A brief history of the AbilityOne program:

• The Wagner-O’Day Act: The origins of the AbilityOne program can be traced back to the Wagner-O’Day Act, which was enacted in 1938. This legislation was named after its sponsors, Senator Robert F. Wagner of New York and Congressman Olin Teague of Texas. The act’s primary purpose was to address the high unemployment rate among individuals who were blind by creating employment opportunities for them through government contracts.
• National Industries for the Blind (NIB) was incorporated as a 501(c)(3), private, nonprofit corporation on August 10, 1938.
• In 1952 NIB launches SKILCRAFT® – the brand name for quality products made by people who are blind.
• The Javits-Wagner-O’Day Act: In 1971, Senator Jacob K. Javits of New York co-sponsored an amendment to the Wagner-O’Day Act to expand the program to include people with severe disabilities beyond blindness. As a result, it was renamed the Javits-Wagner-O’Day Act (JWOD).
• In 1974 the National Industries for the Severely Handicapped (later to become NISH, and then SourceAmerica®) begins operations. It joins NIB as a Central Nonprofit Agency (CNA) in the JWOD Program.
• In 1980 the JWOD Program provides jobs to 7,500 people, provides 3.8 million direct labor hours, pays an average hourly wage of nearly $3.00, and pays $11.6 million in direct labor wages.
• The AbilityOne Program: In 2006, the JWOD Act underwent another amendment and was renamed the AbilityOne program. The amendment aimed to strengthen the program and increase its efficiency. Under this name, the program continues to operate to this day.
• The AbilityOne Commission: The AbilityOne program is managed by the U.S. AbilityOne Commission, a federal agency responsible for overseeing the implementation and administration of the program. The Commission works in partnership with National Industries for the Blind (NIB) and SourceAmerica.

The AbilityOne identifies products and services that can be provided by individuals with disabilities and encourages federal agencies to purchase those products and services from qualified nonprofit agencies that employ people with disabilities. This creates a market for these products and services while allowing people with disabilities to gain meaningful employment.

The program continues to evolve, adapting to the changing needs of the disabled community and aligning with federal procurement policies and regulations. It remains an essential initiative in the United States to promote inclusivity, diversity, and economic empowerment for people with disabilities.

What makes an AbilityOne contract attractive to NPAs?

The AbilityOne program offers several attractive benefits to government contractors, including:

• Social Impact and Corporate Social Responsibility (CSR): By participating in the AbilityOne program, government contractors demonstrate their commitment to social impact and CSR. The program helps people with disabilities become more self-sufficient and contributing members of society. This aligns with the broader goal of fostering inclusivity and diversity in the workforce, which reflects positively on the contractor’s image and reputation.
• Favorable Procurement Opportunities: The federal government is a significant buyer of goods and services. Participating in the AbilityOne program opens up access to a unique market segment, as government agencies are encouraged to purchase designated products and services from qualified nonprofit agencies employing individuals with disabilities.
• Set-Aside Contracts: The AbilityOne program offers set-aside contracts, which means certain products and services are exclusively reserved for procurement from qualified nonprofit agencies participating in the program. This can be advantageous for contractors as it reduces competition for those specific contracts, potentially improving their chances of winning and securing long-term business with government agencies.
• Simplified Bidding Process: The procurement process for AbilityOne contracts may be less complex than competing for standard government contracts. This streamlined process can save contractors time and resources, making it more appealing for companies looking to work with government agencies.
• Support and Resources: The U.S. AbilityOne Commission, National Industries for the Blind (NIB), and SourceAmerica (formerly NISH) provide support and resources to contractors participating in the program. This assistance can include training, technical support, and guidance on meeting compliance requirements, which can be beneficial for contractors new to working with the federal government.
• Tax Incentives: Some contractors may also benefit from tax incentives or other financial advantages by participating in the AbilityOne program, although these can vary based on the contractor’s specific circumstances and local tax laws.

Overall, the AbilityOne program provides a win-win situation, allowing government contractors to fulfill their business goals while positively impacting the lives of individuals with disabilities.

GSA National has built a reputation as a turnkey solution for NPAs navigating the AbilityOne landscape. We understand the bid implications of SCA compliance and can help you understand its complexities. If you have questions about your AbilityOne contract or are looking for guidance in the bid process of an AbilityOne contract, feel free to contact our team of SCA experts today at SCA@gsanational.com, or click here to schedule a consultation.

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The Act provides that government contractors operating in or providing services at/to airports in New York and New Jersey would be subject to the provisions of The Healthy Terminals Act. As a result, they would have to comply with the Act’s requirements regarding employee compensation and benefits, which may include:

• Increased wages: The Act might mandate higher minimum wages for airport workers than those set by state or federal laws. This could lead to increased labor costs for government contractors employing workers at airports.

• Enhanced benefits: The Act could require employers to provide additional benefits, such as paid sick leave, health insurance, retirement plans, or other employee protections. Government contractors would need to adjust their employee benefit packages accordingly.

• Compliance and reporting: Contractors would have to ensure that their operations at New Jersey airports are in full compliance with the Act’s provisions. This might include reporting requirements to demonstrate adherence to the mandated standards.

• Competitive bidding: When bidding for government contracts that involve airport services in New Jersey, contractors would need to consider the added costs associated with complying with The Healthy Terminals Act. This could impact their competitiveness compared to contractors from other states without similar legislation.

• Labor relations: Contractors would need to address potential labor relations issues, as the Act could lead to increased unionization efforts or collective bargaining demands from airport workers seeking to take advantage of the improved conditions mandated by the legislation.

• Reputation and public perception: Government contractors that comply with The Healthy Terminals Act may be viewed more favorably by the public, airport authorities, and government agencies for their commitment to providing better working conditions for employees.

Overall, The Healthy Terminals Act could significantly impact government contractors’ operations and bottom line, requiring them to adjust their business practices and financial planning to accommodate the new regulations and employee benefits mandated by the law.

The Healthy Terminals Acts have a broad reach and potentially significant impact on government contractors’ operations and bottom line, requiring them to adjust their business practices and financial planning to accommodate the new regulations and employee benefits mandated by the law. At its inception in 2021 the legislation was estimated to impact roughly 34,533 minimum wage workers in New York and New Jersey. At this same time, the estimated annual cost of the Healthy Terminals Act was estimated to be approximately $85,558,033 for employers at New Jersey’s Newark International Airport and $207,409,299 for employers at New York’s JFK and LaGuardia International Airports.

If you have questions regarding the Healthy Terminals Act and whether it may impact your government contract, contact our subject matter specialists today at Solutions@gsanational.com, or Schedule a Meeting here!

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For federal contract brokers, who act as intermediaries between government agencies and contractors, understanding and ensuring SCA compliance is crucial for several reasons:

• Legal Requirement: Brokers must ensure that the contractors they work with are compliant with all applicable laws, including the SCA. Failure to do so can result in legal liabilities and potential penalties for both the broker and the contractor.
• Contract Eligibility: Many government contracts include SCA compliance as a mandatory requirement for bidding and winning the contract. Brokers need to ensure that the contractors they represent are compliant with the SCA to maintain eligibility for these contracts.
• Reputation and Trust: Brokers play a vital role in connecting government agencies with qualified contractors. By ensuring SCA compliance, brokers can build a reputation for working with reputable and responsible contractors who adhere to labor laws. This enhances the broker’s credibility and trustworthiness in the eyes of government agencies.
• Risk Mitigation: Non-compliance with the SCA can lead to audits, investigations, and potential legal consequences for contractors. Brokers who work with non-compliant contractors may also face risks such as contract termination, financial losses, and damage to their own reputation. Ensuring SCA compliance helps mitigate these risks.
• Compliance Assistance: Brokers can provide valuable guidance and support to contractors in understanding and meeting SCA compliance requirements. This includes helping contractors determine the appropriate wage rates and fringe benefits, ensuring accurate record-keeping, and facilitating compliance with reporting and notification obligations.

By understanding and promoting SCA compliance, brokers can effectively navigate the complex landscape of federal government contracting and contribute to the success of both the contractors they represent and the government agencies they serve.

What impact, if any, does SCA and the Health and Welfare (H&W) rate have on the profitability of a government contract?

Understanding SCA and the H&W rate can have a significant impact on the profitability of a government contract. Here’s how:

• Cost Estimation and Pricing: The SCA requires contractors to provide certain fringe benefits, including H&W benefits, to covered employees. The health and welfare rate represents the cost of these benefits. When estimating costs and pricing a government contract, contractors need to accurately account for the H&W rate to ensure they cover the cost of providing these benefits. Failure to accurately include this rate can result in underestimating costs, leading to reduced profitability or even losses.
• Labor Costs: The SCA establishes minimum wage standards for covered employees. Contractors must pay employees at least the prevailing wage rates specified in the contract. The H&W rate is often included as part of the prevailing wage rate. Failure to properly account for these rates can result in non-compliance, potential penalties, and increased labor costs that impact profitability.
• Competitive Bidding: Government contracts are often awarded through competitive bidding processes. Understanding the SCA and the H&W rate allows contractors to accurately factor in these costs when preparing bids. Properly accounting for these rates ensures that contractors can offer competitive pricing while still maintaining profitability.
• Cost Control and Management: SCA compliance involves tracking and documenting fringe benefit expenses, including H&W costs. Having a clear understanding of these requirements enables contractors to effectively manage and control their costs related to providing benefits. Efficient cost management can help improve profitability by minimizing expenses and optimizing resource allocation.
• Compliance Risks and Penalties: Non-compliance with the SCA, including inaccurate calculation or payment of the H&W rate, can lead to investigations, penalties, and potential contract termination. These consequences can result in financial losses and damage to a contractor’s reputation. Understanding the SCA and adhering to its requirements mitigates compliance risks, ensuring that profitability is not affected by costly penalties or reputational damage.
• Contract Renewals and Extensions: Government contracts are often subject to renewals or extensions. Maintaining SCA compliance, including accurate calculation and payment of the H&W rate, is essential for contract performance evaluations. Compliance can contribute to a positive track record and increase the likelihood of contract renewals or extensions, securing continued profitability for the contractor.

As you can see, understanding the SCA and the H&W rate is crucial for accurately estimating costs, pricing contracts competitively, managing labor expenses, ensuring compliance, and minimizing risks. By properly incorporating these factors into contract planning and execution, contractors can enhance profitability and maximize their chances of success in the government contracting space.

If you have questions regarding the Service Contract Act, contact our subject matter specialists today at SCA@gsanational.com, or Schedule a Meeting here!

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GSA National provides unique solutions to government contractors facing the challenges posed by hourly fringe benefit requirements. We specialize in the setup, management and support of hourly fringe benefit programs for government contractors, both domestically and internationally, helping leading contractors balance cost, compliance and quality to help win and retain both contracts and employees.

Put our team of ERISA, CBA, trust service, benefits administration, and compliance experts in your corner today! Call us at 1-800-250-2741 or email us at solutions@gsanational.com.

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On September 29, 2022, the U.S. Department of Labor announced that the amended minimum wage for federal contractors will increase to $16.20 due to inflation. The increase will apply to Service Contract and Davis-Bacon and Related Act contracts, and will be in-effect on January 1, 2023.

This increase will also apply to tipped federal contractors covered by Executive Order 14026, whose minimum wage will increase to $13.75 per hour, up from $10.50.

Executive Order 14026, and its increase in the federal contractor employee minimum wage, applies to federal contracts initiated after January 30, 2022, and existing federal contracts that are renewed or extended after this date.

GSA National’s #GovCon experts are here to assist with any questions you may have regarding the wage increase and its application to your government contract(s). Please contact our team of SCA and DBRA subject matter specialists with any questions.

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The W&H Division is responsible for enforcing some of the most comprehensive labor laws affecting more than 148 million workers. Investigator responsibilities include the following:

• Conducting investigations to determine if employers are paying workers and affording them their rights as the law requires.
• Promoting compliance through outreach and public education initiatives.
• Supporting efforts to combat worker retaliation and worker misclassification as independent contractors. 

“Adding 100 investigators to our team is an important step in the right direction,” said Acting Wage and Hour Administrator Jessica Looman. “We anticipate significantly more hiring activity later in fiscal year 2022. While appropriations will determine our course of action, we are optimistic we will be able to bring new talented professionals onboard to expand our diverse team.” 

In fiscal year 2021, the Wage and Hour Division collected $230 million in wages owed to 190,000 workers.

GSA National’s Government Contract experts are here to answer any questions you may have regarding H&W investigations, or compliance challenges your organization may be up against. Please contact our team of government contract subject matter specialists with any questions.

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GSA offers customized, in-house training on SCA and DBRA compliance. While regulations may be satisfied in a number of ways, our technical experts will educate your staff on practical applications that will show you how to remain compliant while keeping an eye on what matters most, your bottom line.

Recent DOL violation findings:

• US Department of Labor recovers $1.5M in back wages for 242 home healthcare workers in Pennsylvania, Missouri
• US Department of Labor recovers $98K for 39 construction workers denied overtime wages by Jamul employer
• St. Louis metal finishing company pays $45K in back wages, benefits to employee terminated illegally while on protected leave
• Court orders two Minnesota restaurants to pay $435k in back wages following US Department of Labor investigation
• US Department of Labor recovers more than $1M for 362 gas pipeline workers in five states after federal court affirms investigation’s findings

To learn how GSA training could help you on your path to SCA compliance or how to be prepared for a DOL audit, visit our SCA Compliance area or contact us at 1.800.250.2741 or solutions@gsanational.com.

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Weil is expected to pick up where he left off under the Obama administration and make a bold move to reverse priorities from the employer-friendly policies of the previous administration.

What Might Change?

Weil is well-known for his views on worker classification under federal law and is expected to promote a broader definition of who qualifies for protections and benefits like minimum wage and overtime pay, paid sick time and family leave.

Weil’s confirmation puts him at the head of a Wage and Hour Division that the White House is clearly looking to adapt an aggressive approach toward enforcement. This is evidenced by President Biden’s recent budget requests for increased funding for the DOL’s efforts to combat violations of federal wage, safety and other work-related laws and regulations.

What Does This Mean for Federal Contractors?

This stresses the importance of the need for federal contractors to continually review their Service Contract Act (SCA) and Davis-Bacon and Related Acts (DBRA) compliance measures.

GSA National offers customized training on SCA and DBRA compliance. While regulations may be satisfied in several ways, our technical experts will educate your staff on practical applications that will show you how to remain compliant while keeping an eye on what matters most, your bottom line.

To learn more about training or our other compliance solutions, contact us at 1.800.250.2741 or solutions@gsanational.com.

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This award is presented to an organization that has shown exemplary support for Goodwill’s mission and has made generous contributions in-kind services in support of our mission.

This award highlights that GSA National has gone above and beyond to support our mission through sponsorships and donations. It gives Palmetto Goodwill great pleasure to notify you that GSA National has been selected as the 2019 Corporate Partner of the Year.“

Starting in the first quarter of 2019 GSA National partnered with Palmetto Goodwill as their Third Party Administrator for the management of their SCA employee’s Health & Welfare obligations. The relationship began with GSA National setting a knowledge base for critical staff through onsite SCA training before providing Fringe Benefit Accounting & Trust Services.

At GSA National, we pride ourselves in providing excellent service to all of our clients and we are particularly pleased when our efforts are recognized and rewarded by distinguished clients such as Palmetto Goodwill.

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