Does anyone have guidance on service contract act adjustments? I already have a guidebook from an Air Force Labor site but would like to review and compare with others. Also, I need references to regulation/s that cover procedures for wage determination adjustments for option years.

By Anonymous on Thursday, December 27, 2001 - 08:54 am:

for "references to regulation/s that cover procedures for wage determination adjustments for option years" try beginning with FAR 22.1008-5 -- Multiple-Year Contracts. Then go to the supplements. Or are you only referring to SOP's on "how to do it"?

By debbie scali on Thursday, December 27, 2001 - 10:04 am:

I have looked at FAR 22.1008-5 along with the DFARS, AFFARS, 29 CFR and various info on the DOL web page. My contractor is questioning the way the AF guide uses actual wages paid in the previous contract period for the adjustment. The contractor has furnished me with projected hours...2080 across the board for around 500 employees. Things I have found in regulations allude to using prior period but none are clear cut. Would like to know if there is specific requirements out there or is this left to interpretation. Would also like to know how others are doing price adjustments. Any help would be greatly appreciated.

By Abacus on Thursday, December 27, 2001 - 01:35 pm:

FAR 52.222-43 (Multiple Year and Option Contracts) and 52.222-44 Fair Labor Standards Act and Service Contract Act-Price Adjustment (xxx) (May 1989) at http://www.arnet.gov/far/current/html/52_222.html#1046946

Analogous are new FAR clauses beginning at FAR 52.222-30 through 52.222-32 Davis-Bacon Act--Price Adjustment (xxx) (Dec 2001) at http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfars/far/52_220.htm#P363_65839

Dave Berkey on Thursday, December 27, 2001 - 02:27 pm:

Debbie:

Your contract should include the Fair Labor Standards Act and Service Contract Act-- Price Adjustments (Multiple Year and Option Contracts) clause 52.222-43 which gives the mechanics of computing the dollar changes. Note that changes are limited to the actual changed amounts for wages and fringes and associated fringes (not overhead, G&A and profit) as mandated by the the new Wage/Collective Bargaining Agreement Determination you received from DOL to effect the mod.

Dave

By Tom Dickinson on Thursday, December 27, 2001 - 06:31 pm:

Debbie:
According to the FAR clauses, the increase is from the current amount being paid by the contractor (presumably from your question, the contractor is paying a higher rate than the WD rate), to the new WD rate. (I have never seen Fringe addressed in this manner, but have not read all the case law yet.) With the increase, the new rate to be paid has to take into consideration the changes in pay for vacation and holidays, and the overall change in taxes due to the differing pay rate.

By Anonymous on Friday, December 28, 2001 - 08:45 am:

You must remembner that an increase in a WD does not automatically mean an increase in contract price. If the contractor is paying a higher wage than called for by the new WD NO adjustment is made at all.

By Larry Edwards on Friday, December 28, 2001 - 01:20 pm:

The Air Force guide actually refers to “actual or projected” hours and also talks about adjusting for changes in the amount of work to be preformed.
If a contractor can substantiate a projected increase in hours due to workload increases, you will need to pay that WD increase on the number of hours he can substantiate.Actual wages are useful for establishing the baseline hourly pay. As mentioned above, you won’t give him the full increase if the actual wage rate he is paying is higher than the wage determination.