S. 2963 — Fair Pay for Federal Contractors Act of 2025

This section appropriates such sums as may be necessary for FY2026 for each federal agency affected by the lapse in appropriations beginning on or about October 1, 2025, and any subsequent lapses during FY2026, to adjust the price of agency contracts under section 3. Such sums remain available until December 31, 2026.

This section directs Federal agencies affected by a lapse in appropriations to adjust prices of contracts suspended, delayed, interrupted, or stopped due to the lapse to compensate contractors for reasonable costs incurred (1) to provide back compensation at standard rates to furloughed, laid-off, reduced-hour, or reduced-compensation employees or (2) to restore paid leave used during the lapse. Affected employees include service employees under the Service Contract Act (41 U.S.C. § 6701(3), expanded to include certain exempted employees) and laborers or mechanics under the Davis-Bacon Act (40 U.S.C. § 3142, i.e., prevailing-wage workers on federal construction, alteration, or repair contracts over $2,000). Adjustments apply notwithstanding contract terms, are limited to actual incurred costs (with proof required), cap weekly compensation at $1,442 (or actual weekly pay, pro-rated for less than 40 hours), and must be made as soon as practicable after enactment. The Office of Federal Procurement Policy must report to congressional committees within one year on implementing agencies and affected employees, including counts furloughed, compensated at full or capped rates, and using paid leave.

This section authorizes appropriations of such sums as may be necessary for each Federal agency subject to a lapse in appropriations for adjustments in the price of contracts under section 3.