O contractors and subcontractors engaged in Federal construction to file weekly statements showing wages paid and deductions made. Administratively, the Secretary of Labor has determined that such weekly statements are not required for contracts under $2,000. The regulations further provide that the contractor and subcontractor must present evidence showing the deductions are proper and obtain Department of Labor approval for all deductions. The Anti-Kickback Law applies to Federal public work and public building and also to all work financed with Federal funds, loans or grants. It prohibits inducing an employee, by force, threats or any other means, to give up any part of the compensation to which he is entitled. Service Contract Act of 1965 The Act prescribes must specify the minimum wages and fringe benefits for the service employees as determined by the Secretary of Labor to be prevailing for such employees 92-577 - 77-6 to the labor standards legislation described above, contracting agencies must determine the compliance status of the apparent successful bidder prior to award and incorporate wage determinations in bid solicitations, allowing the Department of Labor at least 30 days to respond to the request for a wage determination. The contracting agencies also must review payroll records to assure contractor compliance with minimum wage requirements. Enforcement of the labor standards laws is primarily the responsibility of the contracting agency but it is often shared with either the Department of Labor, the Comptroller General, or both. Such arrangements lead to differences of opinion concerning assigned responsibilities and result in cumbersome reporting procedures. The threshholds currently in effect for applying the requirements of the above statutes are wholly inappropriate. The inflation which we have experienced in the years since those levels were established renders insignificant the exemptions provided by the same level today. A new higher dollar level should be established. Logically, that level should be set at $10,000, the cut-off point for small purchases. Before July 1974, when Public Law 93-536 established a ceiling of $10,000 for small purchases, the ceiling had been in the community. For each service employee, the contractor must keep certain records, for a period presentatives of the Wage and Hour Division, Department O Contract Work Hours and Safety Standards Act, construction contracts and $2,500 for service contracts The conditions or provisions which are incorporated in Government contracts to further the social and economic objectives of the foregoing statutes add many complicating factors to the procurement process. With respect to the Buy American Act, differences between the military and civilian agencies in evaluating foreign bids are a source of confusion to suppliers who sell to both military and civilian agencies. With respect set at $2,500. Since the application of social and economic The laws to Government contracts was generally required at a level of $2,500 or above, small purchases were largely exempted. same relationship between threshholds and small purchases should exist today. Socio-economic threshholds generally should be set at the same dollar level which has been established as the ceiling for small purchases, namely $10,000. To permit the threshholds to remain unchanged is inconsistent with past practice and imposes a paperwork burden of considerable magnitude upon the Government and industry at the very time when a concerted effort is being made to ease that burden. The administrative and paperwork load rests with particularly heavy weight upon small business concerns. They do not command the resources available to larger firms and often cannot afford to hire additional clerical help, let alone maintaining a staff of legal, fiscal and accounting experts to provide advice on statutory and contractual requirements. As indicated earlier, the Buy American Act contains no threshholds and applies to all contracts regardless of amount. The Commission on Government Procurement found that "foreign procurement constitutes a small proportion of total procurement and the bulk of foreign products purchased represents end items or materials not available in the United States." Foreign purchases under $10,000 are minimal, and establishing a threshhold at that level would have little or no effect on the number of foreign bids received. The absence of a thresh old under the Buy American Act and the inadequate thresholds currently in effect under the labor standards legislation discussed above, increase administrative costs, delay the time required for award, and entail the use of additional personnel for purposes of implementing the requirements. OFPP believes that thresholds for the Acts cited above, should be established at $10,000 and has held discussions toward that end with agency officials and with members of Congress and committee staffs. OFPP shortly plans to submit proposals to Congress for appropriate legislation and further plans to request the Secretary of Labor to consider raising the $2,000 threshold under the Copeland Act by administrative action. In the event the Department of Labor withholds taking action on this matter, it is planned to request Congressional consideration for this threshold as well. The Commission recommends that OMB sponsor amendments to the following statutes establishing or revising the level where they become applicable to Government contracts to $10,000: |