1 Marshall Space Flight Center Government Acquisitions and the Contractor Industrial Labor Relations Program Talmage R. Reynolds November 19, 2009

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Marshall Space Flight Center

Government Acquisitions and the

Contractor Industrial Labor Relations Program

Talmage R. Reynolds

November 19, 2009

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Responsibilities of the Functional Program Manager

–Administer Center’s Contractor Industrial Labor Relations Program

–Represent the Center Director in day-to-day contacts with organized labor and contractor management personnel

–To ensure consistent application, administration, and enforcement of the Federal Labor Standards

• Serve as a staff representative and technical advisor to:

– Center Director– Program Mangers – Contracting Officers– Contracting Officers Technical Representatives– Facilities Staff and Inspection Personnel– Source Evaluations Boards and Committees

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Involves two very distinct program functions…

– Industrial Labor Relations…

– Federal Labor Standards…

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What is Industrial Labor Relations?

– It’s the Relationship Business and it...

Involves the right of every American

to be represented by a Union (Collective Bargaining Representative) as defined by

the

National Labor Relations Act

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What is Collective Bargaining…

“A Doctrine of Fairness”

Burney E. DeLury

Former Director

Federal Mediations & Conciliation Service

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Industrial Labor Relations (FAR 22.101)

• Industrial Labor Relations as defined by the National Labor Relations Act• To maintain sound relations with industry and organized labor to ensure:

– Prompt receipt of information involving labor relations that may adversely affect NASA Acquisitions

– That NASA obtains critical supplies and support services without delay– That the parties in dispute use all available methods for resolving the dispute– That prompt and immediate action be taken to:

• Encourage continued proactive interest-based bargaining• Notify and involve agencies (Federal Mediation and Conciliation Service,

National Labor Relations Board, and other Federal, state, local, and private agencies) responsible for conciliation, mediation, and arbitration

• Furnish the parties in dispute factual information regarding potential adverse impact to the many critical NASA-MSFC Programs

• Seek voluntary agreement between contractor management and organized labor to permit uninterrupted flow of supplies and services at MSFC & MAF

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What should “Center Employees” do?

– Not allow contractor management nor organized labor to entice you to state an opinion or offer advise about union activity

– Refrain from making comments either pro or con involving unions– Remain impartial and neutral at all times– Not to infer nor imply a NASA position on any labor relations issues

• Refer all issues and inquires to:

Contractor Industrial labor Relations OfficeOffice of Center Operations / AS01

Patrick W. Rasco / 544-8027Talmage R. Reynolds / 544-4600

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Organized Labor at Marshall Space Flight Center (MSFC)

– 17 Labor Unions representing contractor's employees

• 14 Collective Bargaining Agreements

Organized Labor at Michoud Assembly Facility (MAF)

– 3 Labor Unions representing contractor’s employees

• 3 Collective Bargaining Agreements

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Mission Success…

MarshallManagement

ContractorManagement

OrganizedLabor

GovernmentContract

Contractor Industrial Labor

Relations Program

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What’s been done in this area?

– Established an Area Labor-Management Relations Council (ALMRC)

• Bimonthly Council Meetings since 1990

– Implemented a Center-wide Policy

• Contractor Union Activity at MSFC (re-issued July 3, 2007)

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The Federal Labor Standards (FAR 22.2 – 22.10)

• Statutes:– Davis-Bacon Act -- (40 U.S.C. 276-276a-7)– Copeland (Anti-kickback) Act -- (40 U.S.C. 276c)– Walsh-Healey Act -- (41 U.S.C. 38, as amended)– Contract Work Hours & Safety Standards Act -- (40 U.S.C. 327-332)– Service Contract Act -- (41 U.S.C. 351, as amended)– Fair Labor Standards Act -- (U.S.C. 201, et seq.)

• Implementing Regulations:– Title 29 Code of Federal Regulations:

• Part 3 = Copeland Act• Part 4 = Service Contract Act• Part 5 = Davis-Bacon Act & Contract Work Hours & Safety Standards Act• Part 6 = Rules & Practices for Labor Standards Enforcement Proceedings• Part 7 = Rules & Practices for the Administrative Review Board –

Construction• Part 8 = Rules & Practices for the Administrative Review Board – Services• Part 541 = Executive, Administrative, and Professional Exemptions• Part 778 = Overtime• Part 785 = Hours Worked

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Davis-Bacon Act - 1931

– Purpose and Intent of the Act...

To protect communities and workers from the

economic disruption caused by competition

arising from non-local contractors coming into

an area and obtaining Federal construction

contracts by underbidding local wages

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– Federal Statute• Public Law 403 of March 3, 1931 (As amended in 1935 and 1964)

– Implementing Regulation• Title 29 CFR Parts 3 and 5

– Contract Clause• FAR 52.222-6 plus all other related clauses

– Coverage…• Construction, Alternations, Repair, Painting, or Decorating of:

– Public Buildings or Public Works– At the “site of work” (site specific)

– Affords Protection to:• Laborers and Mechanics

– Defined as workers whose duties are manual or physical in nature who uses tools or who are performing the work of a trade

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– Exempts those employees who qualify as bona fide Executive, Administrative, or Professional employees as defined in Title 29 CFR Part 541

– Minimum Mandatory Requirements• A very precise and exacting Federal labor standard• Weekly payment of wages & fringes– 29 CFR 5.5(a)(1)(i)• Payroll and Basic Records – 29 CFR 5.5(a)(3)(i)• Submittal of Certified Payroll Records – 29 CFR 5.5(a)(3)(ii)• Posting Requirements at site of work – 29 CFR 5.5(a)(1)(i)• Prime is liable for compliance of Subs – 29 CFR 5.5(a)(6)• Working Foremen – 29 CFR 5.2(m)• Apprentices & Trainees authorized – 29 CFR 5.2(n)(1) and 5.5(a)

(4)(i): – Must be an “approved” USDOL Certified Program– Must not exceed journeyman to apprentice ratio

• Helpers are not authorized unless USDOL criteria is met

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– Implementation of a Preventative Labor Standards Enforcement

Program

• Contractor / Procurement / Facility Personnel Training• Preconstruction Activities

– Preconstruction Conference– Davis-Bacon Act Letter and Preconstruction Conference Checklist

– Implemented an Advisory Letter

• Labor Morsel– Published to keep Procurement and Program Staffs current on

issues affecting our contracts and resources

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Who’s Responsible for Davis-Bacon Act Enforcement?

– The Contracting Agency (Reorganization Plan No. 14 of 1950)

• Day-to-day oversight for compliance

Facilities Inspection Personnel

• Certified Payroll Compliance Reviews

Pamela S. Davis – AS22

Cari H. Willingham – AS23

• Labor Standards Investigations

Contractor Industrial Labor Relation Officer

• Enforcement

Contracting Officer in coordination with the Contractor

Industrial Labor Relations Officer and Chief Counsel’s Office

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Copeland (Anti-Kickback) Act - 1934

– Purpose and Intent of the Act • Prohibits “Kickback” of wages and back wages• Requires contractors on DBA and DBRA covered projects to submit

weekly payroll containing a certified “statement of compliance”• Regulates payroll deductions

– Federal Statute• 40 U.S.C. 276c

– Implementing Regulation• Title 29 CFR Part 3

– FAR Clauses• FAR 52.222-8 and 52.222-10

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Who’s Responsible for Copeland (Anti-Kickback) Act Enforcement?

– The Contracting Agency (Reorganization Plan No. 14 of 1950)

• Day-to-day oversight of compliance

Facilities Inspection Personnel

• Labor Standards Investigations

Contractor Industrial Labor Relation Officer

• Enforcement

Contracting Officer in coordination with the Contractor

Industrial Labor Relations Officer and Chief Counsel’s Office

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Walsh-Healey Public Contracts Act - 1936

– Provides Labor Standards for employees working on Federal contracts for the manufacturing or furnishing of goods, supplies, articles, or equipment

– Federal Statute• 41 U.S.C. 38, as amended

– Implementing Regulation• CFR Title 41, Chapter 50

– FAR Clause• 52.222-20

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Walsh-Healey Public Contracts Act - 1936

– Establishes• Minimum Wage (equal to or greater than FLSA minimum wage rate)• Overtime Requirement• Safety and Health Standards• Prohibits employment of

– Convict labor– Male person under 16 years of age– Female person under 18 years of age

• Posting Requirements

– Who’s Responsible for Enforcement• U.S. Department of Labor

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Contract Work Hours and Safety Standards Act – 1962

– Consolidating a number of “eight hour” laws that provided for overtime pay on Federally financed contracts employing “laborers” and “mechanics”

– Federal Statute• 40 U.S.C. 327 – 332

– FAR Clause• 52.222-4

– In 1986, the Federal daily overtime requirement was repealed to require overtime pay only after 40 hours work per week

– Both the Contract Work Hours and Safety Standards Act (CWHSSA) and Fair Labor Standards Act (FLSA) require overtime pay for hours worked in excess of 40 hours in a work week

– No “site of work” limitation (as with the Davis-Bacon Act)

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Contract Work Hours and Safety Standards Act - 1962

– Coverage…

• Covers contracts over $100,000 • Covers DBA, DBRA, and SCA contracts involving the employment

of laborers, mechanics, watchmen, guards, firefighters, and fireguards

– Mandates

• Overtime pay of one and one-half times the basic hourly rate of pay for hours worked in excess of 40 in a workweek

• The collection of liquidated damages in the amount of $10 per day, per person, per violation when contractor fails to pay the required overtime rate (one and one-half time the basic rate of pay)

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Whose Responsible for CWHSSA Enforcement?

– Contracting Agency (Reorganization Plan No. 14 of 1950)

• Day-to-day OversightFacilities Inspection Personnel; and

Certified Payroll Compliance Reviews (on DBA contracts)

– Contractor Industrial Labor Relations Officer• Conducts CWHSSA investigations• Determines amount of back wages due employee and liquidated

damages to be assessed

– Enforcement• Contracting Officer in coordination with the Contractor Industrial

Labor Relations Officer and Chief Counsel’s Office

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Service Contract Act of 1965

– Purpose and Intent of the Act…

To remove wages as a factor in the competition for

Federal service contracts by requiring the payment

of not less than locally prevailing wage rates and

fringe benefits, or in certain cases, the wages and

fringe benefits in the predecessor contractor’s

collective bargaining agreement(s)

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Service Contract Act of 1965

– Federal Statute• 41 United States Code 351 (as amended in 1972 and 1976)

– Implementing Regulation• Title 29 Code of Federal Regulations Part 4

– Contract Clause• FAR 52.222-41

– Affords Protection to Service Employees • Service employees are defined as any person engaged in the

performance of a covered Federal Service Contract– However, it exempts those employees who qualify as bona fide

Executive, Administrative, or Professional employees as defined in Title 29 CFR Part 541

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Service Contract Act coverage

– Contracts for “support services” entered into by any agency

or instrumentality of the Federal Government including non-

appropriated funds activities

– Covers contract over $2,500

– Elements necessary for coverage:• Contracts must be principally for services• Coverage is not dependent upon interstate commerce• Contract must be performed within the United States• Contract must be performed through the use of “service employees”

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Contracts not covered by the Service Contract Act

– Construction – Supply– Manufacturing– Leasing of Space– Freight Carriage– Utilities– Certain items for “commercial services”

• (29 CFR 4.123(e)(1)(i) and (2)(i)-(iv))• Requires contractor certification [FAR 22.103-4(b)(4)(ii)(D)]

– ADPE Maintenance and Repair Contracts• Requires contractor certification [FAR 22.103-4(b)(4)(ii)(D)]

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Service Contract Act

– Coverage…• Mission Support Services Contracts

– Minimum Mandatory Requirements• Timely payment of wages – 29 CFR 4.165(b)• Posting Requirements – 29 CFR 4.184• Minimum Record Keeping – 29 CFR 4.185• Minimum wages based on job classification – 29 CFR 4.161

– If no matching classification one must be conformed – 29 CFR 4.6(b)(2)• Minimum Health and Welfare Rate – 29 CFR 4.171• Minimum Number of Vacation Days – 29 CFR 4.173

– Accrual rate is based on length of service which includes the whole span of continuous service with all predecessor, present, and successor contractors. Vacation days are due on the employee’s anniversary date

• Minimum number of Paid Holidays – 29 CFR 4.174• SCA makes no distinction between a full-time permanent, part-time

permanent, temporary, or part-time employee – 29 CFR 4.176

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Service Contract Act

–Items that cannot be counted as Health and Welfare (Fringe Benefits) for SCA Health and Welfare computation purposes:

• Federal, State, and Local Taxes, Unemployment or Workers’ Compensation, Professional Insurance, Liability Insurance, etc. – 29 CFR 4.171(c)

• Furnishing of Board and Lodging – 29 CFR 4.171(d)• Furnishing of “facilities” or “transportation” – 29 CFR 4.171(e)• Contribution to social functions – 29 CFR 4.171(f)• Vacation Pay – 29 CFR 4.173• Holiday Pay – 29 CFR 4.174

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– Implementation of a Preventative Labor Standards

Enforcement Program

• Contractor / Procurement / Personnel Training• Service Contract Act Letter and Checklist

– Implemented an Advisor Letter

• Labor Morsel– Published to keep Procurement and Program Staffs current

on issues affecting our contracts and resources

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Who’s Responsible for Service Contract Act Enforcement?

– U.S. Department of Labor

• Wage and Hour Division

– However, the Contracting Agency has an obligation to

• Ensure day-to-day compliance

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Violations of the Federal Labor Statutes and Regulations

Is nothing less than contract…

Fraud, Waste, and Abuse

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NASA FAR Supplement Part 1822 Changes…

– Wage Determinations

• Davis-Bacon Act Procedures NFAR 1822.404-3

– Contracting Officers shall follow the detailed FAR procedures for obtaining DBA Wage Determinations at www.wdol.gov

– Contracting Officers must become familiar with USDOL All Agency Memorandums (AAM) Numbers 130 and 131

– Caution there are four types of DBA Wage Determinations:» Building Construction (Sheltered enclosures for people & equipment)

» Heavy Construction (Catch-all …bridges, dams, levees, towers, canals)

» Highway Construction (Highways, streets, runways, etc.)

» Residential Construction (Apartments < 4 stories, single family housing)

– Note: DBA Wage Determinations cannot be mixed on a single project except in rare circumstances [i.e., the work must be substantial in relationship to total project cost (20 percent or more of the total contract value); it must be distinct; and it must be clearly segregable from the principal purpose of the contract (See AAM # 131 for more details)]

http://www.wdol.gov/

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• Davis-Bacon Act Procedures NFAR 1822.404-3 (continued)

– After obtaining the required Wage Determination the Contracting Officer shall submit request for review to the Center’s Resident Contractor Industrial Labor Relations Officer at least 10 days before issuing a solicitation or exercising a contract option

– For multiyear construction contracts wage determination’s shall be updated in accordance with U.S. Department of Labor, All Agency Memorandum (AAM) No. 157, dated December 9, 1992, and NFAR 1822.404-3(b)

» Caution on multiple year IDIQ and Credit Cards Contracts – don’t award contracts which could leave the perception NASA is trying to circumvent the “spirit and intent” of the USDOL AAM and the regulations

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FAR 22.107 Requirement to Obtain SCA Wage Determinations

– Contracting Officers shall obtain wage determinations for the following service contracts:

a) Each new solicitation and contract in excess of $2,500

b) Each contract modification that brings the contract above $2,500

a) Extends the existing contract pursuant to an option clause or otherwise; or

b) Changes the scope of the contract whereby labor requirements are affected significantly

c) Each multiple year contract in excess of $2,500 upon --

a) Annual anniversary date if the contract is subject to annual appropriations; or

b) Biennial anniversary date IF the contract is not subject to annual appropriations and its proposed term exceeds 2 years – unless otherwise advised by the Wage and Hour Division.

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• Service Contract Act procedures NFAR 822.1008

– Contracting Officers shall follow the detailed FAR procedures for obtaining SCA Wage Determinations at www.wdol.gov :

» An electronic Form e98 must be submitted to obtain Wage Determinations prior to release of all solicitations as well as the exercise of contract options, contract anniversary dates, or contract extensions in accordance with the FAR procedures

– There are three types of Wage Determinations (select with caution):» AREA WAGE DETERMINATIONS (two types; even & odd #s)» NATIONWIDE WAGE DETERMINATIONS (specialty WDs)» 4(c) WAGE DETERMINATIONS (Based on an incumbent

contractor’s Collective Bargaining Agreement(s))

http://www.wdol.gov/

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• Service Contract Act procedures NFAR 822.1008 (continued)

AREA WAGE DETERMINATIONS (AAM # 188 – May 1997)

– Even Number (i.e., 2005-2008)» Mandates the payment of the Health and Welfare rate based on

an average of all hours worked by SCA employees

– Odd Number (i.e., 2005-2007)

» Mandates the payment of the Health and Welfare rate based on all hours paid each service employee to a maximum of 2080 hours annually

Even number and odd number… When to use which?

– Even Number – only applies to older contracts that already contain an even number wage determination (these contracts are grandfathered)

– Odd Number – applies to all new contract requirements and all future requirements (re-competition solicitations, annual anniversary dates, contract options, and extensions)

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NATIONWIDE WAGE DETERMINATIONS

– Aircraft Operations and Maintenance WDs– Environmental Cleanup WDs– Elevator Services WDs– Auto Concession Services WDs– Aerial Photographer/Seeding/Spraying Services WDs– Etc., Etc.

4(c) WAGE DETERMINATIONS

– Based on collective bargaining agreement(s) between an incumbent contractor’s and the service employees union representative

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– After obtaining the Wage Determination Contracting Officers shall submit request for review to their Center’s Resident Contactor Industrial Labor Relations Officer at least 10 days before issuing solicitations, modifications, options, or extensions

Instructions and assistance for completing the electronic (e98) can

be obtained from the Center’s Resident Contractor Industrial Labor

Relations Officer

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Who is the Center’s Contractor Industrial Labor Relations Officer?

Patrick W. Rasco

Mail Code: AS01

Building 4200 / G37

544-8027

Talmage R. Reynolds

Mail Code: AS01

Building 4200 / 432

544-4600

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The End…

Documents

1 Marshall Space Flight Center Government Acquisitions and the Contractor Industrial Labor Relations Program Talmage R. Reynolds November 19, 2009