General Services Administration Acquisition Regulation (GSAR); Construction Labor Requirements for Lease Acquisitions, 87993-87998 [2024-25656]

Agencies

• General Services Administration

[Federal Register Volume 89, Number 215 (Wednesday, November 6, 2024)]
[Proposed Rules]
[Pages 87993-87998]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-25656]


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GENERAL SERVICES ADMINISTRATION

48 CFR Part 570

[GSAR Case 2021-G530; Docket No. GSA-GSAR 2024-0019; Sequence No. 1]
RIN 3090-AK51


General Services Administration Acquisition Regulation (GSAR); 
Construction Labor Requirements for Lease Acquisitions

AGENCY: Office of Acquisition Policy, General Services Administration 
(GSA).

ACTION: Proposed rule.

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SUMMARY: The General Services Administration is proposing to amend the 
General Services Administration Acquisition Regulation to add a new 
section that adopts the amended definition of the term ``public 
building or public work'' from the Department of Labor's Updating the 
Davis-Bacon and Related Acts Regulations final rule and to include 
compliance with the minimum wage and sick leave Executive Orders, and 
other requirements for leasehold acquisitions when there is a 
qualifying construction event as defined in this rule.

DATES: Interested parties should submit written comments to the 
Regulatory Secretariat Division at the address shown below on or before 
January 6, 2025 to be considered in the formation of the final rule.

ADDRESSES: Submit comments in response to GSAR Case 2021-G530 to: 
Regulations.gov: https://www.regulations.gov. Submit comments via the 
Federal eRulemaking portal by searching for ``GSAR Case 2021-G530''. 
Select the link ``Comment Now'' that corresponds with GSAR Case 2021-
G530. Follow the instructions provided at the ``Comment Now'' screen. 
Please include your name, company name (if any), and ``GSAR Case 2021-
G530'' on your attached document. If your comment cannot be submitted 
using https://www.regulations.gov, call or email the points of contact 
in the FOR FURTHER INFORMATION CONTACT section of this document for 
alternate instructions.
    Instructions: Please submit comments only and cite GSAR Case 2021-
G530 in all correspondence related to this case. Comments received 
generally will be posted without change to https://www.regulations.gov, 
including any personal and/or business confidential information 
provided. To confirm receipt of your comment(s), please check https://www.regulations.gov approximately two to three days after submission to 
verify posting.

[[Page 87994]]


FOR FURTHER INFORMATION CONTACT: Ms. Johnnie McDowell, Procurement 
Analyst, at 202-718-6112 or [email protected] for clarification of 
content. For information pertaining to status or publication schedules, 
contact the Regulatory Secretariat Division at 202-501-4755 or 
[email protected]. Please cite GSAR Case 2020-G530.

SUPPLEMENTARY INFORMATION:

I. Background

    The Federal Government is the largest single lessee of space in the 
United States. General Services Administration (GSA), as one of the 
nation's largest public real estate organizations, provides workspace 
for over one million Federal workers located in space owned by the 
Federal government and in leased properties including buildings, land, 
and sites across the country.
    Since 1994, GSA has applied the Construction Wage Rate Requirements 
(CWRR), also known as the Davis-Bacon Act (DBA), clauses in contracts 
and subcontracts specifically for new building construction, whether 
planned lease construction or the complete rehabilitation or 
reconstruction of an existing building, where the Government is the 
sole or predominant tenant of the facility.
    On August 23, 2023, the Department of Labor (DOL) published a final 
rule updating the regulations that implement the Davis-Bacon and 
Related Acts (DBRA) (see 88 FR 57526). The DOL rule, among other 
things, clarified the regulatory definitions of a ``building or work'' 
and ``public building or public work'' to include a portion of a 
building or work, or the installation of equipment or components into a 
building or work, even where the entire building or work is not owned, 
leased, or used by a Federal agency, so long as other requirements for 
coverage are met. Examples of other requirements for coverage include 
the Federal government's sufficient involvement with the lease, and the 
existence of a contract for construction that is authorized or financed 
by the Federal government.
    In reviewing the clarifying language in DOL's recent revisions to 
the DBRA regulations, the Federal Acquisition Regulation (FAR) subpart 
22.4 Labor Standards for Contracts Involving Construction, and GSAR 
Part 570 Acquiring Leasehold Interests in Real Property, GSA determined 
that proposing a new subpart addressing all of the requirements for 
lease contracts with a CWRR qualifying construction event was 
necessary.

II. Discussion and Analysis

    The rule proposes to amend GSAR Subpart 570.1, General by creating 
a new section GSAR 570.119 Construction labor requirements for lease 
acquisitions to assist the leasing acquisition workforce in 
implementing the changes to the CWRR clauses. The new subpart will 
identify:
     When CWRR applies;
     Common terminology to ensure the Government, offeror, 
lessor, and subcontractors clearly understand the application and 
associated requirements;
     Why the Service Contract Labor Standards usually does not 
apply to lease contracts;
     Procedures for compliance monitoring and reporting; and
     All applicable clauses and executive orders required for 
lease contracts with a qualifying construction event.

A. Identify When CWRR Applies

    The rule will require the application of the CWRR in all new and 
existing lease contracts with a qualifying construction event provided 
that the construction work itself is performed in whole or in part 
within the United States, District of Columbia, or the Commonwealth of 
Northern Mariana Islands.

B. Common Terminology

    The key component of the rule is defining a qualifying construction 
event which prompts a lease contract to include the CWRR requirements. 
This rule also defines ancillary terms including tenant improvements, 
building shell and building specific amortized capital. These terms 
have long been used in GSA lease contracts.

C. Service Contract Labor Standards

    The rule clarifies that the Service Contract Labor Standards 
(SCLS), also known as Service Contract Act (SCA), generally does not 
apply to contracts for the lease of space for government occupancy 
because these contracts usually do not have the principal purpose of 
furnishing services, as required for coverage under the SCLS. (See 41 
U.S.C. 6702, 29 CFR 4.134(b)). In addition, workers carrying out the 
construction activities on lease contracts with a qualifying 
construction event are covered by the CWRR and therefore are exempt 
from coverage under the SCLS. (See 29 CFR 4.115(b)).

D. Procedures for Requirements, Compliance Monitoring and Reporting

    The rule directs contracting officers to the Federal Acquisition 
Regulation (FAR) guidance to implement CWRR requirements in lease 
acquisitions involving qualifying construction events, including wage 
determinations (FAR 22.404), payroll certification and work safety and 
health (FAR 22.407), and compliance and monitoring (FAR 22.406-7).

E. List of All Applicable Clauses

    The rule will add CWRR labor clauses to GSAR section 570.701 FAR 
provisions and clauses for all lease contracts with a qualifying 
construction event including the clauses that incorporate Executive 
Order (E.O.) 13706, Establishing Paid Sick Leave for Federal Contracts, 
and E.O. 14026, Increasing the Minimum Wage for Federal Contractors.
    Although the majority of the required CWRR labor clauses were 
previously included in leasing contract templates per the DOL's All 
Agency Memorandum 176 and the remaining clauses were included as a 
result of the two applicable E.O.s, the application of the CWRR 
affected only a small number of lease contracts. The DOL DBRA final 
rule's clarification of the term ``public building or public works'' 
expanded GSA's application of CWRR for lease contracts involving 
construction and prompted this change.

F. Severability

    If any portion (e.g., section, clause, sentence) of this rule, as 
finalized, is held to be invalid or unenforceable facially, or as 
applied to any entity or circumstance, it shall be severable from the 
remainder of the rule, and shall not affect the remainder thereof, or 
its application to entities not similarly situated or to other 
dissimilar circumstances. The various portions of this proposed rule 
are independent and serve distinct purposes. Even if one aspect as 
finalized were rendered invalid, the other benefits of the rule would 
still be applicable. As an illustrative but not exhaustive example, 
were a court to stay or invalidate any changes to GSAR subpart 570.1 as 
finalized regarding the definition of ``public building or public 
works'', GSA would intend the broader proposed restructuring of GSAR 
570 to remain effective.

III. Expected Impact of the Rule

    This section is divided into an analysis of the qualitative and 
quantitative impact the rule will have on the public and the 
Government. The associated costs were calculated by analyzing Fiscal 
Years 2021 through Fiscal Year 2023 data from the Real

[[Page 87995]]

Estate Across the United States (REXUS) database.
    According to the review of REXUS data, the estimated annual number 
of lease contract actions with a qualifying construction event is 727, 
of which 70 percent, or 509, were with small business entities. In this 
section, GSA based the calculations for the Regulatory Impact Analysis 
on the 2024 General Schedule Grade 12 Step 5 pay scale (using the rate 
for the rest of the United States) with a burden of 100% for fringe 
benefits. The following paragraphs detail activities which are required 
by this rule for lease contracts with a qualifying construction event:

A. Overall Impact

    Although the rule will expand GSA's application of CWRR from less 
than 10 lease contracts per year to an estimated average of 727 
annually, existing resources will greatly reduce the impact of this 
rule. Specifically, existing DOL training resources, GSA leasing guide 
and templates, and stakeholders' familiarity with the CWRR requirements 
and the two E.O.s will significantly reduce the impact of this rule. 
GSA analyzed the effects of the rule in four significant areas:
     Wage determinations;
     Payroll reviews and certifications;
     Familiarization of applicable clauses; and
     Monitoring and reporting.
A.1. Wage Determinations
    First, GSA reviewed the process for incorporating the appropriate 
wage determinations throughout the lease contract with a qualifying 
construction event's life cycle. This rule will require the contracting 
officer to incorporate the wage determinations with the solicitation 
package and update with the most recent wage determinations at the time 
of a qualifying construction event. Lessors and their subcontractors 
are responsible for ensuring laborers and mechanics are being paid in 
accordance with the CWRR wage determination, accrue the correct sick 
time, and are paid at or above the E.O. 14026 minimum wage rate.
    GSA estimates that lessors with qualifying construction events may 
initially take an average of 2 hours to implement the procedures for 
ensuring the wage determinations are included in any subcontract 
awarded to carry out the qualifying construction event. The 2 hours 
estimation is based on historical estimates from GSA construction 
contractors. GSA estimates that there will be an average of 1 
subcontractor for each qualifying construction event, which takes into 
consideration circumstances in which lessors use their own employees to 
carry out the construction and circumstances in which more than one 
subcontractor work on the project. GSA estimated the regulatory cost 
for this part of the rule to be $137,316 (= 2 hours x $94.44 x 727 
(rounded)).
A.2. Payroll Reviews and Certifications
    Next GSA reviewed the CWRR requirement for contractors and 
subcontractors to submit weekly certified payroll to the contracting 
agency. (See FAR clause 52.222-8(b)). In analyzing the impact of the 
rule on payroll reviews and certifications, GSA found that most 
businesses use automated payroll software to process their payrolls. 
The impact of this rule associated with the use of these automated 
systems will be reduced because the majority of the data such as 
employee identifiers, number of withholdings/exemptions, hours worked, 
and rate of pay is already being captured.
    GSA recognizes that for leasing, the payroll review and 
certification process will only apply to lease contracts with a 
qualifying construction event and will terminate at the successful 
completion of the qualifying construction event work. Therefore, 
lessors will not necessarily be required to review and submit the 
payroll data for an entire 52-week timeframe.
    GSA also discovered, due to the frequency of the payroll data 
submissions, that after the completion of the first payroll review and 
certification, subsequent reviews required less time and effort. This 
reduction in review and certification time could be traced back to the 
lack of variances or major changes to the contractor payroll data. Most 
changes were due to employee turnover, new hires, and apprenticeship to 
journeyman ratios. Currently, GSA is looking at an enterprise-type 
solution to the payroll review and certification process through the 
procurement of commercial off-the-shelf products.
    GSA estimates that lessors with qualifying construction events may 
initially take an average of 1.5 hours to develop and implement 
procedures for reviewing and certifying payroll data. GSA's calculation 
also includes the average weeks a qualifying construction event takes 
to complete the work, which is 24 weeks . GSA estimated the regulatory 
cost for the above scenario to be $2,471,684 (= 1.5 hours x $94.44 x 
727 x 24 weeks (rounded)).
A.3. Labor Clause Familiarization
    In analyzing the impact of the rule associated with the need to 
become familiar with the added clauses, GSA found that all of the 
clauses being applied through GSAR 570.701 already exist in current 
leasing contract templates. Therefore, the leasing acquisition 
workforce and the lessor community have general familiarity with the 
majority of the changes proposed in the rule.
    GSA estimates that lessors with qualifying construction events may 
initially take an average of 2 hours to familiarize themselves with 
CWRR. The 2 hours estimation is based on historical information, 
complexity of the clause and the detailed training available to the 
lessor. GSA estimated the regulatory cost for this part of the rule to 
be $137,316 (= 2 hours x $94.44 x 727 (rounded)).
    In addition, lessors are estimated to require 5 additional hours 
based on the complexity of the information to familiarize themselves 
with E.O. 13706. GSA estimated the regulatory cost for this part of the 
rule to be $343,289 (= 5 staff hours x $94.44 x 727).
    Lessors were also estimated to take 3 hours to familiarize 
themselves with E.O. 14026. Minimum wage requirements have been part of 
the Federal, State and local laws for decades. The 3 hours accounts for 
some of the nuances made in the E.O. application. GSA estimated the 
regulatory cost for this part of the rule to be $205,974 (= 2 hours x 
$94.44 x 727).
A.4. Monitoring and Reporting
    In analyzing the monitoring and reporting requirements, GSA found 
the initial impact would be on the increased number of leasing 
contracting officers, lessors, and subcontractors affected by the 
updated DOL rule. Although the CWRR clauses were in GSA templates, GSA 
did not apply the CWRR requirements to the majority of the lease 
contracts and did not require the development of internal processes to 
resolve payroll discrepancies, if needed, or reporting to DOL.
    GSA will be responsible for submitting two enforcement or 
compliance reports annually, as necessary, to DOL. These reports 
include the submission or updating of the 3-year forecast report and 
the submission of semi or annual compliance reports.
    GSA estimates that lessors with qualifying construction events may 
take an average of 1.5 hours to provide responses to payroll 
discrepancies with

[[Page 87996]]

supplemental payroll review documents or other information if required 
for investigations, which can be generated from databases very quickly. 
GSA estimated the regulatory cost for this part of the rule to be 
$102,987 (= 1.5 hours x $94.44 x 727 (rounded)).

B. Benefits

    GSA believes that applying the DOL DBRA final rule through the CWRR 
statute to lease contracts with a qualifying construction event will 
result in benefits to the government, laborers and mechanics, and 
lessors and their subcontractors. Some possible benefits for each group 
are provided below:
B.1. For the Government
    In updating its regulation, the DOL clearly explained the benefits 
to the Federal Government. For GSA, this change will ensure GSA leases 
are performed in accordance with current regulations. GSA has an 
interest in only contracting with those lessors that comply with all 
applicable Federal regulations, for that provides the greatest 
confidence that they will support the requirements of their lease 
contract.
B.2. For Laborers and Mechanics
    Affected laborers and mechanics are expected to significantly 
benefit from the implementation of the changes to CWRR to the extent 
they increase the wages and fringe benefits paid to these workers. Any 
increase in wages will increase their ability to buy groceries, pay for 
housing (i.e., rent or mortgage payments), purchase gasoline and other 
necessities as well as entertainment. In addition, laborers and 
mechanics will be provided with compliance and protections that may 
increase worker's job satisfaction and productivity levels.
B.3. For Lessors and Subcontractors
    Lessors and their subcontractors, especially small businesses, will 
be knowledgeable of the regulations and well positioned to comply thus 
avoiding the risk of enforcement action from the DOL. Also, some 
proponents to modernizing DBA argue that DBA, also known as CWRR, 
payment of no less than prevailing wages to eligible workers may 
attract a more experienced level of laborers and mechanics to work on 
Government construction contracts.

C. Summary of Total Costs

    The overall annual total cost, including both Public and Government 
costs, is outlined in the table below:

----------------------------------------------------------------------------------------------------------------
                                                                                         Number of
                                                         Number of       Cost per       qualifying
                       Action                              hours        qualifying         lease      Total cost
                                                                           event         contracts
----------------------------------------------------------------------------------------------------------------
Updating Wage Determinations (Public)...............               2          $94.44             727    $137,316
Payroll Reviews and Certification (Public)..........           * 1.5           94.44             727   2,471,684
Familiarization with DBA Requirements (Public)......               2           94.44             727     137,316
Familiarization With E.O. 13706 Establishing Paid                  5           94.44             727     343,289
 Sick Leave for Federal Contractors (Public)........
Familiarization With E.O. Executive Order 14026                    3           94.44             727     205,974
 Increasing the Minimum Wage for Federal Contractors
(Public)............................................
                                                     -----------------------------------------------------------
    Total (Public)..................................  ..............  ..............  ..............   3,295,579
Updating Wage Determinations (Government)...........              .5           94.44             727      34,329
Payroll Reviews and Certifications (Government).....               2           94.44             727     137,316
Monitoring and Reporting CWRR,and Paid Sick                      1.5           94.44             727     102,987
 Leave(Government)..................................
                                                     -----------------------------------------------------------
    Total Government................................  ..............  ..............  ..............     274,632
                                                     -----------------------------------------------------------
        Total Public + Total Government.............  ..............  ..............  ..............   3,570,211
----------------------------------------------------------------------------------------------------------------
* For 24 weeks.

    Although there are no quantifiable cost savings in implementing 
this proposed rule, the majority of the costs incurred (95%) are 
associated with the conducting of weekly payroll reviews and 
certification. GSA expects to have an automated resolution in the near 
future which is expected to significantly reduce the cost of performing 
this activity.

IV. Executive Orders 12866, 13563, and 14094

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
E.O. 14094 (Modernizing Regulatory Review) supplements and reaffirms 
the principles, structures, and definitions governing contemporary 
regulatory review established in E.O. 12866 and E.O. 13563.
    This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, dated September 30, 1993.

V. Regulatory Flexibility Act

    The change 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 of the application of the 
CWRR to a larger number of leases. An Initial Regulatory Flexibility 
Analysis (IRFA) has been prepared consistent with 5 U.S.C. 603.
    The Regulatory Secretariat will be submitting a copy of the Initial 
Regulatory Flexibility Analysis (IRFA) to the Chief Counsel for 
Advocacy of the Small Business Administration. A copy of the IRFA may 
be obtained from the Regulatory Secretariat Division. GSA invites 
comments from small business concerns and other interested parties on 
the expected impact of this rule on small entities.
    GSA will also consider comments from small entities concerning the 
existing regulations in subparts affected by this rule in accordance 
with 5 U.S.C. 610. Interested parties must submit such comments 
separately and should cite 5 U.S.C. 610 (GSAR Case 2021-G530) in 
correspondence.
    The analysis is summarized as follows:

    The General Services Administration (GSA) is proposing to amend 
the General Services Administration Acquisition Regulation (GSAR) to 
add a new section to adopt the amended definition of the term 
``public building or public work'' from the Department of Labor's 
(DOL) Updating the Davis-Bacon Acts Regulations final rule and to 
include compliance with the minimum wage and sick leave Executive 
Orders and

[[Page 87997]]

other requirements for leasehold acquisitions of real property when 
there is a qualifying construction event as defined in this rule.
    The objective of the rule is to amend GSAR Subpart 570.1, 
General, by creating section 571.119 Construction Labor requirements 
for lease acquisition and adding applicable labor clauses at 570.701 
FAR provisions and clauses to clarify when GSA's lease contracts 
with a qualifying construction event would need to apply 
Construction Wage Rate Requirements (CWRR).
    Title 40 of the United States Code (U.S.C.) Section 121 
authorizes GSA to issue regulations, including the GSAR, to control 
the relationship between GSA and contractors.
    The rule will apply to large and small businesses. For purposes 
of this assessment, information generated from the Real Estate 
Across the United States (REXUS) has been used as the basis for 
estimating the number of contractors that may be involved. GSA 
estimates that of the 7,618 lease contracts in its inventory 
approximately 727 annual lease contracts are projected annually to 
have a qualifying construction event of which over 509 (70 percent) 
are estimated to involve small business entities.
    It is anticipated that these changes will ensure both large and 
small businesses comply with CWRR statutory requirements for lease 
contracts with a qualifying construction event. These changes will 
clarify the requirements for the acquisition workforce, offerors and 
lessors and ensure that all laborers and mechanics receive the 
appropriate wages, protections provided by the statute, and receive 
the paid sick leave and minimum wages provided by executive orders. 
Overall, the implementation of the changes to the application of 
CWRR will ensure small businesses can compete equally with large 
businesses when recruiting qualified and experienced laborers and 
mechanics.
    The rule will not impose any additional reporting, recordkeeping 
and other compliance requirements than those required by the CWRR 
statute as updated in the DOL DBRA final rule.
    There are no known significant alternative approaches to the 
rule. The changes to the Davis-Bacon and Related Acts final rule 
clarify that the definition of ``building or work'' and ``public 
building (or public work)'' applies to lease contracts involving 
public construction over $2,000.

VI. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. chapter 35) does apply; 
however these changes to the GSAR do not impose additional information 
collection requirements to the paperwork burden previously approved 
under the Office of Management and Budget Control Numbers 1235-0008 and 
1235-0018 (Davis-Bacon Certified Payroll); and OMB control number 1235-
0023 (Requests to Approve Conformed Wage Classifications and 
Unconventional Fringe Benefit Plans Under the Davis-Bacon and Related 
Acts/Contract Work Hours and Safety Standards Act).

List of Subjects in 48 CFR Part 570

    Government procurement.

Jeffrey A. Koses,
Senior Procurement Executive, Office of Acquisition Policy, Office of 
Government-wide Policy, General Services Administration.

    Therefore, GSA proposes amending 48 CFR part 570 as set forth 
below:

0
1. The authority citation for 48 CFR part 570 continues to read as 
follows:


    Authority:  40 U.S.C. 121(c).

PART 570--ACQUIRING LEASEHOLD INTERESTS IN REAL PROPERTY

0
2. Add section 570.119 to read as follows:


570.119   Construction labor requirements for lease acquisitions.

    This section applies to all new and existing leases with a 
qualifying construction event where the work is performed in whole or 
in part within the 50 states, District of Columbia, or the Commonwealth 
of Northern Mariana Islands. See FAR subpart 22.4, GSAR Subpart 522.4, 
and the Public Buildings Service (PBS) Pricing Desk Guide located at 
https://www.gsa.gov/real-estate/pricing-policy for additional guidance, 
as applicable.


570.119-1   Definitions.

    As used in this section--
    Building specific amortized capital (BSAC) improvements means 
security items that are a separate capital investment in the property. 
See PBS Pricing Desk Guide for additional information at https://www.gsa.gov/real-estate/pricing-policy.
    Building shell improvements means improvements to provide the 
complete enveloping structure, the base building systems, and the 
finished common areas (e.g., building common and floor common) of a 
building that adjoin the occupant areas. See PBS Pricing Desk Guide for 
additional information at https://www.gsa.gov/real-estate/pricing-policy.
    Public Building or Public Works includes construction activity 
involving just a portion of a building or work, including the 
installation, where appropriate, of equipment or components into a 
building or work, and even where the entire building or work is not 
owned, leased by, or to be used by a Federal agency so long as the 
other requirements for coverage are met. Examples of other requirements 
for coverage include the Federal government's sufficient involvement 
with the lease, and the existence of a contract for construction that 
is authorized or financed by the Federal government.
    Qualifying construction event means an event that requires 
construction, alteration, or repair work as defined in FAR 22.401, in 
excess of $2,000 of Federal funds, required by the Government in or in 
connection with leases of real property. There may be one or more 
qualifying construction events during the lease term. A qualifying 
construction event exists where the construction, alteration, or repair 
work--
    (1) Is carried on by authority of or with funds of a Federal agency 
to serve the interest of the general public, and there is sufficient 
involvement of the Federal government in the lease and specified 
construction so as to satisfy the definition of a public building or 
public work and supplemental language included in this section;
    (2) Has a defined begin and end date; and
    (3) Includes, at a minimum, one or more of the following:
    (i) Initial occupancy build-out (e.g., building shell improvements, 
tenant improvements, BSAC improvements-construction portions only);
    (ii) Build-out projects associated with expansion or reduction in 
square footage;
    (iii) Stand-alone alterations projects; or
    (iv) Cyclical carpet replacement and re-painting required by the 
lease contract, not including maintenance.
    Tenant improvements (TI) means finishes and fixtures that typically 
take space from the shell condition to a finished, usable condition. 
The resulting space is complete, meets applicable building codes, and 
meets the customer agency's functional needs. See PBS Pricing Desk 
Guide for additional information at https://www.gsa.gov/real-estate/pricing-policy.


570.119-2   Inapplicability.

    The following paragraphs specify circumstances in which certain 
labor standards do not apply paragraphs specify circumstances in which 
certain labor standards do not apply:
    (a) Service Contract Labor Standards (SCLS). The SCLS, also known 
as Service Contract Act (SCA), does not apply per 41 U.S.C.6702, 29 CFR 
4.115(b), and 29 CFR 4.134(b)to lease contracts for government 
occupancy.
    (b) Construction wage rate requirements (CWRR). The CWRR does not 
apply to the following work:
    (1) Maintenance services which are regularly scheduled, routine, or

[[Page 87998]]

recurring tasks provided on an incidental basis and not performed as 
part of a qualifying construction event associated with the lease. 
Examples include--
    (i) Janitorial services;
    (ii) Utility services; and
    (iii) Landscaping services.
    (2) Repair or replacement work required under the lease contract 
which is not substantial or segregable. Examples include work of the 
following type where such work is not substantial or segregable--
    (i) Repairing or replacing broken or damaged improvements 
(e.g.,locks, partitioning, flooring, or ceiling tiles);
    (ii) Repairing or replacing building systems (e.g., mechanical, 
electrical, plumbing); and
    (iii) Repairing or replacing finishes in common areas (e.g., 
carpet, paint, or ceiling tiles).
    (3) Alteration or repair work within the Government's space which 
were not requested by the Government;
    (4) Design work for a qualifying construction event; and
    (5) Leases or projects in Guam, Puerto Rico, U.S. Virgin Islands, 
U.S. Territories or foreign countries.


570.119-3   Procedures.

    (a) Requirements. Contracting officers must ensure solicitations 
and resultant contracts with an anticipated qualifying construction 
event include the appropriate labor clauses and wage determination(s). 
Contracting officers must also ensure that all existing lease contracts 
with qualifying construction events (whether ordered by lease 
amendments or other methods) are formalized in a contract modification, 
extension, or option that includes the appropriate labor clauses and 
wage determination(s).
    (1) Appropriate construction labor clauses. Contracting officers 
shall include Construction Wage Rate Requirements (CWRR), also known as 
Davis-Bacon Act (DBA), clauses in any solicitation, resulting contract, 
and contract modification involving anticipated qualifying construction 
events (see 570.701(d)).
    (2) Wage determination requirements. Contracting officers shall 
follow compliance outlined in FAR 22.404 and this section.
    (i) Contracting officers shall include the most recent wage 
determination(s) for the applicable location(s) and the type(s) of 
construction work (e.g., building, heavy, highway, residential) in 
solicitations, before requesting final proposal revisions, or, for 
qualifying construction events associated with lease modifications, 
with the initial pricing request to the lessor.
    (ii) Contracting officers shall provide the most recent wage 
determination(s) to the apparent successful offeror if the wage 
determination(s) changes after the final proposal revisions are 
received but prior to the award of the lease contract.
    (b) Compliance monitoring procedures. Contracting officers shall 
follow compliance and reporting requirements outlined in FAR 22.406-7, 
FAR 22.2109, or FAR 22.1905 for lease acquisitions with qualifying 
construction events:
    (1) Compliance Monitoring. (i) The contracting officer must take 
reasonable steps during and after each qualifying construction event to 
ensure compliance with the requirements outlined in this section to 
include the:
    (A) Payment of correct wage determination or minimum wage rates 
during each qualifying construction event.
    (B) Receipt of payroll records from the lessor from each qualifying 
construction event, as required.
    (C) Accessibility of all payroll records to the DOL during the 3-
year retention period for investigation or audits.
    (ii) The contracting officer is responsible for tracking 
discrepancies for qualifying construction events, including 
investigation, reporting, and resolution. Outstanding discrepancies 
unresolved at the completion of the construction work shall be followed 
up until resolved.
    (2) Reporting. The PBS Leasing Office is responsible for the timely 
submission of reports to DOL including enforcement and forecasting 
reports (see FAR 22.406-13 and 522.406-13). The PBS Leasing Office 
shall submit a copy of these reports to the GSA Labor Advisor at 
[email protected].
0
3. Amend section 570.701 by adding paragraph (1) to the table to read 
as follows:


570.701   FAR provisions and clauses.

* * * * *

------------------------------------------------------------------------
                If . . .                        Then include . . .
------------------------------------------------------------------------
 
                              * * * * * * *
(1) Insert the following clauses in the  52.222-4 Contract Work Hours
 solicitation, resulting contract or      and Safety Standards--Overtime
 contract modification that involve a     Compensation.
 qualifying construction event in        52.222-5 Construction Wage Rate
 excess of $2,000:.                       Requirements Secondary Site of
                                          the Work.
                                         52.222-6 Construction Wage Rate
                                          Requirements.
                                         52.222-7 Withholding of Funds.
                                         52.222-8 Payrolls and Basic
                                          Records.
                                         52.222-9 Apprentices and
                                          Trainees.
                                         52.222-10 Compliance with
                                          Copeland Act Requirements.
                                         52.222-11 Subcontracts (Labor
                                          Standards).
                                         52.222-12 Contract Termination-
                                          Debarment.
                                         52.222-13 Compliance with
                                          Construction Wage Rate
                                          Requirements and Related
                                          Regulations.
                                         52.222-14 Disputes Concerning
                                          Labor Standards.
                                         52.222-15 Certification of
                                          Eligibility.
                                         52.222-55 Minimum Wages for
                                          Contractor Workers Under
                                          Executive Order 14026.
                                         52.222-62 Paid Sick Leave Under
                                          Executive Order 13706.
------------------------------------------------------------------------

[FR Doc. 2024-25656 Filed 11-5-24; 8:45 am]
BILLING CODE 6820-61-P