“SMALLTOFEDS” By Ken Larson
“When pricing government contracts, in particular service contracts, the small business will encounter government wage determinations under the Service Contract Act and Davis-Bacon Act.
These determinations specify the minimum wages and related benefitsthat must be paid to all hourly employees charging time directly to a federal service contract as part of a total compensation plan.”
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“When bidding a service contract with a requirement containing a Wage Determination, the labor category wages and fringe must conform, as a minimum,to the Wage Determination in the government Request for Proposal (RFP). The personnel must be paid not less than the wages and fringe benefits specified in the determination when the contract is awarded.
Service Contract Act, as an example, requires minimum wages be paid per labor category as defined in the Directory of Occupations and listed as minimum wages per labor category on the Area Wage Determination incorporated into each contract. The wages are mandatory minimums paid employees for every hour worked on the contract as defined by The Act, both full-time and part-time.
Due to competitive factors and labor market concerns the company may propose labor and fringe exceeding the Wage Determination, but the bid cannot go beneath the government specified rates. Below is a typical conformance table for an engineering firm with the Wage Determination information on the right side and the company bid rate on the left side of the table. “
READ MORE ABOUT MANAGING COMPLIANCE WITH THE SERVICE CONTRACT AND DAVIS-BACON ACTS: https://www.smalltofeds.com/2015/03/government-contract-wage-determinations.html
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