[Federal Register: November 7, 2007 (Volume 72, Number 215)]
[Rules and Regulations]
[Page 63076-63083]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07no07-16]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 4, 15, 17, 22, and 52
[FAC 2005-21; FAR Case 2001-004; Item V; Docket 2007-0001, Sequence 6]
RIN 9000-AK82
Federal Acquisition Regulation; FAR Case 2001-004, Exemption of
Certain Service Contracts from the Service Contract Act (SCA)
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Interim rule with request for comments.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) have agreed on an interim
rule amending the Federal Acquisition Regulation (FAR) to revise the
current SCA exemption and to add a SCA exemption for contracts for
certain additional services that meet specific criteria.
DATES: Effective Date: November 7, 2007.
Comment Date: Interested parties should submit written comments to
the FAR Secretariat on or before January 7, 2008 to be considered in
the formulation of a final rule.
ADDRESSES: Submit comments identified by FAC 2005-21, FAR case 2001-
004, by any of the following methods:
Federal eRulemaking Portal: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov. To
search for any document, first select under ``Step 1,'' ``Documents
with an Open Comment Period'' and select under ``Optional Step 2,''
``Federal Acquisition Regulation'' as the agency of choice. Under
``Optional Step 3,'' select ``Rules''. Under ``Optional Step 4,'' from
the drop down list, select ``Document Title'' and type the FAR case
number ``2001-004''. Click the ``Submit'' button. Please include your
name and company name (if any) inside the document.
You may also search for any document by clicking on the ``Search
for Documents'' tab at the top of the screen. Select from the agency
field ``Federal Acquisition Regulation'', and type ``2001-004'' in the
``Document Title'' field. Select the ``Submit'' button.
Fax: 202-501-4067.
Mail: General Services Administration, Regulatory
Secretariat (VIR), 1800 F Street, NW, Room 4035, ATTN: Laurieann
Duarte, Washington, DC 20405.
Instructions: Please submit comments only and cite FAC 2005-21, FAR
case 2001-004, in all correspondence related to this case. All comments
received will be posted without change to http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov.
Please include your name and company name (if any) inside the document.
FOR FURTHER INFORMATION CONTACT: Mr. Ernest Woodson, Procurement
Analyst, at (202) 501-3775 for clarification of content. Please cite
FAC 2005-21, FAR case 2001-004. For information pertaining to status or
publication
[[Page 63077]]
schedules, contact the FAR Secretariat at (202) 501-4755.
SUPPLEMENTARY INFORMATION:
A. Background
On January 18, 2001, the Wage and Hour Division of the U.S.
Department of Labor's Employment Standards Administration, issued a
final rule amending the regulations at 29 CFR part 4 to exempt certain
contracts for services meeting specific criteria from coverage under
the SCA (66 FR 5327). The Councils opened FAR case 2001-004 to
implement the Department of Labor (DoL) rule.
The FAR currently exempts contracts (or subcontracts) principally
for the maintenance, calibration, or repair of certain equipment if--
The items of equipment are items which are used regularly
for other than Government purposes and are sold or traded by the
contractor in substantial quantities to the general public in the
course of normal business operations.
The contract services are furnished at prices which are,
or are based on, established catalog or market prices (see 29 CFR
4.123(e)(1)(ii)(B)).
The contractor utilizes the same compensation (wage and
fringe benefits) plan for all service employees performing work under
the contract as the contractor uses for equivalent employees servicing
the same equipment of commercial customers.
The contractor certifies in the contract that it meets
these criteria.
This interim FAR rule incorporates slight revisions to this current
exemption for consistency with the current DoL regulations and
clarification of appropriate course of action for the contracting
officer.
The interim FAR rule does not refer to these services as commercial
services, because the specified criteria are not exactly the same as
the FAR definition of ``commercial item.'' Rather than redefining
``commercial item,'' this rule imposes the DoL criteria and does not
utilize the term ``commercial services.''
In addition to this first category of service contracts, in order
to implement the new DoL regulations, the FAR interim rule establishes
a new category of exemption for contracts for certain services that
includes the following:
Automobile or other vehicle (e.g., aircraft) maintenance
services (other than contracts or subcontracts to operate a Government
motor pool or similar facility).
Financial services involving the issuance and servicing of
cards (including credit cards, debit cards, purchase cards, smart
cards, and similar card services).
Hotel/motel services for conferences, including lodging
and/or meals, that are part of the contract or subcontract for the
conference (which must not include ongoing contracts for lodging on an
as needed or continuing basis).
Maintenance, calibration, repair, and/or installation
(where the installation is not subject to the Davis-Bacon Act, as
provided in 29 CFR 4.116(c)(2)) services for all types of equipment
where the services are obtained from the manufacturer or supplier of
the equipment under a contract awarded on a sole source basis.
Transportation by common carrier of persons by air, motor
vehicle, rail, or marine vessel on regularly scheduled routes or via
standard commercial services (not including charter services).
Real estate services, including real property appraisal
services, related to housing Federal agencies or disposing of real
property owned by the Government.
Relocation services, including services of real estate
brokers and appraisers to assist Federal employees or military
personnel in buying and selling homes (which shall not include actual
moving or storage of household goods and related services).
In order for these contracts for services to be exempt, the
contract must meet all the criteria for the other services in the first
category (substituting ``services'' for ``item of equipment'' in the
first criterion, and removing other specific references to
``equipment'' and ``manufacturer''), but the contract must also meet
the following criteria:
The services under the contract (or subcontract) will be
awarded on a sole-source basis or the contractor will be selected for
award based on other factors in addition to price or cost, with the
combination of other factors at least as important as price or cost in
selecting the contractor.
Each service employee who will perform the services under
the contract (or subcontract) will spend only a small portion of his or
her time (a monthly average of less than 20 percent of the available
hours on an annualized basis, or less than 20 percent of available
hours during the contract period if the contract period is less than a
month) servicing the Government contract (or subcontract).
The contracting officer (or contractor with respect to a
subcontract) determines in advance, based on the nature of the contract
(or subcontract) requirements and knowledge of the practices of likely
offerors, that all or nearly all offerors will meet the conditions. If
the services are currently being performed under contract (or
subcontract), the contracting officer (or contractor with respect to a
subcontract) shall consider the practices of the existing contractor
(or subcontractor) in making a determination regarding the conditions.
The apparent successful offeror certifies, the contracting
officer has no reason to doubt the certification, and the contracting
officer determines that the same certification is obtained from
substantially all other offerors that are--
In the competitive range, if discussions are to be
conducted (see FAR 15.306)(c)); or
Considered responsive, if award is to be made without
discussions (see FAR 15.306(a)).
Council representatives discussed with DoL the implementation of
the DoL rule for these contracts for services at the point of receipt
of offers. The FAR rule attempts to minimize the occurrence of the
situation in which it will be necessary to revise the solicitation
after receipt of offers to remove the exemption provision and require
use of the SCA clauses, even though the apparent successful offeror
certified to criteria for the exemption. The FAR rule uses the term
``substantially all'' to indicate that there could be a slightly
different interpretation of the phrase ``all or nearly all'' than at
the beginning of the process. DoL concurs that the contracting officer
will have the discretion to interpret this term, as long as the
intention reflected in the preamble to the SCA regulations (66 FR 5327)
controls the contracting officer's exercise of discretion. DoL also
concurs that it is not necessary to consider offerors that did not
certify if these offerors were not in the competitive range or not
responsive. Therefore, the FAR rule adds this condition when
considering whether substantially all offerors have certified.
The exemption for the second category of contracts for services
does not apply to solicitations and contracts (subcontracts)--
Awarded under the Javits-Wagner-O'Day Act, 41 U.S.C. 47.
For the operation of a Government facility, or part of a
Government facility (but may be applicable to subcontracts for services
that meet all of the criteria); or
Subject to Section 4(c) of the Service Contract Act (see
22.1002-3).
Whether the contracts for services fall in the first or second
category, the Department of Labor retains the right to review those
contracts that claim exemption from the SCA. If the Department of Labor
determines after award of the contract (or subcontract)
[[Page 63078]]
that any condition for exemption has not been met, the exemption shall
be deemed inapplicable, and the contract (or subcontract) becomes
subject to the Service Contract Act. In such case, the procedures at 29
CFR 4.123(e)(2)(iii) and 29 CFR 4.5(c) will be followed.
In accordance with Section 29 of the Office of Federal Procurement
Policy Act, the Federal Acquisition Regulatory Council (FAR Council)
has obtained the approval of the Administrator of the Office of Federal
Procurement Policy for the inclusion of two nonstatutory certifications
in this interim FAR rule, as required by the Department of Labor
Regulations at 29 CFR 4.123(e)(1)(ii)(D) and (e)(2)(ii)(G).
This is not a significant regulatory action and, therefore, was not
subject to review under Section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
B. Regulatory Flexibility Act
The changes may have a significant economic impact on a substantial
number of small entities within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq., because this rule exempts
certain service contracts from the Service Contract Act for both
contractors and subcontractors. An Initial Regulatory Flexibility
Analysis (IRFA) has been prepared. The analysis is summarized as
follows:
This interim rule implements 29 CFR 4.123(e) of the Department
of Labor (DoL) regulation regarding Administrative limitations,
variance, tolerances, and exemptions. Paragraph (e) provides
exemption for contracts for certain services that meet specific
criteria.
The objective of the DoL final rule was to further the
commitment of the Administration to be more commercial-like,
encourage broader participation in Government procurement by
companies doing business in the commercial sector, and reinforce our
commitment to reduce Government-unique terms and conditions, without
compromising the purpose of the SCA to protect prevailing labor
standards.
The interim FAR rule should have a positive economic impact on
the small contractors and subcontractors that meet the exemption
criteria to be exempt from the SCA for certain services, because it
may provide additional opportunities for work on Federal projects;
enable these contractors to compete in a more commercial-like
environment, and alleviate the burden of complying with Government-
unique terms and conditions for these types of contracts.
Pursuant to Section (4)(b) of the SCA, the Secretary of Labor
may grant reasonable exemptions to the provisions of the SCA, but
only in special circumstances where the exemption is necessary and
proper in the public interest, and is in accord with the remedial
purposes of the Act to protect prevailing labor standards.
This interim FAR rule will apply to all large and small entities
that seek award of Federal service contracts in the service
categories identified. The Councils relied on the DoL regulatory
flexibility analysis (66 FR 5339), which determined that a majority
of contracts affected by the proposed exemption would likely be
performed by small businesses. Federal Procurement Data System
(FPDS) does not provide an accurate estimate of the contracts
potentially covered by the exemption, but DoL estimates that the
total value of the exempt contracts could be relatively small, and
that the SCA would no longer apply to only a relatively small number
of contracts that currently contain SCA wage determination
provisions.
The interim rule does not duplicate, overlap, or conflict with
any other Federal rules.
There are no practical alternatives that will accomplish the
objectives of this interim rule. However, the exemption is expected
to have a positive impact on small entities, because it does not
contain any new reporting or recordkeeping or other compliance
requirements applicable to small business. Rather, the exemption
would relieve small businesses and other contractors from the
requirements of the SCA on certain contracts.
The FAR Secretariat has submitted a copy of the IRFA to the Chief
Counsel for Advocacy of the Small Business Administration. Interested
parties may obtain a copy from the FAR Secretariat. The Councils will
consider comments from small entities concerning the affected FAR Parts
4, 15, 17, 22, and 52 in accordance with 5 U.S.C. 610. Interested
parties must submit such comments separately and should cite 5 U.S.C.
601, et seq., (FAC 2005-21, FAR case 2001-004), in the correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the changes to
the FAR do not impose information collection requirements that require
the approval of the Office of Management and Budget under 44 U.S.C.
3501, et seq.
D. Determination to Issue an Interim Rule
A determination has been made under the authority of the Secretary
of Defense (DoD), the Administrator of General Services (GSA), and the
Administrator of the National Aeronautics and Space Administration
(NASA) that urgent and compelling reasons exist to promulgate this
interim rule without prior opportunity for public comment. This action
is necessary to incorporate the Department of Labor's final rule, which
was effective March 19, 2001, into the Federal Acquisition Regulation.
Although there has been delay while seeking appropriate implementation
of the DoL final rule, industries that provide services in these
categories are seeking to take advantage of the offered exemptions
without further delay. However, pursuant to Public Law 98-577 and FAR
1.501, the Councils will consider public comments received in response
to this interim rule in the formation of the final rule.
List of Subjects in 48 CFR Parts 4, 15, 17, 22, and 52
Government procurement.
Dated: October 31, 2007.
Al Matera,
Director, Office of Acquisition Policy.
0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 4, 15, 17, 22, and 52
as set forth below:
0
1. The authority citation for 48 CFR parts 4, 15, 17, 22, and 52
continues to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 4--ADMINISTRATIVE MATTERS
4.1201 [Amended]
0
2. Amend section 4.1201 by removing from paragraph (c) ``52.212-3(k)''
and adding ``52.212-3(l)'' in its place.
0
3. Amend section 4.1202 by revising paragraph (q) to read as follows:
4.1202 Solicitation provision and contract clause.
* * * * *
(q) 52.222-48, Exemption from Application of the Service Contract
Act to Contracts for Maintenance, Calibration, or Repair of Certain
Equipment Certification.
* * * * *
PART 15--CONTRACTING BY NEGOTIATION
15.102 [Amended]
0
4. Amend section 15.102 by removing from paragraph (b) ``52.212-3(k)''
and adding ``52.212-3(l)'' in its place.
PART 17--SPECIAL CONTRACTING METHODS
17.109 [Amended]
0
5. Amend section 17.109 by removing from paragraph (b)(1) ``, as
amended''.
PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
0
6. Amend section 22.1003-4 by removing paragraph (b)(4); and by adding
paragraphs (c) and (d) to read as follows:
[[Page 63079]]
22.1003-4 Administrative limitations, variations, tolerances, and
exemptions.
* * * * *
(c) Contracts for maintenance, calibration or repair of certain
equipment.-- (1) Exemption. The Secretary of Labor has exempted from
the Act contracts and subcontracts in which the primary purpose is to
furnish maintenance, calibration, or repair of the following types of
equipment, if the conditions at paragraph (c)(2) of this subsection are
met:
(i) Automated data processing equipment and office information/word
processing systems.
(ii) Scientific equipment and medical apparatus or equipment if the
application of micro-electronic circuitry or other technology of at
least similar sophistication is an essential element (for example,
Federal Supply Classification (FSC) Group 65, Class 6515, ``Medical
Diagnostic Equipment;'' Class 6525, ``X-Ray Equipment;'' FSC Group 66,
Class 6630, ``Chemical Analysis Instruments;'' and Class 6665,
``Geographical and Astronomical Instruments,'' are largely composed of
the types of equipment exempted in this paragraph).
(iii) Office/business machines not otherwise exempt pursuant to
paragraph (c)(1)(i) of this subsection, if such services are performed
by the manufacturer or supplier of the equipment.
(2) Conditions. The exemption at paragraph (c)(1) of this
subsection applies if all the following conditions are met for a
contract (or a subcontract):
(i) The items of equipment to be serviced under the contract are
used regularly for other than Government purposes and are sold or
traded by the contractor in substantial quantities to the general
public in the course of normal business operations.
(ii) The services will be furnished at prices which are, or are
based on, established catalog or market prices for the maintenance,
calibration, or repair of such equipment. As defined at 29 CFR
4.123(e)(1)(ii)(B)--
(A) An established catalog price is a price included in a catalog
price list, schedule, or other form that is regularly maintained by the
manufacturer or the contractor, is either published or otherwise
available for inspection by customers, and states prices at which sales
currently, or were last, made to a significant number of buyers
constituting the general public.
(B) An established market price is a current price, established in
the usual course of trade between buyers and sellers free to bargain,
which can be substantiated from sources independent of the manufacturer
or contractor.
(iii) The contractor will use the same compensation (wage and
fringe benefits) plan for all service employees performing work under
the contract as the contractor uses for these employees and equivalent
employees servicing the same equipment of commercial customers.
(iv) The apparent successful offeror certifies to the conditions in
paragraph (c)(2)(i) through (iii) of this subsection. (See 22.1006(e).)
(3) Affirmative determination and contract award. (i) For source
selections where the contracting officer has established a competitive
range, if the contracting officer determines that one or more of the
conditions in paragraphs 22.1003-4 (c)(2)(i) through (iii) of an
offeror's certification will not be met, the contracting officer shall
identify the deficiency to the offeror before receipt of the final
proposal revisions. Unless the offeror provides a revised offer
acknowledging applicability of the Service Contract Act or
demonstrating to the satisfaction of the contracting officer an ability
to meet all required conditions for exemption, the offer will not be
further considered for award.
(ii) The contracting officer shall determine in writing the
applicability of this exemption to the contract before contract award.
If the apparent successful offeror will meet all conditions in
paragraph (c)(2) of this subsection, the contracting officer shall make
an affirmative determination and award the contract without the
otherwise applicable Service Contract Act clause(s).
(iii) If the apparent successful offeror does not certify to the
conditions in paragraph (c)(2)(i) through (iii) of this subsection, the
contracting officer shall incorporate in the contract the Service
Contract Act clause (see 22.1006(a)(2)) and, if the contract will
exceed $2,500, the appropriate Department of Labor wage determination
(see 22.1007).
(4) Department of Labor determination. (i) If the Department of
Labor determines after award of the contract that any condition for
exemption in paragraph (c)(2) of this subsection has not been met, the
exemption shall be deemed inapplicable, and the contract shall become
subject to the Service Contract Act, effective as of the date of the
Department of Labor determination. In such case, the procedures at 29
CFR 4.123(e)(1)(iv) and 29 CFR 4.5(c) shall be followed.
(ii) If the Department of Labor determines after award of the
subcontract that any conditions for exemption in paragraph (c)(2) of
this subsection have not been met, the exemption shall be deemed
inapplicable. The contractor may be responsible for ensuring that the
subcontractor complies with the Act, effective as of the date of the
subcontract award.
(d) Contracts for certain services.-- (1) Exemption. Except as
provided in paragraph (d)(5) of this subsection, the Secretary of Labor
has exempted from the Act contracts and subcontracts in which the
primary purpose is to provide the following services, if the conditions
in paragraph (d)(2) of this subsection are met:
(i) Automobile or other vehicle (e.g., aircraft) maintenance
services (other than contracts or subcontracts to operate a Government
motor pool or similar facility).
(ii) Financial services involving the issuance and servicing of
cards (including credit cards, debit cards, purchase cards, smart
cards, and similar card services).
(iii) Hotel/motel services for conferences, including lodging and/
or meals, that are part of the contract or subcontract for the
conference (which must not include ongoing contracts for lodging on an
as needed or continuing basis).
(iv) Maintenance, calibration, repair, and/or installation (where
the installation is not subject to the Davis-Bacon Act, as provided in
29 CFR 4.116(c)(2)) services for all types of equipment where the
services are obtained from the manufacturer or supplier of the
equipment under a contract awarded on a sole source basis.
(v) Transportation by common carrier of persons by air, motor
vehicle, rail, or marine vessel on regularly scheduled routes or via
standard commercial services (not including charter services).
(vi) Real estate services, including real property appraisal
services, related to housing Federal agencies or disposing of real
property owned by the Government.
(vii) Relocation services, including services of real estate
brokers and appraisers to assist Federal employees or military
personnel in buying and selling homes (which shall not include actual
moving or storage of household goods and related services).
(2) Conditions. The exemption for the services in paragraph (d)(1)
of this subsection applies if all the following conditions are met for
a contract (or for a subcontract):
(i)(A) The contract will be awarded on a sole-source basis; or
(B) Except for services identified in paragraph (d)(1)(iv) of this
subsection, the contractor will be selected for award
[[Page 63080]]
based on other factors in addition to price or cost, with the
combination of other factors at least as important as price or cost in
selecting the contractor.
(ii) The services under the contract are offered and sold regularly
to non-Governmental customers, and are provided by the contractor (or
subcontractor in the case of an exempt subcontract) to the general
public in substantial quantities in the course of normal business
operations.
(iii) The contract services are furnished at prices that are, or
are based on, established catalog or market prices. As defined at 29
CFR 4.123(e)(2)(ii)(C)--
(A) An established catalog price is a price included in a catalog,
price list, schedule, or other form that is regularly maintained by the
contractor, is either published or otherwise available for inspection
by customers, and states prices at which sales are currently, or were
last, made to a significant number of buyers constituting the general
public; and
(B) An established market price is a current price, established in
the usual course of trade between buyers and sellers free to bargain,
which can be substantiated from sources independent of the manufacturer
or contractor.
(iv) Each service employee who will perform the services under the
contract will spend only a small portion of his or her time (a monthly
average of less than 20 percent of the available hours on an annualized
basis, or less than 20 percent of available hours during the contract
period if the contract period is less than a month) servicing the
Government contract.
(v) The contractor will use the same compensation (wage and fringe
benefits) plan for all service employees performing work under the
contract as the contractor uses for these employees and equivalent
employees servicing commercial customers.
(vi) The contracting officer (or contractor with respect to a
subcontract) determines in advance, based on the nature of the contract
requirements and knowledge of the practices of likely offerors, that
all or nearly all offerors will meet the conditions in paragraph
(d)(2)(ii) through (v) of this subsection. If the services are
currently being performed under contract, the contracting officer (or
contractor with respect to a subcontract) shall consider the practices
of the existing contractor in making a determination regarding the
conditions in paragraphs (d)(2)(ii) through (v) of this subsection.
(vii)(A) The apparent successful offeror certifies that the
conditions in paragraphs (d)(2)(ii) through (v) will be met; and
(B) For other than sole source awards, the contracting officer
determines that the same certification is obtained from substantially
all other offerors that are--
(1) In the competitive range, if discussions are to be conducted
(see FAR 15.306)(c)); or
(2) Considered responsive, if award is to be made without
discussions (see FAR 15.306(a)).
(3) Contract award or resolicitation. (i) If the apparent
successful offeror does not certify to the conditions, the contracting
officer shall insert in the contract the applicable Service Contract
Act clause(s) (see 22.1006(a)(2)) and, if the contract will exceed
$2,500, the appropriate Department of Labor wage determination (see
22.1007).
(ii) The contracting officer shall award the contract without the
otherwise applicable Service Contract Act clause(s) if--
(A) The apparent successful offeror certifies to the conditions in
paragraphs (d)(2)(ii) through (v) of this subsection;
(B) The contracting officer determines that the same certification
is obtained from substantially all other offerors that are--
(1) In the competitive range, if discussions are to be conducted
(see FAR 15.306); or
(2) Considered responsive, if award is to be made without
discussions (see FAR 15.306(a)); and
(C) The contracting officer has no reason to doubt the
certification.
(iii) If the conditions in paragraph (d)(3)(ii) of this subsection
are not met, then the contracting officer shall resolicit, amending the
solicitation by removing the exemption provision from the solicitation
(see 22.1006(e)(4)), and inserting in the contract the applicable
Service Contract Act clause(s) (see 22.1006(a)(2)) and, if the contract
will exceed $2,500, the appropriate Department of Labor wage
determination (see 22.1007).
(4) Department of Labor determination. (i) If the Department of
Labor determines after award of the contract that any conditions for
exemption at paragraph (d)(2) of this subsection have not been met, the
exemption shall be deemed inapplicable, and the contract shall become
subject to the Service Contract Act. In such case, the procedures at 29
CFR 4.123(e)(2)(iii) and 29 CFR 4.5(c) shall be followed.
(ii) If the Department of Labor determines that any conditions in
paragraph (d)(2) of this subsection have not been met with respect to a
subcontract, the exemption shall be deemed inapplicable and the
contractor may be responsible for ensuring that the subcontractor
complies with the Act, effective as of the date of the subcontract
award.
(5) Exceptions. The exemption at paragraph (d)(1) of this
subsection does not apply to solicitations and contracts
(subcontracts)--
(i) Awarded under the Javits-Wagner-O'Day Act, 41 U.S.C. 47 (see
Subpart 8.7).
(ii) For the operation of a Government facility, or part of a
Government facility (but may be applicable to subcontracts for
services); or
(iii) Subject to Section 4(c) of the Service Contract Act (see
22.1002-3).
22.1003-5 [Amended]
0
7. Amend section 22.1003-5 by removing from paragraph (k) ``22.1003-
4(b)(4)'' and adding ``22.1003(c)(1) and (d)(1)(iv)'' in its place.
22.1003-6 [Amended]
0
8. Amend section 22.1003-6 by removing from paragraph (b)(2) ``22.1003-
4(b)(4)'' and adding ``22.1003(c)(1) and (d)(1)(iv)'' in its place.
0
9. Amend section 22.1004 by revising paragraph (h) to read as follows:
22.1004 Department of Labor responsibilities and regulations.
* * * * *
(h) Practice before the Administrative Review Board (29 CFR part
8).
0
10. Amend section 22.1006 by--
0
a. Revising the section heading;
0
b. Revising paragraph (a);
0
c. Removing from paragraphs (c)(1) and (c)(2) ``as amended,''; and
0
d. Revising paragraph (e) to read as follows:
22.1006 Solicitation provisions and contract clauses.
(a)(1) The contracting officer shall insert the clause at 52.222-
41, Service Contract Act of 1965, in solicitations and contracts if the
contract is subject to the Act and is--
(i) Over $2,500; or
(ii) For an indefinite dollar amount and the contracting officer
does not know in advance that the contract amount will be $2,500 or
less.
(2) If the solicitation includes the provision at 52.222-48,
Exemption from Application of the Service Contract Act to Contracts for
Maintenance, Calibration, or Repair of Certain Equipment--
Certification, or 52.222-52, Exemption from Application of the Service
Contract Act to Contracts for Certain Services--Certification, the
contracting officer shall not insert the clause at 52.222-41 (or any of
the associated Service Contract Act clauses
[[Page 63081]]
prescribed in this section for possible use when 52.222-41 applies) in
the resultant contract unless the contracting officer determines, in
accordance with paragraphs (c)(3) or (d)(3) of subsection 22.1003-4,
that the Service Contract Act applies to the contract. (In such case,
do not insert the clause at 52.222-51, Exemption from Application of
the Service Contract Act to Contracts for Maintenance, Calibration, or
Repair of Certain Equipment--Requirements, or 52.222-53, Exemption from
Application of the Service Contract Act to Contracts for Certain
Services--Requirements, in the contract, in accordance with the
prescription at paragraph (e)(2) or (e)(4) of this subsection).
* * * * *
(e)(1) The contracting officer shall insert the provision at
52.222-48, Exemption from Application of the Service Contract Act to
Contracts for Maintenance, Calibration, or Repair of Certain
Equipment--Certification, in solicitations that include the clause at
52.222-41, Service Contract Act of 1965, but the contract may be exempt
from the Service Contract Act in accordance with 22.1003-4(c).
(2) The contracting officer shall insert the clause at 52.222-51,
Exemption from Application of the Service Contract Act to Contracts for
Maintenance, Calibration, or Repair of Certain Equipment--Requirements,
in solicitations that include the provision at 52.222-48, and resulting
contracts in which the contracting officer has determined, in
accordance with 22.1003-4(c)(3), that the Service Contract Act does not
apply.
(3) Insert the provision at 52.222-52, Exemption from Application
of the Service Contract Act to Contracts for Certain Services--
Certification, in solicitations that include the clause at 52.222-41,
Service Contract Act of 1965, but the contract may be exempt from the
Service Contract Act in accordance with 22.1003-4(d).
(4) The contracting officer shall insert the clause at 52.222-53,
Exemption from Application of the Service Contract Act to Contracts for
Certain Services--Requirements, in solicitations that include the
provision at 52.222-52, and resulting contracts in which the
contracting officer has determined, in accordance with 22.1003-4(d)(3),
that the Service Contract Act does not apply.
* * * * *
22.1008-2 [Amended]
0
11. Amend section 22.1008-2 by removing from the last sentence of
paragraph (d)(1) ``, as amended''.
22.1018 [Amended]
0
12. Amend section 22.1018 by removing from paragraph (b) ``, as
amended''.
22.1019 [Amended]
0
13. Amend section 22.1019 by removing from paragraphs (a), in the first
sentence, and (c) ``, as amended''.
22.1020 [Amended]
0
14. Amend section 22.1020 by removing ``, as amended''.
22.1022 [Amended]
0
15. Amend section 22.1022 by removing ``Assistant'' and ``Board of
Service Contract Appeals'' and adding ``Deputy'' and ``Administrative
Review Board'' in their places, respectively.
22.1023 [Amended]
0
16. Amend section 22.1023 by removing ``, as amended''.
22.1026 [Amended]
0
17. Amend section 22.1026 by removing ``as amended,''.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
52.212-1 [Amended]
0
18. Amend section 52.212-1 by revising the date of the clause to read
``(Nov 2007)''; and by removing from paragraph (b)(8) ``52.212-3(k)''
and adding ``52.212-3(l)'' in its place.
0
19. Amend section 52.212-3 by--
0
a. Revising the date of the clause;
0
b. Removing from the introductory text of the clause ``paragraph (k)''
and ``through (j)'' and adding ``paragraph (l)'' and ``through (k)'' in
its place, respectively;
0
c. Redesignating paragraph (k) as paragraph (l); removing from the
newly designated paragraph (l)(1) ``paragraph (k)(2)'' and adding
``paragraph (l)(2)'' in its place, and in the newly designated
paragraph (l)(2), in the bracketed paragraph, removing ``through (j)''
and adding ``through (k)'' in its place; and
0
d. Adding a new paragraph (k) to read as follows:
52.212--3 Offeror Representations and Certifications--Commercial
Items.
* * * * *
OFFEROR REPRESENTATIONS AND CERTIFICATIONS--COMMERCIAL ITEMS
``(Nov 2007)''
* * * * *
(k) Certificates regarding exemptions from the application of
the Service Contract Act. (Certification by the offeror as to its
compliance with respect to the contract also constitutes its
certification as to compliance by its subcontractor if it
subcontracts out the exempt services.) [The contracting officer is
to check a box to indicate if paragraph (k)(1) or (k)(2) applies.]
[ballot] (1) Maintenance, calibration, or repair of certain
equipment as described in FAR 22.1003-4(c)(1). The offeror [ballot]
does [ballot] does not certify that--
(i) The items of equipment to be serviced under this contract
are used regularly for other than Governmental purposes and are sold
or traded by the offeror in substantial quantities to the general
public in the course of normal business operations;
(ii) The services will be furnished at prices which are, or are
based on, established catalog or market prices (see FAR 22.1003-
4(c)(2)(ii)) for the maintenance, calibration, or repair of such
equipment; and
(iii) The compensation (wage and fringe benefits) plan for all
service employees performing work under the contract will be the
same as that used for these employees and equivalent employees
servicing the same equipment of commercial customers.
[ballot] (2) Certain services as described in FAR 22.1003-
4(d)(1). The offeror [ballot] does [ballot] does not certify that--
(i) The services under the contract are offered and sold
regularly to non-Governmental customers, and are provided by the
offeror (or subcontractor in the case of an exempt subcontract) to
the general public in substantial quantities in the course of normal
business operations;
(ii) The contract services will be furnished at prices that are,
or are based on, established catalog or market prices (see FAR
22.1003-4(d)(2)(iii));
(iii) Each service employee who will perform the services under
the contract will spend only a small portion of his or her time (a
monthly average of less than 20 percent of the available hours on an
annualized basis, or less than 20 percent of available hours during
the contract period if the contract period is less than a month)
servicing the Government contract; and
(iv) The compensation (wage and fringe benefits) plan for all
service employees performing work under the contract is the same as
that used for these employees and equivalent employees servicing
commercial customers.
(3) If paragraph (k)(1) or (k)(2) of this clause applies--
(i) If the offeror does not certify to the conditions in
paragraph (k)(1) or (k)(2) and the Contracting Officer did not
attach a Service Contract Act wage determination to the
solicitation, the offeror shall notify the Contracting Officer as
soon as possible; and
(ii) The Contracting Officer may not make an award to the
offeror if the offeror fails to execute the certification in
paragraph (k)(1) or (k)(2) of this clause or to contact the
Contracting Officer as required in paragraph (k)(3)(i) of this
clause.
* * * * *
0
20. Amend section 52.212-5 by--
0
a. Revising the date of the clause;
0
b. Revising paragraph (c)(1), redesignating paragraph (c)(5) as (c)(7),
and adding new paragraphs (c)(5) and (c)(6); and
0
c. Revising paragraph (e)(1)(vi), and redesignating paragraph
(e)(1)(viii) as
[[Page 63082]]
(e)(1)(x), and adding new paragraphs (e)(1)(viii) and (e)(1)(ix).
0
The revised and added text reads as follows:
52.212-5 Contract Terms and Conditions Required to Implement Statutes
or Executive Orders--Commercial Items.
* * * * *
CONTRACT TERMS AND CONDITIONS REQUIRED TO IMPLEMENT STATUTES OR
EXECUTIVE ORDERS--COMMERCIAL ITEMS ``(Nov 2007)''
* * * * *
(c) * * *
------ (1) 52.222-41, Service Contract Act of 1965 ``(Nov
2007)'' (41 U.S.C. 351, et seq.).
* * * * *
------ (5) 52.222-51, Exemption from Application of the Service
Contract Act to Contracts for Maintenance, Calibration, or Repair of
Certain Equipment--Requirements ``([Insert Abbreviated Month and
Year of Date of Publication in the Federal Register]'' (41 U.S.C.
351, et seq.).
------ (6) 52.222-53, Exemption from Application of the Service
Contract Act to Contracts for Certain Services--Requirements ``(Nov
2007)'' (41 U.S.C. 351, et seq.).
* * * * *
(e)(1) * * *
(vi) 52.222-41, Service Contract Act of 1965 ``([Insert
Abbreviated Month and Year of Date of Publication in the Federal
Register])'' (41 U.S.C. 351, et seq.).
* * * * *
(viii) 52.222-51, Exemption from Application of the Service
Contract Act to Contracts for Maintenance, Calibration, or Repair of
Certain Equipment--Requirements ``(Nov 2007)'' (41 U.S.C. 351, et
seq.).
(ix) 52.222-53, Exemption from Application of the Service
Contract Act to Contracts for Certain Services--Requirements ``(Nov
2007)'' (41 U.S.C. 351, et seq.).
* * * * *
0
21. Amend section 52.213-4 by revising the date of the clause; and
revising the first sentence of paragraph (b)(1)(vi) to read as follows:
52.213-4 Terms and Conditions--Simplified Acquisitions (Other Than
Commercial Items).
* * * * *
TERMS AND CONDITIONS--SIMPLIFIED ACQUISITIONS (OTHER THAN
COMMERCIAL ITEMS) ``(Nov 2007)''
* * * * *
(b) * * *
(1) * * *
(vi) 52.222-41, Service Contract Act of 1965 ``(Nov 2007)'' (41
U.S.C. 351, et seq.). * * *
* * * * *
0
22. Amend section 52.222-41 by--
0
a. Revising the section heading;
0
b. Revising the clause heading and the date; and
0
c. Amending paragraph (a) by--
0
1. Revising the introductory text;
0
2. Revising the definitions ``Act'' and ``Contractor'';
0
3. Removing from the definition ``Service employee'' the words ``, as
used in this clause,''; and
0
4. Removing from paragraph (f) ``Board of Service Contract Appeals''
and adding ``Administrative Review Board'' in its place.
0
The revised text reads as follows:
52.222-41 Service Contract Act of 1965.
* * * * *
SERVICE CONTRACT ACT OF 1965 ``(Nov 2007)''
(a) Definitions. As used in this clause--
Act means the Service Contract Act of 1965 (41 U.S.C. 351, et
seq.)
Contractor when this clause is used in any subcontract, shall be
deemed to refer to the subcontractor, except in the term
``Government Prime Contractor.''
* * * * *
0
23. Revise section 52.222-48 to read as follows:
52.222-48 Exemption from Application of the Service Contract Act to
Contracts for Maintenance, Calibration, or Repair of Certain Equipment
Certification.
As prescribed in 22.1006(e)(1), insert the following provision:
EXEMPTION FROM APPLICATION OF THE SERVICE CONTRACT ACT TO
CONTRACTS FOR MAINTENANCE, CALIBRATION, OR REPAIR OF CERTAIN
EQUIPMENT CERTIFICATION ``(Nov 2007)''
(a) The offeror shall check the following certification:
CERTIFICATION
The offeror [ballot] does [ballot] does not certify that--
(1) The items of equipment to be serviced under this contract
are used regularly for other than Government purposes, and are sold
or traded by the offeror in substantial quantities to the general
public in the course of normal business operations;
(2) The services will be furnished at prices which are, or are
based on, established catalog or market prices for the maintenance,
calibration, or repair of equipment.
(i) An ``established catalog price'' is a price included in a
catalog, price list, schedule, or other form that is regularly
maintained by the manufacturer or the offeror, is either published
or otherwise available for inspection by customers, and states
prices at which sales currently, or were last, made to a significant
number of buyers constituting the general public.
(ii) An ``established market price'' is a current price,
established in the usual course of trade between buyers and sellers
free to bargain, which can be substantiated from sources independent
of the manufacturer or offeror; and
(3) The compensation (wage and fringe benefits) plan for all
service employees performing work under the contract are the same as
that used for these employees and equivalent employees servicing the
same equipment of commercial customers.
(b) Certification by the offeror as to its compliance with
respect to the contract also constitutes its certification as to
compliance by its subcontractor if it subcontracts out the exempt
services. If the offeror certifies to the conditions in paragraph
(a) of this provision, and the Contracting Officer determines in
accordance with FAR 22.1003-4(c)(3) that the Service Contract Act--
(1) Will not apply to this offeror, then the Service Contract
Act of 1965 clause in this solicitation will not be included in any
resultant contract to this offeror; or
(2) Will apply to this offeror, then the clause at 52.222-51,
Exemption from Application of the Service Contract Act to Contracts
for Maintenance, Calibration, or Repair of Certain Equipment--
Requirements, in this solicitation will not be included in any
resultant contract awarded to this offeror, and the offeror may be
provided an opportunity to submit a new offer on that basis.
(c) If the offeror does not certify to the conditions in
paragraph (a) of this provision--
(1) The clause in this solicitation at 52.222-51, Exemption from
Application of the Service Contract Act to Contracts for
Maintenance, Calibration, or Repair of Certain Equipment--
Requirements, will not be included in any resultant contract awarded
to this offeror; and
(2) The offeror shall notify the Contracting Officer as soon as
possible, if the Contracting Officer did not attach a Service
Contract Act wage determination to the solicitation.
(d) The Contracting Officer may not make an award to the
offeror, if the offeror fails to execute the certification in
paragraph (a) of this provision or to contact the Contracting
Officer as required in paragraph (c) of this provision.
(End of provision)
0
24. Add sections 52.222-51, 52.222-52, and 52.222-53 to read as
follows:
52.222-51 Exemption from Application of the Service Contract Act to
Contracts for Maintenance, Calibration, or Repair of Certain
Equipment--Requirements.
As prescribed in 22.1006(e)(2), insert the following clause:
EXEMPTION FROM APPLICATION OF THE SERVICE CONTRACT ACT TO
CONTRACTS FOR MAINTENANCE, CALIBRATION, OR REPAIR OF CERTAIN
EQUIPMENT--REQUIREMENTS ``(Nov 2007)''
(a) The items of equipment to be serviced under this contract
are used regularly for other than Government purposes, and are sold
or traded by the Contractor in substantial quantities to the general
public in the course of normal business operations.
(b) The services shall be furnished at prices which are, or are
based on, established catalog or market prices for the maintenance,
calibration, or repair of equipment.
(1) An ``established catalog price'' is a price included in a
catalog, price list, schedule, or other form that is regularly
maintained by the manufacturer or the Contractor, is either
published or otherwise available for inspection by customers, and
states prices at which sales currently, or were last, made to a
significant number of buyers constituting the general public.
[[Page 63083]]
(2) An ``established market price'' is a current price,
established in the usual course of trade between buyers and sellers
free to bargain, which can be substantiated from sources independent
of the manufacturer or Contractor.
(c) The compensation (wage and fringe benefits) plan for all
service employees performing work under the contract shall be the
same as that used for these employees and for equivalent employees
servicing the same equipment of commercial customers.
(d) The Contractor is responsible for compliance with all the
conditions of this exemption by its subcontractors. The Contractor
shall determine the applicability of this exemption to any
subcontract on or before subcontract award. In making a judgment
that the exemption applies, the Contractor shall consider all
factors and make an affirmative determination that all of the
conditions in paragraphs (a) through (c) of this clause will be met.
(e) If the Department of Labor determines that any conditions
for exemption in paragraphs (a) through (c) of this clause have not
been met, the exemption shall be deemed inapplicable, and the
contract shall become subject to the Service Contract Act. In such
case, the procedures at 29 CFR 4.123(e)(1)(iv) and 29 CFR 4.5(c)
will be followed.
(f) The Contractor shall include the substance of this clause,
including this paragraph (f), in subcontracts for exempt services
under this contract.
(End of clause)
52.222-52 Exemption from Application of the Service Contract Act to
Contracts for Certain Services--Certification.
As prescribed in 22.1006(e)(3), insert the following provision:
EXEMPTION FROM APPLICATION OF THE SERVICE CONTRACT ACT TO
CONTRACTS FOR CERTAIN SERVICES--CERTIFICATION ``(Nov 2007)''
(a) The offeror shall check the following certification:
CERTIFICATION
The offeror [ballot] does [ballot] does not certify that--
(1) The services under the contract are offered and sold
regularly to non-Governmental customers, and are provided by the
offeror (or subcontractor in the case of an exempt subcontract) to
the general public in substantial quantities in the course of normal
business operations;
(2) The contract services are furnished at prices that are, or
are based on, established catalog or market prices. An ``established
catalog price'' is a price included in a catalog, price list,
schedule, or other form that is regularly maintained by the
manufacturer or the offeror, is either published or otherwise
available for inspection by customers, and states prices at which
sales currently, or were last, made to a significant number of
buyers constituting the general public. An ``established market
price'' is a current price, established in the usual course of
ordinary and usual trade between buyers and sellers free to bargain,
which can be substantiated from sources independent of the
manufacturer or offeror;
(3) Each service employee who will perform the services under
the contract will spend only a small portion of his or her time (a
monthly average of less than 20 percent of the available hours on an
annualized basis, or less than 20 percent of available hours during
the contract period if the contract period is less than a month)
servicing the Government contract; and
(4) The offeror uses the same compensation (wage and fringe
benefits) plan for all service employees performing work under the
contract as the offeror uses for these employees and for equivalent
employees servicing commercial customers.
(b) Certification by the offeror as to its compliance with
respect to the contract also constitutes its certification as to
compliance by its subcontractor if it subcontracts out the exempt
services. If the offeror certifies to the conditions in paragraph
(a) of this provision, and the Contracting Officer determines in
accordance with FAR 22.1003-4(d)(3) that the Service Contract Act--
(1) Will not apply to this offeror, then the Service Contract
Act of 1965 clause in this solicitation will not be included in any
resultant contract to this offeror; or
(2) Will apply to this offeror, then the clause at FAR 52.222-
53, Exemption from Application of the Service Contract Act to
Contracts for Certain Services--Requirements, in this solicitation
will not be included in any resultant contract awarded to this
offer, and the offeror may be provided an opportunity to submit a
new offer on that basis.
(c) If the offeror does not certify to the conditions in
paragraph (a) of this provision--
(1) The clause of this solicitation at 52.222-53, Exemption from
Application of the Service Contract Act to Contracts for Certain
Services--Requirements, will not be included in any resultant
contract to this offeror; and
(2) The offeror shall notify the Contracting Officer as soon as
possible if the Contracting Officer did not attach a Service
Contract Act wage determination to the solicitation.
(d) The Contracting Officer may not make an award to the
offeror, if the offeror fails to execute the certification in
paragraph (a) of this provision or to contact the Contracting
Officer as required in paragraph (c) of this provision.
(End of provision)
52.222-53 Exemption from Application of the Service Contract Act to
Contracts for Certain Services--Requirements.
As prescribed in 22.1006(e)(4), insert the following clause:
EXEMPTION FROM APPLICATION OF THE SERVICE CONTRACT ACT TO
CONTRACTS FOR CERTAIN SERVICES--REQUIREMENTS ``(Nov 2007)''
(a) The services under this contract are offered and sold
regularly to non-Governmental customers, and are provided by the
Contractor to the general public in substantial quantities in the
course of normal business operations.
(b) The contract services are furnished at prices that are, or
are based on, established catalog or market prices. An ``established
catalog price'' is a price included in a catalog, price list,
schedule, or other form that is regularly maintained by the
manufacturer or the Contractor, is either published or otherwise
available for inspection by customers, and states prices at which
sales currently, or were last, made to a significant number of
buyers constituting the general public. An ``established market
price'' is a current price, established in the usual course of
ordinary and usual trade between buyers and sellers free to bargain,
which can be substantiated from sources independent of the
manufacturer or Contractor.
(c) Each service employee who will perform the services under
the contract will spend only a small portion of his or her time (a
monthly average of less than 20 percent of the available hours on an
annualized basis, or less than 20 percent of available hours during
the contract period if the contract period is less than a month)
servicing the Government contract.
(d) The Contractor uses the same compensation (wage and fringe
benefits) plan for all service employees performing work under the
contract as the Contractor uses for these employees and for
equivalent employees servicing commercial customers.
(e)(1) Any subcontract for these exempt services shall be
awarded on a sole-source basis; or
(2) Except for services identified in FAR 22.1003-4(d)(1)(iv),
the subcontractor shall be selected for award based on other factors
in addition to price or cost with the combination of other factors
at least as important as price or cost in selecting the Contractor.
(f) The Contractor is responsible for compliance with all the
conditions of this exemption by its subcontractors. The Contractor
shall determine in advance, based on the nature of the subcontract
requirements and knowledge of the practices of likely
subcontractors, that all or nearly all likely subcontractors will
meet the conditions in paragraphs (a) through (d) of this clause. If
the services are currently being performed under a subcontract, the
Contractor shall consider the practices of the existing
subcontractor in making a determination regarding the conditions in
paragraphs (a) through (d) of this clause. If the Contractor has
reason to doubt the validity of the certification, the requirements
of the Service Contract Act shall be included in the subcontract.
(g) If the Department of Labor determines that any conditions
for exemption at paragraphs (a) through (e) of this clause have not
been met, the exemption shall be deemed inapplicable, and the
contract shall become subject to the Service Contract Act. In such
case, the procedures in at 29 CFR 4.123(e)(2)(iii) and 29 CFR 4.5(c)
will be followed.
(h) The Contractor shall include the substance of this clause,
including this paragraph (h), in subcontracts for exempt services
under this contract.
(End of clause)
[FR Doc. 07-5481 Filed 11-6-07; 8:45 am]
BILLING CODE 6820-EP-S