Question
Is new SCA needed for each option year of a 1 year plus 2 option year, C type service contract? The original SCA stated it was 3 year contract including the options.
Answer
In answering your question, I'm making the following assumptions: By SCA, you mean a Service Contract Act covered contract and by C type service contract, you mean Type C contracts as defined in DoDI 5000.72, Subject: DoD Standard for Contracting Officer's Representative (COR) Certification, dated Mar 26, 2015. According to DoDI 5000.72, Type C contracts are "unique contract requirements that necessitate the COR have a higher education or specialized training beyond the Type B requirements." Examples of such requirements include: environmental remediation, major weapons systems, medical, dental or veterinarian services, etc. (DoDI 5000.72, Enclosure 6, Table 4).
According to the Department of Labor, Service Contract Act (SCA) wage determinations set forth the prevailing wages and benefits that are to be paid to service employees working on covered contracts exceeding $2,500. In FAR 22.001, service employee is defined as “…any person engaged in the performance of a service contract other than any person employed in a bona fide executive, administrative, or professional capacity, as those terms are defined in 29 CFR part 541.” Wages are the monetary compensation provided employees. FAR clause 52.222-41 -- Service Contract Labor Standards, is inserted in solicitations and contracts for SCA covered contracts over $2,500 and FAR clause 52.222-43 -- Fair Labor Standards Act and Service Contract Labor Standards--Price Adjustment, is also inserted if the contract is a Fixed-price (FP), time-and-materials (T&M), or labor hour (LH) service contract containing FAR clause 52.222-41. According to FAR 52.222-41(c)(3), “…the contract shall be subject to adjustment after 1 year and not less often than once every 2 years, under wage determinations issued by the Wage and Hour Division.” And, according to FAR 52.222-43, the "the contract price...will be adjusted to reflect the Contractor’s actual increase or decrease in applicable wages and fringe benefits...as a result of [a new DOL wage determination] on the anniversary date of a multiple year contract or at the beginning of the renewal option period." (FAR 52.222-43(d)(1). Therefore, when one or both of these clauses are in the contract and a new wage determination exists at the beginning of the next option period, the option exercise modification would need to include the new wage determination as an attachment which normally would trigger an adjustment to the contract cost or price for any SCA covered CLINs.
However, you also mentioned this is a C type service contract which leads me to believe your contract or a portion of it might be for professional services in which case FAR Subpart 22.11 – Professional Employee Compensation may apply. FAR 22.1101 states, "the Service Contract Act of 1965, now codified at 41 U.S.C. chapter 67, Service Contract Labor Standards, was enacted to ensure that Government contractors compensate their blue-collar service workers and some white-collar service workers fairly, but it does not cover bona fide executive, administrative, or professional employees. FAR 22.1102 defines a professional employee as “any person meeting the definition of “employee employed in a bona fide. . . professional capacity” given in 29 CFR 541. The term embraces members of those professions having a recognized status based upon acquiring professional knowledge through prolonged study. Examples of these professions include accountancy, actuarial computation, architecture, dentistry, engineering, law, medicine, nursing, pharmacy, the sciences (such as biology, chemistry, and physics, and teaching). To be a professional employee, a person must not only be a professional but must be involved essentially in discharging professional duties.” Therefore, FAR 52.222-41 and -43 wouldn’t apply and an SCA wage determination wouldn’t be required for any CLINs considered professional services as defined in the FAR. Please note, however, an offeror would need to submit a compensation plan as part of their proposal in accordance with FAR provision 52.222-46 -- Evaluation of Compensation for Professional Employees. This provision must be inserted in solicitations for negotiated contracts that are over $700,000 and that are for professional services.
Open full Question Details
