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Understanding The Service Contract Act of 1965

November 11, 2019


The Service Contract Act of 1965 (SCA) requires that government contractors pay most non-professional service employees designated minimum wage rates and fringe benefits. These regulations are complex and often poorly understood by federal contractors, government contracting officers and auditors, particularly with respect to the SCA’s fringe benefits requirements. This is especially challenging for smaller contractors who may not have the resources to address such complexities. As a result, federal service contractors often face government allegations of SCA non-compliance.

Potential penalties for SCA errors are severe, including default termination and debarment. Extensive fines are on record and the potential loss of contracting access are common. In addition, a contractor’s failure to correctly understand the Service Contract Act when preparing bid pricing may result in a reduction to anticipated profits on the resulting government contract.

The Contractors Plan has created administrative processes and compliance solutions to address these risks for over 30 years. In addition to our expertise, The Contractors Plan has been committed to helping employers identify and implement solutions that are Affordable Care Act compliant, eliminating additional compliance risks as result of federal health regulations.

We encourage you to review our solutions and utilize our Savings Calculator so you can thoroughly understand the options available to you. We are here to be an expert resource and partner with you in minimizing your administration efforts and compliance risks.