While federal contracts offer highly attractive opportunities to businesses, it makes good business sense to thoroughly understand the nuances of the Service Contract Act (SCA) before bidding on a federal contract. Be sure that you can stay compliant with its tenets. The core purpose of the SCA is to ensure that service employees are paid the prevailing wage rates and applicable fringe benefits for their work locations. These rates are determined by the Department of Labor (DoL). The scope of the SCA is very broad and covers a wide range of services from manual labor (landscaping, custodial/janitorial services, snow removal, etc.) to more sophisticated services such as contracts for information technology services, call center work, data collection, processing or analysis services, and operation, maintenance or logistic support of a federal facility. Failure to adhere to the SCA rules and regulations could result in substantial financial penalties as well as being prohibited from bidding on or working under government contracts. Contractors need to be compliant with the SCA to avoid such penalties, and safeguard themselves from risk by not steering clear of some of these common pitfalls:
The DOL interviews employees to get their payroll history and other employment details, through its auditors and compliance personnel as a part of its enforcement activities. To avoid possible charges of liability for non-compliance, contractors need to adopt the best possible defense by maintaining appropriate payroll records; and monitoring sub-contractor activities from the outset. Let us discuss these aspects in more detail in our next post!
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