Service Contract Act Should Not Apply to Service Employees of ADP and High-Technology Companies--A Supplement

HRD-80-102(A): Published: Mar 25, 1981. Publicly Released: Mar 30, 1981.

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In response to a congressional request, GAO evaluated the Department of Labor's comments on a previous report that assessed the impact of Labor's ruling that all Federal contracts for the maintenance and repair of automatic data processing (ADP), telecommunications, and other high technology commercial equipment are subject to the wage determination and other requirements of the Service Contract Act (SCA).

Labor strongly disagreed with the original report and charged that the report contained material errors of fact and law. However, Labor misread the GAO analysis of the Act's congressional intent. Also, Labor did not adequately address the major issues that wage protection for service workers is not needed and that undue financial and administrative burdens result from applying the Act to high technology industries. GAO continues to believe that actions are fully justified and needed to permanently exclude Federal contracts for ADP and other high technology commercial product support services from the Act's coverage.

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