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Barry McVay's FEDERAL CONTRACTS DISPATCH

DATE: August 29, 2000

FROM: Barry McVay, CPCM

SUBJECT: Department of Defense; Class Deviation Regarding the Applicability of the Service Contract Act to Subcontracts for Certain Commercial Services

SOURCE: Department of Defense Memorandum, dated August 25, 2000

AGENCIES: Department of Defense (DOD)

ACTION: Federal Acquisition Regulation (FAR) Deviation

SYNOPSIS: On August 25, 2000, Director of Defense Procurement Deidre Lee issued a memorandum to the directors of defense agencies and the services' deputies for acquisition directing all military contracting activities to deviate from the FAR to reflect the Secretary of Labor's temporary exemption of subcontracts for certain commercial services from the provisions of the Service Contract Act (SCA).

EDITOR'S NOTE: For more on the Secretary of Labor's temporary exemption, see the July 26, 2000, FEDERAL CONTRACTS DISPATCH "Department of Labor (DOL); Service Contract Act (SCA) -- Labor Standards for Federal Service Contracts."

For more on the removal of the SCA commercial subcontract exemption from the FAR, see the July 26, 2000, FEDERAL CONTRACT DISPATCH "Federal Acquisition Circular (FAC) 97-19, Miscellaneous Amendments."

EFFECTIVE DATE: This deviation is effective through July 26, 2001, or until the policy is addressed in the FAR, whichever occurs first.

FOR MORE INFORMATION CONTACT: Office of the Director of Defense Procurement, 3000 Defense Pentagon, Washington, DC 20301-3000. Refer to DAR Tracking Number 2000-O0006 when referring to this deviation.

SUPPLEMENTAL INFORMATION: Effective August 25, 2000, the Department of Labor removed the SCA from the list of laws that do not apply to commercial subcontracts (see Federal Acquisition Regulation (FAR) 12.504, Applicability of Certain Laws to Subcontracts for the Acquisition of Commercial Items). However, DOL is proposing an SCA exemption for a more limited group of commercial service contracts and subcontracts, so it issued a temporary SCA exemption to prevent the disruption to this group of commercial service contracts that would be caused by being exempt (up to August 25, 2000), then not exempt (from August 25, 2000), then exempt again (upon approval of the final SCA exemption). Though DOL believes the regulatory process will take approximately six months to conduct, the temporary SCA exemption is in effect until July 26, 2001.

To implement the DOL temporary exemption, Director of Defense Procurement Deidre Lee has issued a FAR deviation in which defense contracting activities are to deviate from the following:

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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