Overview
This section prescribes the mandatory FAR clauses and provisions that must be included in federal construction solicitations and contracts to enforce labor standards and the Construction Wage Rate Requirements statute. It establishes the $2,000 threshold for application and provides specific instructions for cost-reimbursement, mixed-work, and multi-year contracts with option periods.
Key Rules
- Monetary Threshold: Labor standards clauses are required for all construction contracts within the United States exceeding $2,000.
- Mandatory Clause Set: Standard contracts must include clauses covering wage rates, payroll records, withholding of funds, apprenticeship programs, and Copeland Act compliance.
- Mixed-Purpose Contracts: If a contract is not primarily for construction but includes significant construction work, the labor standards must be applied specifically to those identified construction items.
- Price Adjustment Methods: For contracts with option years, the Contracting Officer must insert one of three specific clauses (52.222-30, 52.222-31, or 52.222-32) based on whether the price adjustment method is "None/Separately Specified," "Percentage," or "Actual."
- Secondary Site Disclosure: Solicitations must include provision 52.222-5 to address labor standards at secondary sites of work.
Practical Implications
- Contracting Officers must carefully identify the appropriate price adjustment method before solicitation to ensure the correct "Construction Wage Rate Requirements—Price Adjustment" clause is selected.
- Prime contractors are responsible for flowing these clauses down to all subcontractors, as failure to comply can lead to contract termination, withholding of funds, or debarment.
- Non-construction contractors (such as those in IT or facilities management) must remain aware that incidental construction tasks exceeding $2,000 will trigger these complex labor reporting and wage requirements.