(a) Section 4(c) of the Service Contract Act of 1965 as amended
provides special minimum wage and fringe benefit requirements applicable
to every contractor and subcontractor under a contract which succeeds a
contract subject to the Act and under which substantially the same
services as under the predecessor contract are furnished in the same
locality. Section 4(c) provides that no such contractor or subcontractor
shall pay any service employee employed on the contract work less than
the wages and fringe benefits provided for in a collective bargaining
agreement as a result of arms-length negotiations, to which such service
employees would have been entitled if they were employed under the
predecessor contract, including accrued wages and fringe benefits and
any prospective increases in wages and fringe benefits provided for in
such collective bargaining agreement. If, however, the Secretary finds
after a hearing in accordance with the regulations set forth in
Sec. 4.10 of this subpart and parts 6 and 8 of this title that in any of
the foregoing circumstances such wages and fringe benefits are
substantially at variance with those which prevail for service of a
character similar in the locality, those wages and/or fringe benefits in
such collective bargaining agreement which are found to be substantially
at variance shall not apply, and a new wage determination shall be
issued. If the contract has been awarded and work begun prior to a
finding that the wages and/or fringe benefits in a collective bargaining
agreement are substantially at variance with those prevailing in the
locality, the payment obligation of such contractor or subcontractor
with respect to the wages and fringe benefits contained in the new wage
determination shall be applicable as of the date of the Administrative
Law Judge's decision or, where the decision is reviewed by the
Administrative Review Board, the date of the decision of the
Administrative Review Board. (See also Sec. 4.163(c).)
(b) Pursuant to section 4(b) of the Act, the application of section
4(c) is made subject to the following variation in the circumstances and
under the conditions described: The wage rates and fringe benefits
provided for in any collective bargaining agreement applicable to the
performance of work under the predecessor contract which is consummated
during the period of performance of such contract shall not be effective
for purposes of the successor contract under the provisions of section
4(c) of the Act or under any wage determination implementing such
section issued pursuant to section 2(a) of the Act, if--
(1) In the case of a successor contract for which bids have been
invited by formal advertising, notice of the terms of such new or
changed collective bargaining agreement is received by the contracting
agency less than 10 days before the date set for opening of bids,
provided that the contracting agency finds that there is not reasonable
time still available to notify bidders; or
(2) Notice of the terms of a new or changed collective bargaining
agreement is received by the agency after award of a successor contract
to be entered into pursuant to negotiations or as a result of the
execution of a renewal option or an extension of the initial contract
term, provided that the contract start of performance is within 30 days
of such award or renewal option or extension. If the contract does not
specify a start of performance date which is within 30 days from the
award, and/or performance of such procurement does not commence within
this 30-day period, any notice of the terms of a new or changed
collective bargaining agreement received by the agency not less than 10
days before commencement of the contract will be effective for purposes
of the successor contract under section 4(c); and
(3) The limitations in paragraph (b)(1) or (2) of this section shall
apply only if the contracting officer has given both the incumbent
(predecessor) contractor and his employees' collective bargaining
representative written notification at least 30 days in advance of all
applicable estimated procurement dates, including issue of bid
solicitation, bid opening, date of award, commencement of negotiations,
receipt of proposals, or the commencement date of a contract resulting
from a negotiation, option, or extension, as the case may be.
