Memorandum

U.S. Department of Transportation
Office of the Secretary of
Transportation

Subject:   ACTION:  Class Deviation from FAR 12.504, 22.1003-4                                 Date:  December 6, 2004
           and 52.212-5 pertaining to the Service Contract Act

To:      Procurement Management Council Members

On August 28, 2003, I granted to the U.S. Department of Transportation contracting officers the authority to deviate from the Federal Acquisition Regulation (FAR) 12.504, 22.1003-4 and 52.212-5 until July 26, 2004, or upon issuance of a FAR change, whichever occurred first.  The FAR change is still in progress, but continues to be delayed; accordingly, I hereby extend the FAR change to July 26, 2005, or upon issuance of a FAR change, whichever occurs first.  The following summarizes this deviation

FAR sections 12.504 and 52.212-5 were revised to remove the Service Contract Act (SCA) from the list of laws inapplicable to subcontracts for commercial services.  The FAR rule was published July 26, 2000, with an effective date of August 25, 2000.  On the same day, the Department of Labor (DOL) pursuant to Section 4(b) of the SCA, (1) issued a final rule which recognizes a temporary exemption from SCA coverage for certain subcontracts for commercial services; and (2) issued a proposed rule which proposed a similar exemption for both prime contracts and subcontracts.

The temporary exemption does not apply to all commercial subcontracts that may have been exempt under the now withdrawn FAR rule nor does it apply to any prime contracts.  The exemption is limited solely to those subcontracts that (1)  were or would have been exempt under the now withdrawn FAR rule and (2)  would be exempt under the DOL proposed rule if that rule becomes final in its current form.

This deviation implements the DOL’s final rule of July 26, 2000, concerning issuance of the temporary exemption referenced above.  The exemption is necessary to prevent the disruption that could be caused by such changes, including the possible disruption of services if the current subcontractor does not agree to continue the subcontract services under the requirements of SCA.

Further background information and previous deviations on this topic can be found at http://www.dot.gov/ost/m60/classdeviation.  This extension has been coordinated with the Chairperson of the Civilian Agency Acquisition Council.