Overview
This section establishes that a contractor's failure to adhere to Service Contract Labor Standards (SCLS) requirements constitutes a material breach of contract, providing the government with the legal authority to terminate the contract for default.
Key Rules
- Statutory Authority: The power to terminate for default in this context is derived directly from the Service Contract Labor Standards statute.
- Scope of Non-compliance: Any failure to comply with contract clauses related to SCLS (formerly known as the McNamara-O'Hara Service Contract Act) serves as sufficient grounds for termination.
- Regulatory Reference: This section specifically points to paragraph (k) of FAR clause 52.222-41, which details the contractor's obligations and the consequences of a breach.
Practical Implications
- Service contractors must treat labor compliance—such as paying prevailing wages and fringe benefits—with the same priority as technical performance, as violations can lead to immediate contract loss.
- Because a termination for default is a severe administrative action, it can result in the contractor being liable for reprocurement costs and may negatively impact their ability to win future government work through poor past performance ratings.