Federal Acquisition Regulation; FAR Case 2001-004, Exemption of Certain Service Contracts from the Service Contract Act (SCA), 63076-63083 [07-5481]

Download as PDF 63076 Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Rules and Regulations 1. The authority citation for 48 CFR parts 2, 4, 5, and 13 continues to read as follows: PART 13—SIMPLIFIED ACQUISITION PROCEDURES Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c). I I 13.104 PART 2—DEFINITIONS OF WORDS AND TERMS 2.101 [Amended] 8. Amend section 13.104 by removing from paragraph (b) the words ‘‘using either FACNET or’’. I 9. Amend section 13.105 by revising paragraph (a) to read as follows: [Amended] 13.105 Synopsis and posting requirements. 2. Amend section 2.101(b)(2) by removing the definition ‘‘Federal Acquisition Computer (Network FACNET) Architecture.’’ I 3. Amend section 4.502 by revising paragraph (b)(2) to read as follows: (a) The contracting officer must comply with the public display and synopsis requirements of 5.101 and 5.203 unless an exception in 5.202 applies. * * * * * I 10. Amend section 13.106–1 by revising paragraph (f) to read as follows: 4.502 13.106–1 PART 4—ADMINISTRATIVE MATTERS I Policy. * * * * * (b) * * * (2) Are implemented only after considering the full or partial use of existing infrastructures; * * * * * PART 5—PUBLICIZING CONTRACT ACTIONS 13.106–2 5.101 * * * * (f) Inquiries. An agency should respond to inquiries received through any medium (including electronic commerce) if doing so would not interfere with the efficient conduct of the acquisition. [Amended] 4. Amend section 5.101 by removing from paragraph (a)(2)(ii) the words ‘‘or Federal Acquisition Computer Network (FACNET)’’. I 5. Amend section 5.102 by revising paragraph (a)(3) to read as follows: 5.102 General. Jkt 214001 BILLING CODE 6820–EP–S DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION [FAC 2005–21; FAR Case 2001–004; Item V; Docket 2007–0001, Sequence 6] RIN 9000–AK82 7. Amend section 5.203 in paragraph (b) by removing the words ‘‘via FACNET or for which’’ and adding the word ‘‘where’’ in its place. 18:14 Nov 06, 2007 [FR Doc. 07–5479 Filed 11–6–07; 8:45 am] 48 CFR Parts 4, 15, 17, 22, and 52 [Amended] VerDate Aug<31>2005 [Amended] 13. Amend section 13.307 by removing from paragraph (b)(1) ‘‘via FACNET,’’ and the comma after ‘‘electronically’’. NATIONAL AERONAUTICS AND SPACE ADMINISTRATION * * * * (b) * * * (2) When transmitting notices using electronic commerce, contracting officers must ensure the notice is forwarded to the GPE. * * * * * I [Amended] 12. Amend section 13.106–3 by removing from paragraph (c) the words ‘‘FACNET or’’. I I * 5.203 13.106–3 13.307 Availability of solicitations. (a) * * * (3) The contracting officer must ensure that solicitations transmitted using electronic commerce are forwarded to the GPE to satisfy the requirements of paragraph (a)(1) of this section. * * * * * I 6. Amend section 5.201 by revising paragraph (b)(2) to read as follows: 5.201 [Amended] 11. Amend section 13.106–2 by removing from paragraph (b)(4) introductory text the words ‘‘FACNET or’’. I I mstockstill on PROD1PC66 with RULES3 Soliciting competition. * Federal Acquisition Regulation; FAR Case 2001–004, Exemption of Certain Service Contracts from the Service Contract Act (SCA) AGENCIES: Department of Defense (DoD), General Services Administration (GSA), PO 00000 Frm 00052 Fmt 4701 Sfmt 4700 and National Aeronautics and Space Administration (NASA). ACTION: Interim rule with request for comments. SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) have agreed on an interim rule amending the Federal Acquisition Regulation (FAR) to revise the current SCA exemption and to add a SCA exemption for contracts for certain additional services that meet specific criteria. DATES: Effective Date: November 7, 2007. Comment Date: Interested parties should submit written comments to the FAR Secretariat on or before January 7, 2008 to be considered in the formulation of a final rule. ADDRESSES: Submit comments identified by FAC 2005–21, FAR case 2001–004, by any of the following methods: • Federal eRulemaking Portal: http:// www.regulations.gov. To search for any document, first select under ‘‘Step 1,’’ ‘‘Documents with an Open Comment Period’’ and select under ‘‘Optional Step 2,’’ ‘‘Federal Acquisition Regulation’’ as the agency of choice. Under ‘‘Optional Step 3,’’ select ‘‘Rules’’. Under ‘‘Optional Step 4,’’ from the drop down list, select ‘‘Document Title’’ and type the FAR case number ‘‘2001–004’’. Click the ‘‘Submit’’ button. Please include your name and company name (if any) inside the document. You may also search for any document by clicking on the ‘‘Search for Documents’’ tab at the top of the screen. Select from the agency field ‘‘Federal Acquisition Regulation’’, and type ‘‘2001–004’’ in the ‘‘Document Title’’ field. Select the ‘‘Submit’’ button. • Fax: 202–501–4067. • Mail: General Services Administration, Regulatory Secretariat (VIR), 1800 F Street, NW, Room 4035, ATTN: Laurieann Duarte, Washington, DC 20405. Instructions: Please submit comments only and cite FAC 2005–21, FAR case 2001–004, in all correspondence related to this case. All comments received will be posted without change to http:// www.regulations.gov. Please include your name and company name (if any) inside the document. FOR FURTHER INFORMATION CONTACT: Mr. Ernest Woodson, Procurement Analyst, at (202) 501–3775 for clarification of content. Please cite FAC 2005–21, FAR case 2001–004. For information pertaining to status or publication E:\FR\FM\07NOR3.SGM 07NOR3 Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Rules and Regulations mstockstill on PROD1PC66 with RULES3 schedules, contact the FAR Secretariat at (202) 501–4755. SUPPLEMENTARY INFORMATION: A. Background On January 18, 2001, the Wage and Hour Division of the U.S. Department of Labor’s Employment Standards Administration, issued a final rule amending the regulations at 29 CFR part 4 to exempt certain contracts for services meeting specific criteria from coverage under the SCA (66 FR 5327). The Councils opened FAR case 2001– 004 to implement the Department of Labor (DoL) rule. The FAR currently exempts contracts (or subcontracts) principally for the maintenance, calibration, or repair of certain equipment if— • The items of equipment are items which are used regularly for other than Government purposes and are sold or traded by the contractor in substantial quantities to the general public in the course of normal business operations. • The contract services are furnished at prices which are, or are based on, established catalog or market prices (see 29 CFR 4.123(e)(1)(ii)(B)). • The contractor utilizes the same compensation (wage and fringe benefits) plan for all service employees performing work under the contract as the contractor uses for equivalent employees servicing the same equipment of commercial customers. • The contractor certifies in the contract that it meets these criteria. This interim FAR rule incorporates slight revisions to this current exemption for consistency with the current DoL regulations and clarification of appropriate course of action for the contracting officer. The interim FAR rule does not refer to these services as commercial services, because the specified criteria are not exactly the same as the FAR definition of ‘‘commercial item.’’ Rather than redefining ‘‘commercial item,’’ this rule imposes the DoL criteria and does not utilize the term ‘‘commercial services.’’ In addition to this first category of service contracts, in order to implement the new DoL regulations, the FAR interim rule establishes a new category of exemption for contracts for certain services that includes the following: • Automobile or other vehicle (e.g., aircraft) maintenance services (other than contracts or subcontracts to operate a Government motor pool or similar facility). • Financial services involving the issuance and servicing of cards (including credit cards, debit cards, purchase cards, smart cards, and similar card services). VerDate Aug<31>2005 18:14 Nov 06, 2007 Jkt 214001 • Hotel/motel services for conferences, including lodging and/or meals, that are part of the contract or subcontract for the conference (which must not include ongoing contracts for lodging on an as needed or continuing basis). • Maintenance, calibration, repair, and/or installation (where the installation is not subject to the DavisBacon Act, as provided in 29 CFR 4.116(c)(2)) services for all types of equipment where the services are obtained from the manufacturer or supplier of the equipment under a contract awarded on a sole source basis. • Transportation by common carrier of persons by air, motor vehicle, rail, or marine vessel on regularly scheduled routes or via standard commercial services (not including charter services). • Real estate services, including real property appraisal services, related to housing Federal agencies or disposing of real property owned by the Government. • Relocation services, including services of real estate brokers and appraisers to assist Federal employees or military personnel in buying and selling homes (which shall not include actual moving or storage of household goods and related services). In order for these contracts for services to be exempt, the contract must meet all the criteria for the other services in the first category (substituting ‘‘services’’ for ‘‘item of equipment’’ in the first criterion, and removing other specific references to ‘‘equipment’’ and ‘‘manufacturer’’), but the contract must also meet the following criteria: • The services under the contract (or subcontract) will be awarded on a solesource basis or the contractor will be selected for award based on other factors in addition to price or cost, with the combination of other factors at least as important as price or cost in selecting the contractor. • Each service employee who will perform the services under the contract (or subcontract) will spend only a small portion of his or her time (a monthly average of less than 20 percent of the available hours on an annualized basis, or less than 20 percent of available hours during the contract period if the contract period is less than a month) servicing the Government contract (or subcontract). • The contracting officer (or contractor with respect to a subcontract) determines in advance, based on the nature of the contract (or subcontract) requirements and knowledge of the practices of likely offerors, that all or nearly all offerors will meet the conditions. If the services are currently being performed under contract (or PO 00000 Frm 00053 Fmt 4701 Sfmt 4700 63077 subcontract), the contracting officer (or contractor with respect to a subcontract) shall consider the practices of the existing contractor (or subcontractor) in making a determination regarding the conditions. • The apparent successful offeror certifies, the contracting officer has no reason to doubt the certification, and the contracting officer determines that the same certification is obtained from substantially all other offerors that are— • In the competitive range, if discussions are to be conducted (see FAR 15.306)(c)); or • Considered responsive, if award is to be made without discussions (see FAR 15.306(a)). Council representatives discussed with DoL the implementation of the DoL rule for these contracts for services at the point of receipt of offers. The FAR rule attempts to minimize the occurrence of the situation in which it will be necessary to revise the solicitation after receipt of offers to remove the exemption provision and require use of the SCA clauses, even though the apparent successful offeror certified to criteria for the exemption. The FAR rule uses the term ‘‘substantially all’’ to indicate that there could be a slightly different interpretation of the phrase ‘‘all or nearly all’’ than at the beginning of the process. DoL concurs that the contracting officer will have the discretion to interpret this term, as long as the intention reflected in the preamble to the SCA regulations (66 FR 5327) controls the contracting officer’s exercise of discretion. DoL also concurs that it is not necessary to consider offerors that did not certify if these offerors were not in the competitive range or not responsive. Therefore, the FAR rule adds this condition when considering whether substantially all offerors have certified. The exemption for the second category of contracts for services does not apply to solicitations and contracts (subcontracts)— • Awarded under the Javits-WagnerO’Day Act, 41 U.S.C. 47. • For the operation of a Government facility, or part of a Government facility (but may be applicable to subcontracts for services that meet all of the criteria); or • Subject to Section 4(c) of the Service Contract Act (see 22.1002–3). Whether the contracts for services fall in the first or second category, the Department of Labor retains the right to review those contracts that claim exemption from the SCA. If the Department of Labor determines after award of the contract (or subcontract) E:\FR\FM\07NOR3.SGM 07NOR3 63078 Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Rules and Regulations that any condition for exemption has not been met, the exemption shall be deemed inapplicable, and the contract (or subcontract) becomes subject to the Service Contract Act. In such case, the procedures at 29 CFR 4.123(e)(2)(iii) and 29 CFR 4.5(c) will be followed. In accordance with Section 29 of the Office of Federal Procurement Policy Act, the Federal Acquisition Regulatory Council (FAR Council) has obtained the approval of the Administrator of the Office of Federal Procurement Policy for the inclusion of two nonstatutory certifications in this interim FAR rule, as required by the Department of Labor Regulations at 29 CFR 4.123(e)(1)(ii)(D) and (e)(2)(ii)(G). This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804. mstockstill on PROD1PC66 with RULES3 B. Regulatory Flexibility Act The changes may have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., because this rule exempts certain service contracts from the Service Contract Act for both contractors and subcontractors. An Initial Regulatory Flexibility Analysis (IRFA) has been prepared. The analysis is summarized as follows: This interim rule implements 29 CFR 4.123(e) of the Department of Labor (DoL) regulation regarding Administrative limitations, variance, tolerances, and exemptions. Paragraph (e) provides exemption for contracts for certain services that meet specific criteria. The objective of the DoL final rule was to further the commitment of the Administration to be more commercial-like, encourage broader participation in Government procurement by companies doing business in the commercial sector, and reinforce our commitment to reduce Government-unique terms and conditions, without compromising the purpose of the SCA to protect prevailing labor standards. The interim FAR rule should have a positive economic impact on the small contractors and subcontractors that meet the exemption criteria to be exempt from the SCA for certain services, because it may provide additional opportunities for work on Federal projects; enable these contractors to compete in a more commercial-like environment, and alleviate the burden of complying with Government-unique terms and conditions for these types of contracts. Pursuant to Section (4)(b) of the SCA, the Secretary of Labor may grant reasonable exemptions to the provisions of the SCA, but only in special circumstances where the exemption is necessary and proper in the public interest, and is in accord with the VerDate Aug<31>2005 18:14 Nov 06, 2007 Jkt 214001 remedial purposes of the Act to protect prevailing labor standards. This interim FAR rule will apply to all large and small entities that seek award of Federal service contracts in the service categories identified. The Councils relied on the DoL regulatory flexibility analysis (66 FR 5339), which determined that a majority of contracts affected by the proposed exemption would likely be performed by small businesses. Federal Procurement Data System (FPDS) does not provide an accurate estimate of the contracts potentially covered by the exemption, but DoL estimates that the total value of the exempt contracts could be relatively small, and that the SCA would no longer apply to only a relatively small number of contracts that currently contain SCA wage determination provisions. The interim rule does not duplicate, overlap, or conflict with any other Federal rules. There are no practical alternatives that will accomplish the objectives of this interim rule. However, the exemption is expected to have a positive impact on small entities, because it does not contain any new reporting or recordkeeping or other compliance requirements applicable to small business. Rather, the exemption would relieve small businesses and other contractors from the requirements of the SCA on certain contracts. The FAR Secretariat has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the Small Business Administration. Interested parties may obtain a copy from the FAR Secretariat. The Councils will consider comments from small entities concerning the affected FAR Parts 4, 15, 17, 22, and 52 in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 601, et seq., (FAC 2005–21, FAR case 2001–004), in the correspondence. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply because the changes to the FAR do not impose information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq. D. Determination to Issue an Interim Rule A determination has been made under the authority of the Secretary of Defense (DoD), the Administrator of General Services (GSA), and the Administrator of the National Aeronautics and Space Administration (NASA) that urgent and compelling reasons exist to promulgate this interim rule without prior opportunity for public comment. This action is necessary to incorporate the Department of Labor’s final rule, which was effective March 19, 2001, into the Federal Acquisition Regulation. Although there has been delay while PO 00000 Frm 00054 Fmt 4701 Sfmt 4700 seeking appropriate implementation of the DoL final rule, industries that provide services in these categories are seeking to take advantage of the offered exemptions without further delay. However, pursuant to Public Law 98– 577 and FAR 1.501, the Councils will consider public comments received in response to this interim rule in the formation of the final rule. List of Subjects in 48 CFR Parts 4, 15, 17, 22, and 52 Government procurement. Dated: October 31, 2007. Al Matera, Director, Office of Acquisition Policy. Therefore, DoD, GSA, and NASA amend 48 CFR parts 4, 15, 17, 22, and 52 as set forth below: I 1. The authority citation for 48 CFR parts 4, 15, 17, 22, and 52 continues to read as follows: I Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c). PART 4—ADMINISTRATIVE MATTERS 4.1201 [Amended] 2. Amend section 4.1201 by removing from paragraph (c) ‘‘52.212–3(k)’’ and adding ‘‘52.212–3(l)’’ in its place. I 3. Amend section 4.1202 by revising paragraph (q) to read as follows: I 4.1202 Solicitation provision and contract clause. * * * * * (q) 52.222–48, Exemption from Application of the Service Contract Act to Contracts for Maintenance, Calibration, or Repair of Certain Equipment Certification. * * * * * PART 15—CONTRACTING BY NEGOTIATION 15.102 [Amended] 4. Amend section 15.102 by removing from paragraph (b) ‘‘52.212–3(k)’’ and adding ‘‘52.212–3(l)’’ in its place. I PART 17—SPECIAL CONTRACTING METHODS 17.109 [Amended] 5. Amend section 17.109 by removing from paragraph (b)(1) ‘‘, as amended’’. I PART 22—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS 6. Amend section 22.1003–4 by removing paragraph (b)(4); and by adding paragraphs (c) and (d) to read as follows: I E:\FR\FM\07NOR3.SGM 07NOR3 Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Rules and Regulations 22.1003–4 Administrative limitations, variations, tolerances, and exemptions. mstockstill on PROD1PC66 with RULES3 * * * * * (c) Contracts for maintenance, calibration or repair of certain equipment.— (1) Exemption. The Secretary of Labor has exempted from the Act contracts and subcontracts in which the primary purpose is to furnish maintenance, calibration, or repair of the following types of equipment, if the conditions at paragraph (c)(2) of this subsection are met: (i) Automated data processing equipment and office information/word processing systems. (ii) Scientific equipment and medical apparatus or equipment if the application of micro-electronic circuitry or other technology of at least similar sophistication is an essential element (for example, Federal Supply Classification (FSC) Group 65, Class 6515, ‘‘Medical Diagnostic Equipment;’’ Class 6525, ‘‘X-Ray Equipment;’’ FSC Group 66, Class 6630, ‘‘Chemical Analysis Instruments;’’ and Class 6665, ‘‘Geographical and Astronomical Instruments,’’ are largely composed of the types of equipment exempted in this paragraph). (iii) Office/business machines not otherwise exempt pursuant to paragraph (c)(1)(i) of this subsection, if such services are performed by the manufacturer or supplier of the equipment. (2) Conditions. The exemption at paragraph (c)(1) of this subsection applies if all the following conditions are met for a contract (or a subcontract): (i) The items of equipment to be serviced under the contract are used regularly for other than Government purposes and are sold or traded by the contractor in substantial quantities to the general public in the course of normal business operations. (ii) The services will be furnished at prices which are, or are based on, established catalog or market prices for the maintenance, calibration, or repair of such equipment. As defined at 29 CFR 4.123(e)(1)(ii)(B)— (A) An established catalog price is a price included in a catalog price list, schedule, or other form that is regularly maintained by the manufacturer or the contractor, is either published or otherwise available for inspection by customers, and states prices at which sales currently, or were last, made to a significant number of buyers constituting the general public. (B) An established market price is a current price, established in the usual course of trade between buyers and sellers free to bargain, which can be VerDate Aug<31>2005 18:14 Nov 06, 2007 Jkt 214001 substantiated from sources independent of the manufacturer or contractor. (iii) The contractor will use the same compensation (wage and fringe benefits) plan for all service employees performing work under the contract as the contractor uses for these employees and equivalent employees servicing the same equipment of commercial customers. (iv) The apparent successful offeror certifies to the conditions in paragraph (c)(2)(i) through (iii) of this subsection. (See 22.1006(e).) (3) Affirmative determination and contract award. (i) For source selections where the contracting officer has established a competitive range, if the contracting officer determines that one or more of the conditions in paragraphs 22.1003–4 (c)(2)(i) through (iii) of an offeror’s certification will not be met, the contracting officer shall identify the deficiency to the offeror before receipt of the final proposal revisions. Unless the offeror provides a revised offer acknowledging applicability of the Service Contract Act or demonstrating to the satisfaction of the contracting officer an ability to meet all required conditions for exemption, the offer will not be further considered for award. (ii) The contracting officer shall determine in writing the applicability of this exemption to the contract before contract award. If the apparent successful offeror will meet all conditions in paragraph (c)(2) of this subsection, the contracting officer shall make an affirmative determination and award the contract without the otherwise applicable Service Contract Act clause(s). (iii) If the apparent successful offeror does not certify to the conditions in paragraph (c)(2)(i) through (iii) of this subsection, the contracting officer shall incorporate in the contract the Service Contract Act clause (see 22.1006(a)(2)) and, if the contract will exceed $2,500, the appropriate Department of Labor wage determination (see 22.1007). (4) Department of Labor determination. (i) If the Department of Labor determines after award of the contract that any condition for exemption in paragraph (c)(2) of this subsection has not been met, the exemption shall be deemed inapplicable, and the contract shall become subject to the Service Contract Act, effective as of the date of the Department of Labor determination. In such case, the procedures at 29 CFR 4.123(e)(1)(iv) and 29 CFR 4.5(c) shall be followed. (ii) If the Department of Labor determines after award of the subcontract that any conditions for PO 00000 Frm 00055 Fmt 4701 Sfmt 4700 63079 exemption in paragraph (c)(2) of this subsection have not been met, the exemption shall be deemed inapplicable. The contractor may be responsible for ensuring that the subcontractor complies with the Act, effective as of the date of the subcontract award. (d) Contracts for certain services.— (1) Exemption. Except as provided in paragraph (d)(5) of this subsection, the Secretary of Labor has exempted from the Act contracts and subcontracts in which the primary purpose is to provide the following services, if the conditions in paragraph (d)(2) of this subsection are met: (i) Automobile or other vehicle (e.g., aircraft) maintenance services (other than contracts or subcontracts to operate a Government motor pool or similar facility). (ii) Financial services involving the issuance and servicing of cards (including credit cards, debit cards, purchase cards, smart cards, and similar card services). (iii) Hotel/motel services for conferences, including lodging and/or meals, that are part of the contract or subcontract for the conference (which must not include ongoing contracts for lodging on an as needed or continuing basis). (iv) Maintenance, calibration, repair, and/or installation (where the installation is not subject to the DavisBacon Act, as provided in 29 CFR 4.116(c)(2)) services for all types of equipment where the services are obtained from the manufacturer or supplier of the equipment under a contract awarded on a sole source basis. (v) Transportation by common carrier of persons by air, motor vehicle, rail, or marine vessel on regularly scheduled routes or via standard commercial services (not including charter services). (vi) Real estate services, including real property appraisal services, related to housing Federal agencies or disposing of real property owned by the Government. (vii) Relocation services, including services of real estate brokers and appraisers to assist Federal employees or military personnel in buying and selling homes (which shall not include actual moving or storage of household goods and related services). (2) Conditions. The exemption for the services in paragraph (d)(1) of this subsection applies if all the following conditions are met for a contract (or for a subcontract): (i)(A) The contract will be awarded on a sole-source basis; or (B) Except for services identified in paragraph (d)(1)(iv) of this subsection, the contractor will be selected for award E:\FR\FM\07NOR3.SGM 07NOR3 mstockstill on PROD1PC66 with RULES3 63080 Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Rules and Regulations based on other factors in addition to price or cost, with the combination of other factors at least as important as price or cost in selecting the contractor. (ii) The services under the contract are offered and sold regularly to nonGovernmental customers, and are provided by the contractor (or subcontractor in the case of an exempt subcontract) to the general public in substantial quantities in the course of normal business operations. (iii) The contract services are furnished at prices that are, or are based on, established catalog or market prices. As defined at 29 CFR 4.123(e)(2)(ii)(C)— (A) An established catalog price is a price included in a catalog, price list, schedule, or other form that is regularly maintained by the contractor, is either published or otherwise available for inspection by customers, and states prices at which sales are currently, or were last, made to a significant number of buyers constituting the general public; and (B) An established market price is a current price, established in the usual course of trade between buyers and sellers free to bargain, which can be substantiated from sources independent of the manufacturer or contractor. (iv) Each service employee who will perform the services under the contract will spend only a small portion of his or her time (a monthly average of less than 20 percent of the available hours on an annualized basis, or less than 20 percent of available hours during the contract period if the contract period is less than a month) servicing the Government contract. (v) The contractor will use the same compensation (wage and fringe benefits) plan for all service employees performing work under the contract as the contractor uses for these employees and equivalent employees servicing commercial customers. (vi) The contracting officer (or contractor with respect to a subcontract) determines in advance, based on the nature of the contract requirements and knowledge of the practices of likely offerors, that all or nearly all offerors will meet the conditions in paragraph (d)(2)(ii) through (v) of this subsection. If the services are currently being performed under contract, the contracting officer (or contractor with respect to a subcontract) shall consider the practices of the existing contractor in making a determination regarding the conditions in paragraphs (d)(2)(ii) through (v) of this subsection. (vii)(A) The apparent successful offeror certifies that the conditions in paragraphs (d)(2)(ii) through (v) will be met; and VerDate Aug<31>2005 18:14 Nov 06, 2007 Jkt 214001 (B) For other than sole source awards, the contracting officer determines that the same certification is obtained from substantially all other offerors that are— (1) In the competitive range, if discussions are to be conducted (see FAR 15.306)(c)); or (2) Considered responsive, if award is to be made without discussions (see FAR 15.306(a)). (3) Contract award or resolicitation. (i) If the apparent successful offeror does not certify to the conditions, the contracting officer shall insert in the contract the applicable Service Contract Act clause(s) (see 22.1006(a)(2)) and, if the contract will exceed $2,500, the appropriate Department of Labor wage determination (see 22.1007). (ii) The contracting officer shall award the contract without the otherwise applicable Service Contract Act clause(s) if— (A) The apparent successful offeror certifies to the conditions in paragraphs (d)(2)(ii) through (v) of this subsection; (B) The contracting officer determines that the same certification is obtained from substantially all other offerors that are— (1) In the competitive range, if discussions are to be conducted (see FAR 15.306); or (2) Considered responsive, if award is to be made without discussions (see FAR 15.306(a)); and (C) The contracting officer has no reason to doubt the certification. (iii) If the conditions in paragraph (d)(3)(ii) of this subsection are not met, then the contracting officer shall resolicit, amending the solicitation by removing the exemption provision from the solicitation (see 22.1006(e)(4)), and inserting in the contract the applicable Service Contract Act clause(s) (see 22.1006(a)(2)) and, if the contract will exceed $2,500, the appropriate Department of Labor wage determination (see 22.1007). (4) Department of Labor determination. (i) If the Department of Labor determines after award of the contract that any conditions for exemption at paragraph (d)(2) of this subsection have not been met, the exemption shall be deemed inapplicable, and the contract shall become subject to the Service Contract Act. In such case, the procedures at 29 CFR 4.123(e)(2)(iii) and 29 CFR 4.5(c) shall be followed. (ii) If the Department of Labor determines that any conditions in paragraph (d)(2) of this subsection have not been met with respect to a subcontract, the exemption shall be deemed inapplicable and the contractor may be responsible for ensuring that the PO 00000 Frm 00056 Fmt 4701 Sfmt 4700 subcontractor complies with the Act, effective as of the date of the subcontract award. (5) Exceptions. The exemption at paragraph (d)(1) of this subsection does not apply to solicitations and contracts (subcontracts)— (i) Awarded under the Javits-WagnerO’Day Act, 41 U.S.C. 47 (see Subpart 8.7). (ii) For the operation of a Government facility, or part of a Government facility (but may be applicable to subcontracts for services); or (iii) Subject to Section 4(c) of the Service Contract Act (see 22.1002–3). 22.1003–5 [Amended] 7. Amend section 22.1003–5 by removing from paragraph (k) ‘‘22.1003– 4(b)(4)’’ and adding ‘‘22.1003(c)(1) and (d)(1)(iv)’’ in its place. I 22.1003–6 [Amended] 8. Amend section 22.1003–6 by removing from paragraph (b)(2) ‘‘22.1003–4(b)(4)’’ and adding ‘‘22.1003(c)(1) and (d)(1)(iv)’’ in its place. I 9. Amend section 22.1004 by revising paragraph (h) to read as follows: I 22.1004 Department of Labor responsibilities and regulations. * * * * * (h) Practice before the Administrative Review Board (29 CFR part 8). I 10. Amend section 22.1006 by— I a. Revising the section heading; I b. Revising paragraph (a); I c. Removing from paragraphs (c)(1) and (c)(2) ‘‘as amended,’’; and I d. Revising paragraph (e) to read as follows: 22.1006 Solicitation provisions and contract clauses. (a)(1) The contracting officer shall insert the clause at 52.222–41, Service Contract Act of 1965, in solicitations and contracts if the contract is subject to the Act and is— (i) Over $2,500; or (ii) For an indefinite dollar amount and the contracting officer does not know in advance that the contract amount will be $2,500 or less. (2) If the solicitation includes the provision at 52.222–48, Exemption from Application of the Service Contract Act to Contracts for Maintenance, Calibration, or Repair of Certain Equipment—Certification, or 52.222–52, Exemption from Application of the Service Contract Act to Contracts for Certain Services—Certification, the contracting officer shall not insert the clause at 52.222–41 (or any of the associated Service Contract Act clauses E:\FR\FM\07NOR3.SGM 07NOR3 mstockstill on PROD1PC66 with RULES3 Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Rules and Regulations prescribed in this section for possible use when 52.222–41 applies) in the resultant contract unless the contracting officer determines, in accordance with paragraphs (c)(3) or (d)(3) of subsection 22.1003–4, that the Service Contract Act applies to the contract. (In such case, do not insert the clause at 52.222–51, Exemption from Application of the Service Contract Act to Contracts for Maintenance, Calibration, or Repair of Certain Equipment—Requirements, or 52.222–53, Exemption from Application of the Service Contract Act to Contracts for Certain Services—Requirements, in the contract, in accordance with the prescription at paragraph (e)(2) or (e)(4) of this subsection). * * * * * (e)(1) The contracting officer shall insert the provision at 52.222–48, Exemption from Application of the Service Contract Act to Contracts for Maintenance, Calibration, or Repair of Certain Equipment—Certification, in solicitations that include the clause at 52.222–41, Service Contract Act of 1965, but the contract may be exempt from the Service Contract Act in accordance with 22.1003–4(c). (2) The contracting officer shall insert the clause at 52.222–51, Exemption from Application of the Service Contract Act to Contracts for Maintenance, Calibration, or Repair of Certain Equipment—Requirements, in solicitations that include the provision at 52.222–48, and resulting contracts in which the contracting officer has determined, in accordance with 22.1003–4(c)(3), that the Service Contract Act does not apply. (3) Insert the provision at 52.222–52, Exemption from Application of the Service Contract Act to Contracts for Certain Services—Certification, in solicitations that include the clause at 52.222–41, Service Contract Act of 1965, but the contract may be exempt from the Service Contract Act in accordance with 22.1003–4(d). (4) The contracting officer shall insert the clause at 52.222–53, Exemption from Application of the Service Contract Act to Contracts for Certain Services— Requirements, in solicitations that include the provision at 52.222–52, and resulting contracts in which the contracting officer has determined, in accordance with 22.1003–4(d)(3), that the Service Contract Act does not apply. * * * * * 22.1008–2 [Amended] 11. Amend section 22.1008–2 by removing from the last sentence of paragraph (d)(1) ‘‘, as amended’’. I VerDate Aug<31>2005 18:14 Nov 06, 2007 Jkt 214001 22.1018 [Amended] 12. Amend section 22.1018 by removing from paragraph (b) ‘‘, as amended’’. I 22.1019 [Amended] 13. Amend section 22.1019 by removing from paragraphs (a), in the first sentence, and (c) ‘‘, as amended’’. I 22.1020 [Amended] 14. Amend section 22.1020 by removing ‘‘, as amended’’. I 22.1022 [Amended] 15. Amend section 22.1022 by removing ‘‘Assistant’’ and ‘‘Board of Service Contract Appeals’’ and adding ‘‘Deputy’’ and ‘‘Administrative Review Board’’ in their places, respectively. I 22.1023 [Amended] 16. Amend section 22.1023 by removing ‘‘, as amended’’. I 22.1026 [Amended] 17. Amend section 22.1026 by removing ‘‘as amended,’’. I PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 52.212–1 [Amended] 18. Amend section 52.212–1 by revising the date of the clause to read ‘‘(Nov 2007)’’; and by removing from paragraph (b)(8) ‘‘52.212–3(k)’’ and adding ‘‘52.212–3(l)’’ in its place. I 19. Amend section 52.212–3 by— I a. Revising the date of the clause; I b. Removing from the introductory text of the clause ‘‘paragraph (k)’’ and ‘‘through (j)’’ and adding ‘‘paragraph (l)’’ and ‘‘through (k)’’ in its place, respectively; I c. Redesignating paragraph (k) as paragraph (l); removing from the newly designated paragraph (l)(1) ‘‘paragraph (k)(2)’’ and adding ‘‘paragraph (l)(2)’’ in its place, and in the newly designated paragraph (l)(2), in the bracketed paragraph, removing ‘‘through (j)’’ and adding ‘‘through (k)’’ in its place; and I d. Adding a new paragraph (k) to read as follows: I 52.212—3 Offeror Representations and Certifications—Commercial Items. * * * * * OFFEROR REPRESENTATIONS AND CERTIFICATIONS—COMMERCIAL ITEMS ‘‘(Nov 2007)’’ * * * * * (k) Certificates regarding exemptions from the application of the Service Contract Act. (Certification by the offeror as to its compliance with respect to the contract also constitutes its certification as to compliance by its subcontractor if it subcontracts out the PO 00000 Frm 00057 Fmt 4701 Sfmt 4700 63081 exempt services.) [The contracting officer is to check a box to indicate if paragraph (k)(1) or (k)(2) applies.] b (1) Maintenance, calibration, or repair of certain equipment as described in FAR 22.1003–4(c)(1). The offeror b does b does not certify that— (i) The items of equipment to be serviced under this contract are used regularly for other than Governmental purposes and are sold or traded by the offeror in substantial quantities to the general public in the course of normal business operations; (ii) The services will be furnished at prices which are, or are based on, established catalog or market prices (see FAR 22.1003– 4(c)(2)(ii)) for the maintenance, calibration, or repair of such equipment; and (iii) The compensation (wage and fringe benefits) plan for all service employees performing work under the contract will be the same as that used for these employees and equivalent employees servicing the same equipment of commercial customers. b (2) Certain services as described in FAR 22.1003–4(d)(1). The offeror b does b does not certify that— (i) The services under the contract are offered and sold regularly to nonGovernmental customers, and are provided by the offeror (or subcontractor in the case of an exempt subcontract) to the general public in substantial quantities in the course of normal business operations; (ii) The contract services will be furnished at prices that are, or are based on, established catalog or market prices (see FAR 22.1003– 4(d)(2)(iii)); (iii) Each service employee who will perform the services under the contract will spend only a small portion of his or her time (a monthly average of less than 20 percent of the available hours on an annualized basis, or less than 20 percent of available hours during the contract period if the contract period is less than a month) servicing the Government contract; and (iv) The compensation (wage and fringe benefits) plan for all service employees performing work under the contract is the same as that used for these employees and equivalent employees servicing commercial customers. (3) If paragraph (k)(1) or (k)(2) of this clause applies— (i) If the offeror does not certify to the conditions in paragraph (k)(1) or (k)(2) and the Contracting Officer did not attach a Service Contract Act wage determination to the solicitation, the offeror shall notify the Contracting Officer as soon as possible; and (ii) The Contracting Officer may not make an award to the offeror if the offeror fails to execute the certification in paragraph (k)(1) or (k)(2) of this clause or to contact the Contracting Officer as required in paragraph (k)(3)(i) of this clause. * * * * * 20. Amend section 52.212–5 by— a. Revising the date of the clause; b. Revising paragraph (c)(1), redesignating paragraph (c)(5) as (c)(7), and adding new paragraphs (c)(5) and (c)(6); and I c. Revising paragraph (e)(1)(vi), and redesignating paragraph (e)(1)(viii) as I I I E:\FR\FM\07NOR3.SGM 07NOR3 63082 Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Rules and Regulations (e)(1)(x), and adding new paragraphs (e)(1)(viii) and (e)(1)(ix). I The revised and added text reads as follows: 52.212–5 Contract Terms and Conditions Required to Implement Statutes or Executive Orders—Commercial Items. * * * * * CONTRACT TERMS AND CONDITIONS REQUIRED TO IMPLEMENT STATUTES OR EXECUTIVE ORDERS—COMMERCIAL ITEMS ‘‘(Nov 2007)’’ * * * * * (c) * * * lll (1) 52.222–41, Service Contract Act of 1965 ‘‘(Nov 2007)’’ (41 U.S.C. 351, et seq.). * * * * * lll (5) 52.222–51, Exemption from Application of the Service Contract Act to Contracts for Maintenance, Calibration, or Repair of Certain Equipment—Requirements ‘‘([Insert Abbreviated Month and Year of Date of Publication in the Federal Register]’’ (41 U.S.C. 351, et seq.). lll (6) 52.222–53, Exemption from Application of the Service Contract Act to Contracts for Certain Services—Requirements ‘‘(Nov 2007)’’ (41 U.S.C. 351, et seq.). * * * * * (e)(1) * * * (vi) 52.222–41, Service Contract Act of 1965 ‘‘([Insert Abbreviated Month and Year of Date of Publication in the Federal Register])’’ (41 U.S.C. 351, et seq.). * * * * * (viii) 52.222–51, Exemption from Application of the Service Contract Act to Contracts for Maintenance, Calibration, or Repair of Certain Equipment—Requirements ‘‘(Nov 2007)’’ (41 U.S.C. 351, et seq.). (ix) 52.222–53, Exemption from Application of the Service Contract Act to Contracts for Certain Services—Requirements ‘‘(Nov 2007)’’ (41 U.S.C. 351, et seq.). * * * * * 21. Amend section 52.213–4 by revising the date of the clause; and revising the first sentence of paragraph (b)(1)(vi) to read as follows: I 52.213–4 Terms and Conditions— Simplified Acquisitions (Other Than Commercial Items). * * * * * TERMS AND CONDITIONS—SIMPLIFIED ACQUISITIONS (OTHER THAN COMMERCIAL ITEMS) ‘‘(Nov 2007)’’ * * * * * (b) * * * (1) * * * (vi) 52.222–41, Service Contract Act of 1965 ‘‘(Nov 2007)’’ (41 U.S.C. 351, et seq.). *** mstockstill on PROD1PC66 with RULES3 * * * * * 22. Amend section 52.222–41 by— a. Revising the section heading; b. Revising the clause heading and the date; and I c. Amending paragraph (a) by— I 1. Revising the introductory text; I I I VerDate Aug<31>2005 18:14 Nov 06, 2007 Jkt 214001 I 2. Revising the definitions ‘‘Act’’ and ‘‘Contractor’’; I 3. Removing from the definition ‘‘Service employee’’ the words ‘‘, as used in this clause,’’; and I 4. Removing from paragraph (f) ‘‘Board of Service Contract Appeals’’ and adding ‘‘Administrative Review Board’’ in its place. I The revised text reads as follows: 52.222–41 Service Contract Act of 1965. * * * * * SERVICE CONTRACT ACT OF 1965 ‘‘(Nov 2007)’’ (a) Definitions. As used in this clause— Act means the Service Contract Act of 1965 (41 U.S.C. 351, et seq.) Contractor when this clause is used in any subcontract, shall be deemed to refer to the subcontractor, except in the term ‘‘Government Prime Contractor.’’ * * * * * 23. Revise section 52.222–48 to read as follows: I 52.222–48 Exemption from Application of the Service Contract Act to Contracts for Maintenance, Calibration, or Repair of Certain Equipment Certification. As prescribed in 22.1006(e)(1), insert the following provision: EXEMPTION FROM APPLICATION OF THE SERVICE CONTRACT ACT TO CONTRACTS FOR MAINTENANCE, CALIBRATION, OR REPAIR OF CERTAIN EQUIPMENT CERTIFICATION ‘‘(Nov 2007)’’ (a) The offeror shall check the following certification: CERTIFICATION The offeror b does b does not certify that— (1) The items of equipment to be serviced under this contract are used regularly for other than Government purposes, and are sold or traded by the offeror in substantial quantities to the general public in the course of normal business operations; (2) The services will be furnished at prices which are, or are based on, established catalog or market prices for the maintenance, calibration, or repair of equipment. (i) An ‘‘established catalog price’’ is a price included in a catalog, price list, schedule, or other form that is regularly maintained by the manufacturer or the offeror, is either published or otherwise available for inspection by customers, and states prices at which sales currently, or were last, made to a significant number of buyers constituting the general public. (ii) An ‘‘established market price’’ is a current price, established in the usual course of trade between buyers and sellers free to bargain, which can be substantiated from sources independent of the manufacturer or offeror; and (3) The compensation (wage and fringe benefits) plan for all service employees performing work under the contract are the same as that used for these employees and equivalent employees servicing the same equipment of commercial customers. (b) Certification by the offeror as to its compliance with respect to the contract also PO 00000 Frm 00058 Fmt 4701 Sfmt 4700 constitutes its certification as to compliance by its subcontractor if it subcontracts out the exempt services. If the offeror certifies to the conditions in paragraph (a) of this provision, and the Contracting Officer determines in accordance with FAR 22.1003–4(c)(3) that the Service Contract Act— (1) Will not apply to this offeror, then the Service Contract Act of 1965 clause in this solicitation will not be included in any resultant contract to this offeror; or (2) Will apply to this offeror, then the clause at 52.222–51, Exemption from Application of the Service Contract Act to Contracts for Maintenance, Calibration, or Repair of Certain Equipment—Requirements, in this solicitation will not be included in any resultant contract awarded to this offeror, and the offeror may be provided an opportunity to submit a new offer on that basis. (c) If the offeror does not certify to the conditions in paragraph (a) of this provision— (1) The clause in this solicitation at 52.222–51, Exemption from Application of the Service Contract Act to Contracts for Maintenance, Calibration, or Repair of Certain Equipment—Requirements, will not be included in any resultant contract awarded to this offeror; and (2) The offeror shall notify the Contracting Officer as soon as possible, if the Contracting Officer did not attach a Service Contract Act wage determination to the solicitation. (d) The Contracting Officer may not make an award to the offeror, if the offeror fails to execute the certification in paragraph (a) of this provision or to contact the Contracting Officer as required in paragraph (c) of this provision. (End of provision) 24. Add sections 52.222–51, 52.222– 52, and 52.222–53 to read as follows: I 52.222–51 Exemption from Application of the Service Contract Act to Contracts for Maintenance, Calibration, or Repair of Certain Equipment—Requirements. As prescribed in 22.1006(e)(2), insert the following clause: EXEMPTION FROM APPLICATION OF THE SERVICE CONTRACT ACT TO CONTRACTS FOR MAINTENANCE, CALIBRATION, OR REPAIR OF CERTAIN EQUIPMENT—REQUIREMENTS ‘‘(Nov 2007)’’ (a) The items of equipment to be serviced under this contract are used regularly for other than Government purposes, and are sold or traded by the Contractor in substantial quantities to the general public in the course of normal business operations. (b) The services shall be furnished at prices which are, or are based on, established catalog or market prices for the maintenance, calibration, or repair of equipment. (1) An ‘‘established catalog price’’ is a price included in a catalog, price list, schedule, or other form that is regularly maintained by the manufacturer or the Contractor, is either published or otherwise available for inspection by customers, and states prices at which sales currently, or were last, made to a significant number of buyers constituting the general public. E:\FR\FM\07NOR3.SGM 07NOR3 Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Rules and Regulations (2) An ‘‘established market price’’ is a current price, established in the usual course of trade between buyers and sellers free to bargain, which can be substantiated from sources independent of the manufacturer or Contractor. (c) The compensation (wage and fringe benefits) plan for all service employees performing work under the contract shall be the same as that used for these employees and for equivalent employees servicing the same equipment of commercial customers. (d) The Contractor is responsible for compliance with all the conditions of this exemption by its subcontractors. The Contractor shall determine the applicability of this exemption to any subcontract on or before subcontract award. In making a judgment that the exemption applies, the Contractor shall consider all factors and make an affirmative determination that all of the conditions in paragraphs (a) through (c) of this clause will be met. (e) If the Department of Labor determines that any conditions for exemption in paragraphs (a) through (c) of this clause have not been met, the exemption shall be deemed inapplicable, and the contract shall become subject to the Service Contract Act. In such case, the procedures at 29 CFR 4.123(e)(1)(iv) and 29 CFR 4.5(c) will be followed. (f) The Contractor shall include the substance of this clause, including this paragraph (f), in subcontracts for exempt services under this contract. (End of clause) 52.222–52 Exemption from Application of the Service Contract Act to Contracts for Certain Services—Certification. mstockstill on PROD1PC66 with RULES3 As prescribed in 22.1006(e)(3), insert the following provision: EXEMPTION FROM APPLICATION OF THE SERVICE CONTRACT ACT TO CONTRACTS FOR CERTAIN SERVICES— CERTIFICATION ‘‘(Nov 2007)’’ (a) The offeror shall check the following certification: CERTIFICATION The offeror b does b does not certify that— (1) The services under the contract are offered and sold regularly to nonGovernmental customers, and are provided by the offeror (or subcontractor in the case of an exempt subcontract) to the general public in substantial quantities in the course of normal business operations; (2) The contract services are furnished at prices that are, or are based on, established catalog or market prices. An ‘‘established catalog price’’ is a price included in a catalog, price list, schedule, or other form that is regularly maintained by the manufacturer or the offeror, is either published or otherwise available for inspection by customers, and states prices at which sales currently, or were last, made to a significant number of buyers constituting the general public. An ‘‘established market price’’ is a current price, established in the usual course of ordinary and usual trade between buyers and sellers free to bargain, which can be substantiated from sources independent of the manufacturer or offeror; (3) Each service employee who will perform the services under the contract will VerDate Aug<31>2005 18:14 Nov 06, 2007 Jkt 214001 spend only a small portion of his or her time (a monthly average of less than 20 percent of the available hours on an annualized basis, or less than 20 percent of available hours during the contract period if the contract period is less than a month) servicing the Government contract; and (4) The offeror uses the same compensation (wage and fringe benefits) plan for all service employees performing work under the contract as the offeror uses for these employees and for equivalent employees servicing commercial customers. (b) Certification by the offeror as to its compliance with respect to the contract also constitutes its certification as to compliance by its subcontractor if it subcontracts out the exempt services. If the offeror certifies to the conditions in paragraph (a) of this provision, and the Contracting Officer determines in accordance with FAR 22.1003–4(d)(3) that the Service Contract Act— (1) Will not apply to this offeror, then the Service Contract Act of 1965 clause in this solicitation will not be included in any resultant contract to this offeror; or (2) Will apply to this offeror, then the clause at FAR 52.222–53, Exemption from Application of the Service Contract Act to Contracts for Certain Services— Requirements, in this solicitation will not be included in any resultant contract awarded to this offer, and the offeror may be provided an opportunity to submit a new offer on that basis. (c) If the offeror does not certify to the conditions in paragraph (a) of this provision— (1) The clause of this solicitation at 52.222–53, Exemption from Application of the Service Contract Act to Contracts for Certain Services—Requirements, will not be included in any resultant contract to this offeror; and (2) The offeror shall notify the Contracting Officer as soon as possible if the Contracting Officer did not attach a Service Contract Act wage determination to the solicitation. (d) The Contracting Officer may not make an award to the offeror, if the offeror fails to execute the certification in paragraph (a) of this provision or to contact the Contracting Officer as required in paragraph (c) of this provision. (End of provision) 52.222–53 Exemption from Application of the Service Contract Act to Contracts for Certain Services—Requirements. As prescribed in 22.1006(e)(4), insert the following clause: EXEMPTION FROM APPLICATION OF THE SERVICE CONTRACT ACT TO CONTRACTS FOR CERTAIN SERVICES— REQUIREMENTS ‘‘(Nov 2007)’’ (a) The services under this contract are offered and sold regularly to nonGovernmental customers, and are provided by the Contractor to the general public in substantial quantities in the course of normal business operations. (b) The contract services are furnished at prices that are, or are based on, established catalog or market prices. An ‘‘established catalog price’’ is a price included in a catalog, price list, schedule, or other form that is PO 00000 Frm 00059 Fmt 4701 Sfmt 4700 63083 regularly maintained by the manufacturer or the Contractor, is either published or otherwise available for inspection by customers, and states prices at which sales currently, or were last, made to a significant number of buyers constituting the general public. An ‘‘established market price’’ is a current price, established in the usual course of ordinary and usual trade between buyers and sellers free to bargain, which can be substantiated from sources independent of the manufacturer or Contractor. (c) Each service employee who will perform the services under the contract will spend only a small portion of his or her time (a monthly average of less than 20 percent of the available hours on an annualized basis, or less than 20 percent of available hours during the contract period if the contract period is less than a month) servicing the Government contract. (d) The Contractor uses the same compensation (wage and fringe benefits) plan for all service employees performing work under the contract as the Contractor uses for these employees and for equivalent employees servicing commercial customers. (e)(1) Any subcontract for these exempt services shall be awarded on a sole-source basis; or (2) Except for services identified in FAR 22.1003–4(d)(1)(iv), the subcontractor shall be selected for award based on other factors in addition to price or cost with the combination of other factors at least as important as price or cost in selecting the Contractor. (f) The Contractor is responsible for compliance with all the conditions of this exemption by its subcontractors. The Contractor shall determine in advance, based on the nature of the subcontract requirements and knowledge of the practices of likely subcontractors, that all or nearly all likely subcontractors will meet the conditions in paragraphs (a) through (d) of this clause. If the services are currently being performed under a subcontract, the Contractor shall consider the practices of the existing subcontractor in making a determination regarding the conditions in paragraphs (a) through (d) of this clause. If the Contractor has reason to doubt the validity of the certification, the requirements of the Service Contract Act shall be included in the subcontract. (g) If the Department of Labor determines that any conditions for exemption at paragraphs (a) through (e) of this clause have not been met, the exemption shall be deemed inapplicable, and the contract shall become subject to the Service Contract Act. In such case, the procedures in at 29 CFR 4.123(e)(2)(iii) and 29 CFR 4.5(c) will be followed. (h) The Contractor shall include the substance of this clause, including this paragraph (h), in subcontracts for exempt services under this contract. (End of clause) [FR Doc. 07–5481 Filed 11–6–07; 8:45 am] BILLING CODE 6820–EP–S E:\FR\FM\07NOR3.SGM 07NOR3

Agencies

[Federal Register Volume 72, Number 215 (Wednesday, November 7, 2007)]
[Rules and Regulations]
[Pages 63076-63083]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 07-5481]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 4, 15, 17, 22, and 52

[FAC 2005-21; FAR Case 2001-004; Item V; Docket 2007-0001, Sequence 6]
RIN 9000-AK82


Federal Acquisition Regulation; FAR Case 2001-004, Exemption of 
Certain Service Contracts from the Service Contract Act (SCA)

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comments.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed on an interim 
rule amending the Federal Acquisition Regulation (FAR) to revise the 
current SCA exemption and to add a SCA exemption for contracts for 
certain additional services that meet specific criteria.

DATES: Effective Date: November 7, 2007.
    Comment Date: Interested parties should submit written comments to 
the FAR Secretariat on or before January 7, 2008 to be considered in 
the formulation of a final rule.

ADDRESSES: Submit comments identified by FAC 2005-21, FAR case 2001-
004, by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. To 
search for any document, first select under ``Step 1,'' ``Documents 
with an Open Comment Period'' and select under ``Optional Step 2,'' 
``Federal Acquisition Regulation'' as the agency of choice. Under 
``Optional Step 3,'' select ``Rules''. Under ``Optional Step 4,'' from 
the drop down list, select ``Document Title'' and type the FAR case 
number ``2001-004''. Click the ``Submit'' button. Please include your 
name and company name (if any) inside the document.
    You may also search for any document by clicking on the ``Search 
for Documents'' tab at the top of the screen. Select from the agency 
field ``Federal Acquisition Regulation'', and type ``2001-004'' in the 
``Document Title'' field. Select the ``Submit'' button.
     Fax: 202-501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat (VIR), 1800 F Street, NW, Room 4035, ATTN: Laurieann 
Duarte, Washington, DC 20405.
    Instructions: Please submit comments only and cite FAC 2005-21, FAR 
case 2001-004, in all correspondence related to this case. All comments 
received will be posted without change to http://www.regulations.gov. 
Please include your name and company name (if any) inside the document.

FOR FURTHER INFORMATION CONTACT: Mr. Ernest Woodson, Procurement 
Analyst, at (202) 501-3775 for clarification of content. Please cite 
FAC 2005-21, FAR case 2001-004. For information pertaining to status or 
publication

[[Page 63077]]

schedules, contact the FAR Secretariat at (202) 501-4755.

SUPPLEMENTARY INFORMATION:

A. Background

    On January 18, 2001, the Wage and Hour Division of the U.S. 
Department of Labor's Employment Standards Administration, issued a 
final rule amending the regulations at 29 CFR part 4 to exempt certain 
contracts for services meeting specific criteria from coverage under 
the SCA (66 FR 5327). The Councils opened FAR case 2001-004 to 
implement the Department of Labor (DoL) rule.
    The FAR currently exempts contracts (or subcontracts) principally 
for the maintenance, calibration, or repair of certain equipment if--
     The items of equipment are items which are used regularly 
for other than Government purposes and are sold or traded by the 
contractor in substantial quantities to the general public in the 
course of normal business operations.
     The contract services are furnished at prices which are, 
or are based on, established catalog or market prices (see 29 CFR 
4.123(e)(1)(ii)(B)).
     The contractor utilizes the same compensation (wage and 
fringe benefits) plan for all service employees performing work under 
the contract as the contractor uses for equivalent employees servicing 
the same equipment of commercial customers.
     The contractor certifies in the contract that it meets 
these criteria.
    This interim FAR rule incorporates slight revisions to this current 
exemption for consistency with the current DoL regulations and 
clarification of appropriate course of action for the contracting 
officer.
    The interim FAR rule does not refer to these services as commercial 
services, because the specified criteria are not exactly the same as 
the FAR definition of ``commercial item.'' Rather than redefining 
``commercial item,'' this rule imposes the DoL criteria and does not 
utilize the term ``commercial services.''
    In addition to this first category of service contracts, in order 
to implement the new DoL regulations, the FAR interim rule establishes 
a new category of exemption for contracts for certain services that 
includes the following:
     Automobile or other vehicle (e.g., aircraft) maintenance 
services (other than contracts or subcontracts to operate a Government 
motor pool or similar facility).
     Financial services involving the issuance and servicing of 
cards (including credit cards, debit cards, purchase cards, smart 
cards, and similar card services).
     Hotel/motel services for conferences, including lodging 
and/or meals, that are part of the contract or subcontract for the 
conference (which must not include ongoing contracts for lodging on an 
as needed or continuing basis).
     Maintenance, calibration, repair, and/or installation 
(where the installation is not subject to the Davis-Bacon Act, as 
provided in 29 CFR 4.116(c)(2)) services for all types of equipment 
where the services are obtained from the manufacturer or supplier of 
the equipment under a contract awarded on a sole source basis.
     Transportation by common carrier of persons by air, motor 
vehicle, rail, or marine vessel on regularly scheduled routes or via 
standard commercial services (not including charter services).
     Real estate services, including real property appraisal 
services, related to housing Federal agencies or disposing of real 
property owned by the Government.
     Relocation services, including services of real estate 
brokers and appraisers to assist Federal employees or military 
personnel in buying and selling homes (which shall not include actual 
moving or storage of household goods and related services).
    In order for these contracts for services to be exempt, the 
contract must meet all the criteria for the other services in the first 
category (substituting ``services'' for ``item of equipment'' in the 
first criterion, and removing other specific references to 
``equipment'' and ``manufacturer''), but the contract must also meet 
the following criteria:
     The services under the contract (or subcontract) will be 
awarded on a sole-source basis or the contractor will be selected for 
award based on other factors in addition to price or cost, with the 
combination of other factors at least as important as price or cost in 
selecting the contractor.
     Each service employee who will perform the services under 
the contract (or subcontract) will spend only a small portion of his or 
her time (a monthly average of less than 20 percent of the available 
hours on an annualized basis, or less than 20 percent of available 
hours during the contract period if the contract period is less than a 
month) servicing the Government contract (or subcontract).
     The contracting officer (or contractor with respect to a 
subcontract) determines in advance, based on the nature of the contract 
(or subcontract) requirements and knowledge of the practices of likely 
offerors, that all or nearly all offerors will meet the conditions. If 
the services are currently being performed under contract (or 
subcontract), the contracting officer (or contractor with respect to a 
subcontract) shall consider the practices of the existing contractor 
(or subcontractor) in making a determination regarding the conditions.
     The apparent successful offeror certifies, the contracting 
officer has no reason to doubt the certification, and the contracting 
officer determines that the same certification is obtained from 
substantially all other offerors that are--
     In the competitive range, if discussions are to be 
conducted (see FAR 15.306)(c)); or
     Considered responsive, if award is to be made without 
discussions (see FAR 15.306(a)).
    Council representatives discussed with DoL the implementation of 
the DoL rule for these contracts for services at the point of receipt 
of offers. The FAR rule attempts to minimize the occurrence of the 
situation in which it will be necessary to revise the solicitation 
after receipt of offers to remove the exemption provision and require 
use of the SCA clauses, even though the apparent successful offeror 
certified to criteria for the exemption. The FAR rule uses the term 
``substantially all'' to indicate that there could be a slightly 
different interpretation of the phrase ``all or nearly all'' than at 
the beginning of the process. DoL concurs that the contracting officer 
will have the discretion to interpret this term, as long as the 
intention reflected in the preamble to the SCA regulations (66 FR 5327) 
controls the contracting officer's exercise of discretion. DoL also 
concurs that it is not necessary to consider offerors that did not 
certify if these offerors were not in the competitive range or not 
responsive. Therefore, the FAR rule adds this condition when 
considering whether substantially all offerors have certified.
    The exemption for the second category of contracts for services 
does not apply to solicitations and contracts (subcontracts)--
     Awarded under the Javits-Wagner-O'Day Act, 41 U.S.C. 47.
     For the operation of a Government facility, or part of a 
Government facility (but may be applicable to subcontracts for services 
that meet all of the criteria); or
     Subject to Section 4(c) of the Service Contract Act (see 
22.1002-3).
    Whether the contracts for services fall in the first or second 
category, the Department of Labor retains the right to review those 
contracts that claim exemption from the SCA. If the Department of Labor 
determines after award of the contract (or subcontract)

[[Page 63078]]

that any condition for exemption has not been met, the exemption shall 
be deemed inapplicable, and the contract (or subcontract) becomes 
subject to the Service Contract Act. In such case, the procedures at 29 
CFR 4.123(e)(2)(iii) and 29 CFR 4.5(c) will be followed.
    In accordance with Section 29 of the Office of Federal Procurement 
Policy Act, the Federal Acquisition Regulatory Council (FAR Council) 
has obtained the approval of the Administrator of the Office of Federal 
Procurement Policy for the inclusion of two nonstatutory certifications 
in this interim FAR rule, as required by the Department of Labor 
Regulations at 29 CFR 4.123(e)(1)(ii)(D) and (e)(2)(ii)(G).
    This is not a significant regulatory action and, therefore, was not 
subject to review under Section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1993. This rule is 
not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

    The changes may have a significant economic impact on a substantial 
number of small entities within the meaning of the Regulatory 
Flexibility Act, 5 U.S.C. 601 et seq., because this rule exempts 
certain service contracts from the Service Contract Act for both 
contractors and subcontractors. An Initial Regulatory Flexibility 
Analysis (IRFA) has been prepared. The analysis is summarized as 
follows:
    This interim rule implements 29 CFR 4.123(e) of the Department 
of Labor (DoL) regulation regarding Administrative limitations, 
variance, tolerances, and exemptions. Paragraph (e) provides 
exemption for contracts for certain services that meet specific 
criteria.
    The objective of the DoL final rule was to further the 
commitment of the Administration to be more commercial-like, 
encourage broader participation in Government procurement by 
companies doing business in the commercial sector, and reinforce our 
commitment to reduce Government-unique terms and conditions, without 
compromising the purpose of the SCA to protect prevailing labor 
standards.
    The interim FAR rule should have a positive economic impact on 
the small contractors and subcontractors that meet the exemption 
criteria to be exempt from the SCA for certain services, because it 
may provide additional opportunities for work on Federal projects; 
enable these contractors to compete in a more commercial-like 
environment, and alleviate the burden of complying with Government-
unique terms and conditions for these types of contracts.
    Pursuant to Section (4)(b) of the SCA, the Secretary of Labor 
may grant reasonable exemptions to the provisions of the SCA, but 
only in special circumstances where the exemption is necessary and 
proper in the public interest, and is in accord with the remedial 
purposes of the Act to protect prevailing labor standards.
    This interim FAR rule will apply to all large and small entities 
that seek award of Federal service contracts in the service 
categories identified. The Councils relied on the DoL regulatory 
flexibility analysis (66 FR 5339), which determined that a majority 
of contracts affected by the proposed exemption would likely be 
performed by small businesses. Federal Procurement Data System 
(FPDS) does not provide an accurate estimate of the contracts 
potentially covered by the exemption, but DoL estimates that the 
total value of the exempt contracts could be relatively small, and 
that the SCA would no longer apply to only a relatively small number 
of contracts that currently contain SCA wage determination 
provisions.
    The interim rule does not duplicate, overlap, or conflict with 
any other Federal rules.
    There are no practical alternatives that will accomplish the 
objectives of this interim rule. However, the exemption is expected 
to have a positive impact on small entities, because it does not 
contain any new reporting or recordkeeping or other compliance 
requirements applicable to small business. Rather, the exemption 
would relieve small businesses and other contractors from the 
requirements of the SCA on certain contracts.
    The FAR Secretariat has submitted a copy of the IRFA to the Chief 
Counsel for Advocacy of the Small Business Administration. Interested 
parties may obtain a copy from the FAR Secretariat. The Councils will 
consider comments from small entities concerning the affected FAR Parts 
4, 15, 17, 22, and 52 in accordance with 5 U.S.C. 610. Interested 
parties must submit such comments separately and should cite 5 U.S.C. 
601, et seq., (FAC 2005-21, FAR case 2001-004), in the correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose information collection requirements that require 
the approval of the Office of Management and Budget under 44 U.S.C. 
3501, et seq.

D. Determination to Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense (DoD), the Administrator of General Services (GSA), and the 
Administrator of the National Aeronautics and Space Administration 
(NASA) that urgent and compelling reasons exist to promulgate this 
interim rule without prior opportunity for public comment. This action 
is necessary to incorporate the Department of Labor's final rule, which 
was effective March 19, 2001, into the Federal Acquisition Regulation. 
Although there has been delay while seeking appropriate implementation 
of the DoL final rule, industries that provide services in these 
categories are seeking to take advantage of the offered exemptions 
without further delay. However, pursuant to Public Law 98-577 and FAR 
1.501, the Councils will consider public comments received in response 
to this interim rule in the formation of the final rule.

List of Subjects in 48 CFR Parts 4, 15, 17, 22, and 52

    Government procurement.

    Dated: October 31, 2007.
Al Matera,
Director, Office of Acquisition Policy.

0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 4, 15, 17, 22, and 52 
as set forth below:
0
1. The authority citation for 48 CFR parts 4, 15, 17, 22, and 52 
continues to read as follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 4--ADMINISTRATIVE MATTERS


4.1201  [Amended]

0
2. Amend section 4.1201 by removing from paragraph (c) ``52.212-3(k)'' 
and adding ``52.212-3(l)'' in its place.

0
3. Amend section 4.1202 by revising paragraph (q) to read as follows:


4.1202  Solicitation provision and contract clause.

* * * * *
    (q) 52.222-48, Exemption from Application of the Service Contract 
Act to Contracts for Maintenance, Calibration, or Repair of Certain 
Equipment Certification.
* * * * *

PART 15--CONTRACTING BY NEGOTIATION


15.102  [Amended]

0
4. Amend section 15.102 by removing from paragraph (b) ``52.212-3(k)'' 
and adding ``52.212-3(l)'' in its place.

PART 17--SPECIAL CONTRACTING METHODS


17.109  [Amended]

0
5. Amend section 17.109 by removing from paragraph (b)(1) ``, as 
amended''.

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

0
6. Amend section 22.1003-4 by removing paragraph (b)(4); and by adding 
paragraphs (c) and (d) to read as follows:

[[Page 63079]]

22.1003-4  Administrative limitations, variations, tolerances, and 
exemptions.

* * * * *
    (c) Contracts for maintenance, calibration or repair of certain 
equipment.-- (1) Exemption. The Secretary of Labor has exempted from 
the Act contracts and subcontracts in which the primary purpose is to 
furnish maintenance, calibration, or repair of the following types of 
equipment, if the conditions at paragraph (c)(2) of this subsection are 
met:
    (i) Automated data processing equipment and office information/word 
processing systems.
    (ii) Scientific equipment and medical apparatus or equipment if the 
application of micro-electronic circuitry or other technology of at 
least similar sophistication is an essential element (for example, 
Federal Supply Classification (FSC) Group 65, Class 6515, ``Medical 
Diagnostic Equipment;'' Class 6525, ``X-Ray Equipment;'' FSC Group 66, 
Class 6630, ``Chemical Analysis Instruments;'' and Class 6665, 
``Geographical and Astronomical Instruments,'' are largely composed of 
the types of equipment exempted in this paragraph).
    (iii) Office/business machines not otherwise exempt pursuant to 
paragraph (c)(1)(i) of this subsection, if such services are performed 
by the manufacturer or supplier of the equipment.
    (2) Conditions. The exemption at paragraph (c)(1) of this 
subsection applies if all the following conditions are met for a 
contract (or a subcontract):
    (i) The items of equipment to be serviced under the contract are 
used regularly for other than Government purposes and are sold or 
traded by the contractor in substantial quantities to the general 
public in the course of normal business operations.
    (ii) The services will be furnished at prices which are, or are 
based on, established catalog or market prices for the maintenance, 
calibration, or repair of such equipment. As defined at 29 CFR 
4.123(e)(1)(ii)(B)--
    (A) An established catalog price is a price included in a catalog 
price list, schedule, or other form that is regularly maintained by the 
manufacturer or the contractor, is either published or otherwise 
available for inspection by customers, and states prices at which sales 
currently, or were last, made to a significant number of buyers 
constituting the general public.
    (B) An established market price is a current price, established in 
the usual course of trade between buyers and sellers free to bargain, 
which can be substantiated from sources independent of the manufacturer 
or contractor.
    (iii) The contractor will use the same compensation (wage and 
fringe benefits) plan for all service employees performing work under 
the contract as the contractor uses for these employees and equivalent 
employees servicing the same equipment of commercial customers.
    (iv) The apparent successful offeror certifies to the conditions in 
paragraph (c)(2)(i) through (iii) of this subsection. (See 22.1006(e).)
    (3) Affirmative determination and contract award. (i) For source 
selections where the contracting officer has established a competitive 
range, if the contracting officer determines that one or more of the 
conditions in paragraphs 22.1003-4 (c)(2)(i) through (iii) of an 
offeror's certification will not be met, the contracting officer shall 
identify the deficiency to the offeror before receipt of the final 
proposal revisions. Unless the offeror provides a revised offer 
acknowledging applicability of the Service Contract Act or 
demonstrating to the satisfaction of the contracting officer an ability 
to meet all required conditions for exemption, the offer will not be 
further considered for award.
    (ii) The contracting officer shall determine in writing the 
applicability of this exemption to the contract before contract award. 
If the apparent successful offeror will meet all conditions in 
paragraph (c)(2) of this subsection, the contracting officer shall make 
an affirmative determination and award the contract without the 
otherwise applicable Service Contract Act clause(s).
    (iii) If the apparent successful offeror does not certify to the 
conditions in paragraph (c)(2)(i) through (iii) of this subsection, the 
contracting officer shall incorporate in the contract the Service 
Contract Act clause (see 22.1006(a)(2)) and, if the contract will 
exceed $2,500, the appropriate Department of Labor wage determination 
(see 22.1007).
    (4) Department of Labor determination. (i) If the Department of 
Labor determines after award of the contract that any condition for 
exemption in paragraph (c)(2) of this subsection has not been met, the 
exemption shall be deemed inapplicable, and the contract shall become 
subject to the Service Contract Act, effective as of the date of the 
Department of Labor determination. In such case, the procedures at 29 
CFR 4.123(e)(1)(iv) and 29 CFR 4.5(c) shall be followed.
    (ii) If the Department of Labor determines after award of the 
subcontract that any conditions for exemption in paragraph (c)(2) of 
this subsection have not been met, the exemption shall be deemed 
inapplicable. The contractor may be responsible for ensuring that the 
subcontractor complies with the Act, effective as of the date of the 
subcontract award.
    (d) Contracts for certain services.-- (1) Exemption. Except as 
provided in paragraph (d)(5) of this subsection, the Secretary of Labor 
has exempted from the Act contracts and subcontracts in which the 
primary purpose is to provide the following services, if the conditions 
in paragraph (d)(2) of this subsection are met:
    (i) Automobile or other vehicle (e.g., aircraft) maintenance 
services (other than contracts or subcontracts to operate a Government 
motor pool or similar facility).
    (ii) Financial services involving the issuance and servicing of 
cards (including credit cards, debit cards, purchase cards, smart 
cards, and similar card services).
    (iii) Hotel/motel services for conferences, including lodging and/
or meals, that are part of the contract or subcontract for the 
conference (which must not include ongoing contracts for lodging on an 
as needed or continuing basis).
    (iv) Maintenance, calibration, repair, and/or installation (where 
the installation is not subject to the Davis-Bacon Act, as provided in 
29 CFR 4.116(c)(2)) services for all types of equipment where the 
services are obtained from the manufacturer or supplier of the 
equipment under a contract awarded on a sole source basis.
    (v) Transportation by common carrier of persons by air, motor 
vehicle, rail, or marine vessel on regularly scheduled routes or via 
standard commercial services (not including charter services).
    (vi) Real estate services, including real property appraisal 
services, related to housing Federal agencies or disposing of real 
property owned by the Government.
    (vii) Relocation services, including services of real estate 
brokers and appraisers to assist Federal employees or military 
personnel in buying and selling homes (which shall not include actual 
moving or storage of household goods and related services).
    (2) Conditions. The exemption for the services in paragraph (d)(1) 
of this subsection applies if all the following conditions are met for 
a contract (or for a subcontract):
    (i)(A) The contract will be awarded on a sole-source basis; or
    (B) Except for services identified in paragraph (d)(1)(iv) of this 
subsection, the contractor will be selected for award

[[Page 63080]]

based on other factors in addition to price or cost, with the 
combination of other factors at least as important as price or cost in 
selecting the contractor.
    (ii) The services under the contract are offered and sold regularly 
to non-Governmental customers, and are provided by the contractor (or 
subcontractor in the case of an exempt subcontract) to the general 
public in substantial quantities in the course of normal business 
operations.
    (iii) The contract services are furnished at prices that are, or 
are based on, established catalog or market prices. As defined at 29 
CFR 4.123(e)(2)(ii)(C)--
    (A) An established catalog price is a price included in a catalog, 
price list, schedule, or other form that is regularly maintained by the 
contractor, is either published or otherwise available for inspection 
by customers, and states prices at which sales are currently, or were 
last, made to a significant number of buyers constituting the general 
public; and
    (B) An established market price is a current price, established in 
the usual course of trade between buyers and sellers free to bargain, 
which can be substantiated from sources independent of the manufacturer 
or contractor.
    (iv) Each service employee who will perform the services under the 
contract will spend only a small portion of his or her time (a monthly 
average of less than 20 percent of the available hours on an annualized 
basis, or less than 20 percent of available hours during the contract 
period if the contract period is less than a month) servicing the 
Government contract.
    (v) The contractor will use the same compensation (wage and fringe 
benefits) plan for all service employees performing work under the 
contract as the contractor uses for these employees and equivalent 
employees servicing commercial customers.
    (vi) The contracting officer (or contractor with respect to a 
subcontract) determines in advance, based on the nature of the contract 
requirements and knowledge of the practices of likely offerors, that 
all or nearly all offerors will meet the conditions in paragraph 
(d)(2)(ii) through (v) of this subsection. If the services are 
currently being performed under contract, the contracting officer (or 
contractor with respect to a subcontract) shall consider the practices 
of the existing contractor in making a determination regarding the 
conditions in paragraphs (d)(2)(ii) through (v) of this subsection.
    (vii)(A) The apparent successful offeror certifies that the 
conditions in paragraphs (d)(2)(ii) through (v) will be met; and
    (B) For other than sole source awards, the contracting officer 
determines that the same certification is obtained from substantially 
all other offerors that are--
    (1) In the competitive range, if discussions are to be conducted 
(see FAR 15.306)(c)); or
    (2) Considered responsive, if award is to be made without 
discussions (see FAR 15.306(a)).
    (3) Contract award or resolicitation. (i) If the apparent 
successful offeror does not certify to the conditions, the contracting 
officer shall insert in the contract the applicable Service Contract 
Act clause(s) (see 22.1006(a)(2)) and, if the contract will exceed 
$2,500, the appropriate Department of Labor wage determination (see 
22.1007).
    (ii) The contracting officer shall award the contract without the 
otherwise applicable Service Contract Act clause(s) if--
    (A) The apparent successful offeror certifies to the conditions in 
paragraphs (d)(2)(ii) through (v) of this subsection;
    (B) The contracting officer determines that the same certification 
is obtained from substantially all other offerors that are--
    (1) In the competitive range, if discussions are to be conducted 
(see FAR 15.306); or
    (2) Considered responsive, if award is to be made without 
discussions (see FAR 15.306(a)); and
    (C) The contracting officer has no reason to doubt the 
certification.
    (iii) If the conditions in paragraph (d)(3)(ii) of this subsection 
are not met, then the contracting officer shall resolicit, amending the 
solicitation by removing the exemption provision from the solicitation 
(see 22.1006(e)(4)), and inserting in the contract the applicable 
Service Contract Act clause(s) (see 22.1006(a)(2)) and, if the contract 
will exceed $2,500, the appropriate Department of Labor wage 
determination (see 22.1007).
    (4) Department of Labor determination. (i) If the Department of 
Labor determines after award of the contract that any conditions for 
exemption at paragraph (d)(2) of this subsection have not been met, the 
exemption shall be deemed inapplicable, and the contract shall become 
subject to the Service Contract Act. In such case, the procedures at 29 
CFR 4.123(e)(2)(iii) and 29 CFR 4.5(c) shall be followed.
    (ii) If the Department of Labor determines that any conditions in 
paragraph (d)(2) of this subsection have not been met with respect to a 
subcontract, the exemption shall be deemed inapplicable and the 
contractor may be responsible for ensuring that the subcontractor 
complies with the Act, effective as of the date of the subcontract 
award.
    (5) Exceptions. The exemption at paragraph (d)(1) of this 
subsection does not apply to solicitations and contracts 
(subcontracts)--
    (i) Awarded under the Javits-Wagner-O'Day Act, 41 U.S.C. 47 (see 
Subpart 8.7).
    (ii) For the operation of a Government facility, or part of a 
Government facility (but may be applicable to subcontracts for 
services); or
    (iii) Subject to Section 4(c) of the Service Contract Act (see 
22.1002-3).


22.1003-5  [Amended]

0
7. Amend section 22.1003-5 by removing from paragraph (k) ``22.1003-
4(b)(4)'' and adding ``22.1003(c)(1) and (d)(1)(iv)'' in its place.


22.1003-6  [Amended]

0
8. Amend section 22.1003-6 by removing from paragraph (b)(2) ``22.1003-
4(b)(4)'' and adding ``22.1003(c)(1) and (d)(1)(iv)'' in its place.

0
9. Amend section 22.1004 by revising paragraph (h) to read as follows:


22.1004  Department of Labor responsibilities and regulations.

* * * * *
    (h) Practice before the Administrative Review Board (29 CFR part 
8).

0
10. Amend section 22.1006 by--
0
a. Revising the section heading;
0
b. Revising paragraph (a);
0
c. Removing from paragraphs (c)(1) and (c)(2) ``as amended,''; and
0
d. Revising paragraph (e) to read as follows:


22.1006  Solicitation provisions and contract clauses.

    (a)(1) The contracting officer shall insert the clause at 52.222-
41, Service Contract Act of 1965, in solicitations and contracts if the 
contract is subject to the Act and is--
    (i) Over $2,500; or
    (ii) For an indefinite dollar amount and the contracting officer 
does not know in advance that the contract amount will be $2,500 or 
less.
    (2) If the solicitation includes the provision at 52.222-48, 
Exemption from Application of the Service Contract Act to Contracts for 
Maintenance, Calibration, or Repair of Certain Equipment--
Certification, or 52.222-52, Exemption from Application of the Service 
Contract Act to Contracts for Certain Services--Certification, the 
contracting officer shall not insert the clause at 52.222-41 (or any of 
the associated Service Contract Act clauses

[[Page 63081]]

prescribed in this section for possible use when 52.222-41 applies) in 
the resultant contract unless the contracting officer determines, in 
accordance with paragraphs (c)(3) or (d)(3) of subsection 22.1003-4, 
that the Service Contract Act applies to the contract. (In such case, 
do not insert the clause at 52.222-51, Exemption from Application of 
the Service Contract Act to Contracts for Maintenance, Calibration, or 
Repair of Certain Equipment--Requirements, or 52.222-53, Exemption from 
Application of the Service Contract Act to Contracts for Certain 
Services--Requirements, in the contract, in accordance with the 
prescription at paragraph (e)(2) or (e)(4) of this subsection).
* * * * *
    (e)(1) The contracting officer shall insert the provision at 
52.222-48, Exemption from Application of the Service Contract Act to 
Contracts for Maintenance, Calibration, or Repair of Certain 
Equipment--Certification, in solicitations that include the clause at 
52.222-41, Service Contract Act of 1965, but the contract may be exempt 
from the Service Contract Act in accordance with 22.1003-4(c).
    (2) The contracting officer shall insert the clause at 52.222-51, 
Exemption from Application of the Service Contract Act to Contracts for 
Maintenance, Calibration, or Repair of Certain Equipment--Requirements, 
in solicitations that include the provision at 52.222-48, and resulting 
contracts in which the contracting officer has determined, in 
accordance with 22.1003-4(c)(3), that the Service Contract Act does not 
apply.
    (3) Insert the provision at 52.222-52, Exemption from Application 
of the Service Contract Act to Contracts for Certain Services--
Certification, in solicitations that include the clause at 52.222-41, 
Service Contract Act of 1965, but the contract may be exempt from the 
Service Contract Act in accordance with 22.1003-4(d).
    (4) The contracting officer shall insert the clause at 52.222-53, 
Exemption from Application of the Service Contract Act to Contracts for 
Certain Services--Requirements, in solicitations that include the 
provision at 52.222-52, and resulting contracts in which the 
contracting officer has determined, in accordance with 22.1003-4(d)(3), 
that the Service Contract Act does not apply.
* * * * *


22.1008-2  [Amended]

0
11. Amend section 22.1008-2 by removing from the last sentence of 
paragraph (d)(1) ``, as amended''.


22.1018  [Amended]

0
12. Amend section 22.1018 by removing from paragraph (b) ``, as 
amended''.


22.1019  [Amended]

0
13. Amend section 22.1019 by removing from paragraphs (a), in the first 
sentence, and (c) ``, as amended''.


22.1020  [Amended]

0
14. Amend section 22.1020 by removing ``, as amended''.


22.1022  [Amended]

0
15. Amend section 22.1022 by removing ``Assistant'' and ``Board of 
Service Contract Appeals'' and adding ``Deputy'' and ``Administrative 
Review Board'' in their places, respectively.


22.1023  [Amended]

0
16. Amend section 22.1023 by removing ``, as amended''.


22.1026  [Amended]

0
17. Amend section 22.1026 by removing ``as amended,''.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


52.212-1  [Amended]

0
18. Amend section 52.212-1 by revising the date of the clause to read 
``(Nov 2007)''; and by removing from paragraph (b)(8) ``52.212-3(k)'' 
and adding ``52.212-3(l)'' in its place.

0
19. Amend section 52.212-3 by--
0
a. Revising the date of the clause;
0
b. Removing from the introductory text of the clause ``paragraph (k)'' 
and ``through (j)'' and adding ``paragraph (l)'' and ``through (k)'' in 
its place, respectively;
0
c. Redesignating paragraph (k) as paragraph (l); removing from the 
newly designated paragraph (l)(1) ``paragraph (k)(2)'' and adding 
``paragraph (l)(2)'' in its place, and in the newly designated 
paragraph (l)(2), in the bracketed paragraph, removing ``through (j)'' 
and adding ``through (k)'' in its place; and
0
d. Adding a new paragraph (k) to read as follows:


52.212--3  Offeror Representations and Certifications--Commercial 
Items.

* * * * *
    OFFEROR REPRESENTATIONS AND CERTIFICATIONS--COMMERCIAL ITEMS 
``(Nov 2007)''
* * * * *
    (k) Certificates regarding exemptions from the application of 
the Service Contract Act. (Certification by the offeror as to its 
compliance with respect to the contract also constitutes its 
certification as to compliance by its subcontractor if it 
subcontracts out the exempt services.) [The contracting officer is 
to check a box to indicate if paragraph (k)(1) or (k)(2) applies.]
    [ballot] (1) Maintenance, calibration, or repair of certain 
equipment as described in FAR 22.1003-4(c)(1). The offeror [ballot] 
does [ballot] does not certify that--
    (i) The items of equipment to be serviced under this contract 
are used regularly for other than Governmental purposes and are sold 
or traded by the offeror in substantial quantities to the general 
public in the course of normal business operations;
    (ii) The services will be furnished at prices which are, or are 
based on, established catalog or market prices (see FAR 22.1003-
4(c)(2)(ii)) for the maintenance, calibration, or repair of such 
equipment; and
    (iii) The compensation (wage and fringe benefits) plan for all 
service employees performing work under the contract will be the 
same as that used for these employees and equivalent employees 
servicing the same equipment of commercial customers.
    [ballot] (2) Certain services as described in FAR 22.1003-
4(d)(1). The offeror [ballot] does [ballot] does not certify that--
    (i) The services under the contract are offered and sold 
regularly to non-Governmental customers, and are provided by the 
offeror (or subcontractor in the case of an exempt subcontract) to 
the general public in substantial quantities in the course of normal 
business operations;
    (ii) The contract services will be furnished at prices that are, 
or are based on, established catalog or market prices (see FAR 
22.1003-4(d)(2)(iii));
    (iii) Each service employee who will perform the services under 
the contract will spend only a small portion of his or her time (a 
monthly average of less than 20 percent of the available hours on an 
annualized basis, or less than 20 percent of available hours during 
the contract period if the contract period is less than a month) 
servicing the Government contract; and
    (iv) The compensation (wage and fringe benefits) plan for all 
service employees performing work under the contract is the same as 
that used for these employees and equivalent employees servicing 
commercial customers.
    (3) If paragraph (k)(1) or (k)(2) of this clause applies--
    (i) If the offeror does not certify to the conditions in 
paragraph (k)(1) or (k)(2) and the Contracting Officer did not 
attach a Service Contract Act wage determination to the 
solicitation, the offeror shall notify the Contracting Officer as 
soon as possible; and
    (ii) The Contracting Officer may not make an award to the 
offeror if the offeror fails to execute the certification in 
paragraph (k)(1) or (k)(2) of this clause or to contact the 
Contracting Officer as required in paragraph (k)(3)(i) of this 
clause.
* * * * *

0
20. Amend section 52.212-5 by--
0
a. Revising the date of the clause;
0
b. Revising paragraph (c)(1), redesignating paragraph (c)(5) as (c)(7), 
and adding new paragraphs (c)(5) and (c)(6); and
0
c. Revising paragraph (e)(1)(vi), and redesignating paragraph 
(e)(1)(viii) as

[[Page 63082]]

(e)(1)(x), and adding new paragraphs (e)(1)(viii) and (e)(1)(ix).
0
The revised and added text reads as follows:


52.212-5  Contract Terms and Conditions Required to Implement Statutes 
or Executive Orders--Commercial Items.

* * * * *
    CONTRACT TERMS AND CONDITIONS REQUIRED TO IMPLEMENT STATUTES OR 
EXECUTIVE ORDERS--COMMERCIAL ITEMS ``(Nov 2007)''
* * * * *
    (c) * * *
    ------ (1) 52.222-41, Service Contract Act of 1965 ``(Nov 
2007)'' (41 U.S.C. 351, et seq.).
* * * * *
    ------ (5) 52.222-51, Exemption from Application of the Service 
Contract Act to Contracts for Maintenance, Calibration, or Repair of 
Certain Equipment--Requirements ``([Insert Abbreviated Month and 
Year of Date of Publication in the Federal Register]'' (41 U.S.C. 
351, et seq.).
    ------ (6) 52.222-53, Exemption from Application of the Service 
Contract Act to Contracts for Certain Services--Requirements ``(Nov 
2007)'' (41 U.S.C. 351, et seq.).
* * * * *
    (e)(1) * * *
    (vi) 52.222-41, Service Contract Act of 1965 ``([Insert 
Abbreviated Month and Year of Date of Publication in the Federal 
Register])'' (41 U.S.C. 351, et seq.).
* * * * *
    (viii) 52.222-51, Exemption from Application of the Service 
Contract Act to Contracts for Maintenance, Calibration, or Repair of 
Certain Equipment--Requirements ``(Nov 2007)'' (41 U.S.C. 351, et 
seq.).
    (ix) 52.222-53, Exemption from Application of the Service 
Contract Act to Contracts for Certain Services--Requirements ``(Nov 
2007)'' (41 U.S.C. 351, et seq.).
* * * * *

0
21. Amend section 52.213-4 by revising the date of the clause; and 
revising the first sentence of paragraph (b)(1)(vi) to read as follows:


52.213-4  Terms and Conditions--Simplified Acquisitions (Other Than 
Commercial Items).

* * * * *
    TERMS AND CONDITIONS--SIMPLIFIED ACQUISITIONS (OTHER THAN 
COMMERCIAL ITEMS) ``(Nov 2007)''
* * * * *
    (b) * * *
    (1) * * *
    (vi) 52.222-41, Service Contract Act of 1965 ``(Nov 2007)'' (41 
U.S.C. 351, et seq.). * * *
* * * * *

0
22. Amend section 52.222-41 by--
0
a. Revising the section heading;
0
b. Revising the clause heading and the date; and
0
c. Amending paragraph (a) by--
0
1. Revising the introductory text;
0
2. Revising the definitions ``Act'' and ``Contractor'';
0
3. Removing from the definition ``Service employee'' the words ``, as 
used in this clause,''; and
0
4. Removing from paragraph (f) ``Board of Service Contract Appeals'' 
and adding ``Administrative Review Board'' in its place.
0
The revised text reads as follows:


52.222-41  Service Contract Act of 1965.

* * * * *
    SERVICE CONTRACT ACT OF 1965 ``(Nov 2007)''
    (a) Definitions. As used in this clause--
    Act means the Service Contract Act of 1965 (41 U.S.C. 351, et 
seq.)
    Contractor when this clause is used in any subcontract, shall be 
deemed to refer to the subcontractor, except in the term 
``Government Prime Contractor.''
* * * * *

0
23. Revise section 52.222-48 to read as follows:


52.222-48  Exemption from Application of the Service Contract Act to 
Contracts for Maintenance, Calibration, or Repair of Certain Equipment 
Certification.

    As prescribed in 22.1006(e)(1), insert the following provision:
    EXEMPTION FROM APPLICATION OF THE SERVICE CONTRACT ACT TO 
CONTRACTS FOR MAINTENANCE, CALIBRATION, OR REPAIR OF CERTAIN 
EQUIPMENT CERTIFICATION ``(Nov 2007)''
    (a) The offeror shall check the following certification:
    CERTIFICATION
    The offeror [ballot] does [ballot] does not certify that--
    (1) The items of equipment to be serviced under this contract 
are used regularly for other than Government purposes, and are sold 
or traded by the offeror in substantial quantities to the general 
public in the course of normal business operations;
    (2) The services will be furnished at prices which are, or are 
based on, established catalog or market prices for the maintenance, 
calibration, or repair of equipment.
    (i) An ``established catalog price'' is a price included in a 
catalog, price list, schedule, or other form that is regularly 
maintained by the manufacturer or the offeror, is either published 
or otherwise available for inspection by customers, and states 
prices at which sales currently, or were last, made to a significant 
number of buyers constituting the general public.
    (ii) An ``established market price'' is a current price, 
established in the usual course of trade between buyers and sellers 
free to bargain, which can be substantiated from sources independent 
of the manufacturer or offeror; and
    (3) The compensation (wage and fringe benefits) plan for all 
service employees performing work under the contract are the same as 
that used for these employees and equivalent employees servicing the 
same equipment of commercial customers.
    (b) Certification by the offeror as to its compliance with 
respect to the contract also constitutes its certification as to 
compliance by its subcontractor if it subcontracts out the exempt 
services. If the offeror certifies to the conditions in paragraph 
(a) of this provision, and the Contracting Officer determines in 
accordance with FAR 22.1003-4(c)(3) that the Service Contract Act--
    (1) Will not apply to this offeror, then the Service Contract 
Act of 1965 clause in this solicitation will not be included in any 
resultant contract to this offeror; or
    (2) Will apply to this offeror, then the clause at 52.222-51, 
Exemption from Application of the Service Contract Act to Contracts 
for Maintenance, Calibration, or Repair of Certain Equipment--
Requirements, in this solicitation will not be included in any 
resultant contract awarded to this offeror, and the offeror may be 
provided an opportunity to submit a new offer on that basis.
    (c) If the offeror does not certify to the conditions in 
paragraph (a) of this provision--
    (1) The clause in this solicitation at 52.222-51, Exemption from 
Application of the Service Contract Act to Contracts for 
Maintenance, Calibration, or Repair of Certain Equipment--
Requirements, will not be included in any resultant contract awarded 
to this offeror; and
    (2) The offeror shall notify the Contracting Officer as soon as 
possible, if the Contracting Officer did not attach a Service 
Contract Act wage determination to the solicitation.
    (d) The Contracting Officer may not make an award to the 
offeror, if the offeror fails to execute the certification in 
paragraph (a) of this provision or to contact the Contracting 
Officer as required in paragraph (c) of this provision.
    (End of provision)

0
24. Add sections 52.222-51, 52.222-52, and 52.222-53 to read as 
follows:


52.222-51  Exemption from Application of the Service Contract Act to 
Contracts for Maintenance, Calibration, or Repair of Certain 
Equipment--Requirements.

    As prescribed in 22.1006(e)(2), insert the following clause:
    EXEMPTION FROM APPLICATION OF THE SERVICE CONTRACT ACT TO 
CONTRACTS FOR MAINTENANCE, CALIBRATION, OR REPAIR OF CERTAIN 
EQUIPMENT--REQUIREMENTS ``(Nov 2007)''
    (a) The items of equipment to be serviced under this contract 
are used regularly for other than Government purposes, and are sold 
or traded by the Contractor in substantial quantities to the general 
public in the course of normal business operations.
    (b) The services shall be furnished at prices which are, or are 
based on, established catalog or market prices for the maintenance, 
calibration, or repair of equipment.
    (1) An ``established catalog price'' is a price included in a 
catalog, price list, schedule, or other form that is regularly 
maintained by the manufacturer or the Contractor, is either 
published or otherwise available for inspection by customers, and 
states prices at which sales currently, or were last, made to a 
significant number of buyers constituting the general public.

[[Page 63083]]

    (2) An ``established market price'' is a current price, 
established in the usual course of trade between buyers and sellers 
free to bargain, which can be substantiated from sources independent 
of the manufacturer or Contractor.
    (c) The compensation (wage and fringe benefits) plan for all 
service employees performing work under the contract shall be the 
same as that used for these employees and for equivalent employees 
servicing the same equipment of commercial customers.
    (d) The Contractor is responsible for compliance with all the 
conditions of this exemption by its subcontractors. The Contractor 
shall determine the applicability of this exemption to any 
subcontract on or before subcontract award. In making a judgment 
that the exemption applies, the Contractor shall consider all 
factors and make an affirmative determination that all of the 
conditions in paragraphs (a) through (c) of this clause will be met.
    (e) If the Department of Labor determines that any conditions 
for exemption in paragraphs (a) through (c) of this clause have not 
been met, the exemption shall be deemed inapplicable, and the 
contract shall become subject to the Service Contract Act. In such 
case, the procedures at 29 CFR 4.123(e)(1)(iv) and 29 CFR 4.5(c) 
will be followed.
    (f) The Contractor shall include the substance of this clause, 
including this paragraph (f), in subcontracts for exempt services 
under this contract.
    (End of clause)


52.222-52  Exemption from Application of the Service Contract Act to 
Contracts for Certain Services--Certification.

    As prescribed in 22.1006(e)(3), insert the following provision:
    EXEMPTION FROM APPLICATION OF THE SERVICE CONTRACT ACT TO 
CONTRACTS FOR CERTAIN SERVICES--CERTIFICATION ``(Nov 2007)''
    (a) The offeror shall check the following certification:
    CERTIFICATION
    The offeror [ballot] does [ballot] does not certify that--
    (1) The services under the contract are offered and sold 
regularly to non-Governmental customers, and are provided by the 
offeror (or subcontractor in the case of an exempt subcontract) to 
the general public in substantial quantities in the course of normal 
business operations;
    (2) The contract services are furnished at prices that are, or 
are based on, established catalog or market prices. An ``established 
catalog price'' is a price included in a catalog, price list, 
schedule, or other form that is regularly maintained by the 
manufacturer or the offeror, is either published or otherwise 
available for inspection by customers, and states prices at which 
sales currently, or were last, made to a significant number of 
buyers constituting the general public. An ``established market 
price'' is a current price, established in the usual course of 
ordinary and usual trade between buyers and sellers free to bargain, 
which can be substantiated from sources independent of the 
manufacturer or offeror;
    (3) Each service employee who will perform the services under 
the contract will spend only a small portion of his or her time (a 
monthly average of less than 20 percent of the available hours on an 
annualized basis, or less than 20 percent of available hours during 
the contract period if the contract period is less than a month) 
servicing the Government contract; and
    (4) The offeror uses the same compensation (wage and fringe 
benefits) plan for all service employees performing work under the 
contract as the offeror uses for these employees and for equivalent 
employees servicing commercial customers.
    (b) Certification by the offeror as to its compliance with 
respect to the contract also constitutes its certification as to 
compliance by its subcontractor if it subcontracts out the exempt 
services. If the offeror certifies to the conditions in paragraph 
(a) of this provision, and the Contracting Officer determines in 
accordance with FAR 22.1003-4(d)(3) that the Service Contract Act--
    (1) Will not apply to this offeror, then the Service Contract 
Act of 1965 clause in this solicitation will not be included in any 
resultant contract to this offeror; or
    (2) Will apply to this offeror, then the clause at FAR 52.222-
53, Exemption from Application of the Service Contract Act to 
Contracts for Certain Services--Requirements, in this solicitation 
will not be included in any resultant contract awarded to this 
offer, and the offeror may be provided an opportunity to submit a 
new offer on that basis.
    (c) If the offeror does not certify to the conditions in 
paragraph (a) of this provision--
    (1) The clause of this solicitation at 52.222-53, Exemption from 
Application of the Service Contract Act to Contracts for Certain 
Services--Requirements, will not be included in any resultant 
contract to this offeror; and
    (2) The offeror shall notify the Contracting Officer as soon as 
possible if the Contracting Officer did not attach a Service 
Contract Act wage determination to the solicitation.
    (d) The Contracting Officer may not make an award to the 
offeror, if the offeror fails to execute the certification in 
paragraph (a) of this provision or to contact the Contracting 
Officer as required in paragraph (c) of this provision.
    (End of provision)


52.222-53  Exemption from Application of the Service Contract Act to 
Contracts for Certain Services--Requirements.

    As prescribed in 22.1006(e)(4), insert the following clause:
    EXEMPTION FROM APPLICATION OF THE SERVICE CONTRACT ACT TO 
CONTRACTS FOR CERTAIN SERVICES--REQUIREMENTS ``(Nov 2007)''
    (a) The services under this contract are offered and sold 
regularly to non-Governmental customers, and are provided by the 
Contractor to the general public in substantial quantities in the 
course of normal business operations.
    (b) The contract services are furnished at prices that are, or 
are based on, established catalog or market prices. An ``established 
catalog price'' is a price included in a catalog, price list, 
schedule, or other form that is regularly maintained by the 
manufacturer or the Contractor, is either published or otherwise 
available for inspection by customers, and states prices at which 
sales currently, or were last, made to a significant number of 
buyers constituting the general public. An ``established market 
price'' is a current price, established in the usual course of 
ordinary and usual trade between buyers and sellers free to bargain, 
which can be substantiated from sources independent of the 
manufacturer or Contractor.
    (c) Each service employee who will perform the services under 
the contract will spend only a small portion of his or her time (a 
monthly average of less than 20 percent of the available hours on an 
annualized basis, or less than 20 percent of available hours during 
the contract period if the contract period is less than a month) 
servicing the Government contract.
    (d) The Contractor uses the same compensation (wage and fringe 
benefits) plan for all service employees performing work under the 
contract as the Contractor uses for these employees and for 
equivalent employees servicing commercial customers.
    (e)(1) Any subcontract for these exempt services shall be 
awarded on a sole-source basis; or
    (2) Except for services identified in FAR 22.1003-4(d)(1)(iv), 
the subcontractor shall be selected for award based on other factors 
in addition to price or cost with the combination of other factors 
at least as important as price or cost in selecting the Contractor.
    (f) The Contractor is responsible for compliance with all the 
conditions of this exemption by its subcontractors. The Contractor 
shall determine in advance, based on the nature of the subcontract 
requirements and knowledge of the practices of likely 
subcontractors, that all or nearly all likely subcontractors will 
meet the conditions in paragraphs (a) through (d) of this clause. If 
the services are currently being performed under a subcontract, the 
Contractor shall consider the practices of the existing 
subcontractor in making a determination regarding the conditions in 
paragraphs (a) through (d) of this clause. If the Contractor has 
reason to doubt the validity of the certification, the requirements 
of the Service Contract Act shall be included in the subcontract.
    (g) If the Department of Labor determines that any conditions 
for exemption at paragraphs (a) through (e) of this clause have not 
been met, the exemption shall be deemed inapplicable, and the 
contract shall become subject to the Service Contract Act. In such 
case, the procedures in at 29 CFR 4.123(e)(2)(iii) and 29 CFR 4.5(c) 
will be followed.
    (h) The Contractor shall include the substance of this clause, 
including this paragraph (h), in subcontracts for exempt services 
under this contract.
    (End of clause)
[FR Doc. 07-5481 Filed 11-6-07; 8:45 am]
BILLING CODE 6820-EP-S