Congress Should Consider Repeal of the Service Contract Act

GAO reported on the problems and impacts of the Service Contract Act of 1965, as amended, and the Department of Labor's administration and enforcement of its implementing regulations and procedures.

GAO found that Labor has been unable to administer the Service Contract Act efficiently and effectively because: (1) inherent problems exist in its administration; (2) wage rates and fringe benefits set under the act are generally inflationary; (3) accurate determinations of prevailing wage rates and fringe benefits cannot be made using existing data sources and the data needed to accurately determine prevailing wage rates and fringe benefits would be very costly to develop; and (4) the Fair Labor Standards Act and administrative procedures implemented through the federal procurement process could provide a measure of wage and benefit protection the act now covers. Pending proposed regulations would limit Labor's application of the act while leaving unresolved the major underlying problems in accurately developing prevailing wage rates and fringe benefits. In addition, ambiguities in the act's language have hampered Labor's ability to develop accurate wage rates and fringe benefits for employees. Amendments to the act further complicated Labor's task by requiring Labor to issue collectively bargained wages and benefits in specific successor contractor situations and give due consideration to federal employee wages and benefits in making determinations of the prevailing wages and benefits in a locality.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Janet L. Shikles Team: General Accounting Office: Human Resources Division Phone: (202) 512-7119