Mod authorities

See FAR Clause 52.222-43, Fair Labor Standards Act and Service Contract Act—Price Adjustment (Multiple Year and Option Contracts). Read © of that clause.

I told her that the clause above was in the contract, marked on 52.212-5...made no difference. She still says I have to put another authority on the face of the mod.

I told her that the clause above was in the contract, marked on 52.212-5...made no difference. She still says I have to put another authority on the face of the mod.

Are you saying that you have a contract for commercial services with an option period?

Are you saying that 52.222-43, Fair Labor Standards Act and Service Contract Act—Price Adjustment (Multiple Year and Option Contracts) is referenced in Clause 52.212-5?

Why do you think that 52.217-9 provides the authority to issue a revised wage decision? Where is that mentioned in the clause?

Same old tired argument about reciting authority in the mod. Either you have the authority or you don't. Whether or not the modification recites it is of no consequence whatsoever.

A write up seems overboard. Who'd you piss off?

/threads/2230-excusable-delays-for-construction

Navy_Contracting_4 is going to be so annoyed. Honest, Navy, I don't know jjpaci and didn't put her up to it.

Well, I'm interesting in knowing what authority is in the contract at hand to modify the wage decision. It doesnt appear to be in 52.217-9. Does jjpaci know?

Same old tired argument about reciting authority in the mod. Either you have the authority or you don't. Whether or not the modification recites it is of no consequence whatsoever.

Cardinal, do you know where the contract provides the authority to issue a new wage decision? Do you think that perhaps the contractor might be interested in knowing where the authority is after receiving a unilateral mod incorporating a new wage decision? How about a third party reviewing the contract or the mod? How about someone having to do a forensic analysis of a contract for some reason?

I was taught years ago (before FAR) not to write a mod without being able to cite the applicable authorities for issuing it; not to write a letter to the Contractor without citing the applicable contract terms and conditions. Like I mentioned in another, recent thread - it isn't rocket science.

I'm not sure that there is a FAR clause that expressly authorizes the CO to unilaterally change the wage determination that is attached to the contract. I don't think the SCA clause, FAR 52.222-41 provides any such express authority, but I might have missed it. The price adjustment clause, FAR 52.222-43, says only that the WD issued by the Dept. of Labor that is current on the beginning of an option renewal period shall apply to that period, but describes no procedure for attaching it to the contract. In light of the language of the price adjustment clause, I doubt that the propriety of the procedure used to attach the applicable WD affects its enforceability. This is probably more a matter of form than of substance.

Vern, our service and construction contracts are supposed to contain wage decisions applicable as of award. If clause 52.222-43 states that the SCA wage decision that is current at "the beginning of each renewal option period, shall apply to this contract" and provides for a price adjustment, if necessary, then I would think that the contract should be modified to reflect the correct wage decision for contract administration purposes, if nothing else. This assumes that -43 is in the contract or should be in the contract.

The clauses have been developed to implement various "operation(s) by law" of various Labor laws, I assume.

I understand all of that. I thought that the question is what gives the CO the authority to add the new WD by unilateral mod, as opposed to bilateral mod. I don't doubt that the applicable WD will apply no matter how it's added. We're just dealing with the old SF 30 block 13 issue.

I understand all of that. I thought that the question is what gives the CO the authority to add the new WD by unilateral mod, as opposed to bilateral mod. I don't doubt that the applicable WD will apply no matter how it's added. We're just dealing with the old SF 30 block 13 issue.

Vern, I think that the wording of the -43 clause would provide the authorization. For example, "...(f) The Contractor shall notify the Contracting Officer of any increase claimed under this clause within 30 days after receiving a new wage determination unless this notification period is extended in writing by the Contracting Officer." This would imply to me that the KO issues the new WD to replace the earlier one for the applicable period. The Contractor complies and requests a price adjustment, if applicable.

To me, this -43 clause administratively implements portions of the labor laws. OK, so I would cite this clause, unless there is something more direct to the point. The Changes clause isnt specifically applicable because it provides for an equitable adjustment for certain "changes within the scope of the contract". This clause doesn't authorize an equitable adjustment, only a price adjustment - but not including overhead, G&A, etc.

The Changes clause isn't applicable, specifically or generally, because it doesn't say that a CO can change WDs, not because it calls for an equitable adjustment.

I don't see any language in the clause that says that the CO may attach a new WD by unilateral mod, or even that the CO may attach a new WD. It just says that a new WD shall be "applicable".

You are inferring such authority, but I don't think that the inference is valid based on the plain language of the clause. I'm a plain language guy.

I know that the OP was talking about a commercial item services contract, but I did want to mention that for construction, FAR 22.404-2(a) states:

"When exercising an option to extend the term of a contract, the contracting officer must select the most current wage determination(s) from the same schedule(s) as the wage determination(s) incorporated into the contract."

Emphasis added on must, showing an imperative requirement. If the CO were to incorporate the WD as a bilateral modification, thereby potentially allowing the Contractor not to agree with it, you would compel the CO to violate law. Therefore, a WD must be a unilateral modification.

As a followup to my last post, as a CAB oversight puke, as a contract administrator and in my claims resolution role, I learned that it is important for everyone to know exactly what terms of the contract are involved or being invoked to modify or enforce a contract. I see time and time again where one or both parties have little clue as to what or why there are or are not grounds for price or time adjustments. Its good contract administration and reflects an understanding of the contract requirements. One shouldn't have to comb through an entire contract to understand the basis of a modifuication, order, directive, letter, etc.

I have seen KO's and ACO's pay for things that are the Contractor's responsibility and I've seen where they failed to properly take a contractor's rights into consideration because they don't know the contract. I've seen the wrong clauses used as the basis for an adjustment, profit incorrectly allowed , not allowed, etc. I've also seen many, many incompetent COR's who don't have a clue as to anything other than certain technical requirements in a contract but have been assigned to administer the entire contract.

The Changes clause isn't applicable, specifically or generally, because it doesn't say that a CO can change WDs, not because it calls for an equitable adjustment.

I don't see any language in the clause that says that the CO may attach a new WD by unilateral mod, or even that the CO may attach a new WD. It just says that a new WD shall be "applicable".

You are inferring such authority, but I don't think that the inference is valid based on the plain language of the clause. I'm a plain language guy.

So, are you saying that the KO or ACO simply mails or hands the Contractor the new applicable WD? Since the contract contains a prior WD, then I believe it must be modified to reflect the current WD and what it is applicable to. Unless the SCA procedures are totally different than DBA procedures for developing wage determinations, it isnt the Contractor's responsibility to develop the WD, it is the Government's.

I don't think that a separate, bilateral mod is necessary or advisable to implement the wage determination applicable to the option being awarded, then wait for a claim or request for price adjustment. It makes sense to me to incorporate the WD in the mod incorporating the option and cite the clause that applies once the WD is provided.

I know this is a little technical, but...

The SCA clause, 52.222-41( c)(1), says that the WD that the contractor must pay "as specified in any wage determination attached to this contract." So let's pretend for the moment that words mean something and that the oft-cited "plain language" rule applies. (The Davis-Bacon Act clause also says "attached")

If words mean something, then when exercising an option, the parties should (1) delete the old SCA WD and (2) attach the new one, or retain the old WD for historical purposes. How to add the new WD: by unilateral mod or by bilateral mod? No express language in the SCA clause or in the price adjustment clause says that the CO may do it unilaterally. Thus, if words mean something, the parties must do it bilaterally. It's clear that the new WD would apply by operation of law even it it weren't attached, and doing it bilaterally would mean more work, so COs do it unilaterally. But does the fact that the new WD would apply anyway by operation of law justify COs in doing so? That's the philosophical question of the moment.

Vern, under that premise, where does it say that you need to include the WD by a modification at all? Once DOL provides a new WD, it has the force and effect of law, and would apply to your contract by operation of law (however, FAR 22.1012-1© does include exceptions).

In that case, would not the modification be pursuant to FAR 43.103(d )(1), as an administrative action? FAR 43.101 defines an administrative action as a "unilateral contract change that does not change the substantive rights of the parties." Incorporating the WD is just informing the Contractor that a new law is in effect. FAR Clause 52.222-41 already compels the Contractor to adhere to the WD, so the modification replacing the WD would not change the rights of the parties. The WD affects the substantive rights of the parties, but the modification does not.

Again, the SCA clause says that the contractor must pay as specified in the attached wage determination. So I think a WD must be attached to the contract. As for adding a new WD by administrative change, I don't know if that would be acceptable to reviewers, but it is a reasonable question. It is clear to me that the WD would apply by operation of law even if it were not attached to the contract, but attaching it to the contract puts the parties on notice and reduces the chances for misunderstanding. Moreover, it is consistent with the SCA clause. A reviewer would probably say that an admin change as defined in FAR 43.101 would not be appropriate, because the WD affects the substantive rights of the parties.

The discussion in this thread has raised my curiosity about several things in regard to SCA compliance and the FAR clauses. If a revised WD is in effect on the date an option is exercised on a contract that properly includes 52.222-41 and -43, but the contracting officer does not include the revised WD in the mod exercising the option, would the contractor have an obligation to search WDOL to determine if a revised WD has been issued that covers workers employed on the contract? If the contractor has such an obligation, it would seem the contractor would also have an obligation to pay the revised wages and fringe benefits to its covered employees. If it did, would the contractor be entitled to a price adjustment based upon the increased wages and fringe benefits in the revised WD although the contracting officer has not incorporated the revised WD into the contract?

As a practical matter, in this situation, I would expect the contractor to ask the contracting officer if there is a revised WD when the option is exercised. If the contracting officer says no, should the contractor search WDOL anyway?

1. I don't know if the contractor is obligated to search WDOL, but I think it would be foolish not to, given that DOL will hold it responsible for paying the wages and fringe benefits regardless of whether the CO added the new WD to the contract or even told the contractor about it.

2. I believe that the contractor would be obligated to pay the new wages and fringes.

3. I believe that if there is a new WD, and if the criteria for a price adjustment are met, then the contractor will be entitled to an adjustment even though the CO had failed to incorporate them.

4, If the contractor asks and the CO says no, the contractor should search WDOL anyway. A contractor should never rely on a COs statement of the facts or interpretation of a rule. It should always independently verify.

Regarding Retreadfed's third question, FAR Clause 52.222-43(f) states:

“The Contractor shall notify the Contracting Officer of any increase claimed under this clause within 30 days after receiving a new wage determination unless this notification period is extended in writing by the Contracting Officer.”

The word “receives” begs the question “from whom?” Does “receiving a new wage determination” mean when the CO incorporated the WD into the contract or when DOL publically issues the WD? I am not sure when that 30-day timer would begin. I would think that the standard would be the same as with any law. Since DOL publically publishes the WD, the Contractor knew, or should have known, about the revised rates, and had a duty to timely notify the CO to seek an equitable adjustment 30-days after DOL published the WD.

The answers to some of your questions may be found by reading 29 CFR PART 4—LABOR STANDARDS FOR FEDERAL SERVICE CONTRACTS. The KO must incorporate the WD into the contract, including the options that extend the contract.

§ 4.55 Issuance and revision of wage determinations.

(a) Determinations will be reviewed periodically and where prevailing wage rates or fringe benefits have changed, such changes will be reflected in revised determinations. For example, in a locality where it is determined that the wage rate which prevails for a particular class of service employees is the rate specified in a collective bargaining agreement(s) applicable in that locality, and such agreement(s) specifies increases in such rates to be effective on specific dates, the determinations would be revised to reflect such changes as they become effective. Revised determinations shall be applicable to contracts in accordance with the provisions of § 4.5(a) of subpart A."

( bee) (darned modicoms) "Determinations issued by the Wage and Hour Division with respect to particular contracts are required to be incorporated in the invitations for bids or requests for proposals or quotations issued by the contracting agencies, and are to be incorporated in the contract specifications in accordance with § 4.5 of subpart A. In this manner, prospective contractors and subcontractors are advised of the minimum monetary wages and fringe benefits required under the most recently applicable determination to be paid the service employees who perform the contract work."

I also noted that the KO is specifically required to incorporate Davis Bacon wage determinations into contract modifications for options extending construction contracts and, of course, for task orders on ID/IQ construction contracts. I didn't check the 29 CFR but FAR 22.404-6 (d ) (2) requires the KO to modify the contract to incorporate the WD. Then FAR 22.404-12 – Labor Standards for Contracts Containing Construction Requirements and Option Provisions That Extend the Term of the Contract requires this to be done at the time the mod to exercise the option is issued. So, there is specific authority to issue these unilaterally with the exercise of the option for construction contracts. This makes sense because there is usually no way to know the exact cost effect of the new decision at that point.

So the SCA regulations in 29 CFR and th FAR appear to be less specific than those for the DBA in FAR. However, if the DOL learns that the contracting agency failed to incorporate or mistakenly thought that the SCA wage determination didnt apply, 29 CFR 4.5 (c ) directs the agency to _"_include in the contract the stipulations contained in § 4.6 and any applicable wage determination issued by the Administrator or his authorized representative through the exercise of any and all authority that may be needed (including, where necessary, its authority to negotiate or amend, its authority to pay any necessary additional costs, and its authority under any contract provision authorizing changes, cancellation, and termination)." I think that includes unilateral mods.

Regarding Retreadfed's third question, FAR Clause 52.222-43(f) states:

“The Contractor shall notify the Contracting Officer of any increase claimed under this clause within 30 days after receiving a new wage determination unless this notification period is extended in writing by the Contracting Officer.”

The word “receives” begs the question “from whom?”

Since it doesn't say, how do you think it ought to be interpreted?

BTW, do you know what "begs the question" means? Hint: It does not mean raises the question.

An interesting anecdote regarding contracting officers not including revised WDs in a contract when an option is exercised. I once had to deal with the situation where a DoL contracting officer failed to do so. When asked about incorporating the revised WD, he responded that the WD incorporated into the contract at award was the WD that applied for the life of the contract.

am I the only one who posts here who has ever worked for a fed contractor in a position covered by an Area Wage Determination ?

Back in 1994, when the world was a lot less connected, it was the hourly workers who found out when there was a new Wage Determination, and the workers would tell the Contractor.

Now with the WD's on the web, that must still be the case.

This topic always gets you guys fired up

Since it doesn't say, how do you think it ought to be interpreted?

BTW, do you know what "begs the question" means? Hint: It does not mean raises the question.

Oh, but sadly it has come to mean just that...

From Wikipedia (http://en.wikipedia.org/wiki/Begs_the_question):

"Despite having "long been condemned by usage commentators as incorrect or sloppy",[1][6] some authorities consider the use of "begs the question" as a way of saying "raises the question" or "evades the question" to be no longer mistaken because it has attained such wide usage.[7]"

...in similar fashion to the prefixes "semi" and "bi" when used to decribe recurring events. They've become so diluted with misuse as to be useless.

I'm afraid that I cannot accept Wikipedia's citation of "some authorities" as a valid source for usage. Anyway, see this from the New York Times:

http://afterdeadline.blogs.nytimes.com/2008/09/25/begging-the-question-again/?_r=0

Since it doesn't say, how do you think it ought to be interpreted?

BTW, do you know what "begs the question" means? Hint: It does not mean raises the question.

That really rips my contract. I always thought that it meant to "raise the question" but I see my usage is incorrect. Interestingly, the prevalence of misuse is so significant that M-W Dictionary now includes both meanings.

Back to the topic at hand, my interpretation of FAR Clause 52.222-43(f) is that the 30-day timer would start from when the Contractor knew or should have known about the WD. Part © of that Clause talks about where the WD comes from: "[t]he wage determination, issued under the Service Contract Act of 1965, as amended, by the Administration, Wage and hour Division, Employment Standards Admiinstration, U.S. Department of Labor... shall apply to this contract." Therefore, it is my interpretation that the WD should be received by the Contractor from the DOL, not the Contracting Officer. This interpretation would mean that the Contractor would have the duty to notify the Contracting Officer within 30 days of DOL issuing a new WD, not 30 days of the contract anniversary or when the Contracting Officer unilaterally incorporated the WD into the contract. I could not find any case law surrounding this, however.

Everybody should keep in mind that dictionaries merely report how people use a word or term. Proper usage is a different matter.

FAR 22.1007 states:

The contracting officer shall obtain wage determinations for the following service contracts:

(a) Each new solicitation and contract in excess of $2,500.

( Each contract modification which brings the contract above $2,500 and --

(1) Extends the existing contract pursuant to an option clause or otherwise; or

(2) Changes the scope of the contract whereby labor requirements are affected significantly.

© Each multiple year contract in excess of $2,500 upon --

(1) Annual anniversary date if the contract is subject to annual appropriations; or

(2) Biennial anniversary date if the contract is not subject to annual appropriations and its proposed term exceeds 2 years -- unless otherwise advised by the Wage and Hour Division.

Being AF, I have to lean on what the FLSA Price Adjustment Guide (http://ww3.safaq.hq.af.mil/shared/media/document/AFD-121009-027.pdf) says (as a guide, of course)

3.0 SERVICE CONTRACT ACT WAGE DETERMINATIONS

3.1 Requirement. Contracting Officers incorporate a new or revised WD into an existing contract when required by FAR 22.1007, provided a new or revised WD is received or available timely in accordance with FAR 22.1012. New or revised WDs are incorporated into existing contracts at:

• option exercise;

• extension award;

• the annual anniversary date of multiple year contracts subject to annual funding; and

• the biennial anniversary date in multiple year contracts not subject to annual funding

New or revised WDs are always effective the first day of the new contract period, even though the WD may be dated several months prior to incorporation. A WD is not effective for a contract merely because it is published on WDOL.gov.

So, any of those times you'd exercise an option, do an extension, or on the annual anniversary (annual funding) or biennial anniversary (not subjecto to annual funding), you'd incorporate the current area wage determination into the contract as part of your option mod. The contractor has their 30 days to come in to request a price adjustment after receiving the modification to exercise the option (which incorporates the current wage determination).

I'm not sure about other agency procedures, since the second half of my "conclusion" is based on an agency-specific guide.

EDIT: I think the weakest part of the guide's, err, guidance, is that it assumes "obtain wage determinations..." to mean "incorporate a new or revised WD....".

metteec, FAR 52.222-41© says " Each service employee employed in the performance of this contract by the Contractor or any subcontractor shall be paid not less than the minimum monetary wages and shall be furnished fringe benefits in accordance with the wages and fringe benefits determined by the Secretary of Labor, or authorized representative, as specified in any wage determination attached to this contract." How does the contractor's obligation to pay its employees in accordance with the WD attached to the contract square with your interpretation that the contractor receives the WD from DoL? Would DoL modify the contract to attach a new WD so the contractor could comply with 52.222-41?

OMG! I'm just a Financial Policy wonk but do you folks always debate the meaning of words like this? I'm going to think this through for you like an auditor would. If the wording on ANYTHING in the CO file uses the words attached or attachment, it better be in the file. If it isn't, your files are incomplete and I would write it up as such. When areas that are legally enforceable aren't complete, it opens the door for problems. Please don't be my problem. If you come back to me for money, you have become my problem. Let's assume that putting everything that might ever come up in the master file is the right thing to do.

OMG! I'm just a Financial Policy wonk but do you folks always debate the meaning of words like this?

Yes. We are contracting people, words are important to us, and we know that they are often vague, ambiguous, or specially defined by regulation or trade usage.

If the wording on ANYTHING in the CO file uses the words attached or attachment, it better be in the file. If it isn't, your files are incomplete and I would write it up as such.

Well, now, what do you mean by "in the file"? Do you mean physically? If so, then your thinking is faulty, because "attachment" does not necessarily mean physically. See, for instance, 48 C.F.R. 204.7101 (the DFARS), "Definitions":

Attachment means any documentation, appended to a contract or incorporated by reference, which does not establish a requirement for deliverables.

Emphasis added. Now, by that official definition, an attachment need not be physically "in the file". So, let's debate the meaning of your words. What do you mean by "in the file"? If you say that it means physically in the file, please cite some regulation in support of your position. If you cannot, then you are just another ignorant, smartypants auditor who doesn't know what he or she is talking about, and I do not concur in your unsupported finding. I am not your problem -- you are.

Of course, if by "in the file" you included incorporation by reference, and I referenced the document in my file, then neither one of us is a problem to the other.

So -- what did you mean by "in the file"?

Bob,

Would you please enable the "Like This" button--just this one time?

Just curious. Is it possuible to find an SCA wage determination for a specific project on-line from the Dept. of Labor? No ulterior motive...

Thanks.

Here is the website. http://www.wdol.gov/sca.aspx . Click on Selecting Wage Determinations to get drop downs.

Here is the website. http://www.wdol.gov/sca.aspx . Click on Selecting Wage Determinations to get drop downs.

Thanks for the citation, Boof.

. . . A reviewer would probably say that an admin change as defined in FAR 43.101 would not be appropriate, because the WD affects the substantive rights of the parties.

It seems to me that the issuance (by DoL) of the new WD may affect the rights and obligations of the parties, but now, once it has been issued, what effect does attaching it to a mod have? If the contractor has to pay according to the new WD whether or not it's attached to the mod ("contract"), then isn't there a good argument that its attachment to the mod is "administrative"?

There is no such good argument. Attaching the wage determination is a contractual act that affects the rights of the parties. The mere issuance of a wage determination does not necessarily make it binding, contractually or otherwise. For one thing, a CO or other parties might challenge a wage determination pursuant to 29 C.F.R. 4.11. The Administrator of the Wage and Hour Division might toss it. The contractor is unquestionably bound when it's in the contract.

There is no such good argument. Attaching the wage determination is a contractual act that affects the rights of the parties. The mere issuance of a wage determination does not necessarily make it binding, contractually or otherwise. For one thing, a CO or other parties might challenge a wage determination pursuant to 29 C.F.R. 4.11. The Administrator of the Wage and Hour Division might toss it. The contractor is unquestionably bound when it's in the contract.

If that is the case, then the Contracting Officer would need to incorporate every WD bilaterally. I do not think that is necessary because even if the Contractor were not to sign the modification, or the Contracting Officer forgot to attach the WD, the DOL would compel the agency and Contractor to accept the revised wage determination, and possibly apply the WD retroactively (see 29 C.F.R 4.5©):

Where the Department of Labor discovers and determines, whether before or subsequent to a contract award, that a contracting agency made an erroneous determination that the Service Contract Act did not apply to a particular procurement and/or failed to include an appropriate wage determination in a covered contract, the contracting agency, within 30 days of notification by the Department of Labor, shall include in the contract the stipulations contained in § 4.6 and any applicable wage determination issued by the Administrator or his authorized representative through the exercise of any and all authority that may be needed (including, where necessary, its authority to negotiate or amend, its authority to pay any necessary additional costs, and its authority under any contract provision authorizing changes, cancellation, and termination). With respect to any contract subject to section 10 of the Act, the Administrator may require retroactive application of such wage determination. (See 53 Comp. Gen. 412, (1973); Curtiss-Wright Corp. v. McLucas , 381 F. Supp. 657 (D NJ 1974); Marine Engineers Beneficial Assn., District 2 v. Military Sealift Command , 86 CCH Labor Cases ¶ 33,782 (D DC 1979); Brinks, Inc. v. Board of Governors of the Federal Reserve System , 466 F. Supp. 112 (D DC 1979), 466 F. Supp. 116 (D DC 1979).) (See also 32 CFR 1-403.)

If neither party has the authority to refuse, is incorporation of the WD truly affecting the rights of the parties?

If neither party has the authority to refuse, is incorporation of the WD truly affecting the rights of the parties?

It's not a matter of "authority" to refuse. It's a matter of right to refuse. Either party can refuse to comply with an order of the DOL if it thinks that the DOL has acted unreasonably or unlawfully. Such a party would take a risk that it is wrong. Whether it could properly refuse might ultimately have to be determined by the courts. Is it your impression that the DOL has never lost a case? If so, do some reading.

The DOL wrote and prescribes the use of an SCA clause. FAR merely quotes the clause and implements the DOL prescription. The clause specifies the rights and obligations of the parties under the SCA and the DOL's implementing regulations. The clause specifies special dispute procedures. In effect, the clause makes the Administrator of DOL's Wage and Hour Division a contracting officer for the purposes of SCA enforcement.

When an agency CO attaches a new wage determination to a contract, he or she is changing the obligations of the contractor and the rights of the government. The DOL is not a dictator. The SCA clause prescribes contractually binding administrative dispute settlement procedures, which can be enforced in federal court. See 29 CFR Part 6. The decisions of the DOL are subject to court review under the Administrative Procedures Act.

When a court reads a clause or a WD into a contract by operation of law, all it is doing is supplying a required, but missing contract term, which is standard contract law.

Finally, it does not follow that because the addition of a wage determination affects the rights of the parties that the WD must be added bilaterally. I think that bilateral modification would be best, but the SCA clause can be interpreted to permit a CO to do it unilaterally. Many contract clauses allow the government to unilaterally alter a contractor's obligations and rights.

It's not a good idea for COs to think too much about inclusion or enforcement by operation of law. It's best to simply follow the FAR and think contractually.

Vern, you have mentiioned a couple of times that revised WDs are incorporated into a contract containing 52.222-43 by operation of law when an option is exercised under that contract. I have limited research capabilities (what is available online without a subscription). Using my limited capabilities, I have not been able to find any appeals board or court decision that has addressed this question. Are you aware of any such decisions using your research capabilities?

Retread:

The leading case is Miller's Moving Co., ASBCA 43114, 92-1 BCA P 24707. In that case the contractor did not pay specified wages and fringes arising out of an applicable revised wage determination that had not been attached to the contract and that the contractor knew nothing about. The DOL ordered the contracting officer to withhold $18,000+. The contractor challenged the CO's action pursuant to the Contract Disputes Act. The board granted the government's motion for summary judgement, saying:

The Government correctly points out in the memorandum in support of its motion to dismiss, and appellant admits, that this appeal is similar to that in BUI Construction Co. & Building Supply, supra, wherein we held that Davis-Bacon Act wage rate determinations applied to a Government contract even though neither the solicitation nor the contract contained the labor standards provision or the wage rate determinations required by statute to be included in the contract, upon the following rationale:

The Labor Standards Provisions and the Department of Labor Wage determinations are statutory requirements for all construction, repair and rehabilitation contracts for federal public buildings in amounts over $2000. (40 U.S.C. 276(a)). It is well settled that if a statute requires inclusion of a contract provision, such provision will be read into the contract by operation of law, and is binding on the parties even if omitted from the contract terms. G.L. Christian and Associates v. United States [9 CCF par. 71,964], 312 F.2d 418 (Ct. Cl. 1963) on rehearing, 320 F.2d 345, cert. denied, 375 U.S. 954 (1963). Obligatory congressional enactments cannot be abrogated by failure of Government officials to include necessary provisions in the contract. G.L. Christian, on rehearing, supra. The courts have also held that a contractor is charged with the knowledge of such mandatory requirements. De Matteo Construction Co. v. United States, [26 CCF 83,207], 600 F.2d 1384, 1391 (Ct. Cl. 1979). Lack of actual knowledge does not extinguish a contractor's obligation to comply with the law.

Accordingly, we conclude that the wage determination schedule and the Labor Standards Provisions were binding on appellant from the contract's inception, and their omission from the solicitation did not constitute a contract change, entitling appellant to an equitable adjustment in contract price.

Applying the same reasoning to the present appeal, we conclude that the DOL wage rate determinations under the Service Contract Act were binding on appellant whether it had actual notification thereof or not.

See also Kleenco, Inc., ASBCA 44348, 93-2 BCA P 25619 and TWigg Corp. v. GSA, GSBCA 14639, 99-1 BCA P 30217. In each case the board applied the Christian doctrine to read an omitted SCA wage determination into a contract.

The Government Contractor summarized the Miller decision as follows:

The SCA and the DOL wage determinations are statutory requirements for this type of contract. It is well established that, if a statute requires that a contract include a particular provision, that provision will be read into the contract by operation of law (and be binding on the parties thereto) even if it was omitted from the contract terms. G.L. Christian & Assocs. v. U.S., 312 F.2d 418 (Ct. Cl.), 5 GC ¶ 57, 320 F.2d 345 (Ct. Cl.), 5 GC ¶ 325, cert. denied, 375 U.S. 954 (1963), 5 GC ¶ 572.

Consequently, the DOL wage rate determination was binding on contractor, even if contractor was not actually notified of it. See BUI Const. Co. & Bldg. Supply, ASBCA 28707, 84-1 BCA ¶ 17183, 26 GC ¶ 184. DOL wage determinations were statutory requirements for the type of contract involved, and, therefore, would be read into the contract by operation of law.

Some legal commentators (Feldman, Sullivan and Gill) have questioned the soundness of those decisions, saying that the Christian doctrine should not apply. However, as of today the case law is still good.

BTW, it's FAR 52.222-41, not 52.222-43, that should be the basis for incorporating a revised wage determination. I never said it was to be done under FAR 52.222-43.

Thanks. There is no library where I live that has the BCAs, but there are libraries in cities nearby. The next time I am in one of them, I will have to make a special effort to check out these decisions.

Retreadfed, I used to find a lot of information in the law library at the local Federal Courthouse. I haven't been to a local county courthouse but they may have a law library with Federal board and court decisions....

Retread:

If you send me your email address via Wifcon private message, I'll send you copies of the decisions.

Vern

This has been a very helpful thread. I have a few questions related to this topic.

Background: We were awarded an IDIQ in September of 2012 that had the then current SCA wages attached. In June of this year there was an SCA change in rates. According to FAR 52.222.43 (thanks for leading me to this) "The wage determination, issued under the Service Contract Act of 1965, as amended (41 U.S.C. 351, et seq.), by the Administrator, Wage and Hour Division, Employment Standards Administration, U.S. Department of Labor, current on the anniversary date of a multiple year contract or the beginning of each renewal option period, shall apply to this contract." Our subcontractor is asking us to get a mod to increase the rates.

Question 1) It would seem that until an option is renewed, we are stuck with SCA wages from Sept. 2012. Correct? But the subcontractor must pay the employee the new rates. Who is stuck with the differential amount, the subcontractor or the Prime?

Question 2) When our Option is renewed in a month, we can ask that the new rates be incorporated. Correct?

Question 3) We have FAR 52.222-41 in our contract, but not FAR 52.222.43. So does all of the above still apply?

I'd value your replies.

What type of orders are issued under your contract, e.g., cost reimbursement, FFP, T&M? Why would your subcontractor be required to pay its employees now under the revised WD?

Retread:

If you send me your email address via Wifcon private message, I'll send you copies of the decisions.

Vern

Vern, I tried sending you my e-mail address but got a message that you cannot recieve any more messages.

I guess I have to clean up my Wifcon inbox. Give me a couple of hours, then try again.

Vern

Yikes! I had no idea how many were in that inbox. It should be okay now.

Vern