Service Contract Act

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

29 CFR 4.51 - Prevailing in the locality determinations.

(a) Information considered. The minimum monetary wages and fringe
benefits set forth in determinations of the Secretary are based on all
available 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. Department of Labor, or other Labor Department
personnel. Information may also be obtained from Government contracting
officers and from other available sources, including employees and their
representatives and employers and their associations. The determinations
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 occupational class(es) of employees.

(b) Determination of prevailing rates. Where a single rate is paid
to a majority (50 percent or more) of the workers in a class of service
employees engaged in similar work in a particular locality, that rate is
determined to prevail. The wage rates and fringe benefits in a
collective bargaining agreement covering 2,001 janitors in a locality,
for example, prevail if it is determined that no more than 4,000 workers
are engaged in such janitorial work in that locality. In the case of
information developed from surveys, statistical measurements of central
tendency such as a median (a point in a distribution of wage rates where
50 percent 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
measurements will be applied in a given case will be determined after a
careful analysis of the overall survey, separate classification data,
patterns existing between survey periods, and the way the separate
classification data interrelate. Use of the median is the general rule.
However, the mean (average) rate may be used in situations where, after
analysis, it is determined that the median is 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 computed median results in
an actual rate that is paid to few of the studied workers in the class;

(2) Statistical deviation such as a skewed (bimodal or multimodal)
frequency distribution biases the median rate due to large
concentrations of workers toward either end of the distribution curve
and the computed median results in an actual rate that is paid to few of
the studied workers in the class; or

(3) The computed median rate distorts historic wage relationships
between 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 different skill
levels (i.e., a maintenance electrician as compared with a maintenance
carpenter), or, for example, yields a wage movement inconsistent with
the pattern shown by the surveyoverall or with related and/or similarly skilled job classifications.

(c) Slotting wage rates. In some instances, 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 prevailing wage rate for certain such classifications
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 between 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 skill and duties
attributed to each classification are known to be rated similarly under
pay classification schemes. (Both classifications are assigned the same
wage grade under the Coordinated 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
determinations, section 2(a)(5) of the Act requires that due
consideration be given to the rates that would be paid by the Federal
agency to the various classes of service employees if section 5341 or
section 5332 of title 5 U.S.C., were applicable to them. Section 5341
refers to the Wage Board or Coordinated Federal Wage System for ``blue
collar'' workers and section 5332 refers to the General Schedule pay
system for ``white collar'' workers. The term due consideration implies
the exercise of discretion on the basis of the facts and circumstances
surrounding each determination, recognizing the legislative objective of
narrowing the gap between the wage rates and fringe benefits prevailing
for service employees and those established for Federal employees. Each
wage determination is based on a survey or other information on the wage
rates and fringe benefits being paid in a particular locality and also
takes into account those wage rates and fringe benefits which would be
paid under Federal pay systems.