The provisions of the Act apply to contracts, whether negotiated or
advertised, the principal purpose of which is to furnish services in the
United States through the use of service employees. Under its
provisions, every contract subject to the Act (and any bid specification
therefor) entered into by the United States or the District of Columbia
in excess of $2,500 must contain stipulations as set forth in Sec. 4.6
of this part requiring: (a) That specified minimum monetary wages and
fringe benefits determined by the Secretary of Labor (based on wage
rates and fringe benefits prevailing in the locality or, in specified
circumstances, the
wage rates and fringe benefits contained in a collective bargaining
agreement applicable to employees who performed on a predecessor
contract) be paid to service employees employed by the contractor or any
subcontractor in performing the services contracted for; (b) that
working conditions of such employees which are under the control of the
contractor or subcontractor meet safety and health standards; and (c)
that notice be given to such employees of the compensation due them
under the minimum wage and fringe benefits provisions of the contract.
Contractors performing work subject to the Act thus enter into
competition to obtain Government business on terms of which they are
fairly forewarned by inclusion in the contract. (Endicott Johnson Corp.
v. Perkins, 317 U.S. 501, 507 (1943).) The Act's purpose is to impose
obligations upon those favored with Government business by precluding
the use of the purchasing power of the Federal Government in the unfair
depression of wages and standards of employment. (See H.R. Rep. No. 948,
89th Cong., 1st Sess. 2-3 (1965); S. Rep. No. 798, 89th Cong., 1st Sess.
3-4 (1965).) The Act does not permit the monetary wage rates specified
in such a contract to be less than the minimum wage specified under
section 6(a)(1) of the Fair Labor Standards Act, as amended (29 U.S.C.
206(a)(1)). In addition, it is a violation of the Act for any contractor
or subcontractor under a Federal contract subject to the Act, regardless
of the amount of the contract, to pay any of his employees engaged in
performing work on the contract less than such Fair Labor Standards Act
minimum wage. Contracts of $2,500 or less are not, however, required to
contain the stipulations described above. These provisions of the
Service Contract Act are implemented by the regulations contained in
this part 4 and are discussed in more detail in subsequent sections of
subparts C, D, and E.
