§ 1-18.603-4 Small business.

Nothing in § 1-18.603-1 shall affect the authority or responsibility of an executive agency to place a fair proportion of its total contracts with small business concerns.

§ 1-18.604 Invitation provision.

Except for contracts executed on Standard Form 19, invitations for bids and requests for proposals for affected construction work shall include the following provision:

INFORMATION REGARDING BUY AMERICAN ACT

(a) The Buy American Act (41 U.S.C. 10a10d) generally requires that only domestic construction material be used in the performance of this contract. (See the clause entitled "Buy American" in Standard Form 23A, General Provisions, Construction Contract.) This requirement does not apply to the following construction material or components:

[List the excepted construction material or components.]

(b)(1) Furthermore, bids or proposals offering use of additional nondomestic construction material may be acceptable for award if the Government determines that use of comparable domestic construction material is impracticable or would unreasonably increase the cost or that domestic construction material (in sufficient and reasonably available commercial quantities and of a satisfactory quality) is unavailable. Reliable evidence shall be furnished justifying such use of additional nondomestic construction material.

(2) Where it is alleged that use of domestic construction material would unreasonably increase the cost:

(i) Data shall be included, based on a reasonable canvass of suppliers, demonstrating that the cost of each such domestic construction material would exceed by more than 6 percent the cost of comparable nondomestic construction material. (All costs of delivery to the construction site shall be included, as well as any applicable duty.)

(ii) For evaluation purposes, 6 percent of the cost of all additional nondomestic construction material, which qualifies under paragraph (i), above, will be added to this bid or proposal.

(3) When offering additional nondomestic construction material, bids or proposals may also offer, at stated prices, any available comparable domestic construction material, so as to avoid the possibility that failure of a nondomestic construction material to be acceptable, under (1), above, will cause rejection of the entire bid.

§ 1-18.605 Contract clause.

Except for contracts executed on Standard Form 19, contracts for affected construction work shall include the following clause:

BUY AMERICAN

(a) Agreement. In accordance with the Buy American Act (41 U.S.C. 10a-10d), and Executive Order 10582, December 17, 1954 (3 CFR, 1954-58 Comp., p. 230), as amended by Executive Order 11051, September 27, 1962 (3 CFR, 1959-63 Comp., p. 635), the Contractor agrees that only domestic construction material will be used (by the Contractor, subcontractors, materialmen, and suppliers) in the performance of this contract, except for nondomestic material listed in the contract.

(b) Domestic construction material. "Construction material" means any article, material, or supply brought to the construction site for incorporation in the building or work. An unmanufactured construction material is a "domestic construction material" if it has been mined or produced in the United States. A manufactured construction material is a "domestic construction material" if it has been manufactured in the United States and if the cost of its components which have been mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components. "Component" means any article, material, or supply directly incorporated in a construction material.

(c) Domestic component. A component shall be considered to have been "mined, produced, or manufactured in the United States" (regardless of its source in fact) if the article, material, or supply in which it is incorporated was manufactured in the United States and the component is of a class or kind determined by the Government to be not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality.

§ 1-18.606 Violations.'

If the head of the agency concerned finds there has been a failure to comply with the Buy American provisions of the contract, he shall make public his findings and no other contract for the construction, alteration, or repair of any public building or public work in the United States or elsewhere shall be awarded, as pro

For a temporary regulation affecting § 118.607, see Appendix-Temporary Regulations, appearing at the end of Chapter 1.

vided in the Buy American Act, to the contractor, subcontractors, materialmen, or suppliers with which the contractor is associated or affiliated, for a period of 3 years after such finding is made public. (For debarment procedures, see Subpart 1-1.6.)

Subpart 1-18.7-Labor Standards for Contracts Involving Construction

SOURCE: 38 FR 21405, Aug. 8, 1973, unless otherwise noted.

§ 1-18.700 Scope of subpart.

This subpart sets forth the labor standards applicable to construction contracts, including policies, procedures, and contract clases, and indicates the statutory basis for these standards.

§ 1-18.701 Applicability.

The requirements of this Subpart 118.7 apply to contracts for construction and, under some circumstances, to other types of contracts involving construction.

§ 1-18.701-1 Construction contracts.

(a) A contract is for construction if it is solely or predominantly for construction as defined in § 1-18.101-1.

(1) These requirements are applicable only if the construction, work is, or reasonably can be foreseen to be, performed at a particular site so that wage rates can be determined for the locality.

(2) These requirements do not apply to contracts solely for dismantling, demolition, or removal of improvements, though certain of the statutes mentioned herein may apply to such contracts.

(3) These requirements do not apply to contracts requiring construction work which is so closely related to research, experiment, and development that it cannot be performed separately or which is itself the subject of research, experiment, or development.

(4) These requirements apply to manufacture or fabrication of materials and components on the site by a construction contractor or subcontractor under a contract otherwise subject to these requirements but do not apply to other manufacturing or fur

nishing of equipment, components, or other materials.

(5) These requirements do not apply to employees of railroads operating under collective bargaining agreements that are subject to the provisions of the Railway Labor Act.

(b) Under contracts for construction as described in § 1-18.701-1(a), the requirements of this subpart apply only to work performed by mechanics and laborers at the site of the work.

(1) "Mechanics and laborers" are construed to include at least those workers whose duties are manual or physical in nature as distinguished from mental or managerial whether employed by a prime contractor or by a subcontractor of any tier. The term includes any workers who work with tools or equipment or perform the work of a trade, apprentices and trainees, and, in the case of contracts subject to the Contract Work Hours and Safety Standards Act, watchmen and guards. The term does not apply to employees whose duties are nonmanual in nature, such as office workers, superintendents, technical engineers, or scientific workers, but it does apply to cooks, storekeepers, and working foremen who devote more than 20 percent of their time during a workweek to mechanic or laborer duties.

(2) The "site of the work" is limited to the physical place or places where the construction called for in the contract will remain when work on it has been completed and to other adjacent or nearby property used by the contractor or subcontractor in such construction which can reasonably be said to be included in the "site" because of proximity. For example, if a small office building is being erected, the "site of the work" will normally include no more than the building itself and its grounds and other land or structures "down the block" or "across the street" which the contractor or subcontractor uses in the course of his performance on the particular contract. In the case of larger contracts such as for a large building, an airport, or a dam, the "site of the work" is necessarily more extensive and includes the whole area in which the contract construction activity will take place. Fabrication plants "mobile factories,"

batch plants, borrow pits, job headquarters, and tool yards are part of the "site of the work" provided they are dedicated exclusively or nearly so to performance on the contract and are so located in proximity to the actual construction location that it would be reasonable to include them. Once the limits of "site of the work" have been determined, the Secretary's wage rate decision is applicable only to those mechanics and laborers employed by a contract, contractor, or subcontractor within such limits (that is, upon the "site of the work"), including drivers who temporarily leave the "site" to transport materials and equipment used in the course of contract operations.

§ 1-18.701-2 Supply, service, maintenance, or other contracts involving construction.

(a) The requirements of this Subpart 1-18.7 do not ordinarily apply to supply, service, maintenance, research and development, or other nonconstruction contracts. However, contracts predominantly for nonconstruction work may also involve construction work. Construction items under such contracts are not exempted from the requirements of this subpart simply because the work is to be performed under a contract which also requires, for example, the furnishing of supplies. On the other hand, where construction work is to be performed in support of other work such as manufacturing and furnishing of supplies, the circumstances may be such that the construction work may be so merged with nonconstruction activity or may be so fragmented in terms of the locations or time spans in which it is to be performed that it cannot be segregated as a separate contractual requirement for construction, alteration, or repair of a public building or public work. Generally, the requirements apply to, and the appropriate clauses in § 1-18.703-1 must be included in, a prime contract if:

(1) The contract contains specific requirements for substantial amounts of construction work, or it is ascertainable at the contract date that a substantial amount of construction work will be necessary for the performance

of the contract. The word "substantial" relates to the type and quantity of construction work to be performed and not merely to the total value of construction work as compared to the total value of the contract; and

(2) Such construction work is physically or functionally separate from and, as a practical matter, is capable of being performed on a segregated basis from the other work required by the contract.

(b) The standard clauses provide that they will be applicable to the contract work only to the extent that such work is subject to the labor standards statutes involved. Under contracts requiring substantial amounts of segregable construction work, only such segregable construction will be covered.

(1) For example, the requirements do not apply to installation, maintenance, and alteration work incidental to furnishing supplies under a supply contract; however, if a substantial and segregable amount of construction, alteration, or repair work at the site is required, such as for installation of heavy generators and large refrigerator systems or for plant modification or rearrangement, the labor standards for construction contracts apply to the construction work at the site.

(2) Contracts for maintenance or service are not ordinarily subject to the requirements of this subpart. Maintenance includes the routine, recurring type of work necessary to keep a facility in such condition that it may be continuously used at an established capacity and efficiency for its intended purpose. However, if such maintenance or service contracts call for substantial and segregable items of construction, alteration, or repair, the labor standards provisions for construction contracts will be applicable to those items. All contracts in excess of $2,000 for painting of any public building or public work, whether performed in connection with the original construction or as regular maintenance, are subject to the labor standards provisions for construction contracts.

$1-18.702 Statutory and regulatory requirements.

$1-18.702-1 Davis-Bacon Act.

The Davis-Bacon Act (Act of March 3, 1931, as amended (40 U.S.C. 276a276a-7)), provides that certain contracts over $2,000 entered into by any executive agency for construction, alteration, or repair (including painting and decorating) of public buildings or public works within the United States shall contain a provision (see § 118.703-1(a)) to the effect that no laborer or mechanic employed directly upon the site of the work contemplated by the contract shall receive less than the prevailing rates of wages as determined by the Secretary of Labor. The term "wages" as used in the Davis-Bacon Act includes the basic hourly rate of pay, the rate of contribution irrevocably made by an employer pursuant to a fund, plan, or program, and the rate of costs to the employer which may be reasonably anticipated in providing certain bona fide fringe benefits.

1-18.702-2 Copeland Act.

The Copeland (“Anti-kickback") Act (18 U.S.C. 874 and 40 U.S.C. 276c) makes it unlawful to induce, by force or otherwise, any person employed in the construction, prosecution, completion, or repair of public buildings, public works, or buildings, or works including those financed in whole or in part by loans or grants from the United States, to give up any part of the compensation to which he is entitled under his contract of employment. In accordance with regulations of the Secretary of Labor issued pursuant to the Copeland Act, certain contracts entered into by any executive agency shall contain a provision (see § 1-18.703-1(e)) to the effect that the contractors and any subcontractor shall comply with the regulations of the Secretary of Labor under the Act. 1-18.702-3 Contract Work Hours and Safety Standards Act.

In accordance with the requirements of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327333), certain contracts entered into by any executive agency must contain a

clause effect that no laborer or mechanic doing any part of the work contemplated by the contract shall be required or permitted to work more than 8 hours in any one calendar day or 40 hours in any workweek unless such laborer or mechanic is compensated at not less than one and one-half times his basic rate of pay for all hours worked in excess of 8 hours in any one calendar day or 40 hours in any workweek. The workmen will be paid according to the calculation which represents the greater number of overtime hours.

(see § 1-18.703-1(b)) to the

§ 1-18.702-4 Department of Labor regulations.

Pursuant to the statutes referred to in this § 1-18.702 and Reorganization Plan No. 14 of 1950 (3 CFR, 1949-53 Comp., p. 1007), the Secretary of Labor has issued regulations in Parts 1, 3, 5, 5a, and 7 of Title 29, Subtitle A, Code of Federal Regulations, providing for the administration and enforcement of those statutes in construction contracts. The Secretary's regulations cover the following wage determination procedures: Duties of contractors on Government-financed public buildings; labor standards for construction contracts; standards for ratios of apprentices and trainees to journeymen; and wage determination review procedures.

§ 1-18.703 Contract clauses.

§ 1-18.703-1 Clauses for general use.

Except as provided in § 1-18.703-2, every construction contract in excess of $2,000 (or of such other amount as may be specifically indicated) for work within the United States shall include the following clauses:

(a) Davis-Bacon Act (40 U.S.C. 276a276a-7).

DAVIS-BACON ACT (40 U.S.C. 278a-276a-7)

(a) All mechanics and laborers employed or working directly upon the site of the work shall be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by the Copeland Regulations, 29 CFR Part 3), the full amounts due at time of payment computed at wage rates not less

than the aggregate of the basic hourly rates and the rates of payments, contributions, or costs for any fringe benefits contained in the wage determination decision of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the Contractor or subcontractor and such laborers and mechanics. A copy of such wage determination decision shall be kept posted by the Contractor at the site of the work in a prominent place where it can be easily seen by the workers. The term "mechanics and laborers" shall be deemed to included apprentices and trainees not covered by an approved program as provided by the Apprentices and Trainees clause of this contract.

(b) The Contractor may discharge his obligation under this clause to workers in any classification for which the wage determination decision contains:

(1) Only a basic hourly rate of pay, by making payment at not less than such basic hourly rate, except as otherwise provided in the Copeland Regulations (29 CFR Part 3);

or

(2) Both a basic hourly rate of pay and fringe benefits payments, by making payment in cash, by irrevocably making contributions pursuant to a fund, plan, or program for, and/or by assuming an enforceable commitment to bear the cost of, bona fide fringe benefits contemplated by the Davis-Bacon Act, or by any combination thereof. Contributions made, or cost assumed, on other than a weekly basis shall be considered as having been constructively made or assumed during a weekly period to the extent that they apply to such period. Where a fringe benefit is expressed in a wage determination in any manner other than as an hourly rate and the Contractor pays a cash equivalent or provides an alternative fringe benefit, he shall furnish information with his payrolls showing how he determined that the cost incurred to make the cash payment or to provide the alternative fringe benefit is equal to the cost of the wage determination fringe benefit. In any case where the Contractor provides a fringe benefit different from any contained in the wage determination he shall similarly show how he arrived at the hourly rate shown therefor. In the event of disagreement between or among the interested parties as to an equivalent of any fringe benefit, the Contracting Officer shall submit the question, together with his recommendation, to the Secretary of Labor for final determination.

(c) The assumption of an enforceable commitment to bear the cost of fringe benefits, or the provision of any fringe benefits not expressly listed in section 1(b)(2) of the Davis-Bacon Act or in the wage determination decision forming a part of the contract,

may be considered as payment of wages only with the approval of the Secretary of Labor pursuant to a written request by the Contractor. The Secretary of Labor may require the Contractor to set aside assets, in a separate account, to meet his obligations under any unfunded plan or program.

(d) The Contracting Officer shall require that any class of laborers or mechanics, including apprentices and trainees, which is not listed in the wage determination decision and which is to be employed under the contract shall be classified or reclassified conformably to the wage determination decision, and shall report the action taken to the Secretary of Labor. If the interested parties cannot agree on the propoer classification or reclassification of a particular class of laborers or mechanics, including apprentices and trainees to be used, the Contracting Officer shall submit the question, together with his recommendation, to the Secretary of Labor for final determination. Apprentices and trainees may be added under this clause only where they are employed pursuant to an apprenticeship or trainee program meeting the requirements of the Apprentices and Trainees clause below.

(e) In the event it is found by the Contracting Officer that any laborer or mechanic, including apprentices and trainees. employed by the Contractor or any subcontractor directly on the site of the work covered by this contract has been or is being paid at a rate of wages less than the rate of wages required by paragraph (a) of this clause, or by the Apprentices and Trainees clause of this contract, the Contrating Officer may (1) by written notice to the Government Prime Contractor terminate his right to proceed with the work, or such part of the work as to which there has been a failure to pay said required wages, and (2) prosecute the work to completion by contract or otherwise, whereupon such Contractor and his sureties shall be liable to the Government for any excess costs occasioned the Government thereby.

(f) Paragraphs (a) through (e) of the clause shall apply to this contract to the extent that it is (1) a prime contract with the Government subject to the Davis-Bacon Act, or (2) a subcontract also subject to the Davis-Bacon Act under such prime contract.

(b) Contract Work Hours and Safety Standards Act-Overtime Compensation (40 U.S.C. 327-333).

CONTRACT WORK HOURS AND SAFETY STANDARDS ACT-OVERTIME COMPENSATION (40 U.S.C. 327-333)

This contract is subject to the Contract Work Hours and Safety Standards Act and