52.222-43 Fair Labor Standards Act and

Service Contract Labor Standards-Price

Adjustment (Multiple Year and Option

Contracts).

As prescribed in 22.1006(c)(1), insert the following clause:

Fair Labor Standards Act and Service Contract Labor Standards-Price Adjustment (Multiple Year

and Option Contracts) (Aug 2018)

(a) This clause applies to both contracts subject to area prevailing wage determinations and

contracts subject to collective bargaining agreements.

(b) The Contractor warrants that the prices in this contract do not include any allowance for any

contingency to cover increased costs for which adjustment is provided under this clause.

(c) The wage determination, issued under the Service Contract Labor Standards statute, (41 U.S.C.

chapter 67), by the Administrator, Wage and Hour Division, U.S. Department of Labor, current on

the anniversary date of a multiple year contract or the beginning of each renewal option period,

shall apply to this contract. If no such determination has been made applicable to this contract, then

the Federal minimum wage as established by section 6(a)(1) of the Fair Labor Standards Act of1938,

as amended, (29 U.S.C. 206) current on the anniversary date of a multiple year contract or the

beginning of each renewal option period, shall apply to this contract.

(d) The contract price, contract unit price labor rates, or fixed hourly labor rates will be adjusted to

reflect the Contractor’s actual increase or decrease in applicable wages and fringe benefits to the

extent that the increase is made to comply with or the decrease is voluntarily made by the

Contractor as a result of:

(1) The Department of Labor wage determination applicable on the anniversary date of the multiple

year contract, or at the beginning of the renewal option period. For example, the prior year wage

determination required a minimum wage rate of $4.00 per hour. The Contractor chose to pay $4.10.

The new wage determination increases the minimum rate to $4.50 per hour. Even if the Contractor

voluntarily increases the rate to $4.75 per hour, the allowable price adjustment is $.40 per hour;

(2) An increased or decreased wage determination otherwise applied to the contract by operation of

law; or

(3) An amendment to the Fair Labor Standards Act of1938 that is enacted after award of this

contract, affects the minimum wage, and becomes applicable to this contract under law.

(e) Any adjustment will be limited to increases or decreases in wages and fringe benefits as

described in paragraph (d) of this clause, and the accompanying increases or decreases in social

security and unemployment taxes and workers’ compensation insurance, but shall not otherwise

include any amount for general and administrative costs, overhead, or profit.

(f) The Contractor shall notify the Contracting Officer of any increase claimed under this clause

within 30 days after receiving a new wage determination unless this notification period is extended
in writing by the Contracting Officer. The Contractor shall promptly notify the Contracting Officer of

any decrease under this clause, but nothing in the clause shall preclude the Government from

asserting a claim within the period permitted by law. The notice shall contain a statement of the

amount claimed and the change in fixed hourly rates (if this is a time-and-materials or labor-hour

contract), and any relevant supporting data, including payroll records, that the Contracting Officer

may reasonably require. Upon agreement of the parties, the contract price, contract unit price labor

rates, or fixed hourly rates shall be modified in writing. The Contractor shall continue performance

pending agreement on or determination of any such adjustment and its effective date.

(g) The Contracting Officer or an authorized representative shall have access to and the right to

examine any directly pertinent books, documents, papers and records of the Contractor until the

expiration of 3 years after final payment under the contract.

(End of clause)

Parent topic: 52.222 [Reserved]