Canceled by PIC 03-02
August 25, 2000
CLASS DEVIATION - APPLICABILITY OF
THE SERVICE CONTRACT ACT
FOR THE ACQUISITION OF CERTAIN COMMERCIAL SERVICES
PURPOSE: To provide a class deviation from the requirements of Federal Acquisition Regulation (FAR) 12.504, 22.1003-4, and the clause at 52.212-5.
BACKGROUND: Section 8003(b) of the Federal Acquisition Streamlining Act (FASA) required that the FAR include a list of provisions of law that are inapplicable to subcontracts for commercial items. In implementing this section of FASA, the SCA was included on the list of laws inapplicable to commercial subcontracts (60 FR 48231, September 18, 1995). After subsequent review of the issue, the FAR Council, in consultation with the DOL, concluded that it was not in the best interest of the Government to retain the SCA on the list of laws that are inapplicable to all subcontracts for commercial items. Specifically, the FAR Council concluded that a blanket exemption of all subcontracts for commercial items may not adequately serve the Administration's policy of supporting the exemption of the SCA only where it does not undermine the purposes for which the SCA was enacted.
Additionally, the FAR Council agreed that any exemption from the coverage of SCA for subcontracts for the acquisition of commercial items or components should be accomplished under the Secretary of Labor's authority in the SCA. As a result, FAC 97-19 (65 FR 46068) amended FAR 12.504 by removing the SCA from the list of laws inapplicable to subcontracts for commercial items; and amended 52.212-5 by adding the SCA to the list of clauses to be included in subcontracts for commercial items or components. These changes were effective August 25, 2000.
Also effective August 25, 2000, pursuant to Section 4(b) of the McNamara-O'Hara Service Contract Act (SCA), the Secretary of Labor issued a temporary exemption that provides that the requirements of the SCA are not applicable to subcontracts for the acquisition of certain commercial services. The Secretary of Labor determined that this exemption for certain subcontracts was necessary and proper in the public interest to avoid the serious impairment of government business and was in accord with the remedial purpose of the SCA to protect prevailing labor standards (see 65 FR 45903). This DOL exemption is contained in the attached class deviation language added at FAR 22.1003-4.
This class deviation implements the Secretary of Labor's temporary exemption before the specific changes are incorporated in the FAR. The Department of Defense and the General Services Administration have issued similar class deviations.
GUIDANCE: Effective August 25, 2000, all contracting officers shall deviate from the requirements of FAR 12.504, 22.1003-4, and the clause at 52.212-5 and shall use the enclosed FAR language instead.
EFFECTIVE DATE: This PIC is effective as dated and shall remain in effect until July 26, 2001, or until the FAR is revised to include the provisions of the deviation, whichever occurs first.
Associate Administrator for Procurement
PART 12-ACQUISITIONS OF COMMERCIAL ITEMS
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12.504 Applicability of certain laws to subcontracts for the acquisition of commercial items.
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(c) The applicability of the following laws has been modified in regards to subcontracts at any tier for the acquisition of commercial items or commercial components:
(1) * * *
(2) * * *
(3) * * *
(4) 41 U.S.C. 351, Service Contract Act of 1965 (see 22.1003-4(c) and (d).
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PART 22-APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
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22.1003-4 Administrative limitations, variations, tolerances, and exemptions.
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(c)(1) Through July 26, 2001, the Secretary of Labor has exempted subcontracts principally for the following commercial services from all provisions of the Act if the conditions at paragraph (c)(2) of this subsection are met: the maintenance, calibration, repair, and/or installation of information technology.
(2) The exemption at paragraph (c)(1) of this subsection applies if the following conditions are met:
(i) If the subcontract includes installation services, the installation services are not subject to the Davis-Bacon Act as provided in 29 CFR 4.116(c)(2).
(ii) The items of equipment are commercial items.
(iii) The subcontract services are furnished at prices that are, or are based on, established catalog or market prices for the maintenance, calibration, repair, and/or installation of such commercial items.
(iv) The subcontractor uses the same compensation (wage and fringe benefits) plan for all service employees performing work under the contract as the subcontractor uses for these employees and equivalent employees servicing the same type of equipment of commercial customers.
(v) The subcontractor certifies in the subcontract that the conditions in paragraphs (c)(2)(ii) through (iv) of this subsection have been met.
(vi) Prior to subcontract award, the contractor determines that this exemption applies to the subcontract. In making a judgment that the exemption applies, the clause at 52.212-5(c)(1) requires the contractor to consider all factors and make an affirmative determination that the conditions in paragraphs (c)(2)(ii) through (iv) of this subsection have been met, and that the condition at paragraph (c)(2)(v) of this subsection will be met.
(3) If the Department of Labor determines that any of the above requirements for exemption has not been met with respect to a subcontract, the exemption will be deemed inapplicable, and the contractor may be responsible for compliance with the Act, effective as of the date of contract award.
(d)(1) Through July 26, 2001, the Secretary of Labor has exempted subcontracts for the following commercial item services from all provisions of the Act if the conditions at paragraph (d)(2) of this subsection are met:
(i) Automated data processing (ADP) and telecommunications services, excluding ADP data entry services and ADP optical scanning services. This category includes the following:
(A) ADP facility operation and maintenance services provided at the subcontractor's facility.
(B) ADP telecommunications and transmission services.
(C) ADP teleprocessing and timesharing services.
(D) ADP systems analysis services.
(E) Information and data broadcasting or data distribution services.
(F) ADP backup and security services.
(G) ADP data conversion services.
(H) Computer aided design/computer aided manufacturing services.
(I) Digitizing services (including cartographic and geographic information).
(J) Telecommunications network management services.
(K) Automated news services.
(L) Data services or other information services (e.g., buying data, the electronic equivalent of books, periodicals, newspapers, etc.).
(M) Data storage on tapes, compact disks, etc.
(ii) Automobile or other vehicle (e.g., aircraft) maintenance services (other than subcontracts to operate a Government motor pool or similar facility).
(iii) Financial services involving the issuance and servicing of cards (including credit cards, debit cards, purchase cards, smart cards, and similar card services).
(iv) Lodging at hotels/motels and contracts with hotels/motels for conferences, including lodging and meals, that are part of the subcontract for the conference.
(v) Maintenance services for all types of specialized building or facility equipment, such as elevators, escalators, temperature control systems, security systems, smoke and/or heat detection equipment.
(vi) Maintenance, calibration, repair, 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.
(vii) Transportation of persons by air, motor vehicle, rail, or marine vessel on regularly scheduled routes or via standard commercial services (not including charter services).
(viii) Real estate services, including real property appraisal services, related to housing Federal agencies or disposing of real property owned by the Government.
(ix) Relocation services, including services of real estate brokers and appraisers to assist Federal employees or military personnel in buying and selling homes.
(2) The exemption for the services in paragraph (d)(1) of this subsection apply if the following conditions are met:
(i) The services under the subcontract are commercial.
(ii) The subcontract will be awarded on a sole-source basis or the subcontractor will be selected for award based on other factors in addition to price. In such cases, price must be equal to or less important than the combination of other nonprice or cost factors in selecting the subcontractor.
(iii) The subcontract services are furnished at prices that are, or are based on, established catalog or market prices.
(iv) All of the service employees who will perform the services under the subcontract spend only a small portion of their 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 subcontract.
(v) The subcontractor utilizes the same compensation (wage and fringe benefits) plan for all service employees performing work under the subcontract as the subcontractor uses for these employees and for equivalent employees servicing commercial customers.
(vi) The contractor determines in advance, based on the nature of the subcontract requirements and knowledge of the practices of likely offerors, that all or nearly all offerors will meet the above requirements. If the services are currently being performed under a contract or subcontract, the contractor is required by the clause at 52.212-5(c)(1) to consider the practices of the existing contractor or subcontractor in making a determination regarding the above requirements.
(vii) The subcontractor represents in the subcontract that the conditions in paragraphs (d)(2)(i), and (d)(2)(iii) through (v) of this subsection apply to the subcontract. The contractor is required by the clause at 52.212-5(c)(1) to review available information concerning the subcontractor and the manner in which the subcontract will be performed. If the contractor has reason to doubt the validity of the representation, SCA stipulations must be included in the subcontract.
(viii) The subcontract is not subject to Section 4(c) of the Service Contract Act.
(3) If the Department of Labor determines that any of the above requirements for exemption has not been met with respect to a subcontract, the exemption will be deemed inapplicable for that subcontract, and the contractor might be responsible for compliance with the Act, effective as of the date of contract award.
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PART 52 SOLICITATION PROVISIONS AND CONTRACT CLAUSES
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52.212-5 Contract Terms and Conditions Required to Implement Statutes or Executive Orders - Commercial Items.
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(c) * * *
____(1) 52.222-41, Service Contract Act of 1965, As Amended (41 U.S.C. 351, et seq.) [(Subcontracts for certain commercial services may be exempt from coverage if they meet the criteria in FAR 22.1003-4(c) or (d) contained in Procurement Information Circular (PIC) 00-19, Class Deviation - Applicability of the Service Contract Act for the Acquisition of Certain Commercial Services.)
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