Is it a requirement that we incorporate CBA changes in a FFP contract? Or does the contractor bear the burden of risk for predicting CBA increases? I can understand doing this on a cost contract...
Also, I see in 52.222-43 (d)(1) where you have to do this for DOL wage determinations, but wasn't sure if this also applied to CBA.
Yes, based on the information you've provided, you would need to incorporate CBA adjustments into your multi-year FFP contract.
The most complete answer to your questions would actually have to begin with the circumstances that existed prior to the award of this contract. Without all those details, I'll provide general support for adjusting a contract based on a CBA. While I've provided some FAR references below, you can always go to the source at www.wdol.gov or even more directly at 29 CFR 4.1(b).
Contracts containing the SCA clause(FAR 52.222-41) must also include FAR 52.222-43 if it is a multiple year contract. Within these clauses you'll see that they are applicable to contracts subject to prevailing wage determinations as well as collective bargaining agreements(CBA's). In regard to your question about the contractor bearing the risk for predicting wage increases, paragraph (b) of the -43 clause requires the contractor to warrant that no contingencies have been incorporated into the contract to account for possible wage adjustments.
The Department of Labor conducts wage surveys to determine prevailing rates in a locality. Some of the data collected, which translate into a wage determination, will include union wages. But union wages can more directly impact a contract when the incumbent contractor has a CBA. In these circumstances, FAR 22.1002-3 states that successor contracts are subject to the collective bargaining agreement of the predecessor contract (same services/locality) even if the terms weren't incorporated into the contract. Under FAR 22.1008-(d), the Contracting Officer may establish a CBA-based wage determination that supersedes any other wage determination requirements throughout the period of performance in the contract.
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