22.605
Rulings and interpretations of the statute
Contractors and contracting officers must carefully monitor contract value changes and contract types to ensure proper application of statutory requirements under the Walsh-Healey Act.
Overview
FAR 22.605 outlines key rulings and interpretations issued by the Secretary of Labor regarding the application of the Walsh-Healey Public Contracts Act (the statute) to federal contracts. This section clarifies when contracts become subject to or exempt from the statute based on contract modifications, agency relationships, facility ownership, and the nature of indefinite-delivery contracts. The guidance ensures that contractors and contracting officers correctly apply statutory requirements, especially regarding contract value thresholds and specific contract types.
Key Rules
- Contract Value Modifications
- Contracts initially at or below $15,000 that are modified to exceed $15,000 become subject to the statute for work performed after the modification.
- Reduction of Contract Value
- Contracts initially over $15,000 that are reduced to $15,000 or less by mutual agreement are no longer subject to the statute for subsequent work.
- Prime Contractor as Government Agent
- Prime contractors acting as agents of the Government must include statutory stipulations in subcontracts over $15,000 for supplies used in Government facility construction or equipment.
- Government-Owned vs. Privately Owned Facilities
- Statutory 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 the total orders for one year will not exceed $15,000. This determination must be reviewed annually if the contract is extended.
Responsibilities
- Contracting Officers: Ensure proper application of the statute based on contract value, modifications, and contract type; make annual determinations for indefinite-delivery contracts.
- Contractors: Monitor contract modifications and ensure compliance with statutory requirements when thresholds are crossed; include required stipulations in applicable subcontracts.
- Agencies: Oversee compliance and ensure annual reviews for indefinite-delivery contracts.
Practical Implications
- This section helps prevent misapplication of statutory requirements due to contract changes or special contract types.
- Contractors must be vigilant about contract modifications and the cumulative value of indefinite-delivery contracts.
- Failure to comply can result in statutory violations, affecting contract performance and eligibility for future awards.