to service contracts; the implementing regulations prescribed in 29 CFR Parts 4 and 1516; and instructions issued by the Secretary of Labor. § 18-12.1001 Statutory requirements. The Service Contract Act of 1965, referred to in this subpart as the "Act", embraces two general requirements with respect to service contracts entered into by Federal agencies: (a) Regardless of the contract amount, no contractor or subcontractor holding a Federal service contract shall pay any of his employees engaged in such work less than the minimum wage specified in section 6(a) (1) of the Fair Labor Standards Act of 1938, as amended (29 U.S.C. 201 et seq.); and (b) Federal service contracts in excess of $2,500 shall contain the provisions required by the Act with respect to such matters as minimum wages, including fringe benefits, to be paid the various classes of service employees engaged in the performance of the contract, safe and sanitary working conditions, and notification to employees of the compensation required under the Act. § 18-12.1002 Applicability. § 18-12.1002-1 General. Subject to statutory exemptions or administrative exemptions by the Secretary of Labor under section 4(b) of the Act; (a) The requirement set forth in § 1812.1001(a) applies to any contract with the Federal Government, the principal purpose of which is to furnish services through the use of service employees (as defined in § 18-12.1002-3); and (b) The requirement set forth in § 1812.1001 (b) applies to every contract (and any bid specification therefor) entered into by the Federal Government in excess of $2,500 whether negotiated or advertised, the principal purpose of which is to furnish services through the use of service employees (as defined in § 1812.1002-3). § 18-12.1002-2 Geographical coverage of the Act. (a) Inside the United States, the Act is applicable to all service contracts irrespective of amount. (b) Outside the United States, the Act is applicable to service contracts under $2,500. However, the regulations of the Secretary of Labor (see 29 CFR 4.6(m) and 4.7) have exempted such contracts from the provisions of the Act. (c) When used in a geographical sense, the term "United States" is defined in the 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, Johnston Island, but shall not include any other territory under the jurisdiction of the United States or any U.S. base or possession within a foreign country. § 18-12.1002-3 Service employee. (a) Definition of service employees. As defined in the Act, the term "service employee" means guards, watchmen, and any person engaged in a recognized trade or craft, or other skilled mechanical craft, or in unskilled, semiskilled, or skilled manual labor occupations; and any other employee including a foreman or supervisor in a position having trade, craft, or laboring experience as the paramount requirement; and shall include all such persons regardless of any contractual relationship that may be alleged to exist between a contractor or subcontractor and such persons. (b) Types of covered service contracts illustrated. Types of contracts, the principal purpose of which is to furnish services through the use of service employees, are too numerous and varied to permit an exhaustive listing. The following list is illustrative, however, of the types of services called for by such contracts that have been found to come within the coverage of the Act. (1) Aerial spraying. (2) Aerial reconnaissance for fire detection. (3) Ambulance service. (4) Cafeteria and food service. (9) Electronic equipment maintenance and operation. (10) Flight training. (11) Forest firefighting. (14) Guard or watchman service. (15) Landscaping (other than part of construction). (16) Laundry and dry cleaning. (18) Lodging and meals. (20) Maintenance and repair of motor equipment. (21) Maintenance and repair of office equipment. (22) Miscellaneous housekeeping. (24) Motor pool operation. (25) Packing and crating. (26) Parking services. (27) Snow removal. (28) Stenographic reporting. (29) Support services at installations. (30) Taxicab services. (31) Tire and tube repairs. (32) Transporting property or personnel. (33) Trash and garbage removal. § 18-12.1002-50 Statutory exemptions. Each of the following transactions is exempted from the Service Contract Act of 1965 by the terms thereof: (a) Contracts for construction or repair. Any contract of the United States for construction, alteration, and/or repair, including painting and decorating of public buildings or public works; (b) Work under the Walsh-Healey Public Contracts Act. Any work required to be done in accordance with the provisions of the Walsh-Healey Public Contracts Act (49 Stat. 2036); (c) Contracts for the carriage of freight or personnel. 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; (d) Contracts for communication services. Any contract for the furnishing of services by radio, telephone, telegraph, or cable companies, subject to the Communications Act of 1934; (e) Contracts for public utility services. Any contract for public utility services, including electric light and power, water, steam, and gas; (f) Employment contracts. Any employment contract providing for direct services to a Federal agency by an individual or individuals; and (g) Operation of postal contract stations. Any contract with the Post Office Department, the principal purpose of which is the operation of postal contract stations. Pursuant to the Service Contract Act of 1965, the Department of Labor has issued Parts 4 and 1516, and Part 6, Title 29, Code of Federal Regulations, providing for the administration and enforcement of the Act. The regulations include coverage of the following matters relating to the requirements of the Act: (a) Service contract labor standards provisions and procedures (Subpart A, Part 4 (29 CFR)); (b) Equivalents of determined fringe benefits (Subpart B, Part 4 (29 CFR)); (c) Application of the Service Contract Act of 1965 (rulings and interpretations) (Subpart C, Part 4 (29 CFR)); (d) Safe and sanitary working conditions (Part 1515 of Title 29, CFR); and (e) Rules of practice for administrative proceedings enforcing service contract labor standards (Part 6 of Title 29, CFR). (a) Clause for Federal service contracts in excess of $2,500. Procurement offices (except as provided in § 18-12.1002-50 and § 18-12.1002-51) shall include the following clause in all invitations for bids and requests for proposals which may result in contracts in excess of $2,500 and in contracts in excess of $2,500 (including any transaction for an indefinite amount unless the procurement office has knowledge that it will not exceed $2,500) where the principal purpose of the contract is to furnish services in the United States through the use of service employees: SERVICE CONTRACT ACT OF 1965 (JULY 1970) This contract, to the extent that it is of the character to which the Service Contract Act of 1965 (Public Law 89-286, 41 U.S.C. 351-357) applies, is subject to the following provisions and to all other applicable provisions of the Act and the regulations of the Secretary of Labor thereunder (29 CFR Parts 4 and 1516). (a) Compensation. 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 wage and shall be furnished fringe benefits in accordance with the wages and fringe benefits determined by the Secretary of Labor or his authorized representative, as specified in any attachment to this contract. If there is such an attachment, any class of service employees which is not listed therein, but which is to be employed under this contract, shall be classified by the Contractor so as to provide a reasonable relationship between such classifications and those listed in the attachment, and shall be paid such monetary wages and furnished such fringe benefits as are determined by agreement of the interested parties, who shall be deemed to be the contracting agency, the Contractor, and the employees who will perform on the contract or their representatives. If the interested parties do not agree on a classification or reclassification which is, in fact, conformable, the Contracting Officer shall submit the question, together with his recommendation, to the Administrator of the Wage and Hour and Public Contracts Divisions, Department of Labor, or his authorized representative for final determination. Failure to pay such employees the compensation agreed upon by the interested parties or finally determined by the Administrator or his authorized representative shall be violation of this contract. No employee engaged in performing work on this contract shall in any event be paid less than the minimum wage specified under section 6(a)(1) of the Fair Labor Standards Act of 1938, as amended ($1.60 per hour). (b) Obligation to furnish fringe benefits. The Contractor or subcontractor may discharge the obligation to furnish fringe benefits specified in the attachment or determined conformable thereto by furnishing any equivalent combinations of fringe benefits, or by making equivalent or differential payments in cash, pursuant to applicable rules of the Administrator of the Wage and Hour and Public Contracts Division, Department of Labor (Subpart B of Part 4 (29 CFR)). (c) Minimum wage. In the absence of a minimum wage attachment for this contract, neither the Contractor nor any subcontractor under this contract shall pay any of his employees performing work under the contract (regardless of whether they are service employees) less than the minimum wage specified by section 6(a) (1) of the Fair Labor Standards Act of 1938 ($1.60 per hour). However, in cases where section 6(e) (2) of the Fair Labor Standards Act of 1938 is applicable, the rates specified therein will apply. Nothing in this provision shall relieve the Contractor or any subcontractor of any other obligation under law or contract for the payment of a higher wage to any employee. (d) Notification to employees. The Contractor and any subcontractor under this contract shall notify each service employee commencing work on this contract of the minimum monetary wage and any fringe benefits required to be paid pursuant to this contract, or shall post a notice of such wages and benefits in a prominent and accessible place at the worksite, using such poster as may be provided by the Department of Labor. (e) Safe and sanitary working conditions. The Contractor or subcontractor shall not permit any part of the services called for by this contract to be performed in buildings or surroundings or under working conditions provided by or under the control or supervision of the Contractor or subcontractor which are unsanitary or hazardous or dangerous to the health or safety of service employees engaged to furnish these services. Except insofar as a noncompliance can be justified as provided in section 1516.1 (c) of Title 29 CFR, this will require compliance with the applicable standards, specifications, and codes developed and published by the U.S. Department of Labor, any other agency of the United States, and any nationally recognized professional organization such as, without limitation, the following: National Bureau of Standards, U.S. Department of Commerce. Public Health Service, U.S. Department of Health, Education, and Welfare. Bureau of Mines, U.S. Department of the Interior. American National Standards Institute, Inc. (United States of America Standards Institute). National Fire Protection Association. American Society of Mechanical Engineers. American Society for Testing and Materials. American Conference of Governmental Industrial Hygienists. Information as to the latest standards, specifications, and codes applicable to the contract is available at the office of the Director of the Bureau of Labor Standards, U.S. Department of Labor, Railway Labor Building. 400 First Street NW., Washington, DC 20212, or at any of the regional offices of the Bureau of Labor Standards as follows: (1) North Atlantic Region, 341 Ninth Avenue, Room 920, New York, NY 10001 (Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island, Vermont, New Jersey, and Puerto Rico). (2) Middle Atlantic Region, Room 410, Penn Square Building, Juniper and Filbert Streets, Philadelphia, PA 19107 (Delaware, District of Columbia, Maryland, North Carolina, Pennsylvania, Virginia, and West Virginia). (3) South Atlantic Region, 1371 Peachtree Street NE., Suite 723, Atlanta, GA 30309 (Alabama, Florida, Georgia, Mississippi, South Carolina, and Tennessee). (4) Great Lakes Region, 848 Federal Office Building, 219 South Dearborn Street, Chicago, IL 60604 (Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio, and Wisconsin). (5) Mid-Western Region, 1906 Federal Office Building, 911 Walnut Street, Kansas City, MO 64106 (Colorado, Idaho, Iowa, Kansas, Missouri, Montana, Nebraska, North Dakota, South Dakota, Utah, and Wyoming). (6) Western Gulf Region, 411 North Akard Street, Room 601, Dallas, TX 75201 (Arkansas, Louisiana, New Mexico, Oklahoma, and Texas). (7) Pacific Region, 10353 Federal Building, 450 Golden Gate Avenue, Box 36017, San Francisco, CA 94102 (Alaska, Arizona, Callfornia, Hawaii, Nevada, Oregon, Washington, and Guam). (f) Records. The Contractor and each subcontractor performing work subject to the Act shall make and maintain for 3 years from the completion of the work, the records containing the information specified below for each employee subject to the Act and shall make them available for inspection and transcription by authorized representatives of the Administrator of the Wage and Hour and Public Contracts Divisions, U.S. Department of Labor. (1) His name and address. (2) His work classification or classifications, rate or rates of monetary wages and fringe benefits provided, rate or rates of fringe benefit payments in lieu thereof, and total daily and weekly compensation. (3) His daily and weekly hours so worked. (4) Any deductions, rebates, or refunds from his total daily or weekly compensation. (5) A list of monetary wages and fringe benefits for those classes of service employees not included in the minimum wage attachment to this contract, but for which such wage rates or fringe benefits have been determined by the interested parties or by the Administrator of the Wage and Hour and Public Contracts Divisions, Department of Labor, or his authorized representative pursuant to the labor standards in paragraph (a) of this clause. A copy of the report required by paragraph (1) of this clause shall be deemed to be such a list. (g) Withholding of payments and termination of contract. The Contracting Officer shall withhold or cause to be withheld from the Government Prime Contractor under this or any other Government contract with the Prime Contractor such sums as he, or an appropriate officer of the Labor Department, decides may be necessary to pay underpaid employees. Additionally, any failure to comply with the requirements of this clause relating to the Service Contract Act of 1965 may be grounds for termination of the right to proceed with the contract work. In such event, the Government may enter into other contracts or arrangements for completion of the work, charging the Contractor in default with any additional cost. (h) Subcontractors. The Contractor agrees to insert the paragraphs of this clause relating to the Service Contract Act of 1965 in all subcontracts. The term "Contractor" as used in these paragraphs in any subcontracts, shall be deemed to refer to the subcontractor, except in the term "Government Prime Contractor." (1) Service employee. As used in this clause relating to the Service Contract Act of 1965, the term "service employee" means guards, watchmen, and any person engaged in a recognized trade or craft, or other skilled mechanical craft, or in unskilled, semiskilled, or skilled manual labor occupations; and any other employee including a foreman or supervisor in a position having trade, craft, or laboring experience as the paramount requirement; and shall include all such persons regardless of any contractual relationship that may be alleged to exist between a Contractor or subcontractor and such persons. (1) Contractor's report. If there is a wage determination attachment to this contract and one or more classes of service employees which are not listed thereon are to be employed under the contract, the Contractor shall report to the Contracting Officer the monetary wages to be paid and the fringe benefits to be provided each such class of service employee. Such report shall be made promptly as soon as such compensation has been determined as provided in paragraph (a) of this clause. (k) Regulations incorporated by reference. All interpretations of the Service Contract Act of 1965 expressed in Subpart C of Part 4 (29 CFR) are hereby incorporated by reference in this contract. (1) Exemptions. This clause 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 WalshHealey Public Contracts Act (49 Stat. 2036; 41 U.S.C. 35-45); (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, 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, Kwejalein Atoll, Johnston Island. It does not include any other territory under the jurisdiction of the United States or any U.S. 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 hereby finds necessary and proper in the public interest or to avoid serious impairment of the conduct of Government business: 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. (m) Special employees. Nothwithstanding any of the provisions in paragraphs (a) through (k) of this clause, the following employees may be employed in accordance with the following variations, tolerances, and exemptions, which the Secretary of Labor hereby finds pursuant to section 4(b) of the Act to be necessary and proper in the public interest or to avoid serious impairment of the conduct of Government business: (1) (1) 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 195, without diminishing any fringe benefits or cash payments in lieu thereof required 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 the regulations issued by the Administrator of the Wage and Hour and Public Contracts Division of the Department of Labor (Parts 520, 521, 524, and 525 of 29 CFR). (ii) The Administrator will issue certificates under the Service Contract Act of 1965 for the employment of apprentices, studentlearners, 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 (Parts 520, 521, 524, and 525 of 29 CFR). (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 Part 531 of 29 CFR: Provided, however, That the amount of such credit may not exceed 80 cents per hour. (b) Clause for Federal service contracts not in excess of $2,500. Procurement offices (except as provided in §§ 1812.1002-2, 18-12.1002-50 and 18-12.100251) 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 CONTRACT ACT OF 1965 (JULY 1970) 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 ($1.60 per hour). However, in cases where section 6(e) (2) of the Fair Labor Standards Act of 1938 is applicable, the rates specified therein will apply. All regulations and interpretations of the Service Contract Act of 1965 expressed in 29 CFR Part 4 are hereby incorporated by reference in this contract. (c) Basic ordering agreements and blanket purchase agreements. In the case of the basic ordering agreement or bianket purchase agreement, the amount thereof for purposes of paragraphs (a) and (b) of this section, shall be the aggregate amount of all orders estimated to be placed thereunder for 1 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 paragraph (a) |