Federal Acquisition Regulation; Collective Bargaining Agreement, Contingency Clauses

GENERAL SERVICES ADMINISTRATION

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 22

[FAC 90-23; FAR Case 92-7; Item XVIII]

RIN 9000-AF75

Federal Acquisition Regulation; Collective Bargaining Agreement,

Contingency Clauses

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed on a final rule to amend

the Federal Acquisition Regulation (FAR) to implement the direction

contained in Department of Labor (DOL) Memorandum Nos. 159 and 166

concerning contingencies in collective bargaining agreements subject to

section 4(c) of the Service Contract Act and requests for substantial

variance hearings. This rule also makes editorial changes to more

accurately reflect the DOL regulations on the Service Contract Act.

This regulatory action was not subject to Office of Management and

Budget review under Executive Order 12866, dated September 30, 1993.

EFFECTIVE DATE: February 27, 1995.

FOR FURTHER INFORMATION CONTACT: Mr. Jack O'Neill at (202) 501-3856 in

reference to this FAR case. For general information, contact the FAR

Secretariat, Room 4037, GS Building, Washington, DC 20405 (202) 501-

4755. Please cite FAC 90-23, FAR case 92-7.

SUPPLEMENTARY INFORMATION:

A. Background

This final rule incorporates guidance from two memorandums which

the DOL's Wage and Hour Division has issued to all contracting agencies

of the Federal Government and the District of Columbia concerning

collective bargaining agreements (CBA's) subject to section 4(c) of the

Service Contract Act. Memorandum No. 159 explains a DOL conclusion that

certain contingencies in CBA's generally reflect a lack of arm's length

negotiations. Memorandum No. 166 amplifies the DOL's regulatory

requirements for substantial variance hearings. This final rule also

includes changes to more accurately reflect the DOL's regulations on

the Service Contract Act at 29 CFR Part 4.

B. Regulatory Flexibility Act

This final rule does not constitute a significant FAR revision

within the meaning of FAR 1.501 and Public Law 98-577, and publication

for public comments is not required. Therefore, the Regulatory

Flexibility Act does not apply. However, comments from small entities

concerning the affected subpart will be considered in accordance with 5

U.S.C. 610. Such comments must be submitted separately and cite 5

U.S.C. 601, et seq. (FAC 90-23, FAR case 92-7), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose recordkeeping or information collection

requirements, or collections of information from offerors, contractors,

or members of the public which require the approval of the Office of

Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 22

Government procurement.

Dated: December 7, 1994.

Albert A. Vicchiolla,

Director, Office of Federal Acquisition Policy.

Therefore, 48 CFR part 22 is amended as set forth below:

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

1. The authority citation for 48 CFR part 22 continues to read as

follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

2. and 3. Section 22.1008-3 is amended by revising paragraph (e) to

read as follows:

22.1008-3 Section 4(c) successorship with incumbent contractor

collective bargaining agreement.

* * * * *

(e) Section 4(c) of the Act will not apply if the Secretary of

Labor determines (1) after a hearing, that the wages and fringe

benefits in the predecessor contractor's collective bargaining

agreement are substantially at variance with those which prevail for

services of a similar character in the locality, or (2) that the wages

and fringe benefits in the predecessor contractor's collective

bargaining agreement are not the result of arm's length negotiations

(see 22.1013 and 22.1021). The Department of Labor (DOL) has concluded

that contingent collective bargaining agreement provisions that attempt

to limit a contractor's obligations by means such as requiring issuance

of a wage determination by the DOL, requiring inclusion of the wage

determination in the contract, or requiring the Government to

adequately reimburse the contractor, generally reflect a lack of arm's

length negotiations.

* * * * *

3. Section 22.1021 is revised to read as follows:

22.1021 Requests for hearing.

(a) A contracting agency or other interested party may request a

hearing on an issue presented in 22.1013(a). To obtain a hearing for

the contracting agency, the contracting officer shall submit a written

request through appropriate channels (ordinarily the agency labor

advisor) to: Administrator, Wage and Hour Division, Employment

Standards Administration, U.S. Department of Labor, Washington, DC

20210.

(b) A request for a substantial variance hearing shall include

sufficient data to show that the rates at issue vary substantially from

those prevailing for similar services in the locality. The request

shall also include--

(1) The number of the wage determinations at issue;

(2) The name of the contracting agency whose contract is involved;

(3) A brief description of the services to be performed under the

contract;

(4) The status of the procurement and any estimated procurement

dates, such as bid opening, contract award, and commencement date of

the contract or its follow-up option period;

(5) A statement of the applicant's case, setting forth in detail

the reasons why the applicant believes that a substantial variance

exists with respect to some or all of the wages and/or fringe benefits;

(6) Names and addresses (to the extent known) of interested

parties; and

(7) Any other data required by the Administrator.

(c) A request for an arm's length hearing shall include--

(1) A statement of the applicant's case setting forth in detail the

reasons why the applicant believes that the wages and fringe benefits

contained in the collective bargaining agreement were not reached as a

result of arm's length negotiations;

(2) A statement regarding the status of the procurement and any

estimated procurement dates, such as bid opening, contract award, and

commencement date of the contract or its follow-up option period; and

(3) Names and addresses (to the extent known) of interested

parties.

(d) Unless the Administrator determines that extraordinary

circumstances exist, the Administrator will not consider requests for a

hearing unless received as follows:

(1) For sealed bid contracts, more than 10 days before the award of

the contract; or

(2) For negotiated contracts and for contracts with provisions

exceeding the initial term by option, before the commencement date of

the contract or the follow-up option period.

[FR Doc. 94-30651 Filed 12-27-94; 8:45 am]

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