FAR 22.1025—Ineligibility of violators.
Plain-English Summary
FAR 22.1025 addresses the consequences of violating the Service Contract Labor Standards statute and how those violations affect future federal contracting eligibility. It explains that violators will have an active exclusion record in the System for Award Management (SAM), that agencies may not award a Government contract to a listed violator without the Secretary of Labor’s approval, and that the bar also extends to firms, corporations, partnerships, or associations in which the violator has a substantial interest. The section further makes clear that this ineligibility is not limited to prime contracts; it also applies to subcontracts. In practice, this provision protects the Government from doing business with parties that have failed to comply with wage and labor requirements under the Service Contract Labor Standards statute and gives contracting officials a clear screening and award prohibition tied to labor-law enforcement.
Key Rules
Violators get exclusion records
Persons or firms found in violation of the Service Contract Labor Standards statute will have an active exclusion record in SAM. This record is the mechanism that alerts contracting personnel to the ineligibility issue.
No award to listed violators
A Government contract may not be awarded to any violator listed because of a Service Contract Labor Standards violation unless the Secretary of Labor approves the award. The default rule is prohibition, not discretion.
Substantial-interest entities are covered
The prohibition also applies to any firm, corporation, partnership, or association in which the violator has a substantial interest. This prevents circumvention of the bar by using an affiliated or controlled entity.
Secretary of Labor approval is required
If an award is to be made despite the exclusion, approval from the Secretary of Labor is required. Contracting officials cannot waive this restriction on their own authority.
Applies to prime and subcontracts
The ineligibility restriction applies to both prime contracts and subcontracts. Prime contractors must therefore avoid placing subcontracts with barred parties, and contracting officers must consider the restriction throughout the contracting chain.
Responsibilities
Contracting Officer
Check SAM for active exclusion records, ensure no award is made to a listed violator or an entity covered by the violator’s substantial interest, and obtain Secretary of Labor approval before proceeding if an exception is sought.
Prime Contractor
Avoid awarding subcontracts to ineligible violators or covered entities, screen proposed subcontractors for exclusion status, and ensure subcontracting decisions comply with the Service Contract Labor Standards bar.
Subcontractor
Maintain compliance with the Service Contract Labor Standards statute and avoid bidding or performing work if subject to an active exclusion record or otherwise covered by a violator’s substantial interest.
Department of Labor / Secretary of Labor
Review and approve any proposed award to a listed violator or covered entity when an exception is requested, and support enforcement of the statutory ineligibility.
Agency
Use SAM and related exclusion information to prevent awards to ineligible parties and ensure contracting personnel apply the prohibition consistently at both prime and subcontract levels.
Practical Implications
Contracting personnel must screen SAM before award and not rely on informal knowledge or outdated records; the exclusion record is the key compliance trigger.
The rule reaches beyond the named violator, so ownership and control relationships matter. A contractor cannot avoid the prohibition by forming a new entity if the violator has a substantial interest.
Prime contractors need subcontractor vetting procedures, because the prohibition applies to subcontracts as well as prime awards.
If an award to a barred party is being considered, the contracting office cannot simply document a business reason and proceed; Secretary of Labor approval is required.
A common pitfall is overlooking the labor-law basis of the exclusion and treating it like a routine responsibility issue. This section imposes a hard award bar tied to Service Contract Labor Standards violations.
Official Regulatory Text
Persons or firms found to be in violation of the Service Contract Labor Standards statute will have an active exclusion record contained in the System for Award Management (see 9.404 ). No Government contract may be awarded to any violator so listed because of a violation of the Service Contract Labor Standards statute, or to any firm, corporation, partnership, or association in which the violator has a substantial interest, without the approval of the Secretary of Labor. This prohibition against award to an ineligible contractor applies to both prime and subcontracts.