SCA successor contractors and CBA wages

When the incumbent on a service contract has a union contract with its workers, the next contractor does not get to start from the area WD. Section 4(c) of the Service Contract Act makes the successor pay at least the wages and fringe benefits in the predecessor's collective bargaining agreement (CBA), including raises the CBA has already scheduled. If you bid the area rates on a CBA job, you can lose money from the first payroll.

1. The rule in one paragraph

A contractor on a contract that succeeds an SCA contract, for substantially the same services in the same locality, may not pay any service employee less than the wages and fringe benefits in the predecessor's CBA that those employees would have received under the predecessor contract. That includes accrued wages and fringe benefits and any prospective increases in the CBA (29 CFR 4.1b(a), 4.163(a)). The CBA must have come from arm's-length negotiations.

DOL issues this as a separate type of WD: a collective bargaining agreement (successorship) WD, which sets out the CBA's wages and fringe benefits, including accrued and prospective increases (29 CFR 4.50(b)).

2. Who it binds, and what it does not cover

• Every employee on the contract. The obligation applies whether or not you hire the incumbent's workers (4.163(a)). New hires get the CBA rates too.
• Even if you were the incumbent. Section 4(c) attaches to the contract, not the contractor. Winning your own recompete, or having an option exercised, makes you your own successor (4.163(e)).
• Even with no WD attached. Section 4(c) is self-executing: the duty is in the statute and in the contract clause, not in the WD (4.163(b), FAR 52.222-41(f)).
• Only wages and fringe benefits. The successor is not bound by the CBA's seniority, grievance procedures, work rules or overtime terms (4.163(a)). You are not required to sign the union contract.
• Only if the CBA actually applied. If the predecessor's employees were not paid under the CBA, for example because it took effect only after the predecessor contract ended, 4(c) does not apply (4.163(f)).
• Reconfigured contracts. CBA rates follow the work when an agency splits or combines contracts in the same locality (4.163(g)).

3. The 10-day and 30-day rules for new or changed CBAs

A CBA signed or changed during the predecessor contract does not apply to the successor contract if the agency gets notice of it too late (29 CFR 4.1b(b)):

• Sealed-bid: notice received less than 10 days before bid opening, if the agency finds there is not reasonable time to notify bidders.
• Negotiated, option or extension: notice received after award, if performance starts within 30 days of award. If it does not, notice received at least 10 days before performance starts still counts.

These limits apply only if the contracting officer gave both the incumbent and the union written notice at least 30 days before the procurement dates (4.1b(b)(3)). If that notice was not given, a late CBA can still bind you. Watch for solicitation amendments that swap in a new CBA WD.

4. Substantial variance: not a bidding strategy

CBA rates can be set aside only if DOL finds, after a hearing, that they are substantially at variance with rates that prevail locally (29 CFR 4.10, 4.163(c)). Any new WD from that process applies only from the date of the decision, not back to the start of the contract. Do not price on the hope of a variance ruling.

5. What to price

1. Get the CBA. The CBA WD is normally attached to the solicitation. If the solicitation says the work is unionized and no CBA is attached, ask the contracting officer before bids are due.
2. Map the classifications. CBA job titles may not match the SCA directory. Match by duties, as you would on a standard WD.
3. Put the dated raises on a calendar. Every increase dated inside your base year belongs in your base-year price.
4. Read the CBA's fringe rules. The standard SCA cap of 40 hours a week and 2,080 a year applies unless the WD says otherwise, and a CBA WD can (29 CFR 4.172). Pension, H&W on overtime hours, extra holidays or a different holiday standard (4.174(c)(1)) are common.
5. Vacation service still carries over. The incumbent crew's years of service count (see SCA vacation and holiday pay).
6. Option years. A new WD is incorporated at each option, and FAR 52.222-43 adjusts the price for the increase. Ask in the questions period how the agency wants raises already scheduled in the CBA to appear in option-year prices.

Worked example: CBA job vs the area WD

Illustrative CBA (not a real agreement): Janitor $17.20 an hour, rising to $17.90 on April 1, 2027; H&W $6.40 an hour. The base year runs October 1, 2026 to September 30, 2027, with 20 full-time janitors at 2,080 hours each. The comparison is the area WD 2015-5233 rev 35: $14.74 plus $5.92 H&W.

Over 41,600 paid hours (20 × 2,080), that gap is $136,864 in the base year, before payroll taxes, overhead and profit, which all scale with it. A bidder who missed the CBA, or priced only the October rate and not the April raise, would be under water from month one. Build the loaded rate the usual way from the CBA figures: see how to build a burdened labor rate for an SCA bid.

Related guides

• How to read an SCA wage determination
• FAR 52.222-43 price adjustment, step by step
• SCA vacation and holiday pay: how to price it

Sources

• eCFR: 29 CFR part 4, sections 4.1b, 4.10, 4.50, 4.163, 4.172 and 4.174
• Acquisition.gov: FAR 52.222-41, Service Contract Labor Standards (paragraph (f), successor contracts)
• Acquisition.gov: FAR 52.222-43, Price Adjustment (Multiple Year and Option Contracts)
• SAM.gov: Wage Determination 2015-5233, revision 35 (Texas)
• U.S. Department of Labor: SCA Wage Determinations (Prevailing Wage Resource Book)

Last reviewed: November 2026. This guide is a pricing aid and general information, not legal advice.