29 CFR 4.5

Service Contract Act

Title 29, Code of Federal Regulations, Part 4
Labor Standards for Federal Service Contracts

29 CFR 4.5 - Contract specification of determined minimum wages and fringe benefits.

(a) Any contract in excess of $2,500 shall contain, as an
attachment, the applicable, currently effective wage determination
specifying the minimum wages and fringe benefits for service employees to be employed thereunder, including any document referred to in paragraphs (a)(1) or (2) of this section;

(1) Any communication from the Wage and Hour Division, Employment
Standards Administration, Department of Labor, responsive to the notice required by Sec. 4.4; or

(2) Any revision of a wage determination issued prior to the award
of the contract or contracts which specifies minimum wage rates or
fringe benefits for classes of service employees whose wages or fringe
benefits were not previously covered by wage determinations, or which
changes previously determined minimum wage rates and fringe benefits for service employees employed on covered contracts in the locality.

However, revisions received by the Federal agency later than 10 days
before the opening of bids, in the case of contracts entered into
pursuant to competitive bidding procedures, shall not be effective if
the Federal agency finds that there is not a reasonable time still
available to notify bidders of the revision. In the case of procurements
entered into pursuant to negotiations (or in the case of the execution
of an option or an extension of the initial contract term), revisions
received by the agency after award (or execution of an option or
extension of term, as the case may be) of the contract shall not be
effective provided that the contract start of performance is within 30
days of such award (or execution of an option or extension of term). If
the contract does not specify a start of performance date which is
within 30 days from the award, and/or if performance of such procurement does not commence within this 30-day period, the Department of Labor shall be notified and any notice of a revision received by the agency not less than 10 days before commencement of the contract shall be effective. In situations arising under section 4(c) of the Act, the provisions in Sec. 4.1b(b) apply.

(b)(1) The following exemption from the compensation requirements of
section 2(a) of the Act applies, subject to the limitations set forth in
paragraphs (b)(2), (3), and (4) of this section: To avoid serious
impairment of the conduct of Government business it has been found
necessary and proper to provide exemption from the determined wage and fringe benefits section of the Act (section 2(a)(1), (2)) but not the
minimum wage specified under section 6(a)(1) of the Fair Labor Standards Act of 1938, as amended (section 2(b) of this Act), of contracts under which five or less service employees are to be employed, and for which no such wage or fringe benefit determination has been issued;

(2) The exemption provided in paragraph (b)(1) of this section,
which was adopted pursuant to section 4(b) of the Act prior to its
amendment by Public Law 92-473, does not extend to undetermined wages or fringe benefits in contracts for which one or more, but not all, classes of service employees are the subject of an applicable wage
determination. The procedure for determination of wage rates and fringe benefits for any classes of service employees engaged in performing such contracts whose wages and fringe benefits are not specified in the applicable wage determination is set forth in Sec. 4.6(b).

(3) The exemption provided in paragraph (b)(1) of this section does
not exempt any contract from the application of the provisions of
section 4(c) of the Act as amended, concerning successor contracts.

(4) The exemption provided in paragraph (b)(1) of this section does
not apply to any contract for which section 10 of the Act as amended
requires an applicable wage determination. (c)(1) If the notice of intention required by Sec. 4.4 is not filed with the required 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 (including, where necessary, its authority to negotiate, its authority to pay any necessary additional costs, and its authority under any provision of the contract authorizing changes), include in the contract any wage determinations communicated to it by the Wage and Hour Division, Employment Standards Administration, U.S. Department of Labor, within 30 days of the receipt of such wage determination(s). With respect to any contract for which section 10 of the Act requires an applicable wage determination, the Administrator may require retroactive application of such wage determination.

(2) Where the Department of Labor discovers and determines, whether before or 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 failed to include an appropriate wage determination in a covered contract, the contracting agency, within 30 days of notification by the Department of Labor, shall include in the contract the stipulations contained in Sec. 4.6 and any applicable wage determination issued by the Administrator or his authorized representative through the exercise of any and all authority that may be needed (including, where necessary, its authority to negotiate or amend, its authority to pay any necessary additional costs, and its authority under any contract provision authorizing changes, cancellation, and termination). With respect to any contract subject to section 10 of the Act, the Administrator may require retroactive application of such wage determination. (See 53 Comp. Gen. 412, (1973); Curtiss-Wright Corp. v. McLucas, 381 F. Supp. 657 (D NJ 1974); Marine Engineers Beneficial Assn., District 2 v. Military Sealift Command, 86 CCH Labor Cases para.33,782 (D DC 1979); Brinks, Inc. v. Board of Governors of the Federal Reserve System, 466 F. Supp. 112 (D DC 1979), 466 F. Supp. 116 (D DC 1979).) (See also 32 CFR 1-403.)(d) In cases where the contracting agency has filed its SF-98 within the time limits discussed in Sec. 4.4(a) and has not received a response from the Department of Labor, the contracting agency shall, with respect to any contract for which section 10 of the Act and Sec. 4.3 of this part mandate the inclusion of an applicable wage determination, contact the Wage and Hour Division by telephone for guidance.