Subcontractors often hear 'prevailing wage' used as a catch-all phrase, but federal construction and federal service contracts do not use the same labor framework. Construction work may be subject to the Construction Wage Rate Requirements commonly associated with Davis-Bacon, while covered service work may be subject to Service Contract Labor Standards.
The distinction matters because the applicable clauses, wage determinations, worker classifications, payroll requirements, and conformance processes are different.
Construction work uses the Davis-Bacon framework
FAR 52.222-6 requires covered laborers and mechanics on the site of the work to receive at least the wage rates and bona fide fringe benefits in the attached Department of Labor wage determination. The rate applies to the classification of work actually performed.
Covered construction contractors and subcontractors also face weekly payroll and related recordkeeping requirements under the construction labor clauses.
Official source: FAR 52.222-6 — Construction Wage Rate Requirements.
Covered service work uses a different clause
FAR 52.222-41 applies the Service Contract Labor Standards framework to covered service contracts and subcontracts. It focuses on service employees, monetary wages, fringe benefits, classifications, places of performance, recordkeeping, and employee notice.
The service wage determination is selected using the expected employee classes and locality where services will be performed.
Official source: FAR Subpart 22.10 — Service Contract Labor Standards.
Do not decide coverage from the company trade alone
- A company that usually performs construction can still receive a service-oriented scope.
- A service contractor can receive a subcontract containing substantial construction or repair work.
- Mixed scopes may require careful review of which labor framework applies to which work.
- The incorporated prime-contract clauses and statement of work matter more than the label on the subcontractor's business card.
A practical pre-award comparison
- Identify the labor clause number in the subcontract package.
- Confirm the wage determination is attached or clearly incorporated.
- Match actual duties to the classifications in that determination.
- Check fringe-benefit obligations separately from base wages.
- Confirm payroll, posting, recordkeeping, and lower-tier flowdown duties.
- Resolve mixed construction/service scope before final pricing.