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  • Question

    If a contract was awarded to the incumbent contractor and it contained a Collective Bargaining Agreement (CBA), would the CBA flow down to the subcontractor if some of the subcontractor employees are part of the CBA?


    Answer

    1. The FAR references quoted below in pertinent part are applicable to this response.

    FAR 52.222-41 -- Service Contract Act of 1965
    (f) Successor contracts. If this contract succeeds a contract subject to the Act under which substantially the same services were furnished in the same locality and service employees were paid wages and fringe benefits provided for in a collective bargaining agreement, in the absence of the minimum wage attachment for this contract setting forth such collectively bargained wage rates and fringe benefits, neither the Contractor nor any subcontractor under this contract shall pay any service employee performing any of the contract work (regardless of whether or not such employee was employed under the predecessor contract), less than the wages and fringe benefits provided for in such collective bargaining agreement, to which such employee would have been entitled if employed under the predecessor contract, including accrued wages and fringe benefits and any prospective increases in wages and fringe benefits provided for under such agreement.

    2. The reference quoted below in pertinent part is also applicable to this response

    Code of Federal Regulations, Title 29 – Labor
    Part 4 - Labor Standards for Federal Service Contracts
    §4.1b  Payment of minimum compensation based on collectively bargained wage rates and fringe benefits applicable to employment under predecessor contract.
      (a) Section 4(c) of the Service Contract Act of 1965 as amended provides special minimum wage and fringe benefit requirements applicable to every contractor and subcontractor under a contract which succeeds a contract subject to the Act and under which substantially the same services as under the predecessor contract are furnished in the same locality. Section 4(c) provides that no such contractor or subcontractor shall pay any service employee employed on the contract work less than the wages and fringe benefits provided for in a collective bargaining agreement as a result of arms-length negotiations, to which such service employees would have been entitled if they were employed under the predecessor contract, including accrued wages and fringe benefits and any prospective increases in wages and fringe benefits provided for in such collective bargaining agreement.

    3. There is no requirement in FAR 52.222-41(f) which implements the requirements of 29 CFR 4.1b(a) as quoted above which mandates that all of the service contractor employees working on the contract, whether they may be employed by the prime contractor or by a subcontractor at any tier, be covered under the same CBA. Therefore, as long as multiple CBAs meeting the requirements of 29 CFR 4.1b(a) covering both the prime contractor service employees and subcontractor employees exist, then we would conclude that there would be no need to try to flow down the prime contractor CBA to subcontractor employees. Therefore in our opinion, a separate CBA covering the subcontractor employees would be adequate. If no such CBA exists, then a Wage Determination issued by the Department of Labor would be required for the work being performed by that subcontractor.

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