Special Procurement Procedures Helped Prevent Wage Busting under Federal Service Contract in the Cape Canaveral Area

HRD-78-49: Published: Feb 28, 1978. Publicly Released: Feb 28, 1978.

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The Service Contract Act of 1965 protects all employees of service contractors from wage busting (lowering of wages and benefits by contractors in efforts to become low bidders) except bona fide executive, administrative, and professional employees. To discourage wage busting for professional employees, the National Aeronautics and Space Administration (NASA) and the Air Force designed special procurement procedures which were used for recompetition on three major contracts.

In a review of wages and fringe benefits of 881 of 1,034 employees not covered by the act, no cases of wage busting were found on two of the three contracts, and only two cases were identified on the remaining contract. In the two cases, the contractor paid salaries requested on job applications, and there was no indication of intent by the contractor to wage bust. The procurement procedures influenced contractors to submit proposals based on paying wages and fringe benefits comparable to those paid under the prior contracts, and these factors affected the proposal evaluations. The special procurement procedures demonstrate that a policy directed towards discouraging wage busting is a viable alternative to proposed legislation that would include professional employees under the act.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Administrator for Federal Procurement Policy should establish a government-wide policy to discourage wage busting of professional employees not covered by the act and require federal agencies to include appropriate implementing language in their procurement regulations and service contracts. The Secretary of Defense and the Administrator of NASA should amend their procurement regulations to discourage wage busting of employees not covered by the act on recompetition of service contracts without waiting for a government-wide policy.

    Agency Affected:


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