(a) Pursuant to the statutory scheme provided by sections 2(a)(2)
and 4(c) of the Act, every covered contract in excess of $2,500 shall
contain a provision specifying the fringe benefits to be furnished the
various classes of service employees, engaged in the performance of the
contract or any subcontract thereunder, as determined by the Secretary
or his authorized representative to be prevailing for such employees in
the locality or, where a collective bargaining agreement applied to the
employees of a predecessor contractor in the same locality, the various
classes of service employees engaged in the performance of the contract
or any subcontract must be provided the fringe benefits, including
prospective or accrued fringe benefit increases, provided for in such
agreement as a result of arm's-length negotiations. (For a detailed
discussion of section 4(c) of the Act, see Sec. 4.163.) As provided by
section 2(a)(2) of the Act, fringe benefits
include medical or hospital care, pensions on retirement or death,
compensation for injuries or illness resulting from occupational
activity, or insurance to provide any of the foregoing, unemployment
benefits, life insurance, disability and sickness insurance, accident
insurance, vacation and holiday pay, costs of apprenticeship or other
similar programs and other bona fide fringe benefits not otherwise
required by Federal, State, or local law to be provided by the
contractor or subcontractor.
(b) Under this provision, the fringe benefits, if any, which the
contractor or subcontractor is required to furnish the service employees
engaged in the performance of the contract are specified in the contract
documents (see Sec. 4.6). How the contractor may satisfy this obligation
is dealt with in Secs. 4.170 through 4.177 of this part. A change in the
fringe benefits required by the contract provision will not result from
the mere fact that other or additional fringe benefits are determined to
be prevailing for such employees in the locality at a time subsequent to
the award but before completion of the contract. Such fringe benefit
determinations are effective for contracts not yet awarded (see
Sec. 4.5(a)), or in the event that changes in an existing contract
requiring their insertion for prospective application have occurred (see
Secs. 4.143 through 4.145). However, none of the provisions of this
paragraph may be construed as altering a successor contractor's
obligations under section 4(c) of the Act. (See Sec. 4.163.)
