[Code of Federal Regulations]
[Title 29, Volume 1]
[Revised as of July 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR4.1b]

[Page 30-31]
 
                             TITLE 29--LABOR
 
PART 4_LABOR STANDARDS FOR FEDERAL SERVICE CONTRACTS--Table of Contents
 
  Subpart A_Service Contract Labor Standards Provisions and Procedures
 
Sec. 4.1b  Payment of minimum compensation based on collectively bargained 

wage rates and fringe benefits applicable to employment under predecessor 
contract.

    (a) Section 4(c) of the Service Contract Act of 1965 as amended 
provides special minimum wage and fringe benefit requirements applicable 
to every contractor and subcontractor under a contract which succeeds a 
contract subject to the Act and under which substantially the same 
services as under the predecessor contract are furnished in the same 
locality. Section 4(c) provides that no such contractor or subcontractor 
shall pay any service employee employed on the contract work less than 
the wages and fringe benefits provided for in a collective bargaining 
agreement as a result of arms-length negotiations, to which such service 
employees would have been entitled if they were employed under the 
predecessor contract, including accrued wages and fringe benefits and 
any prospective increases in wages and fringe benefits provided for in 
such collective bargaining agreement. If, however, the Secretary finds 
after a hearing in accordance with the regulations set forth in Sec. 
4.10 of this subpart and parts 6 and 8 of this title that in any of the 
foregoing circumstances such wages and fringe benefits are substantially 
at variance with those which prevail for service of a character similar 
in the locality, those wages and/or fringe benefits in such collective 
bargaining agreement which are found to be substantially at variance 
shall not apply, and a new wage determination shall be issued. If the 
contract has been awarded and work begun prior to a finding that the 
wages and/or fringe benefits in a collective bargaining agreement are 
substantially at variance with those prevailing in the locality, the 
payment obligation of such contractor or subcontractor with respect to 
the wages and fringe benefits contained in the new wage determination 
shall be applicable as of the date of the Administrative Law Judge's 
decision or, where the decision is reviewed by the Administrative Review 
Board, the date of the decision of the Administrative Review Board. (See 
also Sec. 4.163(c).)
    (b) Pursuant to section 4(b) of the Act, the application of section 
4(c) is made subject to the following variation in the circumstances and 
under the conditions described: The wage rates and fringe benefits 
provided for in any collective bargaining agreement applicable to the 
performance of work under the predecessor contract which is consummated 
during the period of performance of such contract shall not be effective 
for purposes of the successor contract under the provisions of section 
4(c) of the Act or under any wage determination implementing such 
section issued pursuant to section 2(a) of the Act, if--
    (1) In the case of a successor contract for which bids have been 
invited by formal advertising, notice of the terms of such new or 
changed collective bargaining agreement is received by the contracting 
agency less than 10 days before the date set for opening of bids, 
provided that the contracting agency finds that there is not reasonable 
time still available to notify bidders; or

[[Page 31]]

    (2) Notice of the terms of a new or changed collective bargaining 
agreement is received by the agency after award of a successor contract 
to be entered into pursuant to negotiations or as a result of the 
execution of a renewal option or an extension of the initial contract 
term, provided that the contract start of performance is within 30 days 
of such award or renewal option or extension. If the contract does not 
specify a start of performance date which is within 30 days from the 
award, and/or performance of such procurement does not commence within 
this 30-day period, any notice of the terms of a new or changed 
collective bargaining agreement received by the agency not less than 10 
days before commencement of the contract will be effective for purposes 
of the successor contract under section 4(c); and
    (3) The limitations in paragraph (b)(1) or (2) of this section shall 
apply only if the contracting officer has given both the incumbent 
(predecessor) contractor and his employees' collective bargaining 
representative written notification at least 30 days in advance of all 
applicable estimated procurement dates, including issue of bid 
solicitation, bid opening, date of award, commencement of negotiations, 
receipt of proposals, or the commencement date of a contract resulting 
from a negotiation, option, or extension, as the case may be.