Government contracts without subcontractors would be like a rock band without a drummer. Not just because of the savings and ease they can provide a contractor, but because the government pretty much requires the use of them on contracts.
- Smart contractors know using subs can help speed up projects. They perform intricate tasks and oftentimes do the things that you don’t want to do yourself. Not to mention the fact it’s a great way to save on costs.
- According to Service Contract Act (SCA) compliance, it’s the duty of the prime contractor to ensure that “every single worker” that set foot on the job was paid the correct wage and fringe rate as set by the contract.
- The prime contractor must ensure correct wage rates were paid to employees regardless of who they work for.
- They must demonstrate that the wage and fringe rates were followed not only by themselves but for all subcontractors as well.
- If a subcontractor is found to be in non-compliance (DOL audit), it’s the prime contractor that takes the hit. They could face back-wages and/or additional penalties as well as takes the hit on their performance record.
Primes Responsible for Subcontractor Compliance
- At Axim, we often hear how difficult it is to get those subs to turn in their compliance. And that doesn’t mean it was done correctly. But no matter how difficult subs make compliance- it doesn’t change the fact the government will penalize the prime for the sub’s non-compliance.
- Many contractors know this to be a fact and do their best to make sure their subs are compliant. However, the Department of Labor (DoL) has recently made it very clear this is an area their auditors will target.
Increased DOL Enforcement
- In other words, prime contractors better be sure their subs are compliant because it’s their butts on the line.
- The best strategy then is to work with subcontractors who perform quality work. Ones that take government compliance seriously.
Subcontractor Compliance Checklist
- This will not only help you in the face of a DOL audit but also save on overhead. Think about the time spent tracking down reports and information from your subcontractors. Difficult, to say the least.
- Sound like something you (team) don’t want to do? Maybe you should subcontract the work to someone else, saving yourself time and money.
- Not only can Axim Fringe Solutions Group guarantee your compliance as well as any subs you hire. We can even let you know which subcontractors have ‘good (or bad) records’ with regards to DOL compliance.
- If you want to know more about how Axim FSG can help with SCA compliance, please contact us. Follow Axim Fringe Solutions Group on LinkedIn.