Overview
This section outlines the corrective actions required when the Department of Labor (DOL) identifies that a Contracting Officer (CO) mistakenly excluded the Service Contract Labor Standards (SCLS) or a required wage determination from a contract.
Key Rules
- Discovery Timing: The DOL can identify errors and mandate corrections regardless of whether the contract has already been awarded.
- 30-Day Mandatory Action: Upon notification from the DOL, the CO has 30 days to incorporate FAR clause 52.222-41 and the appropriate wage determination into the contract.
- Retroactive Application: If the contract falls under 41 U.S.C. 6707(c) (successor contracts), the DOL Administrator may require the wage determination to apply retroactively to the start of the contract.
- Equitable Adjustment: The CO is required to provide an equitable adjustment to the contract price to cover any increased costs of performance resulting from the late incorporation of the wage determination.
Practical Implications
- Financial Risk Shift: The financial burden of a CO’s error regarding SCLS applicability rests with the Government, as the contractor is entitled to be made whole for increased labor costs via an equitable adjustment.
- Compliance Monitoring: Contractors should remain aware that DOL audits or reviews can trigger mid-performance contract modifications, requiring immediate updates to payroll and labor classifications.