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The Service Contract Act (SCA)

The McNamara-O’Hara Service Contract Act of 1965 is the last major labor law that was enacted. By 1965, Congress had already passed the Davis-Bacon Act for federally funded construction contracts, and the Walsh-Healy Public Contracts Act for manufacturing or furnishing of goods, supplies, articles or equipment to the federal government. Why understanding the Service Contract Act is critical when pricing your bid proposal?

The answer has to do with understanding what the law requires you, the contractor, to pay in wages and fringe benefits which will determine if you have properly priced the project.

The Service Contract Act (SCA) was enacted to fill the gap that was created for federally funded service contracts. Also, SCA was intended to remove wages and benefits as a factor from competition.

The Wage and Hour Division within the Department of Labor is responsible for setting wages and fringe benefits based on locality. Each service contract has incorporated a wage determination which specifies the locality, wage rates and fringe benefits that are required.
Unfortunately, the rules are not particularly clear. Try to work them out on your own and you might make a mistake that will cause the government to withhold payments, cancel the contract, or even debar your firm from further government contracts.

To help you understand the rules, CSA in a partnership with the Wage and Hour Division within the Department of Labor sponsors twice a year a Service Contract Act Training Program. For more information or to register click HERE.

How is CSA Improving the process?

CSA through the Labor Relations Committee has worked on issues that improve industry’s relationship with the U.S. Department of Labor, U.S. Agency Labor Advisors and the Labor Unions.

Fringe Benefits

CSA Comments

Training programs on the Service Contract Act

CSA Needs Your Comments

The Department of Labor's Wage and Hour Division is currently reviewing the methodology for determining Health and Welfare benefits under the Service Contract Act and CSA has been asked to comment. We want to hear from our members regarding how you would like us to respond.

Click HERE to read CSA's draft proposal.

Click HERE to read some background information related to this issue.

Click HERE to read CSA's past recommendations on this issue.

Click HERE to see the DoL's Price Adjustment Guide.

Click HERE to see the DoL All Agency Memo of May 20, 2005

Send your comments to Kent Sholars, CSA's Manager of Legislative and Regulatory Affairs.

Need more information about the Service Contract Act?

Contact Kent Sholars, CSA Manager of Regulatory & Legislative Affairs