Service
Contract Act
Title 29, Code of Federal Regulations,
Part 4
Labor Standards for Federal Service Contracts
(29 CFR 4.145-4.146)
29 CFR 4.145 - Extended
term contracts.
(a) Sometimes service contracts
are entered into for an extended
term exceeding one year; however, their continuation in effect is
subject to the appropriation by Congress of funds for each new fiscal
year. In such event, for purposes of this Act, a contract shall be
deemed entered into upon the contract anniversary date which occurs
in each new fiscal year during which the terms of the original contract
are made effective by an appropriation for that purpose. In other cases
a service contract, entered into for a specified term by a Government
agency, may contain a provision such as an option clause under which
the agency may unilaterally extend the contract for a period of the
same
length or other stipulated period. Since the exercise of the option
results in the rendition of services for a new or different period not
included in the term for which the contractor is obligated to furnish
services or for which the Government is obligated to pay under the
original contract in the absence of such action to extend it, the
contract for the additional period is a wholly new contract with respect
to application of the Act's provisions and the regulations thereunder
(see Sec. 4.143(b)).
(b) With respect to multi-year
service contracts which are not
subject to annual appropriations (for example, concession contracts
which are funded through the concessionaire's sales, certain operations
and maintenance contracts which are funded with so-called ``no year
money'' or contracts awarded by instrumentalities of the United States,
such as the Federal Reserve Banks, which do not receive appropriated
funds), section 4(d) of the Act allows such contracts to be awarded
for a period of up to five years on the condition that the multi-year
contracts will be amended no less often than once every two years to
incorporate any new Service Contract Act wage determination which may
be applicable. Accordingly, unless the contracting agency is notified
to the contrary (see Sec. 4.4(d)), such contracts are treated as wholly
new contracts for purposes of the application of the Act's provisions
and regulations thereunder at the end of the second year and again at
the end of the fourth year, etc. The two-year period is considered to
begin on the date that the contractor commences performance on the contract
(i.e., anniversary date) rather than on the date of contract award.
29 CFR 4.146 - Contract
obligations after award, generally.
A contractor's obligation
to observe the provisions of the Act
arises on the date the contractor is informed that award of the contract
has been made, and not necessarily on the date of formal execution.
However, the contractor is required to comply with the provisions of
the
Act and regulations thereunder only while the employees are performing
on the contract, provided the contractor's records make clear the period
of such performance. (See also Sec. 4.179.) If employees of the contractor
are required by the contract to complete certain preliminary training
or testing prior to the commencement of the contract services, or if
there is a phase-in period which allows the new contractor's employees
to familiarize themselves with the contract work so as to provide a
smooth transition between contractors, the time spent by employees undertaking
such training or phase-in work is considered to be hours worked on the
contract and must be compensated for even though the principal contract
services may not commence until a later date.