On construction contracts over $2,000, the Davis-Bacon Act requires paying locally prevailing wages. On service contracts over $2,500, the Service Contract Act (SCA) applies. The Department of Labor publishes Wage Determinations for each geographic area. Contractors must pay at least these rates, including fringe benefits. Failure to comply can result in contract termination, debarment, and liability for back wages. Factor these rates into your pricing.
A janitorial company bidding on a VA hospital cleaning contract checks the SCA wage determination for that county. The prevailing wage for janitors is $18.50/hour plus $5.36/hour in fringe benefits. They must price their proposal using at least these rates.
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