What language can the government put into the SOW that defines minimum/maximum requirements to be used by a contractor during their renegotiation with local trade unions?
Before answering the question, additional information was provided by the submitter and is paraphrased as follows: the question relates to a cost plus fixed fee contract covered by the service contract act and if there was a way the government could identify or add minimum/maximum requirements as SOW language related to the negotiations. The answer to the question regarding what language the government can put into the SOW that defines minimum/maximum requirements to be used by a contractor during their renegotiation with local trade unions is as follows: Under the terms of cost type contract covered by Service Contract Labor Standards (formerly known as Service Contract Act of 1965, as Amended) and FAR 52.222-43, the government is generally liable for all allowable and allocable costs associated with performance of the contract to include Collective Bargaining Agreement (CBA) adjustments. The most opportune time to establish any special terms would be during the solicitation phase, prior to award. Such terms should be worked with the Contracting Officer, Labor Relations Specialist, and General Counsel. Adding new labor terms after award would have to be done bilaterally and would likely introduce, at a minimum, cost, performance and legal risks. Any concerns the government has regarding the pending CBA negotiation can be discussed with the prime contractor as it relates to cost management. If there are pending issues that the government feels, based on standard industry practice, are approaching or exceeding those norms, then it would be well within the government’s rights to express those concerns. Prior to any discussion, it is recommended that any areas of concern are discussed with the requirements owner, and those previously mentioned to include General Counsel and a Labor Relations Specialist. As all costs are subject to DCAA audit, to determine allowability and allocability, it may be possible to have DCAA look at specific cost elements, beforehand, to provide insight into areas that may be of concern. The Department of Labor, Wage and Hours Division can look at CBA’s to help determine if they are within industry standards. According to FAR 22.1013, if the wages, fringe benefits, or periodic increases provided for in a CBA vary substantially from those prevailing wages for similar services in the locality, the contracting officer is required to immediately contact the agency labor advisor to request a hearing on the matter in accordance with FAR 22.1021.
Open full Question Details