In what seems like a recent push to expand the coverage of the Service Contract Act (“SCA”), the Department of Labor (“DOL”) recently removed the exemption from coverage of the SCA for certain “Job Corps” contracts. These Job Corp contracts are contracts entered into by federal contractors for the purpose of running Job Corps centers. These centers are no-cost education and vocational training programs that help young people from the ages of 16-24 increase their experience, vocational training, and education in order to be eligible for better jobs.
Previously these contracts were exempted by DOL from coverage as part of the “GOCO” exemption for Government Owned, Contractor Operated facilities. This exemption is provided for in 29 C.F.R. 4.107(b) which allows the Government to enter into contracts and essentially delegate its responsibilities on a cost-reimbursement basis. Here is what the regulations say.
Thus, sometimes authority to enter into service contracts of the character described in the Act for and on behalf of the Government and on a cost-reimbursable basis may be delegated, for the convenience of the contracting agency, to a prime contractor which has the responsibility for all work to be done in connection with the operation and management of a Federal plant, installation, facility, or program, together with the legal authority to act as agency for and on behalf of the Government and to obligate Government funds in the procurement of all services and supplies necessary to carry out the entire program of operation. The contracts entered into by such a prime contractor with secondary contractors for and on behalf of the Federal agency pursuant to such delegated authority, which have such services as their principal purpose, are deemed to be contracts entered into by the United States and contracts with the Federal Government within the meaning of the Act.
29 C.F.R. 4.107(b) (emphasis added).
This occurs at Job Corps sites, ammunition facilities, and other locations where the government has determined that it would be easier and less expensive for a federal contractor with more experience in the field to run the show. The prime contractor actually stands in the shoes of the government and enters into subcontracts much like the government enters into contracts for supplies or services. In this case, the subcontracts would be covered by the SCA even when the prime contract is not.