Office of Acquisition and Logistics (OAL)

Acquisition Policy Flash! 16-12

Preventing Wage Law Violations in Federal Supply Schedule Task Orders

Purpose:  This Acquisition Flash addresses apparent wage law violations in Department of Veterans Affairs (VA) task orders under Federal Supply Schedule (FSS) contracts.

Dated:  May 26, 2016

Effective Date:  Immediately

Expiration Date:  Until rescinded

Background:  Currently the Department of Labor’s (DOL’s) Wage and Hour Division is investigating unusually problematic contract actions awarded within the VA.  The blanket purchase agreement (BPA) and task orders of interest to DOL were awarded outside the scope of their parent FSS contracts, and are lacking required Federal Acquisition Regulation (FAR) labor clauses and appropriate wage determinations (WDs).

Past experience in these types of matters usually results in a corrective action to address the labor matters, such as issuing modifications retroactive to the beginning of the contract or task order to correct missing and erroneous labor provisions.  DOL and the contractor are then able to accurately calculate any back-wage liability owed to “service employees” (see FAR 22.001) or “laborers or mechanics” (see FAR 22.401).  VA would normally receive a claim for the additional costs of performance, if the error or omission was not the responsibility of the contractor.  However, this standard corrective action approach is not feasible for the contract actions in question because the actions were awarded outside the scope of their parent FSS contracts.

In one instance, orders were placed for services, yet issued under the purview of an FSS contract for commercial supplies.  In another instance, the FAR subpart 8.4 BPA and orders placed were for construction, yet issued under an FSS contract that only allows for ancillary construction when it is associated with other authorized work.  Corrective modifications for adding labor requirements to these orders would potentially exacerbate the scope problems and ultimately raise the dollar value of the nonconforming contract actions.

Applicability:  For VA acquisitions subject to the Construction Wage Rate Requirements statute (see ”Davis-Bacon Act“ at FAR 1.110(c)), this Acquisition Flash applies to all VA acquisitions performed in the 50 United States and District of Columbia.

For VA acquisitions subject to the Service Contract Labor Standards statute (see “Service Contract Act” at FAR 1.110(c)), this Acquisition Flash applies to all VA acquisitions performed in the “United States” as defined in FAR 22.1001.

Action Required:  Heads of the Contracting Activity (HCAs) and contracting officers shall:

a.  Review the FSS contract, any associated BPA, and contractor’s pricelist to ensure the solicitation and subsequent award of an order is within scope.  Specifically:

(1) Ensure an order predominantly for services (i.e., services that are not solely incidental to the supplies being ordered) under an FSS contract or associated BPA for supplies is not solicited or awarded.

(2) Ensure an order or Subpart 8.4 BPA under an FSS contract that allows for only “ancillary” construction (when associated with in-scope nonconstruction work under the FSS contract) does not contain predominantly construction effort.

(3) Ensure the contractor’s pricelist does not include preemptive language that rejects task orders subject to prevailing wage requirements if the order would otherwise be subject to the Service Contract Labor Standards or Construction Wage Rate Requirements statute.

b.  For awards including any substantial and segregable construction valued in excess of $2,000, contracting officers shall comply with the Construction Wage Rate Requirements statute WD requirements outlined in FAR 22.404.

c.  For solicitations and subsequent task orders principally for services performed through the use of service employees, the contracting officer shall comply with the Service Contract Labor Standards statute requirements outlined in FAR 22.1000.  Even if the parent FSS contract already includes a WD appropriate to the task order being placed (flowdown of WD into the basic order), a revised WD must still be obtained and incorporated into the task order’s option periods when the order is extended (see FAR 22.1007(b)).

d.  Before awarding an order or BPA, review the associated FSS contract in GSA eLibrary to ensure the parent contract includes the necessary labor-related clauses.  In addition, it is recommended to compare the Refresh Number in the contractor’s clauses in eLibrary to the Refresh Number in the current solicitation for that Schedule number in Federal Business Opportunities (FBO).¹

¹ Begin by accessing GSA eLibrary .  After entering the FSS contractor’s name in the Search box, select the contractor corresponding to the contract number under which the order will be placed.  From the resulting contractor’s page in eLibrary, select “View the specifics for this contract.”  Review the labor clauses and note the Refresh Number in the upper right of the web page.  Return to the contractor’s page in eLibrary and click on the FSS number (e.g. 03FAC, Schedule 36, 70, etc.).  Select “Click here to view the current solicitation on FedBizOpps.”  Open the solicitation attachment in FBO and compare the Refresh Number of the current FSS solicitation to the number noted in the specific contractor’s clauses.  If the Refresh Numbers are not the same, the contractor may have neglected to accept one or more modifications of its FSS contract.  This could mean the labor clauses or any wage determinations in the FSS contract are out of date which would negatively impact their flowdown into the task order being contemplated.

Additional Information:  Direct questions or concerns to the Risk Management and Compliance Service (003A2C) via email at VARiskManagement@va.gov.

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