Overview
This section outlines the responsibilities of the Contracting Officer (CO) to review and challenge wage determinations that appear inaccurate, inconsistent with local prevailing rates, or the result of non-competitive negotiations.
Key Rules
- CBA Substantial Variance: If a Collective Bargaining Agreement (CBA) provides for wages or benefits that differ significantly from prevailing rates in the locality, the CO must contact the agency labor advisor to consider formal challenge procedures.
- Arm’s Length Negotiations: The CO is required to report to the agency labor advisor if they suspect an incumbent contractor’s CBA was not negotiated at "arm’s length" (e.g., entered into in bad faith to artificially inflate costs).
- Non-CBA Accuracy: For wage determinations not based on a CBA, the CO must verify that the rates conform to local standards and check for significant errors or omissions.
- Mandatory Consultation: In any instance where a wage determination is suspect, the CO must coordinate with the agency labor advisor to determine the appropriate corrective action.
Practical Implications
- Contracting Officers act as a critical checkpoint to ensure the government does not overpay for services due to flawed Department of Labor data or "sweetheart deals" between unions and incumbent contractors.
- This regulation provides a mechanism for the government to protest wage rates that would otherwise unfairly increase contract costs or create an unlevel playing field during competitions.