What is the minimum contract amount for the McNamara-O'Hara Service Contract Act to be applicable?

The McNamara-O'Hara Service Contract Act (SCA) applies to contracts entered into by the U.S. government to provide services that cost at least $2,500. This includes service contracts for a wide range of industries and professions. When a contract meets or exceeds this minimum threshold, the SCA mandates that contractors and subcontractors must pay their service employees no less than the prevailing wage rates and fringe benefits determined for similar work in the locality of the contract.

Understanding this threshold is crucial for healthcare executives and budget managers, as it helps determine when compliance with wage and labor regulations becomes necessary for contracts the organization may enter. Contracts below this amount are not subject to the requirements imposed by the SCA, meaning that organizations may have more flexibility in their staffing and wage decisions for those smaller contracts. This legislation is particularly relevant within healthcare settings where service contracts for maintenance, janitorial, and other support services are common.