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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


November 2014
Vol. XV, No. 11
[pdf version]

CONTENTS


FAC 2005-77 Imposes Uniform Procurement Instrument Identification Numbering System
$10.10/Hour Minimum Wage Established for Contractors
Defense Clarifies, Cleans Up DFARS
GSA Cleans Up GSAR Provisions



FAC 2005-77 Imposes Uniform Procurement
Instrument Identification Numbering System

Federal Acquisition Circular (FAC) 2005-77 amends the Federal Acquisition Regulation (FAR) to implement a uniform Procurement Instrument Identification (PIID) numbering system to standardize procurement transactions throughout the federal government. In addition, FAC 2005-77 amends the FAR to delete a referenced document that is obsolete and sections that have been declared unconstitutional.



$10.10/Hour Minimum Wage Established for Contractors

The Department of Labor (DOL) has issued regulations implementing Executive Order 13658, Establishing a Minimum Wage for Contractors, which raised the hourly minimum wage paid by contractors and subcontractors to workers performing on federal contracts to $10.10 per hour beginning January 1, 2015, and adjusted annually by the Secretary of Labor to compensate for inflation during the year as reflected in the Consumer Price Index for Urban Wage Earners and Clerical Workers. (EDITOR’S NOTE: For more on Executive Order 13658, see the March 2014 Federal Contracts Perspective article “President Issues Executive Order Mandating $10.10/Hour Minimum Wage.”)

The regulations are added to Title 29 of the Code of Federal Regulations (CFR), Labor, as Part 10, Establishing a Minimum Wage for Contractors (29 CFR part 10). The $10.10/hour minimum wage is established in 29 CFR 10.5, Minimum Wage for Federal Contractors and Subcontractors, and the minimum wage applies to “any new contract with the federal government, unless excluded by [Section] 10.4 [Exclusions], provided that: (1)(i) it is a procurement contract for construction covered by the Davis-Bacon Act; (ii) it is a contract for services covered by the Service Contract Act; (iii) it is a contract for concessions, including any concessions contract excluded from coverage under the Service Contract Act by Department of Labor regulations at 29 CFR 4.133(b); or (iv) it is a contract entered into with the federal government in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public; and (2) the wages of workers under such contract are governed by the Fair Labor Standards Act, the Service Contract Act, or the Davis-Bacon Act.” The minimum wage “does not apply to contracts for the manufacturing or furnishing of materials, supplies, articles, or equipment to the federal government that are subject to the Walsh-Healey Public Contracts Act, 41 USC 6501 et seq” (29 CFR 10.3, Coverage).

The exclusions specified in 29 CFR 10.4 include: grants under the Federal Grant and Cooperative Agreement Act; contracts and agreements with, and grants to, Indian tribes under the Indian Self-Determination and Education Assistance Act; contracts for construction that are excluded from coverage of the Davis-Bacon Act; contracts for services that are exempted from coverage under the Service Contract Act; employees who are exempt from the minimum wage requirements of the Fair Labor Standards Act, including learners, apprentices, messengers, students, and individuals employed in a bona fide executive, administrative, or professional capacity.

29 CFR 10.28, Tipped Employees, establishes a different minimum wage for tipped employees: $4.90/hour, which will be adjusted annually by 95¢ per hour or to 70% of the Executive Order minimum wage amount, whichever is less.

29 CFR 10.11, Contracting Agency Requirements, specifies that agencies are to include the contract clause in 29 CFR part 10, Appendix A, “in every contract, contract-like instrument, and solicitation to which Executive Order 13658 applies, except for procurement contracts subject to the Federal Acquisition Regulation (FAR).” The clause mandates that covered contractors and subcontractors shall pay at least the $10.10/hour minimum wage to covered employees between January 1, 2015, and December 31, 2015, and then the amount determined by the Secretary of Labor thereafter. If the Secretary of Labor establishes a higher minimum wage, the contracting officer will compensate the contractor for the increase in labor costs resulting from the adjustment. Contracts subject to the FAR are exempt from the requirement to include the contract clause in Appendix A because a change to the FAR is being prepared that will require the inclusion of a clause in FAR-covered contracts that is identical to that in Appendix A (or nearly so).

The rest of 29 CFR part 10 includes key definitions and regulations on frequency of pay, deductions, overtime pay, records to be kept by contractors, handling complaints, disputes regarding contractor compliance, and debarment proceedings.

More than 6,500 respondents submitted comments on the proposed rule, and many clarifications and editorial changes were made to the final rule in response. For more on the proposed rule, see the July 2014 Federal Contracts Perspective article “$10.10/Hour Minimum Wage Deviations Issued.”



Defense Clarifies, Cleans Up DFARS

The Department of Defense (DOD) decided to do a little DOD FAR Supplement (DFARS) maintenance by issuing a final and an interim rule deleting obsolete and procedural language, a final rule clarifying the flowdown requirements for a clause on specialty metals, a class deviation requiring the tracking of contractor and subcontractor employees in areas of Africa with the Ebola outbreak, and a memorandum authorizing contractors to use a “blended rate” to implement multiple compensation limits for personal services.



GSA Cleans Up GSAR Provisions

The General Services Administration (GSA) has decided to delete two obsolete provisions from the GSA Acquisition Regulation (GSAR): GSAR 552.214-71, Progressive Awards and Monthly Quantity Allocations, and GSAR 552.237-70, Qualifications of Offerors.



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