The 1965 federal statute requiring payment of locally prevailing wages and fringe benefits to service workers on federal service contracts above 2,500 dollars.
SCA.
The McNamara-O'Hara Service Contract Act was enacted October 22, 1965 and is codified at 41 U.S.C. Chapter 67, Sections 6701 through 6707. It applies to federal contracts in excess of 2,500 dollars for the principal purpose of furnishing services in the United States through the use of service employees. The implementing regulations are at 29 CFR Part 4. Service employee is defined broadly and excludes only bona fide executive, administrative, and professional employees as defined under the Fair Labor Standards Act, plus apprentices and learners.
The Department of Labor Wage and Hour Division issues two types of wage determinations under the SCA. Area wage determinations apply to non-collective-bargaining-agreement contracts and set prevailing wage and fringe rates by county and occupational classification under the SCA Directory of Occupations. Successor-contract collective bargaining agreement (CBA) wage determinations apply under Section 4(c) of the SCA when a successor contractor takes over a contract previously performed under a CBA, with the predecessor CBA wage and fringe rates carrying forward to the successor contract. Wage determinations are published at SAM.gov Wage Determinations.
Executive Order 14026, signed April 27, 2021, raises the minimum wage for federal contractors performing SCA-covered work to 15 dollars per hour, indexed annually for inflation. The implementing regulation at 29 CFR Part 23 took effect January 30, 2022. The higher of the EO minimum and the applicable SCA wage determination governs. The SCA also requires posting of the wage determination at the worksite, recordkeeping under 29 CFR 4.6(g), and certified compliance with health and safety standards.
For a foreign-headquartered IT services, professional services, facilities management, security services, base operations, or technical services firm bidding US federal service contracts through a US subsidiary, the SCA is a binding labor-cost gate on most fixed-price service awards. The bid must be priced at the published prevailing wage and fringe rates plus the EO 14026 minimum where applicable, not the firm's commercial labor rates. The Health and Welfare fringe rate, set annually by DOL, is currently published at a per-hour level that materially affects the all-in labor cost.
For an offshore-delivery-model firm, the SCA reaches the US-soil portion of the work. Offshore work is generally outside SCA scope; on-site US service-employee labor on a federal contract is in scope. The certified compliance record runs through the US subsidiary and is auditable by DOL Wage and Hour Division.
SCA sits on the federal-services trajectory in the Operators entering the US book, particularly for IT services, professional services, security, and facilities-management firms. It shows up in the Answers hub on US labor cost-base questions and in the FAR related entry. The presentation work covers how the firm names its certified-compliance posture, its Health and Welfare structure, its successor-contract CBA history, and its EO 14026 compliance on US-facing surfaces.
Global Marketing Agency does not provide SCA wage determination analysis, payroll compliance, US labor counsel, or DOL investigation defense. Those activities belong to US labor counsel and a payroll provider experienced in federal-contract compliance. GMA works on how the firm's federal-services labor posture is presented, sequenced, and read on US-facing surfaces.