Fact Sheet #66B: Interplay Between the Davis-Bacon and Related Acts, the McNamara-O'Hara Service Act, and the Walsh-Healey Public Contracts Act

October 2023

This fact sheet provides general information regarding the basic requirements of and the interaction between the government contracts statutes – the Davis-Bacon and Related Acts, the McNamara-O’Hara Service Contract Act and the Walsh-Healey Public Contracts Act.

The Davis-Bacon and Related Acts (DBRA)

The Davis-Bacon Act (DBA) requires payment of prevailing wages and applies to each federal government or District of Columbia contract in excess of $2,000 for the construction, alteration, or repair (including painting and decorating) of public buildings and public works. Many federal laws that authorize federal assistance for construction through grants, loans, loan guarantees, insurance, and other methods are known as Davis-Bacon “Related Acts.” The “Related Acts” include provisions that apply Davis-Bacon labor standards to most federally assisted construction. For example, the DBA would apply to a construction contract awarded by the Department of Veterans Affairs to build a new hospital in California, while a local housing project that received funding from the Department of Housing and Urban Development under the Housing and Community Development Act of 1974 would be subject to the Davis-Bacon labor standards in accordance with the prevailing wage provisions of that Related Act.

The McNamara-O'Hara Service Contract Act (SCA)

The SCA covers contracts, in excess of $2,500, entered into by the federal government or the District of Columbia that have as their principal purpose the furnishing of services in the U.S. through the use of “service employees.” The SCA applies to a wide variety of contracts and is not dependent on the particular type or form of contract. The definition of “service employee” includes any individual engaged in performing services on a covered contract other than an employee employed in a bona fide executive, administrative, or professional capacity as defined in 29 CFR part 541. For example, the SCA prevailing wages would apply to a contract awarded by the General Services Administration for janitorial services to be performed at a federal facility.

The SCA does not apply to certain types of contract services. See Fact Sheet #67: The McNamara-O’Hara Service Contract Act.

The Walsh-Healey Public Contracts Act (PCA)

The PCA, as amended, establishes minimum wage, maximum hours, and safety and health standards for work on certain contracts over $15,000 for the manufacturing or furnishing of materials, supplies, articles, or equipment to the U.S. government or the District of Columbia. Covered workers must be paid not less than the federal minimum wage of $7.25 per hour and overtime pay of at least one and one-half times the worker’s regular rate of pay for all hours worked over 40 hours in a workweek. For example, the PCA would apply to a contract awarded by the General Services Administration for the furnishing of supplies (such as paper, pens, and pencils) to the Department of Education.

Covered workers under the PCA include only those employees engaged in or connected with the manufacture, fabrication, assembling, handling, supervision, or shipment of materials, supplies, articles, or equipment required under the contract. Employees performing only office or custodial work and employees employed in a bona fide executive, administrative, professional, or outside salesman capacity, as those terms are defined and delimited in 29 CFR part 541, are not covered by the PCA.

General Provisions Requirements

Labor Standards Clauses, Stipulations and Wage Determinations: The DBRA (29 CFR § 5.5), SCA (29 CFR § 4.6) and PCA (41 CFR § 50-201.3) each require the contracting officer to insert, or incorporate by reference, the applicable labor standards clauses or stipulations into any contract covered by the statute(s). In addition, the DBRA and the SCA (but not the PCA) require the contracting officer to insert the applicable wage determination(s) into covered contracts.

Minimum Wages: Covered workers must be paid not less than the appropriate prevailing wage rate, including fringe benefits, as specified in the applicable wage determination, for the classification of work performed under the DBRA (29 CFR § 5.5(a)(1)) and SCA (29 CFR § 4.3). Under the PCA, covered workers must be paid not less than the federal minimum wage. Unlike the DBRA and SCA, there are no fringe benefit requirements under the PCA.

Overtime: When an employee works more than 40 hours in a workweek on a covered contract, overtime may be applicable to covered workers (laborers and mechanics, including guards and watchmen) under the Contract Work Hours and Safety Standards Act (CWHSSA), which generally applies to federal service contracts and federal construction contracts over $150,000 and certain federally assisted construction contracts subject to the DBRA over $100,000. If CWHSSA does not apply, overtime compensation may be due under the Fair Labor Standards Act (FLSA) for eligible employees, regardless of whether they are performing work on a contract covered by the DBRA, SCA, or PCA. Compliance with FLSA overtime requirements satisfies employer overtime obligations under the PCA. Compliance with other applicable state or local laws may also be required.

Interplay Between the Government Contracts Statues

In some cases, more than one statute may be applicable to a covered government contract. For instance, an SCA-covered service contract may also contain a construction component that is subject to the requirements of the DBA. The DBA applies when the construction is substantial (type and quantity of construction work - not merely dollar values or percentages) and the construction is physically or functionally segregable. An example of a contract to which both DBA and SCA apply is one awarded by the Department of the Army for the maintenance and operation of a military base. A contract such as this is principally for services but often requires “substantial” and “segregable” construction work such as painting or repainting base housing, refinishing of floors, or reroofing of facilities.

Likewise, the DBA may also apply to a PCA-covered contract if it requires substantial amount of construction work that is physically or functionally segregable. In such a case, DBA prevailing wages apply only to the work on the contract that is subject to DBA. An example of a contract to which both DBA and PCA apply is one awarded by the General Services Administration for the supply and installation of a security system. A contract such as this may require the replacement of existing conduit, the laying of cable, or the tearing out and replacement of walls (which constitutes more than an incidental amount of construction).

Additional Resources

Where to Obtain Additional Information

For additional information, visit our Wage and Hour Division Website: http://www.dol.gov/agencies/whd and/or call our toll-free information and helpline, available 8 a.m. to 5 p.m. in your time zone, 1-866-4USWAGE (1-866-487-9243).

This publication is for general information and is not to be considered in the same light as official statements of position contained in the regulations.