Rulings and interpretations of the statute
Contractors and contracting officers must closely monitor contract values, modifications, and contract types to ensure proper application of statutory labor requirements under federal contracts.
Overview
FAR 22.605 outlines key rulings and interpretations issued by the Secretary of Labor regarding the application of labor statutes to federal contracts for materials, supplies, articles, and equipment. This section clarifies when contracts become subject to or exempt from the statute based on contract value modifications, agency relationships, facility ownership, and the nature of indefinite-delivery contracts. The guidance ensures that contractors and contracting officers understand when statutory labor requirements apply, especially in cases of contract modifications or special contract types.
Key Rules
- Contract Value Modifications
- If a contract initially at or below $20,000 is modified to exceed $20,000, the statute applies to work performed after the modification. If a contract above $20,000 is reduced to $20,000 or less, the statute no longer applies to subsequent work.
- Prime Contractor as Government Agent
- Prime contractors acting as agents of the Government must include statutory labor stipulations in subcontracts over $20,000 for supplies used in Government facility construction or equipment.
- Government-Owned vs. Privately Owned Facilities
- Statutory labor requirements apply equally to contractors operating Government-owned and privately owned facilities.
- Indefinite-Delivery Contracts
- These contracts are subject to the statute unless it is determined in advance that total orders for one year will not exceed $15,000. This determination must be reviewed annually if the contract is extended.
Responsibilities
- Contracting Officers: Must monitor contract modifications, ensure proper application of labor statutes, and make annual determinations for indefinite-delivery contracts.
- Contractors: Must comply with labor statute requirements when thresholds are met and ensure proper flow-down of stipulations when acting as Government agents.
- Agencies: Oversee compliance and ensure annual reviews for indefinite-delivery contracts.
Practical Implications
This section helps prevent misapplication of labor statutes due to contract changes or special contract types. Contractors must be vigilant about contract modifications and the nature of their agreements to avoid compliance issues. Annual reviews for indefinite-delivery contracts are critical to maintaining compliance.