Secretary of Labor, B-178400
| Decision Date | 28 November 1973 |
| Docket Number | B-178400 |
| Citation | 53 Comp.Gen. 370 |
| Parties | THE SECRETARY OF LABOR |
| Court | Comptroller General of the United States |
Contracts - labor stipulations - service contract act of 1965 - applicability of act - keypunch operators, etc. Although the practice of the labor department in classifying as "service employees' keypunch operators and other clerical-type employees under service contract act of 1965 41 U.S.C. 351, et seq., is questionable since the statutory language of the act and its legislative history as well as the department of labor's regulations indicate "service employee" was intended to mean "blue collar" employee, the practice is not specifically prohibited and, therefore, the protest is denied. However because of the significant adverse impact on procurement procedures, the department should present the matter to congress and obtain clarifying legislation, and should submit statements of the action taken to the appropriate congressional committees as required by the legislative reorganization act of 1970. Contracts - labor stipulations - service contract act of 1965 - minimum wage, etc determinations - locality basis for determination the labor department's practice of issuing service contract act wage determinations for keypunch services based on the locality of the government installation being served rather than the location where the services are to be performed is a questionable implementation of the act in view of the fact the statutory language of the act and its legislative history indicate "locality" refers to the place where service employees are performing a contract, and the practice should be drawn to the attention of the congress when clarifying language is sought concerning the classification of keypunch operators and other clerical-type employees under the act.
We refer to letter of May 24, 1973, with enclosure, from the assistant administrator, employment standards administration concerning the protest of descomp, Inc., against certain terms in request for proposals (RFP) no 3fp-a5-n-3473-4-12-73, issued by the federal supply service, general services administration (GSA).
The RFP was issued March 14, 1973, calling for an indefinite quantity of ADP keypunching and verification services. Prior to the issuance of the solicitation, the contracting officer sent to the department of labor a notice of intention to make a service contract (standard form 98) which listed as the "place of performance" the locations of the government installations for which the services were to be performed. In response, labor provided service contract act wage determinations for 23 classes of employees, including keypunch operators, file clerks, secretaries, stenographers, switchboard operators, typists, computer operators, and draftsmen, in three localities - the District of Columbia; an area of suburban Maryland (montgomery and prince georges counties); and a suburban Virginia area (arlington, fairfax, loudon, and prince william counties, and the independent cities of alexandria, fairfax, and falls church). The wage determinations for these localities were included in the RFP along with the following provision:
Note: the wage determinations shown herein covers employees employed on contracts for services for installations located in the specified localities, cities, counties and/or states. The wage rate paid must correspond to the wage determination for the location of the agency and not for the location of the contractor. For example: if you are awarded service area a, which is located in the District of Columbia, you must pay the rate listed on the wage determination for the District of Columbia regardless of your plant location.
The solicitation further provided that the contractor would be paid on a card-output basis in accordance with 1, 000-card allotments.
Among the objections made by descomp against the terms of the RFP, two contentions, in particular, raise fundamental issues in regard to the interpretation and application of the service contract act of 1965, 41 U.S.C. 351, et seq. Since we believe, for the reasons discussed, that certain procedures which your department has adopted in implementing the act May be questionable, we are calling these matters directly to your attention.
The specific contentions raised by descomp are as follows. First, the protestant's counsel in a letter to our office has questioned whether the service contract act was intended to apply to services of the type being procured under the RFP, counsel has expressed the view that the act's coverage is limited to contracts for services such as janitorial work, guard services, window washing, trash removal and the like. Also, the protestant objects to the RFP "note" requiring payment of wage rates based on the location of the agencies and not the location of the contractor. In this regard, descomp has advised that its actual performance under contracts of this type takes place at its facility in Delaware. Descomp picks up cards at various government agencies in the Washington area, processes them in Delaware, and returns them to Washington. Apparently, a similar procedure would be utilized by any contractor, since there is no indication in the RFP that the services being contracted for are to be performed on the premises of the government installations involved. Descomp believes that it is unfair to force contractors who are not located in the Washington, D.C., area to pay minimum wage rates as determined from the wages prevailing in that area. The protestant therefore requests that your department be required to make wage determinations for its locality and the localities of the other offerors, and that the RFP be amended accordingly.
The service contract act of 1965, requires that every contract (and any bid specification therefor) entered into by the United States or the District of Columbia in excess of $2, 500, with certain exceptions, the principal purpose of which is to furnish services in the United States through the use of service employees, shall contain a provision specifying the minimum monetary wages and fringe benefits to be paid the various classes of service employees in the performance of the contract or any subcontract thereunder as determined by the secretary of labor, or his authorized representative, in accordance with the prevailing rates and fringe benefits for such employees in the locality.
Initially, we have serious doubts whether the RFP contemplates the award of a contract the principal purpose of which is to furnish services through the use of service employees. A contract awarded under the RFP will apparently be performed by clerical, "white-collar" employees who do not come within the act's definition of "service employee" (41 U.S.C. 357(b)):
The term "service employee" means guards, watchmen, and any person engaged in a recognized trade or craft, or other skilled mechanical craft, or in unskilled, semiskilled, or skilled manual labor occupations; and any other employee including a foreman or supervisor in a position having trade craft, or laboring experience as the paramount requirement; and shall...
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