FAR 22.1003—Applicability.

General.

FAR 22.1003-1 explains the basic coverage rule for the Service Contract Labor Standards (SCLS) subpart in FAR 22.10. It tells contracting officers and contractors when the subpart applies: to Government contracts whose principal purpose is to furnish services in the United States through the use of service employees, and to any subcontract at any tier under such a contract, unless an exemption in FAR 22.1003-3 or 22.1003-4 applies. It also clarifies what is not covered: individual service requirements inside a contract that is not primarily for services. The section further warns that the label, type, or form of the contract does not control coverage; the actual principal purpose and work performed do. In practice, this means agencies must look past contract titles and vehicles and determine whether the work is service-based and performed in the United States by service employees, because that determination drives wage and labor standard obligations throughout the prime contract and subcontract chain.

Geographical coverage of the Act.

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.

Statutory exemptions.

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.

Administrative limitations, variations, tolerances, and exemptions.

FAR 22.1003-4 explains when and how the Secretary of Labor may grant administrative limitations, variations, tolerances, and exemptions from the Service Contract Labor Standards (SCLS) statute, and it identifies several specific categories of contracts that are exempt from SCLS coverage. It covers the legal standard for granting special relief, the process for submitting requests through contracting channels and the agency labor advisor to the Wage and Hour Administrator, and the Secretary’s listed exemptions for certain mail carriage and freight/personnel carriage contracts. It also addresses a separate exemption for maintenance, calibration, or repair contracts involving certain equipment, including automated data processing equipment, office information/word processing systems, scientific equipment, medical apparatus, and certain office/business machines when performed by the manufacturer or supplier. For that equipment exemption, the rule lays out detailed conditions involving commercial use, established catalog or market pricing, consistent compensation plans, and contractor certification. It further requires the contracting officer to make an affirmative written determination before award and to notify offerors of deficiencies in competitive procurements when the exemption may not apply. In practice, this section matters because it determines whether SCLS wage and fringe benefit requirements apply at all, and it creates a pre-award screening and documentation process that can affect competition, pricing, and award timing.

Some examples of contracts covered.

FAR 22.1003-5 gives contracting personnel and contractors a practical list of service categories that have been found to be covered by the Service Contract Labor Standards (SCLS) statute. It does not create an exclusive test or a complete catalog; instead, it provides examples to help identify when a contract is likely a covered service contract rather than a supply, construction, or other noncovered arrangement. The section specifically points to motor pool operation, parking, taxicab, and ambulance services; packing, crating, and storage; custodial, janitorial, housekeeping, and guard services; food service and lodging; laundry, dry-cleaning, linen-supply, and clothing alteration and repair; snow, trash, and garbage removal; aerial spraying and aerial reconnaissance for fire detection; certain installation support services such as grounds maintenance and landscaping; specialized services like drafting, illustrating, graphic arts, stenographic reporting, and mortuary services; electronic equipment maintenance and operation and engineering support services; maintenance and repair of equipment including aircraft, engines, electrical motors, vehicles, and electronic, office, and related business and construction equipment; operation, maintenance, or logistics support of a Federal facility; and data collection, processing, and analysis services. In practice, this section helps agencies screen acquisitions for SCLS coverage, determine whether wage determinations and labor standards clauses may apply, and avoid misclassifying service work as something else. Because the list is illustrative rather than exhaustive, contracting officers must still analyze the actual statement of work, the principal purpose of the contract, and any applicable exclusions or special rules in adjacent FAR provisions.

Repair distinguished from remanufacturing of equipment.

FAR 22.1003-6 explains how to tell the difference between repair work and remanufacturing of equipment, because that distinction determines whether the Service Contract Labor Standards statute applies or whether the work is treated as manufacturing under 41 U.S.C. chapter 65. The section focuses on two detailed remanufacturing tests: major overhaul of degraded or inoperable equipment and major modification of obsolete equipment. It also explains what is not remanufacturing, including ordinary repair, periodic maintenance, preservation, care, adjustment, upkeep, and servicing performed to keep equipment usable and in working order. The rule gives practical examples of repair-type work, such as vehicle repair, office equipment repair, appliance and electronics repair, inspection, testing, calibration, painting, packaging, lubrication, tune-up, replacement of internal parts, and furniture reupholstering or refinishing. In practice, this section matters because the labor standards, wage requirements, and contract administration approach can change significantly depending on whether the work is classified as repair or remanufacturing. Contractors and contracting officers must look beyond labels and examine the actual scope, extent of teardown, rebuilding, parts replacement, facility used, and end result of the work.

Questions concerning applicability of the Service Contract Labor Standards statute.

FAR 22.1003-7 addresses what happens when there is uncertainty about whether the Service Contract Labor Standards (SCLS) statute applies to a particular acquisition. It covers the contracting officer’s duty to seek advice from the agency labor advisor, the escalation of unresolved applicability questions to the Administrator, Wage and Hour Division, and the requirement that this be done in a timely manner. In practice, this section is a procedural safeguard to prevent a contract from being incorrectly treated as covered or noncovered under SCLS, which can affect wage determinations, solicitation clauses, contractor pricing, and post-award compliance obligations. The section exists to ensure that coverage determinations are made with labor-law expertise and, when necessary, by the Department of Labor’s designated authority rather than by unilateral local judgment. For contracting officers and contractors, the practical significance is that uncertainty about SCLS coverage should be resolved early, before solicitation or award decisions lock in the wrong labor requirements.