- Certain “Commercial” Services

  1. This exemption applies to contracts or subcontracts for the following seven services (provided that certain criteria for applicability are met, as described below).
    1. Automobile or other vehicle maintenance services (e.g., aircraft) maintenance; other than contracts to operate a motor pool or similar facility);
    2. Financial services involving the issuance and servicing of cards, such as credit, debit, purchase, smart cards, and similar card services;
    3. Contracts with hotels/motels for conferences of limited duration (e.g., one to five days), including lodging and/or meals which are part of the contract for the conference (excluding ongoing contracts for lodging on an as needed or continuing basis - such as longer term contracts to fulfill a continuing lodging need, e.g., lodging military recruits or government employees attending training at an agency training center);
    4. Maintenance, calibration, repair and/or installation (where the installation is not subject to the DBA, as provided in § 4.116(c)(2)) services for all types of equipment where the services are obtained from the manufacturer or supplier of the equipment under a contract awarded on a sole source basis;
    5. Transportation of persons by common carrier by air, motor vehicle, rail or marine vessel on regularly scheduled routes or by standard commercial services (not charter services);
    6. Real estate services related to housing federal agencies or disposal of real property owned by the federal government (e.g. real property appraisal, broker, space planning, lease acquisition, lease negotiation, tax abatement, and real property disposal); and
    7. Relocation services to assist federal employees or military personnel in buying and selling homes, including services such as home marketing assistance, home sales services, destination area services, management reporting services, mortgage counseling, property management services, and other related services, but excluding actual moving or storage of household goods and related services.
  2. This exemption applies only when all of the following criteria are met:
    1. The services are "commercial" services, "i.e., they are offered and sold regularly to non-governmental customers, and are provided by the contractor (or subcontractor in the case of an exempt subcontract) to the general public in substantial quantities in the course of normal business operations";
    2. The contract (or subcontract) will be awarded on a sole source basis or the contractor/subcontractor will be selected on the basis of factors in addition to price (i.e., the combination of other non-price or cost factors must be equally or more important than price in selecting the contractor/ subcontractor);
    3. The services are furnished at prices that are, or are based on, established catalog prices available to the general public or market prices established by trade between buyers and sellers free to bargain for such services;
    4. Each service employee who will perform services under the government contract/subcontract will spend only a small portion of his or her time servicing the government contract/subcontract - less than 20 percent of the individual's available hours (during the contract period if the contract period is less than a month, otherwise monthly average on an annualized basis). This exemption cannot apply if the contractor will perform the services with a workforce dedicated to the government contract/subcontract;
    5. The contractor uses the same compensation (wages and fringe benefits) plan for all service employees performing work under the contract (or subcontract)as the contractor uses for these and equivalent employees servicing the same equipment of commercial customers;
    6. The contracting officer (or prime contractor with respect to a subcontract) determines in advance of receiving offers (based on the nature of the contract requirements and knowledge of the practices of likely offerors), that all or nearly all offerors will meet the above requirements. However, if the contracting officer finds, after bids are received. that the earlier determination that all or nearly all offerors would meet the exemption requirements was incorrect, SCA requirements shall be applied to the procurement; and
    7. The contractor certifies in the prime contract or subcontract, as applicable, to the requirements in paragraphs A, and C through and E, above. Certification by the prime contractor as to its compliance with respect to the prime contract also constitutes its certification as to compliance by its subcontractor if it subcontracts out the exempt services. If the contracting officer or prime contractor has reason to doubt the validity of the certification, SCA stipulations shall be included in the prime contract or subcontract.
  3. There are three categories of contracts not exempt from the application of SCA requirements under the 29 C.F.R. § 4.123(e)(2) exemption:
    1. Contracts subject to collectively bargained wages and fringe benefits applicable to a successor contract where such rates and benefits apply under section 4(c) of the SCA (as well as any options or extensions to such contracts);
    2. Contracts for the operation of a government facility or portion thereof (the exemption may apply to subcontracts for services under such contracts if the subcontracts meet the criteria for exemption); and
    3. Contracts entered into under 41 U.S.C. chapter 85 (traditionally known as the Javits-Wagner-O'Day Act).


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