The Department of Defense, General Services Administration and National Aeronautics Administration on December 12, 2014 announced that they were issuing an interim rule to amend the Federal Acquisition Regulation (“FAR”) applicable to their agencies to implement the President’s executive order of last February and the Department of Labor Rule calling for a minimum wage of $10.10 for employees of U.S. Government contractors.

The interim rule will take effect upon publication in the Federal Register today, Dec. 15. The interim rule will apply to all contracts solicited on or after Dec. 15 that are subject to the FAR. The interim rule will be in effect pending a final rule. Interested parties may submit written comments for the DOD, GSA and NASA to consider when issuing the final rule. Comments are due in 60 days.

The interim rule provides that beginning January 1, 2016, and each following year, the Secretary of Labor will determine the minimum wage rate based on the consumer price index for urban wage earners and clerical workers. The interim rule also provides that a contractor may seek a price adjustment on a contract to reflect increased labor costs resulting from the labor secretary’s annual wage rate adjustment.

The interim rule holds a prime contractor responsible for compliance by its upper tier subcontractors.

The Department of Labor published its final rule on October 7 instructing that the federal Government contractor minimum wage applies to all contracts for construction subject to the Davis-Bacon Act, contracts for services subject to the Service Contract Act, and concessions contracts.

We have substantial experience in representing federal contractors relating to compliance with the Federal Acquisition Regulation, and are available to provide advice or counsel on these and other federal contract related issues.