FAR 22.1003-3—Statutory exemptions.
Plain-English Summary
FAR 22.1003-3 identifies the statutory exemptions from the Service Contract Labor Standards (SCLS) statute, meaning these categories of contracts are outside the statute’s wage, fringe benefit, and labor standard requirements. The section covers seven specific exempt categories: construction, alteration, or repair of public buildings or public works (including painting and decorating); work governed by 41 U.S.C. chapter 65 (the Davis-Bacon Act and related labor standards); certain transportation contracts where published tariff rates apply; services furnished by radio, telephone, or cable companies subject to the Communications Act of 1934; public utility services; employment contracts for direct services to a Federal agency by an individual or individuals; and contracts for operating postal contract stations for the U.S. Postal Service. In practice, this section tells contracting officers and contractors when SCLS clauses and wage determinations do not apply because another statute or regulatory scheme governs, or because Congress has expressly excluded the work. Correctly identifying these exemptions is critical because misclassification can lead to using the wrong labor standards, improper pricing, contract administration errors, and potential wage compliance disputes. The section is especially important at acquisition planning and solicitation drafting, when the agency must decide whether to include SCLS requirements at all.
Key Rules
Construction is excluded
Contracts for construction, alteration, or repair of public buildings or public works are exempt from the Service Contract Labor Standards statute, including painting and decorating. These contracts are generally governed by other labor standards, most notably the Davis-Bacon framework.
Davis-Bacon-covered work excluded
Any work required to be done under 41 U.S.C. chapter 65 is outside SCLS coverage. If another federal labor statute already applies to the work, SCLS does not duplicate it.
Certain transportation contracts exempt
Contracts for transporting freight or personnel by vessel, aircraft, bus, truck, express, railroad, or oil or gas pipeline are exempt when published tariff rates are in effect. The exemption is tied to the existence of regulated tariff pricing.
Communications services exempt
Contracts for furnishing services by radio, telephone, or cable companies subject to the Communications Act of 1934 are not covered by SCLS. These services are regulated under a separate statutory regime.
Public utility services exempt
Contracts for public utility services are excluded from SCLS coverage. The exemption recognizes that utility services are provided under specialized regulatory structures rather than ordinary service-contract labor rules.
Direct personal services exempt
Employment contracts providing for direct services to a Federal agency by an individual or individuals are exempt. This covers direct personal service arrangements rather than ordinary contractor-operated service contracts.
Postal contract stations exempt
Contracts for operating postal contract stations for the U.S. Postal Service are exempt from SCLS. These arrangements are treated as a separate category of postal service operations.
Responsibilities
Contracting Officer
Determine whether the requirement falls within one of the statutory exemptions before applying SCLS clauses or wage determinations. Document the basis for the exemption in the contract file and ensure the solicitation and contract reflect the correct labor standards regime.
Contractor
Review the solicitation and contract to confirm whether SCLS applies or whether the work is exempt. If the contractor believes the requirement has been misclassified, it should raise the issue promptly before award or during administration to avoid compliance and pricing errors.
Agency
Structure requirements so the correct labor statute is applied to the actual work being procured. Agencies must coordinate acquisition, legal, and labor advisors when a requirement may fall into an exempt category or overlap with another labor standards statute.
Wage and Hour / Labor Advisors
Provide technical assistance on whether the work is covered by SCLS or excluded by statute. They help resolve borderline cases, especially where a contract includes mixed work or where another labor statute may control.
Practical Implications
The biggest day-to-day issue is classification: if the work is exempt, SCLS clauses and wage determinations should not be inserted; if the work is not exempt, they must be included. Getting this wrong can create solicitation defects and post-award compliance problems.
Mixed contracts are a common pitfall. A contract may include both exempt and covered work, so the contracting officer must analyze whether the exemption applies to the entire contract or only part of it.
The transportation exemption depends on published tariff rates being in effect, so contractors and contracting officers should not assume all transportation work is exempt.
Direct services to a Federal agency by individuals can look like personal services contracting, so agencies should be careful not to confuse exempt direct service arrangements with ordinary service contracts.
When another labor statute applies, such as construction labor standards, the agency should use that regime instead of SCLS and ensure the solicitation, pricing, and administration align with the correct requirements.
Official Regulatory Text
The Service Contract Labor Standards statute does not apply to- (a) Any contract for construction, alteration, or repair of public buildings or public works, including painting and decorating; (b) Any work required to be done in accordance with the provisions of 41 U.S.C. chapter 65 ; (c) Any contract for transporting freight or personnel by vessel, aircraft, bus, truck, express, railroad, or oil or gas pipeline where published tariff rates are in effect; (d) Any contract for furnishing services by radio, telephone, or cable companies subject to the Communications Act of 1934; (e) Any contract for public utility services; (f) Any employment contract providing for direct services to a Federal agency by an individual or individuals; or (g) Any contract for operating postal contract stations for the U.S. Postal Service.