Posts in Wage & Hour
State Fringe Benefit Requirements and the SCA and DBA Price Adjustment Clauses

Careful drafting of CBAs, particularly on service contracts, should include some attention to language expressly making any state mandated fringe benefits into a CBA contractual requirement. At least that would be prudent for a contractor looking to get a price adjustment for state mandated benefits.

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Court Holds Challenge to SCA Coverage of Cooperative Agreement Not Ripe for Appeal Due to Lack of Final Agency Action 

A U.S. District Court judge holds that a contractor had not received final agency action to allow an Administrative Procedure Act suit. Thus a challenge to DOL’s determination that the Service Contract Act applies to cooperative agreements is not ripe for appeal.

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Annualization or Effective Annual Rate of Fringe Benefits Under the Davis-Bacon Act

DOL wants to annualize fringe benefit contributions, especially pension monies, to get contractors to pay Davis-Bacon Act fringe benefits even for non-Davis-Bacon Act work. This is variously called the annualization rule or the effective annual rate calculation. But some courts have refused to enforce the DOL annualization requirment.

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The Tide of DOL Opinion Letters Has Ebbed and There Likely Won’t Be Many More Under the Current DOL Administration. That is too bad.  

Department of Labor Wage and Hour Opinion Letters follow the ebb and flow of conservative and liberal executive administrations. When President Biden was inaugurated, we began a period where new Opinion Letters are a scarcity. This follows the practice of previous liberal administrations.

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When Your Contracting Officer Rejects an Adjustment for Base Year Labor Increases in a Service Contract Act Covered Contract, Look to the East!

The Service Contract Act price adjustment clause prohibits an adjustment for changes to the contract in the base year of performance. However, in some situations, the contractor is entitled to an adjustment through the Changes clause of their contract.

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No Second Bite at the Apple; ASBCA holds that Contractor Can’t Recover Under FAR 52.222-30 for Increase in Davis-Bacon Act Wages.

The ASBCA holds that FAR 22.404-12(c) does not require that notice be given to offers that they have the opportunity to escalate labor rates into their bid pricing even when the offers will not receive a price adjustment after a new Wage Determination is incorporated into the contract.

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One for Me; and One for Me: Getting Paid for SCA Vacation Benefit Increases in Option Year

Offerors are entitled to a SCA price adjustment for increased costs incurred for vacation pay benefits during a contract renewal option period. Savvy offerors will exclude those vacation benefit costs for their bid costs in order to get a compeittive advantage. But this doesn’t work for existing employees or those hired from the predecessor contractor, who are entitled to a grant of vacation benefits in the base term of the contract.

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Davis-Bacon Classification Decision Was Not Arbitrable, Tenth Cir. Holds

The Tenth Circuit holds that the Union in this case cannot compel the Contractor to arbitrate Davis-Bacon job classifications. However, the court did not hold that Davis-Bacon job classifications are not arbitrable. This article was written by our very own Kirby Rousseau for The Government Contractor publication.

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Catch-22: No Contractor Price Adjustments for State Minimum Wage Increases

When bidding on and pricing US government extended term fixed price contracts, contractors need to price in the possibility that state minimum wages will exceed the SCA or DBA wage levels, and require an escalation be paid, but the contracting agency will not adjust the contract price for that occurrence.

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