22.605 Rulings and interpretations of the statute
Source: FAR 22.605 on acquisition.gov
Under FAR 22.605, coverage turns largely on the $20,000 threshold and can begin or end after a contract modification, so contractors and contracting officers must reassess clause applicability whenever value or ordering estimates change.
Overview
- FAR 22.605 summarizes Department of Labor rulings and interpretations implementing the statute covered in Subpart 22.6, with practical guidance on when the statutory labor stipulations apply based on contract value and later contract changes.
- Its main purpose is to clarify how the $20,000 threshold applies to modifications, agency relationships, Government-owned facilities, and indefinite-delivery arrangements.
Key Rules
- Threshold changes through modification
- If a contract originally at $20,000 or less is modified above $20,000, the statute applies only to work performed after the modification date.
- Reduction below the threshold
- If a contract originally over $20,000 is later reduced by mutual agreement to $20,000 or less, the statute no longer applies to work performed after that modification.
- Prime contractor acting as Government agent
- When a prime contractor is designated as an agent of the Government, it must include the statute’s stipulations in contracts over $20,000 awarded on the Government’s behalf for supplies used in construction and equipping Government facilities.
- Government-owned facilities and IDIQ-type instruments
- Contractors operating Government-owned facilities are covered the same as contractors at privately owned facilities. Indefinite-delivery contracts, BOAs, and BPAs are generally covered unless estimated aggregate orders for the first year will not exceed $20,000; agencies must reassess annually if extended.
Responsibilities
- Contracting Officers: monitor modifications affecting the $20,000 threshold, make annual determinations for extended ordering instruments, and modify agreements when coverage changes.
- Contractors: apply statutory stipulations when required, especially when acting as the Government’s agent or operating Government-owned facilities.
- Agencies: follow Department of Labor interpretations in 41 CFR 50-206 and ensure proper clause flowdown and threshold administration.
Practical Implications
- This section exists to prevent confusion about when statutory labor requirements attach or cease during contract administration.
- It affects pricing, clause inclusion, subcontracting, and administration of ordering vehicles.
- A common pitfall is failing to reassess coverage after modifications or annual extensions of BOAs, BPAs, or other indefinite-delivery contracts.
(a) As authorized by the Act, the Secretary of Labor has issued rulings and interpretations concerning the administration of the statute (see 41 CFR50-206). The substance of certain rulings and interpretations is as follows:
(1) If a contract for $20,000 or less is subsequently modified to exceed $20,000, the contract becomes subject to the statute for work performed after the date of the modification.
(2) If a contract for more than $20,000 is subsequently modified by mutual agreement to $20,000 or less, the contract is not subject to the statute for work performed after the date of the modification.
(3) If a contract awarded to a prime contractor contains a provision whereby the prime contractor is made an agent of the Government, the prime contractor is required to include the stipulations of the statute in contracts in excess of $20,000 awarded for and on behalf of the Government for supplies that are to be used in the construction and equipment of Government facilities.
(4) If a contract subject to the statute is awarded to a contractor operating Government-owned facilities, the stipulations of the statute affect the employees of that contractor the same as employees of contractors operating privately owned facilities.
(5) Indefinite-delivery contracts, including basic ordering agreements and blanket purchase agreements, are subject to the statute unless it can be determined in advance that the aggregate amount of all orders estimated to be placed thereunder for 1 year after the effective date of the agreement will not exceed $20,000. A determination shall be made annually thereafter if the contract or agreement is extended, and the contract or agreement modified if necessary.
(b) [Reserved]