Watch out for GSA's New Mass Modifications!

As you may know, GSA Mass Modifications are government-initiated modifications that occur when a uniform change occurs schedule-wide. They come out about two to three times per year, usually coincide with a Solicitation refresh, and every GSA Schedule contractor must review, accept and incorporate these new legal changes into their contract/business. Most of the time GSA Schedule contractors go through this routine and accept changes without reading and understanding the binding language (SF30). But the NEW mass modification, in particular, is a significant one, updating and adding about 30 new clauses. The most relevant clauses focus on HR/labor issues, incorporating recent Executive Orders issued by President Obama. I strongly recommend that you review each one but I have summarized some of the most important changes below:

Veterans and Individuals with Disabilities

FAR 52.222-35 and 52.222-37 are part of VEVRAA (Vietnam Era Veterans’ Readjustment Assistance Act) and FAR 52.222-36 is part of Section 503, protecting the equal employment of Veterans and individuals with Disabilities. Both add to Affirmative Action Plan requirements for all federal contractors. According to these modifications, contractors must do the following.

(1)    Establish annual hiring benchmarks for protected veterans and apply a nationwide 7% utilization goal for qualified individual with disabilities

(2)    Document and annually update quantifiable applicant and hiring data

(3)    Invite applicants to self-identify at both the pre-offer and post-offer phases of the application process

(4)    Use specific language when incorporating the equal opportunity clause into a subcontract by reference – if the contractor has a subcontract above $15,000, they will need to see clause 52.222-36; subcontract above $100,000, they will need to reference clause 52.222-37

Nondisplacement of Qualified Workers under Service Contracts

FAR 52.222-17 is EO 13495, “Nondisplacement of Qualified Workers under Service Contracts”, which requires that workers on a federal service contract, who would otherwise lose their jobs as a result of the completion or expiration of a contract, be given the right of first refusal for employment with the successor contractor. The regulations apply to all service contracts (prime and subcontractor) above the simplified acquisition threshold (currently $150,000). If the contractor offers a subcontract above the SAT, they will need to flow down this clause to those subcontractors.

Establishing a Minimum Wage for Contractors

Lastly, FAR 52.222-55 is EO 13658, “Establishing a Minimum Wage for Contractors,” which requires the payment of $10.10 per hour minimum wage beginning January 1, 2015, to covered employees working on many federal contracts. Many GSA Schedule contractors work within the professional environment and offer an annual salary, however if you already understand the Wage Determinations and compensation provisions for the Service Contract Act (SCA) or David Bacon Act, and this change may not greatly affect you. Even so, if you use subcontractors under a federal contract, you are responsible for their compliance with this and could be held liable for unpaid wages due to a subcontractor's workers. So make sure you update your subcontractor agreements to also include this flow down clause.

Overall

If you have any questions on this mass mod, or any labor requirement, please reach out to our team for more information!