Application of 4(c) Wage Determinations

Application of “4(c)” Wage Determinations

  1. The successor contractor is obligated to pay its employees the wages and fringe benefits in the predecessor's CBA that they would have been entitled to if they were employed by the predecessor contractor. On a contract subject to annual fiscal appropriations of Congress, this obligation applies independently to the base year of a multi-year contract and each subsequent option. On other contracts, the obligation is for up to two years. (In the section below, concerning "Obtaining SCA Wage Determinations," see the discussion of "Multi-Year Procurement.")
  2. This obligation exists whether or not the employees of the predecessor contractor are hired by the successor contractor. Thus, even if a successor contractor does not hire any of the predecessor contractor's employees, the successor contractor is nevertheless required to pay service employees employed on the contract the CBA rates established in the predecessor contractor's CBA.

    Note: In accordance with Executive Order 13495 and its implementing regulations, and as discussed in the "Nondisplacement" chapter of this resource book, successor contractors providing the same or similar services at the same location as the predecessor often will have an obligation to offer a right of first refusal of employment to service employees on the predecessor contract.
  3. The obligation of the successor contractor is limited to the wage and benefits requirements of the predecessor contractor's CBA and does not extend to other items such as seniority, grievance procedures, work rules, overtime, etc.
    1. Any interpretation of the wage and fringe benefit provisions of the CBA where its provisions are unclear must be based on the intent of the parties signatory to the CBA, provided that such interpretation does not violate any law.
  4. Generally, the provisions of section 4(c) are self-executing and failure to include the CBA rates in the wage determination issued for the successor contract does not relieve the successor contractor of the statutory requirements to comply with the CBA rates.
    1. The self-executing application of section 4(c) may be limited if notice of the terms and conditions of a new or changed collective bargaining agreement is not received within the timeframes and under the circumstances specified in 29 C.F.R. § 4.1b(b)(1) and (2).

      1. These limitations apply only if the contracting officer has given both the incumbent (predecessor) contractor and the employees' collective bargaining representative written notification at least 30 days in advance of all applicable Estimated procurement dates, including 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.
      The limitation on the self-executing application of the 4(c) provision will not apply, i.e. the 4(c) requirements will apply, if the contracting agency has given such notification, and the agency receives notice of the terms of a new or changed CBA which was consummated during the period of performance of the predecessor contract and which was applicable to the performance of work under the predecessor contract -

      1. For advertised procurement - 10 days before the date set for bid opening (or less if the contracting agency finds that there is still reasonable time to notify bidders);
      2. For negotiated procurement - before the award date if start of performance is within 30 days, or 10 days before commencement of the contract if start of performance is beyond 30 days.
      The CBA must be received by the contracting officer (Not DOL) within specified timeframes.
      If the CBA is not received by the contracting officer within these timeframes, then the CBA may not apply.
  5. Two types of appeals can be made concerning CBA rates where section 4(c) applies: appeals based on substantial variance issues, and appeals based on issues concerning "arm's-length" negotiations. Both types of appeals may be resolved by administrative hearings conducted by an Administrative Law Judge pursuant to 29 C.F.R. Part 6, or on appeal, by the ARB pursuant to 29 C.F.R. Part 8. See 29 C.F.R. §§ 4.10 and 4.11. The "4(c) Hearings" chapter of this resource book provides more detailed information on this subject.

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