What Is the Service Contract Act (SCA)?
The Service Contract Act (SCA) requires contractors on federal service contracts over $2,500 to pay service workers at least the wages and fringe benefits in the contract's wage determination.
Service Contract Act (SCA) in plain English
The SCA covers contracts whose main purpose is services done by service employees, such as janitorial, security, food service, grounds and maintenance work. The contract includes a Department of Labor wage determination with a minimum hourly wage for each job and a health and welfare (H&W) amount per hour.
Price your bid from those rates, not your usual pay scale. The minimums are the floor for your labor cost, and fringe benefits, payroll taxes, overhead and profit go on top.
Construction work is covered by the Davis-Bacon Act instead, which has its own wage determinations.
Related terms
- Wage determination: A wage determination is a Department of Labor schedule of minimum wages and fringe benefits for workers on a federal construction or service contract.
- Davis-Bacon Act: The Davis-Bacon Act requires contractors on federal construction contracts over $2,000 to pay laborers and mechanics at least the local prevailing wages and fringe benefits.
- FTE (full-time equivalent): A full-time equivalent (FTE) is one full-time worker's hours, usually 2,080 paid hours a year (40 hours a week for 52 weeks). Service contracts are often staffed and priced in FTEs.
- Period of performance: The period of performance is the time during which a contractor must do the work under a contract, often a base period plus option periods.
Put it to work
- Service Contract Act (SCA) bid price calculator, by county
- How to price a government contract
- Department of Labor: service contracts
Looking for another term? Browse the full glossary or the government contracting glossary guide.
Cyrus Hakimi writes and edits these definitions, using AI tools to help research and draft them, from the FAR, SBA rules and SAM.gov documentation. They're general information, not legal advice. Rules and thresholds change, so confirm the numbers on the official source before you act.