H. R. 1107—136 
exempted under section 6702(b) of this title, whether nego-
tiated or advertised, the principal purpose of which is to 
furnish services in the United States; 
(B) includes an individual without regard to any contrac-
tual relationship alleged to exist between the individual 
and a contractor or subcontractor; but 
(C) does not include an individual employed in a bona 
fide executive, administrative, or professional capacity, as 
those terms are defined in part 541 of title 29, Code of 
Federal Regulations. 
(4) UNITED STATES.—The term ‘‘United States’’— 
(A) includes any State of the United States, the District 
of Columbia, Puerto Rico, the Virgin Islands, the outer 
Continental Shelf as defined in the Outer Continental Shelf 
Lands Act (43 U.S.C. § 1331 et seq.), American Samoa, 
Guam, Wake Island, and Johnston Island; but 
(B) does not include any other territory under the juris-
diction of the United States or any United States base 
or possession within a foreign country. 
§ 6702. Contracts to which this chapter applies 
(a) IN GENERAL.—Except as provided in subsection (b), this 
chapter applies to any contract or bid specification for a contract, 
whether negotiated or advertised, that— 
(1) is made by the Federal Government or the District of 
Columbia; 
(2) involves an amount exceeding $2,500; and 
(3) has as its principal purpose the furnishing of services 
in the United States through the use of service employees. 
(b) EXEMPTIONS.—This chapter does not apply to— 
(1) a contract of the Federal Government or the District 
of Columbia for the construction, alteration, or repair, including 
painting and decorating, of public buildings or public works; 
(2) any work required to be done in accordance with chapter 
65 of this title; 
(3) a contract for the carriage of freight or personnel by 
vessel, airplane, bus, truck, express, railway line or oil or 
gas pipeline where published tariff rates are in effect; 
(4) a contract for the furnishing of services by radio, tele-
phone, telegraph, or cable companies, subject to the Commu-
nications Act of 1934 (47 U.S.C. 151 et seq.); 
(5) a contract for public utility services, including electric 
light and power, water, steam, and gas; 
(6) an employment contract providing for direct services to 
a Federal agency by an individual; and 
(7) a contract with the United States Postal Service, the 
principal purpose of which is the operation of postal contract 
stations. 
§ 6703. Required contract terms 
A contract, and bid specification for a contract, to which this 
chapter applies under section 6702 of this title shall contain the 
following terms: 
(1) MINIMUM WAGE.—The contract and bid specification shall 
contain a provision specifying the minimum wage to be paid 
to each class of service employee engaged in the performance
H. R. 1107—137 
of the contract or any subcontract, as determined by the Sec-
retary or the Secretary’s authorized representative, in accord-
ance with prevailing rates in the locality, or, where a collective- 
bargaining agreement covers the service employees, in accord-
ance with the rates provided for in the agreement, including 
prospective wage increases provided for in the agreement as 
a result of arm’s length negotiations. In any case the minimum 
wage may not be less than the minimum wage specified in 
section 6704 of this title. 
(2) FRINGE
BENEFITS.—The contract and bid specification 
shall contain a provision specifying the fringe benefits to be 
provided to each class of service employee engaged in the 
performance of the contract or any subcontract, as determined 
by the Secretary or the Secretary’s authorized representative 
to be prevailing in the locality, or, where a collective-bargaining 
agreement covers the service employees, to be provided for 
under the agreement, including prospective fringe benefit 
increases provided for in the agreement as a result of arm’s- 
length negotiations. The fringe benefits shall include medical 
or hospital care, pensions on retirement or death, compensation 
for injuries or illness resulting from occupational activity, or 
insurance to provide any of the foregoing, unemployment bene-
fits, life insurance, disability and sickness insurance, accident 
insurance, vacation and holiday pay, costs of apprenticeship 
or other similar programs and other bona fide fringe benefits 
not otherwise required by Federal, State, or local law to be 
provided by the contractor or subcontractor. The obligation 
under this paragraph may be discharged by furnishing any 
equivalent combinations of fringe benefits or by making equiva-
lent or differential payments in cash under regulations estab-
lished by the Secretary. 
(3) WORKING CONDITIONS.—The contract and bid specification 
shall contain a provision specifying that no part of the services 
covered by this chapter may be performed in buildings or sur-
roundings or under working conditions, provided by or under 
the control or supervision of 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 provision specifying that on the date a service employee 
begins work on a contract to which this chapter applies, the 
contractor or subcontractor will deliver to the employee a notice 
of the compensation required under paragraphs (1) and (2), 
on a form prepared by the Federal 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 state-
ment 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 making 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
H. R. 1107—138 
services through the use of service employees, and any subcon-
tractor, may not pay less than the minimum wage specified under 
section 6(a)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C. 
206(a)(1)) to an employee engaged in performing work on the con-
tract. 
(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 violation 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 compensation 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 accrued payments due on the contract or 
on any other contract between the same contractor and the 
Federal Government. The amount withheld 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. 
(2) BRINGING ACTIONS AGAINST CONTRACTORS.—If the accrued 
payments withheld under the terms of the contract are insuffi-
cient to reimburse 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 remaining 
amount of underpayment. Any amount recovered shall be held 
in the deposit fund and shall be paid, on order of the Secretary, 
directly 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 contract 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 completion of the original contract, charging 
any additional cost to the original contractor. 
(d) ENFORCEMENT OF SECTION.—In accordance with regulations 
prescribed 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 dis-
tribute to each agency of the Federal Government a list containing 
the names of persons or firms that a Federal agency or the Secretary 
has found to have violated this chapter. 
(b) THREE-YEAR PROHIBITION.—Unless the Secretary recommends 
otherwise because of unusual circumstances, a Federal Government
H. R. 1107—139 
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 Sec-
retary 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 Secretary’s authority to prescribe regulations, issue 
orders, hold hearings, make 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 limita-
tions and may prescribe regulations allowing reasonable variation, 
tolerances, and exemptions with respect to this chapter (other than 
subsection (f)), but only in special circumstances where the Sec-
retary determines that the limitation, variation, tolerance, or 
exemption is necessary and proper in the public interest or to 
avoid the serious impairment of Federal Government business, and 
is in accord with the remedial purpose of this chapter to protect 
prevailing labor standards. 
(c) PRESERVATION OF WAGES AND BENEFITS DUE UNDER PREDE-
CESSOR CONTRACTS.— 
(1) IN GENERAL.—Under a contract which succeeds a contract 
subject to this chapter, and under which substantially the 
same services are furnished, a contractor or subcontractor may 
not pay a service employee less than the wages and fringe 
benefits the service employee would have received under the 
predecessor contract, including accrued wages and fringe bene-
fits 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 Sec-
retary finds after a hearing in accordance with regulations 
adopted by the Secretary that wages and fringe benefits under 
the predecessor contract are substantially at variance with 
wages and fringe benefits prevailing in the same locality for 
services of a similar character. 
(d) DURATION OF CONTRACTS.—Subject to limitations in annual 
appropriation 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 
OVERTIME 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)).