Under the SCA, the contractor is entitled to an equitable adjustment for actual costs associated with increases to a specific wage determinations. Given that the CBA Wage Determination has not changed, is the contractor entitled to an equitable adjustment for CBA merit increases?
Thank you for your question. I am going to assume that we're dealing with a FP contract.
If we're in a cost scenario, it's another matter altogether- somewhat simpler since 52.216-7 essentially
renders most if not all compensation related costs allowable.
FAR 22.1002-3, 22.1008-2 and 52.222-41(f) address section 4(c), as does 29
CFR 4.1b. SCA extends down to all layers/levels of subcontractors. Anyhow,
in this situation let's presume that the CBA is still in effect as a WD- and
under FAR 22.1007, unless the contracting officer has changed WDs, it still
would be. So any terms specifying an increase in pay or benefits would be
effective and binding on the employer, and presumably are passed on to the
prime. FAR 52.222-43 allows a contractor to seek equitable adjustment
if/when those costs increase as a result of being featured in a wage
determination. Based on the above, I would say that yes, these
increases are allowable under 52.222-43 provided that my assumptions are