(a) Statutory provision. Under section 4(c) of the Act, and under
corresponding wage determinations made as provided in section 2(a)(1)
and (2) of the Act, contractors and subcontractors performing contracts
subject to the Act generally are obliged to pay to service employees
employed on the contract work wages and fringe benefits not less than
those to which they would have been entitled under a collective
bargaining agreement if they were employed on like work under a
predecessor contract in the same locality. (See Secs. 4.1b, 4.3,
4.6(d)(2).) Section 4(c) of the Act provides, however, that ``such
obligations shall not apply if the Secretary finds after a hearing in
accordance with regulations adopted by the Secretary that such wages and
fringe benefits are substantially at variance with those which prevail
for services of a character similar in the locality''.
(b) Prerequisites for hearing. (1)(i) A request for a hearing under
this section may be made by the contracting agency or other person
affected or interested, including contractors or prospective contractors
and associations of contractors, representatives of employees, and other
interested Governmental agencies. Such a request shall be submitted in
writing to the Administrator, Wage and Hour Division, Employment
Standards Administration, U.S. Department of Labor, Washington, DC
20210, and shall include the following:
(A) The number of any wage determination at issue, the name of the
contracting agency whose contract is involved, and a brief description
of the services to be performed under the contract;
(B) A statement regarding the status of the procurement and any
estimated procurement dates, such as bid opening, contract award,
commencement date of the contract or its follow-up option period;
(C) A statement of the applicant's case, setting forth in detail the
reasons why the applicant believes that a substantial variance exists
with respect to some or all of the wages and/or fringe benefits,
attaching available data concerning wages and/or fringe benefits
prevailing in the locality;
(D) Names and addresses (to the extent known) of interested parties.
(ii) If the information in paragraph (b)(1)(i) of this section is
not submitted with the request, the Administrator may deny the request
or request supplementary information, at his/her discretion. No
particular form is prescribed for submission of a request under this
section.
(2) The Administrator will respond to the party requesting a hearing
within 30 days after receipt, granting or denying the request or
advising that additional time is necessary for a decision. No hearing
will be provided pursuant to this section and section 4(c) of the Act
unless the Administrator determines from information available or
submitted with a request for such a hearing that there may be a
substantial variance between some or all of the wage rates and/or fringe
benefits provided for in a collective bargaining agreement to which the
service employees would otherwise be entitled by virtue of the
provisions of section 4(c) of the Act, and those which prevail for
services of a character similar in the locality.
(3) Pursuant to section 4(b) of the Act, requests for a hearing
shall not be considered unless received as specified below, except in
those situations where the Administrator determines that extraordinary
circumstances exist:
(i) For advertised contracts, prior to ten days before the award of
the contract;
(ii) For negotiated contracts and for contracts with provisions
extending the initial term by option, prior to the commencement date of
the contract or the follow-up option period, as the case may be.
(c) Referral to the Chief Administrative Law Judge. When the
Administrator determines from the information available or submitted
with a request for a hearing that there may be a substantial variance,
the Administrator on his/her own motion or on application of any
interested person will by order refer the issue to the Chief
Administrative Law Judge, for designation of an Administrative Law Judge
who shall conduct such a fact finding hearing as may be necessary to
render a decision solely on the issue of whether the wages and/or fringe
benefits contained in the collective bargaining agreement which was the
basis for the wage determination at issue are substantially at variance
with those which prevail for services of a character similar in the
locality. However, in situations where there is also a question as to
whether the collective bargaining agreement was reached as a result of
``arm's-length negotiations'' (see Sec. 4.11), the referral shall
include both issues for resolution in one proceeding. No authority is
delegated under this section to hear and/or decide any other issues
pertaining to the Service Contract Act. As provided in section 4(a) of
the Act, the provisions of section 4 and 5 of the Walsh-Healey Public
Contracts Act (41 U.S.C. 38, 39) shall be applicable to such proceeding,
which shall be conducted in accordance with the procedures set forth at
29 CFR part 6.
(d) The Administrator shall be an interested party and shall have
the opportunity to participate in the proceeding to the degree he/she
considers appropriate.
