LABOR

provided for in a collective bargaining agreement which is or will be effective during any period in which the contract is being performed, the Government prime Contractor shall report such fact to the Contracting Officer, together with full information as to the application and accrual of such wages and fringe benefits, including any prospective increases, to service employees engaged in work on the contract, and a copy of the collective bargaining agreement. Such report shall be made upon commencing performance of the contract, in the case of collective bargaining agreements effective at such time, and in the case of such agreements or provisions or amendments thereof effective at a later time during the period of contract performance, such agreements shall be reported promptly after negotiation thereof.

(n) Exemptions. This clause relating to the Service Contract Act of 1965 shall not apply to the following:

(1) Any contract of the United States or District of Columbia for construction, alteration, and/or repair, including painting and decorating of public buildings or public works;

(2) Any work required to be done in accordance with the provisions of the Walsh-Healey Public Contracts Act (49 Stat. 2036);

(3) Any contract for the carriage of freight or personnel by vessel, airplane, bus, truck, express, railway line, or oil or gas pipeline where published tariff rates are in effect, or where such carriage is subject to rates covered by section 22 of the Interstate Commerce Act;

(4) Any contract for the furnishing of services by radio, telephone, telegraph, or cable companies, subject to the Communications Act of 1934;

(5) Any contract for public utility services, including electric light and power, water, steam, and gas;

(6) Any employment contract providing for direct services to a Federal agency by an individual or individuals;

(7) Any contract with the Post Office Department (U.S. Postal Service), the principal purpose of which is the operation of postal contract stations;

(8) Any services to be furnished outside the United States. For geographic purposes, the "United States" is defined in section 8(d) of the Service Contract Act to include any State of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, Outer Continental Shelf Lands, as defined in the Outer Continental Shelf Lands Act, American Samoa, Guam, Wake Island, Eniwetok Atoll, Kwajalein Atoll, and Johnston Island. It does not include any other territory under the jurisdiction of the United States or any United States base or possession within a foreign country;

(9) Any of the following contracts exempted from all provisions of the Service Contract Act of 1965, pursuant to section 4(b) of the Act, which exemptions the Secretary of Labor, prior to amendment of such section by Public Law 92-473, found to be necessary and proper in the public interest or to avoid serious impairment of the conduct of Government business: (i) Contracts entered into by the United States with common carriers for the carriage of mail by rail, air (except air star routes), bus, and ocean vessel, where such carriage is performed on regularly scheduled runs of the trains, airplanes, buses, and vessels over regularly established routes and accounts for an insubstantial portion of the revenue therefrom;

(ii) Any contract entered into by the U.S. Postal Service with an individual owner-operator for mail service where it is not contemplated at the time the contract is made that such owner-operator will hire any service employee to perform the services under the contract except for short periods of vacation time or for unexpected contingencies or emergency situations such as illness or accident.

(0) Special Employees. Notwithstanding any of the provisions in paragraph (b) through (1) of this clause, relating to the Service Contract Act of 1965, the following employees may be employed in accordance with the following variations, tolerances, and exemptions, which the Secretary of Labor, pursuant to section 4(b) of the Act prior to its amendment by Public Law 92-473, found to be necessary and proper in the public interest or to avoid serious impairment of the conduct of Government business:

(1)(i) Apprentices, student-learners, and workers whose earning capacity is impaired by age, physical or mental deficiency or injury may be employed at wages lower than the minimum wages otherwise required by section 2(a)(1) or 2(b)(1) of the Service Contract Act of 1965, without diminishing any fringe benefits or cash payments in lieu thereof required

12.1004

CFR TITLE 41 CHAPTER 18

SERVICE CONTRACT ACT OF 1965

under section 2(a)(2) of that Act, in accordance with the procedures prescribed for the employment of apprentices, student-learners, handicapped persons, and handicapped clients of sheltered workshops under section 14 of the Fair Labor Standards Act of 1938, in regulations issued by the Administrator. (29 CFR Parts 520, 521, 524, and 525).

(ii) The Administrator will issue certificates under the Service Contract Act of 1965 for the employment of apprentices, student-learners, handicapped persons, or handicapped clients of sheltered workshops not subject to the Fair Labor Standards Act of 1938, or subject to different minimum rates of pay under the two acts, authorizing appropriate rates of minimum wages (but without changing requirements concerning fringe benefits or supplementary cash payments in lieu thereof), applying procedures prescribed by the applicable regulations issued under the Fair Labor Standards Act of 1938 (29 CFR Parts 520, 521, 524, and 525);

(iii) The Administrator will also withdraw, annul, or cancel such certificates in accordance with the regulations in Parts 525 and 528 of Title 29 of the Code of Federal Regulations.

(2) An employee engaged in an occupation in which he customarily and regularly receives more than $20 a month in tips may have the amount of his tips credited by his employer against the minimum wage required by section 2(a)(1) or section 2(b)(1) of the Act, in accordance with the regulations in 29 CFR Part 531:: Provided, however, that the amount of such credit may not exceed 80 cents per hour.

(Note: The classes of service employees expected to be employed under the contract that would be subject, if employed by the contracting agency, to the provisions of 5 U.S.C. 5341, and the corresponding monetary wages and fringe benefits, will be set forth in an attachment to the contract, as required under paragraph (1) of the clause. The Attachment will specifically state that such wages and fringe benefits are required to be included by Service Contract Act Amendments of 1972 (Public Law 92473) but that they do not represent a minimum wage determination for the contract.)

(b) Clause for Federal Service Contracts Not in Excess of $2,500. Procurement offices (except as provided in 12.1002-2, 12.1002-50 and 12.1002-51) shall include the following clause in every contract not in excess of $2,500, which has as its principle purpose the furnishing of services through the use of service employees:

SERVICE CONTRACTS ACT OF 1965, AS AMENDED (JANUARY 1973) Except to the extent that an exemption, variation, or tolerance would apply pursuant to 29 CFR 4.6 if this were a contract in excess of $2,500, the Contractor and any subcontractor hereunder shall pay all of his employees engaged in performing work on the contract not less than the minimum wage specified under section 6(a)(1) of the Fair Labor Standards Act of 1938, as amended. All regulations and interpretations of the Service Contract Act of 1965 expressed by 29 CFR Part 4 are hereby incorporated by reference in this contract.

(c) Basic Odering Agreements and Blanket Purchase Agreements. In the case of the basic odering agreement or blanket purchase agreement, the amount thereof for purposes of (a) and (b) above, shall be the aggregate amount of all orders estimated to be placed thereunder for one year after the effective date of the agreement. If a basic ordering agreement continues or is extended, such estimate shall be made annually for each year after the first and the agreement modified accordingly.

(d) Linen Supply Service Clauses.

(1) In contracts for linen supply services containing the clause in (a) above, (i.e., contracts in excess of $2,500) insert the following clause:

NASA PROCUREMENT REGULATION

12.1004

LABOR

LINEN SUPPLY SERVICE CONTRACTS (JULY 1970)

In the absence of a wage determination issue under the Service Contract Act specifying a higher rate, the special minimum wage provisions of section 6(e)(2) of the Fair Labor Standards Act for linen supply service contracts entered into with the United States Government on or after February 1, 1967, shall apply to all employees (except those qualifying for the minimum wage and overtime exemption under section 13(a)(1) of the Fair Labor Standards Act in an establishment providing such linen supply services. Such employees must be paid not less than $1.15 per hour as of February 1, 1968, with annual increments of 15 cents per hour, as of February 1 each year, increasing to a minimum rate of $1.60 per hour as of February 1, 1971. However, If more than 50 per centum of the gross annual dollar valume of sales made or business done by an establishment is derived from providing linen supply services under contracts or subcontracts with the United States, all employees in the establishment (other than employees qualifying for the minimum wage and overtime exemption under section 13(a)(1) of the Fair Labor Standards Act) must be paid at least $1.60 per hour as of February 1, 1968.

(2) In contracts for linen supply services containing the clause in (b) above (i.e., contracts for $2,500 or less), insert the following clause:

LINEN SUPPLY SERVICE CONTRACTS (JULY 1970)

The special minimum wage provisions of section 6(e)(2) of the Fair Labor Standards Act for linen supply service contracts entered into with the United States Government on or after February 1, 1967, shall apply to all employees (except those qualifying for the minimum wage and overtime exemption under section 13(a)(1) of the Fair Labor Standards Act) in an establishment providing such linen supply services. Such employees must be paid not less than $1.15 per hour as of February 1, 1968, with annual increments of 15 cents per hour, as of February 1 each year, increasing to a minimum rate of $1.60 per hour as of February 1, 1971. However, if more than 50 per centum of the gross annual dollar volume of sales made or business done by an establishment is derived from providing linen supply services under contracts or subcontracts with the United States, all employees in the establishment (other than employees qualifying for the minimum wage and overtime exemption under section 13(a)(2) of the Fair Labor Standards Act) must be paid at least $1.60 per hour as of February 1, 1968.

(e) Price Adjustment Clause. See 12.1050-2(b) for the "Fair Labor Standards Act and Service Contract Act Price Adjustment" clause and instructions for its use.

12.1005 Administration and Enforcement. 12.1005-1 Responsibilities of Department of Labor. The Secretary of Labor is authorized and directed to administer and enforce the provisions of the Act, to make rules and regulations, issue orders, make decisions, and take other appropriate action under the Act.

12.1005-2 Notice of Intention To Make a Service Contract.

(a) Prior to the issuance of any invitation for bids or request for proposals, or the commencement of negotiations for any contract exceeding $2,500 which may be subject to the Act (or for any contract for an indefinite amount, unless the contracting officer has definite knowledge that it will not exceed $2,500 in any event), the contracting officer shall file Standard Form 98, "Notice of Intention To Make a Service Contract and Response to Notice," together with all available payroll data, with the Administrator, Wage and Hour and Public Contracts Division, Department of Labor, through the Office of Industrial Relations, NASA

12.1005

CFR TITLE 41 CHAPTER 18

SERVICE CONTRACT ACT OF 1965

Headquarters (Code QL). Such notice shall be filed in time to reach the Office of Industrial Relations (Code QL) not less than 33 days prior to the issuance of any invitation for bids, request for proposals, or the commencement of negotiations. The back of Standard Form 98 contains instructions for its completion. Whenever the detailed information requested is not readily available, such pertinent general information as is available should be provided. For example, if meaningful estimates of the number of service employees in various classes to be used in the contract cannot be made, estimates of the total number of employees or of the number falling within the categories enumerated in 12.1002-3(a) should be supplied, if practical. The original and four copies of the completed form together with any attachments shall be forwarded as indicated above. The "Response" portion of the original of the form will be completed by the Wage and Hour and Public Contracts Division and returned directly to the procurement office, advising that office of any determination of minimum monetary wage and fringe benefits applicable to the contract. Supplies of Standard Form 98 are available in all GSA supply depots under stock number 7540-926-8972.

(b) If exceptional circumstances prevent the filing of the notice of intention by the time required in paragraph (a) above, the notice shall be submitted to the Administrator, Wage and Hour and Public Contracts Division, Department of Labor through the Office of Industrial Relations, NASA Headquarters (Code QL), as soon as practicable with a detailed explanation of the special circumstances which prevented timely submission.

12.1005-3 Contract Minimum Wage Determinations and Fringe Benefit Specification. (a) Prior to Award. The invitation for bids or request for proposals actually issued, as well as any contract entered into, in excess of $2,500, shall contain an attachment setting forth the minimum wages and fringe benefits specified in any applicable currently effective determiniation, including any expressed in any document referred to in (i) and (ii) below:

(i) any written communication from the Administrator, Wage and Hour and Public Contracts Division, Department of Labor, responsive to the notice required by 12.1005-2(a); however, such communications received by the Federal agency later than 10 days before the opening of bids or the date established for the initial receipt of proposals shall not be effective except where the agency finds that there is reasonable time to notify bidders or offerors thereof;

(ii) any revision of the wage determination prior to the award of the contract or contracts; however, revisions received by the Federal agency later than 10 days before the opening of bids or the date established for the initial receipt of proposals shall not be effective except where the agency finds that there is a reasonable time to notify bidders or offerors of the revision.

(See 12.1005-51 regarding the absence of wage and fringe benefit determinations.)

(b) Subsequent to Award. If a required wage determination is not included in the solicitation or contract (either because the notice required by 12.1005-2 is not filed or is not filed in the time provided by 12.10052(a), and if the contracting officer receives a wage determination from the Department of Labor within 30 days of the late filing of the notice or

NASA PROCUREMENT REGULATION

12.1005-3

LABOR

the discovery by the Department of Labor of the failure to include a wage determination required by this part

The contracting officer shall attempt to negotiate a bilateral modification to:

(A) incorporate the Service Contract Act Clause in 12.1004(a), if not previously included;

(B) incorporate the wage determination which shall be effective as of the date of issuance unless otherwise specified; and

(C) equitably adjust the contract price to compensate for any increased cost of performance under the contract caused by the wage determination.

(ii) If the contracting officer is unable to negotiate a contract modification incorporating the wage determination, he shall document the contract file to show the efforts made.

(iii) In the event the contracting officer questions the applicability of the Service Contract Act to the contract, he shall forward the matter for resolution to the Office of Industrial Relations, NASA Headquarters (Code QL). If that office determines that the Service Contract Act is not applicable to the contract, it shall advise the Department of Labor of the basis for the determination of inapplicability. No further action need be taken on the wage determination by the contracting officer in the absence of a determination by the Secretary of Labor that the contract is subject to the Act.

12.1005-4 Additional Classifications (Conformable Rates). Where any classes of service employees which are to be engaged in the performance of the contract are not listed in the wage and fringe benefit determination attached to the contract (see paragraph (a) of the clause in 12.1004(a)), such employees shall be classified by the contractor so as to bear a reasonable relationship to the classification listed in the determination. The wages paid and the fringe benefits provided to employees so classified shall be determined by agreement between the interested parties. Such parties shall be deemed to be the contracting agency, the contractor, and the employees (or their representatives) who will perform under the contract. If the interested parties do not agree on a classification or reclassification which is, in fact, conformable with the wage and fringe benefit determination, the contracting officer shall submit the question, together with his recommendation, to the Administrator, Wage and Hour and Public Contracts Division, Department of Labor, or his authorized representative, through the Office of Industrial Relations, NASA Headquarters (Code QL), for final determination.

12.1005-5 Notice of Award. Standard Form 99, "Notice of Award of Contracts," shall be used to report the award of any contract in excess of $2,500 subject to the Act to the Department of Labor. The completed original and one copy with the interleaved carbon shall be forwarded to the Administrator, Wage and Hour and Public Contracts Division, Department of Labor, Washington, D.C. 20210. The form shall be completed as follows:

(i) Items 1 through 7 and 12 and 13: Self-explanatory;

(ii) Item 8: Enter the notation "Service Contract Act of 1965";

(iii) Item 9: Leave blank;

(iv) Item 10: (1) Enter the notation "Major Category," and indicate beside this entry the general service area into which the contract falls

12.1005-4

CFR TITLE 41 CHAPTER 18