Two federal laws set wage floors on most labor-based government contracts, and both work through the same mechanism: a wage determination. The Service Contract Act (SCA) covers most service contracts. Davis-Bacon covers construction. Neither law sets one national wage. Instead, the Department of Labor issues determinations that set a minimum hourly wage and a minimum fringe benefit amount for specific labor categories in specific counties, and the solicitation tells you which determination applies to the work you are bidding.
Where to find it
The applicable wage determination is attached to the solicitation directly or incorporated by reference to a specific determination number and revision. It is not optional reading. It lists labor categories, sometimes dozens of them, each with its own hourly wage floor and fringe amount, and those numbers can vary meaningfully from one county to the next for the exact same job title. Before you price anything, confirm you are looking at the determination the solicitation actually cites, including its revision number, since a newer revision can carry different numbers than the one you assumed applied.
Price from the determination, not your payroll
This is the part that trips people up. What you currently pay your own employees is not the floor. The determination is. If your current wage for a role is already above the determination's minimum for that labor category and county, you are fine, keep pricing from your real cost. If it is below, you cannot price the contract at your current payroll number and call it competitive. You have to price, and pay, at least the determination's floor for every hour a covered employee works on that contract, regardless of what you pay that same person on other work. Mapping your actual job titles to the determination's labor categories takes care, since the names rarely match exactly, and a careless mapping can understate your true cost before you have submitted a single number.
This is a legal problem, not just a margin problem
Underpricing against a wage determination is not simply a thin-margin decision you get to make. Paying below the required wage or fringe on covered work is a Department of Labor compliance violation with real consequences: back wage liability for every affected hour, potential contract issues, and enforcement action that can follow the company well past the one contract involved. Treat the determination as a floor set by law, not a number to negotiate around internally. If a determination looks wrong for the work described, or you cannot find one where you expected to, that is exactly the kind of ambiguity worth raising in the question period, not guessing past.
What this means for your price
Once you know the real floor, wage determination numbers feed directly into the direct labor side of your cost buildup, before the wrap rate is even applied. See pricing basics for how that direct labor number turns into a full bid rate.