A recent decision issued by the Armed Services Board of Contract Appeals highlights how contractors might be forced to take a loss if they underbid their offers to perform service contracts.

Employers furnishing Service Contract Act (“SCA”) compliant plans are advised to fully pay for the benefits, rather than require employees to contribute part of the expense. That applies to medical plans and 401K plans. This is more likely to assure that the workers can be compelled to take the benefit plans and cannot demand cash out of the bona fide benefits. You can’t compel SCA covered workers to contribute their own money to the benefit plan, and if you do try to do so, you provide an opportunity for workers to opt out and demand cash fringe benefits, which will cost the employer possible additional FICA, Medicare, FUTA, SUTA, and worker’s comp. payroll taxes.

President Trump signed an Executive Order entilled “Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement” (“EO”). Issued on March 20, 2025, the EO’s main purpose is to transfer the purchasing of “common goods and services” from across the Government to the General Services Administration (“GSA”). Yeah, well, good luck with this.