Service
Contract Act
Title 29, Code of Federal Regulations,
Part 4
Labor Standards for Federal Service Contracts
(29 CFR 4.122-4.123)
29 CFR 4.122 - Contract
for operation of postal contract stations.
29 CFR 4.123 - Administrative
limitations, variances, tolerances, and exemptions.
(a) Authority of the Secretary.
Section 4(b) of the Act as amended
in 1972 authorizes the Secretary to ``provide such reasonable
limitations'' and to ``make such rules and regulations allowing
reasonable variations, tolerances, and exemptions to and from any or
all provisions of this Act (other than Sec. 10), but only in special
circumstances where he determines that such 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 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).
(b) Administrative action
under section 4(b) of the Act. The
authority conferred on the Secretary by section 4(b) of the Act will
be
exercised with due regard to the remedial purpose of the statute to
protect prevailing labor standards and to avoid the undercutting of
such
standards which could result from the award of Government work to
contractors who will not observe such standards, and whose saving in
labor cost therefrom enables them to offer a lower price to the
Government than can be offered by the fair employers who maintain the
prevailing standards. Administrative action consistent with this
statutory purpose may be taken under section 4(b) with or without a
request therefor, when found necessary and proper in accordance with
the statutory standards. No formal procedures have been prescribed for
requesting such action. However, a request for exemption from the Act's
provisions will be granted only upon a strong and affirmative showing
that it is necessary and proper in the public interest or to avoid
serious impairment of Government 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, theviews of such office on the matter
should be obtained and submitted with the request or the contracting
officer may forward such a request through channels to the agency
headquarters for submission with the latter's views to the Administrator
of the Wage and Hour Division, Department of Labor, whenever any wage
payment issues are involved. Any request relating to an occupational
safety or health issue shall be submitted to the Assistant Secretary
for Occupational Safety and Health, Department of Labor.
(c) Documentation of official
action under section 4(b). All papers
and documents made a part of the official record of administrative
action pursuant to section 4(b) of the Act are available for public
inspection in accordance with the regulations in 29 CFR part 70.
Limitations, variations, tolerances and exemptions of general
applicability and legal effect promulgated pursuant to such authority
are published in the Federal Register and made a part of the rules
incorporated in this part 4. For convenience in use of the rules, they
are generally set forth in the sections of this part covering the
subject matter to which they relate. (See, for example, Secs. 4.5(b),
4.6(o), 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
exemptions in Sec. 7 of the Act
(see Sec. 4.115(b)), the following types of contracts have been exempted
from all the provisions of the Service Contract Act of 1965, pursuant
to section 4(b) of the Act, prior to its amendment by Public Law 92-473,
which exemptions the Secretary of Labor found to be necessary and proper
in the public interest or to avoid serious impairment of the conduct
of Government business:
(1) Contracts entered into
by the United States with common carriers
for the carriage of mail by rail, 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 portion of the revenue therefrom;
(2) Any contract entered
into by the U.S. Postal Service with an
individual owner-operator for mail service where it is not contemplated
at the time the contract is made that such owner-operator will hire
any
service employee toperform the services under the contract except for
short periods of vacation time or for unexpected contingencies or emergency
situations such as illness, or accident; and
(3) Contracts for the carriage
of freight or personnel where such
carriage is subject to rates covered by section 10721 of the Interstate
Commerce Act.
(e) The following types of
contracts have been exempted from all the
provisions 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 conduct of Government business and are in accord with
the remedial purpose of the Act to protect prevailing labor standards:
(1)(i) 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 medical apparatus or equipment where
the application of microelectronic circuitry or other technology of
at
least similar sophistication is an essential element (for example,
Federal Supply Classification (FSC) Group 65, Class 6515, ``Medical
Diagnostic Equipment''; Class 6525, ``X-Ray Equipment''; FSC Group 66,
Class 6630, ``Chemical Analysis Instruments''; Class 6665,
``Geographical and Astronomical Instruments'', are largely composed
of the types of equipment exempted hereunder);
(C) Office/business machines
not otherwise exempt pursuant to
paragraph (e)(1)(i)(A) of this section, where such services are
performed by the manufacturer or supplier of the equipment.
(ii) The exemptions set forth in this paragraph (e)(1) 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 general public in
the
course of normal business operations;
(B) The contract services
are furnished at prices which are, or are
based on, established catalog or market prices for the maintenance,
calibration, and/or repair of such commerical items. An established
catalog price is a price included in a catalog, price list, schedule,
or
other form that is regularly maintained by the manufacturer or the
contractor, is either published or otherwise available for inspection
by
customers, and states prices at which sales are currently, or were last,
made to a significant number of buyers constituting the general public.
An established market price is a current price, established in the usual
course of trade between buyers and sellers free to bargain, which can
be substantiated from sources independent of the manufacturer or
contractor; and
(C) The contractor utilizes
the same compensation (wage and fringe
benefits) plan for all service employees performing work under the
contract as the contractor uses for equivalent employees servicing the
same equipment of commercial customers;
(D) The contractor certifies
in the contract to the provisions in
this subparagraph (e)(ii).
(iii) Determinations of the
applicability of this exemption shall be
made in the first instance by the contracting officer prior to contract
award. In making a judgment that the exemption 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 determines after contract award that
any of the above requirements for exemption has 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. In such case, the corrective
procedures in Sec. 4.5(c)(2) of this part shall be followed.