It is common knowledge that contracting entities do not appreciate the application of the Service Contract Act (“SCA”) to their syndicated contracts because it provides too many opportunities for the contractor to play the system. Assuming that the SCA is at stake, the unionized contractor must take into account the particular circumstances of the work in the federal service when negotiating a collective agreement (“CBA”). These negotiations should take into account not only traditional labour law in labour law, but also to take into account three elements: (1) to bring the CBA into the government contract covered in Section 4 (c) of the CSA; (2) maximize coverage of increased costs and negotiated terms set by KBA for future price adjustments under the SCA/FLSA price adjustment clause; and (3) deter falling wages and price competition by competitors in re-solicitations. See also static1.squarespace.com/static/5a6619f32278e7a092c86335/t/5a6668b224a694f20f854049/1516660915294/CBA_and_Union_Negotiation_Strategy.pdf When reassigning unionized contracts, neither the historical contractor nor any other supplier is generally entitled to an adjustment in wage prices and ancillary benefits payable in the base year of the contract. In re-mennation, all suppliers must take into account in their proposed price expected wages and related benefits, as well as the escalation that must be paid during the base year. These rules apply to both the prevailing wage setting and the wage fixings of Section 4, under c), on the basis of the CBAs. Therefore, when a CBA is negotiated and included in the invitation as a section 4 c ( (“WD”) salary setting, it should be added to the invitation, and all suppliers must then include these salaries and benefits in their proposed contract price for the base year. If the CBA increases wages or benefits at some point, but always during the basic year benefit period, this labour cost must also be taken into account in the offer. Since these fixed costs for a fixed-price contract would have been included in the offer, they are generally not subject to any price adjustment. The first question to consider is whether the contract to be awarded is covered by the SCA. This may seem like a simple question, but it is not always the case and can be even more difficult to determine if you are a subcontractor. The first step is to check whether the invitation (or amendment) contains indications that the contract is subject to the SCA.
In other words, does it contain (i) the applicable Federal Acquisition Regulation (FAR) clause (FAR 52.222-41), (ii) a wage setting in force by the SCA and/or (iii) other than it is subject to the SCA? Even if the appeal does not respond directly to the CAS in a foregoing manner, the resulting contract could still be covered by the SCA if all the following factors are met: (a) the award by the U.S. government or the District of Columbia; (b) the contract is primarily for services (as opposed to work, manufacture or products) performed by “service providers” (a clause comprising self-employed contractors, temporary and contract workers) that are not exempt under the Fair Labor Standards Act; (c) the contract is expected to exceed $2,500; and (d) at least some of the services are provided in the United States or their territories. If the answer to these four questions is yes, you may still need to verify the applicability of the SCA and you should probably seek legal advice – even if the FAR SCA clause and/or salary fixing are not included in the invitation or contract.