U.S. Department of Labor 
Employment Standards Administration
Wage and Hour Division
Washington, D.C. 20210
DEC 1 1986
MEMORANDUM NO. 146
MEMORANDUM TO: All Contracting Agencies of the Federal
Government and the District of Columbia
FROM: Paula V. Smith
Administrator
SUBJECT: Annual Updating of Service Contract Act
Health and Welfare Benefit Levels
Effective immediately, prevailing wage determinations issued
under the Service contract Act (SCA) are being revised to reflect
changes in health and welfare (H&W) contribution requirements.
We anticipate that in most cases the new levels will be:
1. $.59 per hour in those area-wide wage determina-
tions which are utilized by contracting agencies
to cover a wide variety of services; and
2. $1.84 per hour in wage determinations for con-
tracts involving displacement of federal employees
or those involving major support contracts.
Annual updates in fringe benefit levels will be issued by the
Wage and Hour Division of the Department of Labor.
The SCA requires the Secretary of Labor to make determinations of
minimum monetary wages and fringe benefits to be paid service
employees engaged in the performance of covered contracts in
accordance with the wage rates and fringe benefits prevailing for
such employees in the locality. SCA regulations provide that
such determinations will be reviewed periodically. Where
prevailing wage rates or fringe benefits in a locality have
changed, these changes are to be reflected in revised wage
determinations. From 1965 to 1980, the SCA H&W fringe benefit



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levels payable to employees performing on contracts subject to
SCA were updated periodically. However, in 1979, the Bureau of
Labor Statistics (BLS) survey program which was the source for
this updating was discontinued. As a result, SCA wage
determination H&W benefit levels have remained unchanged since
1980.
The purpose of this memorandum is to advise all contracting
agencies of the H&W changes. In accordance with section
4.5(a)(2) of Regulations, 29 CFR Part 4, any invitation for bids
(IFB) which is still 10 days prior to bid opening or any request
for proposals (RFP) which has not yet been awarded is to be
amended to include revised wage determinations reflecting the new
H&W requirements. This will ensure that all such contracts in
the referenced procurement stages are consistent with respect to
containing the new H&W requirements regardless of when an initial
SCA wage determination was requested. Since the Wage and Hour
Division (the Division) is not able to track the procurement
status of contracts for which wage determinations have recently
been issued in response to SF-98 requests, contracting agencies
should contact the Division for guidance with respect to current
IFB's and RFP's still in the bidding or negotiating stage which
contain wage determinations reflecting the old H&W requirements.
Accordingly, if you have procurements which will be affected by
these changes, please request a revised wage determination. To
expedite the processing for revised wage determinations,
telephone requests may be made to (FTS or 202) 523-7096. This
telephone will be answered Monday through Friday between the
hours of 8:15 a.m. and 4:45 p.m. EST. Callers should be prepared
to provide the following information:
1) Notice number of the SF-98 originally submitted;
2) Number and revision of the wage determination received
in response to the original SF-98; and
3) Name, address, and telephone number (not Autovon) of the
individual to whom the amended SF-98 response should be
sent.