Check the Water Before You Dive In: GAO Rejects Protest that Government Should Have Clarified Application of Service Contract Act

Last month, the Government Accountability Office (“GAO”) denied a bid protest brought by a Contractor that contended that a solicitation for diving services should have provided more guidance regarding the application of the Service Contract Act (“SCA”). The GAO held that it was up to the Contractor to just figure things out for itself. Ordinarily, this wouldn’t be a particularly remarkable outcome, but I understand why the Contractor, forgive this terrible pun, felt like it was jumping into murky waters. See Anders Construction, Inc., B-420717.2 (Jan. 17, 2023).

The solicitation in question sought proposals to provide scuba diving services to the Army Corps of Engineers in a variety of locations in and near New Orleans. The solicitation noted that the Contract would be subject to the requirements of the Service Contract Act (“SCA”). When a contract is covered by the SCA, nonexempt employees are to be paid wages and furnished fringe benefits set forth in a Wage Determination (“WD”) that is incorporated into the contract.

Once a Contracting Officer determines that a contract will be covered by the SCA and has attached a WD, it is generally up to the contractor to determine how it will staff the contract and to ascertain what wage rates apply to the various classes of employees who will perform the work. When pricing its proposal, the contractor should figure out how many employees will perform the SCA-covered work, the numbers of hours they will perform that work over the period of performance, and then, using that information, calculate its wage and fringe benefits cost. Those costs having been determined, the contractor can then make whatever strategic choices it considers appropriates to offer a competitive price.

Naturally, a contractor would love to be spoon-fed the classifications and numbers of hours, but usually it’s up to the contractor to figure out how to staff the contract to achieve its requirements. Often a solicitation will specify the work to be done and what qualifications the staff must have to perform the work, but not much more.

This case was a little different. Again, the RFP sought the provision of scuba diving services. In addition to the diving work, the contractor was to mobilize before and demobilize after the diving work was performed. Travel between the contractor’s mobilization site and the diving site was part of the mobilization process. During the course of the procurement, the agency inserted, took away, reinserted and reworded a cryptic statement about when the SCA rates were to be paid.

At first the RFP included two senteces, the gist of which stated “that Service Contract Act (SCA) prevailing wage rates applied only after divers arrived at the job site and did not apply to mobilization and demobilization while divers traveled to and from the dive site.” Protest Decision at 2. Later, the agency issued an amendment that deleted those sentences. This was followed by another amendment that reinserted the sentences, which was followed by yet another amendment that took them out again but added the following sentence: “The [c]ontractor is allowed to pay dive team members prevailing wages under mobilization and demobilization.” Protest Decision at 2.

It was these statements that were at issue in this protest decision. The protestor asserted that the soliciation failed to inform offerors whether prevailing wages should be paid during mobilization and demobilization and sought a ruling that would direct the agency to state when prevailing wage rates must be paid. The agency argued and the GAO agreed that the issue of the application of the SCA is left to the Department of Labor and not the agency or GAO.

Frankly, the agency and the prospective contractors all would have been better off if the agency simply had said nothing about when prevailing wages should or could be paid. There would have been no mixed messages. Thus, the result held that neither the agency nor GAO could provide the sought-for guidance. In other words, it was the contractor’s job to figure out what rates should be paid and when for the purpose of formulating what it would charge the government for the services to be provided. Of course, as I said above - that’s the normal situation.