Timing is Everything: Incorporating Wage Determinations into Your Contract

How do I know which Wage Determination should be incorporated and made part of my contract? 

A phrase that usually echoes in my head when it comes to Wage Determination (WD) applicability is the phrase: “The Wage Determination that’s incorporated by Contracting is the one that the contractor needs to abide by”. 

Those are words to live by if you’re in the Government Contracting business. However, just because a WD was incorporated and you have to follow it, it doesn’t mean that it is the correct Wage Determination that should have been made part of your contract. In fact, the incorporation of the wrong WD happens more than you would think.  

In order for the WD to be the correct one that must be incorporated, all of the following factors need to be verified: 

  • Is the WD for the correct locality? 
  • Is it the correct WD Number? Even or Odd? 
  • Is it the correct revision number?

It sounds like verifying if the correct WD was incorporated is a relatively easy task, and making sure that the WD is for the correct location might be easy; however, how do you know if your WD is up to date? How often does contracting need to incorporate a new WD? and what happens when a new WD comes out right before your contract is awarded? We will answer these questions below. 

According to the Service Contract Act (SCA) regulations, the contracting agency, must obtain [and incorporate] a Wage Determination in the following instances: 

  • Pre-Contract Award – Prior to: 
  1. Any invitation for bids 
  1. Request for proposals 
  1. Commencement of negotiations 

 

  • Post-Contract Award – Prior to: 
  1. Exercise of Option or Contract Extension 
  1. Annual anniversary date of a multi-year contract subject to annual fiscal appropriations of the Congress 
  1. Each biennial anniversary date of a multi-year contract not subject to such annual appropriations, if so authorized by the Wage and Hour Division. 

While the contractor has less of a say in the Pre-Award process, they must absolutely ensure that the Wage Determination is updated timely at each applicable Post Award milestone, including at the time of Exercising a yearly Option or signing an extension. For contracts not dependent on the exercising yearly options, a new WD must be incorporated each year on the anniversary date of the contract. Finally, in the event a contract is not subject to annual appropriations, a Wage Determination must be updated at least every two years on the contract’s anniversary date.  

Contractors should be aware of these milestones and maintain communication with their contracting officer or the contracting officer representative, to ensure that new Wage Determinations are incorporated timely and avoid unnecessary violations. 

Questions? Email us at Trust@onsigroup.com. We are happy to work with you and help provide guidance when and where we can!