FAR 22.1003-2—Geographical coverage of the Act.
Plain-English Summary
FAR 22.1003-2 explains the geographic reach of the Service Contract Labor Standards statute and draws a bright line between work performed in the United States and work performed outside the United States. Its purpose is to tell contracting officers and contractors when the statute applies based on location of performance, which is a threshold coverage question before any wage, fringe benefit, or labor standard requirements are enforced. In practice, this section means that service contracts performed in the United States are potentially subject to the Act, while contracts performed outside the United States are not covered by the statute. This coverage rule is important because it affects solicitation clauses, wage determinations, contractor pricing, compliance planning, and whether the Service Contract Labor Standards requirements must be flowed into the contract. It also helps avoid applying domestic labor standards to overseas performance where the statute does not reach. Readers will find here the basic geographic applicability rule and the practical consequence that location of performance is a key jurisdictional factor under the Act.
Key Rules
Applies in the United States
The Service Contract Labor Standards statute applies to service contracts performed in the United States. If the contract work is performed domestically, the statute’s requirements may apply, subject to the other coverage rules in FAR 22.1001 and related provisions.
No coverage outside U.S.
The statute does not apply to contracts performed outside the United States. Overseas performance is outside the statute’s geographic scope, so the Act’s wage and labor standards are not imposed under this section.
Performance location controls
The key coverage question under this section is where the services are performed, not simply where the contract is awarded or where the contractor is headquartered. Contracting personnel must look to the place of performance to determine whether the statute reaches the work.
Responsibilities
Contracting Officer
Determine whether the services will be performed in the United States or outside the United States and apply the Service Contract Labor Standards statute only when the geographic coverage test is met. Ensure the solicitation and contract reflect the correct coverage determination and do not impose the statute on overseas performance.
Contractor
Identify where contract performance will occur and assess whether Service Contract Labor Standards requirements apply. Price and plan performance accordingly, and avoid assuming the statute applies to overseas work or does not apply to domestic work.
Agency
Support accurate acquisition planning and contract administration by identifying the place of performance early and ensuring the correct labor standards framework is used for the acquisition.
Practical Implications
The place of performance is a threshold issue: if the work is overseas, the Service Contract Labor Standards statute does not apply under this section.
A common mistake is focusing on the contracting office location or contractor location instead of where the services will actually be performed.
For mixed-location contracts, parties should carefully map which work is performed in the United States versus outside the United States, because coverage may depend on the domestic portion of performance.
Incorrect geographic assumptions can lead to wrong clause inclusion, bad pricing, and compliance disputes later in performance.
Contracting officers should confirm the performance location early in acquisition planning so wage determinations and labor standards clauses are handled correctly.
Official Regulatory Text
The Service Contract Labor Standards statute applies to service contracts performed in the United States (see 22.1001 ). The Service Contract Labor Standards statute does not apply to contracts performed outside the United States.