Applicability of Service Contract Act to Service Employees of ADP and High-Technology Companies V. 113769

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113769 1 (1980-11-19)

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REMARKS OF CHARLES-J. GAREIS

SENIOR EVALUATOR, HUMAN RESOURCES-DIVISION

U.S. GENERAL ACCOUNTING OFFICE

BEFORE THE

COALITION FOR COMMON SENSE

IN GOVERNMENT PROCUREMENT

NOVEMBER 19, 1980

I am pleased to be here today tQ dipcuss with you the recently

issued General Accounting Office report entitled, LService Contract

Act Sheoul Not Apply to Service Employees of ADP and High-Technology

Companies

The Service Contract Act of 1965 (SCA) was enacted by the

Congress to provide labor standards protection to employees of con-

tractor's and subcontractors furnishing services to Federal agencies.

The act -applies when a con-tract's principal purpose is to provide

services. in the United States using service .employees. It requires

that covered service employees receive wages no less than the minimum

specified under the Fair Labor Standards Act--currently $3.10 an

hour--and that, for contracts exceeding $2,500, the minimum wages

and fringe benefits be based on rates the Secretary of Labor deter-

mines as prevailing for service employees in the locality.

LABOR'S SERVICE CONTRACT ACT DECISION

Over the years the General Services Administrati n (GSA) and

other Federal contracting agencies have awarded numerous contracts

for the purchase or rental of supplies and equipment that included

maintenance and repair services. In the past, Federal agency pro-