The Need to Reform the McNamara – O’Hara Service Contract Act

15 Pages Posted: 14 May 2022

See all articles by Ike Brannon

Ike Brannon

The Jack Kemp Foundation

Chad D. Cotti

University of Wisconsin - Oshkosh

Date Written: April 27, 2022


The nearly sixty-year-old McNamara-O’Hara Service Contract Act (SCA) is a federal statute that governs and regulates service contracts between the federal government and individuals and/or companies. These regulations explicitly govern minimum wage and health/welfare benefits requirements and corresponding contractor compensation. However, several aspects of the SCA’s regulatory structure leave the Federal government (through its contracting partners) in a position where it is less able to recruit and retain a quality workforce.

The regulatory strictures of the SCA impact both the quality of services that Federal contractors are able to provide and implicitly leaves many of the over three million workers employed by government contractors without affordable or quality health and welfare benefits. The recent changes to federal contractor minimum wage mandates have revealed various shortcomings of the SCA, and Congress should consider legislative remedies to alleviate the labor market frictions and notable inefficiencies that have been created in this market.

Keywords: Services Contract Act, Government Contractors, non-wage compensation, contracting

JEL Classification: J45

Suggested Citation

Brannon, Ike and Cotti, Chad D., The Need to Reform the McNamara – O’Hara Service Contract Act (April 27, 2022). Available at SSRN: or

Ike Brannon (Contact Author)

The Jack Kemp Foundation ( email )

Chad D. Cotti

University of Wisconsin - Oshkosh ( email )

800 Algoma Blvd
Oshkosh, WI WI 54901
United States

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