Navy Labor Advisors

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Navy Labor Advisors

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1. Navy Labor Advisors Homepage NEWSLETTER ASN/RDA Who we are, what we do www.acquisition.navy.mil (“Acquisition One Source”) SECNAVINST 4200.36A Desktop Guides

2. Help For These Service Contract Act Advice & Assistance Davis Bacon Act A&A Walsh Healey Act A&A Contract EEO A&A Labor organizing efforts Contractor labor strikes Picketing against contractors Training for all the above

4. FOLLOW THE MONEY The Employee Perspective The Contractor’s Perspective DOL’s Perspective Contracting Agency (YOU) Perspective Why Union Organization “Happens” A brief SCA “History” lesson – Why Congress Enacted SCA. What’s politics got to do with it? – Dear Senator Jones….

5. LABOR STANDARDS – THE “BIG” THREE COMMODITIES – WALSH-HEALEY PUBLIC CONTRACTS ACT (FAR 22.6) (41 CFR 50) CONSTRUCTION – DAVIS BACON AND RELATED ACTS (FAR 22.4) (29 CFR PART 5) SERVICES – SERVICE CONTRACT ACT (FAR 22.10) (29 CFR PART 4) IF YOU DON’T HAVE AT LEAST ONE OF THESE IN YOUR SOL./CONTRACT – DO YOU HAVE A LEGALLY DEFENSIBLE REASON – WHY NOT?

6. KEY ISSUES APPLICABILITY EXEMPTIONS RELATIONSHIP OF THE KEY CLAUSES OBTAINING WAGE DETERMINATIONS UPDATING WAGE DETERMINATIONS PRICE ADJUSTMENTS ENFORCEMENT

7. APPLICABILITY SCA applies to all federal contracts (FAR 22.1003-1): Principally for Services (29 CFR 4.111) Performed in the United States Through the use of Service Employees (29 CFR 4.113) & (29 CFR 541) CLOSE CALLS? FAR 22.1003-7 & 29 CFR 4.1113(a)(4)

11. APPLICABILITY Substantial means -- in its own right OR when it is more than incidental. Segregable means -- could the DBA-type work be separated from the rest of the contract? If both SCA & DBA apply, contract must clearly state which portion is subject to DBA (FAR 22.404-2(a))

13. Service Employees DOL part 541 Executive – manager (29 CFR 541.1) Primarily supervises people Professional (29 CFR 541.3) 4 -yr. Degree Administrative (29 CFR 541.2) Policy maker

15. Examples Global Positioning Contract 250 total on contract 230 electrical engineers, software engineers, computer systems analysts, highly-skilled programmers, managerial personnel 20 clerical & secretarial personnel

16. Example “Star wars” 50 total workforce 30 engineers/managers 8 clerical/secretarial 6 security/messengers 6 janitorial

17. EXAMPLE A & E TYPE CONTRACT -------------------------- 1 ARCHETECT 2 ENGINEERS --------------------------- 2 DRAFTSMEN 4 SURVEY CREW 2 CLERICAL

18. EXAMPLE RADIOLOGY CONTRACT ------------------------------- 2 PHYSICIAN/M.D. ------------------------------- 4 X-RAY TECHNICIANS

21. KEY CLAUSES-RELATIONSHIP FAR 22.1007 – 29 CFR 4.4 (REQUEST WD UPDATE) FAR 22.1010 – 29 CFR 4.1b(b) (NOTICE TO INTERESTED PARTIES) FAR 22.1012-1 OR FAR 22.1012-2 – 29 CFR 4.5 & 4.1b(b) (“TIMELY” RESPONSE) FAR 22.1012-1 – 29 CFR 4.5 (CONTRACT MODIFICATION) FAR 52.222-43 (SCA PRICE ADJUSTMENT)

23. WDs–HOW TO OBTAIN–SF98 FAR 22.1007 (29 CFR 4.4) “HISTORY LESSON” MAIL THE “BLANKET REQUEST” – DEAD PROGRAM INTERACTIVE SF98 ( www.dol-esa.gov/sf98) www.wdol.gov – The Latest & Greatest COLLECTIVE BARGAINING AGREEMENTS

24. Fringe Benefit Levels High H&W (“Average Cost”)-- ‘Grandfathered’ at $2.56 Single Benefit Level $1.16 issued June 1, 1997 (1st of 4) $1.39 issued June 1, 1998 (2nd of 4) $1.63 issued June 1, 1999 (3rd of 4) $1.92 issued June 1, 2000 (4th of 4) $2.02 June 2001 $2.15 June 2002 $2.36 June 2003 $2.59 June 2004 $2.87 June 2005 $3.01 June 2006 $3.16 June 2007 ?? June 2008 GENERAL RULE – Use the “low” (“per employee”) (odd-numbered) wage determination for all contracts (including A-76 studies), EXCEPT as noted below: Only use “high” (“average cost”) (even-numbered) WD where it has a precedent of being used for a specific contract or a recompetition for essentially the same service in the same locality – DOL’s “grandfather” rule

27. UPDATING WDs-?Why/When? FAR 22.1007 (29 CFR 4.4) NEW SOLICITATION/CONTRACT OPTION EXTENSION CHANGE OF SCOPE (“WHEREBY LABOR REQUIREMENTS ARE SIGNIFICANTLY AFFECTED”) ANNUAL ANNIVERSARY

28. WHAT TO SAY IN MOD NEW WAGE DETERMINATION XXXX EFFECTIVE COMPLIANCE DATE FOR NEW WD THIS MAY ALLOW YOU TO REQEST SCA PRICE ADJUSTMENT – IF SO, 30 DAYS TO ADVISE AND PROVIDE PROPOSAL

29. When??? Make no WD changes in mid contract period!!!!!!!!!! ONCE WD PLACED ONTO CONTRACT WILL APPLY TO THE ENTIRE PERIOD OF PERFORMANCE (POP)!

30. DEADLINES FOR WD Revisions IF: work starts < 30 days after award/ option exercise: Deadline is up to the day of award/exercise of option or extension IF: work starts > 30 days after award/option exercise: Deadline is up to 10 days prior to start of work

31. WD Timelines Never incorporate wage determinations dated after the start of the performance on the contract period!!!!! CBAs dated after start of performance will not be effective SCA WD until next period FAR 22.1012-1 & 22.1012-2 (29 CFR 4.4 & 4.1b(b))

32. SCA PRICE ADJUSTMENTS YOUR CUSTOMER’S PERSPECTIVE FIXED PRICE CONTRACT EXCEPTION TO THE FIXED PRICE – WD!!! THE SCA PRICE ADJUSTMENT GUIDE

34. Adjustment: New minimum wage or benefit MINUS ACTUAL WAGE/BENEFIT PAID IN previous contract period Plus change in payroll taxes and workers comp Equals the price adjustment NO G&A, profit, etc.. No OVERTIME PREMIUM Usually NOT Unemployment Tax (Despite FAR allowing – Was there actual COST INCURRED?)

35. Nish Contracts Obtain PRICING MEMORANDUM NO. 3 from your NISH representative NISH contracts may be adjusted annually Wage changes based on WD Supplies and equipment change exceeds the 2% economic adjustment rate ? A NISH fee-% of is charged on any increase “Other burden” cost is 9.5% of any increase WHAT DOES THE FOLLOW-ON YEAR AGREEMENT SAY?? – PM#3 – Section 9!!

36. ENFORCEMENT DOL HAS SOLE RESPONSIBILITY/AUTHORITY WHAT ABOUT COMPLAINTS? WHAT IS THE CONTRACTING AGENCY RESPONSIBILITY? Cooperative with DOL (FAR 22.1024) (29 CFR 4.5) Withhold when necessary (FAR 22.1022) (29 CFR 4.6) Refer Complaints Egregious Violations

37. CONFORMANCE OF ADDITIONAL CLASSIFICATIONS Overview Not Conformable Primary duties covered by WD classifications Subordinate Classifications Helpers and Trainees Exempt classes Relationship to WD rates Procedure (SF 1444) DOL response Indexing and price adjustment FAR 22.1019 – 29 CFR 4.6(b)(2)

38. MISCELLANEOUS ISSUES REVIEW OF WDs (FAR 22.1013) (29 CFR 4.53, 4.54, and 4.55) Delayed Acquisition (FAR 22.1014) (29 CFR 4.4) DOL Discovery of Errors (FAR 22.1015) Statement of Equiv. Rate (FAR 22.1016) Posters (FAR 22.1018) (29 CFR 4.184) Additional Classes (Conform) (22.1019)

39. Miscellaneous Continued Seniority List (FAR 22.1020)(29CFR4.6) Variance Hearing (FAR 22.1021)(29CFR4.10) Withholding of Payments (FAR 22.1022)(29CFR4.6 & 4.187) Termination for Default (FAR 22.1023) Debarment (FAR 22.1025) Disputes RE: Labor Standards (FAR 22.1026)(29CFR4.6 & 4.189)

41. KEY ISSUES Applicability Exemptions Clauses Obtaining WDs (aka General Decisions) Updating WDs DBA Price Adjustments Enforcement

45. Site Of Work Work hours performed on the site must be paid at DBA rates Construction site (FAR 22.401) (29CFR5.2(l)) Secondary Site (FAR 22.401) Dedicated fab plants, borrow pits located in close proximity (22.401) Not: home shop (22.401)

46. EXEMPTIONS STATUTORY -- NONE INDIVIDUAL EMPLOYEE EXEMPTIONS --DOL’s “white collar” exemptions 29 CFR Part 541 -- NOT Laborer or Mechanic

47. KEY CLAUSES FAR 52.222-4, CWHSSA (OT) >$100,000 FAR 52.222-6, Davis Bacon Act FAR 52.222-7, Withholding FAR 52.222-8, Payroll Records FAR 52.222-9, Apprentices & Trainees FAR 52.222-10, Copeland Act Req. FAR 52.222-11 Subcontracts FAR 52.222-12, Contract Termination FAR 52.222-14, Labor Standards Disputes

48. Obtaining DBA WAGE DECISIONS Contract Must Contain One or More WDs–DOL All Agency Memos 131 & 131 General wage decisions (FAR 22.404-6) Wage Dets. On-Line(WDOL) Program Project WDs (FAR 22.404.3(b), 405-5) SF 308 Four Primary Schedules Residential Highway Building Heavy

49. Wage Decision Types BUILDING - non-residential with walk-in access, and site work HIGHWAY - roads, runways, parking HEAVY - all not included in above, launch facilities and adjacent buildings, bridges RESIDENTIAL - housing units up to 4 stories, and incidental site work Project WD - SF 308 (180 day limit)

51. UPDATING DBA WAGE DET. Only Required for CONTRACTS THAT “EXTEND THE TERM – by OPTION “OR OTHERWISE” DOES NOT APPLY TO “FIXED PROJECT” TYPE CONTRACTS – REGARDLESS OF THE LENGH OF TIME FOR COMPLETION OF THE PROJECT FAR 22.404-12 (DOL All Agency Memo #157)

52. UPDATING WDs Continued Must select one of 3 possible clauses during the solicitation/competition These clauses establish whether the price will be adjusted and, if so, how FAR 22.407 (e), (f), or (g) “e” – No Adjustment (52.222-30) “f” – Indexed Adjustment -- % (52.222-31) “g” – Actual Cost Adjustment – Similar to SCA (52.222-32)

53. DBA PRICE ADJUSTMENT Dependent Upon Methodology Chosen by CO during solicitation/competition NONE INDEX -- % Method, such as tied to CPI, Employment Cost Index, etc. ACTUAL – Similar to SCA Price Adjustment

55. ENFORCEMENT CONTINUED DOL Assistance – Highly Recommended Expertise Considerations Resource Considerations Contractor Performing for Multiple Federal Agencies? Possible Violations of other DOL Laws IF NO DOL Assistance – Let’s Dive In

57. Requirements Minimum wage Laborers and mechanics On site of work Subcontractors who do the manual work Working foremen Fringe benefits Overtime premium CWHSSA Recordkeeping/certified payroll

59. Wages DB wage not required: 541 EXEMPT PERSONS salary test supervise 2 or more primary duty test Survey crew Security escort Administrative, timekeepers Truck -- owner/operators

60. Classifications Based on “prevailing” area (local) practice Cluster of work activities comprises a “class” for wage rate “Splitting out” or fragmenting -- not permitted Activity incidental to, integral part of... Wage rates attach to the activity (duties) - not the person

61. Classifications More than one wage rate to one employee ok if: Segregable Contractor keeps accurate records

62. Fringe Benefits Fringe benefits: Funded: insurance, pension.. Paid irrevocably At least quarterly (not profit sharing plans) Unfunded plans: vacation, holiday... Reasonably anticipated to provide Legally enforceable Financially responsible In writing to employee

63. Fringe Benefits Continued All or portion of fringe benefits may be paid as additional wages If the employer elects this option, they must pay weekly along with regular wages

64. Calculations Cost of benefit for An employee

65. Not Fringe Benefits Workers compensation Social security Taxes Unemployment Expenses paid for the employee Trucks, tools Uniforms, safety shoes Profit sharing -- no assurance that profits will exist

66. HELPERS DOL does recognize “helpers” when three criteria are met: Distinct duties - not journeyman or laborer Use of helpers is prevailing in the area Not a “trainee” category If DOL is recognizing a “helper” for any trade, it will appear on the WD

67. Apprentices - Trainees APPRENTICES - individually registered in program approved by DOL-ATELS (or ATELS sanctioned state program) TRAINEES -DOL ETA approved program Paid a % of journeyman rate Generally, fringe benefits same as journeyman rates

68. Apprentices - Trainees Ratio - applied daily - to site Example: ratio of 1 to 3 1 2 3 4 5 6 7... Workers J j j j j j j....Journeymen A a a... Apprentices Apprentice programs are portable, trainee programs not

70. Contract Work Hours And Safety Standards Act (CWHSSA) OVERTIME at time and 1/2, hours over 40 per week Applies to SCA & DBA covered contracts Applies to mechanic and laborers, guards and watchmen Over $100,000 Liquidated damages

71. Copeland Anti Kickback Act No rebates of wages Deduction must be authorized in writing (other than taxes) Expense payments not part of wages Employer pays for required tools, supplies

73. Employee Interviews Plan ahead ID yourself Maintain confidentiality Allow enough time Ask enough questions to determine classification Hours worked Fringe benefits Rate & method of payment Employee reviews statement

74. Contractor Check List WD provided to all subs? Labor posters and WD posted on site? Know the work activities in each classification? Proper record keeping in place? Apprentice/trainee certifications to CO?

75. Contractor Check List Certified payrolls due within 7 days of weekly pay Process for collecting payrolls from subs in place?? Do not allow the contractor to delay turning in payrolls!!! Check the payrolls weekly !!!

76. CONTRACTOR CHECKLIST Contractor’s Guide for DBA Compliance Home Page – “Desktop Guide” Appendix

77. The End

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