How does the Service Contract Act affect pricing and labor categories for service contracts?

Question

My firm is bidding on a federal janitorial services contract, a Request for Quotation for a county building. The NAICS code is 561720, and it's a small business set-aside. I know the Service Contract Act applies to service contracts performed in the United States and above a certain dollar amount. We need to submit our price volume by next Tuesday.

I'm looking at the wage determination included in the solicitation, and it lists a bunch of labor categories and hourly rates. We use different titles for our staff, like 'day porter' and 'night crew lead.' How do I map our existing labor categories and pay scales to the ones in the wage determination without losing money or making our bid non-compliant? Does the Service Contract Act affect how we calculate our overhead and profit for the bid?

I'm looking at the [wage determination](https://govcon.forum/glossary/prevailing-wage/) included in the solicitation, and it lists a bunch of labor categories and hourly rates. We use different titles for our staff, like 'day porter' and 'night crew lead.' How do I map our existing labor categories and pay scales to the ones in the wage determination without losing money or making our bid non-compliant? Does the Service Contract Act affect how we calculate our overhead and profit for the bid?

Tom B. · Answer

The Service Contract Act (SCA) directly impacts pricing and labor categories for service contracts by requiring specific wage and fringe benefit rates, and you must map your labor categories to the wage determination to ensure compliance. The SCA clause at FAR 52.222-41 is inserted in service contracts over a certain threshold and performed in the United States. You must align your staff's duties with the job descriptions in the wage determination. If an exact match is not available, you will need to propose a conformed labor category to the [contracting officer](https://govcon.forum/glossary/contracting-officer/) for approval, ensuring the proposed wages and benefits are fair and align with the closest listed category. The wage determination specifies the minimum hourly rates for wages and fringe benefits. Your overhead and profit calculations must account for these mandated labor costs to avoid underbidding. Bids that do not properly account for the wage determination are often found non-compliant or too low to perform the work.

How does the Service Contract Act affect pricing and labor categories for service contracts?

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How does the Service Contract Act affect pricing and labor categories for service contracts?

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