General Services Administration



GSA Enterprise Infrastructure Solutions (EIS) BulletinVolume 14Date: 11/18/2020Target Audience:??Agency Transition Sponsors; Lead Transition Managers (LTMs); Transition Managers; Ordering Contracting Officers (OCOs); Agency EIS Contracting Officer’s Representatives; EIS contractorsTopics in this Bulletin:McNamara-O’Hara Service Contract Act Applicability to EISQuestions: Email the Transition Coordination Center Help Desk at eistcc.support@.Background: This bulletin addresses the McNamara-O’Hara Service Contract Act Applicability to ic – McNamara-O’Hara Service Contract Act Applicability to EIS: The McNamara-O’Hara Service Contract Act of 1965 (SCA or Act) is included in the EIS contract. The SCA is implemented in the contract per Federal Acquisition Regulation (FAR) Clause 52.222-41 Service Contract Labor Standards. It requires contractors performing on service contracts in excess of $2,500 to which no predecessor contractor’s collective bargaining agreement applies shall pay their employees at least the wages and fringe benefits found by the Department of Labor (DOL) to prevail in the locality or, in the absence of a wage determination, the minimum wage set forth in the Fair Labor Standards Act (FLSA).Several agencies and one EIS contractor questioned the applicability of the SCA to the EIS contract. The main argument against its applicability to EIS was the exemption included in FAR 22.1003-3 (d), which states:“The Service Contract Labor Standards statute does not apply to – (d) Any contract for furnishing services by radio, telephone, or cable companies subject to the Communications Act of 1934.”In September 2019, the GSA asked the DOL Wage and Hour Division (WHD) to reconsider the SCA’s applicability to the EIS contract. The DOL recently reaffirmed to GSA that the SCA applies to the EIS contract. Specifically, DOL stated the following:‘Unless an exemption applies, the SCA generally covers any federal service contract that is performed “through the use of service employees” (41 U.S.C. § 6702(a)(3)). A “service employee” includes all persons engaged in the performance of a covered service contract, except for those persons who are employed in a bona fide executive, administrative, or professional capacity, as those terms are defined in 29 CFR Part 541, under the FLSA (41 U.S.C. § 6701(3)). If a contract for services is performed exclusively or essentially by FLSA-exempt executive, administrative, or professional employees, with the use of service employees being only a minor or nonexistent factor in the performance of a contract, the contract is not subject to the SCA. See 29 CFR § 4.113(a)(2)-(3). However, a contract for services is subject to the Act if it involves the use of service employees to a significant or substantial extent even though there is some use of bona fide executive, administrative, or professional employees in the performance of the contract. Id.; see also Nat’l Cancer Inst., No. 93-10, 1993 WL 832143 (BCSA Dec. 30, 1993) (discussing the “significant or substantial” standard).’Because task orders are the “official contractual mechanism” agencies use to obtain services under the Networx and EIS IDIQs, WHD evaluates whether the Communications Act exemption applies at the task-order level. Therefore, agencies must determine if an exemption applies at the task order level in order to determine SCA’s applicability. Please be advised that DOL has determined that Contact Center Services are not exempt and are subject to the SCA. DOL has not made a determination regarding SCA applicability to any other service on the EIS contract. ................
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