FAR 22.1008-2—Successorship with incumbent contractor collective bargaining agreement.
Plain-English Summary
FAR 22.1008-2 explains how the Service Contract Labor Standards successor-contractor rules apply when an incumbent contractor’s employees are covered by a collective bargaining agreement (CBA). It tells the contracting officer to determine early in the acquisition cycle whether a predecessor contract exists, whether the incumbent prime contractor or subcontractors have a CBA, and whether 41 U.S.C. 6707(c) requires the successor to pay wages and fringe benefits at least equal to those in the predecessor’s agreement. The section also covers the conditions that trigger successor obligations, the limits on when a new or revised CBA will be effective for successor pricing, and the required coordination and documentation steps for obtaining and incorporating the CBA into the successor acquisition. It addresses special issues such as multiple work locations, partial CBA coverage, use of Wage Determinations at SAM.gov and the e98 process, and when the Department of Labor may find the statute inapplicable because the CBA is substantially at variance with local prevailing rates or was not reached through arm’s-length bargaining. In practice, this section is about preserving labor continuity, ensuring proper wage determination treatment, and preventing acquisition delays or pricing errors when a service contract is recompeted.
Key Rules
Determine applicability early
The contracting officer must assess early in the acquisition cycle whether a predecessor contract covered by the Service Contract Labor Standards statute exists and whether the incumbent prime contractor, subcontractors, or their employees are covered by a collective bargaining agreement. This early review is essential because successor obligations can affect solicitation timing, wage determination preparation, and contract pricing.
Successor wage protection rule
If the statutory conditions are met, the successor contractor must pay service employees wages and fringe benefits, including accrued benefits and prospective increases, that are at least equal to those in the predecessor contractor’s CBA. This applies only when the new work is substantially the same, performed in the same locality, and the incumbent’s employees are covered by one or more CBAs.
Same work and locality required
The successor rule applies only when the proposed contract will furnish substantially the same services as the incumbent contract and the services will be performed in the same locality. If either element is missing, the statutory successor wage obligation does not apply under this section.
Limits on new or revised CBAs
A newly signed CBA by the incumbent does not trigger successor obligations if it is the first CBA and becomes effective only after the incumbent contract ends. A new or revised CBA during performance may also be excluded from successor effect in certain sealed-bid and nonsealed-bid situations, but only if the contracting officer gave timely written notice of the applicable acquisition dates to the incumbent and the employees’ bargaining agent.
Obtain and use the CBA
When the statute applies, the contracting officer must obtain a copy of the incumbent’s CBA, often by coordinating with the administrative contracting officer. If the CBA is timely received, the contracting officer may prepare a wage determination in SAM.gov referencing the agreement and attach both the wage determination and a complete copy of the CBA to the successor contract action.
Use e98 when needed
The contracting officer may use the e98 process in Wage Determinations at SAM.gov to request that DOL prepare the cover wage determination. DOL may ask for the complete CBA, and questions about whether the SCLS applies to a CBA should be referred to the agency labor advisor.
Exceptions for variance or non-arm’s-length bargaining
The successor rule does not apply if the Secretary of Labor determines, after a hearing, that the CBA wages and fringe benefits are substantially at variance with local similar services or were not the result of arm’s-length negotiations. Contingent CBA provisions that try to shift risk to the Government or condition obligations on a wage determination often suggest a lack of arm’s-length bargaining.
Handle multiple locations and partial coverage
If services are performed at more than one location and the CBA terms differ by location or do not apply everywhere, the contracting officer must identify which locations are covered. If the CBA does not cover all service employees, the contracting officer must obtain prevailing wage determinations for the classifications not covered by the agreement.
Responsibilities
Contracting Officer
Determine early whether a predecessor SCLS contract and incumbent CBA exist; decide whether 41 U.S.C. 6707(c) applies; obtain the incumbent CBA; prepare and incorporate the appropriate wage determination; identify covered locations and uncovered classifications; use SAM.gov or e98 as appropriate; and consult the agency labor advisor when applicability or bargaining issues arise.
Incumbent Prime Contractor
Provide the contracting officer a copy of each collective bargaining agreement as required by the Service Contract Labor Standards clause; ensure the Government has the information needed to evaluate successor wage obligations.
Incumbent Subcontractor
If its employees are covered by a CBA relevant to the successor acquisition, the subcontractor’s agreement may affect the wage determination and must be identified and considered by the contracting officer.
Employees’ Collective Bargaining Agent
Receive timely written notice of applicable acquisition dates when required for the CBA timing rules to be effective; provide the labor-side information needed to evaluate successor coverage and timing.
Administrative Contracting Officer
Coordinate with the contracting officer, when needed, to obtain the predecessor contract’s CBA and related administration records.
Department of Labor
Prepare or review wage determinations through the e98 process, and determine whether the statutory successor rule is inapplicable because the CBA is substantially at variance with local prevailing rates or was not reached through arm’s-length bargaining.
Agency Labor Advisor
Advise on whether the Service Contract Labor Standards statute applies to the CBA, and help assess potential variance, arm’s-length bargaining concerns, or other labor issues requiring further action.
Practical Implications
This section can materially affect bid pricing and transition planning because successor contractors may have to honor incumbent CBA wage and fringe benefit levels, including accrued and prospective increases.
Timing is critical: if the contracting officer misses the notice requirements or fails to identify a newly negotiated CBA in time, the Government may not be able to apply the new terms to the successor action.
A common pitfall is assuming the incumbent’s latest CBA automatically controls; the rule has specific exceptions for first-time agreements, late-received agreements, and certain post-award situations.
Another frequent issue is incomplete coverage analysis—some locations or classifications may be covered by the CBA while others require separate prevailing wage determinations.
Contracting officers should document the labor file carefully and coordinate early with labor advisors and DOL, because successor wage issues often drive protests, pricing disputes, and solicitation delays.
Official Regulatory Text
(a) Early in the acquisition cycle, the contracting officer shall determine whether 41 U.S.C. 6707(c) affects the new acquisition. The contracting officer shall determine whether there is a predecessor contract covered by the Service Contract Labor Standards statute and, if so, whether the incumbent prime contractor or its subcontractors and any of their employees have a collective bargaining agreement. (b) 41 U.S.C. 6707(c) provides that a successor contractor must pay wages and fringe benefits (including accrued wages and benefits and prospective increases) to service employees at least equal to those agreed upon by a predecessor contractor under the following conditions: (1) The services to be furnished under the proposed contract will be substantially the same as services being furnished by an incumbent contractor whose contract the proposed contract will succeed. (2) The services will be performed in the same locality. (3) The incumbent prime contractor or subcontractor is furnishing such services through the use of service employees whose wages and fringe benefits are the subject of one or more collective bargaining agreements. (c) The application of 41 U.S.C. 6707(c) is subject to the following limitations: (1) 41 U.S.C. 6707(c) will not apply if the incumbent contractor enters into a collective bargaining agreement for the first time and the agreement does not become effective until after the expiration of the incumbent’s contract. (2) If the incumbent contractor enters into a new or revised collective bargaining agreement during the period of the incumbent’s performance on the current contract, the terms of the new or revised agreement shall not be effective for the purposes of 41 U.S.C. 6707(c) under the following conditions: (i) (A) In sealed bidding, the contracting agency receives notice of the terms of the collective bargaining agreement less than 10 days before bid opening and finds that there is not reasonable time still available to notify bidders (see 22.1012-2 (a)); or (B) For contractual actions other than sealed bidding, the contracting agency receives notice of the terms of the collective bargaining agreement after award, provided that the start of performance is within 30 days of award (see 22.1012-2 (b)); and (ii) The contracting officer has given both the incumbent contractor and its employees’ collective bargaining agent timely written notification of the applicable acquisition dates (see 22.1010 ). (d) (1) If 41 U.S.C. 6707(c) applies, the contracting officer shall obtain a copy of any collective bargaining agreement between an incumbent contractor or subcontractor and its employees. Obtaining a copy of an incumbent contractor’s collective bargaining agreement may involve coordination with the administrative contracting officer responsible for administering the predecessor contract. (Paragraph (m) of the clause at 52.222-41 , Service Contract Labor Standards, requires the incumbent prime contractor to furnish the contracting officer a copy of each collective bargaining agreement.) (2) If the contracting officer has timely received the collective bargaining agreement, the contracting officer may use the Wage Determinations at SAM.gov website to prepare a wage determination referencing the agreement and incorporate that wage determination, attached to a complete copy of the collective bargaining agreement, into the successor contract action. In using the Wage Determinations at SAM.gov process, it is not necessary to submit a copy of the collective bargaining agreement to the Department of Labor unless requested to do so. (3) The contracting officer may also use the e98 process on Wage Determinations at SAM.gov to request that the Department of Labor prepare the cover wage determination. The Department of Labor’s response to the e98 may include a request for the contracting officer to submit a complete copy of the collective bargaining agreement. Any questions regarding the applicability of the Service Contract Labor Standards statute to a collective bargaining agreement should be directed to the agency labor advisor. (e) (1) 41 U.S.C. 6707(c) will not apply if the Secretary of Labor determines (i) after a hearing, that the wages and fringe benefits in the predecessor contractor’s collective bargaining agreement are substantially at variance with those which prevail for services of a similar character in the locality, or (ii) that the wages and fringe benefits in the predecessor contractor’s collective bargaining agreement are not the result of arm’s length negotiations (see 22.1013 and 22.1021 ). The Department of Labor (DOL) has concluded that contingent collective bargaining agreement provisions that attempt to limit a contractor’s obligations by means such as requiring issuance of a wage determination by the DOL, requiring inclusion of the wage determination in the contract, or requiring the Government to adequately reimburse the contractor, generally reflect a lack of arm’s length negotiations. (2) If the contracting officer’s review (see 22.1013 ) indicates that monetary provisions of the collective bargaining agreement may be substantially at variance or may not have been reached as a result of arm’s length bargaining, the contracting officer shall immediately contact the agency labor advisor to consider if further action is warranted. (f) If the services are being furnished at more than one location and the collectively bargained wage rates and fringe benefits are different at different locations or do not apply to one or more locations, the contracting officer shall identify the locations to which the agreements apply. (g) If the collective bargaining agreement does not apply to all service employees under the contract, the contracting officer shall access Wage Determinations at SAM.gov to obtain the prevailing wage determination for those service employee classifications that are not covered by the collective bargaining agreement. The contracting officer shall separately list in the solicitation and contract the service employee classifications- (1) Subject to the collective bargaining agreement; and (2) Not subject to any collective bargaining agreement.