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the contractor or any subcontractor, which are unsanitary or hazardous 
or dangerous to the health or safety of service employees engaged to 
provide the services. 
(4) NOTICE.—The contract and bid specification shall contain a pro-
vision specifying that on the date a service employee begins work on 
a contract to which this chapter applies, the contractor or subcon-
tractor will deliver to the employee a notice of the compensation re-
quired under paragraphs (1) and (2), on a form prepared by the Fed-
eral agency, or will post a notice of the required compensation in a 
prominent place at the worksite. 
(5) GENERAL SCHEDULE PAY RATES AND PREVAILING RATE SYS-
TEMS.—The contract and bid specification shall contain a statement of 
the rates that would be paid by the Federal agency to each class of 
service employee if section 5332 or 5341 of title 5 were applicable to 
them. The Secretary shall give due consideration to these rates in mak-
ing the wage and fringe benefit determinations specified in this section. 
§ 6704. Limitation on minimum wage 
(a) IN GENERAL.—A contractor that makes a contract with the Federal 
Government, the principal purpose of which is to furnish services through 
the use of service employees, and any subcontractor, may not pay less than 
the minimum wage specified under section 6(a)(1) of the Fair Labor Stand-
ards Act of 1938 (29 U.S.C. 206(a)(1)) to an employee engaged in per-
forming work on the contract. 
(b) VIOLATIONS.—Sections 6705 to 6707(d) of this title are applicable to 
a violation of this section. 
§ 6705. Violations 
(a) LIABILITY OF RESPONSIBLE PARTY.—A party responsible for a viola-
tion of a contract provision required under section 6703(1) or (2) of this 
title or a violation of section 6704 of this title is liable for an amount equal 
to the sum of any deduction, rebate, refund, or underpayment of compensa-
tion due any employee engaged in the performance of the contract. 
(b) RECOVERY OF AMOUNTS UNDERPAID TO EMPLOYEES.— 
(1) WITHHOLDING ACCRUED PAYMENTS DUE ON CONTRACTS.—The 
total amount determined under subsection (a) to be due any employee 
engaged in the performance of a contract may be withheld from ac-
crued payments due on the contract or on any other contract between 
the same contractor and the Federal Government. The amount with-
held shall be held in a deposit fund. On order of the Secretary, the 
compensation found by the Secretary or the head of a Federal agency 
to be due an underpaid employee pursuant to this chapter shall be paid 
from the deposit fund directly to the underpaid employee.
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(2) BRINGING ACTIONS AGAINST CONTRACTORS.—If the accrued pay-
ments withheld under the terms of the contract are insufficient to reim-
burse a service employee with respect to whom there has been a failure 
to pay the compensation required pursuant to this chapter, the Federal 
Government may bring action against the contractor, subcontractor, or 
any sureties in any court of competent jurisdiction to recover the re-
maining amount of underpayment. Any amount recovered shall be held 
in the deposit fund and shall be paid, on order of the Secretary, di-
rectly to the underpaid employee. Any amount not paid to an employee 
because of inability to do so within 3 years shall be covered into the 
Treasury as miscellaneous receipts. 
(c) CANCELLATION
AND ALTERNATIVE COMPLETION.—In addition to 
other actions in accordance with this section, when a violation of any con-
tract stipulation is found, the Federal agency that made the contract may 
cancel the contract on written notice to the original contractor. The Federal 
Government may then make other contracts or arrangements for the com-
pletion of the original contract, charging any additional cost to the original 
contractor. 
(d) ENFORCEMENT OF SECTION.—In accordance with regulations pre-
scribed pursuant to section 6707(a)–(d) of this title, the Secretary or the 
head of a Federal agency may carry out this section. 
§ 6706. Three-year prohibition on new contracts in case of 
violation 
(a) DISTRIBUTION OF LIST.—The Comptroller General shall distribute to 
each agency of the Federal Government a list containing the names of per-
sons or firms that a Federal agency or the Secretary has found to have vio-
lated this chapter. 
(b) THREE-YEAR PROHIBITION.—Unless the Secretary recommends oth-
erwise because of unusual circumstances, a Federal Government contract 
may not be awarded to a person or firm named on the list under subsection 
(a), or to an entity in which the person or firm has a substantial interest, 
until 3 years have elapsed from the date of publication of the list. If the 
Secretary does not recommend otherwise because of unusual circumstances, 
the Secretary shall, not later than 90 days after a hearing examiner has 
made a finding of a violation of this chapter, forward to the Comptroller 
General the name of the person or firm found to have violated this chapter. 
§ 6707. Enforcement and administration of chapter 
(a) ENFORCEMENT OF CHAPTER.—Sections 6506 and 6507 of this title 
govern the Secretary’s authority to enforce this chapter, including the Sec-
retary’s authority to prescribe regulations, issue orders, hold hearings, make
175 
decisions based on findings of fact, and take other appropriate action under 
this chapter. 
(b) LIMITATIONS
AND REGULATIONS
FOR VARIATIONS, TOLERANCES, 
AND EXEMPTIONS.—The Secretary may provide reasonable limitations and 
may prescribe regulations allowing reasonable variation, tolerances, and ex-
emptions with respect to this chapter (other than subsection (f)), but only 
in special circumstances where the Secretary determines that the limitation, 
variation, tolerance, or exemption is necessary and proper in the public in-
terest or to avoid the serious impairment of Federal Government business, 
and is in accord with the remedial purpose of this chapter to protect pre-
vailing labor standards. 
(c) PRESERVATION
OF WAGES
AND BENEFITS DUE UNDER PREDE-
CESSOR CONTRACTS.— 
(1) IN GENERAL.—Under a contract which succeeds a contract sub-
ject to this chapter, and under which substantially the same services 
are furnished, a contractor or subcontractor may not pay a service em-
ployee less than the wages and fringe benefits the service employee 
would have received under the predecessor contract, including accrued 
wages and fringe benefits and any prospective increases in wages and 
fringe benefits provided for in a collective-bargaining agreement as a 
result of arm’s-length negotiations. 
(2) EXCEPTION.—This subsection does not apply if the Secretary 
finds after a hearing in accordance with regulations adopted by the 
Secretary that wages and fringe benefits under the predecessor con-
tract are substantially at variance with wages and fringe benefits pre-
vailing in the same locality for services of a similar character. 
(d) DURATION OF CONTRACTS.—Subject to limitations in annual appro-
priation acts but notwithstanding any other law, a contract to which this 
chapter applies may, if authorized by the Secretary, be for any term of 
years not exceeding 5, if the contract provides for periodic adjustment of 
wages and fringe benefits pursuant to future determinations, issued in the 
manner prescribed in section 6703 of this title at least once every 2 years 
during the term of the contract, covering each class of service employee. 
(e) EXCLUSION OF FRINGE BENEFIT PAYMENTS IN DETERMINING OVER-
TIME PAY.—In determining any overtime pay to which a service employee 
is entitled under Federal law, the regular or basic hourly rate of pay of the 
service employee does not include any fringe benefit payments computed 
under this chapter which are excluded from the definition of ‘‘regular rate’’ 
under section 7(e) of the Fair Labor Standards Act of 1938 (29 U.S.C. 
207(e)).