Service Contract Modernization Act
Key claim: The Service Contract Modernization Act would raise the $2,500 federal service-contract prevailing-wage coverage threshold by inflation since 1965 and index it to future inflation.
Abstract
(S2963 · 117th Congress) Service Contract Modernization Act This bill increases a threshold used to determine whether an employee of a federal services contractor or subcontractor is entitled to wages and fringe benefits prevailing in the locality where services are performed (or in a predecessor contractor’s collective bargaining agreement). Under current law, a federal contractor or subcontractor that enters into a service contract in excess of $2,500 must comply with prevailing wage and related requirements. This bill increases that amount by adjusting it for inflation since 1965 and provides for future increases based on inflation. Latest action (2021-10-07): Read twice and referred to the Committee on Homeland Security and Governmental Affairs.
Why this matters
The $2,500 dollar threshold that triggers Service Contract Act prevailing-wage and fringe-benefit protections has not been updated since 1965, so inflation has steadily expanded the share of small federal service contracts covered. Indexing the threshold would narrow SCA coverage for low-dollar contracts, reducing compliance obligations for employers on small awards while shrinking wage-floor protections for workers on those contracts.