Overview
FAR 22.1007 mandates that Contracting Officers obtain official Department of Labor wage determinations for service contracts exceeding $2,500 at specific stages of the acquisition lifecycle. It ensures that prevailing wage rates are applied to new requirements, contract extensions, significant scope changes, and throughout the duration of multi-year agreements.
Key Rules
- Threshold: The requirement applies to all covered service contract actions exceeding $2,500.
- New Actions: A wage determination must be obtained for every new solicitation and resulting contract.
- Modifications: Required for modifications that bring a contract above the $2,500 threshold and either:
- Extend the contract (via options or other means); or
- Significantly change the scope in a way that affects labor requirements.
- Multi-year Contracts: Ongoing contracts require updated wage determinations based on funding type:
- Annual Appropriations: Updated on every annual anniversary date.
- Non-Annual Appropriations: Updated every two years (biennially) if the contract term exceeds two years.
Practical Implications
- Compliance Monitoring: Contracting Officers must proactively track anniversary dates and option exercises to ensure the most current wage rates are incorporated, preventing labor standard violations.
- Price Adjustments: The incorporation of new wage determinations during the life of a contract typically triggers the contractor’s right to request a price adjustment for increased labor costs, as outlined in FAR 52.222-43 or 52.222-44.