to a written employ-
ment agreement between the contrac-
tor and the employee which is arrived
at before performance of the work.
(A) The employee receives gross
wages of not less than $300 per week
regardless of the total number of
hours worked in any workweek, and
(B) Within any workweek the total
wages which an employee receives are
not less than the wages to which the
employee would have been entitled In
that workweek if the employee were
paid the minimum hourly wage re-
quired under the contract pursuant to
the provisions ol the Service Contract
Act of 196S and any applicable wage
determination issued thereunder for
all hours worked, plus an additional
premium payment of one-half times
such mt"tm"m hourly wage for all
hours worked in excess of 40 hours in
the workweek;
(11) The contractor maintains accu-
rate records of the total dally and
weekly hours of work performed by
such employee on the government
contract. In the event these conditions
for the exemption are not met, the re-
quirements of section 102 of the Con-
tract Work Hours and Safety Stand-
ards Act shall be applicable to the con-
tract from the date the contractor or
subcontractor falls to satisfy the con-
ditions until completion of the con-
tract.
(The reeordkeepint requirement* contained
in paragraph (dX2> of thU section were ap-
proved by the Office of Management and
Budget under OMB control nuaben 121ft-
0140 and 1215-0017 and paragraph (dxlXU)
under 1315*0017.)
[48 PR 19541. Apr. 74.1M9, a* amended at
51 PR 12368, Apr. B. 19861
B5.14 Training plans approved or reeog-
nixed by the Department of Labor
prior to August 20,1*75.
(a) Notwithstanding the provisions
of 15.5—including
those relating to registration of train-
ees, permissible ratios, and wage rates
to be paid—shall apply to these pro-
grams.
(b) Every trainee employed on a con-
tract executed on and after August 20,
1978. In one of the above training pro-
grams must be Individually registered
In the program in accordance with
Employment and Training Adminis-
tration procedures, and must be paid
at the rate specified in the program
for the level of progress. Any such em-
ployee listed on the payroll at a train-
ee rate who is not registered and par-
ticipating in a program certified by
ETA pursuant to this section, or Ap-
proved and certified by ETA pursuant
to 15.5UX4XI1). must be paid the
wage rate determined by the Secretary
of Labor for the classification of work
actually performed. The ratio of train-
ees to journeymen shall not be greater
than permitted by* the terms of the
program..
(c) In the event a program which
was recognized or approved prior to
August 20. 1975, is modified, revised.
extended, or renewed, the changes in
the program or its renewal must be ap-
proved by the Employment and Train-,
ing Administration before they may
placed into effect.
6 5.17 Withdrawal of approval of • train-
ing program.
If at any time the Employment and
Training Administration determines.
after opportunity for a hearing, that
the standards of any program, wheth-
er it is one recognized or approved
prior to August 20.1975, or a program
subsequently approved, have not been
complied with, or that such a program
fails to provide adequate training for
participants, a contractor will no
longer be permitted to utilize trainees
at less than the predetermined rate
for. the classification of work actually
performed, until an acceptable pro-
gram is approved.
SuDport B • liitef pf 0101 ion of ttie
Fringe •enefits Provisions of the
Dovlt-iocon Act
Sotmcr 29 PR 13465. Sept.
unlen otherwise noted.
0. 1964.
g 5JO Scope and significance of this sub-
part.
The 1964 amendments (Pub. L. 88-
349) to the Davis-Bacon Act require.
among other things, that the prevail-
ing wage determined for Federal and
federally-assisted construction includi
(a) The basic hourly rate of pay; am
(b) the amount contributed by the
contractor or subcontractor for certain
fringe benefits (or the cost to them of
such benefits). The purpose of this
subpart is to explain the provisions of
these amendments. This subpart
makes available in one place official
interpretations of the fringe benefits
provisions of the Davis-Bacon Act.
These interpretations will guide the
Department of Labor in carrying out
its responsibilities under these provi-
sions. These interpretations are in-
tended also for the guidance of con-
tractors, their associations, laborers
and mechanics and their organiza-
tions, and local. State and Federal
agencies, who may be concerned with
these provisions of the law. The inter-
pretations contained in this subpart
are authoritative and may be relied
upon as provided for in section 10 of
-the Portal-to-Portal Act of 1947 (29
D.S.C. 359). The omission to discuss a
particular problem in this subpart or
in interpretations supplementing it
should not be taken to indicate the
adoption of any position by the Secre-
tary of Labor with respect to such
problem or to constitute an adminis-
trative interpretation, practice, or en-
forcement policy. Questions on mat-
ters not fully covered by this sub;
may be referred to the Secretary
interpretation as provided in f 5.12.
15.21 [Reserved]
ia
•
-------
§ 5.22
B-l
Page 12 of 14
§5.22 Effect of the Davis-Bacon fringe
benefit* provision*.
The Davis-Bacon Act and the pre-
e wage provisions of the related
statutes listed in {1.1 of this subtitle
confer upon the Secretary of Labor
the authority to predetermine, as min-
imum wages, those wage rates found
to be prevailing for corresponding
classes of laborers and mechanics em-
ployed on projects of a character simi-
lar to the contract work in the area in
which the work is to be performed.
See paragraphs (a) and (b> of { 1.2 of
this subtitle. The fringe benefits
amendments enlarge the scope of this
authority by including certain bona
fide fringe benefits within the mean-
ing of the terms "wages", "scale of
wages", "wage rates", "minimum
wages" and "prevailing wages", as used
in the Davis-Bacon Act.
§ 5.23 The statutory provisions.
The fringe benefits provisions of the
1964 amendments to the Davis-Bacon
Act are, in part, as follows:
(b) As used In this Act the term "wages",
"scale of wages'. "wage rates", "minimum
wages", and "prevailing wages" shall In-
clude-
(I > The basic hourly rate of pay: and
(2) The amount of—
(A) The rate of contribution Irrevocably
made by a contractor or subcontractor to a
trustee or to a third person pursuant to a
nd. plan, or program: and
i The rate of costs to the contractor or
ntractor which may be reasonably an-
iced in providing benefits to laborers
and mechanics pursuant to an enforceable
commitment to carry out a financially re-
sponsible plan or program which was com-
municated In writing to the laborers and
mechanics affected,
for medical or hospital care, pensions on re-
tirement or death, compensation for Inju-
ries or illness resulting from occupational
activity, or Insurance to provide any of the
foregoing, for unemployment benefits, life
insurance, disability and sickness insurance,
or accident insurance, for vacation and holi-
day pay. for defraying costs of apprentice-
ship or other similar programs, or for other
bona fide fringe benefits, but only where.,
the contractor or subcontractor Is not re-v
quired by other Federal. State, or local law
to provide any of such benefits * * *.
§5£4 The basic hourly rate of pay.
"The basic hourly rate of pay" Is
that part of a laborer's or mechanic's
wages which the Secretary of Labor
would have found and included in
wage determinations prior to the 1964
amendments. The Secretary of Labor
is required to continue to make a sepa-
rate finding of this portion of the
wage. In general, this portion of the
wage is the cash payment made, direct-
ly to the laborer or mechanic. It does
not include fringe benefits.
Rate of contribution or east for
benefits.
Under the amendments, the Sec-
retary is obligated to make a separate
finding of the rate of contribution or
cost of fringe benefits. Only the
amount of contributions or costs for
fringe benefits which meet the re-
quirements of the act will be consid-
ered by the Secretary. These require-
ments are discussed in this subpart/
The rate of contribution or cost
is ordinarily an hourly rate, and will
be reflected in the wage determination
as such. In some cases, however, the
contribution or cost for certain fringe
benefits may be expressed in a formu-
la or method of payment other than
an hourly rate. In such cases, the Sec-
retary may In his discretion express in
the wage determination the rate of
contribution or cost used in the formu-
la or method or may convert it to an
hourly rate of pay whenever he finds
that such action would facilitate the
administration of the Act. See
J5.5(a) of the act).
The phrase "fund. plan, .or program"
is merely intended to recognize the
various types of arrangements com-
monly used to provide fringe benefits
through employer contributions. The
phrase is identical with language con-
tained in section 3(1) of the Welfare
and Pension Plans Disclosure Act. In
interpreting this phrase, the Secretary
will be guided by the experience of the
Department in administering the
latter statute. (See Report of Senate
Committee on Labor and Public Wel-
fare. S. Rep. No. 963. 88th Cong., 2d
Seas., p. 5.)
§5.28 Unfunded plans.
(a) The costs to a contractor or sub-
contractor which may be reasonably
anticipated in providing benefits of
the types described in the act pursu-
ant to an enforceable commitment to
carry out a financially responsible
plan or program, are considered fringe
benefits within the meaning of the act
(see l(b)(2)(B) of the act). The legisla-
tive history suggests that these provi-
sions were Intended to permit the con-
sideration of fringe benefits meeting,
among others, these requirements and
which are provided from the general
assets of a contractor or subcontrac-
tor. (Report of the House Committee
on Education and Labor. H. Rep. No.
308. 88th Cong., 1st Sess.. p. 4.)
(b) No type of fringe benefit is eligi-
ble for consideration as a so-called un-
funded plan unless:
(1) It could be reasonably anticipat-
ed to provide benefits described in the
act;
(2) It represents a commitment that
can be legally enforced:
(3) It is carried out under a finan-
cially responsible plan or program;
and
(4) The plan or program providing
the benefits has been communicated
In writing to the laborers and mechan-
ics affected. (See S. Rep. No. 963. p. 6.)
(O It is in this manner that the act
provides for the consideration of un-
funded plans or programs in finding
prevailing wages and in ascertaining
compliance with the Act. At the same
time, however, there is protection
against the use of this provision as a
means of avoiding the act's require-
ments. The words "reasonably antici-
pated" are intended to require that
any unfunded plan or program be able
to withstand a test which can perhaps
be best described as one of actuarial
soundness. Moreover, as in the case of
other fringe benefits payable under
the act. an unfunded plan or program
must be "bona fide" and not a mere
simulation or sham for avoiding com-
pliance with the act. (See S. Rep. No.
-------
13
Attachment B-l
Page 13 of 14
963. p. 6.) Tin; legislative history sug-
gests that in order to insure against
the possibility that these provisions
might be used to avoid compliance
with the act, the committee contem-
plates that the Secretary of Labor in
carrying out his responsibilities under
Reorganization Plan No. 14 of 1950.
may direct a contractor or subcontrac-
tor to set aside in an account assets
which, under sound actuarial princi-
ples, will be sufficient to meet the
future obligation under the plan. The
preservation of this account for the
purpose intended would, of course.
also be essential. (S. Rep. No. 063, p.
6.) This is implemented by the con-
tractual provisions required by
55.5(aXl)(iv).
§ 5.29 Specific fringe benefit*.
(a) The act lists all types of fringe
benefits which the Congress consid-
ered to be common in the construction
industry as a whole. These include the
following: medical or hospital care.
pensions on retirement or death, com-
pensation for injuries or illness result-
ing from occupational activity, or in-
surance to provide any of the forego-
ing, unemployment benefits, life insur-
ance, disability and sickness insurance.
or accident insurance, vacation and
holiday pay. defrayment of costs of
apprenticeship or other similar pro-
grams, or other bona fide fringe bene-
fits, but only where the contractor or
subcontractor is not required by other
Federal. State, or local law to provide
any of such benefits.
(b) The legislative history indicates
that it was not the intent of the Con-
gress to impose specific standards re-
lating to administration of fringe ben-
efits. It was assumed that the majority
of fringe benefits arrangements of this
nature will be those which are admin-
istered in accordance with require-
ments of section 302.
(f) The act excludes fringe
which a contractor or subcont
obligated to provide under othe
eral. State, or local law. No credit"
be taken under the act for the pay-
ments made for such benefits. For ex-
ample, payment for workmen's com-
pensation insurance. under either a
compulsory or elective State statute
are not considered payments for fringe
benefits under the Act. While each sit-
uation must be separately considered
on its own merits, payments made for
travel, subsistence or to industry pro-
motion funds are not normally pay-
ments for fringe benefits under the
Act. The omission in the Act of any
express reference to these payments.
which are common in the construction
industry, suggests that these pay-
ments should not normally be regard-
ed as-bona fide fringe benefits under
the Act.
0 5JO Type* of wage determinations.
(a) When fringe benefits are prevail-
ing for various classes of laborers and
mechanics in the area of proposed con-
struction, such benefits are includable
In any Davis-Bacon wage determina-
tion. Illustrations, contained in para-
graph (c) of this section, demonstrate
some of the different types of wage de-
terminations which may be made in
such cues.
(b) Wage determinations of thej
retary of Labor under the act
include fringe benefits for
clastei of laborers and mechanics
whenever such benefits do not prevail
In the area of proposed construction.
When this occurs the wage determina-
tion will contain only the basic hourly
rates of pay. that Is only the cash
wages which are prevailing for the var-
ious classes of laborers and mechanics.
An illustration of this situation is con-
tained in paragraph (c) of this section.
(c) Illustrations:
newly
FnnQ§
Apprwv
OMn
SX2S
4.00
3.90
4J9
4.8$
4.40
10.1$
.15
.10
.19
10.10
.19
X
1030
.10
•0.09
(It thouu b* noMd Mi tonmt • not i*r««n««( n *» 0*0 I
85.31 Meeting wage determinmtion obliga-
tion».
(a) A contractor or subcontractor
performing work subject to a Davis-
Bacon wage determination may dis-
charge his mj*iii"»n' wage obligations
for the payment of both straight time
wages and fringe benefits by paying in
cash, making payments or incurring
costs for "bona fide" fringe benefits of
the types listed in the applicable wage
determination or otherwise found pre-
vailing by the Secretary of Labor, or
by a combination thereof.
(b) A contractor or subcontractor
may discharge his obligations for the
payment of the basic hourly rates and
the fringe benefits where both are
contained in a wage determination ap-
plicable to his laborers or mechanics
in the following ways:
(1) By paying not less than the
hourly rate to the laborers or mecl
ics and by making the cont '
for the fringe benefits in the wage de-
terminations, as specified therein. For
example, in the illustration contained
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14
Attachment B-i
Page 14 of 14
in paragraph (c) of f 5.30, the obliga-
tions for "painters" will be met by the
payment of a straight time hourly rate
of not less' than $3.90 and by contrib-
uting not less than at the rate of 15
cents an hour for health and welfare
benefits. 10 cents an hour for pen-
sions, and 20 cents an hour for vaca-
tions: or
(2) By paying not less than the basic
hourly rate to the laborers or mechan-
ics and by making contributions for
"bona fide" fringe benefits in a total
amount not less than the total of the
fringe benefits required by the wage
determination. For example, the obli-
gations for "painters" in the Illustra-
tion in paragraph (c) of $ 5.30 will be
met by the payment of a straight time
hourly rate of not less than $3.90 and
by contributions of not less than a
total of 45 cents an hour for "bona
fide" fringe benefits: or
(3) By paying in cash directly to la-
borers or mechanics for the basic
hourly rate and by making an addi-
tional cash payment in lieu of the re-
quired benefits. For example, where
an employer does not make payments
or Incur costs for fringe benefits, he
would meet his obligations for "paint-
ers" in the illustration in paragraph
(c) of 15.30. by paying directly to the
painters a straight time hourly rate of
not less than $4.35 ($3.90 basic hourly
rate plus 45 cents for fringe benefits):
or
(4) As stated in paragraph
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ATTACHHENT B-2
FEDERAL ACQUISITION REGULATION
PAST 22
APPLICATION 0V LABOB LAWS
TO OOVERHMBBT AOQUZ8XYZOV8
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Page l of 45
PART 22
APPLICATION OF LABOR LAWS TO
GOVERNMENT ACQUISITIONS
TABLE OF CONTENTS
21000 Scope of part
22401 Definition.
SUBPAR1
21101
21101-1
21101-2
21101-3
21101-4
21102
21102-1
22.102-2
21103
21103-1
It 21103-2
1 21103-3
{22.103-4
* 22.103-5
r 22.1-« ASIC LABOR POLICIES
T akrw miLl«««MM
Contract nricififf f^ administration
.» . . ..__..
^••-. ..-.•| -*f ;•_•__ fanM MMI*MMI*M' *-—?«!-? —
Kemovai 01 uems nom contracion lacintifft
affected by work stoppages.
T^|__I «u| ClaiM |ah/w M^iiiii»n\»tiH
Policy.
Overtime.
Policy.
Procedures.
Approvals.
Contract clauses.
SUBPART 212—CONVICT LABOR
22.201 General.
22.202 Contract clause.
SUBPART 12J—CONTRACT WORK HOURS AND
SAFETY STANDARDS ACT
22300 Scope of subpart
Statutory requirement
overtime pay.
21403-3
21403-4
21404
21404-1
22404-2
21404-3
224044
21404-5
214044
22404-7
214044
22.404-9
21404-10
22404-11
22405
21406
22406-1
21406-2
22406-3
214064
22406-5
224064
21406-7
214064
21406-9
Contract Work Hours and Safety Standards
Act
Department of Labor regulations.
Davis-Bacon Act wage determinations.
Types of wage detenn
Procedures far requesting wage determinations.
SoiirJtations issued without wage determina?
of project wage determinations.
Correction of wage determinations containing
clerical errors.
Notification of improper wage determination
before award.
Award of contract without required wage
Pinning wage 4*tf"tWMtfofn and notice.
Wage determination appeals.
Labor standards for construction work per-
formed under facilities contracts.
Administration and enforcement
Policy.
Wages, fringe benefits, and overtime.
Additional classifications.
Apprentices and trainees.
Subcontracts.
22301
22302
22303
22304
21305
AduioisQition and enforcement.
Variations, tolerances, and exemptions.
Contract clause.
Payrolls and statements.
Compliance checking.
Investigations.
Withholding from or suspension of contract
payments.
21406-10 Disposition of disputes concerning construe-
tion contract labor standards enforcement.
Contract terminations.
Cooperation with the Department of Labor.
22.406-11
21406-12
21406-13
21407
Semiannual enforcement reports.
SUBPART 22.4— LABOR STANDARDS FOR
CONTRACTS INVOLVING CONSTRUCTION
22.400 Scope of subpart
22.402 Applicability.
21403 Statutory lad-regulatory requirements.
21403-1 Davis-Bacon ACL
21403-2 CopelandAct
SUBPART 115—RESERVED
SUBPART 224—WALSH.HEALEY PUBLIC
CONTRACTS ACT
22601 ppfinfriMM
22.602 Statutory requirements.
21603 Applicability.
21604 Exemptions.
-------
Page 2 of 45
Statutory exemptions.
Regulatory exemptions.
Rulings and interpretations of the Act
Eligibility as a manufacturer or regular dealer.
Manufacturer.
Regular deafer.
Agents.
Procedures.
^/Seroi s representation*
Determination of eligibility.
PrrntnTtl ^p'B*l eligibility,
Afot^ffl p»«yfing fmml 5fr»*»»niinartTTTT
Award.
Postaward.
Regional jurisdictions of the Department of
Labor, Wue and Hour Division.
22.604-1
22.604-2
22.605
22.606
22.606-1
22.606-2
22.607
22.608
22^08-1
21608-2
22.608-3
22.608-4
22.608-5
22.608-6
22.609
22.610 Solicitation provision and contract clause.
SUBPART 22,7— RESERVED
SUBPART 21*— EQUAL EMPLOYMENT
OPPORTUNITY
22.800 Scope of subpart
22.801 Definitions.
21802 General
21804 Affrmadve action programs.
22.804-1 Nonconstruction.
22.804-2 Construction.
22305 Procedures.
22.806 Inquiries.
21807 Exemptions.
22.808 Complaints.
21809 Enforcement.
22.810 Solicitation provisions and coforact clauses. *
SUBPART 22,9— NONDISCRIMINATION BECAUSE
OF AGE
22.901 Policy.
22.902 Handling complaints.
SUBPART 22.10— SERVICE CONTRACT ACT OF
IMS, AS AMENDED
22.1000
22.1001
22.1002
22.1002-1
22.1002-2
22.1002-3
22.1002-4
22.1003
22.1003-1
22.1003-2
2
Scope of subpazt
Definitions.
Statutory iequiiema
General
Wage determi
nuiaailmc
d on prevailing rates.
Wage determinations based on collective bar-
gaining agreements.
Application of the Fair Labor Standards Act
minimum wage.
Applicability.
General.
Geographical coverage of the Act.
22.1003-3 Statutory exemptions.
22.1003-4 Administrative limitations, variations, toler-
ances, and exemptions.
22.1003-5 Some examples of contracts covered.
22.1003-6 Repair distinguished from remanufacturing of
equipment
22.1003-7 Questions concerning applicability of the Act
22.1004 Department of Labor responsibilities and
rcgulatwnj
211005 Clause for contracts of S1500 or less.
22.1006 Clauses for contracts over $2,500.
211007 Requirement D submit Notice {SF 98/98a).
211008 Piucedures for preparing and submitting Notice
(SF98/98a).
211008-1 Preparation of Notice (SF98/98a).
211008-2 Preparation of SF 98a.
22.1008-3 Section 4
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Attachment B-2
Page 3 of 45
22.1019
22.1020
211021
22.1022
211023
22.1024
22.1025
22.1026
Additional classes of service employees.
Seniority lists.
Substantial wince hearings.
Withholding of ooncaa payments.
Termination for default.
Cooperation with the Department of Labor.
Ineligihflhy of violators.
SUBPART 22.11— PROFESSIONAL EMPLOYEE
COMPENSATION
22.1101 Applicability.
22.1102 Definition.
22.1 103 PoUcy, procedures, and solicitation provisions.
SUBPART 22.12— RESERVED
SUBPART 22.13-^SPEOAL DISABLED AND
VIETNAM ERA VETERANS
22.1300 Scope of subput
22.1301 Policy. .
22.1302 Applicability.
22.1303 Waivers.
22.1304 Department of Labor notices and reports.
22.1305 Collective bargaining agreements.
22.1306 Complaint procedures.
22.1307 Actions because of noncompliance.
22.1308 Contract clause.
SUBPART 22,14—EMPLOYMENT OF THE
HANDICAPPED
22.1400 Scope of subpan.
22.1401 Fblky.
22.1402 Applicability.
22.1403 Waiver*.
22.1404.. Department of Labor notices.
22.1405 Collective bargaining agreements.
22.1406 Complaint procedures.
22.1407 Actions because of noncompliance.
22.1408 Contract clause.
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Attachment B-2
Page 4 of 45
PART 22
APPLICATION OF LABOR LAWS TO
GOVERNMENT ACQUISITIONS
21000 Scope of part
This part—
(a) Deals with general policies regarding contractor
labor relations as they pertain to the acquisition process;
(b) Prescribes contracting policy and procedures for
implementing pertinent tabor laws; and • • - •
(c) Prescribes contract clauses with respect to each per-
tinent labor law.
21001 Definition.
"Administrator" or "Administrator. Wage and Hour
Division.* as used in this pan. means the Administrator,
Wage and Hour Division. Employment Standards
Administration, U.S. Department of Labor, Washington.
DC 20210 or an authorized representative.
SUBPART 211—BASIC LABOR POLICIES
21101 Labor relation*.
22.10M GewraL
(a) Agencies
ynF1^ relations with indus-
try and labor to ensure (1) prompt receipt of information
involving labor relations that may adversely affect the
Government acquisition process and (2) that the
Government obtains needed supplies and services without
delay. All matters regarding labor relations shall be handled
in accordance with agency procedures.
CD) r%flCflCl6£ SuJUl fdDflm UDH^^attl COQOBCDDItf flOY ulS^
pute between labor and contractor management and not
undertake the conciliation, mediation, or arbitration of a
labor dispute, t* me extern practicable, agencies should
ensure that the parties to ofe dispute use aO available meth-
ods for resolving d» dispute, including die services of the
National Labor Relations Board. Federal Mediation and
Conciliation Service, the National Mediation Board and
other appropnats PMlrril, Stale, local, or private tgntrtn,
(c) Agencies should, when practicable, exchange infor-
mation concerning labor matters with other affrftnd agen-
cies to ensure a uniform Government approach concerning
a particular punt or labor-manage
(d) Agencies should take
relations problems to die
actions concerning labor
sot with dwiracqitt-
sinon responsibilities. For example, agencies should—
(1) Notify the agency responsible for conciliation,
mediation, arbitration, or other related action of the
existence of any labor dispute affecting or threatening to
•fleet agency acquisition programs;
(2) Furnish to die parlies to a dispute factual infor-
mation pertinent to the dispute's potential or actual
adverse impact on these programs, to the extent consis-
tent with security regulations; and
(3) Seek a voluntary agreement between manage-
ment and labor, notwithstanding the continuance of the
dispute, to permit uninterrupted acquisition of supplies
and services. This shall only be done, however, if the
attempt to-obttir. voluntary agreement does not involve
the agency in the merits of the dispute and only after
consultation with die agency responsible for concilia-
te) The head of the contracting activity toy designate
programs or requirements fas which it is accessary that
contractors be required to notify the Government of actual
or potential labor disputes that are delaying or threaten to
delay the timely contract performance (see 22. 103-5(a)).
2U01-2 Contract prldng and administration.
(a) Contractor labor policies aad compensation prac-
tices, whedwr or not included in labor-management agree-
ments, are not acceptable bases for allowing costs in cost-
reinu^a^eineMcontrsctsorforiecognitkinofccguinprk:-
ing fixed-price contracts if diey result in unreasonable costs
to the Government. For a discussion of allowable costs
resulting from labor-management agreements, see 31.205-
(b) Labor disputes may cause work stoppages that delay
the performance of Government contracts. Contracting
officers shall impress upon contractors that each contractor
shaO be held accountable for reasonably avoidable delays.
Standard contract clauses dealing wnh default excusable
delays, etc., do not relieve coutractms or subcontractors
from the responsibility for delays that are within the con-
tractors' or ifrfir subcontractors* control. A delay caused by
a strike that the contractor or subcontractor could not rea-
sonably prevent can be excused; however, it cannot be
excused beyond die point at which a reasonably diligent
contractor or subcontractor could have acted to end the
strike by actions such at^
(1) Filing a charge with the National Labor
Relations Board to permit the Board ID seek injunctive
relief m court;
22-1
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Attachment B-2
Page 5 of 45
21101-3
(2) Using other available Government procedures;
and
FEDERAL ACQUISITION REGULATION (FAR^fc
22.102 Federal and Sute labor requirements. ^^
(3) Using private boards or organizationa to settle
disputes.
(c) Strikes normally result in changing patterns of cost
incurrence and therefore may have an impact on the
allowability of costs for cost-reimbursement contracts or
for recognition of costs in pricing fixed-price contracts.
Certain costs may increase because of strikes; e.g., guard
services and attorney's fees. Other costs incurred during a
strike may not fluctuate (e.g., "fixed costs" such as rent
and depreciation), but because of reduced production, their
proportion of the unit cost of items produced increases.
All costs incurred during strikes shall be carefully exam-
ined to ensure recognition of only those costs necessary
for performing the contract in accordance with the
Government's fsscp*"^ interest.
(d) If, during a labor dispute, the inspectors' safety is
not endangered, the normal functions of inspection at the
plant of a Government CTnuactw fhyii be continued win-
out regard to the existence of a labor dispute, strike, or
picket line.
22.101*3 Reporting tabor disputes.
The office administering the contract shall report, in
accordance with agency procedures, any potential or actual
labor disputes that may interfere with performing any con-
tracts under its cc^nizance. If a cooflaa contains die clause
at 52222-1, Notice to the Government of Labor Disputes,
the contractor also must report any actual or potential dis-
pute that may delay contract performance.
•tractors' faculties
22.101-4 Removal of hems front
affected by work stoppages.
(a) Items shall be removed from contracttn' facilities
affected by work stoppages in accordance with agency
procedures. Agency procedures Aoulrt allow for the fol-
lowing;
(1) Pftfuninft whether imwal of itfmt is in tf*c
Government's interest Normally the determining factor
is the critical need* of an agency program.
(2) Attempt to aoaoge with the contractor and the
union representative involved their approval of the ship-
ment of urgently required items.
(3) Obtain appropriate approvals from within the
agency.
(4) Determine who win remove the items from the
plants) involved.
(b) Avoid the use or appearance of force and prevent
incidents that might detrimentally affect labor-manage-
ment relations.
(c) When two or more agencies' requirements are or
may become involved in the removal of items, the contract.
administration office shall ensure mat the necessary coor-
dination is
22-2
22.102-1 Policy.
Agencies shall cooperate, and encourage contractors to
cooperate, with Federal and State agencies responsible for
enforcing labor requirements concerning matters such
(a) Safety;
(b) Health and sanitation;
(c) Maximum hours and minimum wages;
(d) Equal employment opportunity;
(e) Child and convict labor;
(0 Age discrimination;
(g) Disabled and Vietnam veteran employment; and
(h) Employment of the handicapped.
22.102-2 Administration.
(a) Agencies shall cooperate with, and encourage con-
tractors to use to the fullest extent practicable, the United
States Employment Service (USES) and its affiliated local
'State Employment Service offices in meeting contactors'
labor requirements. These requirements may be to staff
new or expanding plant facilities, including requirements
for workers in all occupations and skills from local labor
market areas or through the Federal-State
clearance system.
(b) Local State employment offices are opera*
throughout the United States, Puerto Rico, Guam, and
the Virgin Islands. In addition to providing recruitment
assistance to contractors, cooperation with the local
State Employment Service offices will further the
nyfjflnai program of maintaining continuous assessment
of manpower requirements and resources on a national
and local basis.
22.103 Overtiaw.
22J03-1 DeflnWoms,
"Normal workweek," as used in this subpart, means.
generally, a workweek of 40 hours. Outside the United
States, its possessions, and Puerto Rico, a workweek longer
than 40 hours shaD be considered normal if (a) the work-
week does not exceed the norm for die area, as determined
by local custom, tradition, or law; and (b) the hours worked
in excess of 40 id the workweek are not compensated at a
premium rate of pay.
"Overtime* means time worked by a contractor's
employee in excess of the employee's normal workweek.
"Overtime premium* means the difference between the
contractor's regular rate of pay to sa employee for the shift
involved and the higher ate paid for overtime. It does not
"Shift premium" means the difference between the con
tractor's regular rale of pay to an employee and the higher
rate paid for extra pay-shift wok.
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Page o 01 43
PART 22—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS22J01
22.103-2 Policy.
Contractors shall perform all contracts, so far as practi-
cable, without using overtime, particularly as. a regular
employment practice, except when lower overall costs to
the Government win result or when it is necessary to meet
urgent piugian. needs. Any approved overtime, extra-pay
shifts, and mnltishifts should be scheduled to achieve these
objectives.
22.103-3 Procedures,
(a) Solicitations normally shall not specify delivery or
performance schedules that may require overtime at
Government expense.
(b) In negotiating contracts, contracting officers should,
consistent with the Government's needs, attempt to (1)
ascertain the »»t*"f •*"»? offers are fatfil on die payment of
overtime and shift premiums and (2) negotiate contract
prices or estimated costs without these premiums or obtain..
the requirement from other sources.
(c) When it becomes apparent during negotiations of
applicable contracts (see 22.I03-5O)) that overtime will be
required in contract performance, the contracting officer
shall secure from the contractor a request for all overtime
to be used during the life of the contract. K> the extent that
die overtime can be fttrimaifd with reasonable certainty.
The contractor's request shall contain the information
required by paragraph (b) of the clause at 52.222-2,
Payment for Overtime Premiums.
22.103-4 Approvals.
(a) The contracting officer shall review the contractor's
request for overtime. Approval of the use of overtime may
be granted by an agency approving official after determin-
ing io writing that overtime is necessary to—
(1) Meet essential delivery or performance schedules;
(2) Make up for delays beyond the control and with-
out the fault or negligence of the contractor, or
(3) Fl'TMnttf foreseeable CTtBMteJ production bottle*
necks that cannot be eliminaied in any other way.
(b) Approval by the dmgnaicd official of use and total
dollar amount of overtime is required before inclusion of
an amount in paragraph (•) of the clause at 52322-2,
Payment for Overtime Premiums. This clause is to be
inserted in coat-reimbursement contracts over $100,000,
except for those exempted under 22.103-50).
(c) Qxuractinf officer approval of payment of overtime
contracts (see lubpaagiapa («X3) of die clause at 52332-
7, Payments Under Time-and-Materials and Labor-Hour
Contracts).
(d) No approvals are required for paying overtime pre-
(e) Approvals by the agency approving official (see
22.103-4(a)) may be for an individual contract, project.
program, plant, division, or company, as practical.
(0 During contract performance, contractor requests for
overtime exceeding the amount authorized by paragraph
(a) of the clause at- 52.222-2, Payment for Overtime
Premiums, shall be submitted as stated in paragraph (b) of
the clause to the office administering the contract. That
office will review the request and if it approves, send die
request to the contracting officer. If the contracting officer
determines that the requested overtime should be approved
in whole or in part, the contracting officer shall request the
approval of the agency's designated approving official and
modify paragraph (a) of the clause to reflect any approval
(g) Overtime premiums at Government expense should
not be approved when the contractor is already obligated,
without the right to additional compensation, to meet the
required delivery date.
(h) When the use of overtime is authorized under a con-
tract, the office administering the contract and the auditor
should periodically review die use of overtime to ensure
that it is allowable in accordance with the criteria in Part
31. Only .overtime premiums for work in those depart-
ments, sections, etc.. of the contractor's plant that have
been individually evaluated and the necessity for overtime
confirmed shall be considered for approval
(t) Approvals for using overtime shall ordinarily be
prospective, but. if justified by emergency orcumstances,
approvals may be retroactive. ?
22.103-5 Contract clauses.
(a) The contracting officer shall insert the clause at
52322-1, Notice to the Government of Labor Disputes, in
solicitations and contract* that involve programs or
requirements diat have been designated under 22.101-l(e).
(b) The contracting officer shall include the clause at
51222-2, Payment for Overtime Premiums, in solicitations
and contracts when a cost-reimbursement contract is con-
templated and the contract amount is expected to be over
$100,000: unless (a) a cost-reimbursement contract for
operation of vessels is contemplated, or (b) a cost-plus-
incentive-fee contract that will provide a swing from the
target fee of at least plus or minus 3 percent and a contrac-
tor's share of at least 10 percent is contemplated.
SUBPART 22J-CONV1CT LABOR
22J01GcnenL
The policies and procedures controlling the employment
of prison inmates in the performance of Government con-
tracts are based on the following:
(a) Public Law 89-176 (18 U.S.C. 4082(cX2)). that
empowers the Attorney General to authorize Federal pris-
oners to work at paid employment in the community during
their terms of imprisonment under conditions that protect
aj«in« both the exploitation of convict labof and unfair
competition with free labor.
(b) Executive Order 11755, December 29,1973. that
22-3
267-350 0-90-12 (Vol. I)
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Attachment B-2
Page 7 of 45
22.202
FEDERAL ACQUISITION REGULATION
states: "The development of the occupational and educa-
tional skills of prison inmates is essential to their rehabili-
tation and to their ability to make an effective letum to free
society. Meaningful employment serves to develop those
skills. It is also true, however, that care must be exercised
to avoid either the exploitation of convict labor or any
unfair competition between convict labor and free labor in
the production of goods and services." The Executive order
does not prohibit the contractor, in performing the contract,
from employing—
(1) Persons on parole or probation;
(2) Persons who have been pardoned or who have
served their terms;
(3) Federal prisoners authorized by the Attorney
General under 18 U.S.C. 4082(c)(2) to work at paid
employment in the community during the term of their
imprisonment, if—
(i) The worker is paid or is in an approved work
training program on a voluntary basis;
(ii) Representatives of local union central bodies
or similar labor union organizations have been con-
sulted;
(iii) Paid employment will not (A) result in the
displacement of employed workers; (B) be applied in
skills, crafts, or trades in which there is a surplus of
available gainful labor in the locality; or (C) impair
existing contracts for services; and
(iv) The rates of pay and other conditions of
employment will not be leas than those for work of a
similar nature in die locality where the work is being
performed; or
(4) Nonfederal prisoners under the conditions in
22.201(b) above if die Attorney General has certified
that the work-release laws or regulations of the jurisdic-
tion involved conform to the requirements of Executive
Order 11755. The Executive order provides that, after
notice and opportunity for hearing, the Attorney General
shall revoke the certification if it is found that the juris-
diction's work-release program is not being conducted a
conformance with the order or with in intention or pur-
pose.
22.202 Contract <
The contracting officer shall insert the clause at
52.222-3, Convict Labor, in solicitations and contracts
when the contract is to be performed in any State, the
District of Columbia, the Commonwealth of Puerto Rico.
the Virgin Islands, Guam. American Samoa, or the Trust
Territory of the Pacific Islands; unless—
(a) The contract will be subject to the Walsh-Healey
Public Contracts Act (see Subpart 216), which contains a
separate prohibition against the employment of convict
labor,
(b) The supplies or services are to be purchased from
Federal Prison Industries, Inc. (see Subpart 8.6*); or
22-4
(c) The acquisition involves the purchase, from any
Slate prison, of finished supplies that may be secured in the
open market or from existing stocks, as distinguished from
supplies requiring special fabrication.
SUBPART 77 3 CONTRACT WORK HOURS AND
SAFETY STANDARDS ACT
22JOO Scope of subpart.
This subpart prescribes policies and procedures for
applying the requirements of the Contract Work Hours and
Safety Standards Act (40 U.S.C 327-333) (the Act) to con-
tracts that may require or involve laborers or mechanics. In
mis subpart, the term "laborers or mechanics" includes
apprentices, trainees, helpers, watchmen, guards, firefight-
ers, fireguards, and workmen who perform services in con-
nection win dredging or rock excavation in rivers or har-
bors, but does not include any employee employed as a
22J01 Statutory requirement.
The Act requires that certain contracts contain a clause
specifying that no laborer or mechanic doing any pan of
the work contemplated by the cum act shaD be required or
permitted to work more man 40 hours in any workweek
unless paid for all such overtime noun at not less than
11/2 times the basic rale of pay.
22J02 Liquidated damages and overtime paj.
(a) As set forth in the Act. when an overtime compi
Don discloses under-payments, the contractor and any sub-
contractor responsible therefor shall be liable to the
affected employee for the employee's unpaid wages and
shall, ia addition, be liable to the Government for
liquidated damages. Liquidated damages shall be computed
for each such afiected employee in me sum of $10 for each
calendar day on which such employee was required or per-
mitted to work in excess of the standard workweek of 40
hours without payment of the overtime wages required by
the Act
(b) b ttw event of Mure or n^usal of the contractor or
any subcontractor to comply with overtime pay require-
meno of the Act. if the funds withheld by Federal agencies
for labor standards violations are not sufficient to pay fully
both the unpaid wages due laborers and mechanics and the
liquidated damages due the Cover
the available
funds shall be used first to compensate the laborers and
mechanics for the wages to which they are entitled (or an
equitable portion thereof when the funds are not adequate
for this purpose); and the balance, if any, shall be used for
the payment of liquidated damages.
(c) If me bead of an agency or a designee finds that the
administratively determined liquidated damages due under
Section 104(c) of the Contract Work Hours and Safety
Standards Act are incorrect, or that the contractor or sub-
-------
Page 8 of 45
PART 22—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS 22.401
contractor inadvertently violated the provisions of the Act
notwithstanding the exercise of due care, Hie agency head
or a designee mayr-
(1) Make an adjustment in. or release the contractor
or subcontractor Gram the liability for, liquidated dam-
ages of $500 or few or
(2) Make a recommendation to the Secretary of
Labor for an adjustment in or release from the liability
when the liquidated damages are over $500.
(d) Upon final administrative determination, funds
withheld or collected for liquidated damages shall be dis-
posed of in accordance with agency procedures.
22J03 Administration and enforcement.
The procedures and reports required for construction
contracts in Subpart 22.4 also apply to investigations of
alleged violations of the Act on other than construction
22J04 VarUtkms, tolerances, and exemptions.
(a) The Secretary of Labor, under 40 UAC 331. upon
the Secretary's initiative or at the request of any Federal
agency, may provide reasonable limitations and allow van-,
ations, tolerances, and exemptions to and from any or aQ
provisions of the Aa (see 29 CFR 5,15).
(b) The Secretary of Labor may make variations, toler-
ances, and exemptions from the regulatory requirements of
applicable parts of 29 CFR when me Secretary finds that
such action is necessary and pioycr in the public intfar.u or
to prevent injustice and indue hardship (see 29 CFR 5.14).
22J05 Contract dnuae.
The contracting officer shall insert the clause at
52.222-4. Contract Work Hoars and Safety Standards
Act—Overtime CompffnMtkHi. in solicitations and coo*
tracts (Including, for this purpose, bask ordering and blan-
ket purchase agreements) when me couuact may requite or
involve the employment of laborers or mechanics.
However, the contracting officer shall not include the
clause in solicitations and contracts if it to contemplaied
u^teaxitnctwmbemoaeoftbefoltowmgcates^VMM:
\f/ ^^^BBSM HvlM^B %AMMBemmap ^M ISPttaAnMF 1^ •*••*
(b) Conine*, ether than construction contracts, of
S2J&0 or less. imWbBte quantity or requiremenis coo-
tracts, including basic ordering agreements and blanket
punihase agreements are eiempt, if it can be determined in
advance that the aggregate amount of all orders estimated
to be placed thereunder for 1 year after the effective date of
the agreement will not exceed $2*500. A determination
shall be made annually thereafter if the contract or agree-
nvnt is CTtpndcd and the cn"|Tfi y •fTtnttni Htodififd if
(00
supplies, mi
, or articles ordinar-
ily available in the open market
(d) ftxitnctsfo transportation by land, air,
for the transmission of intelligence.
(e) Contracts to be performed solely within a foreign
country or within a territory under United States jurisdic-
tion other than a State, the District of Columbia. Puerto
Rico, the Virgin Islands, Outer Continental Shelf Lands as
defined in the Outer Continental Shelf Lands Act (43
U.S.C. 1331). American Samoa. Guam, Wake Island.
fnf Johnston Island.
(0 Contracts requiring work to be done solely in
accordance witii the Walsh-Healey Public Contracts Act
(see Subpart 22.6).
(g) Contracts (or portions of contracts) for supplies in
connection with which any required services are merely
incidental to the contract and do not require substantial
employment of laborers or mechanics.
(b) Any other contracts exempt under regulations of the
Secretary of Labor (29 CFR 5.15).-
SUBPART 2L4—LABOR STANDARDS FOR
CONTRACTS INVOLVING CONSTRUCTION
21400 Scop* of ant-part
This subpart implements the statutes which prescribe
labor standards requirements for contncts to excess of
$2,000 for construction, alteration, or repaf;, including
painting and decorating, of public building*) and public
works. (See definition of "Construction* in section
21401.) Labor relations requirements prescribed in other
subparts of Part 22 may also apply.
22401 DefWtfcw.
•Gilding- or "work,- as used in thai snbpart, generally
a^aJ.J^. -- JT ••* !*•••• J
•CDY1EV ^B uUOD2DI^DDv
fit
v*
The terms «»*"*» without hnitation, build-
and improvements of all types, such as
, dams, planta, highways, parkways, streets, sub-
ways, luHmli, sewen, mains, power hnes, pumping sta-
tiona, haavy generators, railways, airports, terminals,
docks, piers, wharves, ways, lighthouses, buoys, jetties,
tion and reactivation of plants, •rafToMing. drilling, burn-
ing, excavating, clearing, and landscaping. The manufac-
rare or finishing of materials, articles, supplies, or equip-
ment (whether or not a Fedenl or Smt$ agency acquires
otk) in suck matcnafet, articles, mpplies, or equipment dur-
ing me cuutse of the "a*"^*'"1"* or fiuuisfaing, or owns
the materials from which they are manufactured or
turaisbe
nj BIB G^aQap^^DCUDD Qt OBi^BBODBnBiii* OB tuB UBUIBH*
t*T**r.* as used in this sub-
22-5
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22.402
Attachment B-2
Page 9 of 45
FEDERAL ACQUISITION REGULATION (FAR
pan, means all types of work done on a particular building
or work at the site thereof, including without limitation,
altering, remodeling, installation (if appropriate) on the site
of the work of items fabricated off-site, painting and deco-
rating, the transporting of materials and supplies to or from
the building or work by the employees of the construction
contractor or construction subcontractor, and the manufac-
turing or furnishing of materials, ankles, supplies, or
equipment on the site of the building or work by persons
employed by the contractor or subcontractor;
"Laborers or mechanics," as used in this subpan,
includes—
(a) Those workers, utilized by a contractor or subcon-
tractor at any tier, whose duties are manual or physical in
nature (including those workers who use tools or who are
performing the work of a trade), as distinguished from
mental or managerial;
(b) Apprentices, trainees, helpers, and. in the case of
contracts subject to the Contract Work Hours and Safety
Standards Act, watchmen and guards;
(c) Working foremen who devote more than 20 percent
of their time during a workweek performing duties of a
laborer or mechanic, and who do not meet the criteria of 29
CFR Pan 541, for the time so spent: and
(d) Every person performing the duties of a laborer or
mechanic, regardless of any contractual relationship
alleged ID exist between the contractor and those individu-
als.
The terms exclude workers whose duties are primarily
executive, supervisory (except as provided in paragraph (c)
of this definition), administrative, or clerical, rather than
manual. Persons employed in a bona fide executive,
administrative, or professional capacity as defined in 29
CFR Part 541 are not deemed to be laborers or mechanics
"Plibiic building" or "public work,'a» used in this sub-
part, means building or work, the construction, prasecu-'
tion, completion, or repair of which, at tfpfiifil in 0"g sec-
tion, is carried on direcUy by aumoruy ot or wiu funds of ,
a Federal agency to serve the interest of the general pubic
regardless of whether title thereof is in a Federal agency.
"Site of the work," as used m this sobpan, is defined as
follows:
(a) The "site of tht work" it limited to the physical
place or places whew to construction caUed for in the con*
tract will remain when work on it is completed, and nearby
property, as described in uaiagiaph (b) of this definition,
used by the contractor or subcontractor during construction
that, because of proximity, can reasonably be included in
the "site."
(b) Except as provided in paragraph (c) of this defini-
tion, fabrication plants, mobile factories, batch plants, bar-
row pits, job headquarters, tool yards, eax, are parts of the
"site of the work," provided they are dedicated exclusively,
or nearly so, to performance of die contract or project, and
are so located in proximity to the actual consmictio
22-6
bon that it would be reasonable to include them.
(c) The "site of the work" does not include
home offices, branch plant establishments, fabrication
plants, or tool yards of a contractor or subcontractor whose
locations and continuance in operation are determined
wholly without regard to a particular Federal contract or
project In addition, fabrication plants, batch plants, bor-
row pits, job headquarters, yards, etc., of a commercial
supplier or material/nan which are established by a supplier
of materials for the project before opening of bids and not
on the project site, are not included in the "site of the
work." Such permanent, previously established facilities
are not a pan of the "site of the work", even if the opera-
tions for a period of time may be dedicated exclusively, or
nearly so, to the performance of a contract.
"Wfcges," as used in this subpan. means the basic hourly
rate of pay, any contribution irrevocably made by a con-
tractor or subcontractor u amis tee or u> a third person pur-
suant to a bona fide fringe benefit fund, plan, or program;
and the rate of costs to the contractor or subcontractor
which may be reasonably anticipated in providing bona
fide fringe benefits to ifh"*y« and mechanic!! putuant to
an enforceable commitment to carry out a finlncially
responsible plan or program, which was communsflued in
writing to die teHiffj* aiMl mechanics affected. TBfe fringe
benefits fnf^twf hi the Davis-Bacon Act include mediv
cat or hospital care, pensions on retirement or death, i
pensation for injuries or illness resulting from occupational1
activity, or insurance to provide any of the foregoing;
unemployment benefits; life insurance, disability insur-
ance, sickness insurance, or accident insurance; vacation or
holiday pay, defraying costs of apprenticeship or other siro-
ilar programs; or other bona fide fringe benefits. Fringe
benefits do not include benefits required by other Federal,
State, or local law.
21402 AppBcabiltty.
(a) Contracts for construction work.
(1) The requirements of this subpan apply—
(D Only if the construction work is. or reasonably
can be foreseen to be, performed at a particular site
so that wage rates can be determined for the locality,
and only to construction work that is performed by
laborers and mechanics at the site of the work;
(U) To dismantling, demolition, or removal of
improvemeao if a pan of the construction contract,
or if construction at that site is anticipated by another
contract as provided in Subpan 373;
(Ui) To the manufactnre or fabrication of con-
struction materials and components conducted in
connection with the construction and on me site of
the work by the contractor or a subcontractor under a
cootraa otherwise subjea to this subparc and
(iv) To painting of public buildings or public
works, whether performed in connection with the
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Attachment B-2
Page 10 of 45
PART 22—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
22.403-4
original construction or as attention or repair of an
existing juifciiJC-
(2) The requirements ot this subpart do not apply
(i) The manufacturing of components or materials
off the sile of me work or their subsequent delivery
to the site by the commercial supplier or material-
(ii) Contracts requiring construction work that is
so closely related to research, experiment, and devel-
opment that it cannot be performed separately, or that
is itself the subject of research, experiment, or devel-
opment (see paragraph (b) of this section for applica-
bility of this subpart to research and development
contracts or portions thereof involving construction,
alteration, or repair of a public building or public
work);
(iii) Employees of railroads operating under col-
lective bargaining agreements that are subject to the
Railway Labor Ace or
(iv) Employees who work at contractors' or sun-
contractors' permanent home offices, fabrication
shops, or tool yards not located at the site of the,
work. However, if the employees go to the site of the
work and perform construction activities there, the
requirements of this subpart are applicable for the
actna! tune so spent, not including travel unless the
employees transport materials or supplies to or from
the site of the work.
(b) Nonconstrnction contracts involving somt
construction work.
(1) The requirements of this subpart apply to coo*
stnifciiflft work to be performed as pan of nonconstruc-
tion contracts (supply, service, research and develop-
ment, ee.) if—
(0 The construction work is to be performed on a
• public building or pobfic work;
(ii) The contract contains specific requirements
for a substantial amount of construction work
exceeding die monetary threshold for application of
the Davis-Bacc* Art (te wort "substantial" relates
to the type and quantity of construction work to be
performed mA not merely ID the total value of con*
sanction woritas compared to the total value of the
contract); siif
(Ui) Tno construction work is physically or func-
tionally jepaiiBt ftom, and is capable of being per-
formed OB a segregated basis from, the other work
required by the contract
(2) The requirements of this subpart do not apply
if—
fl) The construction work is incidental to the fur-
nishing of supplies, equipment, or services (for
example, the requirements do not apply to simple
installation or alttniiofl at a puMtc building or public
work that is incidental to furnishing supplies or
equipment under'a supply contract; however, if i
substantial and segregable amount of construction,
alteration, or repair is required, such as for insulla-
tibn of heavy generators or large refrigerator systems
or for plant modification or rearrangement, the
requirements of this subpart apply); or
(ii) The construction work is so merged with non-
constniction work or so fragmented in terms of the
locations or lime spans in which it is to be per-
formed, that it is not capable of being segregated as a
: contractual requirement.
2X403 Statutory and regulatory requirements.
2X403-1 Dark-Bacon Act.
The Davis-Bacon Act (40 U.S.C. 276a-276V7) provides
that contracts in excess of $2.000 to which the United
Slates or the District of Columbia is a party for construc-
tion, alteration, or repair (including painting and decorat-
ing) of public buildings or public works within die United
Slates. shaD contain a clause (see 5X222-6) that no laborer
or mechanic employed directly upon die site^pf die work
shaO receive leas than the prevailing wage isjes as deter-
mined by die Secretary of Labor.
2X403-2 CopehadAct
The Gopebnd (Anti-Kickback) Act (18 US.C 874 and 40
US.G 276c) makes it unlawful ID induce, by force, intimida-
erwise, any person employed m oecoostrucuoo or repair of
publkbuuolngsorpublkwarBxnjunctdmwhokorinpeit
by the United Stales, to give up any part of the compensation
•0 HrulC& iuflB> DCsTSOD IS COuoBu IfltuCT •% COflfiFeuCK OK OQDaOV*
meat The Gope&ud Act also requires each contractor and
subcontractor to famish weekly a statement of compliance
widi respect to the wages peid each employee during ihe pre-
ceding week. Contracts subject ID die Copt land Act shall
contain a cause (see 5X222-10) requiring contractors and
siibcoiaianun to comply win die regulations issued by the
Secretary of Labor under die Copehad Act
2X4434 Contract Work Hours and Safety Standards
Act
The Contract Work Boon and Safety Standards Act (40
US.C 327-333) requires that certain contracts (tee 2X305)
contain a chose (see 5X222-4) specifying that no laborer
or ntffhanit doing any pan of the work contemplated by
the cuuiract shall be required or permitted ID work more
thw40hainintnywarkw«^unJeapaklfc*tD«ddi^
al hours at not less than 1 1/2 times the bask rate of pay
(see 2X301).
2X403-4 Department of Labor retjnbtfco*.
Under the statutes referred to in this 22.403 and
22-7
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22.404
Attachment B-2
Page 11 of 45
FEDERAL ACQUISITION REGULATION (E
Reorganization Plan No. 14 of 1950 (3 CFR 1949-53
Comp., p. 1007), the Secretary of Labor has issued regula-
tions in Title 29, Subtitle A, Code of Federal Regulations.
prescribing standards and procedures to be observed by the
Department of Labor and the Federal contracting agencies.
Those standards and procedures applicable to contracts
involving construction are implemented in this subpan.
The Department of Labor regulations include —
(a) Pan I, relating to Davis-Bacon Act minimum wage
rates;
(b) Part 3, relating to the Copeland (Anti-Kickback)
Act and requirements for submission of weekly statements
of compliance and the preservation and inspection of week-
ly payroll records;
(c) Pan 5, relating to enforcement of (he Davis-Bacon
Act. Contract Work Hours and Safety Standards Act. and
Copeland (Anti-Kickback) Act;
(d) Pan 6, relating to rules of practice for appealing the
findings of the Administrator, Wage and Hour Division, in
enforcement cases under the Davis-Bacon Act, Contract
Work Hours and .Safety Standards Act, Copeland (Anu>
Kickback) Act, and Service Contract Act, and by which
Administrative Law Judge hearings are held; and
(e) Pan 7, relating to rules of practice by which con-
tractors and other interested parties may appeal to the
Department of Labor Wage Appeals Board, decisions
issued by the Administrator, Wage and Hour Division, or
administrative law judges under the Davis-Bacon Act,
Contract Work Hours and Safety Standards Act, or
Copeland (Anti-Kickback) Act Ail questions relating to
the application and interpretation of wage determinations
(including the cfasfificatiCTB therein) and the interpretation
of the Department of Labor regulations in this subsection
shall be referred to the Administrator, Wage and Hour
Division.
22.404 Davis-Bacon Act wage determinations.
The Department of Labor is responsible for issuing
wage determinations Ffflftcting prevailing wages, IP? hiding
fringe benefits. The wage determinations apply only to
those laborers and mechanics employed by a contractor
upon the site of the work including driven who transport to
or from Ac site materials and equipment used in die course
of contract operations. Dcenninations are issued for dif-
ferent types of construction, snch §s building, heavy, high-
way, and residential (referred to as rate schedules), and
apply only to the types of construction designated in the
determination.
22.404-1 Types of wage determinations.
(a) General wage determinations.
(1) A general wage determination
ing wage rates for the types of
prevail*
in the determination, and is used in contracts performed
within a specified geographical area. General wage
22-8
determinations contain no expiration date and
valid until modified, superseded, or canceled by a i
in the. Federal Register by the Department of Labor.
Once incorporated in a contract, a general wage deter-
mination normally remains effective for the life of the
contract. These determinations shall be used whenever
possible. They are issued at the discretion of the
Department of Labor either upon receipt of an agency
request or on the Department of Labor's own initiative.
(2) General wage determinations are published
weekly in die Government Printing Office (GPO) docu-
ment entitled "General Wage Determinations Issued
Under the Davis-Bacon and Related Acts." Notices of
general wage determinations are published in the
Federal Register., General wage determinations are
effective on the publication date of the notice or upon
receipt of the determination by the contracting agency,
whichever occurs first.
(3) The GPO publication is available for examina-
tion at each of the SO Regional Government Depository
Libraries and many other of the 1,400 Government
Depository Libraries across the country. Subsariptions
may be obtained by contacting: Superintendent of
Documents, U.S. Government Printing Office,
Washington, DC 20402. The GPO publication is
divided into three volumes East. Central, and We
which may be ordered separately. The States
by each volume are as follows:
Alabama
Connecticut
Delaware
Florida
Georgia
Kentucky
Maine
Maryland
Mississippi Vermont
New Hampshire Virginia
New Jersey West Virginia
New York District of Columbia
North Carolina Puerto Rico
Pennsylvania Virgin Islands
Rhode Island
South Carolina
Arkansas
Illinois
Iowa
Kansas
Alaska
Arizona
California
Colorado
Guam
VoluauII- Central
Louisiana Ohio
Michigan Oklahoma
Minnesota Texas
_ Missouri Wisconsin
Nebraska New Mexico
Volume in-West
Montana Utah
Nevada Washington
North Dakota Wyoming
Hawaii Oregon
(4) .On or about January 1 of each year, an annual
-------
Accacnment B-2
Page 12 of 45
PART 22—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
22.404-3
edition will be issued that includes all current general
wa§e detenninations for the States covered by each vol-
ume. Throughout the remainder of the year, regular
weekly updates will be distributed providing any modi'
flcations or superseded wage determinations issued.
Each volume's annual and weekly editions will be pro-
vided in loose-leaf format
(b) Project wage determinations. A project wage deter-
mination is issued at the specific request of a contracting
agency. It is used only when no general wage determina-
tion applies, and is effective for 180 calendar days from the
date of the determination. However, if a determination
expires before contract award, it may be possible to obtain
an extension ID the 180-day life of the determination (see
22,404-5(bX2)). Once incorporated in a contract, a project
wage determination normally fffT>f'nt effective for the life
of the contract.
21404-2 General requirement!.
(a) The contracting officer shall ensure that only the
appropriate wage determinations are incorporated in solici-
tations and contracts and shall designate the work to which
each wage determination or pan thereof applies.
(b) If the wage determination is a general wage deter-
mination or a project wage determination containing more
than one me schedule, the CTOirnr*'nff officer~shall either
include only the rate schedules that apply to the particular
types of construction (building, heavy, highway, etc.) or
include the entire wage determination and clearly indicate
the parts of the wotk to which each rate schedule shall be
applied. Inclusion by reference is not pennitted.
(c) The Wage and Hour Division has issued the foUow-
ing general guidelines for use in selecting the proper sched-
ule^) of wage rates:
(1) Building construction is generally the construc-
tion of sheltered enclosures with walk-in access, for
housing persons, machinery, equipment, or supplies. It
typically includes all construction of such structures,
installation of utilities and equipment (both above and
below grade level), as well as fr^MF*"**1 grading, utili-
ties and paving, unless men is an established area prac-
tice to the """Wy
(2) Rftiritmtnl construction is generally the coo-
jBniCQOO* tflBEIDQ^L Of ICDnUf OK flDKlfi CUIUJY OOtI96ft OF
apartment bmldoigs of no more than four (4) stories m
height, and typically includes incidental items such as
site work, parking anas, utilities, streets and sidewalks.
unless there is an *PAKftdt area practice to die con-
way.
(3) Highway construction is generally the construc-
tion, alteration, or repair of roads, streets, highways,
runways, taxiways. alleys, parking areas, and other simi-
lar projects that are not incirf*Trtiil to "building," "resi-
dential," or *1ieavy" construction.
(4) Heavy construction includes those projects that
are not properly classified as either "building,"
"residential," or "highway," and is* of a catch-all nature.
Such heavy projects may sometimes be distinguished on
the basis of their individual characteristics, and separate
schedules issued (e.g.,"dredging." "water and sewer
line," "dams." "flood control," etc.).
(5) When the nature of a project is not clear, it is
necessary to look at additional factors, with primary
consideration given to locally cs*pt>lishfxf area practices.
If there is any doubt as to the proper application of wage
rate schedules to the type or types of construction
involved, guidance shall be sought before the opening of
bids, or receipt of best and final offers, from the
Administrator. Wage and Hour Division. Further exam-
ples are contained in Department of Labor All Agency
Memoranda Numbers 130 and 131.
22.404*3 Procedures for requesting wage
(a) Requests for general wage determinations. If there
is a general wage determination applicable to the project,
the agency may use it without notifying the Department of
Labor. When necessary, a request for a general wage deter-
mination may be made by submitting StandsVd Form (SF)
308, Request for Determination and Response to Request,
to the Administrator, Wage and Hour Division, attention:
*f*n** Contract Wage Determinations.
(b) Requests for project wage determinations. A con-
tracting agency shall submit requests for project wage
determinations on SF 308 to me Department of Labor. The
requests shall include the following information:
(1) The location, including the county (or other civil
subdivision) and State in which die proposed project is
located.
(2) The name of the project and a sufficiently
detailed description of die work to indicate die types of
construction involved (e.g., building, heavy, highway,
residential, or other type).
(3) Any available pertinent wage payment informa-
tion. unless wage patterns in the area are clearly estab-
lished.
(4) The estimated cost of each project.
(5) All the rlafTJffcitfoflt of lahmf^ and mechanics
likely to be employed.
(c) Time for submission of requests. The time required
by the Department of Labor for processing requests for
project wage detenninations varies according to the facts
and circumstances in each case. An agency should expect
the processing to take at least 30 days. Accordingly, agen-
cies should submu requests B tJie Department of Labor at
least 45 days (60 days if possible) before issuing the solid-
if. Project wage determinations are effec-
(d)
tive for. 180 calendar days from die date of issuance and
apply only to contract awards made within mat time period
22-9
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Attachment B-2
Page 13 of 45
22.404-4
FEDERAL ACQUISITION REGULATION (FAR
(see 22.404-1 (b)). Project wage determinations do not
apply to, and shall not be included in, contracts other than
those for which they are issued. Once incorporated in a
contract, a project wage determination normally remains
effective for the life of the contract.
(e) Review of wage determinations. Immediately upon
receipt, the contracting agency shall examine the wage
determination and inform the Department of Labor of any
changes necessary or appropriate to correct errors. Private
parties requesting changes should be advised to submit
their requests to the Department of Labor.
22.404-4 Solicitations Issued without wage determina*
tions.
(a) If a solicitation is issued before die wage determina-
tion is obtained, a notice shall be included in the solicita-
tion that the schedule of minimum wage rates to be paid
under die contract.will be issued as an amendment to die
solicitation.
(b) In seated bidding, bids may not be opened until a
reasonable time after the wage determination has been fur-
nished to aO bidders.
(c) In negotiated acquisitions, the contracting officer
may open proposals and conduct negotiations before
obtaining the wage determination. However, the conuact-
ing officer ^*flii incorpOPPte the wage determination into
the solicitation before submission of best and final offers.
22.404-5 Expiration of project wage determination*.
(a) The contracting officer shall make every effort to
ensure dial contract award is made before expiration of the
project wage determination included in the solicitation.
(b) The following procedure applies when contracting
by sealed bidding:
(1) If a project wage determination expires before
bid opening, or if it appears before bid opening that a
project wage determination may expire before award,
the contracting officer shall request a new determination
early enough to ensure its receipt before bid opening. If
necessary, the contracting officer shall postpone the bid
opening date to allow a reasonable time to obtain die
determination, amend the solicitation to incorporate the
new determination, and permit bidders to amend their
bids. If the new determination does not change the
wage rates and would not warrant amended bids, (he
contracting officer shall amend the solicitation to
include the number and date of the new determination.
(2) If a project wage determination expires after bid
opening but before award, the contracting officer shall
request an extension of the project wage determination
expiration date from the Administrator, Wage and Hour
Division. The request for extension shall be supported
by a written finding, which shall include a brief state-
ment of factual support, that the extension is necessary
and proper in the public interest to prevent injustice or
22-10
undue hardship or to avoid serious impairment of the
conduct of Government business. If necessary, the con-
tracting officer shall delay award to permit either receipt
of the extension or receipt and processing of a new
determination. If the request is granted, the contracting
officer shall award the contract and modify it to apply
die extended expiration date ID the already incorporated
project wage determination. (See 43.103(bXO.) If the
request is denied, the Administrator will proceed to
issue a new project wage determination. Upon receipt,
the contracting officer shall process the new determina-
tion as follows:
(i) If the new determination changes any wage
rates for classifications to be used in the contract, the
-------
(he contracting officer shall follow the procedures in
22.404-5(0X2X0 or (ii).
,<5) If an effective modification is received by the
ting officer after award, the contracting officer
the contract to incofixwatc the wage modi-
on
Page 14 of 45
PART 22—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS 22.404-7
22J044 Modification of wag* dominations. (4) If an effective modification is received by the
(a) General. The Department of Labor may .modify a contracting, officer after bid opening, but before award,
wage determination to make it current by specifying only -
the items being changed or by issuing a " supersedeas deci-
sion," which ts^a «**«TOPT* of the entire determination
with changes acotporated All project wage determination
modifications expire on die same day as the original deter-
mination. The need to include a modification of a project ficatioo retroactive to die date of award and equitably
wage determination in a solicitation is determined by the adjust die contract price for any increased or decreased
time of receipt of the modification by the contracting agen- cost of performance resulting from any changed wage
cy. Therefore, the f"*M>ifif^ti°" shall be time-date stamped rates. If the modification does not change any wage
rates and would not warrant contract price adjustment,
the contracting officer shall modify the contract to
include die number and date of the modification.
(Q If an award is not made within 90 days after bid
opening, any modification to a general wage determina-
. tioo, notice of .which is published in the Federal Register
before award, shall be effective for any resultant con-
tract unless an extension of the 90-day period is
obtained from the Administrator, Wage and Hour
Division.' An agency head or a designee may request
SOCu Ml CXt6QSSOn frOiP ID6 AuRttDISfttttOf* loft F6QQ6St
must be supported by a written finding, which shall
include a brief statement of actual support, that the
extension is necessary and proper m die public interest
to prevent injustice, undue hardship, or tgavoid serious
immediately upon receipt by the agency. The need for
inclusion of a •«*"««••»'«" of • general wage determina-
is detennined by the piHirpt*
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Attachment B-2
Page 15 of 45
22.4044
FEDERAL ACQUISITION REGULATION (E
22.404-1 Notification of improper wage determination
before award.
(a) Written notification by the Department of Labor
received by the contracting officer prior to award that (1) a
solicitation includes the wrong wage determination or the
wrong rate schedule or (2) a wage determination is with-
drawn by the Department of Labor as a result of a decision
by the Wage Appeals Board, shall be effective immediately
without regard to 22.404-6.
(b) In sealed bidding, the contracting officer shall pro-
ceed in accordance with the following:
(1) If the notification reaches the contracting offi-
cer before bid opening, the contracting officer shall
postpone the bid opening date, if necessary, to allow a
reasonable time to (i) obtain the appropriate determina-
tion if a new wage determination is required, (ii)
amend the solicitation to incorporate the determination
(or rate schedule), and (iii) permit bidders to amend
their bids. If the appropriate wage determination does
not change any wage rates and would not warrant
amended bids, the contracting officer shall amend the
solicitation to include die number and date of the new
dftermination.
(2) If the notification reaches the contracting officer
after bid opening but before award, die contracting offi-
cer shall delay awarding the contract, if necessary, and if
required, obtain the appropriate wage determination.
The appropriate wage determination shall be processed
in accordance with 22.404-3Q>X2Xi) or (ii).
(c) In negotiated acquisitions, the contracting officer
shall delay award, if necessary, and process the notification
in the manner prescribed for a new wage determination at
22.404-5(cX3).
22.404-9 Award of contract without required wage
determination.
(a) If a contract is awarded without the required wage
determination (te* incorporating no determination, con-
taining a clearly inapplicable general wage determination,
or containing a project determination which is inapplica-
ble because of an inaccurate description of the project or
its location), the contracting officer shall initiate action to
incorporate the required determination in the contract
immediately upon discovery of the error. If a required
wage dftprpi * natioo (valid determination in effect on the
date of award) is not available, toe contracting officer
shall expeditiously request a wage determination from the
Department of Labor, including a statement explaining
the circumstances and giving the date of .the contract
award,
(b) The contracting officer shaU—
(t) Modify the contract to incorporate die required
wage determination (retroactive to the date of award)
and equitably adjust the contract price if appropriate; or
(2) Terminate the contract
22-12
22.404-10 Posting wage determinations and notice.
The contractor is required to keep a copy of the wage
determination (and any approved additional classifications)
posted at the site of the work in a prominent place where it
can be easily seen by the workers. The contracting officer
shall furnish to the contractor. Department of Labor Form
WH-1321, Notice to Employees Working on Federal and
Federally Financed Construction Projects, for posting with
the wage rates. The name, address, and telephone number
of die Government officer responsible for the administra-
tion of the contract shall be indicated in the poster to
inform workers to whom they may submit complaints or
raise-questionS'Conccnung MKW standards.
22404-11 Wage determination appeals.
The Secretary of Labor has «*«Mi«*«f4 a wage Appeals
Board which decides appeals of final decisions made by
the Department of Labor concerning Davis-Bacon Act
. wage determinations. A contracting agency or other inter-
ested party may file a petition for review under tie proce-
dures in 29 CFR Pan 7 if reconsideration- by the
Administrator has been sought pursuant 10 29 CFE 1.8 and
denied.
22.405 Labor standards for construction wo
performed under facilities contracts.
If it is not certain at the time of contract award that con-
struction work may be required under a facilities contract
(see 45301), the clause at 52222-17, Labor Standards for
Construction Work—Facilities Contracts (see 22.407(c)},
shall be included in the contract When covered construc-
tion work is necessary after contract award, the contracting
officer shaU obtain the appropriate wage determination and
incorporate it in die contract and identify the item or items
of construction work to which die clauses apply.
2L40C Admlnistratioi and enforcement
22.404-1 PoBey.
(a) Central. Contracting agencies are responsible for
ensuring die fun and impartial enforcement of labor stan-
dards in the administration of construction contracts.
CfcMtncting •gpK'ft «h>ri pflr^tj'" an effective program
.that shall include—
(1) Ensuring dial contractors and subcontractors are
informed, frfforp uti*T"ntwt!fTKfi of wtik, of their obli-
gations under the labor standards clatisesc^ the contract
(2) Adequate payroll reviews, on-site inspections,
and employee interviews to determine compliance by
the contractor and subcontractors, and prompt iniiiauoi^
of corrective action when required:
(3) Prompt investigation and disposition of <
plaints! and
(4) Prompt submission of aO reports required by this
subpart
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Attachment B-2
Page 16 of 45
PART 22—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
22.404-3
(b) ^reconstruction letters and conferences. Before
construction begins, the contracting officer shall inform the
contractor of the labor standards clauses and wage detenni- •
nation requirements of the contract and of the contractor's
and any subcontractor's responsibilities under the contract
Unless it is clear that the contractor is fully aware of the
requirements, the contracting officer shall issue an explana-
tory letter and/or arrange a conference with the contractor
promptly after award of the contract
22.406-2 Wages, fringe benefits, and overtime.
(a) In computing wages paid to a laborer or mechanic,
the contractor may include only the following items:
(1) Amounts paid in cash to the laborer or mechanic,
or deducted from payments under the conditions set
forth in 29 CFR 3.5.
(2) Contributions (except those required by Federal,.
State, or local law) the contractor makes irrevocably to a
trustee or i third party under any bona fide plan or pro-
gram to provide for medical or hospital care, pensions,
compensation for injuries or illness resulting from occu-
pational activity, unfffptoymcpt benefits, life insurance,
disability and sickness insurance, accident insurance, or
any other bona fide fringe benefit
(3) Other contributions or anticipated costs for bona
fide fringe benefits to the extent expressly approved by
the Secretary of Labor.
(bXD The contractor may satisfy the obligation under
the clause at 32.222-6, Davis-Bacon Act, by providing
^VeVics coB^isiip^ of my CQtHDuutioo of contnnuuonff or
costs as jpecifipd in parttrfph (a) of **"• urttfffrtkn*. if thf
total cost of the combination is not less than the total of the
basic hourly rate and fringe benefits payments prescribed
in the wage determination for the clarification of laborer
or mechanic concerned.
(2) Wages provided by me contractor and fringe ben-
efits payments required by the wage determination may
lACitatOG ud99 lull eli^C AOt StattfiO M CXflCt CattD aVDOUDtt*
In thf* eases, the hourly f*** eontvalettt of the cost of
these items shall be determined by dividing the employ-
er's contributions or costs by the employee's boors
worked during die period covered by the costs or contri-
butions. For example, if t conuaciot pays a monthly
health insoraace premium of $112 for a particular
employee who worked 125 boon daring the month, the
hourly cash equivalent is descimined by dividing $112
by 125 boors, which equals 1050 per boor. Similarly,
•D6 CevCUisVDOD OB uQQaflV Gnttfi AQQlYettCBX lOT D1D6 Diflfl
holidays per year for an employee with a hourly we of
pay of $5.00 is determined by multiplying $5.00 by 72
(9 days at 8 boon each), and dividing me result of $360
by the number of hours wotked by die employee during
the year. If the inirated parties (confiKtor, contracting
officer, and employees or their representative) cannot
agree on the cash equivalent, the contracting officer
shall submit the question for final determination to the
Department of Labor as prescribed by agency proce-.
dunes. The information submitted shall include —
(i) A comparison of the payments, contributions.
, -or costs in the wage determination with those made
or proposed as equivalents by the contractor, and
(ii) The comments and recommendations of the
contracting officer.
(c) In computing required overtime payments, (i.e..
1 1 /2 times the basic hourly rate of pay) the contractor shall
use the bask hourly rate of pay in the wage determination,
or the basic hourly rate actually paid by the contractor, if
higher. The bask rate of pay includes employee contribu-
tions to fringe benefits, but excludes the contractor's contri-
butions. costs, or payment of cash equivalents for fringe
benefits. Overtime shall not be computed on a rate lower
dan the bask hourly rate in the wage determination.
22Mt-3
(a) If any laborer or mechanic is to be employed in a
classification that is not listed in the wage determination
applicable to the contract, the contracting officer, pursuant
to the clause at 52222-6, Davis-Bacon Act, shaO require
that the contractor submit to the contracting officer,
Standard Form (SF) 1444, Request for Authorization of
a**4 Pti*. "'hfcfr. aPjrt **irti other
Uattft* CQOKUflS lu£ DVODOflOu atuulDODaU
wage rate *"ftt$nt any fringe benefits
payments.
(b) Upon receipt of SF 1444 from the contractor, the
contracting officer shall review die request to determine
whether it meets the following criteria:
(1) The chnification is appropriate and the work to
be perfoimed by the classification is not performed by
any classification contained in the applicable wage
determination,
(2) The classification is utilized in the area by the
Ofl moustry.
(3) The proposed wage rate, including any fringe
benefits, bears a reasonable relationship to the wage
rates in the wage determination in die contract
(cXD IftteoriieriainparigrBph(b)ofmiifubsectioo
are met and the contractor and die laboias or mechanin to
be employed in the additional chmifirslton fif known) or
CO iftC 000DOBBQ
sification. and die contracting officer approves, me con-
tracting officer shaO snhnrit a report (inr.liiflrng a copy of
SF 1444) of that action to the Administrator. Wage and
Hour Division, for approval, nxxfification, or disapproval
of me additional flasiifiration and wage rass {including
d ft* fringe benefits): or
(2) If te contractor, to laboren or medianics lobe
employed in die ***tfiMfh'ftV1'1 or dMo* representatives,
and the contracting officer do not agree on the proposed
additional claatifiration, or if the criteria are not met.
22-13
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Attachment B-2
Page 17 of 45
22.4064
FEDERAL ACQUISITION REGULATION (FAR;
the contracting officer shall submit a report (including a
copy of SF 1444) giving the views of ail interested par-
ties and the contracting officer's recommendation to the
Administrator, Wage and Hour Division, for determina-
tion of appropriate classification and wage rate.
(d)(l) Within 30 days of receipt of the report, the
Administrator. Wage and Hour Division, will complete
action and so advise the contracting officer, or will notify
the contracting officer that additional time is necessary.
(2) Upon receipt of the Department of Labor's
action, the contracting officer shall forward a copy of
the action to the contractor, directing that the classifica-
tion and wage rate be posted in accordance with para-
graph (a) of the clause at 51222-6 and that workers in
the affected classification receive no less than the mini*
mum rate indicated from the first day on which work
under the contract was performed in the classification,
22.406-4 Apprentices and trainees.
(a) The contracting officer shall review the contractor's
employment and payment records of apprentices and
trainees made available pursuant to the clause at 52222*8.
Payrolls and Basic Records, to ensure that the contractor
has complied with the clause at S&222-9, Apprentices and
Trainees.
(b) If a contractor has classified employees as appren-
tices or trainees without complying with the requirements
of the clause at 52222-9. the contracting officer shall reject
the classification and require the contractor to pay the
affected employees at the rates applicable to the classifica-
tion of the work actually performed.
22.406-5 Subcontracts.
In accordance with the requirements of the clause at
52222*11, Subcontracts (Labor Standards), the contractor
and subcontractors at any tier are required to submit a fulry
executed SF 1413, Statement and Acknowledgment, upon
award of each subcontract
2L406-6 Payrolls M
(a) Submission. 1m accordance with the clause at
52222-8, Payrolls and Bask Records, the contactor must
submit or cause to be submitted, within 7 calendar days
after the regular payment date of the payroll week covered,
for the contractor and each subcontractor, (1) copies of
weekly payrolls applicable to the contract, and (2) weekly
payroll statements of compliance. The contractor may use
the Department of Labor Form WH-347, Payroll (For
Contractor's Optional Use),, or a similar form that provides
the same data i
(b) Withholding for nonsubmission. If the contractor
fails to submit copies of its or its subcontractors' payrolls
promptly, the contracting officer shall, from any payment
due to the contractor, withhold approval of an amount that
the contracting officer considers necessary to protect the
22-14
interest of the Government and the employees of the con-
tractor or any subcontractor.
(c) Examination. (1) The contracting officer shall
examine the payrolls and payroll statements to ensure com-
pliance win the contract and any statutory or regulatory
requirements. Particular attention should be given to—
(i) The correctness of classifications and rates;
(ii) Fringe benefits payments;
(ui) Hours worked;
(iv) Deductions; and
(v) Disproportionate employment ratios of labor-
ers, apprentices, or trainees, to journeymen.
(2) Fringe benefits payments, contributions made, or
costs incurred on odier than a weekly basis shall be con-
sidered as a pan of weekly payments to the extent they
are creditable to die particular weekly period involved
and are otherwise acceptable.
(d) Preservation, The contracting agency shaU retain
payrolls and statements of compliance for 3 years after
completion of die contract and make them available when
requested by the Department of Labor at soy time during
that period. Submitted payrolls shall not be returned 10 a
contractor or subcontractor for any reason, but copies
thereof may be furnished to die contractor or subcontractor
who submitted diem, or 10 a higher tier contractor or sub-
contractor.
(e) Disclosure of payroll records. Contractor payroll
records in the Government's possession must be carefully
protected from any public disclosure which is not required
by law, since payroll records may """fr*" information in
which the contractor's employees have a privacy interest,
as well as information in which the contractor may have a
proprietary interest that die Government may be obliged to
protect Questions concerning release of mis information
may involve the Freedom of Information Act (FOIA).
2L40f>7 CoiipQaiHX checking.
(a) General. The contracting irffJrtr «h«ii m«ir» checks
and investigations on all contracts covered by this subpart
as may be necessary to ensure compliance with the labor
standards requirements of the cuntiU'L
(b) Regular compliance checks. Regular compliance
f**ff*lrif\g irrlmlBi the following acovitiec
(1) Employee interviews to determine correctness of
classifications, rates of pay, fringe benefits payments,
and hours worked. (See Standard Form 1445.)
(2) Othsite inspections to check type of work per-
formed, number sod classification of workers, and ful-
fillment of posting requirements.
(3) Payroll reviews to ensure that payrolls of prime
contractors sod subcontractors have been submitted on i
time and are compHf and in w"pi«we win contract!
requirements.
(4) Comparison of the information in this paragraph
(b) with available data, including daily inspector's report
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Attachment B-2
Page 18 of 45
PART 22—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISniONS
22.406-1
and daily lop of construction, to ensure cons;
y.
(c) Special compliance checks. Situations that may
require special compliance checks include —
(1) Inconsistencies, errors, or omissions detected
during regular compliance checks; or
(2) Recent of a complaint alleging violations. If the
complaint is not specific enough, the complainant shall
be so advised and invited to submit additional infcrma-
22.406-8 Investigations.
Contracting agencies are responsible for conducting
labor standards investigations when available information
indicates such action is warranted. In addition, the
of f-rtwr may gp"5liict an investigation on its
own initiative or may request a contracting agency to do so.
(a) Contracting agencies. The contracting agency shaO
conduct an investigation if a compliance check (see
22.406-7) indicates mat violations may have occurred that
are substantial in amount, willful, or not corrected. (See
also 22.406-9(a) regarding wimbolding from contract pay-
ments.) The investigation shall include all aspects of the
contractor's compliance with contract tabor standards
requirements, and shall not be limited to specific areas'
raised in a complaint or uncovered during compliance
checks. The investigation should be made by personnel
familiar win labor laws and their application to contracts.
If oral or written statements are taken from employees dur-
ing an investigation, the statements, or excerpts or sum-
maries thereof, shafl not be divulged to anyone other man
authorized Government officials without the prior signed
consent of the employee. Investigators may use the inves-
tigation and enforcement instructions issued by and avail*
able upon written request from the Administrator, Wage
and Hour Division. Any available Department of Labor
files pertinent to an investigation may be obtained upon
written request to the Administrator. Wage and Hoar
Division. None of the material obtained from Labor
Department files, other man computations of back wages
8Au uQIUu&tCO u&RUkflCS Ulu SOflUBaVStt Of DttCK VfSflCf flUC*
may be disclosed in any manner to any one other than
responsible Federal officials charged with administering
the contract, without obtaining the permission of the
Department of Late:
(b) Review tfHie Investigation report. The contracting
officer shall review me investigation report on receipt and
make preliminary findings regarding the contractor.
Adverse findings that are not supported by other evidence
shall not normally be based solely on employee statements
that have not been authorized for disclosure by the
employee. However, if the investigation establishes a pat-
tern of possible violations that are based on employees'
ems that have not been authorized for disclosure, the
pattern itfglf may cwMfitutg a suitable bflf" Cor a %H*"t of
(c) Notification to the contractor. The contracting offi-
cer-shall take the following actions upon completing the
review: • •"
(I) Provide written notice to the contractor concern-
ing the preliminary findings, proposed corrective
actions, and the contractor's .right to request that the
basis for the findings be made available and to submit
written rebuttal information within a reasonable period
of time.
(2) Upon request from the contractor, make the basis
for me findings available. However, under no circum-
stances will the contractor be permitted to examine the
investigation report Also, the contracting officer shall
not disclose the identity of any employee who filed a
complaint or who was interviewed, without the prior
consent of the employee.
(3X"0 If the contractor submits a rebuttal, reconsider
the preliminary findings based on information brought
out by the rebuttal and notify the contractor of the final
(ii) If no rebuttal is submitted within a reasonable
time, the preliminary findings shall be considered
final
(4) Request the contractor to make restitution for
underpaid wages and lioutdated <^*rn^yff itc^^nT**1*^ by
the contracting officer to be due. whether tits violation is
considered willful or nonwillful. If the roqutst inclirffs
^ViwidatBd damages, it fhuM mimun a written statement
that the contractor may within 60 days request relief
o^iitt SDCD ftSSCSSDOCllL
(d) Contracting officer's report, (1) After taking the
actions prescribed in paragraphs (b) and (c) of this subsec-
tion, the contracting officer shall prepare and forward a
report of violations including findings and supporting evi-
dence to the agency bead or designee. Standard Form
1446, Labor Standards Investigation Summary Sheet, shall
be completed and attached as «he first page of die report.
(2) After reviewing the contracting officer's report,
the agency head or die agency head's designee, shall
process the report as follows:
(0 A detailed enforcement report shall be submit-
ted to the Administrator, Wtge and Hour Division,
within 60 days after completion of the investigation,
if—
(A) Underpayments by a contractor or subcon-
tractor total $1,000 or more;
(B) There is reason b believe that the viola-
tion arc aggravated or willful (or, also, mte case
of the Davis-Bacon Act, there is reason to believe
that the contractor has disregarded its obligations
to employees and subcontractors);
(O
has not been effected; or
pliance has not been assured.
(D) Future
(ii) If none of the conditions in subdivision
(dXZXi) of this subsection is present but me tavesti-
22-15
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Attachment B-2
Page 19 of 45
22.406-9
FEDERAL ACQUISnTQN REGULATION (E
gaiion was expressly requested by the Department of
Labor, only a summary report shall be submitted to
the Administrator, Wage and Hour Division. The
report shall summarize any violations, including any
data on the amount of restitution paid, the number of
workers who received restitution, liquidated damages
assessed under the Contract Work Hours and Safety
Standards Act, corrective measures taken and any
information that may be necessary to review any rec-
ommendations for an 'ivmEriatf- adjustment in liqui-
dated damages.
(iii) If none of the conditions in subdivision
(dX2XO or (ii) of this subsection is present, me case
shall be closed and the report retained in the appro-
priate contract file.
(iv) If substantial evidence is found that viola-
tions are willful and in violation of a criminal statute,
(generally 18 U.S.C. 874 or 1001) the report (supple-
mented if necessary) also shall be forwarded to the
Attorney General of the United States for prosecution
if the facts warrant. In all such cases, the
Administrator, Wage and Hour Division, shall be
informed simultaneously of the tr*"1** TK^*!*
(e) Department of Labor investigations. In investiga-
tions conducted by the DrnanmctH of Lttwr which diirrlofy
(1) underpayments totaling Si.000 or more, (2)
aggravated/willful violations (or, in the case of the Davis-
Bacon Act, there is reason to believe that the contractor has
disregarded its obligations to employees and subcontrac-
tors), or (3) potential assessment of liquidated damages
under the Contract Work Hours and Safety Standards Act.
the Department of Labor will furnish the concerned con-
tracting agency an enforcement report detailing violations
found and any action taken by the contractor to correct^.
such violations, including any payment of back wages. In
investigations disclosing othtr th/r1* in thii paragraph (e),
the agency will be furnished a letter of notification summa-
rizing the findings of the investigation.
22.406-9 WithhoIdiBf from or SBSpeoskM of contract
payments.
(a) Withholding from contract payments. If the con-
tracting officer believes a violation exists (see 22.406-8), or
upon request of die Department of Labor, the contracting
officer shall withhold from payments due the contractor an
amount equal to the estimated wage underpayment as well
as any *ftirntttfd Ikiuidatfit damages/**** die United States
under the Contract Work Hours and Safety Standards Act
(See 22J02.)
(1) Pursuant to the clauses at 52^22-4, Contract
Work Hours and Safety Standards Act—Overtime
Compensation, and 52.222-7. Withholding of Funds.
cross-withholding of funds from any current Federal
contract with the same prime contractor, or from any •
Federally assisted contract with the same prime contrac-
22-16
tor which is subject to either Davis-Bacon
wage requirements or Contract Work Hours and Safety
Standards Act requirements, respectively, is authorized.
(2) If subsequent investigation confirms violations,
the contracting officer shall adjust the withholding as
necessary. If the withholding was requested by the
Department of Labor, the contracting officer shall not
reduce or release the withholding without written
approval of (he Department of Labor.
(3) The withheld funds shall be used as provided in
(c) of this subsection to satisfy assessed liquidated dam-
ages and. unless the contractor makes restitution, vali-
dated wage underpayments.
(b) Suspension of contract payments. If a contractor or
subcontnctorfails or refuses to comply with the labor stan-
dards clauses of the Davis-Bacon Act and Related Statutes,
the agency upon its own action or upon the written request
of an authorized representative of the Department of Labor.
shall suspend or cause to be suspended any further pay-
ment, advance, or guarantee of funds until the violations
are discontinued or until sufficient funds are withheld to
compensate employees for the wages to which ntey are
entitled, and to cover any liquidated damages which may
be due. "
(c) Disposition of contract payments withheld or sus-
pended.
(1) Forwarding wage underpayments to
Comptroller General. Upon final administrative deter
IBUUuQQ* if PCS&CUUOO Dmtf QOt PCCfl (DJIuC PV IM£ COO*
tractor or subcontractor, the contracting officer shall for-
ward to the appropriate disbursing office Standard Form
(SF) 1093, Schedule of Withholdings Under me Davis-
Bacon Act (40 U.S.C. 276Xa)) and/or Contract Work
Hours and Safety Standards Act (40 U.S.C. 327-333).
The contracting officer shall include with the SF 1093 a
listing of the name, social security number, and last
known address of each affected employee; the amount
due each employee; employee chums if feasible; and a
brief flatfnvmt of the reason for requiring restitution.
Also, the contracting officer tail indicate if restitution
was not made because the employee could not be
located. Underpaid employees may be assisted in me
preparation of their claims. The disbarring office shall
submit the SF 1093 with attached additional data and
the funds withheld (by check) to the Comptroller
General (Chums Division).
(2) Returning of withheld funds to contractor. When
funds withheld are no longer necessary or exceed the
amount required to satisfy validated wage underpay-
ments and assessed liquidated damages, these funds
shsU be paid the contractor in an expeditious mamet
(3) Limitation on forwarding or returning junds. If
the withholding was requested by the Department of
Labor or if the findings are disputed (see 22.406- 10(e».
the conflicting officer shall not forward the funds to the
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Attachment B-2
Page 20 of 45
PART 22—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS 22.407
Comptroller General, Claims Division, or return them to
the contractor without approval by the Department of
Labor.
(4) tiquidairtl damages. Upon final administrative
determination, funds withheld or collected for liquidated
damages shall be disposed of in accordance with agency
procedures.
22.406*10 Disposition of disputes concerning
construction contract labor standards enforcement
(a) The areas of possible differences of opinion
between contracting officers and contractors in construc-
tion contract labor standards enforcement include—
(1) Misclassifkation of workers;
(2) Hours of work;
(3) Wage rates and payment;
(4) Payment of overtime;
(5) Withholding practices; and
(6) The applicability of me labor standards require-
ments under varying circumstances.
(b) Generally, these diffi
s are settled admin
meting agency. If
stn-
lively at the project level by the <
essary, these differences may be sealed with assistance
from the Department of Labor. ^
(c) When requesting the contractor to tike corrective
f^tpff« in labor violation rmrt. thf contracting officer «fan
inform the contractor of the following:
(1) Disputes concerning the labor standards require*
ments of the contract are handled under the contract
clause at 52.222*14, Disputes Concerning Labor
Standards, and not under the clause at 52.233-1.
Disputes.
(2) The contractor may appeal the contracting offi-
cer's findings or pan thereof by furnishing the contract-
ing officer a complete statement of the reasons for the
disagreement with the findings.
(d) The contracting officer shall promptly transmit the
contracting officer's findings and the contractor's statement
to the Administrator, Wage and Hour Division,
(e) The Adromistrator, Wage and Hour Division, wiD
respond directly to me contractor or subcontractor, with a
copy to me conueting agency. The contractor or subcon*
tractor may appeal the Administrator's findings in
accordance whfc the procedures outlined in Labor
Department Regulations (29 CFR 5.11). Hearings before
administrative law judges are conducted in accordance
with 29 CFR Put 6, and hearings before the Labor
Department Wage Appeals Board are conifucied in accor-
dance with 29 CFR Part 7.
(0 The Administrator, Wage and Hour Division, may
institute debanneat proceedings against the contractor or
ractor if the Administrator finds reasonable cause
to believe mat the contractor or subcontractor has commit-
ted willful or aggravated violations of the Contract Work
Hours and Safety Standards Act or the Copeland (Anti-
Kkkback) Act. or any of the applicable statutes listed in 29 •
CFR 5.1 other man me Davis-Bacon Act, or has committed
violations of the Davis-Bacon Act that constitute a disre-
gard of its obligations to employees or subcontractors
under Section 3(a) of that Act
2140*41 Contract U
itioas.
If a contract or subcontract is terminated for violation of
the labor standards clauses, the contracting agency shall
submit a report to the Administrator, Wage and Hour
Division, and the Comptroller General The report shall
include
(a) The number of the terminated contract;
(b) The name and address of the terminated contractor
or subcontractor,
(c) The name and address of the contractor or subcon-
tractor, if any, who is to complete the work;
(d) The amount and number of the replacement con-
ma, if any; and
(e) A description of the wort
2140*12 Cooperation with me Department of Labor.
(a) The contracting agency shall cooperate with repre-
aentativei of me Department of Labor m tha-inspection of
records, interviews with workers, and aD odfer aspects of
investigations undf-r^Vr by the Department of Labor.
. When requested, the contacting agency shaD furnish to the
Secretary of Labor any available information on contrac-
tors, subcontractors, current and previous contracts, and the
nature of me oouiract work.
(b) If a Department of Labor representative undertakes
an investigation at a construction project, the contracting
officer shall inquire into the scope of the investigation, and
request» be notified Jmmnfiatriy of any violations discov-
end under the Davis-Bacon Act, me Contract Work Hours
sod Safety Standards Act. or the Copeland (Anti-Kickback)
Act
2140t>13 Semiannual enforcement reports. .
A semiannual report on compliance with and enforce-
ment of the construction labor standards requirements of
the Davis-Bacon Act and Contract Work Hours and Safety
Standards Act is required from each contracting agency.
The reporting periods are October 1 through March 31 and
Aprfll through September 30. The reports shall only con-
tain information as to the enforcement actions of the con-
tracting agency and shall be prepared as prescribed in
Department of Labor memoranda and submitted to the
Department of Labor within 30 days after me end of the
reporting period. This report has been assigned
imerageocy report control number 1482-DOL-S A.
21407 Contract <
(a) The contracting officer shall insert die following
clauses in solicitations and contracts to excess of $2,000
22-17
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22.601
Attachment B-2
Page 21 of 45 '
FEDERAL ACQUISITION REGULATION (FAR)
for construction within the United Stales:
(1) The clause at 51222-6, Davis-Bacon Act.
(2) The clause at 51222-7, Withholding of Funds.
(3) The clause at 52.222-8. Payrolls and Basic
Records.
(4) The clause at 52.222-9, Apprentices and
Trainees.
(5) The clause at 52.222-10, Compliance with
Copeland Act Requirements.
(6) The clause at 52.222-11, Subcontracts (Labor
Standards).
(7) The clause at 51222-12, Contract Tennination-
DebannenL
(8) The clause at 52.222-13, Compliance with
Davis-Bacon and Related Act Regulations,
(9) The clause at 52£22-14, Disputes Concerning
Labor Standards,
(10) The clause at 52.222-15, Certification of'
Eligibility.
(b) The contracting officer shall insert the clause at
52222-16. Approval of Wage Rates, in solicitations and
contracts in excess of $2,000 for cost-feimbu
sanction to be performed within the United States, except
for contracts with a State or political subdivision thereof.
(c) A oxitraadiatU not prioiarily for construction may
contain a requirement for some construction work to be
performed in the United Slates. If under 22.402(b) die
requirements of this subpan apply to the construction
work, the contracting officer shall insert in such solicita-
tions and contracts the applicable construction labor stan-
dards clauses **flw*red in this section and identify die item
or items of construction work to which die clauses apply.
(d) The contracting officer shall insert the clause at
52.222-17, Labor Standards for Construction
Work—Facilities Contracts, in solicitations and contracts,
if a facilities contract (see 45JOI) may require covered
construction work (see 2Z402(b)) tt be performed in die
United States.
SUBPART 2LS-RESERVED
SUBPART 224—WALSH-HEALEY PUBLIC
CONTRACTS ACT
22401 Definitions.
"Assembly," as used in this subpan, means die piecing
or bringing together of various interdependent or
interrelated parts or components so as to make an operable
whole or unit.
"Manufacturer,'' as used in this subpan, means a person •
that owns, operates, or maintains a factory or establishment
m^i DPDuuccs on tnc p^cnusct tftff i&eUCiTuu2* SUDDUM* m^tt*
cks, or equipment required under the contract and of die
general character described by the specifications.
"Person." as used in this suboait includes associations.
corporations, legal representatives, trustees, trustees in
bankruptcy, or receivers.
"Regular dealer," as used in this subpan. means a per-
son duu owns, operates, or maintains a store, warehouse, or
odter establishment in which the materials, supplies, arti-
cles, or equipment of die general character described by the
specifications and required under die contract are bought,
kept in stock, and sold to the public in the usual course of
business.
22402 Statutory requirements.
Except for the exemptions at 21604. all contracts sub-
ject to the Walsh-Healey Public Contracts Act (the Act) (41
U.S.C. 35-45) and entered into by any executive depart-
ment, independent establishment, or other agency or instru-
mentality of the United Slates, or by the District of
Columbia, or by any corporation (all the stock of which is
beneficially owned by the United States) for the manufac-
ture or furnishing of ""itfrith, supplies, articles, and
equipment (referred to in this subpan as supplies) in any
amount exceeding $10.000. shall—
(a) Be with manufacturers or regular dealers indie sup-
plies manufactured or used in performing the contract and
(b) Include or incorporate by reference die represema-
11 a *<*
of die supplies offered, and die stipulations required by the
Act pertaining ID such matters as minimum wans, maxi-
mum hours, child labor, convict labor, and safe and sani-
tary working conditions.
22403 Applicability.
The requirements in 22.602 apply to
(includ-
ing for this purpose, indefinite-delivery contracts, basic
ordering agreements, and blanket purchase agreements)
and subcontracts under Section 8(a) of the Small Business
Act, for die manufacture or furnishing of supplies that are
to be performed widiin the United Stales, Puerto Rico, or
the Virgin Islands, and which exceed or may exceed
$10.000, unless exempted under 22.604.
22404 Exemptions.
22404-1 Statutory cxenptions.
Contracts for acquisition of die following supplies are
exempt from die Ace
(a) Any item in those
where the contracting
officer is authorized by the express language of a statute to
purchase "in the open market" generally; or where a
jp^ytfiy purchaift is made under the <^**^''»"ns described in
6.302-2 in circumstances where immediate delivery is
required by the public exigency.
(b) PenshtMe*, including dairy, Itvesuck, and nursery
products.
(c) Agricultural or Burn products processed forfirstsale
bv the orurifuU nroducen.
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PAGE 22 of 45
PART 22— APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS 22M6-1
(d) Agricultural commodities or the products thereof
purchased under contract by the Secretary of Agriculture.
2L604-2 Regulatory exemptions.
(a) Contracts for the following acquisitions are fully
exempt from the Act (see 41 CFR 50-201.603):
(1) Public utility services.
(2) Supplies manufactured outside the United States,
Puerto Rico, or the Virgin Islands.
(3) Purchases against toe account of a defaulting
contractor where the stipulations of the Act wen not
included in the defaulted contract
(4) Newspapers, magazines, or periodicals,
contracted for with sales agents or publisher representa-
tives, which are to be delivered by the publishers there-
of.
(b) Contracts of the following type are partially exempt
from the Act (see 41 CFR 50-201.604):
(1) <^y**yfu with certain *
(2) f*«*"'" commodity exchange
(3) Contracts with certain export merchants.
(4) Contracts with small business defense production
pools, and small business research and development
(5) Contracts with public utilities for the acquisition
of certain uranium products.
(c)(l) Upon the request of the, agency head, the
Secretary of Labor may exempt specific contacts or class-
es of contracts from the inclusion or application of one or
more of the Act's stipulations; provided, that the request
includes a finding by the agency head stating the reasons
why the conduct of Government business will be seriously
impaired unltn the exemption is granted.
(2) Those requests fa exemption that relate solely to
safety and health standards shall be transmitted 10 toe
Assistant Secretary for Occupational Safety fit Health,
US. Department of Labor, Washington, DC 20210. Att
other requests shall be transmitted to the Administrator
of the Wage and Hour Division. US. Department of
Labor, Washington, DC 202WL
22405 Ruling and tatfrprtottom of the Act
(a) As ainhnriml by the Act, the Secretary of Labor has
issued rulings aad aiuapremions concerning die adminis-
tration of the Act (see 41 CFR 50-206). The substance of
certain rulings and interpretations is as follows:
(1) If a contract for $101000 or less is subsequently
modified to pxccfd $10,000, the CTfHfict htifoniBii sub*
ject to the Act for work performed after the date of the
modifies
(2) If a contract for more than $10,000 is subse-
quently modified by mutual agreement to $10.000 or
less, the contract is not subject to the Act for work per-
formed' after the date of the modification.
(3) Ifacontraaawardedioapiiniecoritractorcon-
.tains a provision whereby the prime contractor is made
an agent of the Government, the prime contractor is
required to include the stipulations of the Act in con-
tracts in excess of $10X100 awarded for and on behalf of
the Government for supplies that are to be used in the
construction and equipment of Government facilities.
(4) If a contract subject to the Act is awarded to a
contractor operating Government-owned facilities, the
stipulations of the Act affect die employees of that con-
tractor the same as employees of contractors operating
privately owned facilities.
(5) Indefinite-delivery contracts, including basic
ordering agreements and blanket purchase agreements,
are subject to the Act unless it can be determined in
advance that the aggregate amount of all orders
i*im*t*4 to be placed thereunder for 1 year after the
effective.,4ate of the agreement will not exceed $10.000.
A determination shall be made annually thereafter if the
contract or agreement is extended, and the contract or
(b) Reserved,
2&6M Eligibility as a nanufacturer or regular dealer.
224*1 Manufacturer. '
(a) An offerer qualifies as a manufacturer under the cri-
teria m 41 CFR 50-206\51 aad 50-20&52 if it shows before
the a ward that it is—
(1) An established manufacturer--
(9 (X die particular supplies of the general char-
acter sought by die Government; and
00 That has a plant, equipment, and personnel to
nnfiiffyturft on tEf premises the items called for
under the contract; or
(2) Newly entering into a manufacturing activity and
has made aO necessary arrangements and commitments
(0 Manufacturing space;
09 Equipment; and
(iii) Personnel to perform on its own premises the
manufacturing «f»«**«"*t required for the fulfillment
of the contract.
(b) An offerer that is newly entering into a manufactur-
ing activity must show under the criteria in 41 CFR 50-
20&51(b) that the offerer—
(1) Has made written, legally binding arrangements
or commitments to enter a manufacturing business. (An
offerar should not be birred from receiving the award
because it has not yet done any manufacturing, even if
the aitangements and commitments are contingent upon
the award of a Government contract.);
(2) Has not been set up solely to produce on a
Government contract and tint its operations will not be
terminated upon completion of that contract;
(3) Has established arrangements for production on a
22-19
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22.606-2
ATTACHMENT B-2
PAGE 23 of 45
FEDERAL ACQUISITION REGULATION (FAR)
continuing basis of the particular materials, supplies, or
equipment desired by the Government; and
(4) Has documentation to prove that necessary writ-
ten, legally binding arrangements or commitments have
been met before award.
(c) Every offerer must qualify as a manufacturer in its
own rights under the criteria in 41 CFR 50-206.5 l(e) and
(0, and must show the following:
(1) That it is currently capable of manufacturing on
its premises the supplies called for under the contract or,
if it is newly entering into manufacturing, that it has
made written, legally binding commitments before
award to enable it to produce such supplies on its
premises. (The use. rent, or sharing of the manufactur-
ing or producing establishment of another legal entity;
i.e., arrangements for equipment, personnel, or space on
a time-and-material or "as needed" basts, does not meet
this requirement.)
(2) That all evidence documenting the making of
necessary prior arrangements or definite commitments
is in the name of the offerer.
(d) Generally, an offerer that performs assembly opera-
tions as described in 41 CFR 50-206.52 may be considered
a manufacturer, if it performs more dun minimal opera-
tions, such as packaging only, upon the end item to be sup-
plied to the Government, and it—
(1) Produces end items on its premises by assembling
component parts using machines, tools, workers, and the
assembly constitutes substantial or significant fabrica-
tion or production of the end item; or
(2) Has the facilities to produce on its premises a sig-
nificant portion of the required component parts needed
for the end item for which the Government contracted
even if it only performs assembly operations under a
particular acquisition.
(e) An offerer's eligibility status as a prime contractor
or a subcontractor on other contracts subject to the Act is
not determinative evidence of die offerer's present eligibil-
ity as a manufacturer (see 41 CFR 50-206 J l(g)).
22.606-2 Regular dealer.
(a) An offerer qualifies as a regular dealer under the cri-
teria in 41 CFR 50-206J3ff it shows befere me award that
it is a regular dealer dealing m the particular supplies of the
general character offered to the Government Included in
the criteria in 41 CFR 50-206.53 which an offerer must
meet are the following:
(!) It has an establishment, or • leased or assigned
space, in which it regularly maintains a stock of supplies
in which it claims to be a dealer. If the space is in a pub-
lic warehouse, it must be maintained on a continuing
and not on a demand basis.
(2) The stock maintained is • true inventory from
which sales are made. This requirement is not satisfied
by (i) a stock of sample or display items, (u) a stock
22-20
consisting of surplus items remaining from prior orders,
(itt) stock unrelated to the supplies offered, or (iv) a
stock maintained primarily for the purpose of token
compliance- with the Act from which few, if any, sales
are made.
(3) The supplies stocked are of the same general
chancier as those to be supplied under the contract. To
be of the same general character, the items to be sup-
plied must be either identical with those in stock or be
supplies for which dealers in die same line of business
would be an obvious source.
(4) Sales are made regularly from stock on a recur-
ring basis, are not only occasional, or constitute an
exception to the usual operations of the business. The
proportion of sales from stock that will satisfy this
requirement will depend upon the character of the busi-
ness.
(5) Sales are nude regularly in the usual course of
business to the public; i.e.. to purchasers other than
Federal, State, or local Government agencies. This
requirement is not satisfied if the contractor merely
* seeks to sell to the public but has not yet made thersales.
The number and amount of sales that must be made to
the public wiD necessarily vary with the amount o| total
sales and the nature of die business.
(6) The business is an established and going concern.
It is not sufficient to show that arrangements have been
made to set up such a business.
(b) For certain specific products (lumber and timber
products, machine tools, hay. grain, feed or straw, raw cot-
ton, green coffee, petroleum, agricultural liming materials,
tea. raw or unmanufactured cotton timers, certain uranium
products, used automatic data processing equipment, and
specialty advertising products), there are alternate qualifi-
cations for regular dealers in which the dealer need not
physically maintain a stock. The requirements under the
alternative qualifications are in 41 CFR 50-201.101 (*X2)
and 50-201.604.
(c) Coal dealers are exempted from the regular dealer
requirements if they meet the terms and conditions pre-
scribed by the Secretary of Labor in 41 CFR 50-
201.604(a). If these terms and conditions are not met, coal
dealers must mctt the requirements in this subsection.
22407 Aftata.
A "manufacturer" or "regular dealer* may bid. negoti-
ate, and contract through an authorized agent if the agency
is disclosed and the agent acts and contracts in the name of
the principal (see Subpan 3.4, Contingent Fees).
22408 Procedures.
22408-1 Offerer's representation
For each solicitation that may result in a contract subject
to the Act, the contracting officer shall obtain a represena-
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ATTACHMENT B-2
PAGE 24 of 45
PART 22—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
22408-3
lion from the prospective contractor that it is a manufactur-
er or regular dealer of the supplies offered (see 22610(a)).
2&608-2 Determination or eligibility.
(a) The responsibility for applying the eligibility
requirements set forth in 22.606 rests in the first instance
with the contracting officer.
(b) The contracting officer shall investigate and deter*
mine the eligibility of the offerer and not rely on the offer-
er's representation that it is a manufacturer or regular deal-
er in the following circumsu
(1) The contracting officer has knowledge that raises
the question of the validity of the representation.
(2) A protest has been lodged pursuant to 22.608-3.
(3) The offerer that is in line for contract award has
not previously been awarded a contract subject to the
Act by the individual acquisition office.
(4) A preaward investigation or survey of the offer*
or's operations is otherwise made to determine the tech-
nical and production capability, plant facilities and
equipment, and subcontracting and labor resources of
the offerer.
(c) The Department of Labor does not conduct preaward
investigations nor render final determinations of eligibility
until the contracting officer initially has determined
whether the requicements have been met and. any negative
determinations involving small businesses have been con-
firmed by the Small Business Administration.
(d) If the offerer's representation is not accepted, the
contracting officer shall mate a determination as to
whether all of die applicable eligibility requirements have
been met by obtaining apd considering all available
evidence including —
(1) Preaward surveys;
of other frnii*f**'ni> offifrs*
(3) Information available from the cognizant contract
(4) Information provided directly by the offerer; and
(5) Such other factual evidence that may be neces-
sary to determine whether all of the applicable eligi-
bility requirements have been wttt, including evidence
obtained through ao on sile survey conducted specifical-
ly for that purpoat.
(e) The conur ting nffinr shall reject (1) offers from all
offerers whose mprcsftntarion indicates that they are not
manufacturers or regular dealers of die supplies offered and
(2) offers mat qualify or place a reservation on the repre-
sentation and stipulations to avoid full compliance with the
Act.
(00) tf the contracting officer determines that an appar-
ently successful offerer that is not a small business concern
is ineligible, the following procedures shall apply:
(i) The offerer shall be notified in writing that—
(A) It does not meet the eligibility require-
ments and the specify reasons therefore; sod
(B) It may protest the determination by submit-
ting evidence-concerning its eligibility to the con-
tracting officer within 10 working days.
(ii) If, after review of the offerer's evidence, the
contracting officer's position has not changed, the
offerer's protest and all pertinent material shall be
forwarded, in accordance with agency procedures, to
the DOL, Administrator of the Wage and Hour
Division, for a final determination.
(2) If the offerer is a small business concern, the noti-
fication and protest procedures in subparagraph (1)
above shall be followed except that any determination
of ineligibility, whether or not the offerer protests the
determination, shall be forwarded to the SBA Regional
Officer serving the geographical area in which the prin-
cipal office cl ufesinall business concern is located and
the offerer so notifiedTin^woting. The SBA shall review
the dfVftinatifln furl-*
(i) If it diiagttti »tth the contracting officer's
determination, reverse die ^ipi"iiruttifn and forward
to the contracting officer • certification of the offer-
er's eligibility; or
(ii) If it agrees with the contracting officer's deter-
mination, forward the case to? die DOL,
Administrator of the Wage and Hou»Division, for
final determination. *
(3) If the contracting officer forwards the case to the
DOL or the SBA for review of eligibility, the award
should normally be held in abeyance until the contract-
ing officer receives • final determination from the DOL
or a certificate of eligibility from the SBA However.
see 22j608-4 for circumstances that permit award pend-
ing final deienninatkn.
(4) The contracting officer shall notify other offerers
whose offers might become eligible for award when an
•ward is being held in abeyance, and request them to
extend their acceptance period, if necessary.
22M14 Protfrts •pin* «Ufibfllty.
(a) When, before award (see 21608-6 for post-award
protests), another offerer challenges the eligibility of the
apparently successful offerer, the contracting officer
shall—
(1) Promptly notify the apparently successful offerer
of the protest;
(2) Notify bom the protester and the apparently suc-
cessful offerer in writing that evidence concerning the
matter may be submitted to the contracting officer with-
in 10 working days;
(3) Notify offerers whose offers might become eligi-
bk for award that die award is to be held op because of
a protest, and request diem to extend their acceptance
period, if necessary;
(4) Make a determination based on the evidence as
provided in 22408-2$); tad
22-21
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ATTACHMENT B-2
PAGE 25 of 45
22.608-4
FEDERAL ACQUISITION REGULATION (FAR)
(5) Notify the protester and the apparently successful
offerer of the determination and the procedure to be fol-
lowed if either party disagrees with the decision.
(b) If either party disagrees with the determination, the
contracting officer, in accordance with agency procedures,
shall forward the determination and entire record as fol-
lows and notify the parties accordingly;
(1) If the offerer is not a small business concern, to
the DOL. Administrator of the Wage and Hour Division,
for a final determination: or
(2) If the offerer is a small business concern, and the
contracting officer has determined the offerer ineligible,
to the SBA Regional Officer serving the geographical
area in which the principal office of the small business
concern is located; or
(3) If the offerer is a small business concern, and the
contracting officer has determined the offerer to be eli-
gible, to the DOL, Administrator of the Wage and Hour
Division, without referring the matter to the SBA.
22408*4 Award pending final determination.
(aXl) If a small business offerer's eligibility case is for-
warded to SBA for review under 22.608-2 or 22.608-3, the
contracting officer shall comply with Subpart 19.6,
Certificates of Competency and Determinations of
Eligibility. The contracting officer may not make award
until (i) receipt of a Determination of Eligibility from SBA
or (ii) receipt of notification from SBA that the case has
been forwarded to DOL (but see paragraph (b) of this sub-
section), whichever is earlier.
(2) If there is exigency for award at die time the case
is to be forwarded to SBA. the contracting officer may
send with the case a brief statement of urgency and a
request for earliest processing and determination.
(b)(l) If the contracting officer or the SBA has forward-
ed an offerer's eligibility case for review to the DOL under
22.608-2 or 22.608-3, award shall be held in abeyance until
the contracting officer receives a final determination from
the DOL, except that award may be node fa«i«**»ii«trfy if
the contracting officer certifies in writing, and the certifica-
tion is approved as required by agency regulation, mat—
(i) The items to be acquired are urgently required;
or
(ii) Delay of delivery or performance by failure to
make the award promptly will result in substantial
hardship to the Government.
(2) When award is made, the contracting officer
shall document the contract file to explain the need for
making the award before a determination of the offerer's
eligibility by the DOL and give prompt written notice of
the decision to award to the DOL and, as appropriate,
the protester, the SBA. and other concerned parties.
22408-5 Award.
When a contract subject to the Act is awarded, the con-
22-22
txacting officer, in accordance with regulations or
tions issued by the Secretary of Labor and individual agen
cy procedures, shall furnish to the contractor DOL
Publication WH-1313, Notice to Employees Working on
Government Contracts.
22408-f Pottaward.
(a) Protests. (1) If a protest is received after award, but
before final contract completion, the contracting officer
shall follow the procedures in 22.608-3.
(2) If the contract has been completed before receipt
of the protest, the contracting officer shall notify the
protester that no action will be taken on the protesL
(b) Award made to ineligible offerer. If the contracting
officer discovers after an award that the offerer did not act
in good Cuth in representing that it was a manufacturer or
regular dealer of the supplies offered, the contracting offi-
cer, immediately upon discovery, may exercise the right, in
accordance with 41 CFR 30-201. 10l(aX3XO(B) to—
(1) Terminate the contract;
(2) Make open market purchases or enter into other
- contracts for completing the original contract; and^
(3) Charge any additional cost to the original coatrac- *
tor. *
(c) Breach of stipulation. In the event of a vioiatidh of a
stipulation required under die Act, the contracting officer
shall, in accordance with agency procedures, notify the
appropriate regional office of the DOL. Wage and Hour
Division (see 21609), and furnish any information avail-
able.
22.C09 Regional jurisdictions of the Department of
Labor, Wage and Hour Division.
Geographic jurisdictions of the following regional
offices of the DOL, Wage and Hour Division, are shown
here, and are to be contacted by contracting officers in all
situations required by this subpart, unless otherwise speci-
fied:
. (a) The Region I office located in Boston.
Massachusetts, has jurisdiction for Maine, New
Hampshire, Vermont, Massachusetts, Rhode Island, and
Connecticut,
(b) The Region II office located in New York, New
York, has jurisdiction for New York, New Jersey, Puerto
Rico, and the Virgin Islands.
(c) The Region III office located in Philadelphia,
Pennsylvania, has jurisdiction for Pennsylvania, Maryland,
Delaware, Virginia, West Virginia, and the District of
Columbia.
(d) The Region IV office located in Atlanta, Georgia,
has jurisdiction for North Carolina or South Caroli-
na, Kentucky. Tennessee, Mississippi, Alabama. Georgia,
and Florida.
(e) The Region V office located in Chicago, Illinois, has
jurisdiction for Ohio. Indiana. Michigan. Illinois.
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PAGE 26 of 45
PART 22—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS 22JOI
Wisconsin, and Minnesota.
(0 The Region VI office located in Dallas, Texas, has
jurisdiction for Louisiana, Arkansas, Oklahoma, Texas, and
New Mexico.
(g) The Region VII office located in Kansas City,
Missouri, has jurisdiction for Missouri, Iowa, Nebraska.
and Kansas.
(h) The Region Vrn office located in Denver, Colorado,
has jurisdiction for North Dakota, South Dakota. Montana,
Wyoming. Colorado, and Utah.
(i) The Region IX office located in San Francisco.
California, has jurisdiction for Arizona, California.
Nevada, Hawaii, and Guam.
(j) The Region X office located in Seattle, Washington,
has jurisdiction for Washington, Oregon, Idaho, and
Alaska.
2Z410 Solicitation provision and contract dausc.
(a) The contracting officer shall insert the provision at
52.222-19, Walsb-Healey Public Contracts Act
Representation, in solicitations that will result in contracts
covered by the Act (see 22.603,21604, and 21605).
(b) The contracting officer shall insert the clause at
52222-20. Walsh-Healey Public Contracts Act, in solicita-
tions and contracts covered by the Act (see 21603.21604.
and 21605).
SUBPART 22.7—RESERVED
SUBPART 22J-EQUAL EMPLOYMENT
OPPORTUNITY
22*00 Scope of subpart
This subpart prescribes policies and ptuceduics pertain-
ing to TfMfiiT"'" fMf*on in employment by eTo^P^wfTH
contractors and subcontractors.
21801 Definitions.
"Affirmative action program," as used in this subpart,
means a contractor's program that complies with
Department of Labor regulations to ensure equal opportu-
nity in employment to minorities and women,
"Construction work." as used in this subpart, means the
construction, rahabsTharion, alteration, conversion, exten-
sion. demolition, or repair of buildings, highways, or other
changes or improvements to real property, inducting facili-
ties providing utility services. The term also includes the
supervision, inspection, and oner onaite functions inciden-
tal to the actual construction.
"Contracting agency," at used in this subpait, means
any department, agency, establishment, or instrumentality
in the Executive Branch of the Government, including any
wholly owned Government corporation that enters into
contracts.
"Contractor,'' as used in this subpart, includes the terms
"prime contractor* and "subcontractor."
"Director," at used in this subpart, means the Director. •
Office of Federal Contract Compliance Programs
(OFCCP), United Slates Department of Labor.
"Equal Opportunity clause," as used in this subpart.
means the clause at 52.222-26, Equal Opportunity, pre-
scribed in 22.81
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ATTACHMENT B-2
PAGE 27 of 45
22*02
FEDERAL ACQUISITION REGULATION (FAR)
Scales, the District of Columbia, the Virgin Islands, the"
Commonwealth of Puerto Rico, and the possessions of the
United States.
22.802 General.
(a) Executive Order 11246, as amended, sets forth the
Equal Opportunity clause and requires that all Government
contracting agencies (1) include this clause in all nonex-
empi Government prime contracts and subcontracts (see
22.807). and (2) act to ensure compliance with the clause
and the regulations of the Secretary of Labor to promote
the full realization of equal employment opportunity for all
persons, regardless of race, color, religion, sex, or national
origin.
(b) No contract or modification involving new acquisi-
tion shall be entered into, and no subcontract shall be
approved by a contracting officer, with a person who has
been found ineligible by the Director for reasons of non-
compliance with the requirements of EO 11246.
(c) No contracting officer or contractor shall contract for
supplies or services in a manner so as to avoid applicability
of the requirements of EO 11246.
(d) Contractor disputes related to compliance with its
obligation shall be handled according to the rules, regula-
tions, and relevamcroOT of the Secretary of Labor (see 41
CFR 60-1.1).
2Z803 Responsibilities.
(a) The Secretary of Labor is responsible for the—
(1) Administration and enforcement of prescribed
parts of EO 11246; and
(2) Adoption of roles and regulations and the
issuance of orders necessary to achieve the purposes of
EO 11246.
(b) The Secretary of Labor has delegated authority and
assigned responsibility to die Director for carrying out the
responsibilities assigned to the Secretary by EO 11246,
except for the issuance of rules and regulations of a general
nature.
(c) The head of each agency is responsibte far ensuring
that the requirements of das subpan Me carried out within
the agency, and for cooperating with and assisting the
(d) In the event the applicability of EO 11246 and
regulations is questioned, the contracting
officer shall forward the matter through agency channels
for resolution.
22404 Affirmative action programs.
22404-1 Nonconstructkm.
Except as provided in 22.807, each nonconstruction
prime contractor and each subcontractor wiih SO or more
employees and (a) a contract or subcontract of $50,000 or
more or (b) Government bills of lading that in any 12-
22-24
month period, total, or can reasonably be expected to total.
$50,000 or more, is required to develop a written affirma-
tive action program for each of Us establishments within
120 days from the commencement of its first such
Government contract, subcontract, or Government bill of
lading.
22J04-2 Construction.
(a) Construction contractors that hold a nonexempt (see
22J8QT) Government construction contract are required to
meet (1) the contract terms and conditions citing affirma-
tive action requirements applicable to covered geographical
areas or projects and (2) applicable requirements of 41
CFR 60-1 and 60-4.
(b) Each contracting agency shall maintain a listing of
covered geographical areas that are subject 10 affirmative
action requirements that specify goals for minorities and
women in covered construction trades. Information con-
cerning. and additions to, this listing will be provided to the
principally affected contracting officers in accordance with
agency procedures. Any contracting officer contemplating
a construction project in excess of S 10,000 within a geo-
graphic area not known to be covered by specific affirma-
tive action goals shall request instructions on the moat cur-
rent information from the OFCCP regional office/or as
otherwise specified in agency regulations, before issuing
the solicitation.
(^Contracting officers shall give written notice to the
OFCCP regional office within 10 working days of award of
a construction contract subject to these affirmative action
requirements. The notification shall include the name,
address, and telephone number of the contractor employer
identification number; dollar amount of die contract: esti-
mated starting and completion dates of die contract: the
contract number, and die geographical area in which die
contract is to be performed. When requested by die OFCCP
regional office, die contracting officer shall arrange a con-
ference among contractor, contracting activity, and compli-
ance personnel to discuss die contractor's compliance
(a) Prtawerd clearances for contracts and subcoit-
tracts of $1 miUiMorinore(cxtiiduticoianicao*). (1)
Except as provided in 218Q3(*X7) below, if the estimated
amount of the contract, subcontract, or basic ordering
agreement is expected to aggregate SI million or more or
to increase the aggregate value of an existing contract to $1
million or more, the contracting officer shall request the
appropriate OFCCP regional office to determine whether a
contractor is awardable before (0 award of any contract,
including any indefinite delivery contractor letter contract,
(ii) inodifipffliT** of an existing extract for new effort that
would constitute a contract award, or me (in*) issuance of
any basic ordering
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or <*:>
PART 22— APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS 22J07
(2) Preaward clearance for each proposed contract
and for each proposed first-tier subcontract of SI mil-
lion or more shall be requested by the contracting offi-"
cer directly from the OFCCP regional offices). Verbal
requests shall be confirmed in writing.
(3) When die contract work is to be performed out-
side the United States with employees recruited within
the United States, the contracting officer shall send the
request for a preaward review to the OFCCP regional
office serving the area where the proposed contractor's
corporate home or branch office is located in the United
Stales, or the corporate location where personnel
recruiting is handled, if different from the contractor's
corporate home or branch office. If the proposed con*
tractor has no corporate office or location within the
United Slates, the preaward review request action
should be based on the location of the recruiting and
training agency in the United States.
(4) The contracting officer shall include the follow-
ing information in the preaward review request:
(i) Name, address, and telephone number of the
prospective contractor and of any corporate affiliate
at which work is to be performed.
(ii) Name, address, and telephone number of each
proposed first-tier subcontractor with a proposed sub-
contract estimated at SI million or more.
(iii) Anticipated date of award.
(iv) Information as to whether the contractor and
first-tier subcontractors have previously held any
Government contacts or subcontracts.
(v) Place or places of contract performance and
first-tier subcontracts estimated at $1 million or
more, if known.
(vj) The estimated dollar amount of the contract
and each first-tier subcontract, if known.
(5) The contracting officer shall allow as much time
as feasible before award for the conduct of necessary
reviews by OPCCP. As soon as the apparently success-
ful contractor can be determined, me contracting officer
shall process a preaward review request in accordance
with agency procedures, assuring, if possible, that the
preaward review request is submitted to the OFCCP
regional office ai least 30 calendar days before the pro-
posed a ward dale.
(6) In the event the Director has not made a final
preaward clearance determination within 30 calendar
days from submission of the clearance request, the con*
tracting officer shall withhold award of the contract for
an additional IS calendar days, or until clearance is
received, whichever occurs first If the additional IS cal-
endar days expire, and the Director has not either found
the contractor to be in compliance or made a final writ-
ten determination declaring the contractor ineligible for
reasons of noncompliance. the award may be made to
the contractor in question. The contracting officer shall
notify the OPCCP regional office of the award.
(7) If the procedures specified in (5) and (6) above
would delay award of an urgent and critical contract
beyond the time necessary to make award orbeyondTihe
time specified in me offer or exienstohlbereof, die con-
tracting officer shall immediately inform the OPCCP
regional office of the expiration date of throffer or the
required date of award and request clearance be provid-
ed before that date. If the OPCCP regional office advis-
es mat a preaward review cannot be completed by the
required date, the contracting officer shall submit writ-
ten justification for the award to the head of the con-
tracting activity, who. after informing the OFCCP
regional office, may then approve the award without the
preaward clearance. If an award is made under this
authority, the contracting officer shall immediately
request a postaward review from the OPCCP regional
office.
(8) If. under the provisions of (7) above, a postaward
review determines the contractor to be nonawardable,
the Director, may authorize the use of me enforcement
procedures at 22.809 against the noocomplying contrac-
tor.
(b) Furnishing posters. The contracting" officer shall
furnish ID the contractor appropriate quandtia) of the poster
entitled "Equal Opportunity Is The Law." these shall be
obtained in accordance with agency procedures.
2ZB06 Inquiries.
(a) An inquiry from a contractor regarding status of its
compliance with EO 11246, or rights of appeal to any of
the actioni in 22.809 shall be referred to the OFCCP
regional office.
(b) Labor union inquiries regarding the revision of a col-
lective bargaining agreement in order to comply with EO
11246, shall be referred to the Director.
(a) Under die following exemptions, all or pan of the
requirements of EO 11246 may be excluded from a con- '
tract subject to EO 11246:
(1) National security, The agency head may deter*
mine that a contract is essential to the national security
and that the award of the contract without complying
with one or more of (he requirements of this subpart is
ry to the national security. Upon making such a
dftprm illation, the agency f**!11 notify the Director in
writing within 30 days.
(2) Specific contracts. The Director may exempt a
contracting agency from requiring die inclusion of one
or more of the requirements of EO 11246 in any con-
tract if the Director deems that special circumstances in
the national interest so require. Groups or categories of
contracts of the same type may also be exempted if the
Director finds it impracticable to act upon each request
22-25
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ATTACHMENT B-2
PAGE 29 of 45
22.808
FEDERAL ACQUISITION REGULATION (FAR)
individually or if group exemptions will contribute to
convenience in the administration of EO 11246.
(b) The following exemptions apply even though a con-
tract or subcontract contains the Equal Opportunity clause:
(1) Transactions of $10,000 or less. The Equal
Opportunity clause is required to be included in prime
contracts and subcontracts by 22.802(a). Individual
prime contracts or subcontracts of $10,000 or less are
exempt from application of the Equal Opportunity
clause, unless the aggregate value of all prime contracts
or subcontracts awarded to a contractor or subcontractor
in any 12-month period exceeds, or can reasonably be
expected to exceed. $10,000. (Note: Government bills
of lading, regardless of amount, are not exempt)
(2) Work outside the United Suites. Contracts are
exempt from the requirements of EO 11246 for work
performed outside the United States by employees who
were not recruited within the United States.
(3) Contracts with State or local governments. The
requirements of EO 11246 in any contract with a State
or local government (or any agency, instrumentality, or
subdivision thereof) shall not be applicable to any agen-
cy, instrumentality or subdivision of such government
that does not participate in work on or under the con-
tract
(4) Work on or near Indian reservation*. It shall not
be a violation of EO 11246 for a contractor to extend a
publicly announced preference in employment to
Indians living on or near an Indian reservation in con-
nection with employment opportunities on or near an
Indian reservation. This applies to dial area where a per-
son seeking employment could reasonably be expected
to commute to and from in the course of a work day.
Contractors extending such a preference shall not how-.
ever, discriminate among Indians on the basis of reli-
gion, sex, or tribal affiliation, and the use of such prefer-
ence shall not excuse a contractor from complying with
EO 11246, rules and regulations of the Secretary of
Labor, and applicable clauses in die contract
(S) Facilities not connected with contracts. The
Director may exempt from the requirements of EO
11246 any of • contractor's facilities that the Director
finds to be in all respects separate and distinct from
activities of the contractor related to performing the
contract; provided* that the Director also finds that the
exemption will not interfere with, or impede the effec-
tiveness of. EO 11246.
(6) Indefinite quantity contracts. With respect to
indefinite quantity contracts and subcontracts, the Equal
Opportunity clause applies unless the contracting officer
has reason to believe that the amount to be ordered in
any year under the contract will not exceed $10,000.
The applicability of the Equal Opportunity clause shall
be determined by the contracting officer at the time of
award for the first year, and annually thereafter for sue-
22-26
cecding yean, if any. Notwithstanding the abuve,
Equal Opportunity clause shall be applied to the con-
tract whenever the amount of a single order exceeds
S 10,000. Once the Equal Opportunity clause is deter-
mined to be applicable, the contract shall continue to be
subject to such clause for its duration regardless of the
amounts ordered, or reasonably expected to be ordered,
in any year.
(c) To request an exemption under subparagraphs
(aXD. (aX2), or (bXS), the contracting officer shall submit.
under agency procedure, a detailed justification for omit-
ting all, or part of. the requirements of EO 11246.
Requests for exemptions under subparagraphs (aX2) or
(b)(5) above shall be submitted to the Director for
approval:' "
(d) The Director may withdraw the exemption for a
specific contract, or group of contracts, if the Director
deems that such action is necessary and appropriate to
achieve the purposes of EO 11246. Such withdrawal shall
not apply—
(I) To contracts awarded before the withdrawal; or
(2) To any sealed bid contact (including restricted
sealed bidding), unless the withdrawal is madt more
than 10 fa*?*Klar days before the bid opening ^p**
22J08 Complaints.
Complaints received by the contracting officer alleging
violation of the requirements of EO 1 1246 shall be referred
immediately to the OFCCP regional office. The com-
plainant shall be advised in writing of the referral. The
contractor that is the subject of a complaint shall not be
advised in any manner or for any reason of the complain-
ant's name, the nature of the complaint, or the fact that the
complaint was received.
22J09 Enforcement
Upon the written direction of the Director, one or
more of the following actions, as well as administrative
sanctions and penalties, may be exercised against con-
tractors found to be in violation of EO 11246, the regula-
tions of the Secretary of Labor, or the applicable contract
clauses:
(a) Publication of the names of the contractor or their
unions.
(b) Cancellation, termination, or suspension of the con-
tractor's contracts or portion thereof.
(c) Debarmem from future Government contracts, or
extensions or ""^'HcitioBi of y>*5t'ng contracts, until the
contractor has established and carried out personnel and
employment policies in compliance with E0 11246 and the
regulations of the Secretary of Labor.
(d) Referral by the Director of any mauer arising under
EO 11246 to the Department of Justice or to the Equal
Employment Opportunity Commission (EEOQ for the
institution of appropriate civil or criminal proceedings.
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PAGE 30 0£ 4J>
PART 22—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS 22.1001
22410 Solicitation provisions and contract clauses.
(a) The contracting officer shall insert the following
provisions in solicitations when a contract is contemplat-
ed that will include the clause at 32.222-26, Equal
Opportunity:
(1) 52.222-21, Certification of Nonsegregated
Facilities, if the amount of the contract is expected to
exceed! 10,000.
(2) 52.222-22. Previous Contracts and Compliance
Reports.
(b) The contracting officer shall insert the provision at
52222-23, Notice of Requirement for Affirmative Action
to Ensure Equal Employment Opportunity, in solicitations
for construction when a contract is contemplated that will
include the clause at 51222-26. Equal Opportunity, and the
amount of the contract is expected to be in excess of
$10,000.
(c) The contracting officer shall insert the provision at
52.222-24, Preaward Oa-Site Equal Opportunity
fqpMyiifliir* Review, in iolicimin|>fl othtf than those for
construction, when a contract is contemplated that will
include the clause at 51222-26, Equal Opportunity, and the
amount of the contract is expected to be for $1 million or •
more.
(d) The contracting officer shall insert the provision at
52.222-25, Affirmative Action Compliance, in solicita-
tions, other than those for construction, when a contract is
contemplated that will include the clause at 52.222-26.
Equal Opportunity.
(e) The contracting officer shall insert the clause at
52.222-26, Equal Opportunity, in solicitations and con-
tracts (see 224)02) unless all the terms of the clause are
exempt from the requirements of EO 11246 (see
22£07(a)). If one or more, but not all, of the terms of the
clause are exempt from the requirements of EO 11246, the
contracting officer shall use the basic clause with its
Alternate L
(0 The contracting officer shall insert the clause at
52222-27, Affirmative Action Compliance Requirements
for Construction, in solidtatioos and contracts for construc-
tion that will include the clans* at 52.222-26. Equal
Opportunity, and dtt amount of the contract is expected to
be in excess of SIM00.
(g) The contrartint officer shall insert the clause at
52.222-28, Eqotl Opportonity Preaward Clearance of
m SQuCltstOOBS IDO COOtnCtS* CXQCPC vQt
stroction. when the amount of the contract is expected to be
for $1 million or more and includes the clause prescribed in
paragraphs (a), (b). or (c) of 44204.
(h) The contracting officer shall insert the clause at
52222*29, Notification of Visa Denial, in contracts that
will include the clause at 52.222-26. Equal Opportunity, if
the contractor is required to perform in or on behalf of a
foreign country.
SUBPART 2Z»—NONDISCRHVONATION
.BECAUSE OP AGE
22J01 Policy.
Executive Order 11141. February 12, 1964 (29 FR
2477), states that the Government policy is as follows:
(a) Contractors and subcontncion shall not, in connec-
tion with employment, advancement; or discharge of
employees, or the terms, conditions, or privileges of their
employment, discriminate against persons tfcausf of their
age except upon the basis of a bona fide occupational qual-
ification, retirement plan, or statutory requirement.
(b) Contractors and subcontractors, or persons acting on
their behalf, shall not specify in solicitations or advertise-
meats for employees to work on Government contracts, a
maximum age limit for employment unless the specified
itiaKifftum age limit is bawl upon a bona fide occupation3*
qualification, retirement plan, or statutory requirement
(c) Agencies will bring this policy to the attention of
The use of contract clauses is not required.
22J02 Handling complaints.
Agencies shall bring complaints regarding a contractor's
compliance with this policy to thatconiractor'alattention (in
writing, if appropriate), stating the policy, indicating that
the contractor's compliance has been questioned, and
requesting that the contractor take any appropriate steps
that may be necessary to comply.
SUBPART 22.10—SERVICE CONTRACT ACT
OF IMS, AS AMENDED
22.1000 Scope of subparL
This subpart prescribes policies and procedures imple-
menting the provisions of the Service Contract Act of
1965. as amended (41 US.C. 351. et seq.). die applicable
provisions of the Fair Labor Standards Act of 1938, as
amended (29 U.S.C. 201. et seq.). and related Secretary of
Labor regulations and instructions (29 CFR Parts 4,6, 8,
and 1925).
22.1001 Definitions.
"Act" or "Service Contract Act," as used in this subpart,
means the Service Contact Act of 1965, as amended.
"Agency labor advisor" means an individual responsible
for advising contracting agency officials on Federal con-
"Contractor," as used in this subpart. includes a subcon-
oactor at any tier whose subcontract is subject to the provi-
sions of the Act
"Multiple year contracts," as used in this subpart, means
contracts having a term of more than 1 year regardless of
fiscal year funding. The term includes multiyear contracts
with a term of more than I year (see 17.101).
"Notice,** as used in this subpart, means Standard Form
22-27
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ATTACHMENT B-2
PAGE 31 Of 45
22.1002
FEDERAL ACQUISITION REGULATION (FAR)
(SF) 98, "Notice of Intention to Make a Service Contract
and Response to Notice," and SF 98a, "Attachment A."
The term "Notice" is always capitalized in this subpart
when it means Standard Forms 98 and 98a.
"Service contract." as used in this subpart, means any
Government contract, the principal purpose of which is to
furnish services in the United States through the use of ser-
vice employees, except as exempted under section 7 of the
Act (41 U.S.C. 356; see 22.1003-3 and 211003-4). or any
subcontract at any tier thereunder. See 22.1003-5 and 29
CFR 4.130 for a partial list of services covered by the Act
"Service employee" means any person engaged in the
performance of a service contract other than any person
employed in a bona fide executive, administrative, or pro-
fessional capacity, as nose terms are defined in Rut 541 of
Title 29, Code of Federal Regulations. The term "service
employee" includes all such persons regardless of any con-
tractual relationship that may be alleged to exist between a
contractor or subcontractor and such persons.
"United States," as used in this subpart, includes any
State of the United States, the District of Columbia, Puerto
Rico, the Virgin Islands, Outer Continental Shelf Lands as -
defined in the Outer Continental Shelf Lands Act (43
U.S.C. 1331, et seq.), American Samoa. Guam, Northern
Mariana Islands. Wake Island, and Johnston Island but
does not include any other territory under U.S. jurisdiction
or any U.S. base or possession within a foreign country.
"Wage and Hour Division" means the unit in the
Employment Standards Administration of the Department
of Labor to which is assigned functions of the Secretary of
Labor under the Act
"Wage determination'' means a determination of mini*
mum wages or fringe benefits made under sections 2(a) or
4{c) of the Act (41 U.S.C. 351(a) or 3S3(c)) appucable »
the employment in a given locality of one or more classes
of service employees.
22.1002 Statutory requirements.
22.1002-1 General
Service contracts over $2,500 shaO contain mandatory
provisions regarding minimum wages and fringe benefits,
safe and sanitary working conditions, notification to
employees of the minhnum allowable compensation, and
equivalent Federal employee classifications and wage
rates. Under 41 U.S.C. 353(d), service contracts may not
exceed 5 years.
22.1002-2 Wage determinations based on prevailing
rates.
Contractors performing on service contracts in excess of
$2,500 to which no predecessor contractor's collective bar-
gaining agreement applies shall pay their employees at
least the wages and fringe benefits found by the
Department of Labor to prevail in the locality or, in the
22-28
absence of a wage determination, the minimum wage
forth in the Fair Labor Standards Act.
22.1002-3 Wage determinations based on collective
bargaining agreements.
(a) Successor contractors performing on'contracts in
excess of $2.500 for substantially the same services per-
formed in die same locality must pay wages and fringe
benefits (including accrued wages and benefits and
prospective increases) at least equal to those contained in
any bona fide collective bargaining agreement entered into
under the predecessor contract This requirement will not
apply if the Secretary of Labor determines as a result of a
bearing that the wages and fringe benefits are substantially
at variance with those which prevail for services of a simi-
lar character in the locality or that they have not been
reached as a result of arm's length negotiations.
(b) Paragraphs in this Subpan 22.10 which deal with
this statutory requirement and the Department of Labor's
implementing regulations are 22.1008-3, concerning appli-
cability of this requirement and the forwarding .of a collec-
tive bargaining agreement with a Notice (SF 98, 98a);
22.1010, concerning notification to contractors aid bar-
gaining representatives of procurement dates; 22.FD12-3,
explaining when a collective bargaining agreement will not
apply due to late receipt by the contracting officer; and
22.1013 and 22.1021. explaining when the application of a
collective bargaining agreement can be challenged due to a
variance with prevailing rates or lack of arm's length bar-
22.1002-4 Application of the Fair Labor Standards Act
minimum wage.
No contractor or subcontractor holding a service con-
tract for any dollar amount shall pay any of its employees
working on the contract less than the minimum wage sped-
fied in section 6(aXl) of the Fair Labor Standards Act (29
U.S.C.206).
22.1003 AppUcabffity.
22.1003-1 General.
This Subpart 22.10 applies to all Government contracts,
the principal purpose of which is to furnish services in the
United States through the use of service employees, except
as exempted in 22,1003-3 and 22.1003-4 of mis section, or
any subcontract at any tier thereunder. This subpart does
not apply to individual contract requirements for services
in contracts not having as their principal purpose me fur-
nishing of services. The nomenclature, type, or particular
form of contract used by contracting agencies is not deter-
minative of coverage.
22.1003-2 Geographical coverage of the Act
The Act applies to service contracts performed in the
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PART 22--APPUCATTON OF LABOR LAWS TO GOVERNMENT ACQUISITIONS 22.100W
United States (see 22.1001). The Act does not apply to
contracts performed outside the United States.
22.10034 Statutory exemptions.
The Act does not apply to—
(a) Any contract for construction, alteration, or repair of
public buildings or public works, including painting and
decorating;
(b) Any work required to be done in accordance with
the provisions of the Walsb-Healey Public Contracts Act
(41 U.S.C 35-45);
(c) Any contract for transporting freight or personnel by
vessel, aircraft, bus, truck, express, railroad, or oil or gas
pipeline where published tariff rates are in effect;
(d) Any contract for furnishing services by radio, tele-
phone, telegraph, or cable companies subject to the
Communications Act of 1934;
(e) Any contract for public utility services;
(f) Any employment contract providing for direct ser-
vices to a Federal agency by an individual or individuals;
or • •-
(g) Any contract for operating postal contract stations
for the U.S. Postal Service.
22.1003-4 Administrative limitations, variations,
tolerances, and exemptions.
(a) The Secretary of Labor may provide reasonable lim-
itations and may make rules and regulations allowing rea-
sonable variations, tolerances, and exemptions to and from
any or all provisions of the Act other man section 10 (41
U.S.C. 358). These will be made only m special circum-
stances'where it has been detcrmmed'tnai the limitation,
variation, tolerance, or exemption is necessary and proper
in the public interest or to avoid the serious impairment of
Government business, and is in accord with the remedial
purpose of the Act to protect prevafling labor standards (41
U.S.C. 353(b)). See 29 OR 4.123 for a fisting of adminis-
trative exemptions, tolerances, and variations. Requests for
limitations, variances, tolerances, and exemptions from die
Act shall be submitted in writing through contracting chan-
neis and the agency labor advisor a> the Wage and Hour
Adminis
(b) In addition to the statutory exemptions cited in
22.1003-3 of nit subsection, the Secretary of Labor has
exempted the foflowmg types of contracts from all provi-
sions of the Act;
(I) Contracts entered into by die United States with
common carriers for the carriage of mail by nil. air
(except air star routes), bus, and ocean vessel, where
such carriage is performed on regularly scheduled runs
of the trains, airplanes, buses, and vessels over regularly
established routes and accounts for an insubstantial por-
tion of the revenue therefrom.
(2) Any contract entered into by the U.S. Postal
Service with an individual owner-operaior for mail ser-
vice if it is not contemplated at the time the contract is
made that lh» owner-operator will hire any service*
employee to perform the services under the contract
except for short periods of vacation time or for unex-
pected contingencies or emergency situations such as
illness, or accident
(3) Contracts for the carriage of freight or personnel
if such carriage is subject to rates covered by section
10721 of the Interstate Commerce Act
(4) Contracts as follows:
(0 Contracts principally for the maintenance, cal-
ibration, or repair of the following types of equip-
ment are exempt, subject to the restrictions in subdi?
visions (b)(4)(ii), (b)(4)(iii). and (b)(4)(jv) of this
- (A) Automated data processing equipment and
office information/word processing systems.
(B) Scientific equipment and medical appara-
tus or equipment if the application of micro-dec-
tronk circuitry or other technology of at least sim-
ilar sophistication is an essential element (for
example. Federal Supply Classification (FSQ
Group 65, Class 6515. "Medicat Diagnostic
Equipment;" Class 6525. "X-Ray fequipment;"
FSC Group 66, Class 6630. "Cbemfcal Analysis
mSinMttCOlSl ADD ^JttSS wDDv* ^^SOfla^KslDolCsu Sfiu
Astronomical Instruments," are largely composed
of the types of equipment exempted hereonder).
(Q Office/business machines not otherwise
exempt pursuant to subdivision (bX4X9(A) of this
subsection, if such services are pertained by the
manufacturer or supplier of the equipment.
•(it) The exemption set forth in this subpeiagraph
(bX4) of this subsection shall apply only under the
following circumstances:
(A) The items of equipment are commercial
items which are used regularly for other than
Government purposes and are sold or traded by
the contractor in substantial quantities to the gen-
eral public in the course of normal business opera-
tions.
(B) The contract services are furnished at
prices which are. or are based oa, established
catalog or market prices (see 29 CFR
4.l23(eXlX«XB)) for the maintenance, calibra-
tion, or repair of such commercial items.
(Q The contractor utilizes the same compen-
sation (wage and fringe benefits) plan for all ser-
vice employees performing won; under the coo-
- tract as the contractor uses for equivalent employ-
ees servicing the same equipment of commercial
custmuMs.
(D) The contractor certifies in the contract to
the provisions in subdivision (bX4X«i) of this sub-
section. (See 22.1006(e).)
22-29
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ATTACHMENT B-2
PAGE 33 of 45
22.1003-5
FEDERAL ACQUISITION REGULATION (FAR)
(iiiXA) Determinations of ihe applicability of this
exemption shall be made in the first instance by the
contracting officer before contract award. In deter-
mining that the exemption applies, the contracting
officer shall consider all factors and make an affirma-
tive determination that all of the above conditions
have been met
(B) If any potential offerers would not qualify
for the exemption, the contracting officer shall
incorporate in the solicitation the Service Contract
Act clause (see 22.1005 and 22.1006(a)) and, if
the contract will exceed $2,500. the appropriate
Department of Labor wage determination (see
22.1007).
(iv) If the Department of Labor determines after
contract award that any of the requirements for
exemption in subparagraph (bX4) of this subsection
have not been met, the exemption will be deemed
inapplicable, and the contract shall become subject to
the Service Contract Act. effective as of the date of
the Department of Labor determination.
22.1003-5 Some examples of contracts covered.
The following examples, while not definitive or exclu-
sive, illustrate some of the types of services that have been
found to be covered by the Act (see 29 CFR 4. 130 for addi-
tional examples):
(a) Motor pool operation, parking, taxicab, and ambu-
lance services.
(b) Packing, crating, and storage.
(c) Custodial, janitorial, housekeeping, and guard ser-
vices.
(d) Food service and lodging.
(e) Laundry, dry-cleaning, linen-supply, and clothing
alteration and repair services.
(0 Snow, trash, and garbage removal
(g) Aerial spraying and aerial reconnaissance for fire
detection.
(h) Some support services at installations, including
i
(i) Certain specialhted services requiring specific skills.
such as drafting, illusaadng. graphic arts, stenographic
reporting, or mortuary services.
(j) Electronic equipment maintenance and operation
and engineering support services.
(k) Maintenance and repair of all types of equipment,
for example, aircraft, engines, electrical motors, vehicles,
and electronic, telecommunication, office and related busi-
ness and construction equipment. (But see 22.1003-
4(bX4).)
G) Operation, maintenance, or logistics support of a
Federal facility.
(m) Data collection, processing and analysis services.
22-30
22.10034 Repair distinguished from rtmanufacturio|a«^
of equipment. ^V
(a) Contracts principally for remanufacturing of equip-
ment which'is so extensive as to be equivalent to manufac-
turing are subject to the Walsh-Healey Public Contracts
Act, rather than to the Service Contract Act.
Remanufacturing shall be deemed to be manufacturing
when the criteria in either subparagraphs (aXl) or (aX2) of
ihi« subsection are mff
(1) Major overhaul of an item, piece of equipment,
or material which b degraded or inoperable, and under
which all of the following conditions exist:
(i) The item or equipment is required ID be com-
pletely or substantially torn down into individual
component parts. .
(ii) Substantially all of the parts are reworked.
Behafriiimtfd altered and/or replaced.
(iii) The parts are reassembled so as to furnish a
totally rebuilt item or'piece of equipment
(iv) Manufacturing processes similar to those
which were used in the manufacturing of the item or
piece of equipment are utilized. *
(v) The disassembled components, if jsable
(except for situations where the number of utas or
pieces of equipment involved are loo few to make it
practicable) are commingled with existing invento
and, as such, lose their identification with respect to
particular piece of equipment.
(vi) The items or equipment overhauled are
restored to original life expectancy, or nearly so.
(vii) Such work is performed in a facility owned
or operated by the contractor.
(2) Major modification of an item, piece of equip-
ment, or material which is wholly or partially obsolete,
and \f4fr which all of l^c following conditions yuy
(i) The item or equipmem b required to be com-
pletely or substantially torn down.
(ii) Outmoded parts are replaced.
(iii) The item or equipment b rebuilt or reassem-
bled.
.(iv) The contract work results in the furnishing of
a flifrffap^rcy modified item in a usable and service-
able condition.
(v) The work b performed in a facility owned or
operated by me contractor.
(b) Remanufacturing does not include the repair of
damaged or broken equipment which does not require a
complete teaidown, ovemaul, and rebuild as described in
subpangnphs (aXO tad (aX2) of this subsection, or the
periodic and routine maintenance, preservation, care.
adjustment, upkeep, or servicing of equipment to keep it in
usable, serviceable, working ordet Such contracts typically
are billed on an hourly rate (labor plus materials and parts)
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PAGE 34 of 45
PART 22—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
22.1006
basil. Any contract principally for this type of work is sub-
ject to the Service Contract Act. Examples of such work
include the following:
(1) Repair of an automobile, truck, or other vehicle,
construction equipment, tractor, crane, aerospace, air
conditioning and refrigeration equipment, electric
motors, and ground powered industrial or vehicular
equipment
(2) Repair of typewriters and other office equipment
(but see 22.1003-4(bX4)).
(3) Repair of appliances, radios, television sets, cal-
culators, and other electronic equipment.
(4) Inspecting, testing, calibration, painting, packag-
ing, lubrication, tune-up, or replacement of internal
pans of equipment listed in subparagraphs (bXD, (bX2).
and 0>X3) of this subsection.
(5) Reupholstering, reconditioning, repair, and refin*-
ishing of furniture.
22.1003-7 Questions concerning applicability of the
Act.
If the contracting officer questions the applicability of
the Act to an acquisition, the contracting officer shall
request the advice of the agency labor advisor; Unresolved
questions shall be submitted in a timely manner to the
Administrator, Vtfege and Hour Division, for determination.
22.1004 Department of Labor responsibilities tad
regulations.
Under the Act, the Secretary of Labor is authorized and
directed to enforce the provisions of die Act. make rules
and regulations, issue orders, hold hearings, make deci-
sions, and take other appropriate action. The Department of
Labor has issued implementing regulations on such matters
(a) Service contract labor standards provisions and pro-
cedures (29 CFR Plan 4, Subpart AX
(b) Wage detenninatioft procedures (29 CHI Pan 4,
Subpart B);
(c) Applicaticn o/the Aa (ruu^ and interpretations)
(29 CFR Pan 4. Subpart O,
(d) Compensation standards (29 CFR Part 4, Subpart
D);
(e) Enfbrcemeat (29 CFR Pan 4, Subpart E);
(0 Safe and sanitary working conditions (29 CFR Part
1925);
(g) Rules of practice for administrative proceedings
enforcing service contract labor standards (29 CFR Pan 6):
and
(h) Practice before the Board of Service Contract
Appeals (29 CFR Part 8).
22.1005 Clawe for coo tracts of $2,500 or hss.
The contracting officer shall insert the clause at 51222-
40, Service Contract Act of 1963, as amended Contracts
of $2,500 or Less, in solicitations and contracts if the con-
tract is subject to the Act and is (a) for 52,500 or less or (b)
for an indefinite dollar amount and die contracting officer
knows in advance that the contract amount win not exceed
$2300:'
22.1004 Clauses for contracts over $2300.
(a) The contracting officer shall insert the clause at
51222-41, Service Contract Act of 1965, as amended, in
solicitations and contracts if the contract is subject 10 the
Act and is (1) for over $2,500 or (2) for an indefinite dollar
amount and the contracting officer does not know in
advance that die contract amount will be $2,500 or less.
(b) The contracting officer shall insert the clause at
52.222-42, Statement of Equivalent Rates for Federal
Hires, in solicitations and contracts if the contract amount
is expected to be over $2.500 and the Act is applicable.
(See 211016.)
(cXl) The contracting officer shall insert the clause at
52.222-43, Fair. Labor Standards Act and Service Contract
Act—Price Adjustment (Multiple Year and Option
Contracts), or another clause which accomplishes the same
purpose, in solicitations and contracts if the. contract is
expected to be a fixed-price service contract containing (he
clause at 51222-41, Service Contract Act if 1965, as
amended, and is a maniple year contract or k a contract
with options to renew which exceeds die small purchase
limitation. The clause may be used in contracts that do not
exceed the small purchase limitation. The clause at
51222-43, Fair Labor Standards Act and Service Contract
Act—Price Adjustment (Multiple Year and Option
Contracts), applies to both contracts subject to area prevail-
ing wage determinations and contracts subject to the
incumbent contractor's collective bargaining agreement in
effect during this contract's preceding contract period (see
22.1002-2 and 22.1002-3). Contracting officers shall
ensure chat contract prices or contract unit price labor rates
are adjusted only to the extent dial a contractor's increases
or decreases in applicable wages and fringe benefits are
made to comply widt die requirements set forth in the
clauses at 51222-43 (subparagraphs (cXD, a) and (3)). or
51222-44 (subparagraphs (bXD and (2)). (For example,
the prior year wage determination required a minimum
wage rate of $4jOO per hour. The contractor actually paid
$4.10. The new wage determination increases the mini-
mum rate n $4 JO. The contractor increases die rate actual-
ly paid to $4.75 per bout The allowable price adjustment is
$.40 per hoar.)
(2) The contracting officer shaQ insert die clause at
52.222-44. Fair Labor Standards Act and Service
Contract Act—Price Adjustment, in solicitations and
contracts if the contract is expected to be a fixed-price
service contract containing the clause at 52.222-41,
Service Contract Act of 1965, as amended, exceeds the
small purchase limitation, and is not a multiple year
22-31
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ATTACHMENT B-2
PAGE 35 of 45
22.1007
FEDERAL ACQUISITION REGULATION (FAR)
contract or is not a contract with options to renew. The
clause may be used in contracts that do not exceed the
small purchase limitation. The clause at 52222-44, Fair
Labor Standards Act and Service Contract Act— Price
Adjustment, applies to both contracts subject to area
prevailing wage determinations and contracts subject to
contractor collective bargaining agreements (see
22.1002-2 and 22.1002-3).
(3) The clauses prescribed in paragraph
22.1006(cXl) cover situations in which revised mini-
mum wage rates are applied to contracts by operation of
law, or by revision of a wage determination in connec-
tion with 0) exercise of a contract option or (ii) exten-
sion of a multiple year contract into a new program year.
If a clause prescribed in 16.203-4{d) is used, it must not .
conflict with, or duplicate payment under, the clauses
prescribed in this paragraph 22.1006(c).
(d) The contracting officer shall insert the clause at
51222-47. Service Contract Act (SCA) Minimum Wages
and Fringe Benefits, if—
(1) The clause at 51222-41 applies;
(2) The contract resulting from the solicitation suc-
ceeds a contract for substantially the same services to be
performed in the same locality;
(3) The incumbent contractor has negotiated or is
negotiating a collective bargaining agreement with some
or all of its service employees; and
(4) All applicable Department of Labor wage deter-
minations have been requested but not received.
(eXl) The contracting officer shall insert the clause at
52.222-48. Exemption from Application of Service
Contract Act Provisions, in any solicitation and resulting
contract calling for the maintenance, calibration, and/or
repair of ADP, scientific and medial, and office and busi-
ness equipment if the contracting officer determines that
the resultant contract may be exempt from Service Contract
Act coverage as described at 22.1003-4(bX4).
(2) If die successful offerer does not certify that the
exemption applies, die contracting officer shall not
insert the clause at 51222-48 and instead shall insert in
the contract (t) the applicable Service Contract Act
clause(s) and (ii) ibe appropriate Department of Labor
(0 The contracting officer shall insert the clause at
51222-49. Service Contract Act— Place of Performance
Unknown, if using the procedures prescribed in 22.1009-4.
22.1007 Requirement to submit Notice (SF 98V98a).
The contracting officer shall submit Standard Forms 98
and 98a (see 53301-98 and 53.301-98a), "Notice of
Intention to Make t Service Contract and Response to
Notice" and "Attachment A" (both forms hereinafter
referred to as "Notice"), together with any required supple-
mental information to the Administrator, Wsjge and Hour
Division, Employment Standards Administration, U.S.
22-32
Department of Labor, Washington, DC 20210, for the foi
lowing service contracts:
(a) Each new solicitation and contract in excess of
$2^00.
(b) Each contract modification which brings the con-
tract above $2.500 and—
(1) Extends the existing contract pursuant to an
option clause or otherwise; or
(2) Changes the scope of the contract whereby labor
requirements are affected significantly.
(c) Each multiple year contract in excess of $2,500
upon—
(1) Annual anniversary date if the contract b subject
to annual appropriations; or
, (2). Biennial anniversary date if the contract is not
subject to annual appropriations and its proposed term
exceeds 2 yean—unless otherwise advised by the Wage
and Hour Division (see 22.1008-5).
22.1008 Procedures for preparing and submitting
. Notice (SF 98/98*).
22,1008-1 Preparation of Notice (SF 9S/98a). -
The contracting officer shall complete and submit the
Notice in accordance with the instructions on the SF 98 and
shall supplement it with information required under this
section. Cave should be taken to ensure that all
information is provided to avert return without action
the Department of Labor. The contracting officer
retain a copy of the completed Notice and any required
supplementary information until the signed and dated
ffiponse to the Notice is received from the Department of
f jfrnr yn^ placed in the wHiivi file.
224008-2 Preparation of SF 98a.
(a) The SF98a shall contain the following inf<
concerning the service employees expecad to be employed
by the contractor and any known subcontractors in per-
forming the contract:
(1) All chases of service employees to be utilized.
(0 If a wage determination is to be based on a
collective bargaining agreement (CBA) (see 22.1002-
3 and 22.1008-3). use the exact title shown in the
CBA,
00 For.other than subdivision (aXIXO of this
(A) Use the exact title shown in the Wage and
Hour Division's Soviet Contract Act Directory
of Occupations (see paragraph (b) of this subsec-
tion);
(B) Provide an appropriate job title and job
description if the Directory cannot be used
(2) The estimated number of service employees
eachclascand
(3) The wage rate that would be paid each class if
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PAGE 36 of 45
PART 22—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
22.1008-3
employed by the agency and subject to the wage provi-
sions of 5 U.S.C. 5341 and/or 5332 (see 22.1016).
(bXl) The W^e and Hour Division's Service Contract
Act Directory of Occupations (Directory) contains standard
job titles and definitions (descriptions) for many commonly
utilized service employee occupations. Contracting offi-
cers shall use this Directory to the maximum extent possi-
ble in listing service employee classes on the SF 98a. This
usage will enhance the timely issuance of comprehensive
wage determinations.
(2) If the job tide contained in the Directory differs
from that contained in the statement of work but the job
definition (description) in the Directory and the state-
ment of work match sufficiently, the contracting officer
shall use the Directory job title.
(3) The latest edition of the Directory is available for
sale by the Superintendent of Documents and-may-be-
ordered by Calling (202) 783-3238 or writing to
Superintendent of Documents, U.S. Government
Printing Office, Washington, DC 20402. Contracting
agencies, in accordance with agency procedures, are
responsible for notifying their own personnel of a new
edition of the Directory.
22.1008*3 Section 4(c) successorsbip with incumbent
contractor collective bargaining agreement
(a) Early in the acquisition cycle, the contracting officer
shall determine whether section 4(c) of the Act affects the
new acquisition. The contracting officer shall determine
whether there is a predecessor contract and. if so, whether
the incumbent prime contractor or its subcontractors and
any of their employees have a collective bargaining agree-
ment
(b) Section 4(c) of the Act provides that a successor
contractor must pay wages and fringe benefits (including
accrued wages and benefits and prospective increases) to
service employees at least equal to those agreed upon by a
predecessor contractor under the following conditions:
(1) The services to be furnished under the proposed
contract will be substantially the same as services being
furnished by an incumbent contractor whose contract
the proposed contract will succeed.
(2) The servkcswiU be perfonnedrn the same local-
ity.
(3) The UICIBKBW prune conoacior or subcontractor
is furnishing such services through the use of service
employees whose wages and fringe benefits are the sub-
ject of one or more collective bargaining agre
(c) The application of section 4(c) of the Act is subject
to the following 1ifT"tiHKffi7
(1) Section 4(c) of the Act will not apply if the
incumbent contractor enters into a collective bargaining
agreement for the first time and the agreement does not
become effective until after the expiration of the incum-
bent's contract
(2) If the incumbent contractor enters into a new or
revised collective bargaining agreement during the peri-
od of the incumbent's performance on the current con-
tract, the terms of the new or revised agreement shall
not. be effective for the purposes of section 4(c) of the
Act under the following conditions:
OKA) In sealed bidding, the contracting agency
receives notice of the terms of the collective bargain-
ing agreement less than 10 days before bid opening
and finds that there is not reasonable time still avail-
able to notify bidden (see 22.10l2-3(a)); or
(B) For contractual actions other than sealed
bidding, the contracting agency receives notice of
the terms of the collective bargaining agreement
after award, provided that the start of performance
is within 30 days of award (see 22.1012-3(b)); and
(ii> The contracting officer has given both the
incumbent contractor and its employees' collective
bargaining agent timely written notification of the
applicable acquisition d***f (see 22.1010).
(d) If section 4(c) of the Act applies., the contracting
officer shall obtain a copy of any collective bargaining
agreement between an incumbent contractor or subcon-
tnctor and its employees. Obtaining a copy 4f sn incum-
bent contractor's collective bargaining agreement may
involve coordination with the administrative^conncting
officer responsible for administering the predecessor con-
tract (Paragraph (m) of the clause at 52222-41, Service
Contract Act of 1965, as amended, requires the incumbent
prime contractor to furnish the contracting officer a copy
of each collective bargaining agreement) The contracting
officer shall submit a copy of each collective bargaining
agreement together with any related documents specify-
ing the wage rates and fringe benefits currently or
prospectively payable under each agreement with the
Notice.
(e) Section 4(c) of the Act will not apply if the
Secretary of Labor determines after a hearing that the
wages and fringe benefits in the predecessor contractor's
collective bargaining agreement are substantially at vari-
ance with those which prevail for services of a similar
chancier in the locality or are not the result of arm's length
bcrgaining (see 22.1013 and 211021).
(0 If the services are being furnished at more than
one location and the collectively bargained wage rates
and fringe benefits are different at different locations or
do not apply to one or more locations, the contracting
officer shall'identify the locations to which the agree-
ments apply.
(g) If the collective bargaining agreement does not
apply 10 an service employees under the contract, the con-
tracting officer shall separately list on the SF 98s the ser-
vice employee rlaaificatiom (1) subject to the collective
bargaining agreement and (2) not subject to soy collective
22-33
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ATTACHMENT B-2
PAGE 37 of 45
22.1008-4
FEDERAL ACQUISITION REGULATION (FAR)
22.1008-4 Procedures when place of performance'is
unknown. ~ •' •
See 211009.
22.1008-5 Multiple-year contractsT
If the proposed contract is multiple year and is not sub-
ject to annual appropriations, me contracting officer shall
furnish with the Notice a statement in writing describing
the type of funding and giving the length of the perfor-
mance period. Unless otherwise advised by the wage and
hour division that a Notice must be filed on the annual
anniversary date, die contracting officer shall submit a new
Notice on each biennial anniversary date of the multiple
year contract if its term is for a period in excess of 2
years.
22.10084 Contract modifications (options, extensions,
changes in scope) and anniversary dates.
If the purpose of the Notice is to obtain a wage determi-
nation for an exercise of an option, an extension to the con-
tract term, a change in scope (see 22.1007(bX2)). or the
anniversary date of a multiple year contract, the contracting'
officer shall fill in Box 2 of the SF 98 as follows:
(a) In the "^'"^atfil solicitation date" subbOTi indi-
cate, as appropriate:
"Mod-Exercise of Option;" -Mod-Extension;" -Mod-
Change in Scope;* -Annual Anniversary;" or -Biennial
Anniversary;" and
(b) In the "month/day/year" subbox. indicate the date
the wage determination is required.
22.1008-7 Required time of submission of Notice.
(a) If the contract action is for a recurring or known
requirement, the contracting officer shall submit the Notice
not less than 60 days (nor more man 120 days, except with
the approval of the Wage and Hour Division) before the
earlier of (1) issuance of any invitation for bids, (2)
issuance of any request for proposals, (3) commencement
of negotiations, (4) issuance of modification for exercise of
option, contract extension, or change in scope, (5) annual
anniversary date of a contract for move than 1 year subject
to annual appropriation!; or (6) each biennial anniversary
date of a contract for nan than 2 yean not subject to annu-
al appropriations links* otherwise advised by the Wage and
Hour Division (see 22.1008*5).
(b) If the contract action is for a nonrecurring or
unknown requirement for which the advance planning
described in paragraph (a) of this subsection is not feasible,
the contracting officer shall submit the Notice as soon as
possible, but not later than 30 days before the contracting
actions in paragraph (a) of .this subsection. The contracting
officer should indicate on the Notice that the requirement is
nonrecurring or unknown and advance planning was not
feasible.
(c) If exceptional circumstances prevent timely submis-
22-34
sion, as required by paragraphs (a) and (b> of this
lion, the oontacting officer shall submit the Notice and
required supplemental information with a written statement
of the reason for delay as soon as practicable.
(d) In an emergency situation requiring an immediate
wage determination response, die contracting officer shall,
in accordance with contracting agency procedures, contact
the Wage and Hour Division by telephone for guidance
before submitting the Notice.
22.1009 Place of performance unknown.
22.1009-1 General.
If the place of performance is unknown, the contracting
officer may use the procedures in this section. The con-
tracting officer should first attempt to identify the specific
places or geographical areas where the services might be
performed (see 22.1009-2) and then may follow the proce-
dures either in 22.1009-3 or in 22.10094.
22.1009-2 Attempt to identify possible places of
- performance.
The contracting officer should attempt to identify the
specific places or geographical areas where the services
might be performed. The following may indicate passible
(a) Itflfatipflff of previous contractors and their competi
ton.
(b) The fftii**tfa*ion mailing lift
(c) Responses to a presolicintion notice (see 5.204).
22J009-3 All possible places of performance identified.
(a) If the contracting officer can identify all the possible
places or areas of performance (even though the actual
place of performance will not be known until the success-
ful offerer is chosen), the contracting officer, as required in
22.1008, shall submit the Notice to the Wage and Hour
Division. If the number of places of performance exceeds
the space available on the Notice, the contracting officer
shall provide a listing by state-county-city/town in an
attachment to the Notice,
(b) The Wage and Hour Division may issue a wage
determination for each different geographical area of per-
formance identified by the contracting officer, or in unusu-
al situations it may issue a wage determination for one or
more composite areas of performance. If there is a substan-
tial number of places or areas of performance indicating
the need for a wage determination for one or man compos-
ite areas of performance, the contracting officer should,
before submitting the Notice, contact the Wage and Hour
Division concerning the issuance of such a wage determi*
(c) If the contracting offker subsequently (earns of any
potential offerors m previously unidentified places
the closing date for submission of offers, the contracting
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ATTACHMENT B-2
PAGE 38 of 45
PART 22—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
22.101M
officer shall follow one of the following procedures:
(1) Continue to follow the procedures in Mi is
lionand:
(i) Submit Notices for the additional places of
performance to the Wage and Hour Division, and
(ii) Amend the solicitation to include all wage
determinations and, if necessary, extend the time for
submission of final offers.
(2) FbUow the procedures in 22.1009-4.
22.1009-4 All possible places of performance not
identified.
If die contracting officer believes that there may be
offerars '"tfrpiffwl in performing in unidentified places or
areas, the contracting officer may use the following proce-
dures:
(a) If the contracting officer has identified possible
places or areas where services might be performed, the
contracting officer shall submit the Notice to the Wage and
Hour Division (see 22.1009-X*) and (b)).
(b) Include the following information in the Commerce
Business Daily Notice (see 3-207(0(4)):
(I) Hut the place of performance is unknown. *
(2) The possible places or areas of performance for
which the contracting officer has requested wage deter-
minations.
(3) That the contracting officer will request wage
determinations for mMiriornJ PMriMg places of perfor-
mance if asked to do so in writing.
(4) Hie time and date by which requests for wage
determinations for additional places moat be received by
the contracting officer.
(c) Insert the clause at 52322-49, Service Contract
Act—Place of Performance Unknown, b solicitations and
contracts. Include the information required in the clause by
subparagraphs (bX2) and fl»X4) of this subsection. The
closing date for receipt of offerers' requests for wage deter-
minations for additional possible place* of performance
should allow reasonable time for potential offerers to
review the solicitation and determine their interest in com-
peting. Generally, 10 to IS days fiom the dale of issuance
of the solicitation may be considered t reasonable period of
time.
(d) The procedures in 14J04-1 shall apply to late
receipt of offerars' requests for wcge determinations for
additional places of performance. However, late receipt of
an offerer's request for a wage determination for additional
places of performance does not preclude the offerer's com-
peting for the proposed acquisition.
(e) If the contracting officer receives any timely
requests for wage determinations for additional places of
performance the contracting officer shall—
(1) Submit Notices for the additional places of per-
formance to the Tfcfcge and Hour Division; and
(2) Amend die solicitation to include aD wage deter-
minations and, if necessary, extend the time for submis- ,
sion of final offers.
(0 If the successful offerer did not make a timely
request for a wage determination and will perform in a
place of performance for which the contracting officer
therefore did not request a wage determination, the con-
tracting officer shall —
(1) Award the contract;
(2) Request a wage determination; and
(3) Incorporate the wage determination in the con-
tact. retroactive to the date of contract award and with
no adjustment in contract price, pursuant to the clause at
52.222-49, Service Contract — Place of Performance
Unknown.
22.1010 . Notification to interested parties under
• collective bargaining agreements.
(a) The contracting officer should determine whether
the incumbent prime contractor's or its subcontractors' ser-
vice employees performing on die current comiact are rep-
resented by a coOective bargainuig agent If there is i col-
lective bargaining agent, the contracting officer shall give
both the incumbent contractor and its employees' collec-
tive frjf£*'"'n£ ^gff written *yrtffiriitii?B of— x
(1) The forthcoming successor consjact and the
applicable acquisition dates (issuance of solicitation,
ri""''J'f fft
of contract, or start of performance, as the case may be);
or
(2) The forthcoming contract modification and
applicable acquisition dates (exercise of option, exten-
sion of contract, change in scope, or start of perfor-
mance, as dte case may be); or
(3) The forthcoming multiple year contract anniver-
sary dale (annual anniversary date or biennial dale, as
the caae may be).
(b) TUs written notification most be given at least 30
days in f^ancp of the faff"*fl applicable
or the applicable annual or biennial anniversary date in
order for the time-of-receipt limitations in paragraphs
22.1012-3(1) and (b) to apply. The contracting officer shall
retain a copy of the notification in the contract file.
22J011 ResDOOSetoNotfcebyDfpartaieatofUbor.
22.1011-1
The Wife'and Hoar Division will made, date, and sign
the section of ne SF 98 titled "Response to Notice" and
return the signed original together with appropriate addi-
tional
descriptions, etc.). The Wge and Hour Division will take
one of me following four actions:
(a) Issue and attach applicable wage determination(s);
or
(b) Indicate that no wage determination is in effect for
22-35
267-350 0-90-13 (Vol. I)
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ATTACHMENT B-2
PAGE 39 of 45
22.1011-2
FEDERAL ACQUISITION REGULATION (FAR)
the locality of contract performance; or
(c) Indicate that the Service Contract Act is not applica-
ble based on information submitted; or
(d) Return the Notice for additional information (see
22.1008-1).
22.1011-2 Requests for status or expediting oT response.
Checking the status or the expediting of wage determi-
nation responses shall be made in accordance with con-
tracting agency procedures.
22.1012 Late receipt or nonreceipt of wage
determination.
22.1012-1 General.
The Wage and Hour Administrator, generally, will issue
a wage determination or revision to it in response to a
Notice. The contracting officer shall incorporate the deter-
mination or revision in the particular solicitation and con-
tract for which the wage determination was sought
22.1012*2 Response to timely submission of Notice—«o
collective bargaining agreement.
(a) If the contracting officer has not received a response
from the Department of Labor within 60 days (or 30 days if
a nonrecurring or unknown requirement), the contracting
agency shall contact the Wage and Hour Division to deter-
mine when the wage determination or revision can be
expected.
(b) In sealed bidding, a revision of a wage determina-
tion shall not be effective if a collective bargaining agree-
ment does not exist, the revision is received by the con-
tracting agency less than 10 days before the opening of.
bids, and the contracting officer finds that there is not rea-
sonable, time to incorporate the revision in the
solicitation.
(c) For contractual actions other than sealed bidding
where a collective bargaining agreement dots not exist, a
revision of a wage determination received by the contract-
ing agency after award of a new contract or • modification
as specified in 22.1007(b) shall not be effective provided
that the stan of performance is within 30 days of the award
or the specified modification. If the contract does not speci-
fy a stan of perfonnance date which is within 30 days of
the award or the specified modification, and if conuaft per-
formance does not commence within 30 days of the award
or the specified modification, the Department of Labor
shall be notified and any revision received by the contract-
ing agency not less than 10 days before commencement of
the work shall be effective.
(d) The limitations in paragraphs (b) and (c) of this sub-
section shall apply only if a timely Notice required in •
22.1008-7(a) and (b) has been submitted.
22-36
22.1012*9 Response to timely
Notke-^wtth collective bargaining agreement
(a) In sealed bidding, a wage determination or revision
based on a new or changed collective bargaining agreement
shall not be effective if the contracting agency has received
notice of the terms of the new or changed collective bar-
gaining agreement less than 10 days before bid opening
and the contracting officer determines that there is not rea-
sonable time to incorporate the new or changed terms of
the collective bargaining agreement in the solicitation (see
51222-47).
(b) For contractual actions other than sealed bidding, a
wage determination or revision based on a new or changed
collective bargaining agreement shall not be effective if
notice of the terms of the new or changed collective bar-
gaining agreement is received by the contracting agency
after award of a successor contract or a modification as
specified in 22.1007(b), provided that the contract stan of
perfonnance is within 30 days of the award of the contract
or of the specififd modification. If the contract does not
specify a start of performance date which is wuhavSO days
of the award of the contract or of the specified modifica-
tion, or if contract perfonnance does not conunenc* within
30 days of the award of the contract or of the specified
modification, any notice of the terms of a new or changed
collective bargaining agreement received by the agency not|
less than 10 days before commencement of the work shall
be effective for purposes of the successor contract under
section 4(c) of the Act
(c) The limitations in paragraphs (a) and (b)of this sub-
section shall apply only if timely Notices and notifications
required in 22.1008-7 and 22.1010 have been given.
(d) If the contracting officer has not received a response
from die Department of Labor within 60 days (or 30 days if
a nonrecurring or unknown requirement), the contracting
agency shall contact the Wage and Hour Division to deter-
mine when the wage dffterinipattOT or revision CM be
expected. If the Department of Labor is unable to provide
the wage determination or revision by the latest date need-
ed to maintain the acquisition schedule, the solicitat-
ion/connct art**"** fN^iM pimpMl affording to the follow-
ing instructions:
(1) If a successonhtp/ume locaHry/mcnmbent col-
lective bargaining agreement situation exists, the con-
tracting officer shall inffflpo*tt?f in the solicitation the
wage and fiinge benefit terms of the collective bargain-
ing agreement, or the collective bargaining agreement
itself, and the clause at 51222-47, Service Contract Act
(SCA) Minimum Wages and Fringe Benefits.
(2) The tptwtf of a new or cftangftd collective bar-
gaining agreement, negotiated by the predecessor con**]
tractor during the period of performance of the prede-
1 contract, will not apply to the successor contract
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PAGE 40 of 45
PART 22—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
22.1015
under ibe conditions set forth in paragraphs (a), (b), and
(c) of this subsection.
22.1012-4 Response to late submission of Notice—no
collective bargaining agreement
If die contracting officer has not filed the Notice within
the time limits in 22.1008-7, and thus has not received a
response from the Department of Labor, and a successor-
ship/same locality/incumbent collective bargaining agree-
ment situation does not exist, the contracting officer shall
contact the Wage and Hour Division to determine when the
wage determination or revision can be expected.
If the Department of Labor is unable to provide the wage
determination or revision by the latest date needed to main-
tain the acquisition schedule, the contracting officer shall
use me latest wage determination or revision, if any, incor-
porated in the existing contract If any new or revised wage
determination is received later in response to the Notice,
the contracting officer shall include it in the solicitation or
contract within 30 calendar days of receipt If the contract
has been awarded, the contracting officer shall equitably
adjust die contract price 10 reflect any changed cost of per-
formance resulting from incorporating the wage determina-
tion or revision. The Administrator. Wage and Hour
Division, may require retroactive application of the wage
determination for a contractual action over &500 using
more than five service employees. These provisions are
not intended to alter die contracting officer's responsibility
to make timely submissions as required in 211008-7.
22.1012-5 Response to late sobmladon of Notice—vita
collective bargaining agreement
If die contracting officer has not filed the Notice within
the time limits in 22.1008-7, has not received a response
from the Deportment of Labor, and a **"'
locality/incumbent collective bargaining agreement situa-
tion exists, die contracting officer shall contact me Wage
and Hour Division to determine when me wage determina-
tion or revision can be expected If die Department of
Labor is unable to provide the wage determination or revi-
sion by the latest date needed to maintain the iffquirtm
schedule, the contracting officer shaD incorporate in the
solicitation die wssjt and fringe benefit terms of the collec-
tive bargaining agreement or the collective bargaining
agreement itself; aad the daoae.at 52.222-47, Service
Contract Act (SCA) Minimum Wages and Fringe Benefits.
If the contract has been awarded, an equitable adjustment
following receipt of the wage determination or revision
will not be required, since the wage determination or revi-
sion will be based on the economic terms of me collective
bargaining agreement
22.1013 Review of wage determination.
(a) Based on incumbent collective bargaining
agreement.
• (1) If wages, fringe benefits,.or periodic increases .
provided for in a collective bargaining agreement vary
suhsraniially from those prevailing for similar services
in .the locality, the contracting officer shall
contact the agency labor advisor to consider instituting
the procedures in 22.1021.
(2) If the contracting officer believes mat an incum-
bent or predecessor contractor's agreement was not the
result of arm's length negotiations, me contracting offi-
cer shall contact the agency labor advisor to determine
(b) Based on other than incumbent collective bargain-
ing agreement. Upon receiving a wage determination not
predicated upon a collective bargaining agreement, (he
contracting officer shall ascertain—
(1) If the. wage determination does not conform with
wages and fringe benefits prevailing for similar services
in the locality; or
(2) If the wage determination contains significant
errors or omissions. If either subparagnph (bXI) or
(bX2) of this section is evident, the contracting officer
shall contact the agency labor advisor to determine
appropriate action. |
22.1014 Delay of acquisition dates over « elys.
If any invitation for bids, request for proposals, bid
opening, or commencement of negotiation for a proposed
contract for which a wage determination was provided in
response to a Notice has been delayed, for whatever rea-
son. more than 60 days from such date as indicated on die
submitted Notice, the contracting officer shall, in accor-
dance with agency procedures, contact the Wage and Hour
Division for the purpose of determining whether the wage
y«yf*» |h^ mifjjl fyfrpitUJCTl ^ ftill
current Any revision of a wage determination received by
the contracting agency as a result of dial communication,
or upon discovery by the Department of Labor of a delay.
shad supersede die earlier response as die wage determina-
tion applicable to the particular acquisition subject to the
time frames in 21IOl2-2*nl
-------
22.101*
FEDERAL ACQUISITION REGULATION (E
adjust the contract pice to reflect any dunged cost of per-
formance resulting from incorporating a wage determina-
tion or revision.
22.1016 Statement of equivalent rates for Federal him.
(a) The statement reqiured under the clause at 52.222-
42, Statement of Equivalent Rates for Federal Hires, (see
22.1006
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PAGE 42 Of 45
PART 22—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
22.1020 Seniority Hsta.
If a contract is performed at a Federal facility where
employees may be hired/retained by a succeeding contrac-
tor, the incumbent prime contractor is required to furnish a
certified list of all service employees on the contractor's or
subcontractor's payroll during the last month of the con-
tract, together with anniversary dates of employment, to the
contracting officer no later than 10 days before contract
completion. (See paragraph (n) of the clause at 52322-41,
Service Contract Act of 1965. as amended.) At the com-
mencement of the succeeding contract, the contracting ofB-
cer shall provide a copy of the list to the successor contrac-
tor for determining employee eligibility for vacation or
other fringe benefits which are based upon length of ser-
vice, including service with predecessor contractors if such
benefit is required by an applicable wage determination.
22.1021 Substantial variance bearings.
(a) A contracting agency or other interested party may
request a hearing on an issue presented in 22.10l3(a). To
obtain a hearing for the contracting agency, the contracting
officer shall submit a request through appropriate channels
(ordinarily me agency labor advisor) to Administrator..
Wage and Hour Division, Employment Standards
Admiiustntion.U^.DepeAineUofUbor.WashingtooDC
20210, with sufficient data to support a prima rack show-
ing that the rates at issue vary substantially from those pre-
vailing for similar services in the locality. The request
shall also include (1) the number of the wage determine*
tions at issue, (2) name of contracting agency, (3) satus of
tbe acquisition and any estimated acquisition dates (e.g^
bid flpfPiiHt awafu, and itfa*}**t*Ff***tf*1^ of performance).
and (4) names and addresses, if known, of interested par*
ties.
(b) Unless the Adyiniflrafor dfter">iftfi tftt extraordi-
nary circumstances exist, the Administrator will not con-
sider requests for a bearing unless received as specified in
subpsngnphs (bXD and OX?) of tfus section—
(1) For sealed bid contracts, more than 10 days
before the award of tbe contract;
(2) For
and Cor contracts win
date of me contract or the follow-up
i period, as me case may be.
the
opt
22.1022
Any violations of the clause at 52322-40. Service
Contract Act of 1965. as amended ComrtftiofS2jOOor
Less, or the clause at 5232241, Service Contract Act of
1965, as amended, renders the responsible contractor liable
for the amount of any deductions, rebates, refunds, or
underpayments (which includes nonpayment) of compen-
COSOlOyBU DCa^OfOUfiC ID6 COODllCL
tracting officer may withhold— or. upon written request of
tfaeDepamnemofl^icrCromalevdnolowerdianthaiof
22.102*
Assistant Regional Administrator. Wage and Hour
Division, Employment Standards Administration.-
Department of Labor, shall withhold—die amount needed
to pay such underpaid employees from accrued payments
due the contractor on the contract, or on any other prime
contract (whether subject to the Service Contract Act or
not) with the contractor. Tbe agency shall place the
amount withheld in a deposit fund. Such withheld funds
shall be transferred to tbe Department of Labor for dis-
bursement to the underpaid employees on order of the
Secretary (or authorized representatives), an
Administrative Law Judge, or the Board of Service
Contract Appeals. In addition, the Department of Labor
has given blanket approval to forward withheld funds
pending completion of an investigation or other administra-
tive proceeding when disposition of withheld funds
remains the final action necessary to close out a contract.
22J023 Itmaattaa for aeflutt.
As provided by die Act, any contractor failure to com-
ply with the requirements of the contract clauses related to
the Act may be grounds for termination for default (see
paragraph (k) of me clause at 52322-41. Seance Contract
Act of 1965, as amended). 1
22.1024 Cooperation wttk tbe Dcpartaienref Labor.
The contracting officer shall cooperate with Department
of Labor representatives in the examination of records,
interviewsI with service employees, and an other aspects of
invrstigninns unrtmaren by the Department When asked,
agencies shaO furnish the Wage and Hov Administrator or
a designee. any available information on contractor!, sub-
contractors, their tmuacts, and me nature of tbe contract
services. The contracting officer snail promptly refer, in
writing to the appropriate regional office of the
Department, apparent violations and complaints received.
Employee complaints shall not be diarlnenri to me employ*
224025 I»dIgibBty of violator*.
A list of persons or firms found tt> be in violation of the
Act U.contained in the lisa of Parties Excluded from
Federal Piocurement or Nbnprocarement Programs (see
9.404). No Government voitiH t may be awarded to any
violator so fisttd because of a violation of the Act. or to
any firm, cotporatioa, pariftflrship, or aisnc ianon in which
the violator has a substantial interest, without me approval
of the Secretary of Labor. Thai prohibition against award
to an meuffefe contractor applies ft) boo prime and sub-
22.1024
Disputes confrmmg labor standards requirements of
the contract an handled under paragraph (t) of the con-
tract clause at 52322-41. Service Contract Act of 1965,
22-39
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ATTACHMENT B-2
PAGE 43 Of 45
22.1101
FEDERAL ACQUISITION REGULATION (FAR)
as amended, and not under the clause at 52.233-1,
Disputes.
•
SUBPART 22.11—PROFESSIONAL EMPLOYEE
COMPENSATION
22.1101 Applicability.
The Service Contract Act of 1965 was enacted to
ensure that Government contractors compensate their
blue-collar service workers and some white-collar ser-
vice workers fairly, but it does not cover bona fide exec-
utive, administrative, or professional employees. The
Office of Federal Procurement Policy issued Policy
Letter No. 78-2. dated March 29, 1978, Preventing
"Wage Busting" for Professionals. This subpart imple-
ments that policy letter. Its application is limited to pro-
fessional employees. This Subpart 22.11 provides poli-
cies and procedures for use in negotiated service con-
tracts exceeding $250,000 that involve meaningful num-
bers of professional employees.
22.1102 Definition.
"Professional employee" means any person meeting the
definition of "employee employed in a bona fide.. .-pro-
fessional capacity" given in 29 CFR 541. The term
embraces members of those professions having a recog-
nized status based upon acquiring professional knowledge
through prolonged study. Examples of these professions
include accountancy, actuarial computation, architecture.
dentistry, engineering, law, medicine, nursing, pharmacy.
the sciences (such as biology, chemistry, and physics, and
teaching). To be a professional employee, a person must
not only be a professional but must be involved essentially
in discharging professional duties.
22.1103 Policy, procedures, and solicitation provisions.
All professional employees shall be compensated fairly
and properly. Accordingly, the contracting officer shall
insert provisions at 52222-45, Notice of Compensation for
Professional Employees, and 51222-46, Evaluation of
Compensation for Prc/cssJonal EmployMi, in *?*'g'flH'onf
for negotiated service contracts when the contract amount
is expected to exceed $250,000 and the service to be pro-
vided will require meaningful numbers of professional
employees. These provisions require that offerers submit
for evaluation a total compensation plan setting forth
proposed salaries and fringe benefits for professional
employees working on the contract Supporting informa-
tion will include data, such as recognized national and
regional compensation surveys and fflid*fi of professional,
public and private organizations, iiwl in dffitH* skiing the
total compensation structure. Plans indicating unrealisti-
cally low professional employees compensation may be
assessed adversely as one of the factors considered in mak-
ing the award.
22-40
SUBPART 22.12—RESERVED
SUBPART 22.13—SPECIAL DISABLED AND
VIETNAM ERA VETERANS
22.1300 Scope of subpart
This subpan prescribes policies and procedures for
implementing the Vietnam Era Veterans Readjustment
Assistance Act of 1972, as amended (38 U.S.C. 2012) (the
Act); Executive Order 11701. January 24, 1973 (38 FR
2675, January 29, 1973); and the regulations of the
Secretary of Labor (41 CFR Part 60-250 and Part 61-250).
In this subpart. the terms "contract" and "contractor"
' "subcontract" MKJ '
22.1301 Policy.
Government contractors, when entering into contracts
subject to the Act, are required to list an suitable employ-
ment openings with the appropriate local employment
service office and take affirmative action to employ, and
advance in employment, qualified fprcial
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ATTACHMENT B-2
PAGE 44 of 45
PART 22—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
requirements is necessary to the national security. Upon
making such a determination, the head of a civilian agency
shall notify the Director in writing within 30 days.
(c) The contracting officer shall submit requests for
waivers in accordance with agency procedures.
(d) A waiver granted for a particular class of contracts
may be withdrawn for any contract within that class when-
ever considered necessary by the Director to achieve the
purposes of the Act The withdrawal shall not apply to
contracts awarded before the withdrawal. The withdrawal
shall not apply to solicitations under any means of sealed
bidding unless it is made more than 10 calendar days
before the date set for bid opening.
22.1304 Department of Labor notices and reports.
(a) The contracting officer shall furnish to the comnc*
tor appropriate nonces for posting when they are prescribed
by the Director.
(b) The Act requires contractors to submit a report at
leas annually ID the Secretary of Labor regarding employ-
ment of Vietnam era and special disabled veterans unless
all of ihe terms of the clause at 51222-35, Affirmative
Action for Special Disabled and Vietnam En Veterans.
have been waived (see 211303). The contractor shall use
Standard Form VETS-100, Federal Contractor Veterans'
Employment Report, to submit the required reports.
211305 Collective bargaining agrerants.
If performance under the clause at 52.222-35.
Affirmative Action for Special Disabled and Vietnam En
Veterans, may necessitate a revision of a collective bargain-
ing agreement, the contracting officer shall advise the
affected labor unions that the Department of Labor (DOL)
will give them appropriate opportunity to present their
views. However, neither the contracting officer nor any
representative of the contracting flflirtr snail discuss with
die contractor or any labor representative any aspect of the
collective bargaining agnximnpt
22.130* Complaint procedi
Following agency pr
M, the contracting office
shall forward any complaints received about the adminis-
tration of the Act to the Veteran's Employment Serv-
ice of the DOL, dMigfa the local Veteran's Employment
OF flORKDOG* tt CDC JOCaV wtaUB
office. The Director of die Office of Federal Contract
^•QfllOltatflCC ^•Osfi^UfiS Of 01£ ^J^J^^ ift
IOP iaUjQil2 HI YCSttflHuODS Of COfUPitt
22.1307 Actions because of noncompHaac*.
The contracting officer T**J^ lake necessary action as
soon as possible upon notification by me appropriate agen-
cy official to implement any sanctions imposed on a con-
tractor by the Department of Labor for violations of the
clause at 52.222-35, Affirmative Action for Special
22.1402
Disabled and Vietnam Era Veterans. -These sanctions (see
41CFR 60.250.28) may include—
(a) Withholding from payments otherwise doe;
(b) Termination or suspension of the contract; or
(c) Debanneot of the contractor.
22.1308 Contract clat
(aXl) The contracting officer shall insert the clause at
52222-35, Affirmative Action for Special Disabled and
Vietnam Era Veterans, in solicitations and contracts when
the contract is for $10,000 or more or is expected to
amount to SlOjOOO or more, except when —
(0 Work is performed outside the United Slates
by employees recruited outside the United States (for
the purposes of this subpart, "United States" includes
the States, the District of Columbia, the Virgin
Islands, the Commonwealth of Puerto Rico, Guam.
American Samoa, and the Trust Territory of the
Pacific Islands): or
(ii) The agency head has waived, in accordance
with 22.1303(1) or 22.1303(b) all of the terms of the
clause. j
(2) If the agency bead waives one or apre (but not
all) of the terras of the clause in in^"|p"ff with
2Z1303(a) or 22.1303(b), use the basic cl* with its
Alternate L
(b) The contracting officer shall insert the clause at
52.222-37. Employment Reports on Special Disabled
Msterans and MMciani of the Vietnam Era. in solicitations
and contracts containing the clause at 52.222*35.
Affirmative Action for Special Disabled and Vietnam En
SUBPART 22.14—EMPLOYMENT OF THE
HANDICAPPED
22J4M Scoot ofeabpart
This subpan prescribes policies and procedures for
implementing Section 503 of the Rehabilitation Act of
1973. as amended (29 U.S.C 793) (me Act); Executive
Order 11758. January 15.1974; and the regulations of the
Secretary of Labor (41 CFR Part 60-741). to this subpart.
the terms "contract" and "contractor* include "subcontract"
and "subcontractor."
22.1401 Polcy.
Oovtmaent contractors, when entering into contracts
subject to the Act, are required B ake affirmative action to
employ, and advance in employment, qualified handi-
capped iwPv*ififilf without ifiyiiii'WV*1 based on their
Ou^^DCaU Of IDCBiuU DUUDQlClDL
22.1402 AppQcabffity.
(a) Section 503 of the Act applies to all Government
contracts in excess of $2,500 for supplies and services
22-41
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ATTACHMENT B-2
PAGE 45 of 45
22.1403
FEDERAL ACQUISITION REGULATION (FAR)
(including construction) except is waived by the Secretary
of Labor. The clause at 51222*36, Affirmative Action for
Handicapped Workers, implements the ACL
(b) Hie requirements of the clause at 52.222-36,
Affirmative Action for Handicapped Workers, in any con-
tract with a Slate or local government (or any agency,
instrumentality, or subdivision) shall not apply to any agen-
cy. instrumentality, or subdivision of that government that
does not participate in work on or under the contract.
22.1403 Waters.
(a) The agency bead; with the concurrence of the
Director. Office of Federal Contract Compliance Programs
(OFCCP), may waive any or all of the terras of the clause
at 52.222-36. Affirmative Action for Handicapped
Workers, for—
(1) Any contract if a waiver is deemed to be in the
national interest; or
(2) Groups or categories of contracts if a waiver is in
the national interest and it is—
(t) Impracticable to act on each request individu-
ally; and
(ii) Determined mat the waiver will substantially
contribute to convenience in administering the Act
(bXO The bead of a civilian agency, with the concur-
rence of the Director of OFCCP. or (2) the Secretary of
Defense, may waive any requirement in this subpan
when it is determined that the contract is essential to the
national security, and that its award without complying
with such requirements is necessary to the national secu-
rity. Upon making such a determination, die head of a
civilian agency shall notify die Director in writing within
30 days.
(c) The contracting officer shall submit requests for
waivers in accordance with agency procedures.
(d) A waiver granted for a particular class of contracts
may be withdrawn for any contract within that dan when-
ever considered necessary by the Director ID achieve the
purposes of the Act The withdrawal shall not apply to
contracts awarded bete fe withonwaL The withdrawal
«Utf ^•Mtftu •#%
not appiy to
bidding unless it is snde note dual 10 calendar days
before the date set for bid mrriiiin
22.1404 Department of Labor i
Tbe contracting officer shall furnish to the contractor
appropriate notices that sate the contractor's obligations
and the handicapped individual's rights under the
gSnxDioyiBCoi of HUB ••ADQJUDDOQ pffp^Bm^u TUB oooo^fl™
ing officer may obtain these notices from (he Department
of Labor Regional Office, Office of Federal Contrac
Compliance Programs.
22.1405 Collective bargaining agreements.
If performance under the clause at '52.222-36.
Affirmative Action for Handicapped Workers, may neces-
sitate a revision of a collective bargaining agreement, me
contracting officer shall advise the affected labor unions
that the Department of Labor will give them appropriate
opportunity to present their views. However, neither the
contracting officer nor any representative of die contracting
officer shall discuss with the contractor or any labor repre-
sentative any aspect of the collective bargaining agreement
22.140f Complaint procedures.
Following agency procedures, the contracting office
shall forward any complaints received about the adminis-
tration of the Act to the OFCCP, 200 Constitution Avenue,
N.W, Washington. DC 20210. or to any OFCCP regional
or area office. Tbe OFCCP shall institute investigation of
each complaint and shall be responsible for developing a
complete case record. * ,
22.1407 Actiont4>«cause of noncompliance. "'•
The contracting officer shall take necessary action as
soon as possible upon notification by die
official to implement any sanctions imposed on a <
by the Department of Labor for violations of the clause at
32,227.36. Affirmative Action for Handicapped Workers.
These sanctions (see 4 1 CFR 60-74L28) nay include—
(a) Withholding from payments otherwise ****!
(b) Termination or suspension of the contract! or
(c)
of the contractor.
22.1408 Contract dans*.
(a) Tbe contracting officer shall insert the clause at
5? 777-36, Affirmative Action for Handicapped Workers,
in solicitations and contracts that exceed S2JOO or are
expected to exceed S2£00. except when—
(1) Work is performed outside the United States by
employees recruited outside the United States (for the
purpose of this subpan, "United States." includes die
Slates, the District of Columbia, the Virgin Islands,
Puerto Rico, Guam. American Samoa, and the Trust
Territory of die Pacific Islands); or
- (2) The agency head has waived, in accordance with
22-1403(a) or 2X1403(b) all the terms of the clause.
(b) If the agency head waives one or more (but not aO)
of the terms of the clause in accordance win 22.1403(a) or
22.1403(b), use the bask clause with its Alternate L
22-42
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Regulations, Part 4:
tbor Standards for
deral Service Contracts
ATTACHMENT B-3
Title 29, Part 4 of the
Code of Federal Regulations
U.S. Department of Labor
Employment Standards Administration
Wage and Hour Division
WH Publication 1267
(Revised October 1986)
-------
-------
ATTACHMENT B-3
PAGE 1 Of 40
4— lAiOft STANDAtDS FOR
RAL SilVICE CONTRAaS
Jnhpart A— f*wh»
laker fcans»r«»
Sec.
4.1 Purpose and scope.
4.1s Definition* and use or terms,
4.1b Payment of minimum compensation
bated on collectively bargained wage
rate* and fringe benefit* .applicable to
employment under predecessor contract.
4.2 Payment of minimum wage *pecif led in
section 6<»K1) of the Fair Labor Stand-
ardi Act of 1938 under all service con-
tract*.
4.1 Wage determinations.
4.4 Notice of intention to make a service
contract
4.5 Contract specification of determined
fntnimiiin wages and fringe benefits.
4.6 Labor standards clauses for Federal
servloecontracu exceeding 4Z500. .
4.7 Labor standards clause tor Federal
service contract* not exceeding 12,300.
4.8 Notice of awards.
4.9 [Reserved:
4,10 Substantial variance proceedings
, .under section 4 determinations.
4.53 Locality basis of wage and fringe bene-
fit determinations.
4.94 Issuance and revision of wage determi-
nation*.
4.55 Review and reconsideration of wage
determination*.
OK.™ ferric* CM**** Ad
lirrtODOCTOIIT
4.101 'Official rulingi and iDterpretations
in this subpan.
4.102 Administration of the Act
4.103 The Act
4.104 What the Act provides, generally.
Sec.
4.119 Contracts for services of communica-
tions companies.
4.120 Contract* for public utility services.
4.121 Contract* for Individual services.
4.122 Contracts for operation nf postal con-
tract stations.
4.123 Administrative UmlUdon*. " vari-
ations. tolerances, and exemptions.
4.124— f.129 [Reserved)
PAftTiccuJt ArrucATioir or COHTBACT
4.130 Types of covered service contract* il-
lustrated.
4.131 Furnishing services Involving more
than use of labor.
4.132 Services and other Items to be fur-
nished under a single contract
4.133 Beneficiary of contract services.
4.134 Contractt ouulde the Act's- coverage,
4.135—4.139 [Reserved}
Oi
Al
rorCojmicx
4:105 The Act as amended.
4.106. (Reserved]
Acmcus WHOM Cojrnucn MAT Bs
Covnuf
4.107 pederai contract*.
4.108 district of Columbia contracts.
4.109 [Reserved]
CorasD CONTRACTS OamauiXT
4>UO What contract* e« covered.
4.111 . Contract* -to furnish service*".
4.112 Contract* to furnish services "in the
Onited States".
4.112 Contract* to . furnish -cervices
"through the use of service employees".
Subcontract*.
:8Picmc Exclusions
empuon* and exceptions, general-
4.116 Contractt for construction activity.
4.117 Work subject to requirements of
*• Walsh-Healey Act.
4.; 18 Contract* for carriage subject to pub-
•Ushed tariff rtta. • '-
4.140 Slgnlfteance of contract amount.
4.1*1 General criteria for measuring
• amount.
4.142 Contracu.in an Indefinite amount.
CBAKOM n Conucr COVOAOZ
4.143 Effect* of changes or extensions of
contract*, generally.
4.144 Contract mortifications affecting
amount
4.14S Extended term contracts.
1 Pnxov or Covnucr
4.146 Contract obligations after award,
generally..
4.147—4.149 [Reserved)
EMPLOYEES COVXBD IT m ACT
4.150 Employee coverage, generally.
4.151 Employees covered by provisions of
section 2(a).
4.132 Employees subject to prevailing com-
pensatlon provisioni of sections Xa> (1)
and (2) and 4 of the Act
4.164 [ReservedJ
COKPUAJKX Win COMHMATIO* STAJRUWS
4.165 Wage payments and fringe benefits—
In general.
4.166 Wage payments—unit of payment
4J67 Wat* paymenu—medium of pay-
4.168 Wage payments- deductions from
wages paid.
4.169 Wage paymenu-work subject to dif-
ferent rates.
4.170 Furnlahing Mage benefits or equiva-
lents.
4.171 "Bona fide" fringe benefit*.
Sec.
4J72 • sleeting requirement* for particular
fringe benefit*—in general.
4.173 Meeting requirement* for vacation
fringe benefit*.
4.174 Meeting requirement* for holiday
fringe benefits.
4.175 Meeting requirement* for health.
welfare, and/or pension benefits.
4.176 Payment of fringe benefit* to tempo
rary and part-tune employees.
4.177 Discharging fringe benefit obliga-
tions by equivalent means.
4.178 Computation of hours worked.
4.179 Identification of contract work.
OvtBTiu PAT or COVERED EMPLOYEES
4.180 Overtime pay—in general.
4.161 Overtime pay provisions of other
Act*.
4.183 Overtime pay of service employees
entitled to fringe benefits.
NOTICE TO EMPLOYEES
4.183 Employees must be notified of com-
pensation required.
4.184 Posting of notice.
RECOUS
4.185 Recordkeeping requirement*.
4.186 [Reserved]
4.187 Recovery of underpayments?-
4.188 Inellgibllity for further contracts
when violations occur.
4.189 Administrative proceedings relating
to enforcement of labor standards.
4.190 Contract cancellation.
Complaints and compliance atsist-
Atmoarrr 41 VAC. 351, et seq., 79 Sut.
1034. as amended in 86 SUt. 789, 90 Sut.
J358; 41 O.S.C. 38 and 39: and 5 U.S.C. 301.
Source 48 PR 49762. Oct. 27. 1983. unless
otherwise noted.
SwbCMtt A—Service Contract Labor
Standards Provisions and Prote-
• 4.1 Purpose and scope.
Thii put contains the Department
of Labor's rules relating to the admin-
istration of the McNaman-O'Hara
Service Contract Act of IMS. as
referred to hereinafter as
the Act Rule* of practice for adminis-
trative proceedings under the Act and
for the review of wage determinations
are contained in Parts 6 and 8 of this
chapter. See Part 1925 of this title for
. the safety and health standards appli-
cable under the Service Contract Act.
• 4.1s Definitions and UM of term*.
As used in this part, unless other-
wise indicated by the context—
(a) "Act," "Service Contract Act."
McNamart-O'Hart Act. or "Service
Contract Act of l9fS" shall mean the
Service Contract Act of 1065 as
amended by Public Law 92-473, 86
Stat. 789. effective October 9. 1972,
Pub. L, 93-57. 87 Stat. 140, effective
July 6. 1973. and Pub. L. 94-489. 90
SUt. 2358. effective October 13. 1976
and any subsequent amendments
thereto.
-------
f 4.U(b)
(b) "Secretary" Includes the Secre-
tary of Labor, the Deputy Under Sec-
retary for Employment Standards, and
their authorized representatives.
(c) "Wage and Hour Division" means
the organizational unit in the Employ-
ment Standards Administration of the
Department of Labor to which Is as-
signed the performance of functions of
the Secretary under the Service Con-
tract Act of 1965, as amended.
(d) "Administrator" means the Ad-
ministrator of the Wage and Hour Di-
vision, or authorized representative.
(e) "Contract" Includes any contract
subject wholly or in part to the provi-
sions of the Service Contract Act of
1965 as amended, and any subcontract
of any tier thereunder. (See f i 4.107-
4.134.)
(f) "Contractor" includes a subcon-
tractor whose subcontract Is subject to
previsions of the Act. Also, the term
"employer" -means, and is used Inter-
changeably with, the terms "contrac-
tor" and "subcontractor" In various
sections in this part. .The U-S. .Govern-
ment, its agencies, and Instrumental*
Ities are not contractors, subcontrac-
tors, employers or joint employers lor
purposes of compliance with the provi-
sions of the Act.
(g> "Affiliate" or "affiliated person"
includes a spouse, child, parent, or
other close relative of the contractor
or subcontractor; a partner or officer
of the contractor or subcontractor, a
corporation closely connected with a
contractor or subcontractor as a
parent, subsidiary, or otherwise; and
an officer or agent of such corpora-
tion. An affiliation is also deemed to
exist where, directly or Indirectly, one
business concern or individual controls
or has the power to control the other
or where a third patty controls or has
the power to control both.
(h) "Wage determination" Includes
any determination of ™ and/
or 4 of the Act for application to
the employment In a locality of any
class or classes of service employees in
the performance of any contract in
excess of 12.500 which is subject td the
provisions of the Service Contract Act
of IMS.
B4.1b Payment of minimum compensa-
tion based on collectively bargained
wage rates and fringe benefits applica-
ble to employment under predecessor
contract
(a) Section 4(c) of the Service Con-
tract Act of 196S as amended provides
special minimum wage and fringe ben-
efit requirements applicable to every
contractor and subcontractor under a
contract which succeeds a contract
subject to the Act and under which
substantially the same services as
under the predecessor contract are
ATTACHMENT &-3
PAGE 2 of 40
furnished in the same locality. Section
4(c) provides that no such contractor
or subcontractor shall pay any service
employee employed on the contract
work less than the wages and fringe
benefits provided for in a collective
bargaining agreement as a result of
arms-length negotiations, to which
such service employees would have
been entitled If they were employed
under the predecessor contract, in-
cluding accrued wages and fringe ben-
efits and any prospective Increases In
wages and fringe benefits provided for
In such collective bargaining agree-
ment. If. however, the Secretary finds
after a hearing in accordance .with the
regulations set forth in 14.10 of this
subpart and Parts 6 and 8 of this title
that in^acy of the foregoing circum-
stances such wages and fringe benefits
are substantially at variance with
those which prevail for service of a
character similar In the locality, those
wages and/or fringe benefits in such
collective bargaining agreement which
are found to be substantially at vari-
ance shall not apply, and a new wage
determination thill be Issued.
If the contract has been awarded
and work begun prior to a. finding that
the wages and/or fringe benefits in a
collective bargaining agreement are
substantially at variance with those
prevailing in the locality, the payment
obligation of such contractor or sub-
contractor with respect to the wages
and fringe benefits contained In the
new wage determination shall be ap-
plicable as of the date of the Adminis-
trative Law Judge's decision or. where
the decision Is reviewed by the Board
of Service Contract Appeals, the date
of the decision of the Board of Service
Contract Appeals. (See also 14.163(0.)
(b) Pursuant to section Mb) of the
Act,'the application of section 4(c) is
made subject to the following varia-
tion in the. circumstances .and -under
the f{ff» <***/**'Owl' The wage
fates and fringe IbeneflU provided for
In any collective bargaining agreement
applicable to the performance of work
under the •predecessor contract which
is «^">""''Tif **** during 'the period of
performance of each contract shall not
be effective for purposes of the succes-
sor contract under the provisions of
section 4(c) of the Act or under any
wage determination Implementing
such section issued pursuant to section
fta) of the Act, if—
U) In- the case of a successor con-
tract for which bids have been invited
by formal advertising, "notice..of the
terms of such new or changed collec-
tive bargaining agreement is received
by the contracting agency less than 10
days before the date set for opening of
bids, provided that the contracting
agency finds that then is not reasona-
ble time still available to notify bid-
den; or \
(2) Notice of the terms of a new or
changed collective bargaining
flror
merit Is received by the agency
award of a successor contract to be en-
tered into pursuant to negotiations or
as a result of the execution of a renew-
al option or an extension of the initial
contract term, provided that the con-
tract start of performance is within 30
days of such award or renewal option
or extension. If the contract does not
specify a start of performance date
which.is within 30 days from the
award, and/or performance of such
procurement does not commence
within this 30-day period, any notice
of the terms of a new or changed col-
lective bargaining agreement received
by the agency not less than 10 days
before commencement of the contract
will be effective -for purposes of the
successor contract under section «c»;
and
(3)The limitations in paragraph (b>
(1) or (2) of this section shall apply
only if the contracting officer has
.given both the incumbent (predeces-
sor) contractor and his employees' col-
lective baraatnuu representative writ-
ten notification atOeast 30 days in ad-
vance of all applicable estimated pro-
curement dates, including .Issue of bid
solicitation, bid openinti date of
award, commencement of negotiations.
receipt of proposals, or the commence-
ment date of a contract resulting Ufav
a negotiation, option, or extensio^Hfc
the case may be. ^nw*
1X2 Firment of minimum •aye specified
In section MaXD'of the Fair Labor
Standards Act of 1938 under all service
contracts.
Section 2(b)Q> of the Service Con-
tract Act of 1965 provides in effect
that, regardless of contract amount.
no contractor or subcontractor per-
forming work under any Federal con-
tract the principal purpose of which is
to furnish services through the use of
service employees shall pay any of his
employees engaged In such work less
than the ™«nfa«"iiti vage specified in
section eXaXU of the Fair Labor
Standards Act of 1938. as amended
($2.90 per iiour beginning January 1.
1979. $3-10 per hour beginning Janu-
ary 1. 1980. and $3.39 per hour after
December 31.1980).
I.4.3 Wage 4etersmlaaUom.
(a) 'The »»»iTifa»«vm monetary wages
and fringe benefits for service employ-
ees which the Act requires to be speci-
fied in contracts and bid solicitations
subject to section 2(a) thereof wfll be
set forth in wage determinations
Issued by the Administrator. Wage de-
terminations shall be issued as soon as
administratively feasible for all
tracts subject to section 2(a)
Act, and will be issued for all <
entered into under which more than 5
service employees are to be employed.
(b) Such wage determination* will
set forth for the various classes of
service employees to be employed in
mm *w*» a*0
r all cjjsjav
:a) of ^B
IcontrusjpF
-------
f 4.3(b)
ATTACHMENT B-3
PAGE 3 of 40
services under such con-
in the' appropriate localities.
mm monetary wage rates to be
paid and minimum fringe benefits to
be furnished them during the periods
when they are engaged in the per-
formance of such contracts. Including.
Where appropriate under the Act. pro-
visions for adjustments in such mini-
mum rates and benefits to be placed in
effect under such contracts at speci-
fied future times. The wage rates and
fringe benefits set forth in such wage
determinations shaU be determined in
accordance with the provisions of sec-
tions 2(aXl>. <2). and (5). 4. The wage rates
and fringe benefits so determined for
any class of service employees to be
engaged In furnishing covered con-
tract services in a locality shall be
made applicable by contract to all
service employees of such class em-
ployed to perform such services in the
locality under any contract subject to
ion 2(s> of the Act which is en-
into thereafter and before such
htion has been rendered obso-
by a withdrawal, modification, or
supersedure.
Generally, wage determinations
issued for solicitations or negotiations
for any contract where the place of
performance is unknown will contain
minimum monetary wages and fringe
benefits for the various geographic lo-
calities where the work may be per-
formed which were Identified in the
Initial solicitation (see 14.4.) No-
tices with regard to solicitations where
such .planning is not feasible shall be
submitted as soon as possible.- but not
later than 30 days prior to the above
contracting actions. Such notice shall
be submitted on Standard Form 98.
Notice of Intention to Make a Service
Contract, and Standard Form 98-A or
a statement containing the informa-
tion in paragraph (b> of this section
and shall be completed in accordance
with the Instruction provided and
shall be supplemented by the informa-
tion required under paragraphs (c)
and (d) of this section. Supplies of
Standard Forms 98 and 98-A are avail-
able in all OSA supply depots under
stock numbers 7540-926-8972 and
7540-118-1008. respectively. If there
exists any question or doubt as to the
possible application of the Act to a
particular procurement, the contract-
ing agency shall submit such question
in a timely manner to tbe Administra-
tor for determination. •
(2X1) Where the place-of perform-
ance of a contract for services subject
to the Act is unknown at the time of
solicitation, the solicitation need not
initially contain a wage determination.
The contracting agency shall, upon
Identification of firms participating in
tbe procurement in response to an ini-
tial solicitation, file with the Wage
and Hour Division. Employment
Standards Administration. Depart-
ment of Labor. Its notice of intention
to make a service contract. In addition
to the requirements contained in para-
graph (axI) of tbls«ectlon. such sub-
mission shall identify each location
where the work may be performed as
indicated by participating firms. Sub-
sequent amendments to the solicita-
tion setting forth the wage determina-
tions and any •necessary change In the
date and time for submission of final
bids shall be made upon receipt of
wage 'determinations. An applicable
wage determination must be obtained
for each firm participating In the bid-
ding for the location in which It would
perform the contract The appropriate
wage determination shaD -be :incorpo-
rated In the resultant contract ^Docu-
ments and shall be applicable to all
work performed thereunder '(regard-
less of whether the successful contrac-
tor subsequently changes the places)
of contract performance).
(U) There may be unusual situations.
as determined by the Department of
Labor upon consultation with m con-
tracting agency, where the procedure
In paragraph above is not practica-
ble to a particular situation. In which
event the Department may authorize
a modified procedure which '.may
result In the subsequent issuance «f
wage determinations for one or more
composite localities. '
(b> The contracting agency shall file
with its Notice of Intention to Make &
Service Contract
-------
S 4.4(c)
ATTACHMENT B-3
PAGE 4 of 40
wu not entered Into u a result of
trm's-fength negotiations, a full state-
ment of the fact* so indicating shall be
transmitted with the copy of such
agreement. See I 4,11. If the agency
has Infonaation indicating that any
such collectively bargained wage rates
and fringe benefits are substantially at
variance with those prevailing for
services of a similar character in the
locality, the agency shall so advise the
Wage and Hour Division and. U it be-
lieves a hearing thecson pursuant to
section 4(c> of the Act is warranted
shall tile its request for such hearing
pursuant to f 4.10 at the time of filing
the Notice of Intention to .Make a
Service Contract (Form 8F-M)..
(d> If the proposed contract Is for a
multi-year period subject to other
than annual appropriations, the con-
tracting agency shall file with its
Standard Form M a statement in writ-
ing concerning the type of funding
and the contemplated term of the pro-
posed contract. Unless otherwise ad-
vised by the Wage and Hour Division
that a Standard Form 08 must be filed
on the annual anniversary date, a new
Standard Form 98 shall be submitted
on each biennial anniversary date of
the proposed multi-year contract In
the event its term Is for a period In
«y«»«i of two years.
(e) Any Standard Farm 98 submitted
by a contracting agency without the
Information reaulred under para-
graphs (b), (c). or (d) of this section
will be returned to the agency lor fur-
ther action.
(f) If exceptional circumstances pre-
vent the filing of the notice of inten-
tion and supplemental information re-
quired by this section on a •date at
least 60 days cor 30 days In the case of
unplanned procurements) prior to any
invitation for bids, request for propos-
als, or «*»»»»*»^ni''*fn^tt of negotiations.
the notice shall be submitted to the
Wage and Hour Division as soon as
practicable with a detailed explana-
tion of 'the special ^rffi*nt*fif*f
which prevented timely submission. In,
the event the proposed contract in-
volves .performance by mot* than 8
sendee.employees and
situation requires an
award, -the contracting ajency shall
contact the Wage and Boor Division
by telephone for guidance prior to any
such award. In no event may a eon-
tract subject to the act on which more
than 8 service employees are contem-
plated to be employed be awarded
without an appropriate ware determi-
nation. (Section 10 of the Act.)
If any invitation for bids, request
for proposals, bid opening, or com-
mencement of negotiations for a pro-
posed contract for which a wage deter-
mination was provided in response to a
Standard Form 98 has been delayed.
for whatever reason, more than 60
days from the date of such procure-
ment action as indicated on the sub-
mitted Standard Form 98. the con-
tracting agency shall contact the
Wage and Hour Division lor tne pur-
pose of determining whether the wage
determination issued pursuant to the
initial submission is still current. Any
revision of a wage determination re-
ceived by the contracting agency as a
result of such communication or'upon
discovery by the Department of Labor
of a delay, shall supersede and replace
the earlier response as the wage deter-
mination applicable to such procure-
ment, subject to the time frames set
forth in 14.5 The following exemption from
the compensation requirements of sec-
tion 2(a) of the Act applies, subj _
the limitations set forth in paragraphs
(to) (2). (3). and (4) of this section: To
avoid serious impairment of the con-
duct of Government business it has
been-found necessary and proper to
provide exemption from the deter-
mined wage and fringe benefits section
of the Act (section 2(a) (1). (2» but
not the minimum wage specified under
section 6(aXD of the Fair Labor
Standards Act of 1938. as amended
(section 2(b) of this Act), of contracts
under which .five or less service em-
ployees are to be employed, and for
which BO «uch wage or fringe benefit
determination has been issued;
(2) The exemption provided in para-
graph (bXl) of this section, which was
adopted pursuant to section 4 of this section does not
apply to any contract for which sec-
tion 10 of the Act as amended requires
an applicable wage determination.
(cXl) If the notice of intention re-
quired by 14.4 Is not filed with the re-
quired supporting documents within
the time provided in such section, the
contracting agency shall, through the
exercise of any and all of Its power
and authority that may be needed (in-
cluding, where necessary, -its authority
to negotiate, its authority to pay any
necessary additional costs, and its au-
thority under any provision of the
contract authorizing changes), include
m the contract any wage determina-
tions communicated to it by the Wage
and : Hour Division. Employment
Standards Administration. U.S. De-
partment of Labor, within 30 days of
the receipt of such ---wage
determlnatton(s). With respect to any
contract for which section 10 of the
Act requires an applicable wage deter-
mination, the Administrator may re-
quire retroactive application of such
wage determination.
(3) Where the Department of
discovers and determines, whether
before of subsequent to a contract
award, that a contracting agency made
an erroneous determination that the
Service Contract Act did not apply to
a particular procurement and/or
-------
i4.S(c)<2)
ATTACHMENT B-3
PAGE 5 of 40
failed to include mn appropriate wage
•etermlnation in a covered contract.
Phe contracting agency, within 30 days
of notification by the Department of
Labor, shall include la the contract
the stipulations contained In 14.6 and
any applicable wage determination
issued by the Administrator or his au-
thorized representative through the
exercise of any and all authority that
may be needed (Including, where nec-
essary, its authority to negotiate or
amend. Its authority to pay any neces-
sary additional costs, and Its authority
under any contract provision authoriz-
ing changes, cancellation, and termi-
nation). With respect to any contract
subject to Section 10 of the Act, the
Administrator may require retroactive
application oT such wage determina-
tion. (See «3 Comp. Gen. 412. (1073):
Curtitt-Wright Corp. v. McLvcat, 381
F. Supp. 857 (D NJ 1974): Marine En-
gineer* Beneficial Ann., Dittrict 2 v.
Military Scalift Command. 86 CCK
Labor Cases 133.782 (D DC 1970);
Brink*. Inc. v. Board of Governor) of
the Federal Keterve Syttem, 46* F.
Supp. 112 (D DC 1979). 466 F. Supp.
116 (D.DC 1979).) (See also 32 CFR 1-
403.)
. In cases where the contracting
agency, has filed its SF-W within the
time limits discussed in |4.4(a> and
has not received a response from the
it of Labor, the contracting
shall, with respect to any con-
for which section 10 of the Act
"and 14J of this Part mandate the in-
clusion of an applicable wage determi-
nation, contact the Wage and Hour Di-
vision by telephone for guidance.
14.6 Labor tUndwds
•errkx contncu
for Federal
12.500.
The clauses set forth in the follow-
ing paragraphs shall be included in
lull by .the contracting agency in every
contract entered into by the United
States or the District of Columbia, in
«xcess of $2.500.'or in an indefinite
amount, the principal purpose of
which is to furnish services through
the use of service employees:
ta) Service Contract Act of 1966, as
amended: This contract is subject.to
the Service Contract Act of IMS, as
amended <41 U.S.C. 361 tt teg.) and is
subject to the following provisions and
to all other applicable provisions of
the Act and regulations of the Secre-
.tary In the ease of a contract modifi-
cation, an exercise of an option or ex-
tension of an existing contract, or In
any other case where a contractor suc-
ceeds a contract under which the clas-
sification In question was previously
conformed pursuant to this section, a
new -conformed wage rate 'and fringe
benefits-may be assigned to such con-
formed classification by'Indexing (i.e..
adjusting)" the previous conformed
rate and fringe benefits by an amount
equal to*lhe average
-------
I 4.6(b)<3)
ATTACHMENT B-3
PAGE 6 Of 40
tton «d) of the Service Contract Act
of 1965 at 'amended, the term of this
contract is more than 1 year, the mini-
mum monetary wages and fringe bene-
fits required to be paid or furnished
thereunder to'-service employees shall
be subject to adjustment after 1 year
and not less often -than once every 2
years, pursuant to wage determina-
tions to be issued'by the Wage and
Hour Division. Employment Standard*
Administration of the Department of
iAboras provided in such Act
a
result of arm's-length negotiations..
Where it is found in accordance with
the review procedures provided In 29
CFR 4.10 and/or 4.11 and Parts 6 and
8 Umtrtftmt or all of the wages and/or
fringe benefits contained in a prede-
cessor contractor's collective bargain-
ing .agreement are substantially .at
variance with those which prevail .for
services of a character similar In the
locality, and/or that the collective bar-
gaining agreement applicable to serv-
ice employees employed jinder the
predecessor contract was not entered
Into as a result of arm's-length negoti-
ations, the Department wil). issue a
new or revised wage determination set-
ting forth the applicable wage, rates
and fringe benefits. Such determina-
tion shall be made part of the contract
or subcontract, in accordance with the
decision of the Administrator, the Ad-
ministrative taw Judge, or the Board
of Service Contract > Appeals* -as the
case may be, irrespective .of jrhjether
such issuance occurs prior to or'after
the award of a contract-or subcon-
tract. (3 Compl Oca. 401 (1973J. In the
case of a wage determnatlon Issued
solely as a result of a finding of sub-
stantial variance, such determination
shall be effective as of the date of the
final administrative decision • v
(e) The contractor and any subcon-
tractor u--der this •eontract shall
notify each service employee -. com-
mencing work on this contract o'f the
minitrmtn monetary wage ard any
fringe benefits required to be paid purr
suant to this contract, or shall post
the wage determination attached-;**
this contract. .The poster-provided by
the Department of Labor (Publication
WH m<) shall be posted m a promi-
nent and aeeessible.placc at the work-
site. Failure to comply with this re-
quirement It a violation of.section
*aX4> of the Act and of this eontract.
(Approved by the Office of Manage-
ment and Budget under OMB control
number 121S-01M.)
* (f) The contractor or subcontractor
shall not permit any part of the serv-
ices called for by.this contract to be
performed hi buildings or surround-
ings or under working conditions pro-
vided by or under the control or super-
vision of the contractor or subcontrac-
tor which are unsanitary or hazardous
or dangerous to the health or safety of
service employees engaged to furnish
these services, and the contractor or
•subcontractor-shall comply with the
safety and health standards applied
under 29 CFR Part 1988.
(«XI) The contractor and each sub-
contractor performing work subject to
fee Act than mske>«ntf maintain for S
years from the complettori of the work
records ebmatfting the Information
specified^ paragraphs
throdgh HviV of-this section for" each
employee subject to the Act
make them available for
and transcription by authorized repre-
sentatives of the Wage and Hour Divi-
sion. Employment Standards Adminis-
tration of the VS. Department of
Labor. (Sections '4.6(1X1 > (!) through
(iv) approved by the Office of Manage-
ment and Budget under OMB control
number 1215*0017 and sections
4.6 (v) and The correct work classification or
classifications, rate or rates of mone-
tary •wages paid and fringe benefits
provided, rate or rates of fringe bene-
fit payments in lieu thereof, and total
dally.. and weekly - -compensation of
each employee.
' (III) The numberof daily and weekly
hours so worked by each employee.
'• Any'deductions, rebates, or re-
funds from the total daily or weekly
compensation of each employee.
•' (v) A list of monetary wages and
fringe benefits for those classes of
service employees not mcbjded In the
wage' determination attached to this
contract but for which such wage rates
6>-fringe 'benefits have been deter-
mined by the Interested parties or by
the'Administrator or authorized repre-
sentative pursuant to the labor «t
arts clause In paragraph otl
section. A copy of the report req
by the clause In paragraph
-------
I 4.6(h)
ATTACHMENT B-3
PAGE 7 of 40
wages were earned or accrued. A
period under this Act may«ot be
any duration longer than Mini-
CD The contracting officer thai!
withhold or cause to be withheld from
the -Government -prune contractor
under this or any other Government
contract with the prime contractor
•uch sums as an appropriate official of
the Department of Labor requests or
such sums as the contracting officer
decides may be necessary to pay un-
derpaid employees employed.Jby the
contractor or subcontractor. In * the
event of failure to pay any employees
subject to'the Act *U or part of the
waves or fringe benefits-due under the
Act, the agency may. after authoriza-
tion or by direction of the Department
of Labor and written notification to
the contractor, take-action to-cause
suspension of any further payment or
advance of funds uritil such violations
bave ceased. Additionally, any failure
to comply with the requirements of
these clauses relating -to the Service
Contract Act of 1996, may be grounds
for termination of the right to proceed
with the contract work. In such event,
the Government may enter Into other
contracts or arrangements for comple-
tion of the work, charging the contrac-
tor in default with any additional cost
of the Act and Is for informa-
tional purpose* only:
'The following .classes of^ezvice em-
ployees ..expected to be employed
under ttie contract" with the Govern-
ment would bewbject, if employed by
the contracting agency, to Jhe provi-
sions of S BAG. 5341 or S U.S.C. 5332
and .would. If so employed, be.paid.not
Jess than the following, rates of wages
fringe benefits: '
(1M1) If wages to be paid or 'fringe
benefits to be furnished, any service
employees employed by the Govern-
ment prime contractor or any subcon-
tractor under the contract -are provid-
ed for in a collective bargaining agree-
ment which is or will be effective
during any period in which -the con-
tract is being performed, the Govern-
ment prime contractor -shall report
such fact to the contracting officer, .to-
gether with full information as to the
application and accrual of such wages
and fringe benefits, including any pro-
spective increases, to service employ-
ees engaged in work on the contract.
and a copy of the collective bargaining
agreement. Such report shall be made
upon commencing performance of the
contract, in the case of collective bar-
gaining agreements effective at such.
time, and in the case of such agree-
ments or provisions or amendments
thereof effective at a later time during
the period., of contract performance,
such agreements shall be reported
promptly after* negotiation -thereof.
(Approved, by the .Office of Manage-
ment and Budget under OMB control
Dumber 1215-0150.) /
.,(2). Not less 'than. 10 days prior to
completion of any contract being per-
formed at a Federal facility -where
service employees may be retained In
the performance of the succeeding
contract and subject to a wage deter-
mination which contains vacation or
other benefit provisions based upon
length of '"service with a contractor
(predecessor) or successor < 14.173 of
Regulations. 29 CTR Part 4). the in-
cumbent prime contractor shall fur-
nish to the contracting officer a certi-
fied list of the names of an •service em-
ployees on the contractor's or •subcon-
tractor's payroll during the last month
of contract performance. Such list
•hill also contain anniversary dates of
employment on the contract either
with the current or predecessor con-
tractors of each such service employ-
ee. The contracting officer shall turn
over such list to the successor contrac-
tor at tee commencement of the suc-
ceeding contract. (Approved by the
Office of Management 'and Budget
under >OMB. control number-.1215-
0150.)
through of that Act. in accordance with
the conditions and procedures pre-
scribed for the employment ol appren-
tices, student-learners, handicapped
persons., and handicapped clients of
sheltered workshops under .section 14
of.-the^Pair.Labor Standard* Act of
1938. in ther regulations issues! by the
Administrator *a» CFRParU 120. S21.
524. and 125).
<2) The Administrator will issue cer-
tificates cnder the Service Contract
Act for the employment of appren-
tices, student-learners, handicapped
persons, or • handicapped clients of
sheltered .workshops not subject to the
Pair Labor Standards-Act t>f 1938. or
sttbject to-Afferent minimum rates of
pay-under -the two acts, authorizing
appropriate rates of minimum wages
(out without changing requirements
concerning fringe benefits or supple-
mentary cash payments uv lieu'there-
of), applying procedures prescribed by
the .applicable' regulations Issued
under the Pair'Labor'Standards Act of
1938 <» CFR Parts 520, 521. 524. and
526). '
(3) The Administrator wili also with-
draw, annul, or cancel such certificates
in accordance with -the regulations in
Parts 525 and 528 of Title 29 of the
Code of Federal Regulations.
• (p) Apprentices will be permitted to
work at less than the predetermined
rate for the work'they perform when
they are employed and individually
registered In a bona fide apprentice-
ship program registered with a State
Apprenticeship Agency which is recog-
nized by the TJ.S. Department of
Labor, or if "no such recognized agency
exists in a State, under a program reg-
istered with the Bureau of Apprentice-
ship "and Training. Employment and
Training Administration. U.S. Depart-
ment
-------
I 4.6(p)
be less thin the wage nte for their
level of progress set forth In the regis-
tered program, expressed M the appro-
priate percentage of -the Journeyman's
rate contained in the applicable~wage
determination. The allowable ratio of
apprentices to journeymen employed
on the contract work in any craft clas-
sification shall not be greater than the
ratio permitted to the .contractor as to
his entire work force 'under "the regis-
tered program.
. (o.) AD employee engaged In an occu-
pation in which he or she customarily
and regularly receives more than $30 a
month in tips may have the amount of
tips credited by the employer against
the m'"1"""* wage required by section
2 or section 2CbXl) of the Act in
accordance with, section 3(m) of the
Pair Labor. Standards Act and -Regula-
tions^ CFR Part 531: Provided, now-
«*er, That the amount of -such credit
may ikotvxceed $1.24 per hour begin-
atog 'January .1. I960, and $1.34 per
hour after December 31. XNO. To utl-
Uw this proviso:
•ml). -The employer- must Inform
dpped employees about this tip credit
•Uowaabe oetore*he credit is utilized:
MS) The employees must be allowed
to. retain all tips -(Individually or
Cftroogh r~ pooling arrangement and
regardless of whether the employer
elects to take a credit for tips re-
ceived);
r (3) The employer must be able to
•how by records that the employee re-
ceives at least the' applicable Service
Contract Act minimum wage through
the combination .of direct wages and
tip credit (approved by the Office of
Management and Budget under OMB
control number 1215-0017):
. (4) The use of such Up credit must
have been permitted under any prede-
cessor collective bargaining agreement
applicable by virtue of section 4(c) of
the-Act. .
,Xr> Disputes concerning tabor ttamd-
ord*. Disputes arising out of the labor
standards provisions of this contract
shall notbe subject to the general dis-
putes clause of *-***• m/iit^"*' ffb dis-
ATTACHMENT B-3
PAGE 8 of 40
putes shall be resolved in accordance
with -the procedures of the Depart-
ment of Labor set forth in 29 CFR
Puts 4. 6, and 8. Disputes within the
meaning of this clause include dis-
putes between the contractor >•» Ttmilsrdt fliBV fur Federal
*«rric« coatracU not exceeding $t$00.
<-«vefy -contract with the Federal
Government which is not IB excess of
t&SOO but has as its principal purpose
the furnishing of vervtees through the
"Service Contract. .Act ^Except to the
extent that an exemption, variation or
tolerance would apply If this were a
contract in excess of $2,SOO. the con-
tractor and any subcontractor hereun-
der shall pay all of .his employees en-
gaged in performing work on the con-
tract not leas than the minimum wage
specified under section 6(aXl) of the
Fair Labor Standards Act of 1938, as
amended. •Regulations and interpreta-
tions of the Service Contract Act of
1965. as amended, are contained in 29
Part 4.
•.IS- Notice of mwmfdi.
Whenever an agency of the United
States or the' District' of. Columbia
awards a contract subject to the Act
which may be In excess of $10;000 and
such agency does not submit Standard
Form 279. PPD6 Individual Contract
Action Report, or its equivalent, to the
Federal Procurement Data System. It
shall furnish the Wage and Hour Divi-
sion. ESA. an original and one copy of
Standard Form W, Notice of Award of
Contract, unless- It makes other -ar-
rangements with the Wage and Hour
Division for notifying it of such con-
tract-awards. The form shall.be com-
pleted as follows:
(a) Items 1 through 7 and 13 and 13:
Self-explanatory; ..-.-. •.
'(b) Item 8: Enter the notation "Serv-
ice Contract Act:"
til>'***jm> if* ***£ as
provided In section 2(a) (1) and (2) of
the Act. contractors and subcontrac-
tors performing contracts subject to
the Act generauy-are obliged to pay to
service .employees employed on the
contrect^work wages and fringe -bene-
fits not less than those to which they
would have been entitled under, a col-
lective bargaining agreement if they
were employed on -like work-.under a
4tc) of .the Act provides, however, that
"such .obligations shall not apply ;!
the Secretary finds after a hearing in
accordance with regulations adopted
by the Secretary that such wages and
fringe benefits are substantially ai
parlance with those which prevail for
services of a .character similar in the
locality".
v Prerequisite* for hearing, (ixi) A
request for a bearing under this sec-
tion may be made by the contracting
agency or other person affected or in-
terested.. including contractors or pro-
spective contractors and associations
oftcomncton. representatives of em
ployees. and other interested Govern-
mental agencies: Such a reauest shall
be cuomitted In, writing to the Admin
Utrator.. Wage and. Hour Division, Em-
ployment Standards . Administration.
U.S, Department of 'Labor^ Washing
tori, D.C.-20210. and shall include the
following: . . .
1-4A) The number of any wage deter-
-the, name of the
contracting .-agency, whose contract is
involved, and a brief description of the
services -to ,be perfannedsunder the
contract; : . ;
. ' CB) A -statement .regarding the status
of the procurement and any i
procurement dates. «uch as bid,
ing.- contract -award.
dat«-ofcthe contract or its fc
option period: . „.
*- Names-and addresses (to the
extent known) of interested parties.
J (0) If the Information in paragraph
(bxixi) of this-section 1s not submit-
ted *tth the request, the Administra-
tor unay deny the request or request
supplementary Information, at his/her
discretion. 'Hi; particular form 4s pre-
scribed for «ubnisslon of a request
Under this section. --•-
•<2).The Administrator will respond
to the party requesting a hearing
within 30 days after receipt, granting
or denying the. request or advising
that additional time is necessary for a
4^-j--*«v. Jto hearing wDl be provided
pursuant .to this section and section
4(c) of the Act unless the Administra-
tor determines from information avail-
able or submitted with a request for
such a hearing' that there may be a
substantial variance between some or
all of the wage rates and/or fi
benefits provided .for in a coll
bargaining agreement ' to whtei
service employees would otherwise be
entitled by virtue of the provisions of
Metton^e) **f the Act, and those
which 'prevail for:serv»ees of a charac-
ter similar in* the locality. -"—
Pursuant to section 4(b) of the
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l4.10(bK3)
ATTACHMENT B-3
PAGE 9 of 40
low. except In /those situations
ere the Administrator •determines
t extraordinary i ?cirrumstanoK
exist:
(i) For advertised contracts, prior to
ten days before the sward of the con-
tract;
(ii) For negotiated contracts and for
contracts with provisions extending
the initial term by option, prior to the
commencement date of the contract or
the follow-up option period, as the
case may be.
•!c) Referral to the Chief Administra-
tive'Law Judge. When the Administra-
tor-determines from the information
available or submitted with a request
for a hearing that there may be a sub-
stantial variance, the Administrator
on his/her own-motion qr on applica-
tion of any interested person wiU by
prder refer the issue to the Chief Ad-
ministrative taw Judge, for designa-
tion of an. Administrative Law Judge
who shall .conduct such a fact finding
bearing as may be necessary to render
•decision solely on the issue of wheth-
er the -wages and/or fringe .benefits
contained in the collective bargaining
Jtgreemerit which was the basis for the
wage -determination -at taue toe sub-
stantially at variance with those
which prevail for services of a charac-
ter Umilar in the locality. 'However, in
situations where then-is also-a ques-
ion as to whether the collective bar-
agreement was reached as a
of "arm's-length negotiations"
§4.11), the referral shall include
both issues for resolution in one pro-
ceeding. No authority is delegated
under this section to hear -and/or
decide any other issues pertaining to
the Service 'Contract Act. As provided
in section 4(a) of the Act. the provi-
sions of fi 4 and 5 of the Walsh-
Healey Public Contracts Act (41 D.S.C.
38, 39) shall be applicable to such pro-
ceeding, which shall'be conducted in
accordance with the procedures set
forth at 29 CFR .Part 6.
:
and 4(0 of the Act. See Trinity Serv-
Inc. v. Jfanftaft 993 P.2d 1250
. Or: 1778). A finding ajrto wheth-
coiieetrre bargaining agreement or
particular wages -and 'fringe benefits
therein are reached ifo'»'-result of
negotiations tnay be
made through -investigation, hearing
or otherwise pursuant to the Secre-
tary's' authority under Section 4(4) Names and addresses (to the
extent known) af..4nterested parties, f
e(2) Pursuant to Section -Kb) -of the
Act, requests for a-hearing shall not be
considered unless received as .specified
below except in those situations where
the Administrator determines that ex-
traordinary circumstances exist: .
length .negotiations, but finds that
there Is insufficient evidence tg render
a linal dedsloo (henpn.-the Admlnls-
tatoE may. refer the Issue to the Chier
Administrative Law Judge in. accord-
ance with paragraph jM) of this sec-
tion.,.
- If the Administrator finds (hat
the collective hsrgHnlng .agreement or
wages.mnd Mage benefits 4* issue were
reached as a result of mrm's-length .«•
gotiaUons or that arm'ajength negoti-
ations did nfit*ake olace, the Interest-.
ed parties, taetu Referral to the Chief Administra-
tive Lav Ju&ge. The Administrator on
his/her own motion, under paragraph
(cK2) of this section or upon a request
for a hearing under paragraph
(CX3X11) of this section where the Ad-
ministrator determines that material
facts are In dispute. shalLby order
refer the issue to the Chief Adminis-
trative Law Judge for designation of
an Administrative Law -Jadge. who
shall conduct such hearings as may be
necessary to render a decision solely
on the Issue of arm's-length negotia-
tion. However, in situations where
there is also a question as to whether
some or all of the collectively bar-
gained wage rates and/or fringe bene-
fits are substantially at variance (see
f 4.10), the referral shall include both
issues for resolution In one proceeding.
As provided in Section 4(a) of the Act.
the provisions of Sections 4 and S of
the Walsh-Healey Public Contracts
Act (41 U.S.C. 38,39) shall be applica-
ble to such proceeding, which shall be
conducted In accordance with the pro-
cedures set forth at 29 CFR Part 6.
(e) Referral to the Board of Service
Contract Appeal*. When a party re-
quests a hearing under paragraph
(CX3XU) of this section and the Ad-
ministrator determines that no materi-
al facts are in dispute, the Administra-
tor shall refer the issue and the record
compiled thereon to the Board of
Service Contract Appeals to render a
decision solely on the issue of arm's-
length negotiations. Such proceeding
shall be conducted In accordance with
the procedures set forth at 29 CFR
Part8.
14,11 Sab«Ufitt*J Intend proceeding.
(a) Statutory'provision. Under Sec-
tion 5
-------
I 4.12(.)
be awarded " * « to any firm, corpora-
tion, partnership, or association in
which nich persons or firms have a
substantial interest • • •." A finding as
to whether persons or firms whose
names appear on the debarred bidders
list have a substantial interest in any
other firm, corporation, partnership,
or association may be made through
investigation, hearing, or. otherwise
pursuant to the Secretary's authority
under Section 4(a) of the Act.
.(b) IneliyibUity. See 14.188 of this
pan for the Secretary's rulings and In-
terpretations with respect to substan-
tial Interest.
(cxl) A request for a determination
under this section may be made by
any Interested party. Including con-
tractors or prospective contractors.
and associations of contractors, repre-
sentatives of. employees, and interest-
ed Government agencies. Such a re-
quest shall be submitted In writing to
the Administrator, Wage and Hour Di-
vision, Employment Standards Admin-
istration. U.S. Department of Labor,
Washington. D.C. 30210.
<2) The request shall Include a state-
ment setting forth in detail why the
petitioner believes that a person or
firm whose name appears on the de-
barred bidders list has a substantial in-
terest In any firm.- corporation, part-
- nership, or association which Is seek-
.ing or has been awarded a contract of
the United States or the District of
Columbia. No particular form is pre-
scribed for the submission of a request
under this section.
. If the Administrator finds that
no substantial interest adits, or that
there is not sufficient information to
warrant the initiation of aa .investiga-
tion, the requesting party. If any. will
be so notified and no "further action
taken! .....,* .. .
- 44X1) If the Administrator finds that
a. substantial -.interest exist*, the
person or firm affected will be notified
of th* Admlnlttritfty'f finding, which
shall include the. reasons therefor, and
such.person or firm ahall be afforded
an opportunity to request'that a hear-
ing be held to, render a decision on the
issue of substantial Interest .
. kii) ,Such person or .firm shall have
20 days from the date of the Adminis-
trator's'ruling .to request a hearing. A
detailed statement of the reasons why
tiie Administrator's ruling is in error,
including facts .alleged to be in dis-
pute, if any, shall be submitted.with
10
ATTACHMENT B-3
PAGE 10 Of 40
the request for a hearing. ..
. (Ui) If no hearing Is requested within
the time 'mentioned In paragraph
of this section, the Adminis-
trator's finding shall be final and the
Administrator, -shall so notify the
Comptroller General. If a hearing is
requested, the decision of the Adminis-
trator shall be inoperative unless and
until the Administrative Law Judge or
the Board oil Service Contract Appeals
issues an order that there is * substan-
tial Interest.
,»4e4 Referral to-ttu Chief Adminittra-
tive Lav Judge. The Administrator on
his/her own motion, or upon.a request
|or Sv-hearlng where the Administrator
determine* that relevant facts are In
dispute, shall by order refer the Jasue.-
fo the Chief Administrative Law
Judge, for designation /of an Adminis-
trative Law Judge who shall conduct
such hearinn M m*v h» HMMSITV to
render a decision solely on the issue of
substantial, interest. '.As..provided 'm
Section 4(4) of the Act. th* provisions
of Sections 4 and S of. the Walsh-
Heatey Public Contract* Act (4*1 U.S.C.
38. 39) shall be.appHcable to such pro-
ceedings, which shall be conducted in
accordance with the .procedures set
forth at 29 CPR Part 6. '
(f) Referral to the Board of Service
Contract Appeal*. When the penon'or
firm requests a hearing "and the Ad-
ministrator determines .that relevant
facts are not In ttsputc. 'the Adminis-
trator will refer. the 'Issue and the
record compiled thereon to the Board
of Service 'Contract Appeals V render
a decision solely on'the Issue of sub-
stantial . .interest. Such proceeding
shall be conducted Jn accordance with
the procedures .set. jforth at 29 CFR
Pans.
.Procedure* _ r..,. r
•> . .. •: . j •• . • •
• 4JO Typei of wage «ad fringe 1
The Administrstor specifies the min-
imum monetary wages and ft luge ben-
efits to -be -paid as required under the
Act in two types of determinations:
(a) Prevailinff in the Locality. Deter-
minations that SCt fOTth
monetary wages and fringe benefits
determined to be prevailing for^artous
classes of service employees in the lo-
cality (sections 2(aXl> And 2(aX2) of
the Act) after gtvtng "due -consider-
ation" to the rates applicable to such
service employees if directly hired by
the federal Government -(section
.
(bT Collective Bargaining Agree-
meni-tSucceuorttiipl - Determina-
tions that set forth the wage rates and
fringe benefits.' tefftq^.rt aecroed and
prospective Increases, contained in a
collective bargaining agreement appli-
cable to the service employees who
performed on a predecessor contract
tti the same locality (section* 4(e> and
iUXl) and (3) of the, Act). -• • ,
I4J1
nationi.
In the totality
•MRVpfiii
(a) Information considered. The
minimum monetary wages and fringe
benefits set forth in determinations of
the Secretary are based on all avail
able pertinent information as to wage
rates and fringe benefits being paid at
the time the determination is made.
Such information is most frequently
derived from area surveys made by the
Bureau of Labor Statistics, U.S. De-
partment of Labor, or other Labor De-
partment personnel. Information may
also be obtained from Government
contracting officers and from other
available sources, including employees
.and their representatives and employ.
ere and their associations. The deter-
minations may be based on the wage
rates and fringe benefits contained in
collective bargaining agreements
where they have been determined to
prevail in a locality for specified occu-
pational clashes) of employees.
(b) Determination of Prevailing
Rate*. Where a single rate Is paid to a
majority (80 -percent or more) of the
workers In a class of senriej employees
engaged in similar work la » particular
locality, thatnte is determined to pre-
vail. The wage rates and fringe bene-
fits In a collective bargaining
ment covering 2,001 Janitors in i
Ity, for example, prevail if it is'
mined that no more than 4.000 wTSFk-
ers are engaged in such Janitorial work
In that locality. In the case of Infor-
mation developed from surveys, statis-
tical measurements of central tenden-
cy such as a median (a point In a dis-
tribution of wage rates where SO per-
cent of the surveyed workers receive
that or a higher rate and an equal
number receive a lesser rate) or the
mean (average) are considered reliable
Indicators of the prevailing rate.
Which of these statistical measure-
ments will be applied in a given case
will be determined after a careful
analysis of the overall survey, separate
flistlflcitlon data, patterns existing
between survey periods, and the way
the separate classification data inter-
relate. Use of the median Is the gener-
al rule. However, the mean (average)
rate may be used in situations where.
after analysis, it to determined that
the median to not a reliable indicator.
examples where the mean may be
used Include situations where:
. (1) The number of workers studied
for the Job'classification constitutes a
relatively small sample and the com-
puted median results in an actual rate
that Is paid to few of the studied work-
ers m the class;
X2) Statistical deviation such as a
skewed (bimodal or mult
quency distribution biases the
rate due • to large concent
workers toward either end of the dis-
tribution curve and the computed
median results in an actual rate that is
paid to few of the studied workers in
the class; or
-------
I4.5l(3)
11
ATTACHMENT B-3
PAGE 11 of 40
The computed median rate dis-
hlstoric wage relationships be-
en Job levels within a classification
family (i.e.. Electronic Technician
Classes A. B, and C levels within the
Electronic technician classification
family), between classifications of dif-
ferent skill levels (I.e., a maintenance
electrician as compared with a mainte-
nance carpenter), or, for example.
yields a wage movement inconsistent
with the pattern shown by the survey
overall or with related and/or similar-
ly skilled job classifications.
(c) Slotting wage rates. In some In-
stances, a wage survey for a particular
locality may result in Insufficient data
for one or more job classifications that
are required in the performance of a
contract. Establishment of a prevail-
ing wage rate for certain such classifi-
cations may be accomplished through
a "slotting" procedure, such as that
used under the Federal pay system.
Under this procedure, wage rates are
derived for a classification based on a
comparison of equivalent or similar
Job duty and skill characteristics be-
tween the classifications studied and
those for which no survey data is
available. As an example, a wage rate
found prevailing for -the Janitorial
classification may be adopted for the
classification of mess attendant if the
_skffl and duties attributed to each clas-
«~~ .ion are known to be rated slmi-
under pay classification schemes.
classifications are assigned the
same wage grade under the Coordinat-
ed Federal Wage System and are paid
at the Wage Board grade 2 when hired
directly by a Federal agency.)
(d) Due consideration. In making
wage and fringe benefit determina-
tions, section 2(a)(S) of the Act re-
quires that due consideration be given
to the rates that would fce paid by the
Federal agency to the various classes
of service employees U, 15341 or 15332
of Title 5, United States Code, were
applicable to them. Section 5341 refers
to the Wage Board or, Coordinated
Federal Wage System for'"blue collar",
workers and 15332 refer* to the Gen-'
eral Schedule pay system, for '"white
collar" workers. The term "due consid-
eration" implies the exercise of discre-
tion on the basis of the Jtacts and cir-
cumstances surrounding each determi-
nation, mxignlirtng the legislative ob-
jective of narrowing the, gap between
the wage rates and fringe benefits pre-
vailing for .service .employees and
those established for Federal ,employ-
eesi Each wage determination'is based
on a survey or other Information on
the wage rates .and fringe benefits
Ming paid in a particular'locality and
also takes Into account -those -wage
rates and fringe benefits which would
! under Federal pay systems.'
Collect}** 'bargaining -agreement
•(•BcccmonMp) determination*.
Determinations based on the collec-
tive bargaining agreement of a prede-
cessor contractor set forth by Job clas-
sification each provision .relating to
wages (such as the established straight
'time hourly or salary rate, cost-of-
•llving allowance, and any'shift, haz-
ardous, and>other similar pay differen-
cials) and to fringe benefits-
-------
§ 4.54(b)
12
ATTACHMENT B-3
PAGE 12 of 40
cable to contracts in accordance with
the provisions of i 4.5<2> of Subpart
A.
of the Act may request
review and reconsideration by the Ad-
ministrator. A request for review and
reconsideration may be made by the
contracting agency or other interested
party, including contractors or pro*
spective contractors and associations
of contractors, representatives of era-
* ployees, and other interested Govern-
mental agencies. Any such request
must be accompanied by supporting
evidence. In no event shall the Admin*
istrator review a wage determination
or its applicability after the opening of
bids in the case of a competitively ad-
vertised procurement, or, later than 10
days before •commencement of a con-
tract in the case of a negotiated pro-
curement, exercise of a contract
option or extension. This limitation is
tiecessary in order to ensure competi-
tive equality and an orderly procure-
ment process.
<£> The Administrator shall, upon
receipt 'of a request for reconsider-
ation, review the data sources relied
upon as a basis for the wage determi-
nation, the evidence furnished by the
party requesting review or reconsider-
ation, and, if necessary to resolve the
matter, any additional Information
found to be relevant to determining
prevailing wage rates and fringe bene-
fits in a particular locality. The Ad-
ministrator, pursuant to-a review of
available information, .may issue a hew
wage determination, may *•«•• the
wage-determination to be revised, or
.may affirm the wage determination
'issued, -and will notify the requesting
party in writing of the action taken.
The Administrator will render a deci-
sion within 'SO days of receipt of the
request or will notify the requesting
party 'in writing within 30 days of re-
'eeipt that additional time is necessary.
Rtvtev bv IV Board of Service
Contract Jftpeals. Any decision of the
Administrator under paragraph (a) of
thte section may be •appealed to the
Board of Service 'Contract Appeals
within 20 days of issuance of the Ad-
ministrator's decision. Any such
appeal shall be in accordance with the
provisions of Part 8 of this title. .
Svbport C—Application of the McNo-
MuvoHO tforo Service Contract Act
INTRODUCTORY
i 4.101 Official Mlingt and interpretations
in thii rabpwt.
-------
S4.10Ue>
ATTACHMENT B-3
PAGE 13 Of 40
'nued in effect; all other opinions.
gs. Interpretations, and enforce-
policies on the subject* discussed
ie interpretations in this part, to
the extent they are inconsistent with
the rules herein stated, are supersed-
ed, rescinded, and withdrawn.
. (f) Principles governing the applica-
tion of the Act as set forth in this sub-
.part are clarified or amplified in par-
ticular instances by illustrations and
examples based on specific fact situa-
tions. Since such Illustrations and ex-
amples cannot and are not intended to
be exhaustive, or to provide guidance
on every problem which may arise
under the Act. no inference should be
drawn from the fact that a subject or
Illustration is omitted.
/prevailing tabor standards.
authority - and - • enforcement
powers of the Secretary, under'the Act
are;-S."Rep. No.
798," 89th -Cong.. 1st Sess. 3-4 (1965).)
The Act does not permit the monetary
wage rates specified In such a contract
to be less than the minimum wage
specified under section 6 of the
Fair Labor Standards Act. as amended
(29 TJJ5.C. 206UX1U. In addition. It is
a violation of the Act for any contrac-
tor or subcontractor under a' Federal
contract subject to the Act. regardless
of the amount of the contract, to pay
any .of his employees engaged in per-
forming' work -on the contract less
than such Fair Labor Standards Act
minimum wage. Contracts of $2.500 or
less are not. however..required to con-
tain Uie stipulations .described above.
These-provisions,ef the Service Con
tract-Act.areJmplemented by the reg-
ulations contained .in this Pan 4 and
are discussed in-more detail in subse-
quent sections ,of. Subparu C, D. and
• lias The Act a*
(a) The provisions of the Act (see
f 14.102-4.103) were amended, effec
tlve October 9.1972. by Public Law 92-
473. signed Into law by the President
on that date. By virtue of amendments
made to paragraphs (1) and (»of sec-
tion 2(a) and the addition to section 4
of a new subsection (c). the eoBpensa-
tion standards of the Act (see f 14.159-
4.179) were revised to impose on suc-
cessor contractors certain require-
ments (see 144b> with respect to pay-
ment of wage rates and fringe benefits
based on those agreed upon for sub-
stantially the same services in the
same locality In collective bargaining
agreements entered Into by their pred-
ecessor contractors (unless such
agreed compensation b substantially
at variance with that locally'prevailine
or the agreement was not negotiated
at arm's length). The Secretary of
Labor'is to five effect to the provi-
sions of such collective bargaining
agreements In his wage determinations
under section 2 of the Act. A new
paragraph (5) added to section 2(a) of
the Act requires a statement In the
government service contract of the
rates that would be paid by the con-
tracting agency in the event of its
direct employment of those classes of
service employees to be employed on
the contract work who, If directly em-
ployed by the agency, would receive
wages determined as provided in 5
' U.S.C. 5341. The Secretary of Labor is
directed to' give due consideration to
such .rate* .In determining prevailing
monetary wages .and fringe benefits
under .the Act's provisions. Other pro-
visions of the 1972 amendments in-
clude the addition of a new section 10
to the Act to Insure that wage deter-
minations are Issued by the Secretary
for substantially all service contracts
subject to section »a) of the Act at
the earliest administratively feasible
time: an' amendment to section 4(b) of
the Act ttf> provide, in addition to the
condlUomf previously specified for is-
-------
§ 4.105(i)
14
ATTACHMENT B-3
PAGE 14 of 40
tuance of administrative limitations,
-variations, tolerances, and exemptions
added to section 4 of the Act providing
for the award -of service contracts for
terms not more than 5 .years with pro-
vision for periodic adjustment of mini-
mum wage rates and fringe benefits
payable thereunder by the issuance of
wage determinations by the Secretary
of Labor during < the term of the con-
tract. A further amendment to section
5 The provisions of the Act were
•mended by Pub. X* 94-489. 90-6UL
2358. approved October 13. 1976. to
extend the Act's coverage to white
-./•filar workers. Accordingly, the mini-
mum wage protection of the Act now
extends to all workers, both blue
collar and white collar, other than per-
sons employed in a bona fide execu-
tive, administrative, or professional ca-
pacity as those terms are used In the
Pair Labor Standards Act and in Part
541 of Title 29. Pub. L. 94-489 accom-
plished this change by adding to Sec'
tlon 2(aX5) of the Act a reference to 5
U.S.C. 5332, which deals with white
collar workers, and by amending the
definition of service contract employee
In Section Kb) of the Act.
Section 2(a) of the Act covers
contracts (and any bid specification
therefor) "entered into by the United
States" and section 2 Where a Federal agency exer-
cises its contracting authority to pro-
cure services desired by the Govern-
ment, the method of procurement uti-
lised by the contracting agency is not
controlling In determining coverage of
the contract as one entered into by
the United States. Such contracts may
be entered Into by the United States
either through a direct award by a
Federal agency or through the 'exer-
cise by another agency (whether gov-
ernmental or private) of authority
granted to it to procure services for or
on behalf of a Federal -agency. Thus.
sometimes authority to, enter into
service contracts of the -character de-
scribed in the Act lor and on behalf .of
the Government and on a oast-reim-
bursable basis may be delegated* for
the **"*T*>t^*nfff of th* icontrafUng
agency, to a prime contractor which
has.the responsibility for all work to
be done in connection with the oper-
ation and management of a Federal
plant. Installation, facility, or pro-
gram, together with the legal author*
tty to act as agency fox and on behalf
of the Government and to obligate
Government funds in the procurement
of all services and supplies necessary
to carry out the entire program of op-
eration. The contract*-entered into by
such a prime contractor with second-
ary contractors for And on behalf of
the Federal agency pursuant to such
delegated authority, which have such
services as their .principal purpose, are
deemed to be contracts entered into by
the United States and contracts with
the Federal Government within-the
meaning of the Act. However, service
contracts entered* Into by
local public bodies with pui
services are not deemed to be entered
into by the United States merely be-
cause such services are paid for with
funds of the public body which have
been received from the Federal Gov-
ernment as a grant under a Federal
program. For example, a contract en-
tered Into by a municipal housing au-
thority for tree trimming, tree remov-
al, and landscaping for an urban re-
newal project financed by Federal
funds is not a contract entered into by
the United States and is not covered
by the Service Contract Act. Similarly.
contracts let under the Medicaid pro-
gram which are financed by federally-
assisted grants to the States, and con-
tracts., which -provide- for insurance
benefits to a third party .under the
Medicare program are not subject to
the Act.
14.108 District of Colombia contract*.
Section Ka) of the Act covers con-
tract* (and any bid specification there-
for) in excess of I&500 which are "en-
tered Into by the.' * * Dttrict of Co-
lumbia." The contracts of %11 agencies
and .instrumentalities which procure
contract services for or on behalf of
the District or under the authority of
the District Government are contracts
entered into by the District of
bia within the meaning of this
aion. Such contract* are also
ered contracts entered into with the
Federal Government or the -United
States within the meaning of section
2
-------
§ 4.110
15
ATTAHCMENT B-3
PAGE 15 of 40
"prime contract*" between the
Business Administration and an-
er Federal agency pursuant to vari-
ous preferential set-aside program*.
such as the 8 Airafah services.*
(a) "Principal purpose" at criterion.
Under its terms, the Act applies to a
"contract * * * the principal purpose
of which is to furnish services • • V
If the principal purpose Is to provide
something other than services of the
contemplated by the Act
y such services which may be
are only incidental to the
performance of a contract for another
purpose, the Act does not apply. How-
ever, as will be seen by examining the
Illustrative examples of covered con-
tracts In 114.130 efseq. no hard and
fast rule can be laid down as to the
precise meaning of the term "principal
purpose". This remedial Act Is intend-
ed to be applied to a wide variety of
contracts, and the Act does not define
or limit the types of services which
may be contracted for under a con-
tract the principal purpose of which is
to furnish services. Further, the no-
menclature, type, or particular form of
contract used by procurement agencies
is not determinative of coverage.
Whether the principal purpose of a
particular contract Is the furnishing of
services through the use of service em-
ployees is largely a question to be de-
termined on the basis of an the facts
In each particular case. .Even where
tangible items of substantial value are
Important elements of the subject
matter of the contract, the,facto may
show that they are . of secondary
import to the furnishing of services in
the particular case. This principle is il-
lustrated by the examples set forth in
14.131.
(b) Determining whether a contract
"tervicet", generally. Except in-
through the definition of
employee" the Act does not
define, or limit, the types of '-services"
which may be contracted for under a
contract "the principal purpose of
is to furnish services". As stated
in the congressional committee reports
on the legislation, the types of service
contracts covered by its provisions are
varied. Among the examples cited are
contracts for laundry And dry clean-
ing, for transportation of the mail, for
custodial. Janitorial, or guard service.
lor-packing and crating, for food serv-
ice, and far miscellaneous housekeep-
ing services. Covered contracts for
services would also include those for
other types of services which map' be
performed through the use of the vari-
ous . classes of service employees in-
cluded In the definition in section 8 A service contract to be per-
formed in ito entirety outside the geo-
graphic limit* of the United States AS
defined is not subject to the labor
standards of the Act. •,
.r(2) In addition, a contract which is
performed essentially outside the
•United States, with only an incidental
portion performed within the United
States as defined is not covered by the
Act. For example, a contract for serv-
ices to be performed on a vessel oper
•ating exclusively or nearly so in inter-
national or foreign waters outside tht
geographic areas named in section 8(d
would not be for services furnished -in
the United States" within the mean
ing of the Act and would not be cov
ered. However, if a significant or sub
stantial portion of a sen-ice contract is
performed within the statutory geo-
graphic limits, the Act applies, and the
stipulations required by i 4.6 or f 4.7.
as appropriate, must be included in
the invitation for bids or negotiation
.documents and in the contract. In
such a case, the labor standards must
be observed with respect to that part
of the contract services which is per-
formed within these geographic limits.
but the requirements of the Act and of
the contract clauses will not be appli-
.cable to the services furnished outside
the United States.
(3) In close cases involving a decision
.as to whether a significant portion of
a contract will be performed within
the United States as defined* the De-
partment of Labor should be consult-
ed, since such-situations require con-
sideration of other factors such as the
nature.of .the contract work, the type
of work performed in the United
States and how necessary such work is
to contract .performance, .and the
amount of contract work performed or
time spent in the United States vis-a-
vis other contract work.
84.113 Contracts to furnish ten-ices
"throufk the v*e of Mrvice employ res".
(a) Use of "service employees" in a
contract performance. <1) As indicated
in 14.110. the Act covers service con-
tracts only where "service employees"
will be used in performing the services
which it Is the purpose of the contract
to procure. A contract principally for
services ordinarily will meet this con-
dition if any of the services will be fur-
nished through the use of any service
employee or employees. Where it is
contemplated that the services (of the
kind performed by service employees)
will be performed Individually by the
contractor, and the contracting officer
knows when advertising for bids or
concluding negotiations that service
employees will in no event be used by
the contractor in providing the con-
tract services, the Act will not be
deemed applicable to the contract and
the contract clauses required by {4.6
or 14.7 may be omitted. The fact that
the required services will be performed
by municipal employees or employees
of a State would not remove the con-
tract from the purview of the Act, as
this Act does not contain any exemp-
tion for contract* performed by such
employees. Also, as discussed in para-
graph (aX3) of this section, where the
services the Government wants under
the contract are of a type that will re-
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ATTACHMENT B-3
PAGE 16 Of 40
16
quire the use of service employees as
defined in section Mb) of the Act, the
contract Is not taken out of the pur-
view of the Act by the fact that the
manner in which the services of such
employees are performed will be sub-
ject to the continuing overall supervi-
sion of bona fide executive, adminis-
trative, or professional personnel to
whom the Act does not apply.
(2) The coverage of the Act does not
extend to contracts for cervices to be
performed exclusively by persons who
are not service employees. I.e.. persons
who are bona fide executive, adminis-
trative or professional personnel as de-
fined in Part 541 of this title (see para-
graph (b> of this section). A contract
for medical services furnished by pro-
fessional personnel is an example of
such a contract.
<3) In addition, the Department does
not require application of the Act to
any contract for services which is per-
formed essentially by bona fide execu-
tive, administrative, or professional
employees, with the use of service em-
ployees being only a minor factor In
the performance of the contract. How-
ever, the Act would apply to a contract
for services which may Involve the use
• of service employees to a significant or
substantial extent even though there
is some use of bona fide executive, ad-
ministrative, or professional employ-
ees in the performance of the con-
fc act. For example, contracts for draft-
ing or data processing services are
often performed by drafters, computer
operators, or other service employees
and are subject to the Act even
though the work of such employees
may be performed under the direction
and supervision of bona fide profes-
sional employees.
(4) In close cases Involving a decision
as to whether a contract will Involve a
.significant use of service employees.
the Department of Labor should be
consulted, since such situations re-
.quire consideration of other factors
such as the nature of the contract
work, the type of work performed by
service employees, how necessary the
work is to contract performance, the
amount of contract work performed
by service employees vls-a-vls profes-
sional employees, and the total
number of service employees em-
ployed on the contract.
(b) "Service employee*" defined. In
determining whether or not any of the
contract services will be performed by
service employees, the definition of
"service employee" in section Kb) of
the Act Is controlling. It provides:
Tbe tens "service employee" meant any
'person engaged to the performance of a con-
tract entered into by the United States and
not exempted under section 7. whether ne-
gotiated or advertised, the principal purpose
•f which to to furnish services la the United
States (other than any person employed la
a bona fMe executive, administrative, or
pmfnsslnnsl capacity, a* UIOK term* are de-
nned to Part Ml of Title V. Code of Feder-
al Refutation*. ~ai of July 30. 1976. and any
subsequent revision of those regulation!);
and shall Include all such penoni regardless
of any contractual relationship that may be
•alleged te«xlst between • contractor or sub-
contractor and such persons.
It will be noted that the definition ex
pressly excludes those employees who
are employed in a bona fide executive.
administrative, or professional capac-
ity as defined in Pan 541 of this title
and as discussed further in 14.156.
Some of the specific .types of service
employees who may .be employed on
service .contracts are noted Jn other
sections which discuss the application
of the Act to employees.
148 PR =49743. Oct. 37. 1083: 48 PR §0339.
Jlov. J. 1B83)
§4.114 Bitkcmrtncu.
' (a) "Contractor" The Act. In section T,>specifically
'excludes from Its coverage certain con-
tracts and work which night other-
wise come within Its terms as procure-
%tents .the principal purpose of which
is to furnish services through the use
of service employees. <
(b) The statutory exemptions'In sec-
tion 7 of the Act are as follows:
-. (1) Any contract of the
/States or District of Columbia tt
struction. alteration, and/or repalrTin-
cludtng painting and decorating of
public buildings or public worts:
(2) Any work required to be done in
accordance with the provisions of the
Walsh-Healey Public Contracts Act
(49 Stat. 2036);
(3) Any contract lor the carriage of
freight or personnel by vessel, air-
plane, bus. truck, express, railway line.
or oil or gas pipeline where published
tariff rates are in effect:
. (4) Any contract for the furnishing
of services by radio, telephone, tele
graph, or cable companies, subject to
the Communications Act of 1934;
(5) Any contract for public utility
services, including- electric light and
.power, water, steam, and gas:
(6) Any employment contract provid-
ing for direct services to a Federal
•agency by an Individual or individuals:
(7). Any contract with the Post
Office Department, (now the U.S.
Postal Service) the principal purpose
of which is the operation of postal
contract stations.
14.116 Contracts for eortstnction activity.
(a) General scope of exemption. The
Act, in paragraph (1) of «ection 7, ex-
empts ••from Its provisions "any con-
tract of-the United States or
of Columbia for .construction.
•atlon and/or repair. -Including i
and decorating of -public buildings or
public works." This language oorre-
'sponds to the language used in the
Davis-Bacon Act to describe Its cover-
age (40 O.S.C. 276a). The legislative
history of 'the McNamara-O'Hara
Service Contract Act indicates that
the purpose of the provision is to
avoid overlapping coverage of the two
acts by excluding from the application
of the McNamara-O'Hara Act those
contracts to which the Davis-Bacon
Act is applicable and In the perform-
ance of which the labor standards of
that Act are Intended to govern the
compensation payable to the employ-
ees of contractors and subcontractors
on the work. (See H. Kept. 798. pp. 2,
5, and H. Rept 948. pp. i. 9. also Hear-
ing, Special Subcommittee on Labor.
Bouse Commlttff on Education and
Labor, p. 9 (89th Cong.. 1st sess.).) The
Intent.of section 7(1) Is simply to ex-
clude from the. provisions of the Act
those construction contracts which in-
volve the employment of persons
whose wage rates and fringe benefits
are determinable under the Davis-
Bacon Act
(b) Contract* not within exemption.
Section 7(1) does not exempt contracts
which, for purposes of the Davis-
Bacon Act. are not considered to
the character described by the
spending language in that Act.
which the provisions of the Davis-
Bacon Act are therefore not applied.
Such contracts are accordingly subject
to the McNamara-O'Bara Act where
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17
ATTACHMENT B-3
PAGE 17 of 40
principal purpose is to furnish
in the United States through
use of service employees. For ex-
ample, a contract for clearing timber
or brush from land cr for the demoli-
tion or dismantling o? buildings or
other structures located thereon may
be a contract for construction activity
subject to the Davis-Bacon Act where
it appears that the clearing of the site
is to be followed by the construction
of a public building or public work at
the same location. If, however, no fur-
ther construction activity at the site is
contemplated the Davis-Bacon Act is
considered inapplicable to such clear-
ing, demolition, or dismantling work.
In such event, the exemption in sec-
tion 7(1) of the McNamara-O'Bara Act
has ao application -and the contract
may be. subject to the. Act in accord-
ance with Its genera] coverage provi-
sions. It should be noted that the fact
that a contract may be labeled as one
.for the sale and removal of property.
.such .as salvage material, does not
•negate coverage under the Act even
though title to the removable proper-
ty passes to the contractor. While the
value of the property being sold in re-
lation to the services performed under
.the contract is a factor to be consid-
ered in determining coverage, where
the facts show that the principal pur-
pose of removal, dismantling, and
demolition contracts is to furnish serv-
through the use of service employ-
, these contracts are subject to the
(See also 14.131.)
(c) Partially exempt contract*. (I)
Instances may arise in which, for the
convenience of the Government, In-
stead of awarding separate contracts
for construction work subject to the
Davis-Bacon Act and for services of a
different type to be performed by serv-
ice employees, the contracting officer
may include separate specifications for
each type of work in a single contract
calling for the performance of both
types of work. For example, * con-
tracting agency may invite bids for the
installation of a plumbing system or
for the installation of a security alarm
system in a public building and for the
maintenance of the system for one
year. In such a case, if the contract is
principally for services, the exemption
provided by section 7(1) will be
deemed applicable only to that portion
of the contract which calls for con-
struction activity subject to the Davis-
Bacon Act. The contract documents
are required to contain the clauses
prescribed by 14.6 for application to
the contract obligation to furnish serv-
ices through the use of service employ-
ees, and the provisions of the McNa-
mara-O'Hara Act will apply to that
portion of the contract.
(2) Service or maintenance contract*
construction work. The pro-
of both the Davis-Bacon Act
the Service Contract Act would
generally apply to contracts involving
construction and service work where
such contracts are principally for serv-
ices. The Davis-Bacon Act, and thus
the exemption provided by section 7(1)
of the Act. would be applicable to con-
struction contract work in such hybrid
contracts where:
(1) The contract contains specific re-
quirements for substantial amounts of
construction, reconstruction, alter-
ation, or repair work (hereinafter re-
ferred to as construction) or it is ascer-
tainable that a substantial amount of
construction work will be necessary
for the performance of the contract
(the word "substantial" relates to the
type and quantity of construction
work to be performed and not merely
to the total value of construction work
(whether in absolute dollars or cost
percentages) as compared to the total
value of the contract); and
(11) The construction work to phy*
ically or functionally separate from.
and as a practical matter is capable of
being performed on a segregated basis
from, the other work called for by the
[4> m tma. oei n. tm: 4t PR sos».
No*. Z. 19S3J
• 4.117 Work saajcct-to requirement! of
WeJsft.Healcjr Act
(a) The Act. in paragraph (2) of sec-
tion 7. exempts from its provisions
"any work required to be done In .ac-
cordance with the provision of the
Walsh-Healey Public Contracts Act"
(49 Stat. 2036. 41 U.S.C. 39 et sec.). It
wni be noted that like the similar pro-
vision in the Contract Work Hours
and Safety Standards Act (40 UAC.
32Mb)), this Is an exemption for
•"work". Le., specifications or require-
ments, rather than for "contracts"
subject to the Walsh-Healey Act The
•purpose of the exemption was to elimi-
nate possible overlapping of the differ-
ing labor standards of the two Acts.
which otherwise might be applied to
employees performing work on a con-
tract covered by the Service Contract
Act if such contract and their work
under it should also be deemed to be
covered by the Walsh-Healey Act. The
Walsh-Healey Act applies to contracts
in excess.of $10.000 for the manufac-
ture or furnishing of materials, sup-
plies, articles or equipment Thus.
there Is no overlap If the principal
purpose of the contract is the manu-
facture or furnishing of such materials
etc.. rather than the furnishing of •
services o( the character referred to in
the Service Contract Act for such a
contract is not within the general oov-
erage of the Service Contract Act In
such cases.the exemption in section
7(2) is not pertinent See. for example,
the discussion in II 4.181 and 4.132.
(b) Further, contracts principally tor
remanufacturlng of equipment which
Is so extensive as to be equivalent to
manufacturing are subject to the
Walsh-Healey Act Remanuf acturing
•shall be deemed to be manufacturing
when the criteria In paragraph (1) or
(2) of this section are met
U) Major overhaul-of an item, piece
of equipment or materiel which is de
graded or inoperable, and under which
all of the following conditions exist:
(i) The Item or equipment is re-
quired to be completely or substantial
ly torn.down Into individual compo-
nents parts; and
(U) Substantially all of the parts are
reworked, rehabilitated, altered and/
or replaced; and
(111) The parts are reassembled so as
to furnish a totally rebuilt Item or
piece of equipment; and
(iv) Manufacturing processes similar
to those which were used in the manu
facturing of the item or piece of equip-
ment are utilized; and
.(v) The disassembled components, if
usable (except for situations where
the. number of items or pieces of
equipment involved are too few to
make it practicable) are commingled
with existing Inventory and. as such.
lose their identification with respect
•Xo a particular piece of equipment; and
(vf) The items or equipment over-
hauled are restored to original life ex-
pectancy, or nearly so; and
(vll) Such work is performs* in a fa-
cility owned or operated ty£the con-
tractor, j
(2) Major modification o£an item.
piece of equipment, or materiel which
is wholly or partially obsolete, and
under which all of the following condi-
tions exist:
(i) The Item or equipment is re-
quired to be completely or substantial-
ly torn down: and
(il) Outmoded parts are replaced:
and
(ill) The Item or equipment is rebuilt
or reassembled; and
(Iv) The contract work results in the
furnishing of a substantially modified
item in a usable and serviceable condi-
tion: and
(v) The work is performed In a facili-
ty owned or operated by the contrac-
tor.
<3> Remanufacturing -does not in-
clude the repair of damaged or broken
equipment which does not require a
complete teardown. overhaul, and re
build as described In paragraphs (b)( 1 >
and (2) of this section, or the periodic
and routine maintenance, preserva-
tion, care, adjustment, upkeep, or serv-
icing; of equipment to keep it in usable.
serviceable, -working order. Such con-
tracts typically are billed on an hourly
rate (labor plus materials and pans)
baals. Any contract principally for the
woft described in this paragraph
(bXl) Is subject to the Service Con-
tract Act Examples of such work in-
clude:
-<1) Repair of an automobile, truck, or
other vehicle, construction equipment,
tractor, crane, aerospace, air condi-
tioning and refrigeration equipment.
electric motors, and ground powered
industrial or vehicular equipment;
Tti) Repair of typewriters and other
office equipment (see 14.123
-------
S4.1!7(b)(3Xiii)
ATTACHMENT B-3
PAGE 18 of 40
(111) Repair of appliances, radios tele-
vision, calculators, and other electron-
ic equipment;
(Jv) Inspecting, testing, calibration.
paintint. narHglng. lubrication, tune-
up, or replacement of internal parts of
equipment listed in paragraphs . above: and
(v> Reupholstering. reconditioning.
repair, and refinishing of furniture.
... (4) Application of the Service Con-
tract Act or the Walsh-Healey Act to
any similar type of contract not decid-
ed above will .-be decided on a case-by-
case basis by the Administrator.
A 4.1 IS. Contract* for carriage subject to
: published tariff rates.
11 The Act, In paragraph (3) el section
1. exempts from its provisions "any
contract for the carriage of freight or
•'personnel by vessel, airplane, bus.
truck, express, railway line or oil or
gas pipeline where published tariff
rates are in effect". In order for this
exemption to be applicable, the con-
tract must be for such carriage by a
common carrier described by the
terms used. It does not. for example.
apply to contracts for taxicab or am-
bulance service, because taxicab and
•ambulance companies are not among
the •common 'carriers specified by the
statute. Also, a contract for transpor-
tation'service-does not £ome within
this exemption unless .the service con-
tracted for is actually governed. by
-published tariff rates to effeeUpursu-
•'ant-to State or Federal law for such
'carriage. The contracts excluded from
the reach of the Act by this exemption
are typically those where there is on
•file with the Interstate Commerce
Commission or an appropriate State or
local regulatory body a tariff rate ap-
plicable -to the transportation in-
•volved. and the transportation .con-
tract • between the Government and
the carrier Is evidenced by a Govern-
ment bill of lading citing the pub-
lished -tariff rate. An administrative
exemption has been provided for cer-
tain contracts where such' carriage is
subject to rates covered, by section
10721 of the Interstate Commerce Act
jaad is hi accordance wfth applicable
regulations governing such rates. See
I4.123(d;. However, only contracts
principally lor the carriage of "freight
or personnel" are exempt. Thus, the
exemption cannot apply where the
.principal purpose of the contract Is
parking, crating, handling, loading.
and/or storage of goods priorlo or fol-
lowing line-haul transportation. The
fact that substantial local drayage to
and from the contractor's establish-
ment (such as a warehouse) .may be re-
quired to such contracts does not alter
the fact that their principal purpose is
other than the carriage of freight.
Also, this exemption, does not exclude
any contracts for the transportation
of mail .from the application of the
Act, because the term "freight" does
not include the *"?.)
ff 4.119 Contract* for Mrrieei of eommuni-
catkmi companies.
"The Act. in paragraph (4) of section
7, exempts from its provisions "any
contract for the furnishing of services
by radio, telephone, telegraph.-.-or
cable companies, subject to the Com-
munications Act of 1034." This exemp-
tion is applicable to contracts -with
such companies for '•communication
services regulated under the Commu-
nications Act. It does not exempt from
the Act any contracts with such com-
panies to furnish any other kinds of
services through the use of service em-
ployees. ...
• 4.1ZO Contracts tor public utility acr*.
The Act, In paragraph (5) of section
7. exempts from its provisions "any
contract for public utility services. In-
cluding electric light and power, water.
steam, and gas." This exemption is ap-
plicable to contracts tor such services
with companies whose rates therefor
are regulated under State, local, or
Federal law governing operations of
public utility enterprises. Contracts
entered into with public utility compa-
nies to furnish, services through the
use of service .employees, other than
'those subject to such rate regulation.
are not exempt from the Act. Among
the contracts included In the exemp-
tion would be those between Federal
electric power marketing agencies and
investor-owned electric utilities. Rural
Electrification A dm in i*ty^tion coop-
eratives, municipalities and State
agencies engaged in the transmission
and sale of electric power and energy.
(flee H. Kept. Wo. fU. Mtb Cone.. 1st tea..
p. 4)
14.121 Contract* for Individual services.
The Act, In paragraph (6) of section
7. exempts from its provisions "any
employment contract providing for
direct services to a Federal agency by
an Individual or individuals." This ex-
emption, which -applies only to an
"employment contract" for "direct
services." makes it clear that the Act's
application to Federal contracts for
services Is intended to be limited to
service contracts entered Into with In-
dependent contractors. If a contract to
furnish services (to be performed by a
service employee as defined in the
Act) provides that they will be fur-
nished directly to the Federal agency
by the Individual under conditions or
circumstances which will make him an
•employee of the agency In providing
the contract service, the exemption
applies and the contract will not be
subject to the Act's provisions. The ex-
emption does not exclude from the
Act any contract for services of the
kind performed by service employees
which is entered-into with an Inde-
pendent contractor whose individual
services will be used in performir
contract, but as noted eirlic _
14.113. such a contract would be out-
side the general coverage of the Act if
only the contractor's individual serv-
ices would be furnished and no service
employee would In any event be used
in its performance.
14.122 Contracts for operation of postal
contract itations.
The Act. in paragraph (7) of section
7. exempts from its provisions "any
contract with the Post Office Depart-
ment, (now the U.S. Postal Service].
the principal purpose of which is the
operation of postal contract stations."
The exemption is limited to postal
service contracts having the operation
of such stations as their principal pur-
pose. .A provision of the legislation
which would also have exempted con-
tracts with the D.S. Postal Service
having as their principal purpose the
transportation, handling, or delivery
of the malls was eliminated from the
bfll during its consideration by the
House Committee on Education and
Labor (H. Rept 948. 89th: Cong.. 1st
seas., p. 1). -
+
14.133 Arfninktratire limitations, var-
lances, tolerances, and «sonptiont.
(a) Authority of the Secretary.
tion 4(b) of the Act as amend
.1972 authorizes the Secretary to
vide such reasonable limitations"'
to "make such rules and regulations
allowing reasonable variations, toler-
ances, and exemptions to and frorr.
any or all provisions of this Act (other
than 110). but only in special circum-
stances where he determines that such
limitation, variation, tolerance, or ex-
emption Is necessary and proper in the
public Interest or to avoid the serious
.impairment of Government business.
and Is in accord with the remedial pur-
pose of this Act to protect prevailing
labor standards." This authority is
similar to that vested In the Secretary
under section 6 -of the Walsh-Healey
Public Contracts Act (41 U.S.C. 40)
and under section 105 of the Contract
Work Hours and Safety Standards Act
(40 U.S.C. 331).
Go^
ratlw
-------
I4.123(b)
19
PAGE 19 of 40
in accordance ; with -the statutory
dards. No formal procedures have
prescribed for requesting such
ion. However, a request for exemp-
tion from the Act's provisions will be
granted only upon a strong and af-
firmative showing that it is necessary
and proper in the public interest or to
avoid serious impairment of Govern-
ment business, and is in accord with
the remedial purpose of the Act to
protect prevailing labor standards: If
the request for administrative action
under section 4(b) is not made by the
headquarters office of the contracting
agency to which the contract services
are to be provided, the views of such
office on the matter should be ob-
tained and submitted with the request
or the contracting officer may forward
such a request through channels to
the -agency headquarters for submis-
sion with the tatter's views to the Ad-
ministrator-of the Wage and Hour Di-
vision. Department of Labor, when-
ever any wage payment issues are in-
volved. Any request relating to an oc-
cupational safety or health Issue shall
be submitted to the Assistant Secre-
tary for Occupational Safety and
Health; Department of Labor. •
V«c) Documentation of official action
Interaction «6>. All papers and doc-
uments made a pan of the official
record of-administrative action pursu-
ant to section 4tt» of the Act are avail-
for public inspection In accord-
with the regulations In 29 CFR
70. Limitations, variations, toler-
ances and exemptions of general appli-
cability and legal effect promulgated
pursuant to such authority are pub-
lished in the FEDERAL REGISTER and
made a part of the rules incorporated
in this Pan 4. For convenience in use
of the rules, they are generally set
forth in the sections of this pan cover-
Ing the subject matter to which they
relate. (See, for example. ||4.5(b),
4.6(0). 4.112 and 4.113.) Any rules that
are promulgated under section 4(b> of
the Act relating to subject matter not
dealt with elsewhere in this Part 4 will
be set forth immediately following
this paragraph.
(d) In addition to the-statutory ex-
emptions in 17 • of *^" 'Act (Me
14.115 •Contracts for the carriage of
freight or personnel where such car-
riage Is subject to rates covered by sec-
tion 10721 of the Interstate Commerce
Act
(e) The following types of contracts
have been exempted-from all the pro-
visions of the Service Contract Act of
1965, pursuant to section 4(b) of the
Act. which exemptions the Secretary
of Labor found to be necessary and
proper in the public interest or to
avoid serious impairment of the con-
duct of Government business and are
in accord with the remedial purpose of
the Act to protect prevailing labor
standards:
(1X1) Contracts principally for the
maintenance, calibration and/or
repair of:
(A) Automated data processing
equipment 'and office Information/*
word processing systems;
(B) Scientific equipment and medi-
cal apparatus or equipment where the
application of microelectronic circuit-
ry or other technology of at least simi-
lar sophistication Is an essential ele-
ment (for example. Federal Supply
Classification (FSC) Group 65. Class
6515, "Medical Diagnostic Equip-
ment": Class 6525, "X-Ray Equip-
ment"; FSC Group 66. Class 6630,
"Chemical Analysis • Instruments";
Class 6665. "Geographical and Astro-
nomical Instruments", are largely
composed of the types of equipment
exempted hereunder);
(C) Office/business machines not
otherwise exempt pursuant to para-
graph (A) above, where such services
are performed by the manufacturer or
supplier of the equipment.
The contractor utilizes the same
compensation (wage and fringe bene
fits) plan for all service employees per-
forming work under the contract as
the contractor uses for equivalent em-
ployees servicing the same equipment
of commercial customers;
(D) The contractor certifies in the
contract to the provisions in this sub-
paragraph (ii).
(Hi) Determinations of the applica-
bility .of this exemption shall, be made
In the first instance by the contracting
officer -prior to contract award. In
making a judgment that the exemp-
tion applies, the contracting officer
shall consider all factors and make an
affirmative determination that all of
the above conditions have been met.
(iv) If the Department of Labor de-
termines after contract awgrd that
any of the above requirements for ex-
emption has not been met. tb* exemp-
tion will be deemed inapplicable, and
the contract shall become subject to
the Service Contract Act. effective as
of the date of the Department of
Labor determination. In such case, the
corrective procedures in section
4.5(cX2) of this pan shall be followed.
H 4.124-4.129
PARTICULAR APPLICATION or Coimucr
COVERAGE PIXNCXFUS
1 4.130 Type* of covered Mrvkt coirtnett
iUuitratod.
(a) The types of contracts, the prin-
cipal purpose of which is to furnish
services through the use of service em-
ployees. are too numerous and varied
to permit an exhaustive listing. The
following list Is illustrative, however.
of the types of services called for by
such contracts that have been found
to come within the coverage of the
Act. Other examples of covered con-
tracts are discussed in other sections
of this subpart.
(1) Aerial spraying.
(2) Aerial reconnaissance for fire de-
tt)
service.
<4£ Barber .and beauty shop services.
15) Caieterja and food service.
ttrCarpe't laying (other than part of
construction) and cleaning.
' arcatatoglhg services.
<8) Chemical testing and analysis.
(9> Clothing alteration and repair.
(10) Computer services.
UlrConcessloriaire services.
(12) Custodial, janitorial, and house-
keeping services.
•Utt Data • collection, processing.
and/or analysis services.
-------
§4.!30(a)
20
ATTACHMENT B-3
PAGE 20 Of 40
(14) Drafting mnd illustrating.
(IS) . Electronic equipment mainte-
nance and operation and engineering
support services.
(16) Exploratory drilling (other than
part of construction).
(1?) Film processing.
(18) Fire fighting and protection.
< 19) Fueling services.
(20) Furniture repair and rehabilita-
tion.
(21) Geological field surveys and
.testing.
(22) Grounds maintenance.
(23.) Guard and watchman security
service.
(24) Inventory services.
(25) Keypunching and keyverifylng
contracts.
..(rC26) laboratory analysis services.
(27) Landscaping (other than part of
construction).
(28) Laundry and dry cleaning.
(29) Linen supply services.
(30) Lodging and/or meals.
(31) Mail hauling.
(32) Mailing and addressing services.
(33) Maintenance -and repair of all
types of equipment. e.g.. aircraft, en-
gines, electrical motors, vehicles, and
electronic. t«i«!nniinim^^fffn> office
and related business, and construction
equipment (See 1 4.123(e).).
(34) Mess attendant services.
,.,(35) Mortuary services.
(36) Motor pool operation.
(3?) Nursing home services.
(38) Operation, maintenance, or lo-
gistic support of a Federal facility.
. (39) Packing and crating.
(40) Parking services.
(41) Pest control.
(42) Property management
(43) Snow removal. -•=
(44) Stenographic reporting.
(45) Support services at military In-
stallations.
(W Surveying and mapping services
(not directly related to construction)
(47) Taxicab services.
(48) Telephone and .field interview
services.
(49) Tire and tube repairs.
(SO) Transporting property or per-
sonnel (except as explained In 1 4.118).
(81) Trash and garbage removal.
(82) :Tfee planting
clearing Umber or brush, etc. (See also
II 4.116 (b) and 4.131(f >.).
(83) Vending iMrff«™» services.
(84) Visual and graphic arts.
($5) Warehousing or storage.
• 4J81 Ftraiahteg services i»v*htag man
sve of later.
(a) If the principal purpose of a eon-
tract 1s to furnish *erviees to *he per-
formance of 'which service employees
wfll be used, the Act WQ1 apply to the
contract, in the absence of an exemp-
tion. even though the use-or furnish-
ing of nonlabor "items 'may be an Im-
portant element to the furnishing of
the services called for by its terms.
The Act is concerned -with protecting
the labor standards of workers en-
gaged in -performing such contracts.
and Is applicable If the statutory cov-
erage test is met. regardless of the
form In which the contract Is drafted.
The proportion of the labor cost to
the total cost of the contract and the
necessity of furnishing or receiving
tangible nonlabor Items in performing
the contract obligations will be consid-
ered but are not necessarily determi-
native. A procurement that requires
'tangible Items to be supplied to the
Government or the contractor as a
part of the service furnished Is covered
by the Act so long as the facts show
that the contract Is chiefly for serv-
ices, and that the furnishing of tangi-
ble items is of secondary Importance.
' (b) Some examples of covered con-
tracts illustrating these principles may
be helpfuL One such example is a con-
tract for the maintenance and repair
pf typewriters. Such a contract may
require the contractor to furnish .type-
writer parts, v the need arises, in per-
forming the contract services. Since
this does not change the principal pur-
pose of the contract, which is to fur-
nish the maintenance and repair serv-
ices through the use of service employ-
ees, the contract remains subject to
the Act.
(c) Another example of the applica-
tion of the above -principle is a con-
tract for the recurrent supply to a
Government agency of freshly laun-
dered Items on a rental basis. It is
plain from the legislative history that
such a contract Is typical of those in-
tended to be covered by the Act. S.
Kept. 798, 89th Cong.. 1st Sess.. p. 2;
H. Rept. 948. 89th Cong.. 1st Sess.. p.
2. Although tangible items owned by
the contractor are provided on a
rental basis for the use of the Govern-
ment, the service furnished by the
contractor in making them available
foremen use when and where they are
needed, through the use of service em-
ployees who launder and deliver them.
Is the principal purpose of the con-
tract.
(d) Similarly, a contract In the form
of rental of equipment with operators
for the plowing and reseeding of a
park area is a service contract The
Act applies to It because it* principal
purpose is the service of plowing and
reseeding, wnleh will be performed by
service employees, although as a nec-
essary incident the contractor Is re-
quired to furnish equipment. For like
reasons the •contracts for aerial spray-
ing and aerial reconnaissance listed in
14.130 are covered, even though the
use of airplanes, an expensive Item of
equipment. Is essential in performing
such services. In general, contracts
im^toy which the contractor Agrees to
provide the Government with vehicles
or equipment on a rental basis with
drivers or operators for the purpose of
furnishing service* are covered by the
Act. Such contracts are not considered
contracts for •furnishing equipment
within the meaning of the ...
Healey Public Contracts Act. On the
other hand, contracts under which the
contractor provides equipment with
operators for the purpose at construc-
tion of a public building or public
work, such as road resurfacing or dike
repair, even where the work is per-
formed under the supervision of Go\-
emment employees, would be within
the exemption in section 7U> ol the
Act as contracts for construction sub-
ject to the Davis-Bacon Act. (See
14.116.)
(e) Contracts for data collectie „ sur-
veys, computer services, and the like
are within the general coverage of the
Act even though the contractor may
be-required" to furnish such tangible
items as written reports or computer
printouts, since items of this nature
are considered to be of secondary im-
portance to the services which it is the
principal purpose of the contract to
procure. •
(f) Contracts under which the con-
tractor receives tangible Hems from
the Government in return for furnish-
ing services (which Items are in lieu of
or In addition to monetary consider-
ation-granted by either party) are cov-
ered by the Act where the facts
that the furnishing of such
the principal purpose of the >
For example, property removal or*
posal contracts which involve demoli-
tion of buildings or other structures
are subject to the Act when their prin-
cipal purpose Is dismantling and re-
moval (and no further construction ac-
tivity at the site is contemplated).
However, removal or dismantling con-
tracts whose principal purpose is sales
are not covered. So-called "timber
•ales" contracts generally are not sub-
ject to the Act because normally the
services provided under such contracts
are Incidental to the principal purpose
of the contracts. (See also || 4.111
and 4.11«b).>
14.132 Semen and ether teat to to tar-
•wished under a stogie coatnet
If the principal purpose of a con-
tract 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 be-
cause, as a matter of convenience in
procurement, the service specifications
are combined In a single contract doc-
ument with specifications for the pro-
curement of different or unrelated
Items. In such case, the Act would
apply to service specifications
would not. apply to any specif ica^
subject to the'Walsh-Healey Act
the DaviS'Bacon Act. With respect to
contracts which contain separate spec-
ifications for the furnishing of services
and construction activity. see
14.116(0.
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84.133
21
ATTACHMENT B-3
PAGE 21 Of 40
4.IS3 Bcncficiar? of contract Mr?ices.
of printed, reproduced or duplicated
written materials rather than the fur-
nishing of reproduction services
through the use of service employees.
However. In a particular case, the
terms, conditions, and circumstances
of the procurement may be such tha:
the facts would show its purpose to b-
chiefly the furnishing of services (e.g
repair services, typesetting, photoco
pylng. editing, etc.). and where such
services require the use of service em-
ployees the contract would be sub.tec;
to the Act unless excluded therefrorr.
for some other reason.
M 4.1JS— U3»
DCRUCIJIIMG AMOtnrr or CONTRACT
1 4.140 Significance of contract amount.
As set forth in 1 4.104 and in the re
quirements of || 4.6— 4.7, the obliga-
tions of a contractor wittt" respect to
labor standards differ in t»e case of a
covered and nonexempt contract, de-
pending on whether the contract is or
is not in excess of 12.500. Rules for re-
solving questions that may arise as to
whether a contract is or is not in
excess of this figure are set forth in
the following sections.
84.141 Genera] criteria for nwaitirinr
amount
(a) In general, the contract amount
is measured by the consideration
agreed to be paid, whether in money
or other valuable consideration, in
return for the obligations assumed
under .the contract. Thus, even though
a contractor, such as a wrecker enter-
ing into a contract with the Govern-
ment to rate a building on a site which
will remain vacant, may not be enti-
tled to receive any money from the
Government for such work under his
contract or may even agree to pay the
Government in return for the right to
dispose of the salvaged materials, the
contract will be deemed one in excess
of $2.500 if the value of the property
obtained by the contractor, less any-
thing he might pay the Government.
is In excess of such amount. In addi-
tion. concession contracts are consid-
ered to be contracts in excess of $2.500
if the contractor's gross receipts under
the contract may exceed $2.500.
(b) AH bids from the same person on
the same invitation for bids will con-
stitute a single offer, and the total
award to such person will determine
the amount Involved for purposes of
the Act. Where the procurement is
made without formal advertising, in
arriving at the aggregate amount in-
volved. there must be included all
property and services which would
properly be grouped together in a
-------
f 4.|4)(b)
single transaction and which would be
Included to a single advertisement for
bids II the procurement were being ef-
fected by formal advertismg. There-
fore, if an agency procures continuing
services through the Issuance of
monthly purchase orders, the amount
of the contract for' purposes of appli-
cation of the Act is not measured by
the amount of an Individual purchase
order. In such cues, if the continuing
•ervices were procured through formal
advertising, the contract term would
typically be for one year, and the
monthly purchase orders must be
grouped together to determine wheth-
er -the yearly amount may exceed
-$2;500. However, a purchase order for
services •which are not continuing but
iare performed on a one-tune or spo-
radic basis and-which are not per-
formed under a requirements contract
or under the terms of a basic ordering
agreement or similar agreement need
not be equated to a "yearly amount.
'(See |4.142(b).) In addition, where an
Invitation is for cervices in an amount
In excess of $2,500 and bidden are per-
mitted to bid on a portion of the serv-
ices not amounting -to more than
$2,500, the amounts of the contracts
•awarded separately to individual and
unrelated bidden will be measured by
the portions of the services covered by
their respective contracts.
(c) Where a contract Is Issued in an
amount in excess of $3.500 this
amount will govern for purposes of ap-
plication of the Act even though pen-
alty deductions, deductions for prompt
payment, and similar deductions may
reduce the amount actually expended
by the Government to $2.900 or less.
14.J4J Contract* in an Indefinite •mount.
. (a) Every contract subject to this
Act which is Indefinite la amount Is re-
quired to contain the clauses pre-
scribed in f-4.6 for contracts in excess
of $2£00, unless the contracting offi-
cer has definite knowledge in advance
that the contract will not-exceed
$2.500 in any event.
ib) Where contracts or agreements
between a Government agency and
prospective purveyors of services are
negotiated which provide terms and
conditions under which services will be
furnished through the use of service
employees in response to individual
purchase orden or calls. If any, which
may be issued by the agency during
the life of the agreement, these agree-
ments would ordinarily constitute eon-
tracts within the intendment of the
Act under principles judicially estab-
lished in United Biscuit Co. v.. Wirtz.
1? WE Cases 146 (CJLD.C.). a ease
arising under the Walsh-Healey Public
Contracts Act Such a contract, which
may be in the nature of a bilateral
•option contract or ..basic ordering
agreement and not obligate the Gov-
ernment to order any cervices or the
^contractor to furnish any, neverthe-
less governs any procurement of serv-
22
ices that may be made through pur-
chase orden or calls issued under Its
terms. Since the amount of the 'con-
tract is indefinite, it Is subject to the
rule stated in paragraph (a) of this
section. The amount of the contract la
not- determined by the amount of any
individual call or purchase order.
CHAHOXS nr COHTBACT Covnucx
• 4.143 Effect* of changes or extension* of
contract*, generally.
(a) Sometimes an existing service
contract is modified, amended, or ex-
tended in such a manner that the
changed contract Is considered to be a
new contract for purposes of the appli-
cation of the Act's - provisions. The-
general rule .with respect to such con-
tracts -is that, whenever changes af-
fecting .the labor requlremenU are
made in the terms of the contract, the
provisions of the Act and the regula-
Jtions .thereunder will -apply' to the
changed contract in the same manner
and to the same extent as they would
to -a wholly new. contract.' However.
.contract modifications or amendments
(other' tjaan contract extensions) that
.are unrelated to the labor require-
aenU of a •contract will sot be deemed
'to create a new contract tor purposes
of the Act In addition, only signifi-
cant changes related to labor require-
ments will be considered as creating
new* contracts. This limitation on the
application of the Act has been found
to be in accordance with the provi-
sions of section 4(b) of the Act.
(b) Also, whenever the term of an
existing contract Is extended, pursu-
ant to an option clause or otherwise.
so that the contractor furnishes cerv-
ices over an extended period of time.
rather than being granted extra time
to fulfill his original fpttunttm^nt, the
ATTACHMENT B-3
PAGE 22 of 40
c^r
contract extension to considered to be
a new contract for purposes of the ap-
plication of the Act's provisions. All
such "new" contracts as disgusted
above require .the insertion of a new or
revised wage determination in the con-
tract as provided in 1 4-5.
14.144 Contract
affecting
Where a -contract which was origi-
nally issued in an amount not in
excess of $2.500 tt later modified so
that its amount may exceed that
figure, all the provisions of section
2(a) of the Act. and the regulations
thereunder are applicable from the
date of modification to the date of
contract completion. In the event of
such tn^itlflrBttffn. the ffMtfjft4ng of-
ficer will ««^m*>*^*lr KQuect a wage
determination from the Department
of Labor and insert the required eon-
tract clauses and any wage determina-
tion issued Into the contract. In the
event that a contract for services sub-
ject to the Act in excess of *XMO Is
modified so that it -cannot exceed
$2.500. compliance with the provisions
of section 2
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14,146
23
Or- J
PAGE 23 of 40
PERIOD or COVDMGE
4.14S Contract obligation* after award.
federally.
A contractor's obligation to observe
the provisions of the Act arises on the
date the contractor is informed that
•ward of the contract has been made.
and not necessarily on the date of
formal execution. However, the con-
tractor is required to comply with the
provisions of the Act and regulations
thereunder only while the employees
are performing on the contract, pro-
vided the contractor's records moke
clear the period of such performance.
CSee also 14.179.) If employees of the
contractor are required by the con-
tract to complete certain preliminary
training or testing prior to the com*
mencement of the contract services, or
if then is a phase-in period which
mUowi the new contractor's employees
to familiarize themselves with the con-
tract work BO as to provide a smooth
transition between contractors, the
time spent by employees undertaking
such training or phase-to work Is con-
sidered to be hours worked on the con-
tract and must be compensated for
even though the principal contract
services may not commence until a
later date.
•H4.I47-4.IO (Referred)
i EMPLOYEES COTXUD IT THE ACT
4.1SO Employee coverage, generally.
The Act. in section Mb), makes it
clear that its provisions apply general-
ly to all service employees engaged in
performing work on a covered contract
rentered into by the: contractor with
the Federal Government, regardless of
whether, they are the contractor's em-
ployees or those of any subcontractor
under such contract. All service em-
ployees who. on or after the date of
award, are engaged in working on or In
connection with the contract either. In
performing the specific services called
for by Its terms or in performing other
duties necessary to the performance of
the contract, are thus subject to the
Act unless a specific exemption tsee
II 4.115 et sea.) is applicable. All such
employees must be paid wages at a
rate not less than the ••Hiitum* wage
specified under section ttaXl) of the
Fair Labor Standards Act (39 U.S.C.
SOftaXD). as amended. Payment of a
higher minimum monetary wage and
the furnishing of fringe benefits may
be required under the contract, pursu-
ant to the provisions of sections 2
(aXl). (2), and 4«f the Act
14.151 Employee* coveted by .provisioni
of section Ka>. '. .
The provisions of sections 2tal and
c) of the Act prescribe labor stand-
requirements applicable, -except
as otherwise specifically provided, to
every contract in excess of 92,800
which is entered into by the United
States or the District of Columbia for
the principal purpose of furnishing
services to the United States through
the use of service employees. These
provisions apply to all service employ-
ees engaged to the performance of
such a contract or any subcontract
thereunder. The Act. to section Kb)
defines the term "service employee".
The general scope of the definition is
considered In |4.113(b> of this sub-
part.
14.152 Employee* subject to prevailing
compensation provision* of *ectioni
2(a) (1) and (2) and 4(c).
(a) Under sections 2(a) (1) and (2)
And 4
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§4.154
24
ATTACHMENT B-3
PAGE 24 of 40
14.154 Employee* cowed by
K*J (3) and (4).
The safety and health standards of
section 2(aX3> and the notice require-
ments of section 2(a>(4) of the Act (see
14.183) are applicable, in the absence
of a specific exemption, to every serv-
ice employee engaged by a contractor
or subcontractor to furnish services
under a contract subject to section
2(a> of the Act.
14.15$ Employee coverage doe* not
depend on form of employment con-
tract.
The Act, in section 8(b). makes it
plain that the coverage of service em-
ployees depends on whether their
work for the contractor or subcontrac-
tor on a covered contract is that of a
service employee as defined in section
ttb) and not on any contractual rela-
tionship that may be alleged to exist
between the contractor or subcontrac-
tor and such persons. In other words.
any person, except those discussed in
14.156 below, who performs work
called for by a contract or that portion
of a contract subject to the Act is, per
se, a service employee. .Thus, for exam-
ple, a person's status as an "owner-op-
erator" or an "independent contrac-
tor" is immaterial in determining cov-
erage under the Act and all such per-
sons performing the work of service
employees must be compensated In ac-
cordance with the Act's requirements.
I4.1M Employee* in bona fide executive.
•dmlnittntive, or professional capac-
ity-
The term "service employee" as de-
fined in Section 8
of the Act (see f 4.163). the minimum
monetary wage rate specified in the
contract for each of the classes of
service employees for which wage de-
terminations have been made under
section 2(aXl) wfll continue to apply
throughout the period of contract per-
formance. No change In the obligation
of the contractor or subcontractor
with respect to «"'"'"""" monetary
wages will result from the mere fact
that higher or lower wage rates may
be determined to be prevailing for
such employees in the locality after
the award and before completion of
the contract. Such wage determina-
tions are effective for contracts not
yet awarded, as provided in 14.«a).
14.16* Fringe benefit* ander contracts e«-
ceeding SlfttO.
(a) Pursuant to the statutory
scheme provided by sections 2(aX2)
and 4(c) of the Act, every covered con-
tract in excess of $2£00 snail contain a
provision specifying the fringe bene-
fits to be furnished the various classes
of service employees, engaged in the
performance of the contract or any
subcontract thereunder, as determined
by the Secretary or his authorized i
resentative to be prevailing for
employees in the locality or,
collective bargaining agreement ap-
plied to the employees of a predeces-
sor contractor in the same locality, the
various classes of service employees
-------
PAGE 25 of 40
S4.162U)
25
(engaged in the performance of the
contract or any subcontract must be
provided the fringe benefit*. Including
prospective or accrued fringe benefit
increases, provided for In such agree-
ment as a result of arm's-length nego-
tiations. (For a detailed discussion of
section 4(0 of the Act see 14.163.) As
provided by section 2 of the Act,
fringe benefits include medical or hos-
pital care, pensions on retirement or
death, compensation for Injuries or Ill-
ness resulting from occupational activ-
ity, or insurance to provide any of the
foregoing, unemployment benefits, life
insurance, disability and sickness In-
surance, accident insurance, vacation
and holiday :pay.. cost* of apprentice-
ship or other similar programs and
other- bona fide fringe benefits not
otherwise required -by Federal, State,
or local law to be provided by the con-
tractor or subcontractor.
Section 4 is appli-
cable only if the contracting officer
has given both(2>. and.4(c>
must be read to harmony to reflect the
statutory scheme." (& Rept, 92-1131.
92nd Cong.. 2nd Sess. 4.) Therefore.
since section 4(c) refers only to the
predecessor contractor's collective bar-
gaining agreement, the reference to
collective bargaining agreements in
sections 2
applies.regardless of the .amount of
the predecessor contract. (See
H4.141-4.142 for determining con-
tract amount.)
. (e) The operative word* of section
«c> re/er to "contract" not "contrac-
tor". Section 4 Further, since sec-
tions 3(a> And 4(e) must be read in har-
mony to reflect the statutory scheme.
It is clear that the provisions of sec-
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S4.163(e)
26
ATTACHMENT B-3
PAGE 26 of 40
Uon 4(c) apply whenever the Act or
the regulations require that a new
wage determination be Incorporated
into the contract (M Camp. Gen. 401.
404-6(1973)).
Contract reconflpvrations. As a
result of changing priorities, mission
requirements, or other considerations.
contracting agencies may decide to re-
structure their support contracts.
Thus, specific contract requirements
from one contract may be broken out
and placed in a new contract or com-
bined with requirements from other
•ontracts into a consolidated contract.
The protections afforded service em-
ployees under section 4(c) are not lost
or negated because of such contract
reconfigurations, and the predecessor
contractor's collectively bargained
rates follow identifiable contract work
requirements into new or consolidated
contracts, provided that the new or
consolidated contract is for services
which were furnished in the same lo-
cality under a predecessor contract.
See 14.163(1). However, where there is
more than one predecessor contract to
the new or consolidated contract, and
where the predecessor contracts in-
volve the same or similar function^)
of work, using substantially the same
Job classifications, toe predecessor
contract which covers the greater por-
tion of the work In such function^)
shall be deemed to be the predecessor
contract for purposes of section 4(c),
and the collectively bargained wages
and fringe benefits under that con-
tract,-If any. shall be applicable to
such function(s). This limitation on
the application of section 4(c) is neces-
sary .and proper in the public Interest
and Is In accord with the remedial pur-
pose of the Act to protect prevailing
labor standards.
(h) Interruption of contract services.
Other than the requirement that sub-
stantially the same services be fur-
nished, the requirement for 'arm's-
length negotiations and the provision
for variance hearings, the Act does not
impose any other restrictions on the
application of section 4(c). Thus, the
application of section 4(c) is not negat-
ed because the contracting authority
may change and the successor con-
tract Is awarded by a different con-
tracting agency. Also, there is no re-
quirement that the successor contract
commence immediately after the com-
pletion or termination of the predeces-
sor contract, and an Interruption of
contract services does not negate the
application of section 4(c). Contract
services may be Interrupted because
the Government facility is temporarily
closed for renovation, or because a
predecessor defaulted on the contract
or because a bid protest has halted a
contract award requiring the Govern-
ment to perform the services with its
own employees. In all such cases, the
requirements of section 4(c) would
apply to any successor contract which
may be awarded after the temporary
Interruption or hiatus. The basic prin-
ciple in all of the preceding examples
is that successorshlp provisions of sec-
tion 4(c) apply to the full term succes-
sor contract. Therefore, temporary in-
terim contracts, which allow a con-
tracting agency sufficient time to so-
licit bids for a full term contract also
do not negate the application of sec-
tion 4, a
wage determination incorporated in
the contract shall be applicable there-
to regardless of whether the successful
contractor subsequently changes the
place(s) of contract performance.
Similarly, the application of section
4(c) (and any wage determination
Issued pursuant to section 4 are intended to ac-
curately reflect the rates and fringe
benefits set forth in the.predecessor's
collective bargaining agreement. How-
ever, failure, to include in the wage de-
termination any job classification.
wage rate, or fringe benefit encom-
passed In the collective bargaining
agreement does not relieve the succes-
sor contractor of the statutory ^re-
quirement to comply at a ndpfanum
with-the terms of the collective bar-
gaining agreement insofar as wages
and -fringe benefits are concerned.
Since the successor's obligations are
governed by the terms of the collective
bargaining •agreement.-any interpreta-
tion of the wage and fringe benefit
provisions of the collective bargaining
agreement where its provisions are _
clear must be based on the intent of
the parties to the collective bargaining
agreement, provided that such inter-
pretation is not violative of law.
Therefore.-some of the-principles dis-
cussed in II 4.170-4.177 regarding spe-
cific interpretations of the fringe ben-
efit provisions of prevailing wage de-
terminations may not be applicable to
wage determinations issued pursuant
to section 4(c). As provided in section
ataxZ)^ a contractor may satisfy its
fringe benefit obligations under any
wage, determination "by furnishing
any equivalent combinations of fringe
benefits or by making equivalent or
dlffecential payments in cash" in ac-
cordance with the rules.and.regula-
tions set forth in i 4.177 of this Sub-
part.
;
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I 4.165(b)
PAGE 27 Of 40
27
. (b) The Act does not prescribe the
th of the pay period. However, for
; of administration of the Act;
to conform with, practices re-
quired under other statutes that may
be ..applicable to- the employment.
vages and hours worked must be cal-
culated on the basis of a fixed and reg-
ularly recurring workweek of seven
consecutive 24-hour workday periods.
and the records must be kept on this
basis. It is appropriate to use this.
workweek for the pay period. A bi-
weekly or semimonthly, pay period
may, however, be used if advance noti-
fication is given to the affected em-
ployees. A pay period longer than
semimonthly is not recognised as ap-
propriate for service-employees and
wage payments at greater intervals
will, not be considered as constituting
proper payments in compliance with
the Act.
(c) The prevailing rate established
by a wage determination under the
Act-Is a minimum rate. A contractor is
not precluded from paying wage rates
in excess of those determined to be
prevailing in the particular locality.
Nor does the Act affect or require the
changing of any provisions of .union
• • contracts specifying higher monetary
wages or fringe benefits than those
contained in an applicable deteraina-
_Uon. However, if an applicable wage
determination contains a wage or
benefit provision for a class of
employees which is higher
that specified in an existing
union agreement, the determination's
provision must be observed for any
work performed on a contract subject
to that determination.
14.1ft* Wag* pymttntt unit of payment
The -standard by which monetary
wage payments are measured under
the Act is the wage rate per hour. An
hourly wage rate is not. however, the
only unit for payment of wages that
may be used for employees subject to
the Act. Employees may be paid on a
daily, weekly, or other time basis, or
by piece or task rates, so long as the
measure of work and compensation
used, when translated or reduced by
computation to an hourly *asis each
workweek, will provide a rate per hour
that will fulfill the statutory require-
ment. Whatever system of payment is
used, however, must ensure that each
hour of work In performance of the
contract Is compensated at not less
than the required minimum rate. Fail-
ure to pay for certain hours at the re-
quired rate cannot be transformed
into compliance with the Act by real-
locating portions of payments made
for other hours which are in excess of
the specified minimum
1*7 Wage payments -medium of pay-
ment.
The wage payment requirements
under the Act for monetary wages
specified under its provisions will be
satisfied by the timely payment of
such wages to the employee either In
cash or negotiable Instrument payable
at par. Such payment must be made fi-
nally and unconditionally and "free
and clear." Scrip, tokens, credit cards.
''dope checks", coupons, salvage mate-
rial, and similar devices which permit
the employer to retain and prevent
the employee from acquiring control
of money due for the work until some
time after the pay day for the period
In which it was earned, are not proper
mediums of payment under the Act.
If. as Is permissible, they are used as a
convenient device for measuring earn-
ings or allowable deductions during a
single pay period, the employee
cannot be charged with the loss or de-
struction of any of them and the em-
ployer may not, because. the,employee.
has not actually redeemed them.
credit itself with any which remain
outstanding on the pay day .in deter-
mining whether It has met the re-
quirements of the Act. The employer
may not Include the cost of fringe ben-
efits or equivalents furnished as re-
quired under section 2.) The determination of
reasonable cost or fair value will be In
accordance with the Administrator's
regulations under the Fair I*bor
Standards Act, contained to such Part
531 of this title. While employment on
contracts subject to the Act would not
ordinarily Involve situations In which
service employees would receive tips
from third persons, the treatment of
tips for wage purposes In the situa-
tions where this may occur should be
understood For purposes of this Act.
tips may generally be included In.
wages in accordance with the regula-'
tlons under the Fair Labor Standards
Act. contained in Part 531. (See also
|4.6(q) and |4.163(k>.) The general
rule under that Act Is that the amount
paid a tipped employee by his employ-
er' is deemed to be increased on ac-
count of tips' by an -'amount deter-
mined by the employer.-not in excess
of 40 percent of the minimum wage
applicable under section 6 of that Act.
effective January; 1, 1MO. Thus, the
Up credit taken by an employer-sub-
ject to the Service Contract Act may
not exceed 11.31 per hour after De-
cember 31.1980. (See f 4.1«3(k) for ex-
ceptions In section 4 <*) The wage requirements of the
Act will not .be .met where unauthor-
ized deductions, rebates, or refunds
reduce the wage payment made to the
employee below .the minimum
amounts required under the provisions
of -the Act and the 'regulations there-
under, or where the employee fails to
receive such amounts free and clear
Because he "kicks back" directly or in-
directly to the employer or to another
person'for'the''employer's benefit the
whole or pan of the wage delivered to
htm.'Authorised-deductions are limit-
ed"-to Chose required by law, such as
taxes payable by employees required
to-be withheld by the employer and
•mounts due employees which the em-
ployer is required 4y -court order to
pay to anotnec deduction^ Allowable
fortise-reasonable cost or fg|r value .of
.board, lodging, and fadlitief furnished
as:set torth In 14.167; and deductions
of amounts which are authorized to be
paid^to.^hird persons for-the employ-
ee* account and /benefit, pursuant to
bis voluntary assignment or order or a
collective bargaining agreement with
bona fide'representatives of employees
which is applicable to the employer.
Deductions for amounts paid to third
persons on the employee's .account
which are not so authorized or are
contrary to law or from which the con-
tractor, subcontractor or any affiliated
person derives any payment, rebate.
commission, profit, or benefit directly
or indirectly, may not be made If they
cut into 'the wage required to be'paid
under the Act. The principles applied
'in determining the permissibility of
deductions for payments made to
third persons are explained in more
detail in if 531.38-531.40 of this title.
(b) Cott of maintaining and furnish-
ing tfnt/ornu. (l)K the employees are
required to wear uniforms either by
the employer, the nature of the job. or
the Government contract, then the
COSt Of ftimtehlng- >r>/< TT?tlntlln1nf the
uniforms Is deemed to be * business
expense of the employer and such cost
may not be'borne by'the employees to
the extent that to do so would reduce
the -employees* ^compensation below
that required by the Act Since it may
be administratively difficult and bur-
densome for' employers to determine
the actual cost incurred by all employ-
ees fdr ^maintaining their- °own ' uni-
forms, payment In accordance with
the following standards Is -considered
sufficient for the contractor to satisfy
Hs wage obligations under the Act:
- (I) The contractor furnishes all em-
ployees with an adequate number of
uniforms without cost to the employ-
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PAGE 28 of 40
i4.168(b)(IXi)
28
ees or reimburses employees for the
•mutual cost of the uniforms.
' («) • Where uniform -cleaning uid
maintenance Is made the retponslbUity
of the employee, the contractor reim-
burses all employees for-much cleaning
and maintenance at the rate of $3.3$ a
week (or 67 cents a day). Since employ-
ees are generally-required to wear a
clean uniform each day regardless of
the number of hoars the employee may
work -that day, the preceding weekly
amount generally may be reduced to
the stated daOy equivalent but not to
an hourly-equivalent. A contractor may
reimburse employees at a different rate
if the contractor furnishes affirmative
proof as to the actual coat to the em-
ployees of maintaining their uniforms
6Y If a different rate is provided for In a
bona fide«cottecUve bargaining agree-
ment covering the employees working
on the contract.
(2; However, there generally Is no re-
quirement that employees be reim-
bursed for uniform maintenance costs
4n Owte •Instances where the uniforms
furnished are made of "wash and
•wear" materials which may be routine-
ly washed and dried with other per-
sonal garments, and do not generally
require'-dally washing, dry cleaning.
commercial laundering,- or any other
special treatment because of heavy
soiling in work usage or in order to
meet the cleanliness or appearance
standards set by the terms of the Gov-
ernment contract, by the contractor.
by law, or by the nature of the work.
This limitation does not apply where a
different provision has been set forth
on the applicable wage determination.
In the case of wage determinations
issued under section 4(c) of the Act for
successor contracts, the amount estab-
lished by the parties to the-predeces-
sor collective bargaining agreement Is
deemed to be the cost of laundering
wash and wear uniforms.
(c) Stipends, allowances or other
payments made directly to an employ-
ee by a party other than the employer
(such as a stipend for training paid by
the Veterans Administration) are not
part of "wages" and the employer may
not claim credit for such payments
toward its monetary obligations under
the Act.
I4.1C9 Wage payment**
different i
•••rk (abject to
If an employee during a workweek
works In different capacities in the
performance of the contract and two
or more rates of compensation under
section 2 of the Act are applicable to
the classes of work which he or she
performs, the employee must .be paid
the highest of such rates for all hours
worked in the workweek unless it ap-
pears from the employer's records or
other affirmative proof which of such
.hours were included in the periods
spent in etch class of work. The rule is
the same where such an employee Is
employed for a portion of the workr
week,in work not subject to the Act,
for which compensation at a lower
rate would be proper If the employer
by his records or other affirmative
proof, segregated the work-time thus
spent.
• 4.170 Furntehlnc fringe benefit* or
equivalent*.
(a) General Fringe benefits required
under, the Act shall be furnished, sepa-
rate from and in addition to the speci-
fied monetary wages, by the contrac-
tor or subcontractor to the employees
engaged in performance of the con-
tract, as specified in the determination
of the Secretary or his authorized rep-
resentative and prescribed in the con-
tract documents. Section 2(aX2) of the
Act provides that the obligation to
furnish the specified, benefits "may be.
discharged by furnishing any equiva-
lent combinations of fringe benefits or
by making equivalent or differential
payments in cash -under rules and reg-
ulations established by the Secretary."
The governing -rules and regulations
for furnishing such equivalents are set
forth in 14.177 of this Subpart An
employer cannot offset an amount of
monetary wages paid In excess of the
wages required under the determina-
tion in order to satisfy his fringe bene-
fit obligations under the Act. and must
keep appropriate records separately
showing amounts paid for wages and
amounts paid for-fringe benefits.
(b) Meeting the requirement, in gen-
eral The various fringe benefits listed
in the Act and in 14.162
-------
* 4.171 gation.
_ertormed at Federal facilities a.
successor contractor will .utilize the
employees of the*previous contractor
in.the performance of the contract.
The employees typically work at the
same location providing the same sen--
ices to the same clientele over a period
of yean, with periodic, often annual,
changes of employer. The incumbent
contractor,, when bidding on a con-
tract,' must consider his liability for
vacation'benefits Tor those workers in
his employ. If prospective contractors
who pud to employ the same person-
nel-were not required to furnish these
employees with the sam* prevailing
vacation'benefits. It woutt place the
Incumbent-Contractor at£a distinct
competitive disadvantage a* well as de-
nying such employees entitlement to
prevailing vacation benefits.
.
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f 4.173(«X2)
PAGE 30 of 40
30
who has worked for him for 18 months
on regular commercial work and only
for 6 months on a Government service
contract, that employee would be eligi-
ble for the one week vacation since his
total service with the employer adds
up to more than 1 year. Similarly, if a
contractor has 'an 'employee who
worked for 16 months under a janitori-
al service contract at a* particular Fed-
eral base for two different predecessor
contractors, and only 8 months with
the'-present employer, that employee
would also be considered as meeting
the "after one year of service" test and
would thus be eligible for the specified
vacation.
• (3) The "contractor or successor" re-
quirement set forth in paragraph
for an employee's ab-
sence from work Is the primary factor
in determining whether a break in
service occurred.
(1) In cases where employees have
been granted leave with or without
pay by their employer, or are other-
wise absent with permission for such
reasons as sickness or Injury, or other-
wise perform no work on the contract
because of reasons beyond their con-
trol, there would not be a break In
service. Likewise, the absence from
work for a few days, with or without
notice, does not constitute a break In
service, without, a formal .termination
of employment. The following specific
examples are illustrative situations
where it has been determined that a
break in service did not occur
(I) An employee absent for five
months due to illness but employed
continuously for three years.
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PAGE 31 of 40
4.l73(d)(2)
3!
(2) The requirement* for furnishing
data relative to employee hiring dates
In situations where nich employees
worked for "predecessor" contractors
are set forth in i 4.8. However, a con-
tractor is not relieved 'from any obliga-
tion to provide .vacation benefits be-
cause of any difficulty In obtaining
such data.
(e> -Rate, applicable to computation
of vacation benefit*.
(1) If an applicable wage determina-
tion -retires that the hourly wage
rate be increased during the period of
the contract, the rate applicable to the
computation of any required vacation
benefits Is the hourly rate in effect in
the workweek in which the actual paid
vacation is provided or the equivalent
is. paid, as the case may be. and would
not be the average of the two hourly
tales. This rule would not apply to sit-
uations where a wage determination
specified the method ol computation
and the rate to be used.
.,(2) As set forth In 14.172. unless
specified otherwise in an applicable
fringe -benefit determination, service
employees must be furnished the re*
quired amount of fringe-benefits for
all hours paid for up to a 1*"fr*"im of
40 hours per week and 2.080 hours per
year. Thus, an employee on paid vaca-
tion leave would accrue and must be
compensated for any other applicable
ringe benefit* specified in the fringe
'benefit determination, and if any of
the other benefits are furnished in the
form of cash equivalents, such equiva-
lents must be included with the appli-
cable-Hourly wage rate in computing
vacation benefits or a cash equivalent
therefor.'The rules and regulations for
computing cash equivalents are set
forth in i 4.177.
84,174 Meeting requirements for holiday
fringe benefit*.
(a) Determining eligibility for holi'
day benefits—in general
U> Most fringe benefit determina-
tions list a specific number of named
holidays for which payment is re-
quired. Unless specified otherwise in
an applicable determination, an em-
ployee who performs any work during
the workweek in which a named holi-
day occurs is entitled to the holiday
benefit, regardless of whether the
named holiday falls on a Sunday, an-
other day during the workweek on
which 'the employee Is. not normally
scheduled to work, or on the employ-
ee's day off. In addition, holiday bene-
fits cannot be denied because the em-
ployee has not been employed by the
contractor for a designated period
prior to the named holiday or because
employee did not work the day
fore or the day after the holiday,
such qualifications are specifi-
cally included in the determination.
(2) An employee who performs no
work during the workweek in which a
named holiday occurs is generally not
entitled to the holiday benefit. Howev-
er, an employee who performs no work
during the workweek because he is on
paid vacation or sick leave in accord-
ance with the terms of the applicable
fringe benefit determination is enti-
tled to holiday pay or another day off
with pay to substitute for the named
holiday. In addition, an employee who
performs no work during the work-
week because of a layoff does not for-
feit his entitlement to holiday benefits
if the layoff is merely a subterfuge by
the contractor to avoid the payment
of such benefits.
(3) The obligation to furnish holiday
pay for the named holiday may be dis-
charged If the contractor furnishes an-
other day off with pay in accordance
with a plan communicated to the em-
ployees involved: However. In such-in-
stances the holidays named in the
fringe benefit determination are the
reference -points for determining
whether an employee is eligible to re-
ceive holiday benefits. In other words.
if an employee worked in a workweek
in which a listed holiday occurred, the
employee is entitled to pay for that
holiday. Some 'determinations may
provide for a specific number of holi-
days without naming them. In such in-
stances the contractor Is free to select
the holidays to be taken in accordance
with a plan communicated to the em-
ployees involved, and the agreed-upon
holidays are the reference points for
determining whether an employee is
eligible to receive holiday benefits.
(b) Determining eligibility for holi-
day benefit*—neuly hired employee*.
The contractor generally is not re-
quired to compensate a newly hired
employee for the holiday occurring
prior to the hiring of the employee.
However, in the one situation where a
named holiday falls in the first week
of a contract, all employees who work
during the first week would be entitled
to holiday pay for that day. For exam-
ple. If a contract to provide services
for the period January 1 through De-
cember 31 contained a fringe benefit
determination listing New Tear's Day
as a named holiday, and if New Tear's
Day were officially celebrated on Jan-
uary 2 In the year in question because
January 1 fell on a Sunday, employees
hired to begin work on January 3
would be entitled to holiday pay for
New Tear's Day.
(c) Payment of holiday benefits.
(1) A full-time employee who is eligi-
ble to receive payment for a named
holiday must receive a full day's pay
up to 8 hours unless a different stand-
ard is used in the fringe benefit deter-
mination, such as one reflecting collec-
tively bargained holiday benefit re-
quirements issued pursuant to Section
4 Unless a different standard is
used.in the wage determination, a full-
time employee who works on the day
designated as a holiday must be paid.
in addition to the amount he ordinari-
ly-would be entitled to for that day's
work, the cash equivalent of a full-
day's pay up to 8 -hours or be fur-
nished another day off with pay.
'(3) If the fringe benefit determina-
tion lists the employee's birthday as a
paid holiday and that day coincides
with another listed holiday, the con-
tractor may discharge his obligation to
furnish payment-for the second holi-
day by either substituting another day
off with pay with the consent of the
employee, furnishing holiday benefits
Of-an extra day's pay. or if the employ-
ee works on the holiday in question,
furnish holiday benefits of two extra
days'pay.
(4) As stated'ln paragraph
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ATTACHMENT B-3
PAGE 32 of 40
32
maximum -of 40 hours of health and
welfare and/or pension payments in
(bat workweek. If the employee works
more than 32-hours and ajso received 8
hours of holiday pay, the employee is
still only entitled to the maximum of
40 hours of health and welfare and/or
pension payments. .
(Ill) If an employee is off work for
two weeks on vacation and received 80
hours of vacation pay. the employee
must also receive payment for the 80
hours of health and welfare and/or
pension benefits which accrue during
the vacation period.
(iv) An employee entitled to two
weeks paid vacation who instead works
the full 52 weeks in the year, receiving
the full 2.080 hours worth of health
and welfare and/or pension benefits.
would be due an extra 80 hours of va-
cation pay in lieu of actually taking
the vacation; however, such an em-
ployee would not be entitled to have
an additional 80 hours of health and
welfare and/or pension benefits In-
cluded in ills-vacation pay.
(2) A fringe benefit determination
calling for a specified benefit such as
health insurance contemplate* a fixed
and definite contribution *o-a "bona
fide" plan (as that term is defined in
14.171) by an employer on •behalf of
each employee, based on the monetary
cost to -the employer lather than on
Jhe level of benefits provided. There-
fore, in determining compliance with
-Jn applicable fringe benefit determi-
nation, the amount of the employer's
contribution on behalf of each individ-
ual employee governs. Thus, as set
forth in 14.172. if a determination
should require a contribution to a plan
providing a specified fringe' benefit
and that benefit can be obtained for
less than the required contribution, it
would-be necessary for the employer
to make up the difference In cash to
the employee, .or-furnish equivalent
benefits, or a combination thereof.
The following Illustrates the applica-
tion of this principle: A fringe benefit
determination requires a rate of $36.40
per month per employee for a health
insurance plan. The employer obtains
the health insurance coverage speci-
fied at a rate of $20.45 per month for a
single employee. $30.80 for an employ-
ee with spouse..«nd $40.80 .for an em-
ployee with a family. The employer is
required to make up the difference in
cash or equivalent benefits to the first
two rlatm of employees in order to
satisfy the determination, notwith-
standing that coverage for an employ-
ee would be. automatically changed by
the employer if the employee's status
should change (e.g.. single to married)
and notwithstanding that the employ-
ers average contribution per employee
may be equal to or in excess of $36.40
per month.
(3) In determining eligibility for ben-
efits under certain wage determina-
tions containing hours or length of
service requirements (such as having
to work 40 hours in the preceding
month), the contractor must take into
account time spent by employees on
commercial work as well as time spent
on the Government contract. ..
(b) Some fringe benefit determina-
tions specifically provide for health.
and welfare and/or pension benefits In
terms of average cost. Under this con-
cept, a contractor's contributions per
employee to a "bona fide" fringe bene-
fit plan are permitted to vary depend-
ing upon the individual employee's
marital or employment status. Howev-
er, the firm's total contributions for
all service employees enrolled in the
plan must average at least the fringe
benefit determination requirement per
hour per service employee. If the con-
tractor's contributions average less
than the amount .required by-the de-
termination, then the firm must make
up the deficiency by making cash
equivalent payments or equivalent
fringe benefit payments to all service
employees in the plan who worked on
the contract during the payment
period. Where such deficiencies are
made up by means of cash equivalent
payments, the •payments must be
made promptly on the following
payday. The following illustrates the
application of this principle: The de-
termination requires an average con-
tribution of $0.84 an hour. The con-
tractor makes payments to bona fide
fringe benefit plans on a monthly
basis. During a month the firm con-
tributes $15.000 for the service em-
ployees employed on the contract who
are enrolled in the plan, and a total of
20.000 man-hours had been worked by
all service employees during the
month. Accordingly, the firm's aver-
age . cost would have been
$16,000*20.000 hours or $0.75 per
hour, resulting in a deficiency of $0.09
per hour. Therefore, the contractor
owes the service employees in the plan
who worked on the contract during
the month an additional $0.09 an hour
for each hour worked on the contract,
payable on the next regular payday
for wages. Unless otherwise provided
in the applicable wage determination.
contributions made by the employer
for non-service employees may not be
credited toward meeting Service Con-
tract Act fringe benefit obligations.
(c> Employeet not enrolled in or ex-
eluded from participating in fringe
benefit plan*.
(1) Some health and welfare and
pension plans contain eligibility exclu-
sions for certain employees. For exam-
ple, temporary and part-time employ-
ees may .be excluded from participat-
ing in such plans. Also, employees re-
ceiving benefits through participation
in plans of an employer other than
the Government contractor or by a
spouse's employer may be prevented
from receiving Jxnefits from the con-
tractor's plan because of prohibitions
against "double coverage". While such
exclusions do not invalidate an other-
wise bona fide insurance plan, employ-
er contributions to such a plan cannot
be considered to be made on bet]
the excluded employees. _
under fringe benefit determination re-
quirements as described in paragraph
(a>(2) of this section, the employees
excluded from participation in the
health insurance plan must be fur-
nished equivalent bona fide fringe
benefits or be paid a cash equivalent
payment during the period that they
are not eligible to participate in the
plan.
(2) It is not required that al) employ-
ees participating in a fringe benefit
plan be entitled to receive benefits
from that plan at all times. For exam-
ple, under some plans, newly hired em-
ployees who are eligible to participate
in an Insurance plan from their first
day of employment may be prohibited
from receiving benefits from the plan
during a specified "waiting period".
Contributions made on behalf of such
employees would serve to discharge
!he'contractor's obligation to furnish
the fringe benefit However, if no con-
tributions are made for such employ-
ees, no credit may be taken toward the
contractor's fringe benefit obligations.
(d) Payment of health a*d welfare
and pension benefits.
(1) Health and welfare and/or pen-
sion, payments to a "bona fide" insur-
ance plan or trust program may be
made on a periodic payment
which Is not leas often than
.However, where fringe benefit
minations contemplate a fixed contri-
bution on behalf of each employee.
and a contractor exercises his option
to make hourly cash equivalent or dif-
ferential payments, such . payments
must be made .promptly on the regular
payday for wages. (See 14.165.)
•<2) The rules and regulations for fur-
nishing health and welfare and pen-
sion benefits to temporary and part-
time • employees are discussed in
14.176.
(3) The rules and regulations for fur-
nishing equivalent fringe benefits or
cash equivalents in lieu of health and
welfare and pension benefits are 'dis-
cussed In.14.177. . .
14.171 Payncat of fringe benefit* to tem-
porary and part-time malo/ccs.
(a) As set forth in f 4.1«5(aX2), the
Act makes no distinction, with respect
to Its compensation provisions, be-
tween temporary, part-time, and full-
time employees. Accordingly, in the
•absence tff express limitations, the
provisions of an applicable fringe ben-
efit determination apply to all tempo-
rary and part-time service employees
•engaged In covered work. However, in
general, such temporary and
•employees are 'only entitled
amount of the fringe benefits i
In an •applicable determination which
Is proportionate to the amount of time
•spent in covered work. The application
of these principles may be illustrated
by the following examples:
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S4.l7«iXD
ATTACHMENT B-3
PAGE 33 of 40
33
fl) Assuming the paid vacation (or
full-time employees la one week of 40
hours, a pan-time.employee working a
regularly scheduled workweek of 16
hours is entitled to If noun of paid
vacation time or Its equivalent each
year, if all other qualifications are
•met.
(2) In the case «f holidays, a pan-
time employee working a regularly
•scheduled workweek of 16 hours would
be entitled to two-fifths of the holiday
pay due full-time employees. It is im-
material whether or not the holiday
falls on a normal workday of the part-
time employee. Except as provided m
14.174. a temporary or casual em-
ployee hired during a holiday week.
"but after the holiday, would be due no
holiday benefits for that week.
(3) Holiday or vacation pay obliga-
tions to temporary and pan-time em-
ployees working an Irregular schedule
of hours may be discharged by paying
sxich employees * proportion*;of the
holiday or vacation benefits due full-
time-employees-based on the number
of hours-each such employee worked
in .(he workweek prior to the work-
week in which the holiday occurs or.
. with respect to vacations, the number
of hours which the employee worked
In the year preceding the employee's
anniversary date of employment. For
example: • *
i (I) An employee - works 10 .'hours
during the week preceding July 4, a
designated holiday. The employee is
entitled to 10/40 of the holiday pay to
which » full-time employee Is entitled
-(Le., 10/40 times 8«2 noun holiday
pay).
(11) A part-time employee works 520
hours during the 12 months preceding
the employee's anniversary date. Since
the-typical number of nonovertlme
hours tn a'year of work Is 2.080. if a
full-time employee would be entitled
to one week (40 hours) paid vacation
under the applicable fringe benefit de-
termination, then the part-time -em-
ployee would be entitled to 320/2,080
times 40-10 hours paid vacation.
(4) A part-time employee working a
tegularly scheduled workweek of 20
hours would be entitled to one-half of
the health and welfare anoVor pension
benefits specified In th*, applicable
fringe benefit determination. Thus, if
the determination requires $36.40 per
•month for health insurance, the con-
tractor could discharge his obligation
towards the employee In question by
providing a health insurance policy
costing $18.20 per month.
(b> A contractor's obligation to fur-
nish the specified fringe benefits to
temporary and part-time employees
may be discharged by furnishing
equivalent benefits, cash equivalents.
a combination thereof in accord-
* with the rules and regulations set
forth in 14.177.
14.177 DtochaffiRC fringe bowfit obliga-
tion* by equivalent i
(a) In. general
(1) Section 2(aK2> of the Act. which
provides for fringe benefits that are
separate from and in addition to the
monetary compensation required
under section 2 of this section.
(3) Where fringe benefits are stated
as a percentage of the monetary rate,
•the hourly oath equivalent is deter-
mined by multiplying the stated per-
centage by the employees* regular or
baste (l.e, wage determination) rate of
pay. whichever is greater. For exam-
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S4.I?7(c)(3)
ATTACHMENT B-3
PAGE 34 of 40
pie. If the determination calls for m 5
percent pension fund payment and the
employee is paid a monetary rate of
$4.40 an hour, or if the employee
earns M.SO an hour on a piece-work
bast* in a particular workweek, the
cash equivalent of that payment
would be 22 tt cents an hour.
<4) !f the determination lists a par-
ticular fringe benefit in such terms as
$8 a week, the hourly cash equivalent
is determined by dividing the amount
stated in the determination by the
number of working hours to which the
•amount is attributable. For example, if
a determination lists a fringe benefit
as "pension—$8 a week", and does not
specify weekly hours, the hourly cash
equivalent is 20 cents per hour. i.e.. $8
divided by 40, the standard number of
non-overtime working hours in a week.
(5) In determining the hourly cash
equivalent of those fringe benefits
which are not stated in the determina-
tion in terms of a cash amount, but
are stated, for example, as "nine paid
holidays per year" or "1 week paid va-
cation after one year of service", the
employee's hourly monetary rate of
pay is multiplied by the number of
hours making up the paid holidays or
vacation. Unless the hours content-
• plated in the fringe benefit are speci-
fied in the determination, a standard
8-hour day and 40-hour week la consid-
ered applicable. The total annual cost
' so determined is divided by 2.080, the
" Ttandard number of non-overtime
hours, in. a year of work, to arrive at
the hourly cash equivalent. This prin-
ciple may be illustrated by the follow-
ing examples:
If a particular determination lists
as a fringe benefit "nine holidays per
.year" and the employee's hourly rate
of pay is 14.50.. the 84.50 Is multiplied
by 72 (9 days of 8 hours each) and the
result. 8324. is then divided by 2.080 to
arrive at the hourly cash equivalent,
$0.1557 an hour. See 14.174(cX4).
(11) if the determination requires
"one week paid vacation after one Tear
of service", and the employee's hourly
rate of pay is $4.50. the 84JO is multi-
plied by 40 and the remit, 8180.00. Is
then divided by 2.080 to arrive at the
hourly cash equivalent. 90.0865 an
hour.
(fl> Where an employer elects to pay
an hourly cash equivalent in lieu of a
paid vacation, which Is computed in
accordance with paragraph (cX5) of
this section, such payments need com-
mence only after the employee has
satisfied the "after one year of serv-
, ice" requirement However, should the
employee terminate employment for
any reason before receiving the full
amount of vested vacation benefits
due. the employee must be paid the
full amount of any difference remain-
Ing as the final cash payment. For ex-
ample, an employee becomes eligible
for a week's vacation pay on March 1.
'The "employer elects to pay this em-
ployee an hourly cash equivalent be-
ginning that date; the employee termi-
nates employment on March 31. Ac-
cordingly, .as this employee has re-
ceived only vs* of the vacation pay to
which he/she is entitled, the employee
is due the remaining 'V,» upon termi-
nation. As set forth In |4.173(e). the
rate applicable to the computation of
cash equivalents tor vacation benefits
Is the hourly wage rate in effect at the
time such equivalent payments are ac-
tually made. .
(d) Furnishing a, combination of
equivalent fringe benefits and cash
payment*. Fringe benefit obligations
may be discharged by furnishing any
combination of cash or fringe benefits
.as Illustrated In the preceding para-
jraptu of this section, in .monetary
amounts the total of which (s/equiva-
lent, under the rules therein stsiied. to
the determined fringe benefits speci-
fied in the contract For example, if an
applicable determination specifies that
30 cents per hour is to be paid into a
pension fund, this fringe benefit obli-
•gation will-be -deemed.to be met If tn-
'stead. hospitalteation benefits costing
15 cents an hour and a cash equivalent
payment of 5 cents an hour are provid-
ed. ' • - ,
(e) effect of equivalent in comput-
ing overtime pay. Section 6 of the Act
excludes from the regular or basic
hourly .rate of an employee, for pur-
poses of determining the overtime pay
to which .the employee is entitled
under any other Federal law. those
fringe • benefit payments - computed
under the Act which are excluded
from the regular rate under the Fair
Labor Standards Act by provisions of
section 7
-------
S 4.179
35
i -TU-U-... i s~^
PAGE 35 of 40
In connection with the contract, all
oyees working in the establish-
or department where such cov-
wort 4s perf onned shall be pre-
sumed to have worked no or la connec-
tion with the contract during the
period of fts performance, unless af-
firmative proof establishing the con-
trary is presented. Similarly, in the ab-
sence of such records, an employee
performing any work on or in connec-
tion with the contract in a workweek
shall be presumed to have continued
to perform such work throughout the
workweek, unless affirmative proof es-
tablishing the contrary is presented.
Even where a contractor can segregate
Government from non-Government
work, it is necessary that the contrac-
tor comply with the requirements of
section 6(e) of the FLSA discussed in
Ovamcr PAT or COVKKED EMPLOYEES
14.180 Overtime pay—In general.
The Act does not provide for com-
pensation of covered employees at pre-
mium rates for overtime hours of
.work. Section 6 recognises, however.
that other Federal laws may require
such compensation to be paid to em-
ployees working on or in connection
frith contracts subject to the Act (see
61> and prescribes, for purposes of
laws, the manner in which fringe
fits furnished pursuant to the Act
shall be treated in computing such
overtime compensation as follows: "In
determining any overtime pay to
which such service employees are enti-
tled under any Federal law, the regu-
lar or basic hourly rate of such an em-
ployee shall not Include any fringe
benefit payments computed bereunder
which are excluded from the regular
rate under the Fair Labor Standards
Act by provisions of section 7(d) Cnow
section 7 of this part
and Illustrated in 14.182.
14,181 Overtime pay pcwriairas «f other
Art*.
(a) Fair Labor Standard* Act. Al-
though provision hits not been made
for insertion in Government contracts
stipulations requiring compliance
the overtime provisions of the
Labor Standards Act. contractors
and subcontractors performing con-
tracts subject to the McNamara-
O'Hara Service Contract Act may be
required to compensate their employ-
ees working on -or in connection with
such contracts for overtime work pur-
suant to the overtime pay standards of
the Fair Labor Standards Act. This is
true with respect to employees .-en-
gaged in Interstate or foreign com-
merce or in the production of gooos
for such commerce (including occupa-
tions and processes closely related and
directly essential to such production)
and employees employed in enter-
prises which are so engaged, subject to
the definitions and exceptions provid-
ed in such Act. Such employees,
except as-otherwise apedfically provid-
ed in such Act. must receive overtime
compensation at a rate of not less
than IK.times their regular rate of
pay for all hours worked in excess of
the applicable standard In a workweek.
See Part 778 of this title. However; the-
Fair Labor Standards Act provides no
overtime pay requirements tor em-
ployees, not •within-such interstate
commerce coverage of the Act, who
are subject to its "*'"<"""« wage provi-
sions only -by virtue of the provisions
of section 6 Contract Work Hour* and Safety
Standaxdt Act < IV The Contract Work
Hours and Safety Standards Act (40
TJJB.C. 327-332) applies generally to
Government contracts, including serv-
ice contracts in excess of 82.500. which
may require or Involve the employ-
ment i of laborers.. «nd mechanics.
Guards, watchmen, -art** m«Tiy other
classes of-service employees are labor-
ers or mechanics prithln the meaning
Of such Act However, employees ren-
dering only professional services,
seamen, and as a general rule those
whose work is only clerical or supervi-
sory or nonmaaual in nature, are not
deemed laborers or mechanics Jor pur-
poses of the Act The wages of every
laborer or-mechanic for performance
of work on such contracts must la-
elude compensation at a rate not less
than 1H times the employee's baste
rate of pay for all hours worked in any
i of 40. Exemptions
are provided for certain transportation
and ftftmfnunif%tions contracts* coo-
tracts for the purchase of supplies or-
dinarily available In the open market.
and work, required to be done In ac-
cordance with the provisions of the
Walsh-Healey Act
(2) Regulations concerning this Act
are contained in 29 CFR Part 5 which
permit overtime pay to be computed in
the same firm?"** as *1Tv*fT **>• Fair
Labor Standards Act
(0 WaUh-Healetf PvbUc Contract*
Act As pointed out in 14417. while
some Government contracts may be
subject both to the IfcNamara-O'Hara
Service Contract Act and to the
Walsh-Healey Public Contracts Act
the employees performing work on the
contract which Is subject to the latter
Act are, when so engaged, exempt
from the provisions of the former.
They are. however, subject to the
overtime provisions of the Walsh-
Healey Act If, in any workweek, any of
the work performed for the employer
Is subject to such Act and if. in such
.workweek, the total hours worked by
the employee for the employer
(whether wholly or only partly on
such work) exceed 40 hours in the
workweek. In any such workweek the
Walsh-Healey Act requires payment of
overtime compensation at a rate not
less than IV* times the employee's
basic rate for such weekly overtime
hours. The overtime pay provisions of
the Walsh-Healey Act are discussed in
greater detail in 41 CFR Part 50-201.
(48 PR «7S2, Oct. 27. 1983, ai amended at
SI PR 12265. Apr. 9. 19863
6 4.162 Overtime pay of service employees
entitled to frint* beneflta.
Reference is made in |4.180 to the
rules prescribed by section 0 of the Act
which permit exclusion of certain
fringe benefits and equivalents provid-
ed pursuant to section 2(aX2) of the
Act from the regular or basic rate of
pay when computing overtime com-
pensation of a service employee under
the provisions of any other Federal
law. As provided in 14.177. not only
those fringe benefits excludable under
section 8 as benefits determined and
specified under section 2(a$(2). but
also equivalent fringe benefits and
cash payments furnished In I$u of the
specified benefits may be excluded
from the regular or basic rate of such
an employee. The application of this
rule may be illustrated by the follow-
ing examples:
(a) The A company pays a service
employee 84.50 an hour in cash under
a wage determination which requires a
monetary rate of not less than $4 and
a fringe benefit contribution of SO
cents which would qualify for exclu-
sion from the regular rate under sec-
tion 7(e) of the Fair Labor Standards
Act The contractor pays the 50 cents
in cash because he made no contribu-
tions for fringe benefits specified in
the determination and the contract.
Overtime *-"T"*Ti*frn in
would be computed on a regular or
bask rate of 84 an hour.
(b) The B company has for some
time been paying 84£5 an hour to a
service employee as his basic cash
wage plus 25 cents an hour as a contri-
bution to a welfare and pension plan,
which contribution qualifies for exclu-
sion from the regular rate under the
Fair Labor Standards Act For per-
formance of work under a contract
subject to the Act a monetary rate of
84 and a fringe benefit contribution of
SO cents (also qualifying for such ex-
clusion) are specified because they are
found to be prevailing for such em-
ployees In the locality. The contractor
may credit the 25 cent. welfare and
pension contribution toward the dis-
charge of his fringe benefit obligation
under the contract but must also make
an additional contribution of 25 cents
for the specified or equivalent fringe
benefits or pay the employee an addi-
tional 25 cents in cash. These contri-
butions or equivalent payments may
-------
f 4.182(b)
36
ATTACHMENT B-3
PAGE 36 of 40
be excluded from the employee's regu-
lar rate which remains $4.25. the rate
agreed upon as the basic cash wage.
(c) The C company has been paying
14 an hour as Its basic cash wage on
which the lino has been computing
overtime compensation. For perform-
ance of work on a contract subject to
the Act the same rate of monetary
wages and a fringe benefit contribu-
tion of SO cents an hour (Qualifying
for exclusion from the regular rate
under the Fair Labor Standards Act)
are specified in accordance with a de-
termination that these are the mone-
tary wages and fringe benefits prevail-
ing for such employees in the locality.
The contractor is required to continue
to pay at least $4 an hour in monetary
wages and at least this amount must
be included in the employee's regular
or basic rate for overtime purposes
under applicable Federal law. The
fringe benefit obligation under the
contract would be discharged If SO
cents of the contributions for fringe
benefits were for the fringe benefits
specified in the contract or equivalent
benefits as defined in 14.177. The
company may exclude such fringe ben-
efit contributions from the regular or
basic rate of pay of the service em-
ployee in computing overtime pay due.
NOTICE TO &MFLOYXXS
S 4.183 Employee* mint be notified of
compeiuation required.
The Act, in section 2. A notice
form (WH Publication 1313 and any
applicable wage determination) pro-
vided by the Wage and Hour Division
is to be used for this purpose. It may
be delivered to the employee or posted
as stated in 14.184.
14.184 Porting of Mtfea,
Posting of the notice provided by
the Wage and Hour Division shall be
in a prominent and accessible place at
the worksite, as required by |4.«Ke).
The display of the notice In a place
where it may be seen by employees
performing on the contract will satisfy
•the requirement that it be in a "promi-
nent and accessible place". Should dis-
play be necessary at more than one
site, in order to assure that it is seen
by such employees, additional copies
of the poster may be obtained without
cost from the Division. The contractor
or subcontractor is required to notify
•each employee of the compensation
due or attach to the poster any appli-
cable wage determination specified in
the contract listing all minimum mon-
etary wages and fringe benefits to be
paid or furnished to the classes of
service employees performing on the
contract.
RECORDS
• 4.185 Recordkeepinf requirements.
The records which a contractor or
subcontractor is required to keep con-
cerning employment of employees sub-
ject to the Act are specified in I 4.6(g)
of Subpart A of this part. They are re-
quired to be maintained for 3 years
from the completion of the work, and
must be made available for inspection
and transcription by authorized repre-
sentatives of the Administrator. Such
records must be kept for each service
employee performing work under the
contract, for- each- workweekr during
the performance of the contract. If
the required records are not separate-
ly kept for the service employees per-
forming on the contract, it will be pre-
sumed, in the absence of affirmative
proof to the contrary, that all service
employees in the department or estab-
lishment where the contract was per-
formed were engaged In covered work
during the period of performance.
(See 14.179.)
» 4.186 (R**erred]
Subpart I—Enforcement
8 4.187 Recovery of underpayment!.
(a) The Act, in section 3(a), provides
that any violations of any of the con-
tract stipulations required by sections
2. 2(aX2), or 2(b) of the Act.
shall render the party responsible
liable for the amount of any deduc-
tions, rebates, refunds, or underpay-'
ments (which includes non-payment)
of compensation due to any employee
engaged in the performance of the
contract. So much of the accrued pay-
ments due either on the contract or on
any other contract (whether subject to
the Service Contract Act or not) be-
tween the same contractor and the
Government may be withheld in a de-
posit fund as is necessary to pay the
employees. In the case of require-
ments-type contracts, it is the con-
tracting agency, and not the using
agencies, which has the responsibility
for complying with a withholding re-
quest by the Secretary or authorized
representative. The Act further pro-
vides that on order of the Secretary
(or authorized representatives), any
compensation which the head of the
Federal agency or the Secretary has
found to be due shall be paid directly
to the underpaid employees from any
accrued payments withheld.. In order
to effectuate the effident'adminlstra-
tlon of this provision of the Act; such
withheld funds •hall be transferred to
the Department of Labor for disburse-
ment to the underpaid employees on
order of the Secretary or his or her.
authorised representatives, an Admin-
istrative Law Judge, or the Board of
Service Contract Appeals, and are not
paid directly to such
contracting agency without
press prior consent of the Department
of Labor. (See Decision of the Comp-
troller General. B-170784. February
17, 1971.) It is mandatory for a con-
tracting officer to adhere to a request
from the Department of Labor to
withhold funds where such funds are
available. (See Decision of the Comp-
troller General, B-109257, October 14,
1952, arising under the Walsh-Healey
Act.) Contract funds which are or may
become due a contractor under any
contract with the United States mat-
be withheld prior to the institution of
administrative proceedings by the Sec-
retary. (.McCaaland v. U.S. Postal Sen-
ice, 82 CCH Labor Cases f 33,607 (N.D.
N.Y. 1977); G & H Machinery Co. v.
Donovan, 96 CCH Labor Cases 134,354
(S.D. m. 1982).)
(b) Priority to withheld funds. The
Comptroller General has afforded em-
ployee wage claims priority over an In-
ternal Revenue Service levy for unpaid
taxes. (See Decisions of the Comptrol-
ler General. B-170784. February 17,
1971: B-189137. August 1, 1977; 56
Comp. Gen. 499 (1977): 55 Comp. Gen.
744 (1976). arising under the Davis-
Bacon Act: B-178198. August 30. 1973;
B-181460. May 25.1967.)
(1) As the Comptroller General has
stated, "ttlhe legislative histor
these labor statutes [Sen-ice
Act and Contract Work Hoi
Safety Standards Act. 41 U.S.C. 327. et
teg.} disclose a progressive tendency to
extend a more liberal interpretation
and construction In successive enact-
ments with regard to worker's bene-
fits, recovery and repayment of wage
underpayments. Further, ss remedial
legislation, it is axiomatic that they
are to be liberally construed". (Deci-
sion of the Comptroller General. B-
170784. February 17.1971.)
(2) Since section 3(a) of the Act pro-
vides that accrued contract funds
withheld to pay employees wages must
be held in a deposit fund, it is the posi-
tion of the Department of Labor that
monies so held may not be used or set.
aside for agency reprocurement costs.
To hold otherwise would be inequita-
ble and contrary to public policy, since
the employees -have performed work
from which the Government has re-
ceived the benefit (see National Surety
Corporation v. O£, 132 Ct. Cl. 724.
728. 135 F. Supp. 381 (1955), cert.
denied. 350 U.S. 902). and to give con-
tracting agency reprocurement claims
priority would be to require employees
to pay for the breach of contract be-
tween the employer and the agency.
The Comptroller General has sanc-
tioned priority being afforded
underpayments over the repr
ment costs of the contracting
following a contractor's default oT
m
-------
4.187(b)(3)
PAGE 37 of 40
37
without regard to when the competing
claims were raised. See Decisions of
the Comptroller General. B-161460,
y 25. 1967; B-189137. August 1.
1977.
(4) Wages due workers underpaid on
the contract have priority over any as-
signee of the contractor, including as-
signments made under the Assignment
of Claims Act. 31 U.S.C. 203. 41 UJS.C.
IS, to funds withheld under the con-
tract, since an assignee can acquire no
greater rights to withheld funds than
the assignor has in the absence of an
assignment. See Modern Industrial
Bank v. U.S., 101 Ct. Cl. 808 (1944);
Royal Indemnity Co. v. United States.
178 Ct. Cl. 46, 371 F. 2d 462 (1967),
cert, denied. 389 U.S. 833; Newark In-
surance Co. v. U.S., 149 Ct. Cl. 170, 181
F. Supp. 246 (1960); Henningsen v.
United States fidelity and Guaranty
Company. 208 U.S. 404 (1908). When
employees have been underpaid, the
assignor has no right to assign funds
since the assignor has no property
rights to amounts withheld from the
contract to cover underpayments of
workers which constitute a violation of
the law and the terms, conditions, and
obligations under the contract. (Deci-
sion of the Comptroller General, B-
164881, August 14. 1968; B-178198,
August 30. 1973; 56 Comp. Oen. 499
(1977); 5$ Comp. Oen. 744 (1976): The
National City Bank of EvansviUe v.
United State*, 143 Ct. CL 154. 163 F.
>. 846 (1958); National Surety Cor-
ration v. United States, 132 Ct. Cl.
13S F. Supp. 381 (1955). cert.
denied. 350 U.S. 902.)
(5) The Comptroller General, recog-
nizing that unpaid laborers have an
equitable right to be paid from eon-
tract retainages. has also held that
wage underpayments under the Act
have priority over any claim by the
trustee in bankruptcy. 56 Comp. Oen.
499 (1977). citing fearlman v. Reliance
Insurance Company, 371 OJJ. 132
(1962); Hodden v. United State*, 132
Ct Cl. 529 (1955). in which the courts
gave priority to sureties who had paid
unpaid laborer* over the trustee in
bankruptcy.
(c> Section S(b) of the Act provide*
that if the accrued payment* withheld
under the terms of the contract are in-
sufficient to reimburse aD service em-
ployees with respect to wbom there
has been a failure to pay the compen-
sation required pursuant to the Act,
the United States may bring action
against the contractor, subcontractor,
or any sureties la any court of compe-
tent jurisdiction to recover the re-
maining amount of underpayments.
The Service Contract Act is not sub-
ject to the statute of limitations in the
Portal to Portal Act. 29 U.S.C. 255.
and contains no prescribed period
within which such an action must be
it has therefore been held
the general period of six yean
Ibed by 28 U.S.C. 2415 applies to
actions. United States of America
v. Deluxe Cleaners and Laundry, Inc.,
511 F. 3d 929 (C.A. 4. 1975). Any sums
thus recovered by the United States
shall be held in the deposit fund and
shall be paid, on the order of the Sec-
retary, directly to the underpaid em-
ployees. Any sum not paid to an em-
ployee because of Inability to do so
within 3 years shall be covered Into
the Treasury of the United States as
mty»ii^p»f»ii5 receipts.
(d) Releases or waivers executed by
employees for unpaid wages and fringe
benefits due them are without legal
effect. As stated by the Supreme
Court In Brooklyn Savings Bank v.
O'Neii. 324 U.S. 697, 704. (1945). arts-.
ing under the Fair Labor Standards
Act:
"Where a private rifbt Is granted ID the
public interest to effectuate • legislative
policy, waiver of » right so charged or col-
ored with the public interest will oot.be al-
lowed where It would thwart the legislative
policy which It ww dotsned to effectuate."
See also SchuUe, Inc. v. Oanoi, 328
U.S. 108 (1946); United States v.-
Morlev Construction Company. 98 F.
3d 781 (C.A. 2, 1938), cert, denied. 805
UA 651.
Further, as noted above, monies not
paid to employees-to whom they are'
due because of violation are covered
into the U.S. Treasury as provided by
section 5
-------
f 4.187(e)(5)
ALJ, PC-1177. June IS. 1973;Vome* B.
West, Decision of the ALJ. SCA 397-
398, November 17. 1975; Metropolitan
Rehabilitation Corp.. WAS Case No.
78-25. August 2, 1979: Fry Brothers
Corp.. WAS Case No. 76-6, June U.
1977.
(f) The procedures for a contractor
or subcontractor to dispute findings
regarding violations of the Act, includ-
ing back wage liability or the disposi-
tion of funds withheld by the agency
for such liability, are contained In
Parts 6 and 8 of this Title. Appeals in
such matters have not been delegated
to the contracting agencies and such
matters cannot be appealed under the
disputes clause in the contractor's con-
tract.
(g) While the Act provides that
action may be brought against a
surety to recover underpayments of
compensation, there is no statutory
provision requiring that contractors
furnish either payment or perform-
ance bonds before an award can be
made. The courts have held, however,
that when such a bond has been given.
including one denominated as a per-
formance rather than payment bond.
and such a bond guarantees that the
principal shall fulfill "all the under-
takings, covenants, terms, conditions.
and agreements" of the contract, or
similar words to the same effect, the
surety-guarantor is jointly liable for
underpayments by the contractor of
the wages and fringe benefits required
by the Act up to the amount of the
bond. U.S. v. Powers Building Mainte-
nance Co.. 366 F. Supp. 819 (W.D.
Okla. 1972); U.S. v. Gillespie, 72 CCH
Labor Cases 133,986 (C.D. Cal. 1973)
U.S. v. Glens Falls Insurance Co., 279
F. Supp. 236 (E.D. Term. 1967): United
States v. Hudyins-Dtee Co., 83 F. Supp.
593
-------
f 4.188(b)(4)
39
ATTACHMENT B-3
PAGE 39 Of 40
Inc.. Decision of the ALJ. SCA
April 10. 1974; Mclaughlin
Inc., Decision of the ALJ.
SCA 362-365. November 5, 1975. Ad-
ministrator, March 38, 1976; Able
Building & Maintenance A Service
Co.. Decision of the ALJ. SCA 389-390.
May 29. 1975, Assistant Secretary, Jan-
uary 13. 1976; Aarid Van Lines, Inc.,
Decision of the Administrator. SCA
423-425, May 13,1977.
(5) Furthermore, a contractor
cannot be relieved from debarment by
attempting to shift his/her responsi-
bility to subordinate employees. Secu-
rity Systems, Inc., Decision of the ALJ.
SCA 774-775. April 10, 1978: Ventila-
tion A Cleaning Engineers, Inc., Deci-
sion of the Secretary. SCA 176. Sep-
tember 27. 1974; Ernest Roman, Deci-
sion of the Secretary. SCA 275. May 6.
1977. As the Comptroller General has
stated in considering debarment under
the Davis-Bacon Act. "(nlegllgence of
the employer to instruct his employ-
ees as to the proper method of per-
forming his work or to aee that the
employee obeys his instructions ren-
ders the employer liable for injuries to
third parties resulting
therefrom. * * * The employer will be
liable for acts of his employee within
. the scope Of the employment regard-
' less of whether the acts were express-
ly or impUedly
• • Willful and mali-
i acts of the employee are imputa-
• to the employer under the doctrine
respondeat superior although they
might not have been consented to or
expressly authorized or ratified by the
.employer." {Decision of the Comptrol-
ler General. B-145608, August 1.1961.)
(6) Negligence per~se~ddes"nd£ consti-
tute unusual circumstances. Relief on
no basis other than negligence would
render the effect of section 5ah Oarment Co., Inc., Decision
of the Hearing Examiner. PC-632.
August 9,1957).
(2} Nor is Interest determined by
ownership alone. A debarred person
will also be deemed to have a "sub-
stantial Interest" in a firm if such
person has participated in contract ne-
gotiations. Is a signatory to a contract.
or has the authority to establish, con-
trol, or manage the contract perform-
ance and/or the labor policies of a
/inn. A "substantial Interest" may also
be deemed to exist, in other circum-
stances, after consideration of the
facts of the IndMBual case. Factors to
be examined include, among others.
snaring of common premises or facili-
ties, occupying any position such as
manager, supervisor, or consultant to.
any such entity, whether compensated
on a . salary, bonus, fee, dividend.
profit-sharing, or other basis of remu-
neration, including indirect compensa-
tion by virtue of family relationships
or otherwise. A firm will be particular-
ly closely examined where there has
been an attempt to sever an associa-
tion with a debarred firm or where the
firm was formed by a person previous-
ly affiliated with the debarred firm or
a relative of the debarred person.
(3) Firms with such identity of Inter-
est with a debarred person or firm will
be placed on the debarred bidders list
after the determination is made pursu-
ant to procedures in 14.12 and Parts 6
.and 8 of this title. Where a determina-
tion of such "substantial Interest" is
made after the Initiation of the debar-
ment period, contracting agencies are
to terminate any contract with.such
firm entered Into after the initiation
of the original debarment period since
all persons or firms in which the de-
barred person or firm has a substan*
' tlal interest were also Ineligible to re-
ceive Government contracts from the
date of publication of the violating
person's or firm's name on the de-
barred bidders list.
14.189 Administrative proceed inn relat-
ing to enforcement of labor «tand*rdi.
The Secretary is authorized pursu-
ant to the provisions of section 4 of the Act. the Secretary's
findings of fact after notice and hear-
ing are conclusive upon all agencies of
the United States and. if supported by
the preponderance of the evidence,
conclusive in any court of the United
States, without a trial de novo. United
States v. Powers Building Mainte-
nance Co., 336 F. Supp. 819 (W.D.
Okla. 1972). Rules of practice for ad-
ministrative proceedings are set forth
in Parts 6 and 8 of this Title.
• 4.190 Contract e*nceJUUon.^
Any employer, employee, labor
or trade organization, contracting
agency, or other Interested person or
organization may report to any office
.of the Wage and Hour Division (or to
any office of the Occupational Safety
-------
f 4.191W
40
ATTACHMENT B-3
PAGE 40 OP 40
aud Health' Administration. In In-
stances Involving the safety and
health provisions), a violation, or ap-
parent violation, of the Act, or of any
of the rules or regulations prescribed
thereunder. Such offices are also avail-
able to assist or provide information to
contractors or subcontractors desiring
to insure that their practices are in
compliance with the Act. Information
furnished is treated confidentially. It
is the policy of the Department of
Labor to protect the Identity of its
confidential sources and to prevent an
unwarranted Invasion of personal pri-
vacy. Accordingly, the identity of an
employee who makes a confidential
written or oral statement as a com-
plaint or in the course of an investiga-
tion, as well as portions of the state-
ment which would reveal his identity.
will not be disclosed without the prior
consent of the employee. Disclosure of
employee statements shall be gov-
erned by the provisions of the "Free-
dom of Information Act" (5 U.S.C. 552.
see 29 CFR Part 70) and the "Privacy
Act of 1974" (5 U.S.C. 552a).
(b) A report of breach or violation
relating solely to safety and health re-
quirements may be In writing and-ad-
dressed to the Regional Administrator
of an Occupational Safety and Health
Administration Regional Office, U.S.
Department of Labor, or to the Assist-
ant Secretary for Occupational Safety
and Health, U.S. Department of
Labor. Washington, D.C. 20210.
(c) Any other report o* breach or
violation may be in writing and ad-
dressed to the Assistant Regional Ad-
ministrator of a Wage and Hour Divi-
sion's regional office, U.S. Department
of Labor, or. to. the.Administrator.of-..
the Wage and Hour Division. UJS. De-
partment of Labor, Washington, D.C.
20210.
(d) In the event that an Assistant
Regional Administrator for the Wage
and Hour Division, Employment
Standards Administration, is not
of a breach or violation which also'
volves safety and health standards.
the Regional Administrator of the
Employment Standards Administra-
tion shall notify the appropriate Re-
gional Administrator of the Occupa-
tional Safety and Health Administra-
tion who shall with respect to the
safety and health violation take action
commensurate with his responsibilities
pertaining to safety and health stand-
ards.
(e) Any report should contain the
following:
(1) The full name and address of the
person or organization reporting the
breach or violations.
(2) The full name and address of the
•person against whom the report is
made. .
(3) A clear and concise statement of
the facts constituting the alleged
breach or violation of any of the provi-
sions of the McNamara-O'Hara Serv-
ice Contract Act, or of any of the rules
or regulations prescribed thereunder.
U.S. GOVERNMENT PRINTING OFFICE : 1988 0 - 209-363
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ATTACHMENT B-3a
Regulations, Part 541:
Defining the Terms "Executive,"
"Administrative," "Professional"
and "Outside Salesman"
Title 29, Part 541 of the
Code of Federal Regulations
U.S. Department of Labor
Employment Standards Administration
Wage and Hour Division
WH Publication 1281
Revised June 1983
-------
This publication conforms to the Code of Federal Regulations
as of June 28,1983, the date this reprint was authorized.
U.S. Department of Labor
Employment Standards Administration
Washington, D.C. 20210
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ATTACHMENT B-3a
PAGE 1 Of 29
PART 541— DEFINING, AND DELIMIT-
ING THE TERMS "ANY EMPLOYEE
EMPLOYED IN A iONA FIDE EX-
ECUTIVE, ADMINISTRATIVE, Of
PROFESSIONAL CAPACITY (IN-
ClUDING ANY EMPLOYEE EM-
PLOYED IN THE CAPACITY OF
ACADEMIC ADMINISTRATIVE PER-
SONNEL OR TEACHER IN ELEMEN-
TARY OR SECONDARY SCHOOLS),
OR IN THE CAPACITY OF OUTSIDE
SALESMAN"
NOTE The President's Memorandum of
January 28. 1981 (46 FR 11227, Feb. 6,
1M1), directed Federal agencies to postpone
for sixty dayi from January 29,1M1. the ef-
fective date of all regulations that they had
promulgated in final form and had sched-
uled to become effective during such sixty
day period.
Several sections in Part Mi were revised
at 46 FR 3013. Jan. 13. 1981 and the effec-
tive date subsequently postponed. For far-
ther explanation, aee the note* following
the text of affected sections.
Sec.
1.0 Terms used In regulations.
.1 Executive.
.2 Administrative.
1.3 Professional.
541.5 Outside salesman.
Ml.Sa Special provision for motion picture
producing industry.
541.5b Equal pay provisions of section o
of the act apply to executive, adminis-
trative, and professional employees, and
to outside salesmen.
541.6 Petition ior amendment of regula-
tions.
541.52 Special provision for motion pictur*
producing industry.
941.99 Introductory statement.
Eimovvg EKPLOTD m A Bon* Fn»
ExxcuTivt CAPACITY
541.101 General.
541.102 Management.
541.103 Primary duty.
541.104 Department or subdtvWon.
541.105 Two or more other employees.
541.106 Authority to hire or fire.
Ml.107 Discretionary powers.
541.108 Work directly and closely related.
541.109 Emergencies.
541.110 Occasional tasks.
541.111 Nonexempt work generally.
541.112 Percentage limitations on nonex-
empt work.
541.113 Sole-change exception.
541.114 Exception for owners of 20-percent
interest.
541.115 Working foremen.
«116 Trainees, executive.
117 Amount of salary required.
118 Salary basis.
119 Special proviso for high salaried
executives.
-EMPLOYCE EMPLOYED IN A BOHA FIDE
ADMINISTRATIVE OPACITY
541.201 Types of administrative employees.
541.202 Categories of work.
541.203 NonmanuaJ work.
541.205 Directly related to management
policies or general business operations.
541.206 Primary duty.
541.207 Discretion and Independent judg-
ment.
541.208 Directly and closely related.
541.209 Percentage limitations on nonex-
empt work.
541.210 Trainees, administrative.
541.211 Amount of salary or fees required.
541.212 Salary basis.
541.213 Pee basis.
541.214 Special proviso for high salaried
administrative employees.
541.215 Elementary or secondary schools
and other educational establishments
and institutions.
EMPLOYD EMPLOYED ix A BOHA Fn»
PaonssionAL CAPACITY
541.301 General.
541.302 Learned professions.
541.303 Artistic prof cations.
541.304 Primary duty.
541.305 Discretion and Judgment.
541.306 Predominantly Intellectual and
varied.
541.307 Essential part of and necessarily
incident to.
541.308 Nonexempt work generally.
541.309 20-percent nonexempt-work limita-
tion.
$41.310 Trainees, professional.
541.311 Amount of salary or fees required.
541.212 Salary basis.
541.313 Pee basis.
541.314 Exception for physicians, lawyers,
and teachers.
541.315 Special proviso for high salaried
professional employees.
EMPLOYS* EMPLOYED nt THE CAPACITY or
541.500 Definition of "outside salesman."
541.501 Making sales or obtaining orders.
541.502 Away from his employer's iM*ee of
business.
^ 1.503 Incidental to and In conjunction
with sales work.
541.504 Promotion work.
541.505 Driver salesmen.
541.506 Nonexempt work generally.
541.507 20-percent limitation on nonex-
empt work.
541.508 Trainees, outside salesmen.
8PKIAL PROBLEM*
S«1.600 Combination exemptions.
541.601 Special provision for motion pic-
ture producing industry.
541.602 Special proviso concerning execu-
tive and admlrilstative employees In
multi-store retailing operations.
OCCUPATIOKAI. Ijrexx
AOTHOWTY: Sec. 13. 32 Stat. 1067. as
amended: 29 VAC. 213; Reorganization
Plan No. 6 of 1950 <3 CFR 1945-53 comp. p.
1004): Secretary's Order No. 13-71 (3 CFR
8755), and Employment Standards Order 1-
74 (39 FR 33841).
Souacc 38 FR 11390. May 7. 1973. unless
otherwise noted
Subport A—G*ne>ral Regulations
9 541.0 Terms used in regulations.
(a) "Administrator" means the Ad-
ministrator of the Wage* and Hour Di-
vision, U.S. Department of Labor. The
Secretary of Labor has delegated to
the Administrator the functions
vested in him under section 13(a)(l) of
the Pair Labor Standards Act.
(b) "Act" means the Fair Labor
Standards Act of 1938..as amended.
B 541.1 Executive.
The term -employee employed in a
bona fide executive • • • capacity" in
section 13(a) (1) of the act shall mean
any employee:
(a) Whose primary duty consists of
the management of the enterprise in
which he is employed or of a custom-
arily recognized department of subdi-
vision thereof; and
(b) Who customarily and regularly
directs the work of two or more other
employees therein; and
Who has the authority to hire or
fire other employees or whose sugges-
tions and recommendations aa to the
hiring or firing and as to the advance-
ment and promotion or any other
change of status of other employees
will be given particular weight; and
(d> Who customarily and regularly
exercises discretionary powers; and
(e) Who does not devote more than
20 percent, or. in the case of an em-
ployee of a retail or service establish-
ment who does not devote as much as
40 percent, of his hours of work In the
workweek to activities which are not
directly and closely related to the per-
formance of the work described in
paragraphs (a) through (d) of this sec-
tlcn: Provided, That this paragraph
shall not apply in the case of an em-
ployee who is in sole charge of an in-
dependent establishment or a phys-
ically separated branch establishment.
or who owns at least a 20-percent In-
terest in the enterprise in which he is
employed: and
(f) Who is compensated for his serv-
ices on a salary basis at a rate of not
less than $155 per week (or $130 per
week, if employed by other than the
Federal Government in Puerto Rico,
the Virgin Islands, or American
' Samoa), exclusive of board, lodging, or
other facilities: Provided. That an em-
ployee who is compensated on a salary
basis at a rate of not less than $250
per week (or $200 per week, if em-
ployed by other than the Federal Gov-
ernment in Puerto Rico, the Virgin Is-
lands or American Samoa), exclusive
of board, lodging, or other facilities.
and whose primary duty consists of
the management of the enterprise in
which the employee is employed or of
a customarily recognized department
or subdivision thereof, and includes
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I 541.1{f)
ATTACHMENT B-3a
PAGE 2 of 29
the customary and regular direction of
the work of two or more other employ-
ees therein, shall be deemed to meet
all the requirements of this section.
C38 FR 11390. May 7. 1973. u amended at 40
PR 7092. Feb. 19.19751
Po*;poned Refutation* Paragraph in
I 541.1 was revised nt 48 FR 3013. Jar- '3.
1981. In accordance with the President's
Memorandum of January 39. 1981 (46 FR
11227, Feb. 6. 1981 >. the effective date was
postponed indefinitely at 48 FR 1197^. Feb.
12.1981.
The text of paragraph set forth above
remains in effect pending further action by
the issuing agency. The text of the post-
poned regulation appears below.
I MM Executive.
(f) Who is compensated for his services on
a salary basis at • rate of no' less than 8229
per week beginning February 13, 1981 and
•290 per week beginning February 13. 1983
(or 8180 per week beginning February 13.
1981 and 8200 per *eek beginning February
13,1983. If employed by other than the Fed-
era! Government in Puerto Rico, the Virgin
Islands, or American Samoa), exclusive oi
board, lodging, or other faculties: PBOVUSD.
That an employee who is compensated on a
salary basis at a rate of not IMS than 8320
per week beginning February 13 1981 and
834S per week beginning February 19. 1983
(or 8280 per week beginning February 13,
1981 and 8289 per week beginning February
13.1983. If employed by other than the Fed-
eral Government In Puerto Rico, the Virgin
Islands or American Samoa), exclusive of
board. lodging, or other faculties, and whose
primary duty consists of the management of
the enterprise in which the employee is em-
ployed or of a customarily recognized de-
partment or subdivision thereof, and in-
cludes the customary and regular direction
of the work of two or more other employees
therein, shall be deemed to meet all the re-
quirements of this section.
S 541.2 Administrative.
The term "employee employed in a
bona fide * * • administrative • • • ca-
pacity" in section 13(aXl) of the act
shall mean any employee:
(a) Whose primary duty consists of
either
(1) The performance of office or
nonmanual work directly related to
management policies or general busi-
ness operations of his employer or his
employer's customers, or
(2) The performance of functions in
the administration of a school system.
or educational establishment or insti-
tution, or of a department or subdivi-
sion thereof, in work directly related
to the academic instruction or training
carried on therein: and
(b) Who customarily and regularly
exercises discretion and independent
judgment; and
(c) (1) Who regularly and directly as-
sists a proprietor, or an employee em-
ployed in a bona fide executive or ad-
ministrative capacity (as such terms
are defined in the regulations of this
subpart), or
(2) Who performs under only gener-
al supervision work along specialized
or technical lines requiring special
training, experience, or knowledge, or
(3) Who executes under only general
supervision special assignments and
tasks: and
(d) Who does not devote more than
20 percent, or, in the case of an em-
ployee of a retail or service establish-
ment who does not devote as much as
40 percent, of his hours worked In the
workweek to activities which are not
directly and closely related to the per-
formance of the work described in
paragraphs (a) through (c) of this sec-
tion; and
(e> (1) Who is compensated for his
services on a salary or fee basis at a
rate of not less than $155 per week
(8130 per week, if employed by other
than the Federal Government In
Puerto Rico, the Virgin Islands, or
American Samoa), exclusive of board.
lodging, or other faculties, or
(2) Who; in the case of academic ad-
ministrative personnel. Is compensated
for services as required by paragraph
(e) (1) of this section, or on a salary
basis which is at least equal to the en-
trance salary for teachers in the
school system, educational establish-
ment, or institution by which em-
ployed: Provided. That an employee
who is compensated on a salary or fee
basis at a rate of not less than $250
per week ($200 per week if employed
by other than the Federal Govern-
ment in Puerto Rico, the Virgin Is-
lands, or American Samoa), exclusive
of board, lodging, or other faculties.
and whose primary duty consists of
the performance of work described in
paragraph (a) of this section, which
includes work requiring the exercise of
discretion and independent judgment.
shall be deemed to meet all the re-
quirements of this section.
(38 PR 11390. May 7.1973, as amended at 40
FR 7092. Feb. 19.1979)
Portioned RcgatetiwiK Paragraph (e) in
1941.2 was revised at 4« FR 3013. Jan. 13.
1981. In accordance with the President's
Memorandum of January 29. 1981 (46 FR
11237. Feb. 8. 1981). the effective date was
postponed indefinitely at 46 PR 11972. Feb.
12.1981.
The text of paragraph (e) set forth above
remains in effect pending further action by
the issuing agency. The text of the post-
poned regulation appear* below.
IMM AteinMralivc.
(e) (1) Who is compensated for his services
on a salary or fee batti at a rate of not less
than 8229 per week beginning February 13.
1981 and 8290 per week beginning February
13.1983 (8180 per week beginning February
13.1981 and 8200 per week beginning Febru-
ary 13.1983. if employed by other than the
Federal Government In.Puerto Rico, the
Virgin Islands, or American Samoa), exclu-
sive of board, lodging, or other facilities, or
(2) Who, In the case of academic adminis-
trative personnel. Is compensated for serv-
ices as required by paragraph <«xl> of this
section, or on a salary basis which is at least
equal to the entrance salary for teachers In
the school system, educational establish-
ment, or Institution by which employed:
Provided, That an employee who is compen-
sated on a salary or fee basis at a rate of not
less than 8320 per week beginning February
13,1981 and 8348 per week beginning Febru-
ary 13. 1983 (8260 per week beginning Feb-
ruary 13. 1981 and 8289 per week beginning
February 13. 1983. if employed by other
than the Federal Government in Puerto
Rico, the Virgin Islands, or American
Samoa), exclusive of board, lodging, or
other faculties, and whose primary duty
consists of the performance of work de-
scribed in paragraph (a) of this section.
which includes work requiring the exercise
of discretion and independent judgment.
shall be deemed to meet all the require-
ments of this section.
8541.3 Professional.
The term "employee emp&yed in a
bona fide • • • professional capacity"
in section 13(a) (1) of the act
mean any employee:
(a) Whose primary duty consists
the performance of:
(1) Work requiring knowledge of an
advance type in a field of science or
learning customarily acquired by a
prolonged course of specialized Intel-
lectual instruction and study, as distin-
guished from a general academic edu-
cation and from an apprenticeship,
and from training in the performance
of routine mental, manual, or physical
processes, or
(2) Work that Is original and cre-
ative in character in a recognized field
of artistic endeavor (as opposed to
work which can be produced by a
person endowed with general manual
or intellectual ability and training),
and the result of which depends pri-
marily on the invention. Imagination,
or talent of the employee, or
(3) Teaching, tutoring, instructing,
or lecturing In the activity of impart-
ing knowledge and who is employed
and engaged in this activity as a teach-
er in the school system or educational
establishment or institution by which
he is employed: and
(b) Whose work requires the consist-
ent exercise of discretion and judg-
ment in its pertonnance; and
(c) Whose work Is predominantly in-
tellectual and varied In character (as
opposed u> routine mental.
mechanical, or physical work) and
of such character that the output
duced or the result accomplished
cannot be standardized in relation to a
given period of time; and
(d) Who does not devote more than
20 percent of his hours worked in the
workweek to activities which are not
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ATTACHMENT B-3a
PAGE 3 of 29
541.3 (d)
an essential part of and necessarily in-
cident to the work described in para-
graphs (a) through (c) of this section:
and
of this section: Provided further,
That an employee who is compensated
on a salary or fee basis at a rate of not
than $290 per week (or $200 per
, if employed by other than the
ral Government in Puerto Rico,
e Virgin Islands, or American
Samoa), exclusive of board, lodging, or
other facilities, and whose primary
duty consists of the performance
either of work described in paragraph
(1) or (3) of this section, which in-
cludes work requiring the consistent
exercise of discretion and judgment, or
of work requiring Invention, tmaglna-
tion. or talent in a recognized field of
artistic endeavor, shall be deemed to
meet all of the requirements of this
section.
(38 PR 11390, May 7. 1073. as amended at 40
PR 70*2. Feb. 10. 10751
Refutation*: Paragraph («) in
1 541.3 wu revised at 46 PR 3014, Jan. 11.
1081. In Accordance with the President's
Memorandum of January 20, 1M1 (46 PR
11227. Feb. 6. 1M1), the effective date vac
portponed indefinitely M 46 PR 11073, Peb.
12. 1081.
The text of paragraph set forth above
remains in effect pending further action by
the Issuing agency. The text of the port-
poned regulation appears below.
8MIJ Profmkoati.
Who Is compensated for cervices on a
salary or fee bui* at a rate of not less than
1250 per week beginning February 13. 1081
1380 per week beginning February 13.
f$225 per week beginning February 13.
18250 per week beginning February
1371083 If employed by other than the Fed-
eral Government In Puerto Rico, the Virgin
Island*, or American Samoa), exclusive of
board, lodging, or other facilities: Provided.
That this paragraph shall not apply In the
case of an employee who la the holder of a
valid license or certificate permitting the
practice of law or medicine or any of their
branches and who is actually engaged In the
practice thereof, nor In the case of an em-
ployee who la the holder of the requisite
academic degree for the general practice of
medicine and la engaged in an internship or
resident program pursuant to the practice
of medicine or any of Its branches, nor In
the ease of an employee employed and en-
gaged aa a teacher as provided in paragraph
or (3) of this section, which in-
cludes work requiring the consistent exer-
cise of discretion and Judgment, or of work
requiring Invention. Imagination, or talent
in a recognized field of artistic endeavor,
shall be deemed to meet all of the require-
ments of this section.
9541.5 Outside salesman.
The term "employee employed • • *
in the capacity of outside salesman" In
section 13(a) (1) of the act shall mean
any employee:
(a) Who is employed for the purpose
of and who Is customarily and regular-
ly engaged away from his employer's
place or places of business in:
(1) Making sales within the meaning
of section 3 Whose hours of work of a nature
other than that described In para-
graph (a) (1) or <2> of this section do
not exceed 20 percent of the hours
worked in the workweek by nonex-
empt employees of the employer Pro-
vided, That work performed incidental
to and in conjunction with the em-
ployee's own outside sales or solicita-
tions. Including incidental deliveries
and collections, shall not be regarded
as nonexempt work.
• 541 Ja Special provision for motion pic-
ture producing industry.
The requirement of f i 641.1. 541.2.
and 541.3 that the employee be paid
"on a salary basis" shall not apply to
an employee in the motion picture
producing Industry who is compensat-
ed at a base rate of at least 1200 a
week (exclusive of board, lodging, or
other facilities).
Postponed Rcfulmuon*: 'Section 541.5s was
revised at 40 PR 3014. Jan. 13. 1081. In ac-
cordance with the President's Memorandum
of January 20. 1081 (46 PR 11227. Peb. 6.
1081). the effective date was postponed In-
definitely at 46 PR 11072. Feb. 12.1081.
The text of I Ml.Si set forth above re-
mains in effect pending further action by
the Issuing agency. The text of the post-
poned regulation appears below.
IM1.5a Special pnwiilon for motion picture
producing industry.
The requirement of 11541.1. 541.2. and
541.3 that the employee be paid "on a salary
basis" shall not apply to an employee in the
motion picture producing industry who Is
compensated at a base rate of at least $320 •
per week beginning February 13. 1081 and
8345 per week beginning February 13. 1083
(exclusive of board, lodging, or other facili-
ties).
>$4l.5b Equal pay provisions of section
ftd) of the act apply to executive, ad-
ministrative, and professional employ-
ees, and to outside salesmen.
Effective July 1. 1972. the Fair
labor Standards Act was amended to
Include within the protection of the
equal pay provisions those employees
exempt from the minimum wage and
overtime pay provisions aa bona fide
executive, administrative, and profes-
sional employees (including any em-
ployee employed in the capacity of
academic administrative personnel or
teacher in elementary or secondary
schools), or in the capacity of outside
salesmen under section 13(aXl) of the
act. Thus, for example, where an
exempt administrative employee and
another employee of the establish-
ment are performing substantially
"equal work," the sex discrimination
prohibitions of section ftXd) are appli-
cable with respect to any wage differ-
ential between those two employees.
I MM Petition for amendment of reguls-
Any person wishing a revision of any
of the terms of the foregoing regula-
tions may submit in writing to the Ad-
ministrator a petition setting forth the
changes desired and the reasons for
proposing them. If. upon inspection of
the petition, the administrator be-
lieves that reasonable cause for
amendment of the regulations is set
forth, the Administrator will either
schedule a hearing with due notice to
interested parties, or will'make other
provision for affording interested par-
ties an opportunity to present their
views, either in support of or In oppo-
sition to the proposed changes. In de-
termining such future regulations,
separate treatment for different indus-
tries and for different classes of em-
ployees may be given consideration.
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§ 541.52
ATTACHMENT B-3a
PAGE 4 of 29
§541.52 Special provision for motion pic-
ture producing induitry. >
The requirements of if 541.1. 541.2.
and 541.3 that the employee be paid
"on a salary basis" shall not apply to
an employee in the motion picture
producing industry who is compensat-
ed at a base rate of at least $250 a
week (exclusive of board, lodging, or
other facilities).
140 FR 7092. Feb. 19, 1975]
Postponed Refutations: Section 541.52 wms
removed »t 46 FR 3014. Jan. 13. 1981. In ac-
cordance with the President's Memorandum
or Jinutry 29. 1981 (46 FR 11227. Feb. 8.
198:). the effective date of the removal was
postponed indefinitely at 48 FR 11972. Feb.
12. 1981.
The text of 1541.52 set forth above re-
mains in effect pending further action by
the issuing agency.
Support B—interpretations
9 541.99 Introductory lUtcment
(a) Section 13(aXl) of the Fair
Labor Standards Act, as amended.
exempts from the wage and hour pro-
visions of the act "any employee em-
ployed in a bona fide executive, ad-
ministrative, or professional capacity
(including any employee employed in
the capacity of academic administra-
tive personnel or teacher in elemen-
tary or secondary schools), or in the
capacity of outside salesman (as such
terms are defined and delimited from
time to time by regulations of the Sec-
retary, subject to the provisions of the
Administrative Procedure Act, except
that an employee of a retail or service
establishment shall not be excluded
from the definition of employee em-
ployed in a bona fide executive or ad-
ministrative capacity because of the
number of hours in his workweek
which he devotes to activities not di-
rectly or closely related to the per-
formance of executive or administra-
tive activities, if less than 40 percent
of his hours worked In the workweek
are devoted to such actlvitief)." The
requirements of the exemption under
this section of the act are contained in
subpart A of this part.
EMPLOYEE EMPLOYED nr A BOHA FIDE
EXECUTIVE CAPACITY
0541.101 General.
The duties and responsibilities of an
exempt executive employee are de-
scribed in paragraphs (a) through (d)
of i 541.1. Paragraph (e) of f 541.1
contains among other things, percent-
age limitations on the amount of time
which an employee may devote to ac-
tivities "which are not directly and
closely related to the performance of
the work described in paragraphs (a)
through (d>" of that section. For-con-
venience in discussion, the work de-
scribed in paragraphs (a) through (d)
of S 541.1 and the activities directly
and closely related to such work will
be referred to as "exempt" work, while
other activities will be referred to as
"nonexempt" work.
9541.102 MMiatement
(a) In the usual situation the deter-
mination of whether a particular kind
of work is exempt or nonexempt in
nature is not difficult. In the vast ma-
jority of cases the bona fide executive
employee performs managerial and su-
pervisory functions which are easily
recognized as within the scope of the
exemption.
(b) For example, it is generally clear
that work such as the following is
exempt work when it is performed by
an employee in the management of his
department or the supervision of the
employees under him: Interviewing.
selecting, and training of employees;
setting and adjusting their rates of
pay and hours of work; directing their
work; maintaining their production or
sales records for use in supervision or
control; appraising their productivity
and efficiency for the purpose of rec-
ommending promotions or other
changes in their status; handling their
complaints and grievances and disci-
plining them when necessary; plan-
ning the work: determining the tech-
niques to be used: apportioning the
work among the workers; determining
the type of materials, supplies, ma-
chinery or tools to be used or mer-
chandise to be bought, stocked and
sold; controlling the flow and distribu-
tion of materials or merchandise and
supplies; providing for the safety of
the men and the property.
9541.103 Primary duty.
A determination of whether an em-
ployee has management as his pri-
mary duty must be based on all the
facts in a particular case. The amount
of time spent in the performance of
the managerial duties is a useful guide
in determining whether management
is the primary duty of an employee. In
the ordinary case It may be taken as a '
good rule of thumb that primary duty
means the major part, or over 50 per-
cent, of the employee's time. Thus, an
employee who spends over 50 percent
of his time in management would have
management as his primary duty.
Time alone, however, Is not the sole
test, and In situations where the em-
ployee does not spend over 50 percent
of his time in managerial duties, he
might nevertheless have management
as his primary duty if the other perti-
nent factors support such a conclu-
sion. Some of these pertinent factors
are the relative importance of the
managerial duties'as compared with
other types of duties, the frequency
with which the employee exercises dis-
cretionary powers, his relative free-
dom from supervision, and the rela-
tionship between his salary and the
wages paid other employees for the
kind of nonexempt work performed by
the supervisor. For example, in some
departments, or subdivisions of an es-
tablishment, an employee has broad
responsibilities similar to those of the
owner or manager of the establish-
ment, but generally spends more than
50 percent of his time in production or
sales work. While engaged in such
work he supervises other employees.
directs the work of warehouse and de-
livery men. approves advertising.
orders merchandise, handles customer
• complaints, authorizes payment of
bills, or performs other management
duties as the day-to-day operations re-
quire. He will be considered to have
management as his primary duty. In
the data processing field an) employee
who directs the day-to-day activities of
a single group of programen and who
performs the more complex or respon-
sible jobs in programing will be consid^
ered to have management as his p "
mary duty.
9 541.104 Department or lubdirUion.
(a) In order to qualify under {541.1.
the employee's managerial duties must
be performed with respect to the en-
terprise in which he is employed or a
customarily recognized department or
subdivision thereof. The phrase "a
customarily recognized department or
subdivision" is intended to distinguish
between a mere collection of men as-
signed from time to time to a specific
job or series of jobs and a unit with
permanent status and function. In
order properly to classify an individual
as an executive he must be more than
merely a supervisor of two or more
employees: nor Is it sufficient that he
merely participates In the manage-
ment of the unit. He must be in charge
of and have as his primary duty the
management of a recognized unit
which has a continuing function.
(b) In the vast majority of cases
there is no difficulty in determining
whether an individual Is in charge of a
customarily recognized department or
subdivision of a department. For ex-
ample, it is clear that where an enter-
prise comprises more than one estab-
lishment, the employee In charge of
each establishment may be considered
in charge of a subdivision of the enter
prise. Questions arise principally
cases involving supervisors who
outside the employer's establishment,
move from place to place, or have dif-
ferent subordinates at different times.
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fiS41.104(e)
ATTACHMENT B-3a
PAGE 5 of 29
t»cr
^^Kon
(c> In such instances, in determining
whether the employee I* in charge of a
recognized unit with a continuing
function, it is the division's position
that the unit supervised need not be
physically within the employer's es-
tablishment and may move from place
to place, and that continuity of the
same subordinate personnel is not ab-
solutely essential to the existence of a
recognized unit with a continuing
function, although in the ordinary
case a fixed location and continuity of
personnel are both helpful in estab-
lishing the existence of such a unit.
The following examples will illustrate
these points.
(d) The projects on which an individ-
ual in charge of a certain type of con-
struction work Is employed may occur
at different locations, and he may
even hire most of his workforce at
these locations. The mere fact that he
moves his location would not invali-
date his exemption if there are other
factors which show that he is actually
in charge of a recognized unit with a
continuing function in the organiza-
tion.
(e) Nor will an otherwise exempt em-
ployee lose the exemption merely be-
cause he draws the men under his su-
pervision from a pool, if other factors
present which indicate that he is
charge of a recognized unit with a
ntlnuing function. For instance, if
this employee is in charge of the unit
which has the continuing responsibili-
ty for making all installations for his
employer, or all installations in a par-
ticular city or a designated portion of
a city, he would be in charge of a de-
partment or subdivision despite the
fact that he draws his subordinates
from a pool of available men.
(f) It cannot be said, however, that a
supervisor drawn from a pool of super-
visors who supervises employees as-
signed to him from a pool and who is
assigned a Job or series of jobs from
day to day or week to week has the
status of an executive. Such an em-
ployee is not in charge of a recognized
unit with a continuing function.
6 M1.10S Two or more other •••InyMi.
(a) An employee wm qualify aa an
"executive" under 1541.1 only if he
customarily and regularly supervises
at least two full-time employees or the
equivalent. For example, if the "execu-
tive" supervises one full-time and two
part-time employees of whom one
works morning and one, afternoons; or
four part-time employees, two of
whom work mornings and two after-
noons, this requirement would be met.
(b) The employees supervised must
employed in the department which
"executive" is managing.
(c> It has been the experience of the
divisions that a supervisor of a few as
(E
•
two employees usually performs non-
exempt work in excess of the general
20-percent tolerance provided in
t 541.1.
(d) In a large machine shop there
may be a machine-shop supervisor and
two assistant machine-shop supervi-
sors. Assuming that they meet all the
other qualifications $541.1 and par-
ticularly that they are not working
foremen, they should certainly qualify
for the exemption. A small depart-
ment in a plant or in an office is usual-
ly supervised by one person. Any at-
tempt to classify one of the other
workers in the department as an ex-
ecutive merely by giving him an hon-
orific title such as assistant supervisor
will almost Inevitably fall as there will
not be sufficient true supervisory or
other managerial work to keep two
persons occupied. On the other hand.
It Is incorrect to assume that in a large
department, such as a large shoe de-
partment in a retail store which has
separate sections for men's, women's.
and children's shoes, for example, the
supervision cannot be distributed
among two or three employees, con-
ceivably among more. In such in-
stances, assuming that the other tests
are met. especially the one concerning
the performance of nonexempt work.
each such employee "customarily and
regularly directs the work of two or
more other employees therein."
(e) An employee who merely assists
the manager or buyer of a particular
department and supervises two or
more employees only in the actual
manager's or buyer's absence, howev-
erV'doea not meet this requirement.
For example, where a single unsegre-
gated department, such as a women's
sportswear department or a men's
shirt department In a retail store, is
managed by a buyer, with the assist-
ance of one or more assistant buyers.
only one employee, the buyer, can be
considered an executive, even though
the assistant buyers at times exercise
some managerial and supervisory re-
sponsibilities. A shared responsibility
for the supervision of the same two or
more employees in the same depart-
ment does not satisfy the requirement
that the employee "customarily and
regularly directs the work of two or
more employees therein."
OS41.1M Authority to hire or fire.
Section 541.1 requires that an
exempt executive employee have the
authority to hire or fire other employ-
ees or that his suggestions and recom-
mendations as to hiring or firing and
as to advancement and promotion or
any other change of status of the. em-
ployees who he supervises will be
given particular weight. Thus, no em-
ployee, -whether high or low in the
hierarchy of management, can be con-
sidered as employed in a bona fide ex-
ecutive capacity unlefe he is directly
concerned either with the hiring or
the firing and other change of status
of the employees under his supervi-
sion, whether by direct action or by
recommendation to those to who
the hiring and firing functions are
delegated.
9 541.107 Diicrttionary powers.
(a) Section S4l.Kd) requires that an
exempt executive employee customar-
ily and regularly exercise discretion-
ary powers. A person whose work is so
completly routinized that he has no
discretion does not qualify for exemp-
tion.
(b) The phrase "customarily and
regularly" signifies a frequency which
must be greater than occasional but
which, of course, may be less than con-
stant. The requirement will be met by
the employee who normally and recur-
rently is called upon to exercise and
does exercise discretionary, powers in
the day-to-day performance of his
duties. The requirement is not met by
the occasional exercise of discretion-
ary powers.
0541.108 Work directly and eiOMly relat-
ed.
(a) This phrase brings within the
category of exempt work not only the
actual management of the department
and the supervision of the employees
therein, but also activities which are
closely associated with the perform-
ance of the duties involved in such
managerial and supervisory functions
or responsibilities. The supervision of
employees and the management of a
department include a great many di-
rectly and closely related tasks which
are different from the work performed
by subordinates and are commonly
performed by supervisors because they
are helpful in supervising the employ-
ees or contribute to the smooth func-
tioning of the department for which
they are responsible. Frequently such
exempt work is of a kind which In es-
tablishments that are organized differ-
ently or which are larger and have
greater specialization of function, may
be performed by a nonexempt employ-
ee hired especially for that purpose. Il-
lustration will serve to make clear the
meaning to be given the phrase "di-
rectly and closely related".
(b) Keeping basic records of working
time, for example, is frequently per-
formed by a timekeeper employed for
that purpose. In such cases the work is
clearly not exempt in nature. In other
establishments which are not large
enough to employ a timekeeper, or in
which the timekeeping function has
been decentralized, the supervisor of
each department keeps the basic time
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ATTACHMENT B-3a
PAGE 6 of 29
§ S41.108(b)
records of his own subordinates. In
these instances, as indicated above.
the timekeeping Is directly related to
the function of managing the particu-
lar department and supervising its em-
ployees. However, the preparation of a
payroll by a supervisor, even the pay-
roll of the employees under his super-
vision, cannot be considered to be
exempt work, since the preparation of
a payroll does not aid in the supervi-
-,ion of the employees or the manage-
ment of the department. Similarly,
the keeping by a supervisor of produc-
tion or sales records of his own subor-
dinates for use in supervision or con-
trol would be exempt work, while the
maintenance of production records of
employees not under his direction
would not be exempt work.
Another example of work which
may be directly and closely related to
the performance of management
duties is the distribution of materials
or merchandise and supplies. Main-
taining control of the How of materi-
al* or merchandise and supplies in a
department is ordinarily a responsibili-
ty of the managerial employee in
charge. In many nonmercantile estab-
lishments the actual distribution of
materials is performed by nonexempt
employees under the supervisor's di-
rection. In other establishments it is
not uncommon to leave the actual dis-
tribution of materials and supplies in
the hands of the supervisor. In such
cases it is exempt work since it is di-
rectly and closely related to the man-
agerial responsibility of maintaining
the flow of materials. In a large retail
establishment, however, where the re-
plenishing of stocks of merchandise on
the sales floor is customarily assigned
to z nonexempt employee, the per-
formance of such work by the man-
ager or buyer of the department is
nonexempt. The amount of time the
managd or buyer spends In such work
must be offset against the statutory
tolerance for nonexempt work. The
supervision and control of a flow of
merchandise to the sales floor, of
course, is directly and closely related
to the managerial responsibility of the
manager or buyer.
(d) Setup work is another illustra-
tion of work which may be exempt
under certain circumstances if per-
formed by a supervisor. The nature of
setup work differs in various indus-
tries and for different operations.
Some setup work Is typically per-
formed by the same employees who
perform the "production" work; that
is. the employee who operates the ma-
chine also "sets it up" or adjusts It for
the particular job at hand. Such setup
work is part of the production oper-
ation and is not exempt. In other In-
stances the setting up of the work is a
highly skilled operation which the or-
dinary production worker or machine
tender typically does not perform. In
some plants, particularly large ones,
such setup work may be performed by
employees whose duties are not super-
visory in nature. In other plants, how-
ever, particularly small plants, such
work is a regular duty of the executive
and is directly and closely related to
his responsibility for the work per-
formance of his subordinates and for
the adequacy of the final product.
Under such circumstances it is exempt
work. In the data processing field the
work of a supervisor when he per-
forms the more complex or more re-
sponsible work in a program utilizing
several computer programeis or com-
puter operators would be exempt ac-
tivity.
(e) Similarly, a supervisor who spot
checks and examines the work of his
subordinates to determine whether
they are performing their duties prop-
erly, and whether the product is satis-
factory, is performing work which is
directly and closely related to his man-
agerial and supervisory functions.
However, this kind «f examining and
checking must be distinguished from
the kind which is normally performed
by an "examiner." "checker," or "In-
spector." and which is really a produc-
tion operation rather than a pan of
the supervisory function. Likewise, a
department manager or buyer in a
retail or service establishment who
goes about the sales floor observing
the work of sales personnel under his
supervision to determine the effective-
ness of their sales techniques. check-
Ing on the quality of customer se> .ice
being given, or observing customer
preferences and reactions to the lines,
styles, types, colon, and quality of the
merchandise offered, is performing
work which Is directly and closely re-
lated to his managerial and supervi-
sory functions. His actual participa-
tion, except for supervisory training or
demonstration purposes, in such activ-
ities as making sales to customers, re-
plenishing stocks of merchandise on
the sales floor, removing merchandise
from fitting rooms and returning to
stock or shelves, however, is not. The
amount of time a manager or buyer
spends In the performance of such ac-
tivities must be included in computing
the percentage limitation on nonex-
empt work.
(f) Watching machines is another
duty which may be exempt when per-
formed by a supervisor under proper
circumstances. Obviously the mere
watching of machines in operation
cannot be considered exempt work
where, as in certain industries in
which the machinery is largely auto-
matic, it la an ordinary production
function. Thus, an employee who
watches machines.for the purpose of
seeing that they, operate properly or
for the purpose of making repairs or
adjustments is performing nonexempt
work. On the other hand, a supervisor
who watches the operation of the ma-
chinery in his department in the sense
that he "keeps an eye out for trouble"
is performing work which is directly
.and closely related to his managerial
'responsibilities. Making an occasional
adjustment in the machinery under
such circumstances is also exempt
work.
(g) A word of caution is necessary in
connection with these illustrations.
The recordkeeping, material distribut-
ing, setup work, machine, watching
and adjusting, and inspecting, examin-
ing, observing and checking referred
to in the examples of exempt work are
presumably the kind which are super-
visory and managerial functions
rather than merely "production"
work. Frequently it is difficult to dis-
tinguish the managerial type from the
type which is a production operation.
In deciding such difficult cases It
should be borne in mind that it is one
of the objectives of 1941.1 to exclude
from the definition foremen, who hold
"dual" or combination job*. (See dis-
cussion of working foremen
1541.115.) Thus, if work of this
takes up a large part of the empl< _
time it would be evidence that man-
agement of the department is not the
primary duty of the employee, that
such work is a production operation
rather than a function directly and
closely related to the supervisory or
managerial duties, and that the em-
ployee is in reality a combination fore-
man-"setup" man. foreman-machine
adjuster (or mechanic), or foreman-ex-
aminer, floorman-salesperson. etc.,
rather than a bona fide executive.
S 541.109 Emergencies.
(a) Under certain occasional emer-
gency conditions, work which is nor-
mally performed by nonexempt em-
ployees and is nonexempt in nature
will be directly and closely related to
the performance of the exempt func-
tions of management and supervision
and will therefore be exempt work. In
effect, this means that a bona fide ex-
ecutive who performs work of a nor-
mally nonexempt nature on rare occa-
sions because of the existence of a real
emergency will not. because of the
performance of such emergency work.
lose the exemption. Bona fide execu-
tives include among their responsibil-
ities the safety of the employees under
their supervision, the preservation
protection of the merchandise.
chlnery or other property of the
partment or subdivision in the!
charge from damage due to unfore-
seen -circumstances, and the proven-
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ATTACHMENT B-3a
PAGE 7 of 29
§ 541.109(1)
lion of widespread breakdown tn pro-
duction, sales, or service operations.
Consequently, when conditions
beyond control arise which threaten
the safety of the employees, or a ces-
sation of operations, or serious
damage to the employer's property.
any manual or other normally nonex-
empt work performed in an effort to
prevent such results is considered
exempt work and is not included in
computing the percentage limitation
on nonexempt work.
(b) The rule in paragraph (a) of this
section is not applicable, however, to
nonexempt work arising out of occur-
rences which are not beyond control
or for which the employer can reason-
ably provide in the normal course of
business.
(c) A few illustrations may be help-
ful in distinguishing routine work per-
formed as a result of real emergencies
of the kind for which no provision can
practicably be made by the employer
in advance of their occurrence and
routine work which is not in this cate-
gory. It is obvious that a mine superin-
tendent who pitches in after an explo-
sion and digs out the men who are
trapped in the mine is still a bona fide
executive during that week. On the
other hand, the manager of a cleaning
establishment who personally per-
orms the cleaning operations on ex-
ive garments because he fears
to the fabrics if he allows his
subordinates to handle them IB not
performing "emergency" work of the
kind which can be considered exempt.
Nor is the manager of a department In
a retail store performing exempt work
when he personally waits on a special
or impatient customer because he
fears the loss of the sale or the cus-
tomer's goodwill if he allows a sales-
person to serve him. The performance
of nonexempt work by executives
during inventory-taking, during other
periods of heavy workload, or the han-
dling of rush orders are the kind* of
activities which the percentage toler-
ances are intended to cover. For exam-
ple, pitching in on the production tine
in a canning plant during ifiiotnl op-
erations is not exempt
work even if the objective to to keep
the food from spoiling. Similarly,
pitching in behind the sales counter in
a retail store during special sales or
during Christinas or Easter or other
peak sales periods is not "emergency"
work, even if the objective is to im-
prove customer service and the store's
sales record. Maintenance work is not
emergency work even if performed at
night or during weekends. Relieving
subordinates during rest or vacation
periods cannot be considered in the
ure of "emergency" work since the
for replacements can be antici-
Whether replacing the subordi-
nate at the workbench, or production
line, or sales counter during the first
day or partial day of an illness would
be considered exempt emergency'work
would depend upon the circumstances
in the particular case. Such factors as
the size of the establishment and of
the executive's department, the nature
of the industry, the consequences that
would flow from the failure to replace
the ailing employee Immediately, and
the feasibility of filling the employee's
place promptly would all have to be
weighed.
(d) All the regular cleaning up
around machinery, even when neces-
sary to prevent fire or explosion, is noi
"emergency" work. However, the re-
moval by an executive of din or ob-
structions constituting a hazard to life
or property need not be included in
computing the percentage limitation If
It is not reasonably practicable for
anyone but the supervisor to perform
the work and it is the kind of "emer-
gency" which has not been recurring.
The occasional performance of repair
work In case of a breakdown of ma-
chinery, or the collapse of a display
rack, or damage to or exceptional dis-
array of merchandise caused by acci-
dent or a customer's carelessness may
be considered exempt work if the
breakdown is one which the employer
cannot reasonably anticipate. Howev-
er, recurring breakdowns or disarrays
requiring frequent attention, such as
that of an old belt or machine which
breaks down repeatedly or merchan-
dise displays constantly requiring re-
sorting or straightening, are the kind
for which provision could reasonably
be made and repair of which must be
considered at nonexempt
I 541.11*
(a) In addition to the type of work
which by its very nature is readily
Identifiable as being directly and close-
ly related to the performance of the
supervisory and management duties.
there is another type of work which
may be considered directly and closely
related to the performance of these
duties. In many establishments the
proper management of a department
requires the performance of a variety
of occasional, infrequently recurring.
tasks which cannot practicably be per-
formed by the production workers and
are usually performed by the execu-
tive. These small tasks when viewed
separately without regard to their re-
lationship to the executive's overall
functions might appear to constitute
nonexempt work. In reality they are
the means of properly carrying out
the employee's management functions
and responsibilities in connection with
men. materials, mad production. The
particular tasks are not specifically as-
signed to the "executive" but are per-
formed by him in his discretion.
(b) It might be possible for the ex-
ecutive to take one of his subordinates
away from his usual tasks, instruct
and direct him in the work to be done.
and wait for him to finish it. It would
certainly not be practicable, however.
to manage a department in this fash-
ion. With respect to such occasional
and relatively inconsequential tasks, it
is the practice in industry generally
for the executive to perform them
rather than to delegate them to other
persons. When any one of these tasks
is done frequently, however, it takes
on the character of a regular produc-
tion function which could be per-
formed by a nonexempt employee and
must be counted as nonexempt work.
In determining whether such work is
directly and closely related to the per-
formance of the management duties.
. consideration should be given to
whether it is (1) the same as the work
performed by any of the subordinates
of the executive: or <2> a specifically
assigned task of the executive employ-
ees; or (3) practicably deipgable to
nonexempt employees in the establish-
ment; or (4) repetitive and frequently
recurring.
9 541.111 Noocxenpt work generally.
As indicated in 1541.101 the term
"nonexempt work." as used in this
subpart, includes all work other than
that described in 1541.1 (a) through
(d) and the activities directly and
closely related to such work.
(b) Nonexempt work is easily identi-
fiable where, as In the usual cue, it
consists of work of the same nature as
that performed by the nonexempt sub-
ordinates of the "executive." It is
more difficult to identify In cases
where supervisory employees spend a
significant amount of time In activities
not performed by any of their subordi-
nates and not «™«<«HTig of actual su-
pervision and management. In such
cases careful analysis of the employ-
ee's duties with reference to the
phrase "directly and closely related to
the performance of the work described
in paragraphs (a) through (d) of this
section" will usually be necessary in
arriving at a determination.
8541.112 Percentage limitation* OR non-
ecempt work.
(a) An employee will not qualify for
exemption as an executive if he de-
votes more than 20 percent, or in the
case of an employee of a retail or serv-
ice establishment if he devotes as
much as 40 percent, of his hours
worked in the workweek to nonexempt
work. This test is applied on a work-
week basis and the percentage of time
spent on nonexempt work is computed
on the time worked by the employee. .
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§ 541.112(b)(1)
ATTACHMENT B-3a
PAGE 8 of 29
(1) The maximum allowance of
20 percent for nonexempt work ap-
plies unless the establishment by
which the employeee is employed
qualifies for the higher allowance as a
retail or service establishment within
the meaning of the act. Such an estab-
lishment must be a distinct physical
place of business, open to the general
public, which is engaged on the prem-
ises in making sales of goods or serv-
ices to which the concept of retail sell-
ing or servicing applies. As defined in
section 13(a>(2> of the act. such an es-
tablishment must make at least 75 per-
cent of its annual dollar volume of
sales of goods or services from sales
that are both not for resale and recog-
nized as retail in the particular indus-
try. Types of establishments which
may meet these testa include stores
selling consumer goods to the public;
hotels: motels; restaurants; some types
of amusement or recreational estab-
lishments (but not those offering wa-
gering or gambling facilities); hospi-
tals, or institutions primarily engaged
in the care of the sick, the aged, the
mentally ill. or defective residing on
the premises, if open to the general
public; public parking lots and parking
garages; auto repair shops; gasoline
service stations (but not truck stops);
funeral homes; cemeteries; etc. Fur-
ther explanation and illustrations of
the establishments included in the
term "retail or service establishment".
as used in the act may be found in
Fart 779 of this chapter.
(2) Public and private elementary
and secondary schools and institutions
of higher education are, as a rule, not
retail or service establishments, be-
cause they are not engaged in sales of
goods or services to which the retail
concept applies. Under section 13(a)
(2) (iU) of the act prior to the 1966
amendments, it was possible for pri-
vate schools for physically or mentally
handicapped or gifted children to
qualify aa retail or service establish-
ments if they met the statutory tests.
because the special types of services
provided to their student! were consid-
ered by Congress to be of a kind that
may be recognized as retail. Such
schools, unless the nature of their op-
erations has changed, may continue to
qualify as retail or service establish-
ments and, if they do, may utilize the
greater tolerance for nonexempt work
provided for executive and administra-
tive employees of retail or service es-
tablishments under section 13(a)U> of
the act.
(3) The legislative history of the act
makes it plain that an establishment
engaged in laundering, cleaning, or re-
pairing clothing or fabrics is not a
retail or service establishment. When
the act was amended in 1949. Congress
excluded such establishments from
the exemption under section 13(a)<2)
because of the lack of a retail concept
in the services sold by such establish-
ments, and provided a separate exemp-
tion for them which did not depend on
status as a retailer. Again in 1966.
when this exemption was repealed,
Congress made it plain by exclusion-
ary language that the exemption for
retail or service establishments was
not to be applied to laundries or dry
cleaners.
(c) There are two special exceptions
to the percentage limitations of para-
graph (a) of this section:
(1) That relating to the employee in
"sole charge" of an independent. yt
branch establishment, and
(2) That relating to an employee
owning a 20-percent interest in the en-
terprise in which he is employed.
These except the employee only from
the percentage limitations on nonex-
empt work. They do not except the
employee from any of the other re-
quirements of i 541.1. Thus, while the
percentage limitations on nonexempt
work are not applicable, it is clear that
an employee .would not qualify for the
exemption U he performs so much
nonexempt work that he could no
longer meet the requirement of
1541.Ha) that his primary duty must
consist of the management of the en-
terprise In which he is employed or of
a customarily recognized department
or subdivision thereof.
IM1.113 Sofecharge exception.
(a) An exception from the percent-
age limitations on nonexempt work is
provided in 1541.He) for "an employ-
ee who is in sole charge of an inde-
pendent establishment or a physically
separated branch establishment • • •".
Such an employee is considered to be
employed In a bona fide executive ca-
pacity even though he exceeds the ap-
plicable percentage limitation on non-
exempt work.
(b) The term "independent estab-
lishment" must be given full weight.
The establishment must have a fixed
location and must be geographically
separated from other company proper-
ty. The management of operations
within one among several buildings lo-
cated on a single or adjoining tracts of
company property does not qualify for
the exemption under this heading. In
the case of a branch, there must be a
true and complete physical separation
from the main office.
(c) (1) A determination aa to the
status as "an Independent establish-
ment or a physically separated branch
establishment" of any part of the busi-
ness operations on the premises of a
retail or other establishment, however.
must be made on the basis of the
physical and economic facts in the
particular situation. (See 29 CFR
779.225. 779.305. 779.306.) A leased de-
partment cannot be considered to be a
separate establishment where, for ex-
ample, it and the retail- store in which
it is located operate under a common
trade name and the store may deter-
mine, or have the power to determine,
the leased department's space loca-
tion, the type of merchandise it will
sell its pricing policy, its hours of oper-
ation and some or all of its hiring.
firing, and other personnel policies.
and matters such as advertising, ad-
justment, and credit operations. irk»:r-
ance and taxes, are handled on a uni-
fied basts by the store.
(2) A leased department may qualify
as a separate establishment, however.
where, among other things, the facts
show that the lessee maintains a sepa-
rate entrance and operates under a
separate name, with its own separate
employees and records, and in other
respects conducts his business inde-
pendently of the lessor's. In such a
case the leased department would
enjoy the same status as a physically
separated branch store.
(d) Since the employee most be in
"sole charge, only one person in any
establishment can qualify as an execu-
tive under this exception, and
only If he is the top person in
at that location. (It is possible
other persons in the same establish-
ment to qualify for exemption as ex-
ecutive employees, but not under the
exception from the nonexempt work
limitation.) Thus, it would not be ap-
plicable to an employee who is in
charge of a branch establishment but
whose superior makes his office on the
premises. An example is a district
manager who has overall supervisory
functions in relation to a number of
branch offices, but makes his office at
one of the branches. The branch man-
ager at the branch where the district
manager's office is located is not in
"sole charge" of the establishment
and does not come within the excep-
tion. This does not mean that the
"sole-charge" status of an employee
will be considered lost because of an
occasional visit to the branch office of
the superior of the person in charge.
or, in the case of an independent es-
tablishment by the visit for a short
period on 1 or 2 days a week of the
proprietor or principal corporate offi-
cer of the establishment. In these situ-
ations the sole-charge status of the
employee in question will appear from
the facts as to his functions, particu-
larly In the intervals between visits. If,
during these Intervals, the decisions
normally made by an
charge of a branch or an
establishment are reserved for the
perior. the employee is not In sole
charge. If such decisions are not re-
served for the superior, the sole-
tne decisions
executive l^^k
i Independen^B
•ri for th» BU^^"^
-------
S S41.114(d)
ATTACHMENT B-3a
PAGE 9 of 29
Charge status will not be lost merely
because of the superior's visits.
(e) In order to qualify for the excep-
tion the employee must ordinarily be
in charge of ail the company activities
at the location where he Is employed.
If he is in charge of only a portion of
the company's activities at his loca-
tion, then he cannot be said to be in
sole charge of an independent estab-
lishment or a physically separated
branch establishment. In exceptional
cases the divisions have found that an
executive employee may be In sole
charge of all activities at a branch
office except that one independent
function which is not integrated with
those managed by the executive is also
performed at the branch. This one
function is not important to the activi-
ties managed by the executive and
constitutes only an Insignificant por-
tion of the employer's activities at
that branch. A typical example of this
type of situation is one in which "desk
space" in a warehouse otherwise de-
voted to the storage and shipment of
parts is assigned a salesman who re-
ports to the sales manager or other
company official located at the home
office. Normally only one employee (at
most two or three, but in any event an
insignificant number when compared
1th the total number of persons em-
yed at the branch) Is engaged in
e nonlntegrated function for which
the executive whose sole-charge status
Is In question is not responsible. Under
such circumstances the employee does
not lose his "sole-charge" status
merely because of the desk-space as-
signment.
1941.114 Exception for owner* of 20-per-
cent interact.
(a) An exception from the percent-
age limitations on nonexempt work is
provided in { 541.1(e) for an employee
"who owns at least a 20-percent inter-
eat In the enterprise in which he is em-
ployed". This provision recognizes the
special status of a shareholder of an
enterprise who is actively engaged in
its management.
(b) The exception is available to an
employee owning a bona fide 20-per-
cent equity in the enterprise in which
he is employed regardless of whether
the business is a corporate or other
type of organization.
8541.115 Working foremen.
(ft) The primary purpose of the ex-
clusionary language placing a limita-
tion on the amount of nonexempt
work Is to distinguish between the
bona fide executive and the "working"
foreman or "working" supervisor who
performs "production" work
work which is unrelated or
remotely related to his supervi-
sory activities. (The term "working"
foreman is used in this subpart in the
sense indicated in the text and should
not be construed to mean only one
who performs work similar to that
performed by his subordinates.)
(b) One type of working foreman or
working supervisor most commonly
found In industry works alongside his
subordinates. Such employees, some-
times known as strawbosses. or gang or
group leaders perform the same kind
of work as that performed by their
subordinates, and also carry on super-
visory functions. Clearly, the work of
the same nature as that performed by
the employees' subordinates must be
counted as nonexempt work and if the
amount of such work performed Is
substantial the exemption does not
apply. ("Substantial." as used in this
section, means more than 20 percent.
See discussion of the 20-percent limi-
tation on nonexempt work In
i 541.112.) A foreman in a dress shop,
for example, who operates a sewing
machine to produce the product is per-
forming clearly nonexempt work.
However, this should not" be confused
with the operation of a sewing ma-
chine by a foreman to instruct his sub-
ordinates in-the making of a new prod-
uct, such as a garment, before it goes
into production.
(c) Another type of working foreman
or working supervisor who cannot be
classed as a bona fide executive is one
who spends a substantial amount of
time in work which, although not per-
formed by his own subordinates, con-
sists of ordinary production work or
other routine, recurrent, repetitive
tasks which are a regular part of his
duties. Such an employee is In effect
holding a dual job. He may be. for ex-
ample, a combination foreman-produc-
tion worker, supervisor-clerk, or fore-
man combined with some other skilled
or unskilled occupation. His nonsu-
pervisory duties in such Instances are
unrelated to anything he must do to
supervise the employees under him or
to manage the department. They are
in many instances mere "fill-in" tasks
performed because the job does not In-
volve sufficient executive duties to
occupy an employee's full time. In
other instances the nonsupervisory.
nonmanagerial duties may be the prin-
cipal ones and the supervisory or man-
agerial duties are subordinate and are
assigned to the particular employee
because It is more convenient to rest
the responsibility for the first line of
supervision in the hands of the person
who performs these other duties.
Typical of employees in dual jobs
which may Involve a substantial
amount of nonexempt work are: (1)
Foremen or supervisors who also per-
form one or more of the "production"
or "operating" functions, though no
other employees in the plant perform
such work. An example of this kind of
employee is the foreman in a millinery
or garment plant who is also the
cutter, or the foreman in a garment
factory who operates a multiple-
needle machine not requiring a full-
time operator; (2) foremen or supervi-
sors who have as a regular part of
their duties the adjustment, repair, or
maintenance of machinery or equip-
ment. Examples in this category are
the foreman-fixer in the hosiery in-
dustry who devotes a considerable
amount of time to making adjust-
ments and repairs to the machines of
his subordinates, or the planer-mill
foreman who is also the "machine
man" who repairs the machines and
grinds the knives: (3) foremen or su-
pervisors who perform clerical work
other than the maintenance of the
time and production records of their
subordinates; for example, the fore-
man of the shipping room who makes
out the bills of lading and other ship-
ping records, the warehouse foreman
who also acts as Inventory clerk, the
head shipper who also has charge of a
finished goods stock room, assisting in
placing goods on shelves and keeping
perpetual inventory records, or the
office manager, head bookkeeper, or
chief clerk who performs routine
bookkeeping. There is no doubt that
the head bookkeeper, for example.
who spends a substantial amount of
his time keeping books of the same
general nature as those kept by the
other bookkeepers, even though his
books are confidential in nature or
cover different transactions from the
books maintained by the under book-
keepers, is not primarily an executive
employee and should not be so consid-
ered.
S 541.116 Trainees, excentirc.
The exemption is applicable to an
employee employed In a bona fide ex-
ecutive capacity and does not include
employees training to become execu-
tives and not actually performing the
duties of an executive.
8541.117 Amount of salary required.
(a) Except as otherwise noted in
paragraph (b) of this section, compen-
sation on a salary basis at a rate of not
less than $155 per week, exclusive of
board, lodging, or other facilities, is re-
quired for exemption as an executive.
The $156 a week may be translated
into equivalent amounts for periods
longer than 1 week. The requirement
will be met if the employee la compen-
sated biweekly on a salary basis of
$310. semimonthly on a salary basis of
$339.84 or monthly on a salary basis of
$671.67. However, the shortest period
of payment which will meet the re-
quirement of payment "on a salary
basis" IB a week,
(b) In Puerto Rico, the Virgin Is-
lands, and American Samoa, the salary
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ATTACHMENT B-3a
PAGE 10 Of 29
§54l.117(b)
10
test lor exemption as an "executive" Is
$130 per week for other than an em-
ployee of the Federal Government.
(c) The payment of the required
salary must be exclusive of board,
lodging, or other facilities: that is. free
and clear. On the other hand, the reg-
ulations in subpart A of this part do
not prohibit the sale of such faculties
to executives on a cash basis if they
are negotiated in the same manner as
similar transactions with other per-
sons.
(d) The validity of including a salary
requirement in the regulations In sub-
part A of this part has been sustained
in a number of appellate court deci-
sions. See. for example. Wailing v.
Yeaklev. 140 F. <2d> 830 (CJL 10);
HeUiveU v. Haberman. 140 F. (3d) 833
(C.A. 2); and Walling v. Morris, 155 F.
(2d> 832 (C.A. 6) (reversed on another
point in 332 U.S. 442): Wirtz v. Missis-
sippi Publishers. 364 F. (2d> 603 (CJL
S); Craig v. Far West Engineering Co.,
265 F. (2d) 251 (C.A. 9) cert. den. 361
U.S. 816; Hofer v. Federal Cartridge
Corp., 71 F. Supp. 243 (D.C. Minn.).
[38 PR 11390. May 7.1973, as amended at 40
PR 7092. Feb. 19.1975}
Poctpomrf fomlatioiu: Paracraphs <•> and
(b) in | 541.117 were revised at 40 PR 3014.
Jan. 13. 1981. In accordance with the Presi-
dent's Memorandum of January 29.1981 (46
PR 11227. Feb. 6. 1981). the effective date
vac postponed indefinitely at 48 Fit 11972.
Feb. 12.1981.
The text of paragraphs (a) and (b) set
forth above remains in effect pending fur-
ther action by the issuing agency. The text
of the postponed regulation appear* below.
1541.117 AaMwttofMiarrnqitirat
(a) Except as otherwise noted in para-
graph of this section, compensation on a
salary basis at a rate of not lea than S235
per week beginning February IS, 1981 and
$250 per week beginning February 13,1983.
exclusive of board, lodging, or other facill-
Ues. Is required for exemption as an execu-
tive. The 1225 a week or $250 a week nay be
translated into equivalent amounts for peri-
ods longer than 1 week. For example, based
on $250 a week, the requirement will be met
if the employee is compensated biweekly on
a salary basis of $000. semimonthly on a
salary basis of $541.87 or monthly on a
salary basis of $1083.33. However, the shor-
test period of payment which will meet the
requirement of payment "on a salary basis"
is a week.
(b) In Puerto Rico, the virgin Islands, and
American Samoa, the salary test for exemp-
tion as an "executive" is $180 per week be-
ginning Febraruy 13. 1981 and $200 per
week beginning February 13.1983 for other
than an employee of the Federal Oover-
ment.
S 541.118 Salary basis.
(a) An employee will be considered
to be paid "on a salary basis" within
the meaning of the regulations if
under his employment agreement he
regularly receives each pay period on a
weekly, or less frequent basis, a prede-
termined amount constituting all or
part of his compensation, which
amount la not subject to reduction be-
cause of variations in the quality or
quantity of the work performed. Sub-
ject to the exceptions provided below.
the employee must receive his full
salary for any week In which he per-
forms any work without regard to the
number of days or hours worked. This
policy is also subject to the general
rule that an employee need not be
paid for any workweek in which he
performs no work.
(1) An employee will not be consid-
ered to be "on a salary basis" if deduc-
tions from his predetermined compen-
sation are made for absences occa-
sioned by the employer or by the oper-
ating requirements of the business. Ac-
cordingly, if the employee is ready.
willing, and able to work, deductions
may not be made for time when work
is not available.
(2) Deductions may be made, howev-
er, when the employee absents himself
from work for a day or more for per-
sonal reasons, other than sickness or
accident. Thus, if an employee is
absent for a day or longer to handle
personal affairs, his salaried status
will not be affected if deductions are
made from his salary for such ab-
sences.
(3) Deductions may also be made for
absences of a day or more occasioned
by sickness or disability (including In-
dustrial accidents) if the deduction is
made in accordance with a bona fide
plan, policy or practice of providing
compensation for loss of salary occa-
sioned by both sickness and disability.
Thus, if the employer's particular
plan, policy or practice provides com-
pensation for such absences, deduc-
tions for absences of a day or longer
because of sickness or disability may
be made before an employee has quali-
fied under such plan, policy or prac-
tice, and after he has exhausted hi*
leave allowance thereunder. It la not
required that the employee be paid
any portion of his salary for such days
or days for which he receives compen-
sation for leave under such plan.
policy or practice. Similarly. If the em-
ployer operates under a State sickness
and disability Insurance law. or a pri-
vate sickness and disability insurance
plan, deductions may be made for ab-
sences of a working day or longer if
benefits are provided in accordance
with the particular law or plan. In the
case of an Industrial accident, the
"salary basis" requirement will be met
if the employee Is compensated for
loss of salary in accordance with the
applicable compensation law or the
plan adopted by the employer, pro-
vided the employer also has some
plan, policy or practice of providing
compensation for sickness and disabil-
ity other than that relating to indus-
trial accidents.
(4) Deductions may not be made for
absences of an employee caused by
jury duty, attendance as a witness, or
temporary military leave. The employ-
er may, however, offset any amounts
received by an employee as jury or wit-
ness fees or military pay for a particu-
lar week against the salary due for
that particular week without loss of
the exemption.
(5) Penalties imposed in good faith
for infractions of safety rules of major
significance will not affect the employ-
ee's salaried status. Safety rules of
major significance include only those
relating to the prevention of serious
danger to the plant, or other employ-
ees, such as rules prohibiting smoking
in explosive plants, oil refineries, and
coal mines.
(6) The effect of making a deduction
which is not permitted under these in-
terpretations will depend upon the
facts in the particular case. Where de-
ductions are generally made when
there is no work available, it indicates
that there was no intention to pay the
employee on a salary basis. In such a
case the exemption would not be ap-
plicable to him during the entire
period when such deductions were
being made. On the other hand, whe:
a deduction not permitted by these
terpretations Is Inadvertent, or is
for reasons other than lack of work,
the exemption will not be considered
to have been lost if the employer reim-
burses the employee for such deduc-
tions and promises to comply in the
future.
(b) Minimum guarantee plus extras.
It should be noted that the salary may
consist of a predetermined amount
constituting all or part of the employ-
ee's compensation. In other words, ad-
ditional compensation besides the
salary is not Inconsistent with the
salary basis of payment. The require-
ment will be met. for example, by a
branch manager who receives a salary
of $155 or more a week and In addi-
tion, a commission of 1 percent of the
branch sales. The requirement will
also be met by a branch manager who
receives a percentage of the sales or
profits of the branch, if the employ-
ment arrangement also includes a
guarantee of at least the minimum
weekly salary (or the equivalent for a
monthly or other period) required by
the regulations. Another type of situa-
tion In which the requirement will be
met Is that of an employee paid on a
dally or shift basis. If the employment
arrangement includes a provision that
the employee will receive not less than
the amount specified in the regula
tions in any week in which the em
ployee performs any work. Such
rangements are subject to the excep-
tions in paragraph (a) of this section.
The test of payment on a salary basis
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ATTACHMENT B-3a
PAGE 11 Of 29
I 541.118(b)
11
will not be met. however, if the salary
is divided into two part* for the pur-
pose of circumventing the requirement
of payment "on a salary teals". For
example, a salary of $200 In each week
In which any work is performed, and
an additional $50 which is made sub-
ject to deductions which, are not per-
mitted under paragraph (a) of this sec-
tion.
Initial ana terminal weeks. Fail-
ure to pay the full salary in the initial
or terminal week of employment is not
considered inconsistent with the
salary basis of payment. In such weeks
the payment of a proportionate pan
of the employee's salary for the time
actually worked will meet the require-
ment. However, this should not be
construed to mean that an employee is
on a salary basis within the meaning
of the regulations if he is employed oc-
casionally for a few days and is paid a
proportionate part of the weekly
salary when so employed. Moreover,
even payment of the full weekly salary
under such circumstances would not
meet the requirement, since casual or
occasional employment for a few days
at a time is inconsistent with employ-
ment on a salary basis within the
meaning of the regulations.
(38 PR 11390. May 7.1973.l
.7092.Feb. 19.19751
i amended at 40
Bigitilluns, Paragraph (b) la
.118 was revised at 46 ma MM. Jan. is.
1M1. In accordance with the President's
Memorandum of January 29, 1981 (40 PR
11237. Feb. 6. 1981). the effective date was
postponed indefinitely at 48 FR 11972. Feb.
12. 1981.
The text of paragraph (b) set forth above
remalni In effect pending further action by
the Isniinc agency. The text of the post-
poned regulation appemn below.
IM1.1U Salary
(b) Minimum guarantee plus extras. It
should be noted that the •alary may consist
of a predetermined amount constituting all
or part of the employee's nunncnsatloiL In
other words, additional compensation be*
sides the salary Is not "TMmit with the
salary bails of payment The requirement
will be met, for example, by a branch man-
ager who receives a salary of $3M or more a
week and in addition, a mmmisrion of 1 per-
cent of the branch sale*. The requirement
will also be met by a branch manager who
receive* a percentage of the sales or proflU
of the branch, if the employment arrange-
ment also includes a guarantee of at least
the minimum weekly salary Cor the equiva-
lent for a monthly or other period) required
by the regulations. Another type of situa-
tion in which the requirement will be met to
that of an employee paid on a dally or shift
basis, if the employment arrangement in-
cludes a provision that the employee will re-
• not lea* than the amount specified In
regulations in any week in which the
i performs any work. Such arrange-
ments are subject to the exceptions m para-
graph of this section. The test of pay-
ment on a salary bails will not be met. how-
ever. If the talary Is divided Into two parts
for the purpose of circumventing the re-
quirement of payment "on a salary bails".
For example, a salary of S300 In each week
In which any work la performed, and an ad-
ditional $56 which Is made subject to deduc-
tions which are not permitted under para-
graph (a) of this section.
8 541.119 Special proviso for high lalaried
executive*.
(a) Except as otherwise noted in
paragraph (b) of this section, f 541.1
contains an upset or high salary provi-
so for managerial employees who are
compensated on a salary basis at a
rate of not less than $250 per week ex-
clusive of board, lodging, or other
facilities. Such a highly paid employee
is deemed to meet all the requirements
in paragraphs (a) through (f) of
1541.1 if the employee's primary duty
consists of the management of the en-
terprise in which employed or of a cus-
tomarily recognized department or
subdivision thereof and includes the
customary and regular direction of the
work of two or more other employees
therein. If an employee qualifies for
exemption under this proviso, it is not
necessary to test that employee's
qualifications in detail under para-
graphs (a) through (f) of 1541.1 of
this Part.
(b) In Puerto Rico, the Virgin Is-
lands, and American Samoa the provi-
so of |541.1(f) applies to those man-
agerial employees (other than employ-
ees of the Federal Government) who
are paid on a salary basis at a rate of
not less than $200 per week.
(c) Mechanics, carpenters, linotype
operators, or craftsmen of other kinds
are not exempt under the proviso no
matter how highly paid they might be.
[40 FR 7093, Feb. 19.19751
Pastsomf Big»lsHns« Section 541.119 was
revised at 4« FR 3014. Jan. 13. 1981. In ac-
cordance with the President's Memorandum
Of January 29. 1981 (48 FR 11237, Feb. 8.
1981). the effective date was postponed in-
definitely at 48 FR 11972. Feb. 12.1981.
The text .of 1541.119 set forth above re-
mains in effect pending further action by
the issuing agency. The text of the post-
poned regulation appears below.
1541.111 Special swvriso for high wlarM «*•
(a) Except as otherwise noted in para-
graph (b) of this section, 1541.1 contains an
upset or high salary proviso for managerial
employees who an compensated on a salary
basis at a rate of not less than $320 per
week beginning February 13,1981 and $345
per week beginning February 13.1983 exclu-
sive of board, lodging, or other faculties.
Such a highly paid employee is deemed to
meet all the requirements In paragraphs (a)
through (f) of 1541.1 if the employee's pri-
mary duty consists of the management of
the enterprise In which employed or of a
customarily recognised department or sub-
division thereof and Includes the customary
and regular direction of the work of two or
more other employees therein. If an em-
ployee qualifies tor exemption under this
proviso, it Is not necessary to test that em-
ployee's qualifications In detail under para-
graphs (a) through
-------
§ 541.201(1) (2)(")
12
ATTACHMENT B-3a
PAGE 12 of 29
agers. purchasing agents, buyers.
safety directors, personnel directors,'
and labor relations directors.
(3) Those who perform special as-
signments, (i) The third group consists
of persons who perform special assign-
ments. Among them are to be found a
number of persons whose work is per-
formed away from the employer's
place of business. Typical titles of
such persons are lease buyers, field
representatives of utility companies,
location managers of motion picture
companies, and district gaugers for oil
companies. It should be particularly
noted that this is a field which is rife
with honorific titles that do not ade-
quately portray the nature of the em-
ployee's duties. The field representa-
tive of a utility company, for example.
may be a "glorified serviceman."
:ii) This classification also includes
employees whose special assignments
are performed entirely or partly inside
their employer's place of business. Ex-
amples are special organization plan-
ners, customers' brokers in stock ex-
change firms, so-called account execu-
tives in advertising firms and contact
or promotion men of various types.
(b) Job titles insufficient as yard-
sticks. (I) The employees for whom
exemption is sought under the term
"administrative" have extremely di-
verse functions and a wide variety of
titles. A title alone is of little or no as-
sistance in determining the true im-
portance of an employee to the em-
ployer or his exempt or nonexempt
status under the regulations in sub-
part A of this part. Titles can be had
cheaply and are of no determinative
value. Thus, while there are supervi-
sors of production control (whose deci-
sions affect the welfare of large num-
bers of employees) who qualify for ex-
emption under section 13(aXl), it is
not hard to call a rate setter (whose
functions are limited to timing certain
operations and jotting down times on
a standardized form) a "methods engi-
neer" or a "production-control super-
visor."
(2) Many more example* could be
cited to show that titles are Insuffi-
cient as yardsticks. As has been indi-
cated previously, the exempt or nonex-
empt status of any particular employ-
ee must be determined on the bads of
whether his duties, responsibilities,
and salary meet all the requirements
of the appropriate section of the regu-
lations in subpart A of this part.
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ATTACHMENT B-3a
PAGE 13 of 29
5 S4!.203(a)
13
basically white-collar employees since
the accepted usage of the term •'white-
collar" includes all office workers. Per-
sons employed in the routine oper-
ation of office machines are engaged
in office work within the meaning of
1541.2 (although they would not qual-
ify as administrative employees since
they do not meet the other require-
ments of 1541.2).
-------
§ 541-205(c) (6)
ATTACHMENT B-3a
PAGE 14 of 29
14
assignments of the same relative ,ira-
portance or performing identical work
does not affect the determination of
whether they meet this test so long as
the work of each such employee is of
substantial importance to the manage-
ment or operation of the business.
(7) In the data processing field some
firms employ persons described as sys-
tems analysts and computer pro-
gramers. If such employees are con-
cerned with the planning, scheduling.
and coordination of activities which
are required to develop systems for
processing data to obtain solutions to
complex business, scientific, or engi-
neering problems of his employer or
his employer's customers, he is clearly
doing work directly related to manage-
ment policies or general business oper-
ations.
(d) Under 1541.2 the "management
policies or general business oper-
ations" may be those of the employer
or the employer's customers. For ex-
ample, many bona fide administrative
employees perform important func-
tions as advisers and consultants but
are employed by a concern engaged in
furnishing such services for a fee.
Typical instances are tax experts.
labor relations consultants, financial
consultants, systems analysts, or resi-
dent buyers. Such employees, if they
meet the other requirements of
1541.2. qualify for exemption regard-
less of whether the management poli-
cies or general business operations to
which their work Is directly related
are those of their employer's clients or
customers or those of their employer.
B 541.206 Primary duty.
(a) The definition of "administra-
tive" exempts only employees who are
primarily engaged in the responsible
work which is characteristic of em-
ployment in a bona fide administrative
capacity. Thus, the employee must
have as his primary duty office or non-
manual work directly related to man-
agement policies or general business
operations of his employer or his em-
ployer's customers, or, in the case of
"academic administrative personnel."
the employee must have as his pri-
mary duty work that is directly relat-
ed to academic administration or gen-
eral academic operations of the school
In whose operations he is employed.
(b) In determining whether an em-
ployee's exempt work meets the "pri-
mary duty" requirement, the princi-
ples explained in 1541.103 In the dis-
cussion of "primary duty" under the
definition of "executive" are applica-
ble.
9S41.207 Discretion and Independent
judgment.
(a) In general, the exercise of discre-
tion and independent judgment In-
volves the comparison and the evalua-
tion of possible courses of conduct and
acting or making a decision after the
various possibilities have been consid-
ered. The term as used in the regula-
tions in Subpart A of this pan. more
over, implies that the person has the
authority or power to make an inde-
pendent choice, free from immediate
direction or supervision and with re-
spect to matters of significance. (With-
out actually attempting to define the
term, the courts have given it this
meaning in applying It in particular
cases. See. for example. Walling v.
Sterling Ice Co., 69 F. Supp. 655. re-
versed on other grounds, 165 F. <2d>
265 (CCA 10). See also Connell v. Dela-
ware Aircraft Industrie*, 55 Atl. (2d>
637.)
(b) The term must be applied in the
light of all the facts Involved In the
particular employment situation In
which the question arises. It has been
most frequently misunderstood and
misapplied by employers and employ-
ees in cases involving the following: (I)
Confusion between the exercise of dis-
cretion and independent Judgment,
and the use of skill in applying tech-
niques, procedures, or specific stand-
ards: and (2) misapplication of the
term to employees making decisions
relating to matters of little conse-
quence.
(c) Distinguished from skills and
procedures:
(1) Perhaps the most frequent cause
of misapplication of the term "discre-
tion and independent judgment" is the
failure to distinguish it from the use
of skill in various respects. An employ-
ee who merely applies his knowledge
in following prescribed procedures or
determining which procedure to
follow, or who determines whether
specified standards are met or wheth-
er an object falls into one or another
of a number of definite grades, classes.
or other categories, with or without
the use of testing or measuring de-
vices, is not exercising discretion and
independent judgment within the
meaning of 1541.2. This Is true even If
there Is some leeway in reaching a
conclusion, as when an acceptable
standard includes a range or a toler-
ance above or below a specific stand-
ard.
(2) A typical example of the applies*
tion of skills and procedures Is ordi-
nary inspection work of various kinds.
Inspectors normally perform special-
ized work along standardized lines In-
volving well-established techniques
and procedures which may have been
cataloged and described in manuals or
other sources. Such inspectors rely on
techniques and skills acquired by spe-
cial training or experience. They may
have some leeway in the performance
of their work but only within closely
prescribed limits. Employees of this
type may make recommendations on
the basis of the information they de-
velop in the course of their inspections
(as for example, to accept or reject an
insurance risk or a product manufac-
tured to specifications), but these rec-
ommendations are based on the devel-
opment of the facts as to whether
there is conformity with the pre-
scribed standards. In such cases a deci-
sion to depart from the prescribed
standards or the permitted tolerance
is typically made by the inspector's su-
perior. The Inspector is engaged in ex-
ercising skill rather than discretion
and independent judgment within the
meaning of the regulations in Subpart
A of this part.
(3) A related group of employees
usually called, examiners, or graders
perform similar work involving the
comparison of products with estab-
lished standards which are frequently
cataloged. Often, after continued ref-
erence to the written standards, or
•through experience, the employee ac-
quires sufficient knowledge so that
reference to written standards is un-
necessary. The substitution of the em-
ployee's memory for the-manual of
standards does not convert the charac-
ter of the work performed to work re-
quiring the exercise of discretion and
Independent judgment as required by
the regulations in subpart A of,
part. The mere fact that the <
uses his knowledge and exi
does not change his decision, i.e., that
the product does or does not conform
with the established standard, into a
real decision in a significant matter.
(4) For example, certain "graders" of
lumber turn over each "stick" to see
both sides, after which a crayon mark
is made to Indicate the grade. These
lumber grades are well established and
the employee's familiarity with them
stems from his experience and train-
Ing. Skill rather than discretion and
independent judgment is exercised in
grading the lumber. This does not nec-
essarily mean, however, that all em-
ployees who grade lumber or other
commodities are not exercising discre-
tion and Independent Judgment. Grad-
ing of commodities for which there are
no recognized or established standards
may require the exercise of discretion
and Independent judgment as contem-
plated by the regulations in Subpart A
of this part. In addition, in those situa-
tions In which an otherwise exempt
buyer does grading, the grading even
though routine work, may be consid-
ered exempt if it is directly and closely
related to the exempt buying.
(5) Another type of situation where
skill in the application of techniques
and procedures is sometimes confused
with discretion and independent
ment is the "screening" of appl
by a personnel clerk. Typically
an employee will interview apt
and obtain from them data regarding
their qualifications and fitness for em-
ployment. These data may be entered
-------
f 541.207{c) (5)
ATTACHMENT B-3a
PAGE 15 Of 29
IS
a form specially prepared for the
purpose. The "screening" operation
consists of rejecting all applicants who
do not meet standards for the particu-
lar job or for employment by the com-
pany. The standards are usually set by
the employee's superior or other com-
pany officials: and the decision to hire
from the group of applicants who do
meet the standards is similarly made
by other company officials. It seems
clear that such a personnel clerk does
not exercise discretion and independ-
ent judgment as required by the regu-
lations in Subpart A of this part. On
the other hand an exempt personnel
manager will often perform similar
functions: that is. he will interview ap-
plicants to obtain the necessary data
and eliminate applicants who are not
qualified. The personnel manager will
then hire one of the qualified appli-
cants. Thus, when the interviewing
and screening are performed by the
personnel manager who does the
hiring they constitute exempt work.
even though routine, because this
work is directly and closely related to
the employee's exempt functions.
<6) Similarly, comparison shopping
performed by an employee of a retail
store who merely reports to the buyer
his findings as to the prices at which a
competitor's store is offering merchan-
of the same or comparable quality
not involve the exercise of discre-
and Judgment as required in the
regulations. Discretion and judgment
are exercised, however, by the buyer
who evaluates the assistants' reports
and on the basis of their findings di-
rects that certain items be re-priced.
When performed by the buyer who ac-
tually makes the decisions which
affect the buying or pricing policies of
the department he manages, the com-
parison shopping, although In Itself a
comparatively routine operation, is di-
rectly and closely related to his man-
agerial responsibility.
(?) In the data processing field a sys-
tems analyst is exercising discretion
and independent judgment when he
develops methods to process, for ex-
ample, accounting. Inventory, sales.
and other business information by
using electronic computers. Be alto ex-
ercises discretion and independent
judgment when he determines the
exact nature of the data processing
problem, and structures the problem
in a logical manner so that a system to
solve the problem and obtain the de-
sired results can be developed. Wheth-
er a computer programer Is exercising
discretion and independent judgment
depends on the facts in each particu-
lar case. Every problem processed in a
computer first must be carefully ana-
so that exact and logical steps
its solution can be worked out.
this preliminary worm to done
a computer programer he Is exerds-
ing discretion and independent judg-
ment. A computer programer would
also be using discretion and Independ-
ent judgment when he determined ex-
actly what information must be used
to prepare the necessary documents
and by ascertaining the exact form in
which the information is to be pre-
sented. Examples of work not requir-
ing the level of discretion and judg-
ment contemplated by the regulations
are highly technical and mechanical
operations such as the preparation of
a flow chart or diagram showing the
order in which the computer must per-
form each operation, the preparation
of instructions to the console operator
who runs the computer or the actual
running of the computer by the pro-
grammer, and the debugging of a pro-
gram. It is clear that the duties of data
processing employees such as tape li-
brarians, keypunch operators, comput-
er operators, junior programers and
programer trainees are so closely su-
pervised as to preclude the use of the
required discretion and independent
judgment.
(d) Decisions in significant matters:
(1) The second type of situation in
which some difficulty with this phrase
has been experienced relates to the
level or Importance of the matters
with respect to which the employee
may make decisions. In one sense
almost every employee Is required to
use some discretion and independent
judgment. Thus, it is frequently left to
a truckdrtver to decide which route to
follow in going from one place to an-
other the shipping clerk is normally
permitted to decide the method of
ptrKInf and the mode of shipment of
snail orders; and the bookkeeper may
usually decide whether he wffl post
first to one ledger rather than an-
other. Tet it is obvtous that these deci-
sions do not constitute the exercise of
discretion and independent judgment
of the level contemplated by the regu-
lations In Subpart A of this part The
divisions have consistently taken the
position that decisions of this nature
concerning relatively unimportant
matters are not those intended by the
regulations in Subpart A of this part.
but that the discretion and independ-
ent judgment exercised mutt be real
and substantial, that is. they must be
exercised with respect to matters of
consequence. This interpretation has
also been followed by court* in deci-
sions Involving the application of the
regulations in this part, to particular
(2) It Is not possible to state a gener-
al rule which will ^Hftfrigiifrrt In each
of the many thousands of possible fac-
tual situations between the making of
real decisions in significant matters
and the BiE""f of choices involving
matters of little of no consequence. It
should be clear, however, that the
term "discretion and independent
judgment," within the meaning of the
regulations in Subpart A of this part,
does not apply to the kinds of deci-
sions normally made by clerical and
similar types of employees. The term
does apply to the kinds of decisions
normally made by persons who formu-
late or participate in the formulation
of policy within their spheres of re-
sponsibility or who exercise authority
within a wide range to commit their
employer in substantial respects finan-
cially or otherwise. The regulations in
Subpart A of this part, however, do
not require the exercise of discretion
and independent judgment at so high
a level. The regulations in Subpart A
of this part also contemplate the kind
of discretion and independent judg-
ment exercised by an administrative
assistant to an executive, who without
specific instructions or prescribed pro-
cedures, arranges interviews and meet-
ings, and handles callers and meetings
himself where the executive's personal
attention is not required. It includes
the kind of discretion and independent
Judgment exercised by a customer's
man in a brokerage house in-deciding
what recommendations to make to a
customer for the purchase of securi-
ties. It may include the kind of descre-
tlon and judgment exercised by
buyers, certain wholesale salesmen.
representatives, and other contact per-
sons who are given reasonable latitude
in carrying on negotiation on behalf of
their employers.
(e) Final decisions not necessary:
(1) The term "discretion and inde-
pendent judgment" as used in the reg-
ulations in Subpart A of this part does
not necessarily imply that the deci-
sions made by the employee must have
a finality that goes with unlimited au-
thority and a complete absence of
review. The decisions made as a result
of the exercise of discretion and inde-
pendent judgment may consist of rec-
ommendations for action rather than
the actual taking of action. The fact
that an employee's decision may be
subject to review and that upon occa-
sion the decisions an revised or re-
versed after review does not mean that
the employee is not exercising discre-
tion and Independent judgment within
the meaning of the regulations in Sub-
part A of this part. For example, the
»—<-**•«» to the president of a large
corporation may regularly reply to
correspondence addressed to the presi-
dent. Typically, such an assistant will
submit the more important replies to
the president for review before they
are sent out Upon occasion, after
review, the president may alter or dis-
card the prepared reply and direct
that another be sent instead. This sec-
tion by the president would not, how-
ever, destroy the exempt character of
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ATTACHMENT B-3a
PAGE 16 Of 29
§ S41-207(e)O)
the assistant's function, and does not
mean that he does not exercise discre-
tion and independent judgment In an-
swering correspondence and in decid-
ing which replies may be sent out
without review by the president.
<2) The policies formulated by the
credit manager of a large corporation
may be subject to review by higher
company officials who may approve or
disapprove these policies. The manage-
ment consultant who has made a
study of the operations of a business
and who has drawn a proposed change
in organization, may have the plan re-
viewed or revised by his superiors
before it is submitted to the client.
The purchasing agent may be required
to consult with top management offi-
cials before making a purchase com-
mitment for raw materials in excess of
the contemplated plant needs for a
stated period, say 6 months. These em-
ployees exercise discretion and Inde-
pendent Judgment within the meaning
of the regulations despite the fact that
their decisions or recommendations
are reviewed at a higher level.
(f) Distinguished from loss through
neglect: A distinction must also be
made between the exercise of discre-
tion and independent judgment with
respect to matters of consequence and
the cases where serious consequences
may result from the negligence of an
employee, the failure to follow instruc-
tion or procedures, the improper appli-
cation of skills, or the choice of the
wrong techniques. The operator of a
very intricate piece of machinery, for
example, may cause a complete stop-
page of production or a breakdown of
his very expensive machine merely by
pressing the wrong button. A bank
teller who is engaged in receipt and
disbursement of money at a teller's
window and in related routine book-
keeping duties may. by crediting the
wrong account with a deposit, cause
his employer to suffer a large financial
loss. An inspector charged with re-
sponsibility for loading oil onto a ship
may, by not applying correct tech-
niques fall to notice the presence of
foreign ingredients in the tank with
resulting contamination of the cargo
and serious loss to his employer. In
these cases, the work of the employee
does not require the exercise of discre-
tion and independent judgment within
the meaning of the regulations in Sub-
part A of this part.
(g) Customarily and regularly: The
work of an exempt administrative em-
ployee must require the exercise of
discretion and independent judgment
customarily and regularly. The phrase
"customarily and regularly" signifies a
frequency which must be greater than
occasional but which, of course, may
be less than constant. The require-
ment will be met by the employee who
normally and recurrently is called
upon to exercise and does exercise-dis-
cretion and independent judgment in
the day-to-day performance of his
duties. The requirement is not met by
the occasional exercise of discretion
and independent judgment.
8 541.208 Directly uuJ closely related.
(a) As indicated in §541.202. work
which is directly and closely related to
the performance of the work described
in 1541.2 is considered exempt work.
Some illustrations may be helpful in
clarifying the differences between
such work and work which Is unrelat-
ed or only remotely related to the
work described in 1541.2.
(b) (1) For purposes of illustration.
the case of a high-salaried manage-
ment consultant about whose exempt
status as an administrative employee
there is no doubt will be assumed. The
particular employee is employed by a
firm of consultants and performs work
in which he customarily and regularly
exercises discretion and independent
judgment. The work consists primarily
of analyzing, and recommending
changes in. the business operations of-
his employer's client This work falls
In the category of exempt work de-
scribed In 1541.2.
(2) In the course of performing that
work, the consultant makes extensive
notes recording the How of work and
materials through the office and plant
of the client. Standing alone or sepa-
rated from the primary duty such
notemaking would be routine in
nature. However, this Is work without
which the more important work
cannot be performed properly. It is
"directly and closely related" to the
administrative work and is therefore
exempt work. Upon his return to the
office of his employer the consultant
personally types his report and draws.
first In rough and then in final form, a
proposed table of organization to be
submitted with it Although all this
work may not be essential to the per-
formance of his more important work,
it is all directly and closely related to
that work and should be considered
exempt While it Is possible to assign
the typing and final drafting to nonex-
empt employees and in fact it Is fre-
quently the practice to do so. it Is not
required as a condition of exemption
that it be so delegated.
(3) Finally, if because this particular
employee has a special skill In such
work, he also drafts tables or organiza-
tion proposed by other consultants, he
would then be performing routine
work wholly unrelated, or at best only
remotely related, to his more impor-
tant work. Under such conditions, the
drafting is nonexempt
(c) Another Illustration Is the credit
manager who makes and administers
the credit policy of his employer. Es-
tablishing credit limits for customers
and authorizing the shipment of
orders on credit, including the deci-
sions to exceed or otherwise vary these
limits In the case of particular custom-
ers, would be exempt work of the kind
specifically described in i 541.2. Work
which is directly and closely related to
these exempt duties may include such
activities as checking the status of ac-
counts to determine whether the
credit limit would be exceeded by the
shipment of a new order, removing
credit reports from the files for analy-
sis and writing letters giving credit
data and experience to other employ-
ers or credit agencies. On the other
hand, any general office or bookkeep-
ing work is nonexempt work. For in-
stance, posting to the accounts receiv-
able ledger would be only remotely re-
lated to his administrative work and
must be considered nonexempt.
(d) One phase of the work of an ad-
ministrative assistant to a bona fide
executive or administrative employee
provides another illustration. The
work of determining whether to
answer correspondence personally, call
it to his superior's attention* or route
it to someone else for reply requires
the exercise of discretion and inde-
pendent Judgment and is exempt
of the kind described in I 541.2.
ing the mail for the purpose of
ing it to make the decisions indicated
will be directly and closely related to
the administrative work described.
However, merely opening mail and
placing it unread before his superior
or some other person would be related
only remotely, if at all. to any work re-
quiring the exercise of discretion and
independent judgment.
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ATTACHMENT B-3a
PAGE 17 Of 29
§ 5*1-208(f)
ministrative duties, such as the execu-
tive of the employer's credit policy,
the management of the* company's
traffic, purchasing, and other respon-
sible office work requiring the custom-
ary and regular exercise of discretion
and judgment, which are clearly
exempt. On the other hand, this office
manager may perform all the book-
keeping, prepare the confidential or
regular payrolls, and send out month-
ly statements of account. These latter
activities are not directly and closely
related to the exempt functions and
are not exempt.
0541.209 Percentage limitations on ROM.
exempt work.
(a) Under 1541.2(d>, an employee
will not qualify for exemption as an
administrative employee if he devotes
more than 20 percent, or. in the case
of an employee of a retail or service es-
tablishment if he devotes as much as
40 percent, of his hours worked in the
workweek to nonexempt work; that is.
to activities which are not directly and
closely related to the performance of
the work described in (541.2 (a)
through (c).
This test is applied on a work-
week basis and the percentage of time
spent on nonexempt work is computed
on the time worked by the employee.
(c) The tolerance for nonexempt
rk allows the performance of non-
exempt manual or nonmanual work
within the percentages allowed for all
types of nonexempt work.
Refer to I 541.112(b) for the defi-
nition of a retail or service establish-
ment as this term is used in paragraph
(a) of this section.
1541.210 Trainees, administrative.
The exemption is applicable to an
employee employed In a bona fide ad-
ministrative capacity and does not in-
clude emloyees training for employ-
ment in an administrative capacity
who are not actually performing the
duties of an administrative employee.
9541.211 Amount of salary or fees re-
quired.
(a) Except as otherwise noted in
paragraphs (b) and (c) of this section.
compensation on a salary or fee basis
at a rate of not less than $155 a week,
exclusive of board, lodging or other
facilities, is required for exemption as
an administrative employee. The re-
quirement will be met if the employee
is compensated biweekly on a salary
basis of $310. semimonthly on a salary
basis of $335.64. or monthly on a
salary basis of $071.87.
(b) In Puerto Rico, the Virgin Is-
and American Samoa, the salary
for exemption as an administra-
emplpyee is $125 per week for
other than an employee of the Federal
17
Government.
(c) In the case of academic adminis-
trative personnel, the compensation
requirement for exemption as an ad-
ministrative employee may be met
either by the payment described in
paragraph (a) or (b) of this section.
whichever is applicable, or alternative-
ly by compensation on a salary basis in
an amount which is at least equal to
the entrance salary for teachers in the
school system, or educational estab-
lishment or institution by which the
employee is employed.
(d) The payment of the required
salary must be exclusive of board.
lodging, or other facilities; that is, free
and clear. On the other hand, the reg-
ulations in Subpart A of this part do
not prohibit the sale of such facilities
to administrative employees on a cash
basis if they are negotiated In the
same manner as similar transactions
with other persons.
[38 PR 11390. May 7. 1973. as amended at 40
PR 7093. Peft. 19.. 1975] .
Postponed Regulations: Paragraph* (a) and
(b) In 1541.211 were revised at 46 FR 3014.
Jan. 13. 1981. In accordance with the Presi-
dent's Memorandum of January 29.1981 (46
FR 11227. Feb. 6. 1981). the effective date
was postponed Indefinitely at 46 FR 11972.
Feb. 12.1981.
The text of paragraphs (a) and (b) set
forth above remain* In effect pending fur-
ther action by the issuing agency. The text
of the postponed regulation appears below.
f S41JII Amount of Mlary or lea reqaind.
(a) Except u otherwise noted in para-
graphs (b) and (c) of this section, compensa-
tion on a salary or fee batli at m rate of not
lea than 8225 per week beginning February
13.1981 and 6250 per week beginning Febru-
ary 13, 1983. exclusive of board, lodging or
other facilities, is required for exemption u
an administrative employee. For example.
based on 8250 a week, the requirement will
be met If the employee Is compensated bi-
weekly on a salary basis of 8500. semi-
monthly on a salary basis of 8541.67 or
monthly on a salary basis of 81.083.33.
(b) In Puerto Rico, the Virgin Islands, and
American Samoa, the salary test for exemp-
tion at an administrative employee Is 3180
per week beginning February 13. 1981 and
8200 per week beginning February 13. 1983
for other than an employee of the Federal
Government.
1541.212 Salary basis.
The explanation of the salary basis
of payment made in f 541.118 in con-
nection with the definition of "execu-
tive" is also applicable in the defini-
tion of "administrative".
9541413 Pee basis.
The requirements for exemption as
an administrative employee may • be
met by an employee who is compensat-
ed on a fee basis as well as by one who
is paid oh a salary basis. For a discus-
sion of payment of a fee basis, see
S 541.313.
B 541.214 Special proviso for high salaried
administrative employees.
(a) Except as otherwise noted in
paragraph (b) of this section. {541.2
contains a special proviso including
within the definition of "administra-
tive" an employee who is compensated
on a salary or fee basis at a rate of not
less than $250 per week exclusive of
board, lodging, or other facilities, and
whose primary duty consists of either
the performance of office or nonman-
ual work directly related to manage-
ment policies or general business oper-
ations of the employer or the employ-
er's customers, or the performance of
functions in the administration of a
school system, or educational estab-
lishment or institution, or of a depart-
. merit or subdivision thereof, in work
directly related to the academic in-
struction or training carried on there-
in, where the performance of such pri-
mary duty includes work requiring the
exercise of discretion and Independent
judgment. Such a highly paid employ-
ee having such work as his or her pri-
mary duty is deemed to mtet all the
requirements in §541.2 (a) through
(e). If an employee qualifies for ex-
emption under this provisio, it is not
necessary to test the employee's quali-
fications in detail under f 541.2
through (e).
(b) In Puerto Rico, the Virgin Is-
lands, and American Samoa, the provi-
so of i S41.2(e) applies to those admin-
istrative employees other than an em-
ployee of the Federal Government
who are compensated on a salary or
fee basis or not less than $200 per
week.
(40 FR 7093. Feb. 19. 19751
PottpMMd Rtfalfltoac Section 541.214 was
revised at 46 FR 3015. Jan. 13. 1981. In ae-
cordmnce with the President's Memorandum
of January 29. 1981 (46 FR 11227. Feb. 6.
1981). the effective date wss postponed in-
definitely at 46 FR 11972. Feb. 12. 1981.
The text of 1 541.214 set forth above re-
mains in effect pending further action by
the issuing agency. The text of the post-
poned regulation appears below.
1541.214 Special svotte for high nlaffed ad-
(a) Except u otherwise noted in para-
graph (b) of this section. 1 541.2 contains a
special proviso including within the defini-
tion of "administrative" an employee who Is
compensated on a salary or fee basis at a
rate of not less than 8320 per week begin-
ning February 13. 1981 and 8345 per week
beginning February 13. 1983. exclusive of
board, lodging, or other facilities, and whose
primary duty consists of either the perform-
ance of office or nonmanual work directly
related to management policies or general
business operations of the employer or the
employer's customers, or the performance
of functions in the administration of a
school system, or educational establishment
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ATTACHMENT B-3a
PAGE 18 of 29
f 541 -214(t)
or Institution, or of a department or subdlvi>
sJon thereof, in work directly related to the
academic Instruction or training carried on
therein, where the performance of *uch pri-
mary duty includes work requiring the exer-
cise of discretion and independent judg-
ment. Such a highly paid employee having
such work at his or her primary duty is
deemed to meet all the requirements In
1541.2 (a) through . If an employee quali-
fies for exemption under this provisio. It Is
not necessary to test the employee's qualifi-
cations in detail under 1541.2 (a) through
.
(b) In Puerto Rico, the Virgin Islands, and
American Samoa, the proviso of 154I.2(c>
applies to those administrative employees
other than an employee of the Federal Gov-
ernment who are compensated on a salary
or fee basis or not less than $260 per week
beginning February 13. 1981 and 1285 per
week beginning February 13.1983.
5541.215 Elementary or Mcoitdary
school* and other educational estab-
lishments and institutions.
To be considered for exemption as
employed In the capacity of academic
administrative personnel, the employ-
ment must be in connection with the
operation of an elementary or second-
ary school system, an institution of
higher education, or other educational
establishment or Institution. Sections
3(v) and 3(w) of the act define elemen-
tary and secondary schools as those
day or residential schools which pro-
vide elementary or secondary educa-
tion, as determined under State law.
Under the laws of most States, such
education includes the curriculums in
grades i through 12; under .many it in-
cludes also the introductory programs
in Kindergarten. Such education in
some States may include also nursery
school programs in elementary educa-
tion and junior college curriculums in
secondary education. Education above
the secondary school level is in any
event included in the programs of In-
stitutions of higher education. Special
schools for mentally or physically
handicapped or gifted children are in-
cluded among the educational estab-
lishments in which teachers and aca-
demic administrative personnel may
qualify for the administrative exemp-
tion, regardless of any classification of
such schools as elementary, secondary.
or higher. Also, for purposes of the ex-
emption, no distinction is drawn be-
tween public or private schools. Ac-
cordingly, the classification for other
purposes of the school system, or edu-
cational establishment or institution.
is ordinarily not a matter requiring
consideration in a determination of
whether the exemption applies. If the
work is that of a teacher or academic
personnel as defined in the regula-
tions, in such an educational system.
establishment, or institution, and if
the other requirement of the regula-
tions, are met. the level of instruction
involved and the status of the school
18
as public or private or operated for
profit or not for profit will not alter
the availability of the exemption.
EMPLOYEE EMPLOYED IN A DOHA FIDE
PROFESSIONAL CAPACITY
8541.301 General.
The term "professional" is not re-
stricted to the traditional professions
of law. medicine, and theology. It in-
cludes those professions which have a
recognized status and which are based
on the acquirement of professional
knowledge through prolonged study.
It also includes the artistic profes-
sions, such as acting or music. Since
the test of the bona fide professional
capacity of such employment-is differ-
ent In character from the test for per-
sons in the learned professions, an al-
ternative test for such employees is
contained in the regulations, in addi-
tion to the requirements common to
both groups.
S54U02 Learned professions.
(a) The "learned" professions are de-
scribed in | M1.3(aXl) as those requir-
ing knowledge of an advanced type in
a field of science or learning customar-
ily acquired by a prolonged course of
specialized intellectual instruction and
study as distinguished from a general
academic education and from an ap-
prenticeship and from training in the
performance of routine mental,
manual, or physical processes.
(b) The first element in the require-
ment is that the knowledge be of an
advanced type. Thus, generally speak-
ing, it must be knowledge which
cannot be attained at the high school
level.
(c) Second, it must be knowledge in a
field of science or learning. This serves
to distinguish the professions from the
mechanical arts where In some in-
stances the knowledge is of a fairly ad-
vanced type, but not in a field of sci-
ence or learning.
(d) The requisite knowledge. In the
third place, must be customarily ac-
quired by a prolonged course of spe-
cialized Intellectual Instruction and
study. Here It should be noted that
the word "customarily" has been used
to meet a specific problem occurring In
many Industries. As is well known.
even in the rlamlral profession of law,
there are still a few practitioners who
have gained their knowledge by home
study and experience. Characteristi-
cally, the members of the profession
are graduates of law schools, but some
few of their fellow professionals whose
status is equal to theirs, whose attain-
ments are the same, and whose word Is
the same did not enjoy that opportu-
nity. Such persons «re not barred from
the exemption. The word "customar-
ily" implies that in the vast majority
of cases the specific academic training
is a prerequisite for entrance into the
profession. It makes the exemption
available to the occasional lawyer who
has not gone to law school, or the oc-
casional chemist who is not the posses-
sor of a degree in chemistry, etc.. but
it does not include the members of
such quasi-professions as journalism in
which the bulk of the employees have
acquired their skill by experience
rather than by any formal specialized
training. It should be noted also that
many employees in these quasi-profes-
slons may qualify for exemption under
other sections of the regulations in
Subpart A of this pan or under the al-
ternative paragraph of the "profes-
sional" definition applicable to the ar-
tistic fields.
(e> (I) Generally speaking the pro-
fessions which meet the requirement
for a prolonged course of specialized
intellectual instruction and study in-
clude law. medicine, nursing, account-
ing, actuarial computation, engineer-
ing, architecture, teaching, various
types of physical, chemical, and bio-
logical sciences, including pharmacy
and registered or certified medical
technology and so forth. The typical
symbol of the professional training
and the best prima fade evidence of
its possession is. of course, the
prtate academic degree, and in
professions an advanced acadei
degree is a standard (if not universal
prequlsite. In the case of registered (or
certified) medical technologists, suc-
cessful completion of 3 academic years
of preprofessional study in an accred-
ited college or university plus a fourth
year of professional course work in a
school of medical technology approved
by the Council of Medical Education
of the American Medical Association
.will be recognized as a prolonged
course of specialized intellectual in-
struction and study. Registered nurses
have traditionally been recognized as
professional employees by the Division
in its enforcement of the act. Al-
though, in some cases, the course of
study has become shortened (but more
concentrated), nurses who are regis-
tered by the appropriate State exam-
ining board will continue to be recog-
nized as having met the requirement
of 1541.3
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ATTACHMENT B-3a
PAGE 19 Of 29
f 541402{«) (2)
19
"good commonsense, combined with
long experience with a company, with-
out the aid of a college education or
degree in any area. A college education
would perhaps give an executive or ad-
ministrator a more cultured and pol-
ished approach but the necessary
know-how for doing the executive job
would depend upon the person's own
inherent talent. The professional
person, on the other hand, attains his
status after a prolonged course of spe-
cialized intellectual instruction and
study.
Many accountants are exempt as
professional employees (regardless of
whether they are employed by public
accounting firms or by other types of
enterprises). (Some accountants may
qualify for exemption as bona fide ad-
ministrative employees.) However, ex-
emption of accountants, as in the case
of other occupational groups (see
1541.308). must be determined on the
basis of the individual employee's
duties and the other criteria in the
regulations. It has been the Divisions'
experience that certified public ac-
countants who meet the salary re-
quirement of the regulations will.
except in unusual cases, meet the re-
quirements of the professional exemp-
tion since they meet the tests con-
led in 1541.3. Similarly, account-
ats who are not certified public ac-
luntants may also be exempt as pro-
fessional employees if they actually
perform work which requires the con-
sistent exercise of discretion and judg-
ment and otherwise meet the testa
prescribed in the definition of "profes-
sional" employee. Accounting clerks.
junior accountants, and other account-
ants, on the other hand, normally per-
form a great deal of routine work
which is not an essential part of and
necessarily incident to any profession-
al work which they may do. Where
these facts are found such accountants
are not exempt. The title "Junior Ac-
countant." however, is not determina-
tive of failure to qualify for exemption
any more than the title "Senior Ac-
countant" would necessarily Imply
that the employee is exempt.
(g) (1) A requisite for exemption as a
teacher is the condition that' the em-
ployee is "employed and engaged" in
this activity as a teacher In the school
system, or educational establishment
or institution by which he is em-
ployed.
(2) "Employed and engaged as a
teacher" denotes employment and en-
gagement in the named specific occu-
pational category as a requisite for ex-
emption. Teaching consists of the ac-
tivities of teaching, tutoring, instruct-
ing, lecturing, and the like in the ac-
f,y of imparting knowledge. Teach-
personnel may include the follow-
(although not necessarily limited
to): Regular academic teachers' teach-
ing,
€
ers of kindergarten or nursery school
pupils or of gifted or handicapped
children: teachers of skilled and semi-
skilled trades and occupations: teach-
ers engaged in automobile driving in-
struction; aircraft flight instructors;
home economics teachers; and vocal or
instrumental music instructors. Those
faculty members who are engaged as
teachers but also spend a considerable
amount of their time in extracurricu-
lar activities such as coaching athletic
teams or acting as moderators or ad-
visers in such areas as drama, foren-
sics. or journalism are engaged in
teaching. Such activities are a recog-
nized part of the school's responsibili-
ty In contributing to the educational
development of the student.
(3) Within the public schools of all
the States, certificates, whether condi-
tional or unconditional, have become a
uniform requirement for employment
as a teacher at the elementary and
secondary levels. The possession of an
elementary or secondary teacher's cer-
tificate provide a uniform means of
Identifying the Individuals contem-
plated as being within the scope of the
exemption provided by the statutory
language and defined in |541.3(aM3)
with respect to all teachers employed*
In public schools and those private
schools who possess State certificates.
However, the private schools of all the
States are not uniform in requiring a
certificate for employment as an ele-
mentary or secondary school teacher
and teacher's certificates are not gen-
erally necessary for employment as a
teacher in Institutions of higher edu-
cation or other educational establish-
ments which rely on other qualifica-
tion standards. Therefore, a teacher
who is not certified but is engaged in
teaching in such a school may be con-
sidered for exemption provided that
such teacher is employed as a teacher
by the employing school or school
system and satisfies the other require-
ments of 1541.3.
(4) Whether certification is condi-
tional or unconditional will not affect
the determination as to employment
within the scope of the exemption
contemplated by this section. There Is
no standard terminology within the
States referring to the different kinds
of certificates. The meanings of such
labels as permanent, standard, provi-
sional, temporary, emergency, profes-
sional, highest standard, limited, and
unlimited vary widely. For the pur-
pose of this section, the terminology
affixed by the particular State in des-
ignating the certificates does not
affect the determination of the
exempt status of the Individual.
(h) The question arises whether
computer programers and systems an-
alysts in the data processing field are
included In the learned professions. At
the present time there is too great a
variation in standards and academic
requirements to conclude that employ-
ees employed in such occupations are
a pan of a true profession recognized
as such by the academic community
with universally accepted standards
for employment in the field. Some
computer programers and systems an-
alysts may have managerial and ad-
ministrative duties which may qualify
them for exemption under 5 § 541.1 or
541.2 (see »541.206(0(7) and
541.207(0(7) of this subpart).
9 541.303 Artistic profCMiom.
(a) The requirements concerning the
character of the artistic type of pro-
fessional work are contained in
1541.3(a)(2). Work of this type Is
original and creative in character in a
recognized field of artistic endeavor
(as opposed to work which can be pro-
duced by a person endowed with gen-
eral manual or Intellectual ability and
training), and the result of which de-
pends primarily on the Invention.
imagination, or talent of ^the em-
ployee. *
(b) The work must be "itt a recog-
nized field of artistic endeavor." This
includes such fields as music, writing,
the theater, and the plastic and graph-
ic arts.
(c) (1) The work must be original
and creative in character, as opposed
to work which can be produced by a
person endowed with general manual
or intellectual ability and training. In
the field of music there should be
little difficulty in ascertaining the ap-
plication of the requirement. Musi-
cians, composers, conductors, soloists.
all are engaged in original and creative
work within the sense of this defini-
tion. In the plastic and graphic arts
the requirement is. generally speaking.
met by painters who at most are given
the subject matter of their painting. It
I* similarly met by cartoonists who are
merely told the title or underlying
concept of a cartoon and then must
rely on their own creative powers to
express the concept. It would not nor-
mally be met by a peron who is em-
ployed as a copyist, or as an "anima-
tor" of motion-picture cartoons, or as
a retoucher of photographs since it Is
not believed that such work is proper-
ly described as creative in character.
(2) In the field of writing the distinc-
tion Is perhaps more difficult to draw.
Obviously the requirement is met by
essayists or novelists or scenario writ-
ers who choose their own subjects and
hand in a finished piece of work to
their employers (the majority of such
persons are. of course, not employees
but self-employed). The requirement
would also be met. generally speaking,
by persons holding the more responsi-
ble writing positions in advertising
agencies.
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ATTACHMENT B-3a
PAGE 20 of 29
§S41303(4)
(d) Another requirement is that the'
employee be engaged in work "the
result of which-depends primarily on
the invention, imagination, or talent
of the employee." This requirement is
easily met by a person employed as an
actor, or a singer, or a violinist, or a
short-story writer. In the case of news-
paper employees the distinction here
is similar to the distinction observed
above in connection with the require-
ment that the work be "original and
creative in character." Obviously the
majority of reporters do work which
depends primarily on intelligence, dili-
gence, and accuracy. It is the minority
whose work depends primarily on "in-
vention, imaging, or talent." On the
other hand, this requirement will nor-
mally be met by actors, musicians.
painters, and other artists.
(1) The determination of the
exempt or nonexempt status of radio
and television announcers as profes-
sional employees has been relatively
difficult because of the merging of the
artistic aspects of the job with the
commercial. There is considerable
variation in the type of work per-
formed by various announcers, rang-
ing from predominantly routine to
predominantly exempt work. The wide
variation in earnings as between indi-
vidual announcers, from the highly
paid "name" announcer on a national
network who is greatly in demand by
sponsors to the staff announcer paid a
comparatively small salary in a small
station, indicates not only great differ-
ences in personality, voice and
manner, but also in some inherent spe-
cial ability or talent which, while ex-
tremely difficult to define, is neverthe-
less real.
<2> The duties which many announc-
ers are called upon to perform include:
Functioning as a master of ceremo-
nies; playing dramatic, comedy, or
straight parts in a program; interview-
ing; conducting farm, fashion, and
home economics programs; covering
public events, such as sporU programs.
in which the announcer may be re-
quired to ad lib and describe current
changing events; and acting as narra-
tor and commentator. Such work is
generally exempt. Work such as giving
station identification and time signals.
announcing the names of programs,
and similar routine work is nonexempt
work. In the field of radio entertain-
ment as in other fields of artistic en-
deavor, the status of an employee as a
bona fide professional under { 541.3 is
in large part dependent upon whether
his duties are original and creative in
character, and whether they require
invention, imagination or talent. The
determination of whether a particular
announcer is exempt as a professional
employee must be based upon his indi-
vidual duties and the amount of
exempt and nonexempt work per-
20
formed, as well as his compensation.
(f) The field of journalism also em-
ploys many exempt as well as many
nonexempt employees under the same
or similiar job titles. Newspaper writ-
ers and reporters are the principal cat-
egories of employment in which this is
found. '
(1) Newspaper writers, with possible
rare exceptions in certain highly tech-
nical fields, do not meet the require-
ments of I 54l.3(a)(l) for exemption as
professional employees of the
"learned" type. Exemption for news-
paper writers as professional employ-
ees is normally available only under
the provisions for professional employ-
ees of the "artistic" type. Newspaper
writing of the exempt type must,
therefore, be "predominantly original
and creative in character." Only writ-
ing which is analytical, interpretative
or highly individualized is considered
to be creative in nature. (The writing
of fiction to the extent that it may be
found on a newspaper-would also be
considered as exempt work.) Newspa-
per writers commonly performing
work which is original and creative
within the meaning of { 541.3 are edi-
torial writers, columnists, critics, and
"top-night" writers of analytical and
interpretative articles.
(2) The reporting of news, the re-
writing of stories received from var-
ious sources, or the routine editorial
work of a newspaper is not predomi-
nantly original and creative in charac-
ter within the meaning of | 541.3 and
must be considered as nonexempt
work. Thus, a reporter or news writer
ordinarily collects facts about news
events by investigation, interview, or
personal observation and writes stories
reporting these events for publication.
or submits the facts to a rewrite man
or other editorial employees for story
preparation. Such work is nonexempt
work. The leg man. the reporter cover-
ing a police beat, the reporter sent out
under specific instructions to cover a
murder, fire, accident, ship arrival.
convention, sport event, etc.. are nor-
mally performing duties which are not
professional in nature within the
meaning of the act and 1541.3.
(3) Incidental interviewing or Inves-
tigation, when it Is performed as an es-
sential part of and is necessarily inci-
dent to an employee's professional
work, however, need not be counted as
nonexempt work. Thus, If a dramatic
critic interviews an actor and writes a
story around the interview, the work
of interviewing him and writing the
story would not be considered as non-
exempt work. However, a dramatic
critic who is assigned to cover a rou-
tine news event such as a fire or a con-
vention would "be doing nonexempt
work since covering the fire or the
convention would not be necessary
and incident to his work as a dramatic
critic.
§ 541.304 Primary duty.
(a) For a general explanation of the
term "primary duty" see the discus-
sion of this term under "executive" in
9 541.103. See also the discussion
under "administrative" in i 541.206.
(b) The "primary duty" of an em-
ployee as a teacher must be that of ac-
tivity in the field of teaching. Mere
certification by the State, or employ-
ment in a school will not suffice to
qualify an individual for exemption
within the scope of { 541.3(a)<3) if the
individual is not in fact both employed
and engaged as a teacher (see
5 541.302(gH2)). The words "primary
duty" have the effect of placing major
emphasis on the character of the em-
ployee's job as a whole. Therefore, em-
ployment and engagement in the ac-
tivity of imparting knowledge as a pri-
mary duty shall be determinative with
respect to employment within the
meaning of the exemption a* "teach-
er" in conjunction with the ether re-
quirements of ! 541.3.
9 541 JOS DUcretlon and judgment
(a) Under {541.3 a professional em-
ployee must perform work which re-
quires the consistent exercise of
cretion and judgment in Its perfi
anee.
(b) A prime characteristic of profes-
sional work is the fact that the em-
ployee does apply his special knowl-
edge or talents with discretion and
judgment. Purely mechanical or rou-
tine work Is not professional.
9541 JOS Predominantly intellectual and
varied.
(a) Section 541.3 requires that the
employee be engaged in work predomi-
nantly intellectual and varied in char-
acter as opposed to routine mental.
manual, mechanical, or physical work.
This test applies to the type of think-
ing which must be performed by the
employee in question. While a doctor
may make 20 physical examinations in
the morning and perform in the
course of his examinations essentially
similar tests. It requires not only judg-
ment and discretion on his part but a
continual variety of interpretation of
the tests to perform satisfactory work.
Likewise, although a professional
chemist may make a series of similar
tests, the problems presented will vary
as will the deductions to be made
therefrom. The work of the true pro-
fessional is inherently varied even
though similar outward actions may
be performed.
(b) Another example of this is.
professional medical technologist f
performs complicated chemical, m _
scopic. and bacteriological tests and
procedures. In a large medical labors-
, mflgW
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ATTACHMENT B-3a
PAGE 21 of 29
S 54! J06{b)
tory or clinic, the technologist usually
specializes in making several kinds of
related tests in areas such a* microbi-
ology, parasitology. biochemistry, he-
matology. histology, cytology, and nu-
clear medical technology. The tech-
nologist also does the blood banking.
He will also conduct tests related to
the examination and treatment of pa-
tients, or do research on new drugs, or
on the improvement of laboratory
techniques, or teach and perform ad-
ministrative duties. The simple, rou-
tine, and preliminary tests are general-
ly performed by laboratory assistants
or technicians. However, technologists
who work in small laboratories may
perform tasks that are performed by
nonexempt employees in larger estab-
lishments. This type of activity will
not necessarily be considered nonex-
empt (see {541.307).
(c) On the other hand. X-ray techni-
cians have only limited opportunity
for the exercise of independent discre-
tion and judgment, usually performing
their duties under the supervision of a
more highly qualified employee. The
more complex duties of interpretation
and judgment in this field are per-
formed by obviously exempt profes-
sional employees.
1 JOT Essential part of and necessarily
incident to.
Section 541.3(d). it will be noted.
has the effect of including within the
exempt work activities which are an
essential part of and necessarily inci-
dent to the professional work de-
scribed in 1541.3 through . This
provision recognizes the fact that
there are professional employees
whose work necessarily Involve* some
of the actual routine physical tasks
also performed by obviously nonex-
empt employees. For example, a chem-
ist performing important and original
experiments frequently find* it neces-
sary to perform himself some of the
most mental tasks in conoBCttaD with
the operation of his experiments, even
though at times these nMonl task*
can be conveniently or properly as-
signed to laboratory assistant*. See
also the example of Incidental Inter-
viewing or investigation In
1541.303(aX3).
(b) It should be noted that the test
of whether routine work is exempt
work is different in the definition of
"professional" from that in the defini-
tion of "executive" and "administra-
tive." Thus, while routine work will be
exempt If It Is "directly and closely re-
lated" to the performance of executive
vr administrative duties, work which Is
and closely related to the per-
of the professional duties
I not be exempt unless It is also "an
essential part of and necessarily incl-
21
dent to" the professional work.
(c) Section S41.3(d) takes into con-
sideration the fact that there are
teaching employees whose work neces-
sarily Involves some of the actual rou-
tine duties and physical tasks also per-
formed by nonexempt employees. For
example, a teacher may conduct his
pupils on a field trip related to the
classroom work of his pupils and In
connection with the field trip engage
in activities such as driving a school
bus and monitoring the behavior of
his pupils In public restraurante.
These duties are an essential part of
and necessarily incident to his job as
teacher. However, driving a school bus
each day at the beginning and end of
the schools day to pick up and deliver
pupils would not be exempt type work.
8 Ml JOS Nonesempt work generally.
(a) It has been the Divisions' experi-
ence that some employers erroneously
believe that anyone employed in the
field of accountancy, engineering, or
other professional fields, will qualify
for exemption a* a professional em-
ployee by virtue of such employment.
While there are many exempt employ-
ee* in theae fields, the exemption of
Individual depends upon his duties and
other qualifications.
(b) It i* necessary to emphasize the
fact that section 13 exempt*
"any employee employed in a bona
fide • • • professional capacity." It
does not exempt all employees of pro-
fessional employers, or all employees
in industries having large numbers of
professional members, or all employ-
ee* In any particular occupation. Nor
does it exempt, as such those learning
a profession. Moreover, it does not
exempt persons with professional
training, who are working in profes-
sional fields, but performing sub-
professional or routine work. For ex-
ample. In the field of library science
there are large numbers of employees
who are .trained librarians but who.
nevertheless, do not perform profes-
sional work or receive salaries com-
mensurate with recognized profession-
al status. The field of "engineering"
has many persons with "engineer" .
titles, who are not professional engi-
neers, a* well as many who are trained
in the engineering profession, but are
actually working as trainees, junior
engineers, or draftsmen.
0541.300 20-percent noncxempt work llml-
9 541.310 Trainees, professional.
The exemption applies to an em-
ployee employed in a bona fide profes-
sional capacity and does not include
trainees who are not actually perform-
ing the duties of a. professional em-
ployee.
§541.311 Amount ot (alary or fees re-
quired.
(a) Except as otherwise noted in
paragraphs (b) and (c) of this section.
compensation on a salary or fee basis
at a rate of not less than $170 per
week, exclusive of board, lodging or
other facilities, is required for exemp-
tion as a "professional employee." An
employee will meet this requirement if
paid a biweekly salary of $340. a semi
monthly salary of $368.33 or a month-
ly salary of $736.67.
(b) In Puerto Rico, the Virgin Is-
lands. and American Samoa the salary
test for exemption as a "professional"
for other than employees of the Fed-
eral Government is $150 per week.
(c) The payment of the compensa-
tion specified in paragraph (a) or (b)
of this section is not a requisite for ex-
emption in the case of employees
exempted from this requirement by
the proviso to { 541.3(e). as explained
in f 941.314.
(d) The payment of the required
salary must be exclusive of board.
lodging, or other faculties; that is, free
and clear. On the other hand, the reg-
ulations in Subpart A of this part do
not prohibit the sale of such facilities
to professional employees on a cash
basis If they are negotiated in the
same manner as similar transactions
with other persons.
(38 PR 11390. May 7. 1073. u amended at 40
PR 7M3. Feb. 10, 1079)
Time spent in nonexempt work, that
I Is. work which is not an essential part
of and necessarily Incident to the
exempt work, is limited to 20 percent
of the time worked by the employee in
the workweek.
Refutation*: Paragraph* (a) and
(b) In I M1.311 were revised at 48 FR 3013.
Jan. 13. 1081. In accordance with the Presi-
denf» Memorandum of January 20. 1981 (4«
FR 11337. Feb. 8. 19*1). the effective date
wai postponed indefinitely at 46 PR 11073.
Feb. 12. 1081.
The text of parairaphs (a) and (b) *et
forth above remains In effect pending fur-
ther action by the issuing agency. The text
of the postponed regulation appears below.
IM1J11 AiMMrat of latanr or f*n require*.
(a) Except as otherwise noted In pan-
graphs (b) and of this section, compensa-
tion on • salary or fee basis at a rate of not
less than 8250 per week beginning February
13. 1081 and 8280 per week beginning Febru-
ary 13. 1083, exclusive of board, lodging or
other faculties, is required for exemption as
a "professional employee." For example,
based on 8380 a week, an employee will meet
this requirement If paid a biweekly salary of
1500. s semi-monthly salary of $806.67 or a
monthly salary of $1.213.33.
(b) In Puerto Rico, the Virgin Islands, and
American Samoa the salary test for exemp-
tion as a "professional" for other than em-
-------
§ 54141 l(b)
ATTACHMENT B-3a
PAGE 22 of 29
22
ployees of the Federal Government is $225
per week beginning February 13. 1981 and
$250 per week beginning February 13. 1983.
§541.312 Salary basis.
The salary basis of payment is ex-
plained in 5 541.118 in connection with
the definition of "executive."
1541.313 Fee basis.
(a) The requirements for exemption
as a professional (or administrative)
employee may be met by an employee
who is compensated on a fee basis as
well as by one who is paid on a salary
basis.
(b) Little or no difficulty arises in
determining whether a particular em-
ployment arrangement involves pay-
ment on a fee basis. Such arrange-
ments are characterized by the pay*
ment of an agreed sum for a single Job
regardless of the time required for its
completion. These payments in a sense
resemble piecework payments with the
important distinction that generally
speaking a fee payment is made for
the kind of job which is unique rather
than for a series of jobs which are re-
peated an indefinite number of times
and for which payment on an identical
basis is made over and over again. Pay-
ments based on the number of hours
or days worked and not on the accom-
plishment of a given single task are
not considered payments on a fee
basis. The type of payment contem-
plated in the regulations in Subpart A
of this part is thus readily recognized.
The adequacy of a fee payment.
Whether it amounts of payment at a
rate of not less than (170 per week to
a professional employee or at a rate of
not less than $155 per week to an ad-
ministrative employee can ordinarily
be determined only after the time
worked on the Job has been deter-
mined. In determining whether pay-
ment is at the rate specified in the reg-
ulations in Subpart A of this part the
amount paid to the employee will be
tested by reference to a standard
workweek of 40 hours. Thus compli-
ance will be tested in each caw of a fee
payment by determining whether the
payment is at a rate which would
amount to at least $170 per week to a
professional employee or at a rate of
not less than $155 per week to an ad-
ministrative employee if 40 hours were
worked.
The following examples will illus-
trate the principle stated above:
(DA singer receives $50 for a song
on a 15-minute program (no rehearsal
time is involved). Obviously the re-
quirement will be met since the em-
ployee would earn $170 at this rate of
pay in far leas than 40 hours.
(2) An artist is paid $100 for a pic-
ture. Upon completion of the assign-
ment, it is determined that the artist
worked 20 hours. Since earnings at
this rate would yield the artist $200 if
40 hours were worked, the require-
ment is met.
(3) An illustrator is assigned the il-
lustration of a pamphlet at a fee of
(ISO. When the job is completed, it is
determined that the employee worked
60 hours. If the employee worked 40
hours at this rate, the employee would
have earned only $100. The fee pay-
ment of $150 for work which required
60 hours to complete therefore does
not meet the requirement of payment
at a rate of $170 per week and the em-
ployee must be considered nonexempt.
It follows that if in the performance
of this assignment the illustrator
worked in excess of 40 hours in any
week, overtime rates must be paid.
Whether or not the employee worked
in excess of 40 hours in any week, rec-
ords for such an employee would
have to be kept in accordance with the
regulations covering records for non-
exempt employees (Part 516 of this
chapter).
(38 FR 11390. May 7. 1973. u amended at 40
FR 7093. Feb. 19. 19751
Postponed Regulation*: Paragraphs in 1541.313 were revised at 46 FR 3015.
Jan. 13. 1981. In accordance with the Presi-
dent's Memorandum of January 29.1981 (46
FR 11227. Feb. 6. 1981). the effective date
was postponed Indefinitely at 46 FR 11972.
Feb. 12.1981.
The text of paragraphs and set
forth above remains in effect pending fur-
ther action by the issuing agency. The text
of the postponed regulation appears below.
I541J13 Fm tails.
(c) Examples of the adequacy of certain
fee payment* follow. For example, whether
a fee payment amounts to payment at a rate
of not leas than 8280 per week to a profes-
sional employee or at a rate of not less than
8250 per week to an administrative employ-
ee can ordinarily be determined only after
the time worked on the Job has been deter-
mined. In determining- whether payment is
at the rate specified in the regulations in
Subpart A of this part the amount paid to
the employee will be tested by reference to
a standard workweek of 40 hours. Thus
compliance will be tested In each case of a
fee payment by determining whether the •
payment is at a rate which would amount to
at least 8280 per week to a professional em-
ployee or at a rate of not less then 8250 per
week to an administrative employee If 40
hours were worked.
(d) The following examples will illustrate
the principle stated above:
(DA singer receives 850 for a song on a
15-mlnute program (no rehearsal time is in-
volved). Obviously the requirement will be
met since the employee would earn 8280 at
this rate of pay in far less than 40 hourt
(2) An artist Is paid 8150 for a picture.
Upon completion of the assignment it is de-
termined that the artist worked 20. hours.
Since earnings at this rate would yield the
artist $300 if 40 hours were worked, the re-
quirement is met.
(3) An Isslustrator Is assigned the illustra-
tion of a pamphlet at a fee of $180. When
the job is completed. It is determined that
the employee worked 60 hours. If the em-
ployee worked 40 hours at this rate, the em-
ployee would have earned only $120. The
fee payment of $180 for work which re-
quired 60 hours to complete therefore does
not meet the requirement of payment at a
rate of $280 per week and the employee
must be considered nonexempt. If follows
that if in the performance of this assign-
ment the illustrator worked in excess of 40
hours In any week, overtime rates must be
paid. Whether or not the employee worked
In excess of 40 hours in any week, records
for such an employee would have to be kept
In accordance with the regulations covering
records for nonexempt employees (Part 516
of this chapter).
0541.314 Exception for physician!), law-
yers, and teacher*.
(a) A holder of a valid license or cer-
tificate permitting the practice of law
or medicine or any of their branches.
who is actually engaged in practicing
the profession, or a holder of the req-
uisite academic degree for the general
practice of medicine who is engaged in
an internship or resident program pur-
suant to the practice of his profession,
or an employee employed and engaged
as a teacher in the activity of im
ing knowledge, is excepted from
salary or fee requirement. This ex
tion applies only to the traditional
professions of law, medicine, and
teaching and not to employees in re-
lated professions which merely serve
these professions.
(b) In the case of medicine:
(1) The exception applies to physi-
cians and other practitioners licensed
and practicing in the field of medical
science and healing or any of the
medical specialities practiced by physi-
cians or practitioners. The term physi-
cians means medical doctors including
general practitioners and specialists,
and osteopathic physicians (doctors of
osteopathy). Other practitioners in
the field of medical science and heal-
ing may include podiatrists (some-
times called chiropodists), dentists
(doctors of dental medicine), optom-
etrists (doctors of optometry or bache-
lors of science in optometry).
(2) Physicians and other practition-
ers included in paragraph (bXl) of
this section, whether or not licensed to
practice prior to commencement of an
internship or resident program, are ex-
cepted from the salary or fee require-
ment during their internship or resi-
dent program, where such a training
program is entered upon after the
earning of the appropriate degree re-
quired for the general practice of the
profession.
(c) In the case of medical occui
tions. the exception from the salary
fee requirement does not apply to
re-
*
r Of^
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ATTACHMENT B-3a
PAGE 23 of 29
§ S4U14(c)
23
pharmacists, nurses, therapists.- tech-
nologists, sanitarians, dietitians, social
workers, psychologist*, psychome-
trists. or other professions which serv-
ice the medical profession.
054UIS Special pro»i»o for high salaried
professional employe**.
(a) Except as otherwise noted in
paragraph (b> of this section, the defi-
nition of "professional" contains a spe-
cial proviso for employees who are
compensated on a salary or fee basis at
a rate of at least $250 per week exclu-
sive of board, lodging, or other facili-
ties. Under this proviso, the require-
ments for exemption in i 541.3 (a)
through (e) will be deemed to be met
by an employee who receives the
higher salary or fees and whose pri-
mary duty consists of the performance
of work requiring knowledge of an ad-
vanced type in a field of science or
learning, or work as a teacher in the
activity of Imparting knowledge.
which includes work requiring the con-
sistent exercise of discretion and judg-
ment, or consists of the performance
of work requiring invention, imagina-
tion, or talent in a recognized field of
artistic endeavor. Thus, the exemption
will apply to highly paid employees
employed either in one of the
"learned" professions or in an "artis-
tic" profession and doing primarily
professional work. If an employee
qualifies for exemption under this pro-
viso, it is not necessary to teat the em-
ployee's qualifications in detail under
1541.3 (a) through (e).
(b) In Puerto Rico, the Virgin Is-
lands, and American Samoa the
second proviso of I S41.3(e) applies to
those "professional" employees (other
than employees of the Federal govern-
ment) who are compensated on a
salary or fee basis of not less than
$200 per week.
(40 PR TOOT. Feb. 19.1975)
PostsoiMri RtgulaiiM*: Section M1.319 vat
revised at 46 PR 3018, Jan. 11. Ittl. In ac-
cordance with the President's Memorandum
of January 29. 1981 (46 PR 11237, Feb. 6,
1981). the effective date vat psstponed in-
definitely at 46 PR 11972. **. IS. 1M1.
The text of f 541.315 set forth above re-
main* in effect pending further action by
the issuing agency. The text of the post-
poned regulation appear* below.
IMI4IS Special proviso for Uffc calarM pro-
fewfcuul «••*>;««.
(a) Except aa otherwise noted in para-
graph (b) of this section, the definition of
"professional" contain* a special proviso for
employee! who are compensated on a salary
or fee basis at a rate of at least 8320 per
week beginning February 13,1M1 and 8343
per week beginning February 13. 1983. ex-
clusive of board, lodging, or other facilities.
Onder thi* proviso, the requirements for ex-
in 1541.3 (a) through f*) will be
to be met by an employee who re-
ceives the higher salary or fees and whose
primary duty consists of the performance of
work requiring Knowledge, of an advanced
type In a field of science or learning, or
work u * teacher In the activity of impart-
ing knowledge, which Includes work requir-
ing the consilient exercise of discretion and
judgment, or consist* of the performance of
work requiring invention, imagination, or
talent in a recognised field of aniitic en-
deavor. Thus, the exemption will apply to
highly paid employees employed either in
one of the "learned" professions or in an
"artistic" profesxion and doing primarily
professional work. If an employee qualifies
for exemption under this proviso. It I* not
necessary to test the employee's qualifica-
tions In detail under I 541.3 (a) through (e),
(b) In Puerto Rico, the Virgin Islands, and
American .Samoa the second proviso of
|M1.3(e) applies to those "professional"
employees (other than employee* of the
Federal Government) who are compensated
on a salary or fee basis of not less than (260
per week beginning February 13. 1981 and
8285 per week beginning February 13, 1983.
EKPLOYZE Emoro nr tm CAMCTTY
OP OVTSXDK SALtSMAlt
1541.500 Definition of "outside sales-
Section 541.5 defines the term "out-
side salesman" as follows: The term
"employee employed * •• in the ca-
pacity of outside salesman" in section
13 of the act. or (2) obtaining orders
or contracts for service* or for the use
of facilities.
(b) Generally speaking, the divisions
have Interpreted section 3(k) of the
act to Include the transfer of title to
tangible property, and in certain cases.
of tangible and valuable evidences of
intangible property. Thus sales of
automobiles, coffee, shoes, cigars,
stocks, bonds, and insurance are con-
strued as sales within the meaning of
section 3(k). (Sec. 3(k) of the act states
that "sale" or "sell" includes any sale.
exchange, contract to sell, consign-
ment for sale, shipment for sale, or
other disposition.)
(c) It will be noted that the exempt
work includes not only the sales of
commodities, but also "obtaining
orders or contracts for services or for
the use of facilities for which a consid-
eration will be paid by the client or
customer." "Obtaining orders or * • •
for the use of facilities" includes the
selling of time on the radio, the solici-
tation of advertising for newspapers
and other periodicals and the solicita-
tion of freight for railroads and other
transportation agencies.
(d) The word "services" extends the
exemption as outside salesmen to em-
ployees who sell or take orders for a
service, which is perfom»fd for the
customer by someone othar than the
person taking the order. Pwr example,
it Includes the salesman ofa typewrit-
er repair service who does not himself
do the repairing. It also includes oth-
erwise exempt outside salesmen who
obtain orders for the laundering of the
customer's own linens as well as those
who obtain orders for the rental of the
laundry's linens.
(e) The inclusion of the word "serv-
ices" is not intended to exempt per-
sons who, in a very loose sense, are
sometimes described as selling "serv-
ices". For example, it does not include
persons such as servicemen even
though they may sell the service
which they themselves perform. Sell-
ing the service in such cases would be
incidental to the servicing rather than
the reverse. Nor does it include outside
buyers, who in a very loose sense are
sometimes described as selling their
employer's "service" to the person
from whom they obtain their goods. It
is obvious that the relationship here is
the reverse of that of salesman-cus-
tomer.
• 541.502 Away from hi* employer1! place
of I
(a) Section 541.5 requires that an
outside falffi"»n be customarily and
regularly engaged "away from his em-
ployer's place or places of business".
This requirement is based on the obvi-
ous connotation of the word "outside"
in the term "outside salesman". It
would obviously lie beyond the scope
of the Administrator's authority that
"outside salesman" should be con-
strued to include inside salesmen.
Inside sales and other inside work
(except such as Is directly In conjunc-
tion with tad incidental to outside
-------
ATTACHMENT B-3a
PAGE 24 of 29
§ 541.502(a)
24
sales and solicitations, as explained in
paragraph of this section) is non-
exempt.
(b) Characteristically the outside
salesman is one who makes his sales at
his customer's place of business. This
is the reverse of sales made by mall or
telephone (except where the tele-
phone is used merely as an adjunct to
personal calls). Thus any fixed site.
whether home or office, used by a
salesman as a headquarters or for tele-
phonic solicitation of sales must be
construed as one of his employer's
places of business, even though the
employer is not in any formal sense
the owner or tenant of the property. It
should not be inferred from the fore-
going that an outside salesman loses
his exemption by displaying his sam-
ples in hotel sample rooms as he trav-
els from city to city; these sample
rooms should not be considered as his
employer's places of business.
f 541.503 Incidental to and in conjunction
with talei work.
Work performed "incidental to and
in conjunction with the employee's
own outside sales or solicitation" in-
cludes not only Incidental deliveries
and collections which are specifically
mentioned in f 541.5, but also any
other work performed by the employ-
ee in furthering his own sales efforts.
Work performed incidental to and in
conjunction with the employee's own
outside sales or solicitations would in-
clude, among other things, the writing
of his sales reports, the revision of his
own catalog, the planning of his itiner-
ary and attendance at sales confer-
ences.
§541.504 Promotion work.
-------
§S*1.S04(c){3)
ATTACHMENT B-3a
PAGE 25 of 29
25
the order. In such Instances the utility
representative is not an outside sales-
man since he does not consummate
the sale or direct his efforts toward
making the sale himself. Similarly, the
utility representative is not exempt as
an outside salesman if he merely per-
suades the consumer to purchase an
appliance and the consumer then goes
to an appliance dealer and places his
order.
(4) Still another type of situation in-
volves the company representative
who visits chainstores, arranges the
merchandise on shelves, replenishes
stock by replacing old with new mer-
chandise, consults with the manager
as to the requirements of the store.
fills out a requisition for the quantity
wanted and leaves It with the store
manager to be transmitted to the cen-
tral warehouse of the chainstore com-
pany which later ships the quantity
requested. The arrangement of mer-
chandise on the shelves or the replen-
ishing of stock is not exempt work
unless it is incidental to and in con-
junction with the employee's own out-
side sales. Since the manufacturer's
representative in this instance does
not consummate the sale nor direct
his efforts toward the consummation
of a sale (the store manager often has
no authority to buy)'this work must
be counted as nonexempt.
1641 JOS Driver taiewMit.
(a) Where driven who deliver to an
employer's customers the products dis-
tributed by the employer also perform
functions concerned with the selling
of such products, and questions arise
as to whether such an employee is em-
ployed In the capacity of outside sales-
man, all the facts bearing on the con-
tent of the job as a whole mutt be
scrutinized to determine whether such
an employee is really employed for the
purpose of making sales rather than
for the service and delivery duties
which he performs and. if so. whether
he is customarily and regularly en-
gaged in making sales and his per-
formance of nonexempt work is suffi-
ciently limited to come within the tol-
erance permitted by 1541.5. The em-
ployee may qualify as an employee
employed in the capacity of outside
salesman if, and only if, the facts
clearly indicate that he is employed
for the purpose of making sales and
that he is customarily and regularly
engaged in such activity within the
meaning of the act and this part. As in
the case of outside salesmen whose
jobs do not involve delivery of prod-
ucts to customers, the employee's
chief duty or primary function must
be the making of sales or the taking of
orders if he is to qualify under the
definition in §541.5. Be must be a
salesman by occupation. If he Is. all
work that he performs which is actual-
ly incidental to and in conjunction
with his own sales effort is exempt
work. All other work of such-an em-
ployee is nonexempt work. A determi-
nation of an employee's chief duty or
primary function must be made in
terms of the basic character of the job
as a whole. All of the duties performed
by an employee must be considered.
The time devoted to the various duties
is an important, but not necessarily
controlling, element.
(b) Employees who may perform a
combination of selling or sales promo-
tion activities with product deliveries
are employed in a number of indus-
tries. Distributors of carbonated bever-
.agea, beer, bottled water, food and
'dairy products of various kinds, cigars
and other nonfood products commonly
utilize such employees, variously
known as routemen. route drivers,
.route salesmen, dealer salesmen, dis-
tributor salesmen, or driver salesmen.
Some such emloyees deliver at retail
to customers' homes; others deliver on
wholesale routes to such customers as
retail stores, restaurants, hospitals.
hotels, taverns, and other business es-
tablishments. Whether such an em-
ployee qualifies as an outside salesman
under the regulations depends, as
stated in paragraph (a) of this section.
on the content of the job as a whole
and not on its title or designation or
the kind of business in which the em-
ployer is engaged. Hearings in 1964
concerning the application of 1541.5
to such employees demonstrated that
there Is great variation in the nature
and extent of sales activity and its sig-
nificance as an element of the job. as
among driven whose duties an per-
formed with respect to different prod-
ucts or different industries and also
among drivers engaged in the same in-
dustry in delivering products to differ-
ent types of customers. In some cases
the fact* may make It plain that such
an employee la employed for the pur-
pose of making sales; in other cases
the facts are equally clear that he is
employed for another purpose. Thus,
there Is little question that a route-
man who provides the only sales con-
tact between the employer and the
customers, who calls on customers and
takes orders for products which he de-
livers from stock in his vehicle or pro-
cures and delivers to the customer on
a later trip, and who receives compen-
sation commensurate with the volume
of products sold, is employed for the
purpose of making sales. It Is equally
clear, on the other hand, that a route-
man whose chief duty is to transport
products sold by the employer
through vending machines and to keep
such machines stocked, in good operat-
ing condition, and in good locations, is
not selling his employer's product or
employed for the purpose of, making
sales but is employed for purposes
which, although important to the pro-
motion of sales to customers using the
machines, plainly cannot characterize
the employee as a salesman by occupa-
tion. In other cases there may be more
difficulty in determining whether the
employee is employed for the purpose
of making sales within the meaning of
this part. The facts in such cases must
be weighed in the light of the princi-
ples stated in paragraph (a) of this
section, giving due consideration to
the factors discussed in subsequent
paragraphs of this section.
(c) One source of difficulty in deter-
mining the extent to which a route
driver may actually be engaged in
making sales arises from the fact that
such a driver often calls on established
customers day after day or week after
week, delivering a quantity of his em-
. ployer's products at each call. Plainly,
such a driver is not making sales when
he delivers orders to customers to
• whom he did not make the initial sale
in amounts which are exactly or ap-
proximately prearranged *y customer
or contractual arrangement or in
amounts specified by Uje customer
and not significantly affected by solici-
tations of the customer by the deliver-
' ing driver. Making such deliveries, as
well as recurring deliveries the
amounts of which are determined by
the volume of sales by the customer
since the previous delivery rather than
by any sales effort of the driver, do
not qualify the driver as an outside
salesman nor are such deliveries and
the work incident thereto directly to
the making or soliciting of sales by the
driver so as to be considered exempt
work. On the other hand, route driven
are making sales when they actually
obtain or solicit, at the stops on their
routes, orden for their employer's
products from persons who have au-
thority to commit the customer for
purchases. A driver who calls on new
prospects for customen along his
route and attempts to convince them
of the desirability of accepting regular
delivery of goods Is likewise engaged in
sales activity and is making sales to
those from whom he obtains a com-
mitment. Also, a driver salesman call-
ing on established customen on his
route, carrying an assortment of the
articles which his employer sells, may
be making sales by persuading regular
customen to accept delivery of in-
creased amounts of goods or of new
products, even though the initial sale
or agreement for delivery of the em-
ployer's products may have been made
by someone else. Work which is per-
formed incidental to and in conjunc-
tion with such sales activities will also
be considered exempt work, provided
such solicitation of the customer is
frequent and regular. Incidental activi-
ties Include loading the truck with the
goods to be sold by the driver sales-
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ATTACHMENT B-3a
PAGE 26 of 29
§ 541.505(cl .
26
man. driving the truck, delivering the
products sold, removing empty con-
tainers for return to the employer.
and collecting payment for the goods
delivered,
Neither delivery of goods sold by
others nor sales promotion work as
such constitutes making sales within
the meaning of S 541.5; delivery men
and promotion men are not employed
in the capacity of outside salesmen for
purposes of section 13
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ATTACHMENT B-3a
PAGE 27 of 29
27
referred to in i541.501(e). are not
exempt as outside salesmen. They are
primarily engaged in delivery or serv-
ice functions, not in outside selling.
8541.506 Nonexempt work generally
Nonexempt work is that work which
is not sales work and is not performed
incidental to and In conjunction with
the outside sales activities of the em-
ployee. It includes outside activities
like meter-reading, which are not pan
of the sales process. Inside sales and
all work incidental thereto are also
nonexempt work. So is clerical ware-
house work which is not related to the
employee's own. sales. Similarly, the
training of other salesmen is not
exempt as outside sales work, with one
exception. In some concerns it Is the
custom for the salesman to be accom-
panied by the trainee while actually
making sales. Under such circum-
stances it.appears that normally the
trainer-salesman and the trainee make
the various sales Jointly, and both nor-
mally receive a commission thereon.
In such instances, since both are en-
gaged in making sales, the work of
both is considered exempt work. How-
ever, the work of a helper who merely
assists the aalfaman in transporting
goods or samples and who is not di-
conceraed with effectuating the
; is nonexempt work.
20-percent limitation on aonex-
empt work.
Nonexempt work In the definition of
"outside salesman" is limited to "20
percent of the hours worked in the
workweek by nonexempt employees of
the employer." The 20 percent Is com-
puted on the basis of the hours
worked by nonexempt employees of
the employer who perform the kind of
nonexempt work performed by the
outside salesman If there are no em-
ployees of the employer performing
such nonexempt work, the base to be
taken is 40 hours a week, and the
amount of nonexempt work allowed
will be 8 hours a week,
S 541.548 Trainees, outside safcmnia
The exemption is applicable to an
employee employed in the capacity of
outside salesman and does not include
employees training to become outside
salesmen who are not actually per-
forming the duties of an outside sales-
man (see also i 541.506).
SPECIAL PROBLZMS
0S41.6MI Combination exemptions
(a) The divisions' position under the
regulations in Subpart A of this part
.Its the "tacking" of exempt work
• one section of the regulations in
A to exempt work under an-
aer section of those regulations, so
that a person who. for example, per-
forms a combination of executive and
professional work may Qualify for ex-
emption. In combination exemptions,
however, the employee must meet the
stricter of the requirements on salary
and nonexempt work. For Instance, if
the employee performs a combination
of an executive's and an outside sales-
man's function (regardless of which
occupies most of his time) he must
meet the salary requirement for ex-
ecutives. Also, the total hours of non-
exempt work under the definition of
"executive" together with the hours of
work which would not be exempt if he
were clearly an outside salesman, must
not exceed either 20 percent of his
own time or 20 percent of the hours
worked in the workweek by the nonex-
empt employees of the employer.
whichever is the smaller amount.
(b) Under the principles in para-
graph (a) of this section combinations
of exemptions under the other sec-
tions of the regulations in Subpart A
of this part are. also, permissible. In
short, under the regulations in Sub-
pan A. work which is "exempt" under
one section of the regulations in Sub-
part A will hot defeat the exemption
under any other section.
6 541.MI Special provision for motion pic-
ture producing imtaitty.
Under | 541.5a, the requirement that
the employee be paid "on a salary
basis" does not apply to an employee
in the motion picture producing indus-
try who Is compensated at a base rate
of at least $250 a week (exclusive of
board, lodging, or other facilities).
Thus, an employee in this industry
who is otherwise exempt under
fi 541.1.541.2, or 541J and who is em-
ployed at a base rate of at least $250 a
week Is exempt if he is paid at least
prorata (based on a week of not more
than 6 days) for any week when he
does not work a full workweek for any
reason. Moreover, an otherwise
exempt employee in this industry
qualifies for exemption if he is em-
ployed at a dally rate under the fol-
lowing circumstances: (a) The employ-
ee is in a job category for which a
weekly base rate is not provided and
his daily base rate would yield at least
(250 if 6 days were worked: or (b) the
employee is in a job category having a
weekly base rate of at least $250 and
his daily bate rate la at least one-sixth
of such weekly base rate.
The higher Minimum salary tests will
be effective on April 1.1975.
t40FR 1094. Feb. 19, 197BJ
i Seetloo 641.601 4wa*
revised at 46 PR 30l«. Jan. 13.1981. In ac-
cordance with the President's Memorandum
of January 29. Ittl (46 PR 11227, Feb. 6.
1981). the effective date was postponed in-
definitely at 46 FR U973. Feb. 12.1981.
The text of I S41.60I set forth above re-
mains tn effect pending further action by
the teuinc atency. The text of the post-
poned regulation appean below.
IS4I.W1 Special prvrtton for awtfcHi frietiirc
producing indurtry.
Under 1941.Sa. the requirement that the
employee be paid "on a salary basis" does
not apply to an employee in the motion pic-
ture producing industry who is compensated
at a bate rate of at least S330 per week be-
ginning Febraury 13. 1961 and $348 per
week beginning February 13,1983 (exclusive
of board, lodging, or other facilities). Thus,
an employee in this industry who is other-
wise exempt under II 541.1, 541.2. or 641.3
and who is employed at a base rate of at
least $330 per week beginning February 13.
1981 and $345 per week beginning February
13,1983 Is exempt If he is paid at least pro-
rata (bated on a week of not more than 6
days) for any week when he does not work a
fuU workweek for any reason. Moreover, an
otherwise exempt employee in this industry
qualifies for exemption If he Is employed at
a daily rate under the following circum-
stances: (a) The employee is uva job catego-
ry for which a weekly base raff Is not pro-
vided and his dally base rate Mild yield at
least $330 per week beginning February 13,
1981 and $343 per week betmnf)* February
13. 1983 if 6 days were worke* or (b) the
employee Is in a job category having a
weekly base rate of at least $390 per week
beginning February 13, 1983 and his daily
bate rate is at least one-sixth of such weekly
base rate.
The higher m<«>mum amlary tests will be
effective on February 13. 1981. and Febru-
ary 13.1983. respectively.
0641.602 Special proviso concerning ex,
ecutlve and administrative employee*
in muhi-suire retaiunff oatntnoa.
(a) The tolerance of up to 40 percent
of the employee's time which to al-
lowed for nonexempt work performed
by an executive or admtnistratrre em-
ployee of a retail or service estabUah-
ment does not apply to employees of a
multiunlt retailing operation, such as
a chainstore system, or a retail estab-
lishment having one or more branch
stores, who perform central functions
for the organization in physically sep-
arated establishments such as ware-
houses, central office buildings or
other central service units or by trav-
eling from store to store. Nor does this
special tolerance apply to employees
who perform central office, warehous-
ing, or service functions in a multi-unit
retailing operation by reason of the
fact that the space provided for such
work is located in a portion or portions
of the building in which the main
retail or service establishment or an-
other retail outlet of the organisation
Is also situated. Such employees are
subject to the 20-percent limitation on
nonexempt work.
(b) With respect to executive or ad-
ministrative employees stationed in
-------
§ *41.602(b) .
ATTACHMENT B-3a
PAGE 28 of 29
28
the main store of a multlstore retail-
ing operation who engage in activities
(other than central office functions)
which relate to the operations of the
main store, and also to the operations
of one or more physically separated
units, such as branch stores, of the
same retailing operation, the Divisions
will, as an enforcement policy, assert
no disqualification of such an employ-
ee for the section 13(a 1) exemption by
reason of nonexempt activities if the
employee devotes less than 40 percent
of his time to such nonexempt activi-
ties. This enforcement policy would
apply, for example, in the case of a
buyer who works in the main store of
a multistore retailing operation and
who not only manages the millinery
department in the main store, but is
also responsible for buying some or all
of the merchandise sold in the milli-
nery departments of the branch
stores.
OCCUPATIONAL Imsx
NOTE This index lists, for ease of refer-
ence, the sections of this part which refer to
job titles. The user should note, however.
that where job titles do appear in the Illus-
trations in the text, they should not be con-
strued to mean that employees holding such
titles are either exempt or nonexempt or
that they meet any one of the specific re-
quirements for exemption.
Accountant, 541.302
Account executive. 541.201.541.205
Actor. 541.303
Adjuster. 541.205
Advisory specialist. 541.205
Analyst, wage rate. 541.201.541.205
Animator. 541.303
Announcer, radio. 541.303
Announcer, television. 541.303
Artist. 541.303, 541.313
Assistant, administrative. 541.201. 541.208.
541.207, 641.208
Assistant buyer. 541.105.541.201,541.206
Assistant, confidential, 541.301
Assistant, executive, 541.201
Assistant department head. 841.108
Assistant to general msniger. 841.201
Assistant to president. 54L2O1.841.207
Auditor, traveling, 541.201
Bookkeeper, 541.205,541 JOT
Bookkeeper, head, 541.116
Broker, customers'. 541.201.641.205.641.207
Buyer. 541.108. 541.201, 541.205. 641.207,
541.501. 541.602
Buyer, assistant. 541.105, 541.201. 541.205
Buyer, lease. 541.201
Buyer, outside. 541.601
Buyer, resident, 541.206
Carpenter. 541.119
Cartoonist. 541.303
Cashier, bank. 541.205
Checker. 541.108
Chemist. 541.302.541.306.541.307
Claim agent, M1.205
Clerk. 541.205
Clerk, accounting. 541.302
Clerk, chief. 541.115
Clerk, counter. 541.109
Clerk, shipping. 541.207
Columnist. 541.303
Company representative, 541.504
Comparison shopper. 541.207, 541.504
Composer. 541.303
Computer operator, 541.108. 541.207
Computer programer. 541.108, 541.205,
541.207. 541.302
Conductor. 541.303
Consultant. 541.205. 541.207, 541.208
Contact man. 541.201. 541.207
Copyist (motion picture). 541.303
Craftsman. 541.119
Credit manager, 541.201. 541.205. 541.207.
541.208
Delivery man, 541.505
Dentist. 541.314
Department head, assistant. 541.105
Dietitian, 541.202. 541.314
Doctor. 541.306.541.314
Draftsman. 541.308
Dramatic critic. 541.303
Driver salesman. 441.506
Engineer. 541.302, 541.308
Engineer, junior, 541.308
Essayist. 541.303
Examiner. 541.108. 541.207
Executive secretary. 541.201
Financial consultant, 541.205
Foreign exchange consultant, 541.201
Foreman-cutter. 541.115
Foreman-examiner, 541.108
Foreman-fixer (hosiery), 541.115
Foreman-machine adjuster, 541.108
Foreman-"setup" man, 541.108
Foreman, construction. 541.104
Foreman, garment shop. 541.115
Foreman, Installation. 541.104
Foreman, planer-mill. 541.115
Foreman, shipping room. 541.115
Foreman, warehouse. 541.115
Foreman, working. 541.115
Oang leader, 541.115
Oauger (oil company), 541.201
Group leader, 541.115
Grader. 541.207
Bead bookkeeper. 541.115
Bead shipper. 541.115
Illustrator. 541.313
Inttdy «*'ftmin. 541.502
Inspector. 541.108,541.207
Inspector, Insurance, 541.20ft
Insurance expert. 541.201
Interns. 541.314
Inventory man, traveling, 541.201
Investment consultant, 541.201
Jobber's representative. 541.504
Jobber's salesman. 541.504
Journalist. 541.303
Key punch operator. 541.207
Junior programer, 541.207
Labor relations consultant. 541.205
Labor relations director. 541.201
Lawyer, 541.303.541.314
Legal stenographer. 641.302
Librarian, 541.308
Linotype operator. 541.119
Location manager, motion picture, 541.201
Lumber grader. 641.207
Machine shop supervisor. 541.105
Manager, branch. 541.113.541.118
Manager, credit, 541.201, 541.208. 541.207.
541.208
"•nig" cleaning establishment, 541.108
Manager, office, 541.116.541.208
Manager, traffic. 541.208
Management consultant. 541.207. 541.208
Manufacturer's representative. 541.504
Mechanic, 541.119 -
Medical technologist, 641.203.541.308
Methods engineer. 541.201
Mine superintendent. 541.109
Motion picture producing industry, employ-
ees In. 541.601
Musician. 541.303
Newspaper writer. 541.303
Novelist. 541.303
Nurse. 541.314
Office manager, 541.115. 541.208
Optometrist, 541.314
Organization planner. 541.201
Painter. 541.303
Personnel clerk. 541.205. 541.207
Personnel director, 541.201
Personnel manager. 541.205.541.207
Pharmacist. 541.314
Physician. 541.306. 541.314
Physician, general practitioner, 541.314
Physician, intern. 541.31*
Physician, osteopathic. 541.314
Physician, resident. 541.314
Planer-mill foreman. 541.115
Podiatrist. 541.314
Production control supervisor. 541.201
Programer trainee, 541.207
Promotion man. 541.201. 541.205. 541.504,
541.505
Psychologist. 541.202.541.314
Psychometrist. 541.314
Purchasing agent, 541.201.541.207
Radio announcer. 541.303
Ratesetter. 541.201
Registered nurse. 541.302 f
Reporter. 541.303 j
Representative, company, 541.584
Representative. Jobber's. 541.504-
Representative, manufacturer's. 541.504
Representative, utility, 541.504
Resident buyer. 541.205
Retail routeman. 541.505
Retoucher, photographic, 541.303
Route driver. 541.505
Routeman. 541.505
Routeman, retail. 541.506
Safety director, 541.201.541.205
«*i««m«n dealer. 541.505
Salesman, distributor. 541.505
Salesman, driver. 541.505
Salesman, inside, 541.502
n. jobber's. 541.504
Salesman, laundry. 541.501
Salesman, matt. 541.503
Salesman, route, 541.506
Salesman, telephone. 541.502
Salesman, typewriter repair. 541.501
Salesman, wholesale. 541.207
Salesman's helper, 541.606
Sales research expert. 541.201
Sanitarian. 541.314
School building manager. 541.202
School department head. 541.201
School lunch room manager, 541.202
School maintenance man, 541.202
School principal, 541.201
School superintendent, 541.201
School vice principal. 641.201
Secretary. 541.206
Secretary, executive. 541.201
Serviceman. 541.501
Shipper, head. 541.115
Shipping clerk. 541.207
Shipping room foreman. 641.115
Singer. 541.303.541.313
Social worker. 541.202.541.314
Statistician. 541.201. 541.206
Strawboss. 541.115
Supervisor, production control. 541.201
Tape librarian, 541.207
Tax consultant. 641.206
Tax expert. 641.201.541.206
Teacher. 541.216. 541.300. 541.302. 54
541.307,541.315
Technologist. 541J14
Television announcer, 541.303
Teller, bank. 541.206.541.207
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ATTACHMENT B-3a
PAGE 29 of 29
29
ThenpUt. M1.S14
Timekeeper. Ml.108
Tnlfte m*Mier. M1.90I
Trmlnee, Ml.116. M1.310. ML308. 541.310.
M1.50S. M1.508
Tnuner-Mletnwn. Ml.KM
Truck driver. Ml.807. Ml JM
UtUlty reprewnutlve, M1.201, Ml J04
Vloilnlit. M 1.303
Worklm forcBsn. Ml. 115
WorUn* supervlMr. Ml.115
Writer. sdveitUinc. Ml.303
Writer, fiction. Ml.JOJ
Writer, newspaper. 541.903
Writer, •eeiurio. 541.303
Writer, thort itory. 541.303
X-rmy technlclsn. M 1.306
•frU.I.CQVERNHINT PMINTIN6 OFf1CIi1l*t-I4l-407/0*«1•
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ATTACHMENT B-4
Service Contract Act
•Directory of Occupations
U. S. Department of Labor
Employment Standards Administratio
Wafe and Hour Division
Second Edition
July 1986
U. S. Department of Labor
epar
E.
William E. Brock, Secretary
Employment Standards Administration
Susan R. Meisinier, Deputy Under Secretary
For Ml* kr tb* 8np»rtnt»od»nt of DBCMMCU. U.S. OorarMMt PrUttw (>•••
. O.C.
-------
ATTACHMENT
PAGE 1 Of 6
FOREWORD
In April 1985, the -first edition of the Service Contract Act
Directory of Occupations was issued. Since that time, this
new resource has been universally viewed by procurement staff
as a key time-saver in developing Service Contract Act wage
determinations. In response to requests to expand the.
Directory with additional occupations and to make the
Directory Available through a central distribution point*
this second edition contains standard job titles and defini-
tions fcr 262 occupations, 81 more than the number included
in the initial version. Also, the-Service Contract Act
Directory of Occupations is now available for sal* by the
Superintendent of Documents. The Directory may be ordered by
calling (202). 783-3238 or writing to the Superintendent of
Documents, U.S. Government Printing Office, Washington, D.C.
20402.
We look forward to receiving comments and suggestions for
additional enhancements to the Directory and any other
assistance which improves our administration of the Service
Contract
ract Act. A »
juV. //***
Paula V. Smitn
Admi nistrator
NOTE: in purchasing the Directory/ Federal and Distriict of Columbia government
agencies can realize a cost savings by riding the Department of Labor's
printing requisition. If you wish to take advantage of this opportunity* your
printing office should submit a Form SF-1 to the Government Printing Office and
reference Labor Requisition No. 6-00300G9F .
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ATTACHMENT B-4
PAGE 2 of 6
CONTENTS
Foreword
AcknowIedgments
Introduction
Background
How to Us* the Directory
How to Obtain Titles and Codes for Unlisted
Occupations
Numerical Listing of Occupational Categories and
Titles and Location by Page
Titles and Descriptions of Categories
Administrative Support and Clerical Occupations
Automatic Data Processing Occupations
Automotive Services
Food Preparation and Service Occupations
Furniture Maintenance, and Repair Occupations
General Services and Support Occupations
Information and Arts Occupations
Laundry, Drycleaning, Pressing and Related
A Occupations
Library and Archives Occupations
Machine Tool Operation and Repair Occupations
Materials Handling and Packing Occupations
Mechanics and Maintenance and Repair Occupationi
Merchant Marine Occupations
Plant and System Operation Occupations
Protective Service Occupations
Technical Occupations
Transportation/Mobile Equipment Operation
Occupation*
Miscellaneous Occupations
Alphabetical Inde* of Occupational Titles
Page
i
ii
v
v
vi
viii
ix
1
3
25
33
37
41
43
49
39
61
63
63
81
87
89
93
105
109
117
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ATTACHMENT B-4
PAGE 3 of 6
INTRODUCTION
Background
The Wage and Hour Division (WH) directs and coordinates the
determination of wage rates for various classes of employees
in establishments providing services to the Federal Govern-
ment under the Service Contract Act (SCA). Within the WH,
responsibility for making these wage determinations rests
with the Division of Wage Determinations, Branch of Service
Contract Wage Determinations.
The Branch of Service Contract Wage Determinations receives
approximately 55,OOO requests for wage determinations (SF-
98's) each year. These requests are for contracts to perform
a wide range of services, including such diverse activities
as aerial spraying, barber and beauty shop services, computer
services, electronic equipment maintenance, furniture repair,
surveying and mapping, trash removal and war •housing'.
Employees in a wide spectrum of occupation* ar* needed to
perform these services. The SF-98's submitted contain
listings of occupational titles of employees to be employed
on the contract covered. There ar* no job description*
associated with these titles. Also, as they app*ar, th*
titles often are vague. Ascertaining th* content of each
job for wag* determination purposes become* a difficult and
time-consuming process. The great variety of services
procured by the Federal Bovernment and th* many different
occupations required in the performance of these service*
present a major challenge in the acquisition of data and th*
development of wag* determination*.
At th* present time, a variety of data sourc** ar* utilized
in th* development of SCA prevailing wag* rat* d*t*r*ina-
tions. These sourc** include th*- Bureau of Labor Statistic*
(BLS) Area Wag* Survey Program^ local, Stat* and Federal
agency wag* data} and data fro*) contractor*, trad* associa-
tions and labor organizations. Of th***, th* primary sourc*
of data i* th* BLS Ar*a Wag* Surveys. To collect such
information tin* «LS u*** 9O occupational description*. Other
description* are prepared for special surv*y*. Sine* payroll
titles and work assignment* vary among establishments and
geographic area*, such descriptions ar* useful a* standards
in classifying work*r» by occupation so that wag* rat**
representing job content can be established.
In order to implement effectively it* primary assignment of
issuing wage determinations, the Branch of Service Contract
Wage Determinations requires a standardized occupational
language for us* with all of the contracting establishment*.
In response to this need, thi* Directory of commonly used
occupational titles and descriptions was d*v*lop*d. Th*
-------
B—4
PAGE 4 of 6
Directory should provide a better means of communication
between contractors, contracting agencies,, and SCA Branch -
personnel^ *As the Directory is used, experience gained will
necessitate changes in the document. Users of the Directory .
are invited to propose charges in keeping with the intent and
structure of the volume.
By being a standard source of occupational information, the
Directory can be used as a tool not only for making wage
determinations but also for generating occupational informa-
tion and to facilitate effective compliance activities. It
also should permit an effective interchange of occupational
data with government agencies such as the Office of Personnel
Management, the Bureau of Labor Statistics and. the Department
of Defense.
In recent years, more and more information has been computer-
ized. In the near future, computerization will..be ,*n integral
part of the SCA wage determination process. The Directory
has been constructed so that the occupational information
contained in it, and any information that may be generated by
its use also can be computerized.
The Directory contains occupational titles and descriptions
and a classification structure under which the occupations
are arranged according to their interrelationships. It makes
available uniform occupational information by providing
composites of similar jobs performed in many geographic areas
all over the country.
In order to produce the Directory, occupational descriptions
prepared by the BLS and the Branch of Service Contract Wage
Determinations, as well as other source materials, including
the Dictionary of Occupational Titles}., the Standard Occupa--
tional Classification Hantial •
Trades and Labor Decimation*
and the JOP 'Sradino System ft
e studied.
How to Use the Director*
There are three arrangements of the occupational information
in the Directorys The Numerical Listing of Occupational
Categories ••£.Titles, the Titles and Descriptions of the
Categories*&BJMf the) Alphabetical Index of Occupational
Titles.
The classification system developed is structured on a three-
tier arrangements category, occupation, an* level of
difficulty. Each tier represents grouping* in successively
finer detail. This should enable users who so desire to
tabulate or analyze data at different levels of aggregation.
There are 18 categories arranged alphabetically and coded
numerically:
vi
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PAGE 5 of 6
01000 Administrative Support and Clerical Occupations
03000 Automatic Data Processing Occupations
05000 Automotive Services
070OO Food Preparation and Service Occupations
0900O Furniture Maintenance and Repair Occupations
11000 General Services and Support Occupations
13000 Information and Arts Occupations
15000 Laundry, Drycleaning, Pressing and Related
Occupations
17000 Library and Archives Occupations
19000 Machine Tool Operation and Repair
•Occupations
210OO Materials Handling and Packing Occupations
23000 Mechanics and Maintenance and Repair
Occupations
24000 Merchant Marine Occupations
25OOO Plant and System Operation Occupations
27000 Protective Service Occupations
29000 Technical Occupations
31000 Transportation/Mobile Equipment Operation
Occupations .. -.
99000 Miscellaneous Occupations
The numerical listing presents the categories, occupations,
and levels of difficulty. The levels of difficulty have been
denoted by Roman numerals placed after the title with the
numeral I being the least difficult, and each numeral
thereafter indicating a more difficult lever.
Each of the titles has been identified by an occupational
cade number. The first two digits identify a particular
category, e.g. Ol Administrative Support and Clerical
Occupations. The next two digits indicate the alphabetical
order of the titles within the category, e.g. 01 Accounting
Clerk. The last digit indicates the level of difficulty,
e.g/. 1 for Accounting Clerk I. The complete code for
Accounting Clerk X is, therefore, O1O11. In most instances,
occupations with level distinctions are preceded by an
introductory descriptive statement. An occupation with such
* statement is. identified by a "0" in the fifth position,
e.g. 01O1O Accounting Clerk.
The second arrangement includes a listing of occupational
titles and descriptions arranged alphabetically and coded
numerically within each category. Each category is defined
so that homogeneous groupings can be delineated. The title*
represent those most commonly used in the wage.determination
process. The descriptions represent composite* of job* found
in a number of establishments and may differ from those in
use in individual establishments or those prepared for other
purposes. An asterisk shown to the right of the title
vii
I
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PAGE 6 Of 6
indicate* that the description MM prepared and used by the
BLS for uee in 'its wage survey*. Some of these definitions
have been modified to meet SCA operations requirements.
Immediately following the title there may be one or more
titles in parentheses. These arm alternate titles that are
synonyms for the main titles with which they are shown, and
appear in the alphabetical index in lower case.
The'alphabetical index consists of four columns. All of the
titles appearing in the Directory are arranged in alphabet-
ical order in one column. The other three columns show the
appropriate SCA code, the equivalent Standard Occupational
Clarification code or codes for each title, and the
page number on which the title may be found. The SOC codes
have been added to provide a link to other occupational
classification systems and the information generated by those
systems.
How to Obtain Titli
and Codes for Unlisted Qccuoatii
Users of the Directory who are unable to locate a title) or
description or who cannot match the duties of a similar
occupation in the Directory should submit an appropriate;
occupational title and description with the SF-98 request.
This procedure Mill assist the Branch of Service Contract
Wage Determinations in issuing wage determinations for all
occupations on SF-98 requests. Xt also Mill provide) infor-
mation to update and revise the Directory. It should be kept
in mind that wage determinations will not be issued for
occupations unless applicable Job descriptions are found in
the SCA Directory or an acceptable description has been
submitted by the requesting procurement agency. Note that
the job definitions included in the Directory may not be
applicable when the service-contract is governed by Section
4(c) of the Service Contract Act.
-------
-------
ATTACHMENT B-5
AFPUOOTON OF LABOR LAWS TO GOVERNMENT ACQUISmONS^
General Wage Determinations
Issued Under The Davis-Bacon
And Related Acts
APFUCATTOKOTLAlOtLAWSTO
GOVERNMENT ACQIHSTTIONS
-------
U.S. Department of Labor
ATTACHMENT B-5
PAGE 1 Of 18
How General wage Determinations Is Distributed
General Wage Deterroinations is distributed through the Government
Printing Office. Superintendent of Documents. Each year, on or
about January 1. the GWD annual edition is issued. It contains
all Davis-Bacon general wage determinations in effect.
Thereafter, weekly updates are issued to subscribers via first
class mai 1.
GWD is divided geographically into three volumes:
and west. The State composition of each volume is
East, Central
as follows:
Volume I
East
volume IX
Central
volume III
west
A 1abama
Connecticut
Delaware
Florida
Georgia
Kentucky
Maine
Maryland
Massachusetts
Mississippi
New Hampshire
New jersey
New York
North Carol ma
Pennsylvania
Rhode Island
South Carolina
Tennessee
Vermont
Virginia
West Virginia
District of Col
Puerto Rico
Virgin Islands
.Arkansas
1111 no 1s
Ind1 ana
Iowa
Kansas
Lou1s1ana
Michigan
Minnesota
Missouri
Nebraska
New Mexico
Ohio
Oklahoma
Texas
Wisconsin
Alaska
Arizona
Cal if orma
Colorado
Guam
Hawali
Idaho
Montana
Nevada
North Dakota
Oregon
South Dakota
Utah
Washington
Wyoming
Subscriptions may be ordered for any of the three volumes.
Inquiries regarding price and availability may be directed to the
Superintendent of Documents Order Desk at 202-783-3231. New
subscribers will receive the current year's annual edition and
all weekly updates for that calendar year regardless of when the
order 1s placed.
For those not wishing to subscribe, the publication is available
at each of the 50 Regional Government Depository Libraries and
many of the 1.400 Government Depository Libraries across the
Nation.
-------
ATTACHMENT B-S
PAGE 2 10 is
GENERAL WAGE DETERMINATIONS ISSUED
UNDER THE DAVIS-BACON AND RELATED ACTS
There are two listings of general wage determinations.
Listings of general wage determinations are by location
and number/page.
The FIRST is Listing By Location. This listing
furnishes a comprehensive listing of all U.S. counties
for States covered by volume. For each county it lists
the current general wage determination numbers for the
major types of construction:
o Building
o Heavy
o Highway
o Residential
Blank entries indicate no current general wage
determination is applicable.
The SECOND is LISTING BY DECISION NUMBER. This listing
includes all current general wage determinations in
numerical order with corresponding general wage
determination page numbers.
-------
ATTACHMENT B-5
PAGE 3 of 18
The first listing by location furnishes a comprehensive listing of all U.'S,
counties for each State.
U.S. DEPARTMENT OF LABOR
State/County
ALASKA
Aleutian Zslanos
Anchorage
Angoon
Barrow
Bethel
Bristol Bay Ber.
Bristol Bay
Caroova McCarthy
Fairoanks
Haines
Juneau
Kenai-Cook Inlet
Katenikan
Kopuk
Kodiak
Kuskokvm
Matanuska Susitna
None
Outer Ketchikan
Prmca of wales
Saward
Sitka
Skagway vakutat
S.E Fairoanks
Upper Yukon
vaJdex Chitina
wnittier
wade Hanpton
"range11 Petersburg
Yukon Koyukuk
- Bui 1dtng
LISTING BY LOCATION
v/
,/ Apacna
Coema*
Coconino
GHa
Granan
Graan i a«
La Par
Mar 1 eopa
Monava
Neva jo
Santa Crux
Yavaoat
Yuna
A290-i
A29O-3
Heavy'
H1ghway
AK90-
AK90-
AK90-
AK90-
AK90*
AK90-
AK90-
AK90-
AK90-
AK90-
AK90-
AK90-
AK9O-
AK90-
AK90-
AK9O-
AK90-
AK90-
AK90-
AK90- 1
AK9O- 1
AK90- 1
AK90- 1
AK90- 1
AK90- 1
AK90- 1
AK90-1
AK90- 1
AK90- 1
t AK90-
< AK9O-
AK9O-
AK9O-
AK90-
AK9O-
AK9O-
AK9O-
AK90-
AKtO-
AK9O-
AK9O-
AK90-
AK90-
AK90-
AK9O-
AK9O-
AK9O-
AK8O-
A»C9O-
AK9O-
AK90-
AK9O-
AK»O-
AK90-
AK9O-
AK9O-
AK9O-
AK90-1
1 AK9O- 1
1 AK90-1
1 AK9O- 1
1 AK9O- 1
1 AK9O- 1
1 AK90- t
1 AK90- 1
1 AK90- 1
1 AK9O- 1
1 AK9O- 1
1 AK9O- 1
1 AK90- 1
1 AK9O- t
1 AK9O- 1
1 AK9O- 1
1 AK9O- 1
1 AK90- 1
1 AK9O- 1
1 AK9O- 1
AKSO-1
AK9O-1
AK9O- 1
AK90- t
AKfO-1
AK9O-1
AK90-1
AK9O- 1
AK9O-1
AK90- 1
^^2SQs2._
f A Z9O~2"r^
A290-3
AZ9O-2
A 290- 2
AZ9O-3
A 2 90 -2
4290-2
AZ9O-2
A2SO-2
A 290 -2
A2SO-3
A29O-2
A2SO-2
A 290 -2
A29O-2
A 2 SO- 2
A 2 SO- 2
A29O-2
A29O-2
A29O-2
A29O-2
A29O-2
A 290- 2
A290-2
A 290- 3
A290-2
A29O-3
A 290- 2
A29O-2
AZ9O-4
-------
ATTACHMENT B-5
PAGE 4 Of 18
The second listing by decision number includes all general wage determinations
kin numerical order with the corresponding- general wage determination page numbers.
U.S. DEPARTMENT OP LABOR -
DECISION NUMBER
AK9O-1
A290-1
29
31
41
«7
71
1O7
117
121
129
133
137
147
1S9
191
1CS
171
199
211
223
227
229
HH1C
-------
PAGE 5 of 18
GENERAL WAGE DETERMINATIONS ISSUED
UNDER THE DAVIS-BACON AND RELATED ACTS
The following is instructions on how to locate and interpret
general vage determinations (GWD).
1.
2.
3.
To find the wage determination by location of State and
county locate the State and county listed alphabetically in
.the GWD listing.
Refer to the previous page 3 of this attachment for listings
by location. Obtain the wage determination number listed to
the right of the relevant county under the appropriate type
of construction classification. For example:
Listing Bv Location
Construct ion
Type:
State:
County:
Arizona
Apache
Heavy
AZ90-2
Refer to the previous page 4 of this attachment for listings
by decision number. For example, refer to decision number
AZ90-2. It is arranged first by State abbreviation (in this
case "AZ" for Arizona). Within States, wage determinations
are listed in numerical order. Obtain the page number on
which the wage determination is found by identifying the
number listed directly to the right of the wage
determination number. For example:
Listincr Bv Decision Number
Decision Number
AZ90-2
Page Number
15
Turn to the page number identified, "15" in the copy of the
following wage determination. ,
-------
ATTACHMENT B-5
PAGE 6 Of 18
GENERAL WAGE DETERMINATIONS ISSUED
UNDER THE DAVIS-BACON AND RELATED ACTS
Tha format uaad to prasant wage datarnmations aay ba divided
into thraa parts:
1. Each waga datarnlnatlon baglns with a eovar shaat that
dafinas ita applicability.
Included on thla ahaat ara:
Tha declaIon number
The number of the decision superseded
State(s) covered
Count yd as) or city (las) covered
Type of construction (building, heavy, highway.
and/or residential)
Description of the construction covered and/or
excluded from coversge
Record of modifications, including number, data, and
GWO pages affected.
2. Each wage da t ami nation
includaa a listing of
classifications (laborars and nachanies). along with
thalr basic hourly waga rata and frlnga banaflt rata.
In so«a casas. classification listings may Includa
occupational daflnit Ions, and a dascrlptlon of tha
gaographical covaraga of tha particular waga and frmga
banaflt ratas.
3. Many waga datarninationa conclude with footnotes.
classification dafinitiona. and dascripttons of tne
gaographlc araas eovarad by spaclflc clasaificationa.
-------
ATTACHMENT B-5
PAGE 7 of 18
U.S. Department of Labor
GENERAL WAGE DECISION NO. AZ3O-2
Supersedes General wage Decision No. A289-2
State:
ARIZONA
County(ies): Statewide
Construction
Type: Heavy & Highway
Construction
Description: Heavy & Highway Construction Projects
Modification Record:
NO.
1
2
3
4
Puoiicat ion Date
July 13. 1990
July 20, 1990
Aug. 3. 1990
Dec. 7. 1990
Page Na.
-------
ATTACHMENT B-5
page 8 of 18
U.S. Department of Labor
AZ90-2
BRICKLAYERS; Stonemasons: '
Northern Area:
Zone A
Zont B
Zone C
Zone D
Zone E
Southern Area:
Zone A:
Brick layers: Stonemasons
Manhole BuiIders
Zone B:
Bricklayers; Stonemasons
Manhole Buiiders
Zone C: . ,
Bricklayers; Stonemasons
Manhole Builders
Zone D:
Bricklayers: Stonenasons
Manhole Builders
CARPENTERS:
Carpenters
P11edrivermen
DIVERS:
Zone 1:
Diver-wet
Stand-Dy
Zone 2:
Diver-wet
Stand-Dy
Zone 3:
Diver-wet
Stand-by
Zone 4:
Diver-Wet
Stand-By
MILLWRIOMTS:
Zone 1
Zone 2
Zone 9
Zone 4
CEMENT MASONS:
Zone 1:
Northern Area:
Cement Masons
Concrete Troweling Machine; Sawing
and Scoring Machine; Curb and
Cutter Machine
Central ft Southern Areas:
Cement Masons
Concrete Troweling Machine; Sawing
and Scoring Machine; Curb and
Gutter Machine
Zone 2:
Basic
Hourly
Rates
14.95
16.95
17.95
18.45
2O. 45
13. 13
13.43
13.50
13.SO
13.8S
14. 10
14.63
14.93
14.71
15.23
40.26
20.49
41.64
21. rr
42.26
22.44
43.26
24.49
17.10
19.39
19.OO
2O.OO
19.74
16.005
Fringe
Benefits
2.39
2.39
2.39
2.39
2.39
2.62
2.62
2.62
2.62
2.62
2.62
2.62
2.62
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
j
19.SOS 3.OS
3.OS
3.OS
16.24 3.OS
Vol. Ill
16 (Aug. 3. 1990)
-------
ATTACHMENT B-5
PAGE 9 Of 18
U.S. Department of Labor
AZ90-2
Cable Spli-
Cement Masons
Concrete Troweling Machine: Sawing
and Scoring Machine: Curo and
Gutter Machine; Clary and similar type
of power Screed Operator
ELECTRICIANS:
Area 1:
Electricians
Cable Spi leers
Area 2:
Electricians' Technicians;
cers:
Zone A
Zone 8
Area 3:
Area 4:
Electricians on projects having an
electrical contract value of less
than $20 mi 1 ton
Electricians on projects having an
electrical contract value of $20
ml 1 1 ion or more
Area 5:
Electricians
Cable Spi leers
IRONWORKERS:
Northern Area
Southern Area
Central Area
LABORERS :
Area 1 :
Group
Group
Group
Group
Group
Barricade Setter:
Placement, removal, transport, and
maintenance of the traffic control
devices
Area 2:
Group i
Group 2
Group 3
Group 4
Group 5
Barricade Setter:
Placement, removal, transport, end
maintenance of the traffic control
devices
(Tunnel and Shaft Work):
Area 1:
Group 1
Group 2
Group 3
Group 4
Group 5
Group SA
Area: 2
16.445 2.62
16.68 2.62
16.81 1.3O+ 3.73%
18.16 1.30+ 3.75%
17.1O 2.33* 3.8%
20.22 2.334- 3.5%
18,74 12%+.1.40
16.CO 2.14+ 3%
17.95 2.144- 3%
17.00
17.25
19.00
16.00
16. OO
13.08
15.61
16.19
16.46
18.01
1.OO+
1.OO+
5.40
5.40
5.40
2.77
2.77
2.77
2.77
2.77
11
11
10.58
13.11
13.89
13.96
15.51
15.995
16.24
16.44
16.98
17.295
17.655
5.90 1.27
2.77
2.77
2.77
2.77
2.77
5.90 1.27
2.77
2.77
2.77
2.77
2.77
2.77
-------
ATTACHMENT B-5
PAGE 10 of 18
U.S. Department of Labor
A29O-2
Group 1
Group 2
Group 3
Group 4
Group 5
Group 5A
LINE CONSTRUCTION:
Zone 1:
Groundmen
Equipment Operator; Powdermen & Mech-
anics
Linemen, Crane Operator, Sagger, and
-p-not
Cable splleers
Zone 1-A:
Groundmen ::~'~
Equipment Operator; Powdermen ft Mech-
anics
Linemen, Crane Operator. Sagger, and
Cable splleers
Zone 2: -
Groundmen
Equipment Operator; Powdermen & Mech-
anics
Linemen, Crane Operator, Sagger, and
Pilot
Cable splicers
PAINTERS:
Area 1:
Zone A:
Brush
Brush. Steel ft Bridge
Spray
Spray,
Zone B:
A BHR)
Zone C: ($1.75 par hour above Zone
A BHR)
Zone 0: (t2.CC per hour above Zone
A BHR)
Area 2:
Zone A:
Brush and Roller; SandDiaster (NO-
zzleman); Sheetrock Taper; Floor
Coverer; Sandbiaster (pot tender)
Spray; Paperhanger
Creosote Appller
Swing Stage:
Brush; Sandbiaster
Spray
Steeplejack
Steel and Bridge, Brush; Nozzle-
man and Pot Tender; Steel (steam
cleaner); Electric and Air Tool
Operator; Steel Sandbiaster
Steel Sandbiaster
Zone B: ($1.OO per hour above Zone
Steel ft Bridge
(SO.75 per hour above Zone
13.485 2.77
13.74 2.77
13.94 2.77
14.48 2.77
14.795 2.77
15.155 2.77
13.41
15. B3
18.15
18.66
14.41
16.74
18. IS
19.73
15.40
17.74
20.12
20.67
4.75*
4.75*
4.75*
4.75*
4.75*
4.75*
4.75*
4.75*
4.75*
4.75*
4.75*
4.74*
3 . 5%
3.5%
3.5%
3.5%
3. .5%
3.5%
3-1/2%
3-1/2%
3-1/2%
3-1/2%
3-1/2%
3-1/2%
11.60
12.10
12.05
12.60
1.SO
1.90
1.9O
1.90
13.54
13.79
13. B7
13.94
14.19
14.40
1.30
1.3O
1.30
1.30
1.30
1.3O
14.67
14.67
1.30
1.30
Vol. Ill
-------
U.S. Department of Labor
ATTACHMENT B-5
PAGE 11 of 18
AZ90-2
A (BHR)
Zone C: ($2.50 per hour above Zone
A BHR)
Area 3:
Zone A:
Brusn 12.47 1.77
Spray; Sandb)aster 13.O7 1.77
Paperhanger 12.60 1.77
Swing Stage, under 40 feet:
Brusn 12,77 1.77
Spray 13.37 1.77
Swing Stage, over 40 feet:
Brusn 13.47 1.77
Spray 14.07 1.77
Structural Steel & Tanks:
Brusn .13.47 1.77
Spray-a Sandbiasters 14.07 1.77..
Creosote Base and Bituminous ma-
terial 12.87 1.77
Zone B: ($O.75 per hour abeva Zone
A BHR)
Zone C: ($ 1.50 per hour above Zone
A BHR)
Zone 0: (S2.75 per hour above Zone
A BHR)
•PLUMBERS AND PIPEFITTERS:
Zone 1 17.28 4.73
Zone 2 20.25 4.73
Zone 3:
Commercial 16.OO 3.78
Industrial 19.34 3.78
POWER EQUIPMENT OPERATORS:
Group 1 12.35 3.28
Group 2 15.10 3.28
Group 3 16.O4 3.28
Group 4 16.91 3.28
TRUCK DRIVERS:
Group 1 7.62 2.87
Group 2 10.82 2.87
Group 3 15.26 2.87
Premium Pay: Combination Man - $.30 per
hr. over highest rated work.
Multiple-Unit Equipment
WELDERS -- Receive the rate prescribed for craft performing operation
to which welding is incidental.
Vol. Ill
AREA DESCRIPTIONS
BRICKLAYERS; STONEMASONS:
Northern Area: Apache. Coeonlno and Gila Counties; Graham County
(west and north of the San Francisco River to the Gila River);
Greenlee County (west and north of the San Francisco River to the
Gila River): MaMcopa, Mohave. and Navajo Counties; Plnai County
(north of a boundary line drawn west along the Gila River to the
western City limits of Florence, a straight line from the extreme
southwestern City limits of Florence to the extreme'southern City
19 (Dec. 7. 1990)
-------
ATTACHMENT B-5
PAGE 12 of 18
U.S. Department of Labor
AZ9O-2
limits of Coo 11 age, then % straight 1 ine.-to the extreme southern
City limits of Casa Grande, with the Mne extending to the Maricopa/
Pinal County Line): Yavapai. Yuma and La .Paz Counties:
Zone A: 0-50 road miles from the City Han in Phoenix
Zone B: 50-75 road miles from the City Hall in Phoenix
Zone C: 75-100 road miles from the City Hall m Phoenix
Zone D: 100-200 road miles from the City Hall m Phoenix
Zone E: 200 road miles and over from the City Hall m
Pnoen1x
Southern Area: Cochlse County; Graham County (east and south of the
San Francisco River to the Glla River); Greenlee County (east and
south of the San Francisco River to the Glla River); Pima County:
Pinal County (south of a boundary 1 me drawn west along the Glla
River to the western City limits of Florence, a straight line from
the extreme southwestern City limits of Florence to the extreme
southern City limits of CooMdge. then a straight line to the ex-
treme southern city limits of Case Grande, with the line extending
to the Mancopa/Plnal County Line); Santa Cruz Counties:
Zone A: O-15 road miles from Tucson City limits
Zone B: 15-3O road miles from Tucson City limits
Zone C: 30-40 road miles from Tucson City limits
Zone 0: Over 40 road miles from Tucson City limits
CARPENTERS:
Northern Area: Area north of a straight line drawn between a point
35 miles due north of the City Hall m Flagstaff and a point 35
miles due north of the City Hall In Kingman. extending to the
Arizona/Nevada State Line on the west: end connecting to a point
35 miles due north of the City Hall m HOlbrook, thence due eaet
to the intersection of the Arizona/New Mexico State Line
Central and Southern Areas: All areas not included in the
Northern Area
OXVERS & MILLWRIGHTS:
Zone 1: 0-30 miles from City Hall in Phoenix or Tucson
Zone 2: 30-45 miles from City Han m Phoenix or Tucson
Zone 3: 45-60 miles from City Han in Phoenix or Tucson
Zone 4: over 60 miles from City Hall m Phoenix or Tucson
CEMENT MASONS:
Zone 1: Apache, Coeonino, and Glla Counties; Graham County (north
of Sentinel-Case Grande-Safford Line); Greenlee County (north of
Sentinel-Casa Grande-Safford Line): Maricopa County (north of
Sentinel-Case Grande-Safford Line); Mohave. and Nevajo Counties;
Pinal County (north of Sentinel-Case Grande-Safford Line); Yavapai.
Yuma and La Paz Counties:
NORTHERN AREA: Area North of a straight line drawn between
a point 35 miles due north of the City Hail in Flagstaff
and a point 35 miles due north of the City Hen in Kingman.
extending to the Arizona/Nevada State Line on the west and
connecting to a point 35 miles due north of the City Han m
Hoibrook, thence due east to the intersection of the Arizona/
New Mexico State Line.
CENTRAL end SOUTHERN AREAS: All Areas not included m the
NORTHERN AREA
Zone 2: Southern parts of Cochlse. Graham, Greenlee. Maricopa. and
Pinal Counties; Pima and Santa Cruz Counties
Vol. Ill
20 (Aug. 3. 19»0)
-------
Attachment B-5
Page 13 of 18
U.S. Department of Labor
AZ90-2
*
VOI. HI
ELECTRICIANS:
Area 1; Apache County (north of Highway #66)
Area 2: Coconino County; Navajo County (north and west of a boundary
1 me beginning at a point where Clear Creek crosses the Coconino/
Navajo County Line and then extending m a northeasterly direction
along Clear Creek and northeasterly to Cottonwood Wash, along
Cottonwood Wash extending northeasterly to where it intersects the
Navajo Indian Reservation, then easterly along the Navajo Indian
Reservation boundary line to a point where it intersects the
Navajo/Apache County Line):
Zone A: 5 miles north-south, east and west of the
Post Offices of Williams. Sedona. and Wins low
Zone B: Remainder of Area 2 not covered by Zone A
Area 3: Apacne County (south of Highway #66); Gtla County; Navajo
County (south and east of a boundary beginning at a point where
Clear Creek crosses the Coconmo/Navajo County Line, then- extending
m a northeasterly direction along Clear Creek and northeasterly to
Cottonwood wash, along Cottonwood Wash extending northeasterly to
where it intersects the. Navajo Indian Reservation, then easterly
along the Navajo Indian Reservation boundary line to a point where
it intersects the Navajo/Apacha County Line); Pinal County (north
of the line, "First Standard Parallel South- and east of the line
•Second Guide Meridian East")
Area 4: Marlcope and Mohave Counties; Pinal County (north and wesj
of the boundary 1 me beginning at a point where the Papago
Reservation Road #15 crosses the Pima/Plnal County Line, then
tending in a northeasterly direction on the Papago Indian
Reservation Road #15 to the intersection with the Florence Canal.
north and east on the Florence Canal to the intersection with the
line. "Second Guide Meridian East", then north to the Pmai/Mancope
County Line); Yavepal County
Area S: Cochlse. Graham. Greenlee. and Pime Counties; Pinal County
(south and east of the boundary iine beginning at a point where the
Papago Indian Reservation Road #15 crosses the Pima/Plnal County
Line, then extending in a northeasterly direction on the Florence
Canal, north and east on the Florence Canal to the intersection
with the line. "Second Guide Meridian East", then north to tne
line, "First Standard Parallel South*, and along that line to the
Graham/Pinal County Line); Santa Cruz. Yuna. and La Pax Counties
IRONWORKERS:
Northern Area: The boundaries of the area shall be the Navajo a
Hopi Indian reservations, the City of Page a the Glen Cayon Oam
Southern Area: Cochlse, Graham, Pima. Santa Cruz. Yuna a Greenlee
Coe. a those portions of Pinal a Giia Cos. located south of the 33rd
parallei
Central Area: Ail parts of Arizona not in the Northern or Southern
Areas
LINE CONSTRUCTION:
Zone 1: Phoenix and Tucson 30 miles radius from the center of
Town; Area within 10 mile radius from the City Hall m Yuna
Zone 1-A: Flagstaff. Globe, and Kingman; and 10 mile radius
from the center of Town
Zone 2: Other areas not .covered by Zone 1 and Zone 1-A
PAINTERS:
Area 1: Apache. Coconino. Navajo. and vavapai Counties (north of
21 (AUG. i. 199O)
-------
Attachment B-5
Page 14 of IS
U.S. Department of Labor
AZ90-2
Vol. Ill
Woodruff/Camp wood Lin*); Monave County (north of a line following
the Geodetic Hualapai Boundary Line to the Colorado River, a dis-
tance of 23 miles east of Plercs Ferry and then intersecting the
Arizona/Nevada State Line):
Zone A: 0-20 road miles from Courthouse in Flagstaff
Zone B: 20-35 road nllet from Courthouse in Flagstaff
Zone C: 35-80 road miles from Courthouse m Flagstaff
Zone D: 80 road miles and over from Courthouse m
Flagstaff
Area 2: Apache. Coconino. Navajo. and Yavapai Counties (south of the
woodruff /Camp wood Line); Gila, Graham, Green lee. Mancopa. and
Pinal Counties (north of 33rd Parallel); Mohave County (south of a
line following the Geodetic Hualapai Boundary Line to the Colorado
River, a distance of 23 niies east of Pierce Ferry and then
intersecting the Arizona/Nevada State Line):
Zone A: 0-40 paved road miles from Courthouse m
Phoenix; also. Luke and Williams Air Force Bases
Zone B: 41-60 paved road miles from Courthouse in Phoenix
Zone C: 61 paved road miles and pver from Courthouse in
Phoenix
Area 3: CocMse County; Graham. Greeniee, Mancopa and Pinal
Counties (south of 33rd Parallel); Pima. Santa Cruz. YUM.
and La Paz Counties:
Zone A: 0-30 paved road miles from Stone and Congress
in Tucson or from the County Courthouse in Yuma
Zone B: 31-40 paved road miles from Stone and Congress
in Tucson or from the County Courthouse in Yuma
Zone C: 41*50 paved road miles from Stone and Congress
in Tucson or from the County Courthouse in Yuma
Zone D: 51 paved road miles and over from Stone and
Congress in Tucson or from the County Courthouse
m Yuna
PLUMBERS * PIPEFITTERS
ZONE 1
Base points shall be: Phoenix—the intersection of Central Avenue
and Jefferson Street; Flagstaff. Yuna. Kingman, Prescott, Mavasu
City and Winslow — the main Post Office building in each city.
The 'Free Zone' (Zone No. D from Phoenix shall be 40 stiles from
the stated base point. The Free Zone from Flagstaff. Yuma. King-
man. Preecott, Hevasu City and winslow shall be 20 road miles
from the stated base point. In addition, all areas within the city
limits of Phoenix. Chandler, Scottsdaie. Tempe. Giendale,
Mesa and Gilbert, as well as that area bordered or encompassed
by Apache Trail on the north, Higley Road on the east. Elliott
Road on the south and Arizona Avenue on the west, and Sun City
west will be included as Free Zones. Any work contracted for out-
side of these Free Zones will be determined from the Phoenix ease
point.
ZONE 2
Pay Zone shall refer to an jobs outside of the Free Zones listed
above.
ZONE 3
Seven southern Counties of Arizona: Pima,. 61 la, Pinal. Graham.
Greeniee. Santa Cruz, and Cochise
22 (Aug. 3. 1990)
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n-s
Page 15 of 18
U.S. Department of Labor
AZ90-2
LABORERS:
Area 1: Area north of a straight Tine drawn between a point 35
miles due north of the City Hall in Flagstaff and a point 35
miles due north of the City Han m Klngman. extending to the
Arizona/Nevada State Line on the west; and connecting to a point
35 miles due north of the City Hall in Holbrook. thence due east
to the intersection of Arizona/New Mexico state Line
Area 2: All Areas not included m Area 1
GROUP DESCRIPTIONS
LABORERS
Group i: Laborer. General or Construction; Tool Dispatcher or
Checker: Manually Controlled Signal Operator; Pence Builder;
Guard Rail Builder - highway; Chat Box Man; Oumpman
Spotter; Rip Rap Stone Man: Rock Slinger; Head Rock
Form Stripper; Packing Rod Steel and Form Stripper;
Rod Steel and Pans; Cesspool Diggers and Installers;
Layer: Clean Up * Bull Gang Trackman; Railroad Chipper
ing and grubbing): Kettleman - Tarman; Spikers: wrenchers -
Creosote Tieman; Floor Sanders - Concrete: Sandblaster (Pot Tender);
Powder man Tender; Fine Grader; All Tenders not iierem separately
classified; Window Cleaner Fiagger9
and/or
SUnger ($.25)
Packing
Astro Turf
(clear-
Group 2: Concrete Laborer (belt, pipe and/or Hoseman); Cement Mason
Tender; Cutting Torch Operator; Power-type Concrete Buggy; Bander
Group 3: Chuck Tender (except tunnel): Gu1nnea/Chaser; Operator and
Tender of Pneumatic and Electric Tools: Concrete vibrating Machines.
Cham Saw Machines (on clearing and grubbing): Hydraulic Jacks and
similar mechanical tools not separately herein classified: Pipe
Caulker and/or Backup Man - Pipeline: Rigger and Signal Man -
Pipeline; Pipe Wrapper; Crlbber: Shorer (except tunnel); Pneumatic
Gopher; Pre-cast, Manhole Erector
Group 4: Asphalt Raker and Ironer; Air and Water washout Nozzieman
(low and high pressure): sealer (using Bos n's Chair or Safety Belt);
Tamper (mechanical - an types); Sandbiaster (Nozzieman); concrete
Saw (hand-guided): Concrete Cutting Torch; Gunite (Gunman. Mixerman.
Rodawn): bio-fliter; Pressman; Installer; Operator; Hand-guided
Trencner and similarly operated equipment; Driller (jaekhammer and/
or Pavement Breaker); Grade Setter (pipeline); Pipe Layer (including
but not limited to non-metal He transits and plastic pipe, water
pipe, sewer pipe, dram pipe, underground tile and conduit)
Group 5: Drill Doctor and/or Air Tool Repairman; Sealer (Ontier);
Form Setter and/or Builder; welder and/or Pipe Layer installing pro-
cess piping; Driller - Core Diamond. Wagon. Air Track, joy, Mustang.
PR-143. 220 Gardner. Denver. Hydrasomc: Powder Man: Water Blaster
Operator
(TUNNEL and SHAFT WORK)
Group 1: Bull Gang. Muckers. Trackman; Dumpmen; Concrete Crew
(includes Rodders and Spreaders): Grout Crew; Swamper (Brakeman and
Switchmen on tunnel work)
Vol. Ill
23 (Aug. 3. 1990)
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Attachment B-5
Page 16 of 18
U.S. Department of Lit>or
AZ9O-2
Group 2: Nipper; Chucktender. Cabletender; vibretorraan. Jackhammer,
Pneumatic Tools (except Driller)
Group 3: Grout Gunman
Group 4: Tlmberman. Retlmberman - wood or steel blaster. Dril!«r.
Powderman: Cherry Pickerman; Powderman - Primer House; Steel Form
Raiser and Setter: Kemper and other Pneumatic Concrete Placer Ope-
rator: Miner - Finisher; Miners - Tunnel (hand or machine)
Group 5: Diamond Drill
Group 5A: Shaft and Raise Miner welder
POWER EQUIPMENT OPERATORS
Vol. Ill
Group 1: A Frame Boom Truck. Winch Truck, Air Compressor Operator.
Bel terete Operator. Boring Bridge and Texture, Concrete Mixer
Operator (skip type). Conductor. Brakeman. Handler, Conveyor
Operator. Cross Timing and Pipe Float, Curing Machine Operator, >
Dinky Operator (under 30 tons). Elevator Hoist Operator (husky and
similar). Firemen (all). FoorkHft and Ross carrier Operator,
Generator operator (all). HignHne Cable way Signalman, Hydrographic
Muleher. Hydrographic seeder. Joint Inserter, jumbo Finishing
Machine. Kolman Belt Loader Operator. Machine Conveyor Operator.
Multiple Power Concrete Saw Operator. Oiler, Pavement Breaker. Power
Grizzly Operator. Power Sweeper. Pressure Grout Machine Operator (as
used m heavy engineering construction). Pump Operator. Roller
Operator (except as otherwise classified). Self-Propel led Chip
Spreading Machine, Skiploader (3-1/2 c.y. and less). Slurry Seal
Machine Operator (moto paver driver). Small Self-Propel led Compactor
(with blade) - backfill, ditch operation. Straw Blower, Tractor
Operator (D-S and under). Tripper Operator. Tugger Operator, welding
Machine Operator. Wheel-Type Tractor Operator (Ford. Ferguson type
with attachments. BeeGee etc.)
Group 2: Aggregate Plant Operator (including crushing, screening and
sand plants, etc.), Asphalt Plant Mixer Operator. Asphalt Laydown
Machine Operator. Backhoe Operator (rubber tire or track less than 1
c.y. MltC). Boring machine Operator, Concrete Batch Plant Operator
(an types and sizes), Concrete Mechanical Tamping, Spreading or
Finishing Machine Operator (including Clary. Johnson or similar
types), Concrete Mixer Operator (paving type and mobile mixers).
Concrete Pump Operator, Crane Operator (crawler and pneumatic less
than 15 ton capacity MRC). Drill-trip, Machine Operator (including
water wells). Elevating Grader Operator (all types and sizes, except
as otherwise classified). Field Equipment Serviceman. Grade Checker
(excluding Civil Engineer). Locomotive Engineer (including Dinky 20
tons weight and over). Moto-Paver (and simmmilar type equipment)
Operator. Motor Grader Operator (any type power blade-rough). Oiler
Driver. Operating Engineer Rigger. Pneumatic Tired Scraper Operator
(all sizes and types). Power jumoo Form Setter Operator. Road Oil
Mixing Machine Operator, Re-tier Operator (on all types asphalt
pavement). Screed Operator, Self-Propel led Compactor (wjth blade)
(615. 825 or equivalent - grade operation). Skip Loader Operator
(ail types with a rated capacity over 3 1/2 but less than € c.y.).
Slip Form Operator (power driven lifting device for concrete forms).
3. 199O)
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Attachment B-5
Page 17 of 18
U.S. Department of Labor
AZ90-2
v
Soil Cement Road Mixing Machine Operator (single Pass type).
Stationary Pipe-wrapping and Cleaning Machine Operator. Surface
"—*— Planer Operator * " '
son cement Road Mixing Machine Operator (single Pass type).
Stationary Pipe-wrapping and Cleaning Machine Operator. Surface
Heater and Planer Operator Tractor Operator (dozer, pusher - all).
Traveling Pipe-wrapping Machine Operator. Trenching Machine
Operator, Tugger (two or more)
Operator, Tugger (two or
Group 3: Asphalt or Concrete Planing, Rotonill and Milling Machine
Operator. Auto Grade Machine Operator (CMI and similar Equipment),
Boring Machine Operator (Including Mole, Badger and similar type),
Concrete Pump Operator (truck mounted, with Doom attached). Crane
Operator (crawler and pneumatic over 15 tons and less than 10O ton
capacity MRC). Crawler-Type Tractor Operator (with boom attachment
and slope bar), Derrick Operator. Gradall Operator. Heavy Duty
Mechanic/Welder. Helicopter Hoist Operator or Pilot. Hignime
Cableway Operator, Mass Excavator Operator (ISO Bucyrus. Erie and
similar type). Mechanical Hoist Operator (two or more drums). Motor
Grader Operator (any type power blade-finish), Mucking Machine
Operator, Operating Engineers Electrician (including lineman, tower
erector, cable splicer, etc'.), Overhead Crane Operator, Piiedriver
Engineer (portable stationary or skid rig). Power Driver Ditch
Lining or Ditch Trimming Machine Operator. Remote Control Earth
Moving Machine Operator Skip Loader Operator (all types with rated
capacity 6 c.y. but less than 10 c.y.). Slip Form Paving Machine
Operator (including Gunnert, Zimmerman and similar types). Tower
Crane.(or similar type). Universal Equipment Operator (shovel.
Deckhoe, dragline, clamshell, etc.. up to 10 c.y.).
Group 4: Crane Operator (pneumatic or crawler - 100 ton hoisting
capacity and over MRC rating), Skip Loader Operator (all typee with
rated cap1city of 10 c.y. or more). Universal Equipment Operator
(shovel, beekhoe. dragline, clamshell, etc.. 1O c.y. and over)
TRUCK DRIVERS
Group 1: Pickup Driver. Station Wagon Driver, Man Haul Driver. 4 axle
or leas Dump or Fiettrack Driver, Self-propelled street sweeper.
tireman. Water Truck Driver. 3800 Gals, and under, vacuum Pump Truck
Driver. ForklIft or Fork Truck. Transit Mix Driver. 8 cy or less Mixer
capacity. Ambulance Driver with current Red Cross or Bureau/Mines
First Aid Certificate
Group 2: Transit Mix Driver, over 87 cy. Rock Truck Drlver-under 35
tone. 011 Tanker or Spreader Truck Driver and/or Bootman. Retortmen or
Leverman. 5 axle Dump or Flattrack Driver, water Truck Driver 39OO gal
and over. Off-Highway Equipment Driver including but not limited to: 2
or 4 Wheel Power unit, i.e., Cat DW Series. Euclid. Int'l and Similar
Type Equipment. Transporting Material when top loaded or by External
Means. Including Pulling Water Tanks. Fuel Tanks or other applications
under Teamster Classification
Group 3: Field Equipment Serviceman or Fuel Truck Driver. Heavy Duty
Mechanic/Welder. Transport Driver (Heavy Equipment). Off Highway Ro,
Truck-35 Tons and over
Combination men snail be paid thirty cents ($.30) over the highest
rated work.
Vol. Ill
25 (Aug. 3. 199O)
-------
Attachment B-5
U.S. Department of Liter Page IB of IB
AZ90-2
Unlisted classifications needed for work not included within the scope
of the classifications listed may be added after award only as
provided in the labor standards contract clauses (29 CFR, 5.5 (a) (1)
| „, - 3.
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-------
Davis Bacon Act Wage Determinations
ATTACHMENT B-6
Procedures for requesting wage determinations.
Wage determinations are issued at the discretion of the
Department of Labor «ifafr upon receipt of an agency
or on the Department of Labor's own
of wage determinations.
General wage determuianons.
Project wage determinations.
General wagedetermuiafotu.
A general wage determination contains prevail-
ing wage nues for the types of i
within a specified
in the Federal Register by the
^•^M^l^^^H^^ES ^jB^SflK^^SiC^A
General wage
A^ttt ftflwft fWVtflffH
^m
of Labor.
If there is a general wage determination applicable »the projeo,
tse it wahort notifying the Department of
shafl be used whenever possible.
dina
general wage den*
normally remains eflecave for the fife of the
-------
Attachment B-6
*age 1 of n
kddhiootl
If any tebre or mechanic is 0 be employed a *
t« ^ Kmrf m the WMC
the
thai the contractor sobmii to (he eaatneoaf
•
Request for Authorization of
E. Conforn«nc« ProeadurM. 29 CFR 5.5 («)(l)(il) provides that after
contract award tha contracting officer is responsible for the addition.
conformable to the wage determination, of • any needed classification of
laborers or mechanics not listed in the wage determination. Such an action
requires the concurrence of all interested parties and the Department of
Labor (BCWD) must approve of the action. An additional classification action
is not valid unless the Department has approved it; if a dispute exists, the
natter is to be referred to the Department for resolution.
The above referenced section of the regulations specify that "the contract-
ing officer shall require that any class of laborers or mechanics which is
not listed in the wage determination and which is to be employed under the
contract shall be classified in conformance with the wage determination..."
when the following criteria have been met:
-------
Attachment B-6
Page 2 of n
(1) The work to be performed by the classification requested
is not performed by a classification in the wage deter-
mination; and
(2) The classification is utilized in the area by the con-
struction industry; and
(3) The proposed wage rate, including any bona fide fringe
benefits, bears a reasonable relationship to the
wage rates contained in the wage determination.
If there - is -agreement f^pf all interested parties (the contractor, the
employees to be used in the new classification(s), if known, or their
representative* and the contracting officer) as to the conformed
• ••«* ••=*" • a • -sis-
classifications and wage rates, a report of the action taken is sent to the
W-H Administrator. If a dispute exists, the matter must be referred to the
Administrator along with the views of all interested parties and the
recommendation of the contracting officer.
All conformance notices are to4» responded to in writing within 30 days of
receipt. These responses either approve or deny the request or inform the
submitting agency that additional time will be required. Every conformance
request is analyzed to verify that the criteria for approval are complied
with:
4.
5.
The work to be performed is performed by a classification
not already in the wage determination.
There is information to indicate that the classification
is utilized in the area by the construction industry.
The proposed wage rates are conformable, i.e., bear a
reasonable relationship to the wage rates in the deter*
mination.
There is agreement indicated among the parties involved.
The request is not for apprentices or trainees.
Conformance letter is to be used in responding to
federal agency requests. Conformance requests, as with requests for project
determinations, are accepted from some state agencies and other organiza-
tions.
If the conformance notice is submitted to add a helper classification,
Conformance Letter is issued. If the request
must be denied for any reason not covered by the two conformance letters or
-------
Attachment B-6
Page 3 of 11
in the case of a disputed classification, the response is to be by custom
letter.
Conforaance notices and copies of the replies thereto are to be attached to
the file copy of the wage determination to which they apply. Helpers classi-
fications and other subclassifteations» pursuant to long-standing DOL
practice, can be added to a wage determination only where use of the
classification prevails, the. duties of the classifications are clearly
defined and distinct from those of the journeyman classification, clearly
defined and distinct from the laborer, and where the term "helper" is not
synonymous with "trainee" in an informal training program.
-------
General wage determinations.
Attachment ?
Page 4 of 11
determ«1*«»M are published
Govcnuncat Prinanf Office (G?0) doca-
-Cf«* Wage Detcnninaliow £
Davis-Bacon and Related Acs." Nbocesof
w,ge determinates are poblished in the
Register. General wage determinations are
on the publication date of the notke
dewminaiion by the comracriag
»
The GPO publication is available
Subscriptions may be obtained by contacting:
Superintendent of Documents.
U.S. Government Printing Office,
Washington. DC 204m
A* annual edition will be issued on or about
•^^MM^^^^B0 1 e^m ^^^MB& t^^^MA 0§fcA0 fl^^AflflMA^^B A If 4MAM^^^Btf ^^^^^^^^^1
jXffj^^fy • Ow C^EO ji^^iw* UHhi BlCvQQBv BU vUwvflK CCDBfT^U
Throtjgaow tne remainder of tne year, regular
' «***•*•• WUl *"* JS **"""
or superseded wage detfrainaa'oaa is»oed,
volume's anrnal and weekly edinorn win be pro-
t^. t^ • __ . • *
Tfe* GPO publication is divided into three volames
which my be ordered septtstely.
Vote»tn-C«etnJ
Requests for general wage detemuiaoans.
en necessary, a requd for a gcnejal wage deter*
mfiurion may be made by tubmtmng Standard Pom (SF)
308, Xeqnesc lar Determmaaon and Response ID Request.
to the »*
Wage ^nd Hbor
- • ^fe __^^ _^ •• M_. Mk
onstncijuii conflict wige ueter
7
-------
Project wage determinations.
Page 5 of 11
A project wage deter-
mination is issued ai the specific request of a bonneting
agency. U is used only when no general wage determina-
tion applies, and is effective for 180 calendar days from the
of the determination.
Requests for project wage determinations.
A coo trading agency shall submit requests for oroject wage
determinations on SF 308 to the Depanmem of Labor,
The requests shall include the following information:
The location* y^wffw the county (or othff civil
subdivision) and State in which the proposed project is
locatrd
The name of the project and a sufficiently
detailed description of the work to indicate the types of
aion involved (64^ building, heavy, highway.
residential, or other type).
. Any available penmeat wage payment informa-
tion, unless wage pattens in the area are cleanly estab-
lished,
The estimated cost of each project.
All the '*i**"fi'** •***•*« of fa*****»* and
likely to be employed
Project wage determinations apply only to. and shall
included in, connor for which they are issued,
incorporated in a
contract, a project wage determination normally
effective for the Ufe of the connact
The contracting officer shall make every effort to
ensure that contract award is made before expiration of the
project wige determination included in the solicitation.
All jaoject wage determinaoon
mnrfifirations expire on the same day as the originai deter-
mination. •• . .
-------
r.t- R-R
Page 6 of 11
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il
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Attachment ts-o
Page 7 of 11
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-------
Attachment B-6
Page 8 of 11
Modifications of wage determinations.
•Die Department of Labor may modify a wage determination
10 make it current by specifying only die items being changed
by issuing i ** fl
decision," which is a reissnance
of the entire determination with changes incorporated.
Correction of wage determinations
Toe Labor Decanment. may correct any wage determination
found to contain clerical errors. Such corrections shall be
effective immediately and shall apply to any solicitation or
Solicitations issued without wage determinations
If a solicitation is issued before me wage det
lion is obtained, a notice shall be included in the solicita-
tion that the schedule of minimum wage rates to be paid
under the contract will be issued as an amendment to the
solicitation.
In negotiated acquisitions, the contracting officer
may open proposals and conduct negotiations before
obtaining the wage determination. However, the contract-
ing officer shall incorporate the wage determination into
the solicitation before submission of best and final offers.
PgMO
-------
Attachment B-6
Page 9 of 11
Notification of improper wage determination before award.
Wriuen notification by the Department of Labor
received by the contracting officer prior to award that
f
(1) a solicitation includes the wrong wage determination of the
wrong rate schedule
(2) a wage determination is with*
drawn by the Department of Laoor as a
by the Wage Appeals Board, shall be effective immetfately
In negotiated acquisitions, the contracting officer
shall delay award, if necessary, and process the notification
in the manner prescribed for a new wage determination
\o
-------
Attachment B-6
Page 10 of 11
Award of contract without required wage determination.
If a contract is awarded without the required wage
ma tmn
(Lc*, incorporating no df term "Wion. con*
taining a clearly inapplicable general wage determination.
or containing a project determination which is '
ble because of an inaccurate description of the project or
its location).
te the required detenn&iatioo is thf?
hnnwliatfty upon discovery of the emt If a required
van detennisatioo
(valid detennination in effect on the
date of award)
is not available* the contracting officer
shall expeditiousiy request a wage determinarioo from the
tmeac of Labor, including a flitrmrm explaining
the circumstances and giving the date of the contract
The contracting officer shaD—
Modify the contract to incorporate the required
wage determination (retroactive to the date of award)
and equitably adjust the contract price if appropriate: or
or
Terminate the con
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Attachment B-6
Page 11 of 11
Posting wage determinations and notice.
The contractor is required to keep a copy of the wage
determination (and any approved ad^it™1*1 classifications)
at the site of the work in a prominent place where it
can be easily seen by the workers.
The contracting officer
«haii furnish to the contractor, Depa
I of Labor FORD
WH-1321. Notice to Employees Working on Federal and
.Federally Financed Construction Projects, for posting with
the wage rates.
The name, address, and telephone number
of the Government officer responsible for the administra-
tion of the contract shall be indicated in the poster to
inform workers to whom they may submit complaints or
raise Questions concerning lafrof standards.
-------
ATTACHMENT B-7
Logistics of Wage Determination.
•
- now dOM OSC/RFM know which local wage rate applies
- DOL Memorandums No. 130 and 131 for assistance in determining the, appropriate
DBA wage rate schedule(s)
ApfticxnoN or LABOKLAWS TO
GOVESNMENT AOQUBinOFS
-------
Attachnar.t p-~
Page 1 of 9
U.S. DEPARTMENT OF LABOR
EMPLOYMENT STANDARDS ADMINISTRATION
Wage and Hour Division
WASHINGTON, D.C 20210
\
1 7 1978
ALL AGENCY MEMORANDUM NO. 130
TO:
ALL GOVERNMENT CONTRACTING AGENCIES AND THE
DISTRICT OF COLUMBIA
FROM: XAVIE/M. VELA
ADMDflSTRATOR
SUBJECT: Application Of The Standard Of Coriparison
Vojects Of A Character Similar" Under The
''Davis-Bacon And Related Acts
The purpose of this memorandum Is to set forth present policies of
the Wage and Hour Division with regard to the determination of "projects
of a character similar to the contract work" for wage determination
purposes. The guidelines contained in the memorandum are to be used by
the contracting agencies In selecting the proper schedule(s) of wage
rates from the Federal Register and 1n instructing contractors regarding
the application of multiple schedules. This Memorandum supersedes All
Agency Memorandum No. 68 (July 19, 1966).
The Davis-Bacon and related Acts require the Secretary of Labor to
determine the prevailing wage rates for corresponding classes of laborers
and mechanics on projects 1n the area which are of a "character similar"
to the proposed contract work to which the determination will be applied.
The Department's Mage Appeals Board in a decision specifically relating to
high-rise apartment buildings (WAB Case No. 76-11, dated January 27, 1977)
stated:
The test of whether a project is of a character
similar to another project refers to the nature
of the project itself in a construction sense*
not to whether union or nonunion wages are paid
or whether union or nonunion workers are employed.
Since the 1935 amendments to the Davis-Bacon Act,
the statutory focus has-always been on the character
of the project itself rather than on who was employed
on the project or how much he or she was being paid.
-------
Attacnmenu u-
Page 2 of 9
Page 2
•, *
Again, in a decision relating to a water treatment plant project
(WAB Case No. 77-20, dated September 30, 1977), the Board stated:.
"When it is clear from the nature of the project itself in a construction
sense that it is to be categorized as either building, heavy, or highway
construction it is not necessary to resort to an area practice survey to
determine the appropriate categorization of the project."
Generally construction projects are classified as either Building,
Heavy, Highway or Residential. ]_/ Below are descriptions of these
classifications with an illustrative listing of the kinds of projects
that are generally included within the classification. Contracting
agencies should utilize these descriptions and illustrations in carrying
out their responsibilities, to insure a uniform and consistent administra-
tion of the Davis-Bacon and related prevailing wage statutes.
The advertised and contract specifications, should identify as specifically
as possible the segments of work to which the schedules will apply. Note,
however, that the descriptions and illustrations are guides. Contracting
agencies should seek a determination from the Department of Labor on close
questions or when the appropriate classification is in dispute. In making
this determination where a project does not readily fall within any category,
the Department of Labor may consider wages being paid on analogous projects
as an indication of the proper category. As stated by the wage Appeals
Board in WAB Case No. 77-23, dated December 30, 1977: "Wages, however, are
only one indication. It is also necessary to look at other characteristics
of the project, including the construction techniques, the material and
equipment being used on the project, the type of skills called for on the
project work and other similar factors which would Indicate the proper
category of construction."
BUILDING .CONSTRUCTION
Building construction generally is the construction of sheltered enclosures
with walk-in access for the purpose of housing persons, machinery, equipment,
or supplies. It includes all construction of such structures, the installation
of utilities and the installation of equipment, both above and below grade
VGenerally, for wage determination purposes, a project consists of all
construction necessary to complete a facility regardless of the number of
contracts involved so long as all contracts awarded are closely related in
purpose, time and place. For example, demolition or site work preparatory
to building construction is considered a part of the building project for
wage determination purposes. Where a project, such as a water and sewage
treatment plant, includes construction items that in themselves would be
otherwise classified, a multiple classification may be justified if such
construction items are a substantial part of the project. Further,
however, a separate classification would not apply if such construction
items are merely incidental to the total project to which they are closely
related in function. For example, water or sewer line work which Is a
part of a building project would not generally be separately classified.
Where construction is "incidental" in function, 20 percent of project cost
is used as a rough guide for determining when construction is also
"incidental" in amount to the overall project.
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Attachment B-
Page 3 of 9
Page 3. .
level, as well as incidental grading, utilities and paving. Additionally,
such structures need not be "habitable" to be building construction. The
installation of heavy machinery and/or equipment does not generally change
the project's character as a building.
Examples
Alterations and additions to buildings
Apartment buildings (5 stories and above)
Arenas (enclosed)
Auditoriums
Automobile parking garages
Banks and financial buildings
Barracks
Churches
City halls
Civic centers
Commercial buildings
Court houses
Detention facilities
Dormitories
Farm buildings
Fire stations
Hospitals ' :
Hotels
Industrial buildings
Institutional buildings
Libraries
Mausoleums
Motels
Museums :
Nursing and convalescent facilities
Office buildings
Out-patient clinics
Passenger and freight terminal buildings
Police stations
Post offices
Power plants
Prefabricated buildings
Remodeling buildings
Renovatfng buildings
Repairing buildings
Restaurants
Schools
Service stations
Shopping centers
Stores
Subway stations
Theaters
Warehouses
Mater and sewage treatment plants (buildings only)
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Attachrsnt B-7
Page 4 of 9
Page 4
RESIDENTIAL CONSTRUCTION
Residential projects for Davis-Bacon purposes are those Involving the
construction, alteration, or repair of single family houses or apart-
ment buildings of no more than four(4) stories in height. This includes
all incidental items such as site work, parking areas, utilities, streets
and sidewalks.
Examples
Town or row houses
Apartment buildings (4 stories or less)
Single family houses
Mobile home developments
Multi-family houses
Married student housing
HEAVY CONSTRUCTION
Heavy projects are those projects that are not properly classified as
either "building", "highway", or "residential". Unlike these classifi-
cations, heavy construction is not a homogeneous classification. Because
of this catch-all nature, projects within the heavy classification may
sometimes be distinguished on the basis of their particular project
characteristics, and separate schedules issued. For example, separate
schedules may be Issued for dredging projects, water and sewer line
projects, dams, major bridges, and flood control projects.
Examples
Antenna towers
Bridges (major bridges designed for commercial navigation) 21
Breakwaters
Caissons (other than building or highway)
Canals
Channels
Channel cut-offs
Chemical complexes or facilities (other than buildings)
Cofferdams
Coke ovens
Dams
Demolition (not incidental to construction)
Dikes
Docks
Drainage projects
27Major bridges contain elements of both heavy and highway construction.
lee WAS Case No. 77*2 (October 21, 1977)
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Attachment B-7
Page 5 of 9
Page 5
Dredging projects
Electrificatiop projects (outdoor)
Flood control projects
Industrial incinerators (other than building)
Irrigation projects
Jetties
Kilns
Land drainage (not incidental to other construction)
Land leveling (not incidental to other construction)
Land reclamation
Levees
Locks, waterways
Oil refineries (other than buildings)
Pipe lines
Ponds
Pumping stations (prefabricated drop-in units - not buildings)
Railroad construction
Reservoirs • . -
Revetments
Sewage collection and disposal lines
Sewers (sanitary, storm, etc)
Shoreline maintenance
Ski tows
Storage tanks
Swimming pools (outdoor)
Subways (other than buildings)
Tipples
Tunnels
Unsheltered piers and wharves
Viaducts (other than highway)
Water mains
Waterway construction
Water supply lines (not incidental to building)
Water and sewage treatment plants (other than buildings)
Wells
HIGHWAY CONSTRUCTION
Highway projects include the construction, alteration or repair of roads,
streets, highways, runways, taxiways, alleys, trails, paths, parking areas,
and other similar projects not incidental to building or heavy construction.
Examples
Alleys
Base courses
Bituminous treatments
Bridle paths
Concrete pavement
Curbs
Excavation and embankment (for road construction)
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Attachment B-7
Page 6 of 9
Page 6
c
Fencing (highway)
Grade crossing elimination (overpasses or underpasses)
Guard rails on highway
Highway signs
Highway bridges (overpasses; underpasses; grade separation)
Medians
Parking lots
Parkways
Resurfacing streets and highways
Roadbeds
Roadways
Runways
Shoulders
Stabilizing courses
Storm sewers Incidental to road construction
Street Paving
Surface courses
Taxiways
Trails
In applying these guidelines contracting agencies are reminded that they
have the authority only 1n the first Instance to^designate the appropriate
wage schedule(s) from the Federal Register, and to determine the applica-
tion of multiple schedules Issued by the Wage and Hour Division In project
wage determinations. Any questions regarding the application of the
guidelines set forth 1n this memordum to a particular project or any disputes
regarding the application of the wage schedules are to be referred to the
Wage and Hour Division for resolution, and the Instructions of the Wage and
Hour Division are to be observed In all Instances. Furthermore, where
multiple schedules are Issued by the Wage and Hour Division, they must be
utilized In the contract specifications unless the agency requests and
receives a change In the wage determination from the Wage and Hour Division.
To ensure that appropriate schedules are Issued, contracting agencies are
advised to provide the Wage and Hour Division 1n their requests for wage
detennlnations with a sufficiently specific description of the project to
be able to determine Its character.
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Attachment B-7
Page 7 of 9
U.S. DEPARTMENT OF-LABOR
EMPLOYMENT STANDARDS ADMINISTRATION
Wage and Hour Division
WASHINGTON. D.C. 20210
•••"a,
'^ ^ S
r> „ j y
JUL 14 1978
ALL AGENCY MEMORANDUM NO. 131
TO:
FROM:
SUBJECT:
ALL GOVERNMENT CONTRACTING AGENCIES AND THE
DISTRICT OF COLUMBIA
R M. VELA
• »e5j^^^an^
^u^B^^P^B^^B^^^^MBjBf
'fication of All Agency Memorandum No. 130
The purpose of this memorandum is to clarify Memorandum
No. 130, dated March 17, 1978. Although the Wage and Hour
Division has received a positive reaction from most contracting
agencies who work regularly with the issues raised, some
questions have arisen over specific aspects of the memorandum.
Memorandum No. 130 is intended to be a guide to categories
of projects in a construction sense and is to be applied uni-
formly by the contracting agencies in the absence of specific
direction on the wage determination or advice by the Wage
and Hour Division. However, the Wage and Hour Division is
aware that in some circumstances the category of a project may
appear to be unclear or a literal application of the guidelines
may be inappropriate. For example, questions frequently arise
over pumping stations, which may vary greatly in sophistication
and construction techniques. Therefore, if the contracting
agency has any questions regarding application of the guidelines
in a specific case, or if a question is raised with the agency
by interested parties, the issue of application of the wage
rate schedules should be referred to the Wage and Hour Division.
This referral should include a complete description of the pro-
ject, any evidence available of area practice regarding wages
paid on similar projects, comments by interested parties which
may have been submitted to the agency, and • the agency's recom-
mendation. Where the nature of the project in a construction
sense is not clear, .area practice regarding wages paid will
be taken into consideration together with other factors such
as construction techniques and classifications of workers re-
quired on the project. See WAS Case No. 77-23 (December 30,
1977).
Questions have also arisen regarding the circumstances in
which multiple schedules of wage rates are issued for a project
which includes construction items that in themselves would be
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Attachment B-7
Page 8 of 9
Page 2, " % '
different categories'of construction. Because of the complexities
in application of multiple schedules, the contracting agency
should consult with the Wage and Hour Division whenever it
appears that more than one schedule of rates is appropriate
for a project, unless the wage decision(s) as issued indicates
that multiple schedules are applicable.
Generally, multiple schedules are issued if the construction
items are substantial in relation to project cost — more than
approximately 20 percent. Only one schedule is issued if con-
struction items are "incidental" in function to the over-all
character of a project (e.g., paving of parking lots or an access
road on a building project), and if there is not a substantial
amount of construction in the second category. Note/ however,
that 20 percent is a rough guide. For example, when a project
is very large, items of work of a different character may be
sufficiently substantial to warrant a separate schedule even
though these items of work do not specifically amount to 24
percent of the total project cost.
Although the example given is that of incidental paving
and utilities, the same principles are applied to other
categories, such as building construction on a heavy or high*
way project. Thus, in a recent case, the Wage and Hour Division
deleted the building schedule when it learned that a small build-
ing under a contract primarily for runway construction was approx-
imately 4 percent of project cost. Another example of general
interest is the applicability of the building schedule to a
building in a rest area of a highway. In this situation,
applying the principles of MART A, WAS Case Mo. 75-5, for
extensive projects, the project for comparison purposes is
the rest area itself, rather than the entire highway.
These principles regarding incidental construction are not
in conflict with the Wage and Hour Division's recognition in
certain circumstances (WAS Case No. 77-19) of a clearly
established practice of paying different wage rates on specific
portions of building projects. For example, different rates
may be paid for incidental paving and utilities than are paid
in the construction of buildings on building projects. These
projects are building projects, and the wage rates issued by the
wage and Hour Division for incidental paving and utilities re-
flect wages paid on such work on building projects.
Contracting agencies are reminded of their responsibility
to advise contractors on the application of multiple wage
schedules issued by the Wage and Hour Division or obtained by
the agency from the Federal Register. If any questions arise
regarding application of the schedules to the project in
accordance with these guidelines, or if it appears that a
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Attachment B-7
Page 9 of 9
"ji'ge 3 -
wage schedule may have been issued in error, a ruling should
be requested from the Wage and Hour Division. On these issues,
as in all other matters in the administration of the Davis-
Bacon and related acts, we will continue to work cooperatively
with the contracting agencies. For convenience, Memorandum
No. 130 is attached.
Attachment
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ATTACHMENT B-8
Labor Standards
COMPLIANCE
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ATTACHMENT B-8
PAGE 1 Of 25
TABLE OF CONTENTS Page
COMPLIANCE REQUIREMENT FOR CONTRACTS INVOLVING CONSTRUCTION
Laws Prescribing Labor Standards Requirements i
Areas of Attention for a Compliance Review 1
Expanded Reference
SERVICE CONTRACT ACT
General 3
Outline Summary 4
Enforcement 4
EPA Responsibilities 5
DAVIS-BACON ACT and RELATED ACTS
General ; 5
Outline Summary 6
Minimum Wages 7
Direct Federal Contracts 7
Federally Assisted Projects 7
General Wage Determinations 7
Enforcement 7
CONSTRUCTION CONTRACTS
Application 9
Enforcement 9
Multiple Schedules Wage Determinations 9
Additional Classifications 9
Apprentices 10
Actual Work Performed 10
Labors - Mechanics 10
Contractual Arrangements ; 10
Prime Contractor 10
Subcontractor 11
Site of Work 11
Prevailing Wages 11
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ATTACHMENT B-8
PAGE 2 of 25
Contract Work Hour and Safely standards Act 11
Anti-kickback Act 12
Payroll and Records 12
Service Contract Act 12
/
CONSTRUCTION PHASE
Compliance Review 13
Proper Classification 14
Laborers, Helpers, and Apprentice and Trainees 15
Apprentice and Trainee Ratios 16
Payroll Review . 16
Net wages 17
Retaining Payroll Records 17
Interview 18
Enforcement and Compliance a
Continuing Responsibility 18
Voluntary Compliance 19
Withholding of Contract Funds 19
Escrow Funds 20
Reporting the need for an Investigation 20
Violations 21
Investigation of Allegation of Labor Standard
Violations 21
Appeal Assessment of Liquidated Damages 21
Final Payment ....; 21
Additional Laws Governing Labor Standards Compliance
COPEIAND "Anti-kickback" Act
General 22
Weekly Certified statements 22
Summary Outline 22
Administration 23
EQUAL EMPLOYMENT OPPORTUNITY
Assistance Agreements 23
Direct Federal Procurement 23
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PAGE 3 Of 25
-1- - - '
COMPLIANCE REQUIREMENT FOR CONTRACTS INVOLVING CONSTRUCTION
If the work is solely for dismantling or demolition of buildings,
ground improvements or other real property structures, or for
removal of such structures, the Service contracts Act applies.
When the work of dismantling or demolition is to be followed by
construction work, even through a separate contract vehicle, the
Davis-Bacon Act applies.
The following information presumes construction activity; EPA
construction contracts are covered by the following statutes,
each of which has statutory prescribed labor standards
requirements:
o The Davis-Bacon Act requires that every laborer or mechanic
employed directly on the work site shall receive no less than the
prevailing wage rates prescribed by the Secretary of Labor
through the Department of Labor's Wage and Hour Division.
o The Contract Work Hours and Safety Standards Act requires that
no laborer or mechanic shall be required or permitted to work
more than 40 hours in any work week unless that employee is paid
one and one-half times the basic rate of pay.
o The Copeland Act requires that each contractor and
subcontractor furnish weekly statements of compliance with
respect to wages paid each employee during the preceding week.
This Act makes it unlawful to induce employees to kick-back any
part of the pay to which the employee is entitled.
The following points highlight the areas of review in conducting
a compliance inspection on projects covered by the statutes
followed by an expanded reference:
1. EPA will request the prevailing wage rate determinations from
the Department of Labor. These wage rates will be included in
the bid solicitation and resulting contract documents.
Compliance will be required of the prime contractor and
subcontractors performing the substantial and segreable
construction activities.
In cases where a project includes construction items which
encompass different categories of construction outside the
standard building, residential, heavy or highway wage rate
classifications, the Contracting Officer has responsibility of
advising the contractor on the appropriate application of each
category. This is also applicable if there is a need for an
additional classification for a laborer or mechanic.
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PAGE 4 Of 25
-2- ...-•*
The Department of Labor's Regional Wage Specialist will be
available to provide clarification concerning multiple schedules
or additional classifications.
2. Apprentices may work on the EPA construction project under
terms of an applicable labor agreement. An apprentice refers to
a person employed and registered in a bona fide apprenticeship
program with the Department of Labor's Bureau of Apprenticeship
training program. Apprentices are not paid the full amount
listed in the prevailing wage rate determination.
3. Individuals, except apprentices, are to be paid full wages as
listed in the prevailing wage rate determination regardless of
the contractual relationship which may be alleged to exist
between the contractor and subcontractor and such laborers and
mechanics. Fringe benefits are to be included in the provision
of the pay to employees. Deductions from the wages must be
authorized by employee.
4. The prime contractor has primary responsibility for payment of
the work required to complete the construction project. The
prevailing wage rates are applicable as well to the laborers and
mechanics in the subcontractors' work force. The prime
contractor and applicable subcontractors are required to post the
wage determination schedule in a prominent place on site.
5. A certified complete copy of each weekly payroll must be
submitted by the prime contractor and each subcontractor within
seven (7) days after the regular payment date. Failure to submit
timely payroll records will result in delayed payment processing.
The prime contractor is responsible for the timely submittal of
payrolls by the subcontractors.
All basis records pertaining to payrolls, including time cards,
are to be preserved by the prime contractor for a period of 3
years after completion of the contract.
6. All payment records are to be made available for inspection to
determine compliance with contract requirements. Compliance
inspections will be conducted by the Contracting Officer's
representative. Early and complete labor compliance inspections
are essential to develop a sound compliance on the project and
should be done periodically throughout the life of the project.
All employee records will be reviewed to determine the nature of
work performed in light of the proper classification. Employees
may be interviewed to confirm the accuracy of the payrolls.
Disputes as to the proper wages payable are to be promptly
settled in accordance with the terms of the contract.
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... . -_*..ti 4. u~ O
PAGE 5 of 25
-3-
Violations shall be immediately corrected, with notification to
EPA's Contracting Officer's representative.
7. Complaints from employees may be received by the Department of
Labor or EPA. EPA notifies the DOL Regional Wage Specialist
concerning the appropriate disposition of the complaint.
8. EPA will periodically review contract requirements to
determine current applicability of the Service Contracts Act and
The Davis-Bacon Related Acts. On-going discussions will be
maintained with the Department of Labor to ensure validity of the
site requirements pertaining to wage rates.
Expanded Reference
Federal Law
FAR Subpart 22.10
General
SERVICE CONTRACT ACT
29 CFR Part 4
41 USC 351, et seq
The McNamara-O'Hara Service Contract Act of 1965, as amended
covers service contracts including subcontracts in excess of
$2,500 of the Federal agencies that are performed in the United
States which are for the principal purpose to furnish services
through the use of service employees. It establishes standards
for minimum compensation and safety and health protection. Such
service contracts shall contain the clause at FAR 52.222-41, SCA
of 1965, as amended or at 29 CFR 4.6, Labor Standards Clauses for
Federal service contracts exceeding $2,500 [Federal service
contracts also require coverage under FAR 22.4-CWHSSA or at 29
CFR 4.i81(b), overtime pay provisions of CWHSSA].
The SCA specifies minimum wages and fringe benefits to be paid to
service employees performing on the contract, in certain cases,
the wages and fringe contained in a predecessor contractor's
collective bargaining agreement. It requires the contractor to
notify the employees of the minimum wages and fringe benefits to
be paid. All service employees performing on the contract must
be classified in accordance to the classification listed on the
wage determination or to conform to those listings. The SCA does
not cover bone fide executive, administrative or professional
employees. Employees are to be paid no later than one pay period
following the pay period in which the pay is earned. The
contractor is responsible for underpayments to employees.
Underpayment of wages can be withheld from contract payments.
The exercise of an option period to a service contract is
considered a new contract with respect to the applicable wage
determination. Service contracts may perform work activity other
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ATTACHMENT B-8
PAGE 6 Of 25
-4.
than services, such as construction reference FAR 22.402(b)
nonconstruction contracts involving some construction work or 29
CFR 4.116, contracts for construction activity (These type of
service contracts may require coverage under DBA). Failure to
comply with SCA requirements may be grounds for contract
termination. Contractors found negligent or willful disregard of
the SCA requirements can be debarred from further federal
contracts. Complaints and compliance enforcement of SCA is the
responsibility of the Wage and Hour Division, U.S. Department of
Labor. Assistance agreements are not covered by SCA.
Outline Summarv
- The Act applies only to direct Federal Contracts.
- Minimum wages and fringe benefits are set by DOL in
accordance with prevailing wages in the locality
where the contract is to be performed or those
contained in a predecessor contractor's collective
bargaining agreement.
- The Act provides that every service employee will be
classified in accordance to the listing on the wage
determination and be paid no less than the minimum
wage listed for that classification.
- Overtime hours worked are protected under CWHSSA
- The Act provides that contractor will notify employees of
the minimum compensation.
- The contractor is liable to employees for unpaid
wage. The Act permits withholding of contract funds for
unpaid wages.
Enforcement
The DOL is responsible for the enforcement compliance of wage
rates and fringe benefits and related provisions of the Act. The
DOL conducts investigations, .to determine violations or to
respond to complaints.
The DOL Administrative Law Judges issue orders for placement of
contractors violating the Act on the government wide debarment
list.
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PAGE 7 of 25
-5-
EPA Responsibilities
- Timely submission of Notice of Intention to make a
Service Contract SF98,98a
- Incorporate the appropriate wage determination and
contract clause in bid solicitation and resulting
contract, designate the work to which each
determination classification applies to.
- Notify DOL of any SCA violations encountered
- Honor requests for withholding of contract payments
to cover back wage due employee.
- Will not utilize contractors appearing on the debarment
list.
Federal Law
FAR Subpart 22.4
General
DAVIS-BACON ACT
29 CFR 1, 3, 5 & 7
40 USC 276-276a-7
The Davis-Bacon Act (DBA) governs Federal contracts in excess of
$2,000.00, to which the United States is a party, for the
construction, alteration, repair, including painting and deco-
rating of public buildings or public works, which involve the
employment of laborers and mechanics. Such contracts shall
contain provisions at FAR 52.222-6 thru-15 or at 29 CFR 5.5 with
respect to minimum wages, fringe benefits, payments without
deduction or rebates, withholding funds from contractors to
ensure compliance with the wage-provisions, and termination of
the contract for failure to pay the required wages. The Act
contains provisions for debarment by the Comptroller General of
the United States of contractors and subcontractors who are found
to have disregarded their obligations to employees. If funds
withheld from the contractor are insufficient for full
reimbursement of the amount of wages due unpaid employees, the
Act creates a right of action by employees against the contractor
and his sureties.
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PAGE 8 of 25
Federal Law
29 CFR 1, appendix
A, 3, 5 & 7
-6-
DAVIS-BACON RELATE ACT
40 USC 276a
A Davis-Bacon Related. Act (DBRA) covers Federally assisted con-
struction projects by making wage determinations in accordance
with the Davis-Bacon Act applicable to the projects. The Act
provides for the payment of prevailing wages, to be determined by
the Secretary of Labor, to laborers and mechanics employed on
construction work performed on Federally assisted construction
projects. It should be emphasized that only those provisions of
the Davis-Bacon which relate to the determination of prevailing
wages are made applicable to Federally assisted construction
projects.
Out 1 i
- Wages paid to laborers and mechanics must not be less
than the hourly wage rates, including fringe benefits,
shown in the minimum wage schedule.
- Laborers and mechanics must be paid once a week.
These workers must be paid unconditionally, and not
less often than once each week, the full amounts which
are due and payable for the period covered by the
particular payday. This means that an employer must
establish a fixed workweek (Sunday through Saturday,
for example) and an established payday (such as every
Friday (or preceding day should such payday fall on
holiday)). On each and every payday, each employee
must be paid all sums due him as of the end of the
preceding workweek. The worker's rate for the
straight time hours worked must equal or exceed the
rate specified in the contract for the class of work
actually performed in accordance with the Davis-Bacon
Act. The hourly rate for hours worked in excess of 40
hours in a workweek must equal or exceed one and one-
half time the contract minimum rate.
- The minimum wage schedule and supplements applicable to
the project must be posted at the project site.
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PAGE 9 of 25
-7-
Minimum Wages for Laborersand Mechanics
Direct Federal Contracts
The Davis-Bacon Act, as amended, requires that each contract over
$2,000 to which the United States is a party for the
construction, alteration, or repair of public buildings or public
works contain a clause setting forth the minimum wages to be paid
to various classes of laborers and mechanics employed under the
contract. Under the provisions of the Act, contractors or their
subcontractors are to pay workers employed directly upon and site
of the work no less than the locally prevailing wages and fringe
benefits paid on projects of a similar character. The Davis-
Bacon Act directs the Secretary of Labor to determine such local
prevailing wage rates.
Federally Assisted Projects.
A Davis-Bacon Related Act;
In addition to the Davis-Bacon Act itself, Congress has added
prevailing wage provisions to approximately 70 statutes as well
as such additional statutes as may from time to time be enacted
containing provisions for the payment of wages which assist con-
struction projects through grants, loans, loan guarantees, and
insurance. These "related Acts" involve construction in such
areas as health, housing, air and water pollution and
transportation. If a construction project is funded or assisted
under more than one Federal statute, the Davis-Bacon prevailing
wage provisions may apply to the project if any of the applicable
statutes requires payment of Davis-Bacon wage rates.
The Comprehensive Environment Response, Compensation, and
Liability Act (CERLA) is a DBRA.
General Wage Determination Issued under Davis-Bacon and Related
Acts.
The General Wage Determination Issued Under
The Davis-Bacon And Related Acts are
published weekly by the Government Print-
ing Office (GPO). This publication is
available for examination at all EPA
locations listed on attachment
Enforcement
The EPA is responsible for ensuring that:
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ATTACHMENT B-8
PAGE 10 of 25
-8-
o Contractors and subcontractors are informed of their
obligations under labor standards requirements and wage
determination requirements.
o All contracts and subcontracts contain the applicable
Davis-Bacon wage determinations and requisite labor
standard clauses at FAR 52.222-6 thru-15 or 29 CFR 5.5
o Wage rate decisions are posted conspicuously on the
project site;
The minimum wage schedule and all supplements must be
kept posted in a prominent place at the -site of the
work where they are easily accessible to all employees
and other interested parties. The minimum wage sche-
dule and the minimum wage poster should be posted when
work on the project starts and supplements should be
added when received.
o Laborers and mechanics are paid at least once a week at
rates not less than those prescribed for the
classification of work which they actually perform;
o Work is properly classified in conformity with Department
of Labor standards and procedures and there shoul be no
disproportionate employment of laborers, helpers or
apprentices;
o Appropriate action inconformity with contract provisions
is taken to preclude or correct any failure of the
contractor or subcontractor to pay the proper wage rate;
o Disputes as to the proper wages payable are promptly
settled in accordance with contract terms;
o Adequate payroll reviews are conducted. Payrolls
accompanied by a signed statement of compliance are
submitted weekly by the contractor and each subcontractor
to the contracting officer;
o Employees are interviewed to confirm accuracy of payroll;
o Site reviews are conducted.
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PAGE 11 Of 25
-9-
CONSTRUCTION CONTRACTS
Application
The description of the application and enforcement of labor law
to construction contracts is located at FAR Subpart 22 and at 29
CFR Part 5.
Enforcement
The EPA is responsible for the actual performance of the
enforcement activity required by labor standards and procedures
applicable to construction contracts including the investigation
of complaints and violations.
The EPA is responsible for insuring that the appropriate wage
determination is incorporated in bid solicitation and resulting
contract and for designating the work to which each wage
determination applies.
Multiple Schedules Wage Determinations
In cases where a project includes construction items that
encompasses different categories of construction (building,
residential, heavy, highway) and a wage determination contains
multiple constructions categories and wages rates. The
Contracting Officer or his designee has the responsibility to
advise the contractor on the application of each category to the
contract work. If there are any question regarding the
application of the wage determination they should be referred to
DOL. The DOL Regional Wage Specialist are listed on attachment
Additional Classifications
If needed classification of laborer or mechanics are not listed
in the applicable wage determination, the contractor requests
from the Contracting Officer that additional classifications are
required in the performance of the contract work. Any requested
classification must bear a reasonable relationship to the other
rates in the wage determination. The Contracting Officer passes
the request for workers to be added or conformed to the wage
determination to DOL. An additional classification action is not
valid unless the. DOL has approved it. All laborers and mechanics
are assigned to classification listed in or to conform to a
classification in the wage determination.
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PAGE 12 of 25
-10-
Apprentices
Apprentices, information on wage rates paid to apprentices and
apprentice classifications do not appear in wage determinations.
Their addition through the additional classification procedures
(conformance) is not necessary'. Apprentice refers to a person
employed or individual registered in a bona fide apprenticeship
program registered with the U.S. DOL Employment and Training
Administration, Bureau of Apprenticeship (BAT) or with the state
Apprenticeship Agency recognized by BAT or a person in the first
90 days of probationary employment as an apprentice program who
is not individually registered in the program but who has been
certified to be eligible.
Actual Work Performed
The DBA regulation requires that the wage rates and fringe
benefits listed on the wage determination are the minimum to be
paid to the classification of work actually performed by laborers
and mechanics without regard to skill.
Laborers - Mechanics
The laborers or mechanics include the workers who use tools or
who are performing the work of a trade, as distinguished from
mental or managerial. The Act does not apply to worker whose
duties are primarily administrative, executive or clerical rather
than manual. Working foremen are those who devote more than 20
percent of their time during a workweek to laborer or mechanic
duties are laborers or mechanics for that time.
Contractual Arrangements
The DBA provides that contractors or subcontractors shall pay all
laborers and mechanics employed directly upon the site of work
minimum wages which are listed in the wage determination.
Individuals performing the work of laborers and mechanics on the
construction site are to be paid the listed wage rate regardless
of contractual relationship which may be alleged to exist between
the contractor or subcontractor and such laborers and mechanics.
Prime Contractor
The prime contractor has primary responsibility for the work
required to complete the construction project. The work is
usually accomplished through the award and coordination of
subcontracts supervised by the prime contractor.
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ATTACHMENT B-8
PAGE 13 Of 25
-11- .- - . -
Subcontractor
The subcontractor has a contractual agreement with the prime.
contractor. Most employees working on a job will be employees of
subcontractors. Whether or not the employees who perform
construction type work in connection with the project will be
covered, by the labor standards, laws applicable to such projects
will depend upon the nature of the contract involved and the work
performed.
Site of Work
DBA provides that the listed rates on the wage determination be
paid to all laborers and mechanics employed directly upon the
site of the work. The site of the work is limited to the
physical place or places where the construction called for in the
contract will remain when work has been completed and other
adjacent or nearby property used in the construction.
Davis-Bacon Act - Prevailing Wages
- Wages paid to laborers and mechanics must not be less
than the hourly wage rates, including fringe benefits,
shown in the minimum wage schedule;
- Laborers and mechanics must be properly classified and
paid according to the work actually performed;
- Laborers and mechanics must be paid not less than once a
week;
- The minimum wage schedule and supplements must be posted
at the project site.
Contract Work Hours and Safety Standards Act. Overtime Wages
- 40 hours constitutes a standard workweek.
- At least 1-1/2 times the basic rate of pay (excluding
fringe benefits payments) must be paid for all hours
worked in excess of 40 hours per week.
- The employer is liable to his employees for unpaid
wages.
- The employer is liable to the Federal government for
liquidated damages at $10 per day, per person, per
violation.
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ATTACHMfcrt i1 B-8
PAGE 14 of 25
-12-
** Contract payments are subject to withholding for unpaid
wages and liquidated damages.
- An intentional violation may be reason for debarment or
may constitute a Federal misdemeanor subject to fine or
imprisonment.
Cooeland "Anti-Kickback" Act
- Full wages earned must be paid.
- Deduction from wages must be authorized.
- Proper record must be kept.
- Weekly payroll statements must be submitted by the
contractor and all subcontractors for work performed
during the preceding payroll period.
Payroll and Records
- A certified copy of each weekly payroll must be submitted
by the prime contractor and each subcontractor within 7
days after the regular payment date.
- Payrolls must be complete.
- Delay in submitting of the payroll will result in delay
in processing payment estimates. The prime contractor is
responsible for the submittal of payrolls by
subcontractors.
- All basic records pertaining to the payrolls including
time cards, must be preserved for a period of 3 years
after completion of the contract.
- Laborer and mechanics employed by the prime contractor
and subcontractors are covered by the contract
provisions.
- The prime contractor is responsible for violations of
labor provisions by the subcontractor.
Service Contract Act (applies to direct Federal Contracts only)
- Hourly wages and fringe benefits in the SCA wage
determination are minimum wages to be paid service
employees.
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ATTACHMENT B-8
PAGE 15 Of 25
Collective bargaining agreement may be applicable to
work performed.
Service employees must be properly classified and paid
according to wage determination and actual work
performed.
CONSTRUCTION PHASE
Compliance
Refer to Superfund Guidance Section # 7.0.
The SCA applies when the principal purpose of the work is to
furnish services through the use of service employees.
If the work is solely for dismantling or demolition of buildings,
ground improvements and other real property structures and for
the removal of such structures or portions of them SCA applies.
When the work of dismantling, demolition or removal is to be
followed by construction work even through by separate contract,
DBA applies.
When the work involves substantial amount of construction
activity including painting, decorating, installation on the site
of work of items fabricated off site, dredging, rehabilitation,
excavating, clearing and landscaping the DBA applies.
When the nature of the work is required to be performed by
professional employees neither the SCA or DBA apply, the
Contracting Officer should be consulted.
When the DBA applies the published updated DBA general wage
determination applies. The current up-dated DBA wage
determination can be obtained from the office listed on
attachment *A-4. All covered workers performing on the project
must be classified and listed on the wage determination or be
added to the classifications on the wage determination by the
Contracting Officer. Any added classification must be approved
by DOL, The wage determination and the full text labor standards
provisions must be included in the subcontract.
The wage rates and fringe benefits listed are minimum payment
requirements employees are paid for the actual work performed.
The hours worked over 40 hours in a workweek are to be paid at
1-1/2 times the basic rate of pay.
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PAGE 16 of 25
• ' -14- ~ '
The wage determination and the Davis-Bacon poster (WH-1312) must
be posted at all times where it can be easily seen by the workers
at the site of work.
The construction contractor and subcontractors should be informed
of the labor statutes requirements, which are summarized below:
Proper Classifications
An important factor in proper administration and enforcement of
Federal contract labor standards requirements is the proper
classification of laborers and mechanics according to the work
they actually perform, since construction work generally is
performed by recognized craft classifications, practice in the
construction industry and labor union jurisdiction over the
workers usually determines the proper classifications. For
example, carpenters have recognized duties and workers performing
such duties should be classified as "carpenters11. However, there
is no universal system for identifying all construction job
classifications and have it is possible that a wage rate for
workers performing certain duties will be included in the wage
decision under a nomenclature which differs from that used by the
contracting officer in his request for a wage decision. For
example, "mason tenders" in some areas are known as "hod carries"
in other areas.
The contract labor standards requirements intend that the
contractor and each subcontractor must:
Use only the classifications and nomenclature listed in
the wage rate decision of the Secretary of Labor and
any supplements or modifications thereto;
Use the classifications which are accurately
descriptive of the duties of the work being performed.
Reclassify workers to conform to changes in duties, if
any, so as to provide proper classifications when
duties have been changed; and
Maintain an accurate record of the time spent in
separate classifications of work.
Improper classification often results in the underpayment of
wages and, of course, is contrary to the provisions of the
contract and the law. A good guide to the proper classification
and wage rates applicable is the use of the "tools of the trade"
by the employee. However, in instances where doubtful
classifications arise which cannot be resolved by the Contracting
Officer to the satisfaction of all concerned, the question,
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PAGE 17 of 25
-15-
together with all pertinent facts and recommendations of the
contractor, as well as those of the contracting officer, must be
sent to the United States Department of Labor for a ruling.
Check for posting of wage determination and/or poster.
Check for any disproportionate employment of laborers, helpers,
or apprentices so as to indicate avoidance of the minimum wage
rate provisions and other labor provisions of the contract.
Employment of apprentices and trainees, apprentices and trainees
shall be permitted to work only: (1) when they are individually
registered under a bona fide apprenticeship program registered
with a State apprenticeship agency, which is recognized by the
Bureau of Apprenticeship and Training, Employment and Training
Administration, United States Department of Labor; or (2) if no
such agency exists in a State, under a program registered with
Bureau of Apprenticeship and Training, Employment and Training
Administration, United States Department of Labor;
Wage Rates for Apprentices and Trainees: Percentages of the
journeyman's rate to be paid apprentices and trainees are
determined by the agreement.under which they are employed rather
than by the Department of Labor in wage rate decisions.
Before using apprentices or trainees on the job, the contractor
shall present to the contracting officer written evidence of the
registration of such employees in a proper program. Unless the
written evidence is in the contracting officer's possession, the
journeyman's wage rate must be paid for the work.
"Labor. ** "Helpers^" and Apprentices and Trainees":
Laborers are generally defined as pick-and-shovel
workers.
Helpers are generally defined as those who assist
craft workers in certain trades by passing tools
to them and assisting journeymen in the unskilled
phase of the work. The use of helpers at rates
below the minimum wage rates for journeymen, when
separate for helpers, are not listed in the wage
determination or allowed by reclassification, is
not permissionble. Where helpers are a recognized
classification, that classification will be included
in the wage rate decision and become a part of the
contract.
Apprentices and trainees, consistent with their level
of training, perform all types of craft work from
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ATTACHMENT B-S
PAGE 18 of 25
-16-
passing of tools, etc., to the work of skilled
craftsmen under supervision of journeymen.
Apprentice andTrainee Ratios;
Ratio: The ratio of apprentices to journeymen permitted to
work on a covered project shall not exceed the ratio allowed
under the registered program. The contractor or
subcontractor shall furnish written evidence to the
contracting officer of the appropriate ratios and wage rates
prior to using any apprentices on the contract work. The
contracting officer must ensure that the allowed employment
ratio of apprentices to journeymen is not exceeded.
Payroll Review (contracts involving construction covered under
DBA)
Contractors and subcontractors are not required to keep copies of
payroll records on the site of the project; however, they are
required to make such records available at the job site for
inspection by authorized representatives of EPA, DDL and the
recipient. The payroll reviewer should notify the contractor and
subcontractors when an inspection of the payroll records is
scheduled. Discrepancies and clerical errors which appear on
payrolls may result from poor recordkeeping or a misunderstanding
of the minimum wage requirements of the contracts. Consequently,
such errors should be called to the attention of EPA's
Contracting Officer and to the contractor and corrections made
promptly. The original payroll should not be returned under any
circumstances to the contractor. The corrections should be made
by supplemental payrolls prepared and submitted in the same
manner as the original payrolls.
The payrolls should be submitted 7 days after the regular pay
date. It should include a properly executed certification. The
payroll should be complete. There is no mandatory prescribed
format for contractors1 or subcontractors' payroll records.
However, all payroll records must contain the following data:
The employee's full name, address and social security
number.
The employee's classification, hourly wage rates, and
overtime hour rates where applicable.
The daily and weekly hours worked in each classification,
and overtime hours where applicable.
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ATTACHMENT B-8
PAGE 19 of 25
-17-
Split Rates: Certain employees, at various construction
stages, perform during a single payroll period in •
different work classifications, which may require
different wage rates. In such circumstances, the
employee must receive wages which are not less
than the rate specified in the Secretary of Labor's
wage rate decision for the classification which
describes each type of work performed. Contractors
must keep accurate records of such periods of work, and
ensure that the employee is paid at the correct rate
for periods of work performed in each classification.
The identification itemized deductions made.
The objective of specifying the purpose of a deduction,
and the amount withheld, is to assure compliance with
the Copeland "Anti-Kickback" Act and the Department
of Labor regulations, 29 CFR Part 3. Therefore, the
combining of payroll deductions on the payroll form
without proper identification is not permitted unless
supplemental data specifying the purpose and amount of
each deduction is attached to the payroll when
submitted.
The net wage paid.
Each laborer or mechanic must be paid not less than the
applicable wage rate and fringe benefits or cash equivalents for
the classification of work performed, as specified in the
applicable wage determination incorporated into the contract.
The pay for the payroll period should be the full weekly wages
earned, without rebate, or deductions that are not authorized
from the full wages earned.
Retaining Payroll Records by the EPA
Payroll records for direct contracts and assistance agreements
under grants for construction projects submitted to the EPA, by
the prime contractor of his payroll and those of all his
subcontractors and those submitted, by the grant recipient of
payrolls of their prime contractor and subcontractors must be
maintained by the EPA for a period of 3 years after completion of
the project.
Retaining PavroU, Records Bv the Contractors
Payroll records shall be maintained by contractors and
subcontractor during the course of the work and preserved for a
period of 3 years following the completion of the project.
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ATTACHMENT B-8
PAGE 20 Of 25
The reviewer is responsible for ensuring that the payroll is in
compliance, any violations are to be reported to the Contracting
Officer.
Interview
The employee interview:
The conduct of employee interviews is essential to
carry out a successful compliance inspection. The
interviews should cover a sufficient number of
employees to serve as a check against the employer's
records and should cover a number of employees in
various job classifications on the project.
The employee's statements should be treated as confidential.
Employee shall be permitted to be interviewed during working
hours on the job, free from the presences of the employer.
Interviews conducted at the jobsite should be arranged so
as to cause the least inconvenience to both the employer and
the employee. Interviews conducted elsewhere shall be
scheduled during the employee's non-working hours and at his
convenience.
The employee should by properly classified and be paid for actual
work performed.
Payment should be verified by payment statement or check stubs.
Employee information should be compared to the payroll data.
Enforcement and Compliance a Continuing Responsibility
The inspection for compliance of the labor standards contract
provision and responsibilities is a continuing responsibility for
the duration of the construction project. As the project
progress the Contracting Officer's on-site representative should
become familiar with the contractor's labor practices. It may
not be necessary to make a detailed audit of the payrolls or to
conduct extensive interviews. Familiarity with the payroll and
time sheets, progress reports, the contractor's apprenticeship
agreement and similar data, together with oral inquires of
employees and the employer, should be sufficient to develop
information as to whether there is compliance. Systematic spot
interviews with employees of the prime contractor or
subcontractors on the job to establish that the minimum wage and
other labor standards of the contract are being fully complied
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PAGE 21 of 25
-19-.
*
with and that there is no misclassification of labor or
disproportionate employment of apprentices, statements made by an
employee, whether orally or in writing, must be treated as
confidential so as to avoid disclosing the employee's identity to
his employer without the employees consent.
Voluntary Compliance
Before any circumstance is treated as a violation, every
reasonable effort should be made by the reviewer to obtain the
contractor's voluntary compliance. In situations wherein the
violation is unintentional, voluntary restitution by the
contractor or subcontractor involved may remedy it. Such
situations may be due to a misinterpretation of the labor
standards, a valid dispute as to their meaning or application, or
simple human error in the calculation of wage payments which
cannot be considered willful negligence.
A distinction should be drawn between investigations, which are
concerned with a specific allegation, or allegations, of
wrongdoing in the labor field, and inspections, which are checks
upon procedures and practices regarding labor matters without any
allegations of improper actions. Because of this difference,
investigations are necessarily much more thorough in that they
are designed either to dispel the allegations made, or to
assemble concrete evidence upon which administrative action, or
even criminal action, could be taken. Because of the seriousness
of investigations, much more attention must be paid to details,
and evidence must be obtained to substantiate all findings of the
investigator.
Withheld for Backwaqes and Liquidated Damages
The Contracting Officer shall withhold from payments due the
prime contractor any backwage unpaid to the employees of the
contractor or subcontractor. When violations occur of the
overtime provision of the Contract Work Hours and Safety
standards Act, In addition to the backwages due employees,
liquidated damages shall be with held in the amount of $10 for
each overtime violation per man, per day. The EPA itself or
through the loan or grant recipient shall upon its owen action or
upon written request or an authorized representative of the
Department of Labor withhold or cause to be withheld, from any
monies payable on account of work performed by the contractor or
subcontractor under any such contract or any other Federal
contract with the same prime contractor, or any other Federally
assisted contract subject to the Contract Work Hours and Safety
Standards Act, and Bacon Act, Davis-Bacon Related Acts, Service
Contract Act, and Walsh-Healey Public Contracts Act, which is
held by the same prime contractor,
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ATTACHMENT B-8
PAGE 22 Of 25
-20-
such sums as may be determined to be necessary to satisfy any
liabilities of such contractor or subcontractor for unpaid wages
and liquidated damages.
The underpayment of wages shald be withheld until the proper
payments have been made to the employees. Should the contractor
not pay the wages owed to his employees, a check in the amount
withheld shall be sent by grant recipient or EPA Financial
Management Division to the Wage and Hour Division U.S. Department
of Labor.
EPA does not maintain an escrow account for labor standard
violations of unpaid wages and assessed liquidated damages. The
backwages due employees should be submitted to Wage and Hour
Division, U.S. Department of Labor (DOL) Regional Office listed
on attachment /A-5, along with a list of names of the unpaid
employees, social security numbers, last known address and the
amount due each. The backwage funds are to be disbursed by DOL.
The liquidated damage funds are to be made payable to the U.S.
Environmental Protection Agency" and accompanied with the request
for payment. The payment is mailed to:
EPA Washington
Accounting Operations
P.O. BOX 360277M
Pittsburgh, PA 15251
Reportingthe Need for an Investigation
The reviewer should bring to the attention of the Contracting
Officer the need for investigation assistance whenever there is
reason to believe that violations are of a serious nature or are
not readily adjustable.
Items that may require investigation:
- Habitual violations of labor standards
- Carelessness on the part of the contractor in conducting
his labor standards responsibilities
- Payroll discrepancies
- Complaints of violations
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ATTACHMENT B-8
PAGE 23 Of 25
-21-
Violations
Complaints of, and suspected violations shall be thoroughly and
promptly investigated. Complaints should be treated as
confidential. Generally, it is desirable that voluntary
correction by the contractor or subcontractor be solicited and
every reasonable effort toward encouraging such cooperation
undertaken before reports are submitted to EPA or DOL. However,
if the pattern of conduct of the contractor indicates a
reasonable basis for suspecting a criminal violation, reports,
including a full statement of all facts pertinent thereto, should
be forwarded promptly to the Office of the Inspector General.
Unlawful deductions could be the basis for termination of the
contract, withdrawal of Federal participation, and could result
in criminal prosecution by the Federal Government.
Investigation Of Allegations Of Labor Standard violations
The investigations are generally conducted by the U.S. Department
of Labor. The EPA conducts investigations whenever there is
reason to believe that violations exist and efforts by the EPA
reviewer or the recipient officials have failed in obtaining
contractor's voluntary compliance or the violations are of a
serious nature, or may be willful or criminal in character.
(Such notice may arise from a project inspection report, an
employee's or other interested person's complaint, as the result
of office review of payroll data, or otherwise.) Investigations
will also be conducted whenever specifically requested by the
Department of Labor.
Appeal Assessment of Liquidated Damages
- •*• . —
An appeal of an assessment of liquidated damages under Contract
Work Hours and Safety Standard Act (CWHSSA) must be taken within
60 days from the date that fund were withheld for liquidated
damages from funds due the contractor. The appeal should be
addressed to the Chief Judicial Officer EPA, A-10 Washington,
D.C., 20460.
Final Payment
The final settlement voucher for a project may not be processed,
where there is an appeal concerning the withholding of funds for
backwage and/or liquidated damages, until that appeal has been
administratively determined by either the EPA or the DOL.
However, all payments may be made for work completed with the
exception of an amount adequate to cover any unpaid wages plus
the liquidated damages involved. Upon administrative
determination of the claim, the final settlement voucher may be
processed with appropriate withholding for any unpaid wages
and/or liquidated damages.
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ATTACHMENT B-8
PAGE 24 of 25
-22-
* '
The Additional Laws Governing Labor Standards Compliance
Federal Law
29 CFR 3 & 4
General
COPEIAND "Anti-Kickback" ACT
40 USC 276c; &
18 USC 874
The Copeland "Anti-Kickback Act" (Copeland Act) makes it a
criminal offense for any person to induce, by any manner
whatsoever, any person employed in the construction, prosecution,
completion, or repair of any public building,'public work, or
building or work financed in whole or part by loans or grants
from the United States, to give up any part of the compensation
to which he is entitled under his contract of employment. The
provisions applies even if the work is not governed by Federal
wage standards. The Act also provides that the Secretary of
Labor shall make reasonable regulations for contractors engaged
in such public works, including a provision to the submission of
weekly statements of compliance. The Secretary of Labor's
regulations, 29 CFR Part 3, apply to all contracts which are
subject to Federal wage standards. They apply to both direct
Federal and Federally assisted construction projects subject to
Federal wage standards.
Weekly Certified Statements
In accordance with the Copeland Act, the regulations require that
weekly certified statements of wages paid be submitted to the
contracting agency or recipient.
Any suspected violations of the criminal provisions of the
Copeland Act which are uncovered by either the recipient or EPA
should be immediately reported to the Office of Inspector General
(OIG) for further action.
Summary Outline
- Full wages earned must be paid.
- Deductions from wages must be authorized.
- Proper records must be kept.
41
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ATTACHMENT b-
PAGE 25 Of 25
-23-
!»
•- Weekly statements must be submitted by contractor and all
subcontractors for work performed during the preceding
payroll period.
o A certified copy of each weekly payroll must be
submitted within 7 days after the regular payment
date.
o Payroll must be complete.
o Delay in submittal of payroll will result in delay
in processing payment estimates. The prime con-
tractor is responsible for the submittal of pay-
rolls by subcontractors.
•• b
o All basic records pertaining to payrolls, including
time cards must be preserved for a period of 3 years
after completion of the contract.
Administration
The primary authority for administration of the Copeland Act is
vested in the Department of Labor (DOL). The Environmental
Protection Agency (EPA) is responsible for ensuring that there is
compliance with the provisions of the Act and its implementing
regulations. EPA is responsible for reporting violations.
The recipient is primarily responsible for ensuring that there is
compliance with the provisions of the Act and its implementing
regulations by contractors and subcontractors and is responsible
for reporting violations.
EQUAL EMPLOYMENT OPPORTUNITY
Federally assisted construction program are prohibited from
discrimination on the basis of race, color, national origin, sex,
age or handicap. The Equal Opportunity Program of EPA is
enforced by External Compliance Programs, Office of Civil Rights.
Direct Federal contracts prohibited from discriminating in
employment practices under Executive Order 11246 enforced by the
Office of Federal Contract Compliance Programs, U.S. Department
of Labor.
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ATTACHMENT B-9
APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
Qutitioni And Anmttrs
On Tht OM of Otvis-Btcon Wagt
APPLICATION OF LABOR LAWS TO
GOVERNMENT ACQUISITIONS
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Attachment B-9
Page 1 of 8
i.
low do I obtain a vaga dataraination for •
construction projact to b« par* oraad at a location
not covarad by a publiahad dataraination?
Aaavcri It no oonoral waea detoraijiatioa ts liatod foe a
given county cad typo of construction, ua« tae
following procedure to obtain « pee} tec waoe
determination!
The Federal aoeacy fund! no, or financially
•Milting tho construct ion prelect rojueata • veqo
deteraiiaetioa under tae Devia-iacen Act or any of
tae celatad pctralllaf waq* ctatutoa by •utBittlfto,
• suadaro rpca («fj 301 to t&« CollowUf addcoMi
O.f. Otpartaoet of Later, MfiofMOK iuadtrd*
Adllaimratloa, wa«* aad low Olvldon, Itaatt of
Ooootrttctloa ttao* 0«e«aiaatioa«» 200 Comcitaetoa
&TOBM, «.»., MOB •»3M4> Mattiaftoa, O.C. 20210.
aftacy •&•!! cfecck only t&OM craft
tioM oa U« ir-iOi vbiefe v ill bo aoodod
la taa portonaaea of taa «ock. XaMrtlaf a net*
neft ae •entire acfcetfale* er 'ill aaftliablo
eUMiflcauoM1 le aet eaCfieicat. Addltloaal
elaedf Icatloaa a*«ded vbicft are net prlatod oa
tfte ten aoet be typed la tae bleak apaeea er en a
•operate lie* aad attached to tae Cera.
Za eoaplotlaf aa SP-JM* tae afeaoy eaat Cuxaiabi
(1) A eoffleieBtly dftailod deeerlptlea of tae
Sejeei te ladleat* tae type of eoaetructloa
volvetf. Additioael deeerletieae er
eepirate attaeaaeace. if oeceeeary fer
ideatifieatiea of tae type of project, aoet
be) fuaiaked.
(3] Tae ooonty (er etaer et»U wbdiTlaioa) aad
State la vaica tae prepeeed project ie
located.
tequoets for veee dotoealaatloae ekooid be
aeceapeaied by aay pertiaeat vaee peyaeet
iaf oraatioa vhica »«y be available. Aea tae
rcfoeetiaf aeeacy ie a State fiicbvey
deperoieat uader ta* Pederal**id llfbvay Acta
(See 23 B.S.C. 113)* tae aeeacy ekeeld alee
laclude lee rocouondatloae ae te tae veeee
vaica are prcrailiaf fer eaea claeeiflcatloa
of laborer* aad aocaanlce eeployod on aiailar
ooaetruction projocta in tae aree.
i
(3) Tho tlae required for preeeaaiae, roqueets for
vaee dotonlnatloae variee accord!nq to tao
fact* aad eircuBotancoa in aacb eaae. Aa
a«ancy •aoold antidpato taat auca preeeaaiaq
will take at Uaat 30 day*.
0)
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Attachment B-9
Page 2 of 8
3. Question i
*• *
The wage determination applicable to my project
doei not contain a class of workers which ia
needed to complete construction. Can a worker
classification and wage rate be added to an
existing wage determination?
Answer i After contract award, a contractor shall subalt to
**t contracting officer the addition «f any needed
classification of laborers or aechanics not listed
in tat veee detonlnatiea, together vita the pro-
posed vaoe ratoa and f rlaoe benefits conforaablo
to the ve«o detonlnatloa. Sacs an action
requires eat concurrence of tao oaployees oe taeir
"^•"•Bt««iT; «nd «»• contraetino, offices, and
tae Naoo and lout Division eust approve of tao
action. Aa_ajldltloml elj«««»•
classification and proposed veee rats aiona.
tae parti as iavolvedi aad !
(S) The raqoest deet not involve veee races foe
apprentices ec trainees.
It tae eoatrsctia* offloat balloves that these
criteria are not aet, the classification or vaoe
race aey not be approved but shall be referred to
the waee and lour Division for resolution of
dispute.
All centoraance notices vlll be rasponded to la
vrltia« vithia JO days of receipt. These
responses either approve or deny the request or
inform the auaalttlno. aeency that additional tiae
will be required, failure to reealve • response
doeo aet constitute approval. If a reepoaee Is
aet reeeived^tae vaee sad Beet Division suet be
contacted directly, tvety osafeowaea request is
analysed te verify that tae criteria fee approval
we complied with. . .
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Attachment B-9
Page 3 of 8
3. Qwatloai
lov do vorktri on a construction titt knov that a
projtct is covtrtd by tht Davit-Bacon Act? How do
thty knov th« pr mailing va«t to which they art
tntitltdt
Aatwart Ta« »«9» datacBlaatlea (including tar additional
claaaifiatioea aad vao* rut* oooCoca«4) «nd «
Bt*ir>tacoa pp«t«c (HI-13U1 MM b« potted *t til
U««« by tt« oantractoc aad lu •obeoattactot* at
tfec •!«• «C tb« vock la • MealMOt asd acectaibl*
plae* *b«f« It e»n tm M«ily M«a* B»« vt-i3U
p*Mw **f b» oetaiMd at ao cbaxfi (COB gfftev*
«< t>« «•«• aad leu OiTialoa. Xa Ut aUaaea o£
MCfe p*«t*d iatonatioa* aay par MB vba waata to
dattmla* if th« pcojcct la eov«c«d aaoold eeataet
tfc« f«4trai af»acy toadtaf oc aaal«tia«
|t«)*et ec tb« vaft aad I«« Olviaiaa.
One* construction has ba^un, act tht vocktcj'
rates Uf tcttd vhtn tht waqt dtt arm! nation for tht
arta in which tht pcojtct is looattd it chanftd?
Aaavai i
«• a «aM
eeauaet ward
aad f rtaot
aatit* taoi of
>«!•« tt« ««t dttacalaatlaa
lato a Bid ••llcttatlaa aad calatad
MM
tft« eeatcaet.
««1« eataa
*• paid e«c tfe«
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Attachment B-9
Page 4 of 8
t
Is it possible for more than one wage schedule to
apply to contract apecifl cat ions?
Answers Construction projects art generally classified •«
either Building, Heavy, lighvay 9t Residential Cor
purposes of issuing wage determinations, wage
schedules for one or aore of theso construction
categories aey nave application to construction
items contained in a pcopoaod construction
project. Guidelines foe the Mloctioo of proper
warn scbodults arc Mt forth in Ail A«,«ncy
Nnoranda Soi. 130 (Htrcn 17, 1971) and 131 (July
14, 1171). Any quart ions rt^ardina, tho
application of those guldalinos to a particular
project, or any disputes reojrdino; tae application
of the vege schedules issued for the various
coastruction categories are to be referred to the
Nag* and lour Division, together with relevant
intonation,.Including a complete description of
the orelect and area practice.
C. Question!
A* the contracting officer, what is my obligation
when the wage dttermination or wage deterninations
applicable to a construction project contain
multiple wage schedules?
Answert It is the responsibility of the contracting
officer to advise contract or a which schedule shall
be applied to the various construction itaaa la
the bid specifications. Because of the
complexities la the application of Multiple
schedules (see Question 9 above), the contracting
officer ahould consult with the Cage and lour
Division to resolve any questions.
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t. Quastloat
Attachment B-9
Page 5 of 8
Can apprentices, trainees, and/or helpers worn on
a project coveted by the Davis-Bacon or related
Acts and what wage rates must they be paid? .
Aaawact * paraoa aiployad and individually taqlstarad in *
boat Clda appranticaaaip proqran tto.istarad with .
. tha U.S. Oapartaant ot Labor, tftpioynont tad
training fcdalniatratioa. BUCMU of Apprantlcsahip
•ad Training, or with • stata fcppraatlcaaaip
Aqancy tacoonlsad by tha luraau, or t porson tn
tha fltat 90 >*t lB{Qr
Miitf titl
siauatiy,
thait addition through tha additional
ciaaaifleation pcoeaduce (eoatonaaca) la naitbar
aacaaaary nor appropriate. Qa pcojeeta funded by
the rederal Aid I leeway Act. ape* eat ice a aad
traiaaaa cactifiad by tha Saccatary ot
ttaaaportatiea aca not covered by Devia-iecon
lahar staadacda.,
tha peeper wee* rataa ta ba paid ta apprentices
aad trainee aca thaaa epedtlod .by tha particalac
pcoe?aaa la which thaw aca eat ailed, etpresaed aa
a par cantata at .tha loot nay aea rata oa tha *a«e
deteralaatlea. ta tha area* eaaloyeea raportad aa
aeffcesticee ot tcaiaaaa oa a covered pro)act hare
aat been pcoparly registered within tha aaaaiat at
tha fteeulatioaa aad tha ooatract saipvletiona,
at aca utilised at tha job aita ia aacaaa ot tha
ratio ta jounayaaa pamitted ttadac tha approved
ptofraa. thay Mat ba paid tha appUcaala wa«a
cata* tat iabacaca aad aachaaica oBployad oa tha
pto)aet parfonlaf tha Und oc claaaltieatioa
at work thay actaally partonad^ taaicdlaaa at
ot,workL claaaif leatioaa whicl aay ba llatad aa
tha aohaittad aayrolla aad ca^acdlaaa at thaic
kawai at awn./: •;;•", •-. !.-;;. ;. '
Oadat axiatlaa ratolationa, halpac ciaaaitleatioaa
aca aa* llatad la vaaja dataniaatioaa at appro*ad
at a* additional claaaifieatioa ualaaa eactaia
citacla aca pcaaaatt . U tha uaa ot halpara ia aa
liahad ptavailiat practical « tha datiaa at
halpac aca elaa«ly datlaad aad alstiact fro*
tha
halpac aca eiaauy datlaad aad dlstiact troi
datiaa at tha laiicaayaaa elaaattieaUaat 31
thait datiaa aca olatiack team tha datiaa ot th<
Iabacaca, aad 4) tha 'Ualpac* ia aot aynaayMiia
with •tcaiaaa* la aa intonal training pcaftaa,
•alpara can only ba aaployad an a Oawla-»ae«n
acajaca at wa^a rataa laaa thaa. thaaa apacitlad •
lac a «t»an cratt claaaitlcatlon it tha, applleabla
wae
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Attachment fc-y
Page 6 of 8
I. QiM*tieai
What wage rates must be paid to supervisory
employees {foremen, general foremen,
superintendents, etc.) employed on a covered
project? * .
Aaevort
Tie wage catts for bona fid* supervisory eaployees
are net regulated under the Oav la-Bacon and
related Acts ainea their dutiee aca primarily
adainlatrative or encutive in nature catAat than
tbo«« o£ labecaca or ••cbamtoi. aew«r«c. eueb
•pioyaaa who dcvota «ota t&an 20 ptrecat of thtlt
U»a dating a wockwaak to ••cbaaie or late rat
dutiaa act laberaca tad •aehauica fee th« tiaa to
apene, and aiwe be paid taa aepcopciata «««j rates
apeetfied in tbe vaoe detaoalnatioiu ttployaaa
who are ben* fide an entire, adaiaiatratiTe*
or profeaeional eapieyees aa defined under the
fair Labor Standards Act at 29 CfB fact 341 are
net covered by the Devia-lacon Act.
Zf it la believed that tbe rate* ea a wage
deteninatioo da not accurately reflect theee
prevailing in the -area* bow aay taa wage
^tanination be appealed?
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Qua at Ion I
Page 7 of 8
If it la believed that the rates on a wage
determination do not accurately reflect those
prevailing in the area, how nay the wage
determination be appealed?
act Aay Intaraatad parson raquaatlna raconaidaratloR
of a vaaa datanlnatlon or of a datanUnatioa
taaardlao, application of • wa«a dadaion taould
praaant taair raquaat la vcltina. accaapanitd by a
aucaaaat with any aappartiaa data or otaar
pactlnaBt information ta taa «a«a and lour
OlTiaiaiu tta Haaa and lour Oivlalon will taapend
wlthla 10 daya {or notify tha raquaator withia
taia tlaa fraaa that additional tlaa la aaadad).
IS raeonaldtration of « waaa dataralnatlon ftaa
baaa aauqftt and daniad. aa appaal for tariav of
tha waqa dataralnatlaa or ita application aay ba
filad wlta tha Ha^a Appaal a loard, o. s.
Dapartaant of Labor, Kaca a-«so?, 200 Conn 1 tut ion
Avanua, H. u., waahlnqtan, D. C.. 20210. laquaata
far rawlaw of waaa dataralaatiaaa aoat ba filad.
aad any naw waaa dattrainatlon raaultlnq f raa tha
apaaal auat ba iaaoad. batata contract award at
- auxt at oaaatrnctiaa wbara tbara it aa award (off
tta data ot laitial aadaciaaam adar tha latlaaal
lot Ac* ar data at ta« hawlaf aaaiataaea
BMI actaaaant ladar Sactiea I ot tto 0. J.
t 113?).
wt
(11
III
la«acaatad paeaaa* la eaaaidarad t« laciuda,
llaltauaai
Aay coatractar, at aa aaaadatlaa
rapcaaantla« a eantfaetat. wa« la llkaly ta
aa«a or u watt uadar a eaatcacc «amalal.a« a
parucaiar «a«a datarataatiaa. ac aay !**•"«
at aac&aaie, at any laaar ataaaisaciaa waitt
raaraaanta a labarar at aacaaaic. waa la
lUaly ta aa aaalayad ac ta aaat aaployaaat
taidar a eaatraci eoauiaiat a partieoiai vaaa
datanlaatioa* aad,
aay naaral, Slata, at local ajaacy eaaearaad
witt taa adalalacratlaa a< • arafaaad
eaaacact ac eaatcaea aaauiaiaii a partiaalat
wa«a dataniaatioa laaaad pofaoaaa ta taa
fiavla-tacaa Act af aay af it* ralatad
smtttaa.
a laard waa aataall
tta v«a» Appaala laard waa aataaaia f taa
tvactttf* oTuavr ia 1M3 ta dacida, ac it*
dtaavatiaa. apoaala eaaearaiat loaaUaaa at fae»
aad lav ralatad to f latl aaclaiaaa od taa vaat «•«
Mvlaiaa
raiafi
• CaBtravaraloa aaaearaiaf Ua paycaat at
ptavaUlM wa«a rataa ac pcaaar claaaif ieatiau
waiam iaralva aiamillcaat aoaa *t aaaay* !•*••
fiaaaa of aaalayaaa* ac aaval at taiaaaal
altoatiaaat
id aadat tM Oavla-laaaa
•
a
*a«a datacalaatiau i
aad ralatad Actai
eaaaa aciala*
a IwralTlaf taa taaaaaaaat af l^aidatad
daaaaaa tatdac taa Caaxraek ««ct ••«• «•* saf atr
Maadirda
it « cn Met
• Aapaal af any ataac final dadaiaa By taa
ttalayaMt staadarda AdalalatraUaa.
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Attachment B-9
Page 8 of 8
fko ieard conaiita of eaca* ••Mrs* oaa at v
la. dauoaattd caalaaa. t&a aoBtara «ra
appaiatad BT cut stcratair of Utait aa4 •
••jMiqr vo*« of t&« iMtd U aaatiMcr C
4te*«lon, ttoipt ta«c a dadatoa «• iamf
ap9*ai HY b« tqr ««• ••Me. THa Board can act
a« fuily and finally aa eh« Scerttacy o£ t -bet
eoaetcniat ua lateara vitbia ita 3«ia«Jl«,tion.
Ifet rulaa pctsetited in 29 en. Nre 7,
•tract tea lafoca va«« Appaaia loard',
f»*ara ta« pcooaadin^a o< tAa l«acd.
A CMpeabvnaiT* dawripeioa o£ eft* aatira Oa»ta-
taeoa «?• datanlnatloaa ptecaaa la prerldtd la
xana- Tbla puAl ieaeion. laaiwd la
*e»U 1M«, la avaUaal* ftM ea« Supafiaeandaat
of OoeoBtota, o. s. CovotMaat rrlatta« Off lea,
O.C. 20402.
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ATTACHMENT B-10
SCA WAGE DETERMINATION REQUEST PROCEDURES
This section focuses on the key information needed and
procedures followed by contracting agencies to complete and
submit SP-98 requests for wage determinations. Contracting
agencies have the initial responsibility for determining
whether a proposed contract is subject to the SCA, and if so,
to request a wage, determination from the Wage and Hour
Division.
The information provided in the SF-98 request is carefully
evaluated so that a proper WD can be developed.
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ATTACHMENT B-10
PAGE 1 Of 8
INDIVIDUAL SF-98 REQUESTS
For any contract exceeding $2,500 which may be subject to
the SCA, the contracting agency requests the wage determination
by submitting the notice of Intention t9 yffke a Service
Contract — Standard Form fSFl 98. The individual SF-98
request consists of two forms, the SF-98 and SF-98a, and any
supporting documentation required. The request is sent to the
Administrator, Wage and Hour Division, Employment Standards
Administration, U.S. DOL, Washington, D.C. 20210. Supplies of
the SF-98 and SSa are-available in all GSA (General Services
Administration) supply depots under stock numbers
7540-926-8972 and 7540-118-1008, respectively.
•-. an~ individual SF-98
request must be submitted for each anticipated SCA-covered
procurement.. Contracting agencies having'any doubts as to
whether SCA applies to a given procurement should contact
appropriate Wage and Hour personnel
._— - - submission procedures concerning
two key aspects.
e TIMING
e CONTENT
The SF-98/98a and any required supporting documentation
must be submitted to the Wage_and Hour Division for recurring
or known procurement needs not lees than 60 days (nor more than
120 days except with the approval of the Wage and Hour
Division)
e any invitation for bids;
e request for proposal*;
e commencement of contract negotiations;
e exercise of options or contract extensions;
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ATTACHMENT B-10
PAGE 2 of 8
For unplanned procurement needs, individual SF-98 requests
must be submitted as soon as possible, but not later than 30
days prior to the above listed contracting actions. For
emergency procurement needs, appropriate Wage and Hour
officials should be consulted prior to submission ,
Requests should then be submitted
as soon as possible according to instructions provided by the
Wage and Hour officials contacted.
The SF-98 specifies the relevant procurement dates, the
geographic location of the work to be performed, the type of
services to be covered by the contract, and provides
information on incumbent contractors/ previous wage
determinations, and collective bargaining agreements that may
apply. The SF-98a identifies the occupations (classes) of
service employees to be employed under the SCA-covered
contract, the number to be employed, and the hourly wage rates
that would be paid if such workers were Federal direct-hires.
The SF-98 includes instructions for proper completion.
While all requested information is important for the proper
issuance of the wage determination, certain items are key,
. Tne items discussed
below reference the appropriate SF-98 or SF-98a blocks.
Procurement Datea /sy-98. Block* 2. ?. 41
• *
Procurement dates are important for evaluating the
timeliness of requests and the wo response issued by wage and
Hour. In addition, these dates are important to the evaluation
of the currency of data sources to be used in developing the WO
and the proper tracking of annual vs. multi-year service
contracts.
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PAGE 3 Of 8
SAMPLE COMPLETED IHDrVTDQAL SP-98
ia KMfMOT or
f
NOTICE OF INTENTION TO MAKE
A SEKVICE CONTRACT AHO RESPONSE TO NOTICE
(Str lmanfit»"i mm. Krrrrtri
A 1775909
MAIL rot
r
20210
05
10
OS
11
01
ornia
CUSTODIAL SZtVICU
^L ^J So^flfiH •MM? ptnM^feM Wf A •• ^J M^fW0 B9f
No Ma«a
P.O. Box xxx
M-1011 .
Ad «•• MI
mtthtd tsptttnit*).
O, O **Mitt mutwrf te addilioaal ia
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PAGE 4 of 8
Jo — A U
SAMPLE COMPLETED INDIVIDUAL SF-98a
MMMMMHt*^ , NOTICE Of INTENTION TO MAKE
U.S. 0»MTMH«* » UWt * SEIVICE CONTRACT AND RESPONSE TO NOTICE
CUSTODIAL WOIXEK (WC-l/2)
*
-
;
•
.
(•norm
MtJtCXCUtt
23
~zs&.
7.09
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ATTACHMENT B-10
PAGE 5 Of 8
Listing the city, county, and State of the location(s)
where the services called for will be performed is important to
the development of the wage determination. Prevailing,
areawide HDs are based on wage rates and fringe benefits
determined to prevail in the locality of the place of
performance. The place of performance could be the
contractor's site, a government installation, or elsewhere.
Where the place(s) of performance of an SCA-covered
contract is unknown at the time of solicitation, bid
specifications may not initially contain the wage
determination. A two-step solicitation process may be used.
In the first step, the contracting agency will issue an
initial solicitation with no wage determination, from which
it identifies all interested bidders and their possible
places of performance and then transmits this information
to DOL with the SF-98. In the second step, DOL will issue
separate wage determinations for the various localities
identified in the first step, to be incorporated in the
solicitation prior to the submission of final bids. The
appropriate wage determination applicable to the geographic
location of the successful bidder shall be incorporated in
the resultant contract and shall be observed, regardless of
whether the contractor subsequently changes the place(s) of
contract performance.
For unusual situations, this two-step procedure may not be
practical. Upon consultation with the contracting agency, Wag*
and Hour may modify the procedure as it determines necessary.
Note that once a contractor is selected to perform \he
services, the appropriate WD corresponding to the selected
contractor's place of performance is the one incorporated into
the contract.
Services to be Performed tSF-98. Block <1
A clear description of the type or types of services called
for by the procurement assists the wage determination staff in
addressing the request. It is particularly important to the
evaluation of the procurement with regard to SCA coverage and
the selection of appropriate data sources for use as the basis
of the WD to be issued.
Usually a simple statement
will suffice. If services to be provided are unusual'ia any
way, however, a detailed description may be necessary.
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ATTACHMENT B-10
PAGE 6 Of 8
Information About Performance fSF-98-. Block 7
Identification of the status of the procurement alerts the
wage determination staff to several important considerations
that will need to be addressed. These include, for example,
the following.
e Box A — Services Now Performed Bv a Contractor:
Checking this box indicates that the procurement is
recurring. . Depending upon the procurement dates, the
contract may be an annual, recurring contract or a
continuous, multi-year contract. Also, a contract that
is currently being performed by a contractor will have a-
previously-issued wage determination on file that will.
be evaluated by. staff as part of the ND development .
process.
Checking this box indicates that the contracting agency •
is considering whether to contract out for services
currently being performed by Federal workers in
accordance with U.S. Government policy established by
OMB Circular Mo. A-76 (revised), August 4, 1983. This"
policy establishes the principles and procedures used by
agencies in determining whether a given Federal
Government service is better provided by a commercial
source in order to achieve economy and enhance
productivity. A decision to contract with a commercial
source may result in a displacement of Federal workers
which is taken into account as part of the ND
development process. Checking this box also indicates
that there does not currently exist a previously-issued
ND for the procurement action.
e Box C — Services Not Presently Being Performed»
Checking this box indicates that the procurement is a
completely new service not currently performed by
Federal workers or contractors. A previously-issued ND
will therefore not exist.
Collective Bargaining Agreement fSF-99. Block 81
Attachment of applicable collective bargaining agreement(s)
(CBAs) and related documentation is necessary for SCA-covered
contracts for which the Act requires the application of a
section 4(c) wage determination. Zf an incumbent contractor is
performing the services called .for by the proposed contract and
the service employees performing the contract are covered by-
one or more CBAs, the applicable CBA(s) must be attached. In.
addition to CBA(s) addressing the wage rates and fringe
benefits afforded to the incumbent contractor's service
employees, any related documents must be attached.
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PAGE 7 of 8
B-1G
Note that the proposed or auccsiaor contract oust b* for
th* same or substantially the, sane 0«rvices and b« performed in
the'sane locality as that of tne incumbent contract. If th*
applicable CBA(s). does not apply to all the service employees
employed under the SGA-covered contract, the contracting agency
must identify the occupational classes and/or work subject to
the CBA(s).
Official Submitting Notice/Where To Send Response fSF-98.
Blocks 9 and 101 . ..
All information requested should be properly coapleted so
that Wage and Hour staff can address any inquiries it may have
and issue its response to the appropriate contracting agency
officials.
Response to Notice Segment
The boxes listed herein are completed by Wage and Hour
staff as part of its response to the SF-98 request.
ttivmhaT of
Rlaefca
and
The SP-98a must list the classes of service employees
expected to perform the services called for by the proposed
SCX-eovered contract, and where applicable, any subcontracts.
The listing of all occupational classes of service employees to
be employed under the proposed contract must utilise job titles
and corresponding code numbers found in the, sex Directory of
Occupations . where applicable (see chapter 7, page 209 , for a
description of the Directory! . For any occupation not '
contained in the Directory,. an appropriate" job title shall *be\ '
given"_in Block 12 and * job-description most* be- attached toSthe*
SP-9 8 'request.
The WD to be issued will include the minimum wage rates
and fringe benefits to be paid by the contractor for
occupational classes listed in the SF-98a to be used in the
performance of the SCA-covered contract. An occupational
class is classified according to the duties, skills, and
knowledge required to perform it. .. Such factors affect the
job's relative rate of pay. Occupational classes vary
considerably with regard to these factors. Wage rates
therefore vary considerably with regard to these factors.
Wage rates therefore vary considerably by class. Thus, job
descriptions are evaluated by Wage and Hour staff to
determine appropriate classifications (and respective
relative pay rates) for evaluation against survey or other
related data used to develop the WD.
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8 of 8
The number of service employees expected to be employed in
each occupational class or'a statement that the 'total number
for all classes will exceed S must also be included in the
SF-98a. This information is also important to the data
evaluation and HD development process.
Comparable Federal Sates fSF-98a. Block 141
The hourly wage rates or grade levels that would be paid if
workers were Federal direct-hires smst^be^l^gted>in the»SP-98a.
Wage rate* for white collar classes "are" established by the
Federal General Schedule (GS rates and grades) .
». Wage rates for blue collar classes are
established by the Federal Wage System Schedules (Wage Board or
MAF rates and grades) as described in chapter 5. These
comparable pay rates or grade levels are used to apply the
principles of due consideration required by section 2(a)(5) of
the Act ' - • • -^
Comparable Federal fringe benefits need not be indicated in
the SF-98a. All Federal employees, regardless of occupational
class, receive the standard Federal fringe benefits package.
The level of benefits so-provided by law and regulations at the
time of the procurement is used in the application of due
consideration, as necessary. .
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