Contract

Federal Labor Standards

Talmage R. ReynoldsDir, Contractor Industrial Labor Relations

The Federal Labor Standards

• This solicitation will result in a hybrid contract containing the requirements of both the Service Contract Act and Davis-Bacon Act as outlined in Title 29 Code of Federal Regulations Part 4.116(c)(2).

– Service Contract Act

– Davis-Bacon Act

Service Contract Act (SCA)

Service Contract Act of 1965

• Federal Statute41 United States Code 351

as amended in 1972 and 1976

• Implementing RegulationTitle 29 Code of Federal Regulation Part 4

• Contract ClauseFAR 52.222.41

Purpose and Intent of the Service Contract Act

“To remove wages as a factor in the competition for Federal Service Contracts by requiring the payment of not less than locally prevailing wage rates and fringe benefits, or in certain cases, the wage rates and fringe benefits contained in a predecessor contractor’s collective bargaining agreement (section 4(c) of the Act).”

Definition of “Service Employee”

Service Contract Act (SCA) defines a

“service employee” as any person engaged

in the performance of a covered Federal

services contract… However, it exempts those employees that qualify

as bona fide Executive, Administrative, or Professional Employee as defined in Title 29 Code of Federal Regulations Part 541 (as amended August 23, 2004).

SCA - Things to Consider…

As a prospective offeror/contractor you are liable for the proper interpretation, application, implementation, and administration of the mandatory provisions of the Service Contract Act which are a criticalcritical part of this solicitation.

Therefore, it is imperative that you take appropriate action when preparing your offer to ensure compliance with the Act and to also make certain that your corporate policies are compliant with the spirit and intent of the law.

[Section L, paragraph L.I-21]

Mandatory RequirementsService Contract Act

• Applies to contracts entered into by the United States or District of Columbia in excess of $2,500 for the furnishing of services through the use of “service employees” (29 CFR 4.113) and it mandates:

– Timely payment of wages (29 CFR 4.165(b))– Posting Requirements (29 CFR 4.184) – Minimum Record Keeping (29 CFR 4.185)

SCA - Mandatory Requirements (continued-2)

• Those outlined in the SCA “Area”“Area” Wage Determination– Minimum wages based on job classification (29 CFR 4.161)

• See the SCA Directory of Occupations to ensure the proper classification of each service employee.

– Minimum Health and Welfare Rate (29 CFR 4.171).• A minimum of $3.16 per hour, computed on the basis of all hours paid the “service

employees” employed on the contract up to 2080 hours annually.

– Minimum number of Vacation Days (29 CFR 4.173).• Based on years of continuous service in any capacity with the incumbent

contractor and all predecessor support services contractors..

– Minimum number of Paid Holidays (29 CFR 4.174).• 10 Paid Holidays per year.• Does not require a “service employee” to work the day before or the day after a

holiday to receive holiday pay.– If any work is performed (by a service employee) in a work week in which a holiday falls,

the employee is entitled to holiday pay.

SCA - Mandatory Requirements (continued-3)

• Requires the payment of Health and Welfare, Vacation, and Holiday pay to temporary and part-time employees (29 CFR 4.176).

• SCA does not provide for premium rates of pay for overtime hours worked, but it does recognize other Federal laws that do require overtime pay:

– The Fair Labor Standards Act. – Contract Work Hours and Safety Standards Act.

• Premium Pay is one-and-one-half (1½) times the employee’s basic hourly rate of pay for all time worked over 40 hours per week.

SCA - Mandatory Requirements (continued-4)

• Items that can not be counted as Health and Welfare for SCA computation purposes:

– Federal, State, and Local Taxes, Unemployment or Workers’ Compensation, Professional Insurance, Liability Insurance, etc., (29 CFR 4.171(c)).

– The furnishing of Board and Lodging (29 CFR 4.171(d)).

– The furnishing of “facilities” or “transportation” (29 CFR 4.171(e)).

– Contributions to social functions (29 CFR 4.171(f)).

– Vacation Pay (29 CFR 4.173).

– Holiday Pay (29 CFR 4.174).

SCA Wage Determinations

• Local “Area” SCA Wage Determinations – 2005-2033 (Revision 7), dated 05/29/2007– 2004-0401 (Revision 6), dated 01/18/2008

• Section J-18

• There are no “4(c)” SCA Wage Determinations contained in this solicitation. However, be mindful

– The work performed at the Michoud Assembly Facility is covered by two active Collective Bargaining Agreements.

• United Automobile, Aerospace & Agricultural Implement Workers of America and its Local 1921.

– [POC: Dennis Fauvre, President, (504) 254-0154]

• Service Employees International Union Local 100– [POC: Wade Rathke, President, (504) 872-0480, ext 118]

Job Description/Qualification Form (Section L-9)

TITLEContractor Job Title: _________________________________________________ CBA Job Title: ______________________________________________________Solicitation Job Title: _________________________________________________SCA/DBA Wage Determination Job Title: _________________________________ SCA Directory of Occupations Classification Number ________________________

---------------------------------------------------------------------------------------------------------------------TYPE

EXEMPT NON-EXEMPT --------------------------------------------------------------------------------------------------------------------SALARY / WAGE RANGE

ANNUAL FROM: ________________ TO: _______________ [Exempt]HOURLY FROM: ________________ TO: _______________ [Nonexempt]

---------------------------------------------------------------------------------------------------------------------HEALTH & WELFARE [FRINGE BENEFITS]

EXACT HOURLY COST OF HEALTH & WELFARE ________________________---------------------------------------------------------------------------------------------------------------------DESCRIPTION ________________________________________________________________________________________________________________________________________________________________________________________________________---------------------------------------------------------------------------------------------------------------------QUALIFICATIONS

EDUCATION: _______________________________________________________EXPERIENCE: ______________________________________________________

_______________________________________________________________________

Instruction for Completing JD/Q• TITLE• There are two Job Description/Qualification forms per page. One form

is to be completed for each required job title/classification. • (NOTICE: This applies to all proposed subcontractor job classifications as well)

– Contractor Job Title - Enter your job title if different from the SCA or DBA job title/classification.

– CBA Job Title – Enter the job title from the UAW or SEIU Collective Bargaining Agreements (CBA’s contained in the Technical Library(CBA’s contained in the Technical Library))..

– Solicitation Job Title - Enter the job title identified in the solicitation [Section L-5].

– SCA/DBA Wage Determination Job Title/Classification - Enter the accurate SCA/DBA job title/classification and the SCA job number from the SCA Wage Determination.

• [NOTE: Detailed position descriptions are contained in the SCA Directory of Occupations, Fifth Edition, dated April 2006 for each job classification listed on the wage determination. In addition, the SCA Directory of Occupations can also be found on-line at the following web address: http://www.dol.gov/esa/regs/compliance/whd/wage/SCADirV5/SCADirectVers5.pdf]

Instruction for Completing JD/Q• TYPE:

Place an X in the Box that is applicable to the job title/classification.– Exempt - Those job classifications identified in Title 29 CFR Part 541 (Dated

August 23, 2004) as exempt classifications.– Nonexempt –All job classifications other than those exempt by 29 CFR Part 541.

• SALARY / WAGE RANGES:

– For the specified job title/classification:

• Enter the minimum annual pay in the Annual From space and the maximum annual pay in the corresponding To space for exempt employees.

• Enter the minimum hourly pay in the Hourly From space and the maximum hourly pay in the corresponding To space for nonexempt employees.

– NOTE: The minimum rate can never be lower than the applicable Wage Determination minimum rate.

• HEALTH AND WELFARE [FRINGE BENEFITS]:

– Provide the exact hourly cost of health and welfare for each service employee for all hours paid (See 29 CFR Part 4.175(a)(1) for complete details).

Instruction for Completing JD/Q

• NOTICE: The exact hourly cost of health and welfare for service (non-exempt) employees shall not include the cost of vacation pay, holiday pay, liability insurance, state and Federal taxes, professional liability insurance, unemployment or workmen’s compensation insurance, etc.

• NOTE: The hourly cost of health and welfare must be computed separately for exempt (those employees not covered by the SCA) and nonexempt (those employees covered by the SCA) employees.

• NOTICE: The SCA makes NO distinction between full-time, part-time, and temporary “service employees” in regards to the payment of health and welfare, including vacation and holiday pay.

• DESCRIPTION Briefly describe the duties performed under the specified job title/classification.

• QUALIFICATION REQUIREMENTS Identify the education and experience requirements for an employee to qualify for the specified job title/classification.

Davis-Bacon Act (DBA)

Davis-Bacon Act

• Federal StatutePublic Law 403 of March 3,1931as amended in 1935 and 1964

• Implementing RegulationTitle 29 Code of Federal Regulations Parts 3 and 5

• Contract ClauseFAR 52.222-6 plus all other related clauses

Purpose and Intent of the Davis-Bacon Act

“To protect communities and workers from the economic disruption caused by competition arising from non-local contractors coming into an area and obtaining federal construction contracts by underbidding local wage levels.”

Definition of “Labors and Mechanics”

Davis-Bacon Act defines “Laborers and Mechanics” as workers whose duties are manual or physical in nature who use tools or who are performing the work of a trade in the performance of Construction, Alteration, or Repair (including Painting and Decorating) of Public Buildings or Public Works. However, it exempts those employees who qualify

as bona fide Executive, Administrative, or Professional Employee as defined in Title 29 Code of Federal Regulations Part 541 (as amended August 23, 2004).

Davis-Bacon Act Wage Determination

• Local DBA Wage Determination

– Number: LA9

– Type: Building Construction

– Dated: April 4, 2008

– Location: Section J-17

Mandatory RequirementsDavis-Bacon Act

• Applies to contracts entered into by the United States or District of Columbia in excess of $2,000 for Construction, Alterations, and Repair (including Decorating and Painting) of Public Buildings or Public works (29 CFR 5.5) and it mandates:

– Weekly payment of wages - 29 CFR 5.5(a)(1)(i)

– Payrolls and Basic Records - 29 CFR 5.5(a)(3)(i)

– Submittal of Certified Payroll Records - 29 CFR 5.5(a)(3)(ii)

– Posting Requirements - 29 CFR 5.5a(1)(i) – Prime is liable for subcontractor compliance - 29 CFR 5.5a(6)

– Working Foremen – 29 CFR 5.2(m)

DBA - Mandatory Requirements (continued-2)

– Apprentices & Trainees are authorized if a formal program is pre-approved by the USDOL or by a USDOL approved State Apprenticeship Agency – 29 CFR 5.2(n)1) and 5.5(a)4)(i)

• Caution: The USDOL approved Journeyman to Apprenticeship ratio must not be exceeded.

– Helpers are not authorized on a MAF Construction site unless they meet the following criteria and are approved in advance by the USDOL:

• The duties of a helper are clearly defined and are distinct from other classifications on the Wage Determination; and

• There is a verifiable established prevailing area practice for the use of helpers in the area; and

• The helper is not employed in an informal training program – 29 CFR 5.2(n)(4) and 5.5(a)(1)(ii)(A)

DBA - Mandatory Requirements (continued-3)

• Those outlined in the DBA Wage Determination

– Minimum Wages plus Fringes based on job classification - 29 CFR 5.5(a)(1)(i)

• DBA does not provide for premium rates of pay for overtime hours worked, but it does recognize other Federal laws that do require overtime pay:

– Contract Work Hours and Safety Standards Act. – The Fair Labor Standards Act.

• Premium Pay is one-and-one-half (1½) times the employee’s basic hourly rate of pay for all time worked over 40 hours per week.

DBA – Things to Consider First…

As a prospective offeror/contractor you are liable for the proper interpretation, application, implementation, and administration of the mandatory provisions of the Davis-Bacon Act which are a criticalcritical part of this solicitation.

Therefore, it is imperative that you take appropriate action when preparing your offer to ensure compliance with the Act and to also make certain that your corporate policies are compliant with the spirit and intent of the law.

DBA – Things to Consider Second…

• In addition, the successful offeror shall:

– (1) Conduct Davis-Bacon Act compliance reviews to ensure that all IDIQ subcontractors are compliant with the statutory requirements of Title 29 Code of Federal Regulations Parts 3 and 5 and all related Federal Acquisition Regulation contract clauses;

– (2) Ensure that the appropriate Davis-Bacon wage determination is utilized in each IDIQ work requirement; and

– (3) Collect, retain, verify, and ensure the accuracy and compliance of the IDIQ subcontractors certified Davis-Bacon Act payroll records for each weekly payroll period.

• [Section L, paragraph L.I-22]

Why the Emphasis on the Labor Standards?

• Because they are a criticalcritical part of this solicitation/contract..

• Further, we understand that some interested parties may be Small Businesses.– And we want you to be an informed offeror.

• There are sanctions for failure to comply with mandatory SCA/DBA requirements (29 CFR 4.187 through 4.190 and 29 CFR 5.6).

– If a contractor fails to comply with the mandatory SCA and/ or DBA requirements, the Government may…

• Withhold from payments, an adequate sum, to pay back wages or fringes due the employees;

• Bring legal action against the contractor;

• Terminate contract and hold contractor liable for any resulting cost to Government;

• Not award Government contracts to violators for 3 years.

In Closing…In Closing…

Things to RememberThings to Remember

Purpose and Intent of the Purpose and Intent of the Service Contract ActService Contract Act

“To remove wages as a factor in the competition for Federal Service Contracts by requiring the payment of not less than locally prevailing wage rates and fringe benefits, or in certain cases, the wage rates and fringe benefits contained in a predecessor contractor’s collective bargaining agreement (section 4(c) of the Act).”

Purpose and Intent of the Purpose and Intent of the Davis-Bacon ActDavis-Bacon Act

“To protect communities and workers from the economic disruption caused by competition arising from non-local contractors coming into an area and obtaining federal construction contracts by underbidding local wage levels.”

The 2nd Transition Statement in the RFI

NASA desires that preservation of MAF workforce preservation of MAF workforce skillsskills be a focus of the transitionbe a focus of the transition between contractors. The current contractor workforce at MAF has not experienced such a transition in several decades. AccordinglyAccordingly, NASA seeks to NASA seeks to minimize negative impacts (e.g. accrued benefits)minimize negative impacts (e.g. accrued benefits) on the MAF workforce during the transition for the for the purpose of maintaining continuity of servicespurpose of maintaining continuity of services by experienced personnel consistent with perspective offerors’ approaches to this requirement.