regulations and interpretations as to the coverage of said Act, and exemptions and procedures thereunder. These regulations and interpretations are compiled in a document entitled "Walsh-Healey Public Contracts Act, Rulings and Interpretations," which may be obtained from the Department of Labor Regional Offices listed in § 12.607. In addition to the interpretations stated in that document, attention is directed to an opinion of the Department of Labor that contracts which are originally $10,000 or less, but are subsequently modified to increase the price to an amount in excess of $10,000, are subject to the Walsh-Healey Act; and that contracts in an amount exceeding $10,000, which are subsequently modified to a figure of $10,000 or less, are not subject to said Act with respect to work performed after such modification if modification is effected by mutual agreement. [30 F.R. 6008, Apr. 29, 1965] § 12.603 Determinations of eligibility as manufacturer or regular dealer. § 12.603-1 Manufacturer. As used in § 12.601, a manufacturer is a person who owns, operates, or maintains a factory or establishment that produces on the premises the materials, supplies, articles, or equipment required under the contract and of the general character described by the specifications. In order to qualify as a manufacturer, a bidder must be able to show before the award that he is (a) an established manufacturer of the particular goods or goods of the general character sought by the Government, and (b) if he is newly entering into such manufacturing activity, that he has made all necessary prior arrangements for space, equipment and personnel to perform the manufacturing operations required for the fulfillment of the contract. A new firm which, prior to the award of the contract, has made such definite commitments in order to enter a manufacturing business which will later qualify it, shall not be barred from receiving the award because it has not yet done any manufacturing. § 12.603-2 Regular dealer. (a) Except as set forth in paragraph (b) of this section, as used in § 12.601 a regular dealer is a person who owns, operates, or maintains a store, warehouse, or other establishment in which ma terials, supplies, articles, or equipment of the general character described by the specifications and required under the contract are bought, kept in stock, and sold to the public in the usual course of business. In order to qualify as a regular dealer, a bidder must be able to show before the award: (1) That he has an establishment or leased or assigned space in which he regularly maintains a stock of goods in which he claims to be a dealer; if the space is in a public warehouse, it must be maintained on a continuing, and not on a demand basis; (2) That the stock maintained is a true inventory from which sales are made; the requirement is not satisfied by a stock of sample or display goods, or by a stock consisting of surplus goods remaining from prior orders, or by s stock unrelated to the supplies which are the subject of the bid, or by a stock maintained primarily for the purpose of token compliance with the Act from which few, if any, sales are made; (3) That the goods stocked are of the same general character as the goods to be supplied under the contract; to be of the same general character, the items to be supplied must be either identical with those in stock or be goods for which dealers in the same line of business would be an obvious source; (4) That sales are made regularly from stock on a recurring basis; they cannot be only occasional and constitute an exception to the usual operations of the business; the proportion of sales from stock that will satisfy the requirements will depend upon the character of the business; (5) That sales are made regularly in the usual course of business to the public, i.e., to purchasers other than Federal, State, or local government agencies; this requirement is not satisfied if the contractor merely seeks to sell to the public but has not yet made such sales; if government agencies are the sole purchasers, the bidder will not qualify as a regular dealer; the number and amount of sales which must be made to the public will necessarily vary with the amount of total sales and the nature of the business; and (6) That his business is an established and going concern; it is not sufficient to show that arrangements have been made to set up such business. (b) For certain specific products (lumber and timber products, machine 1 Etools, hay, grain, feed or straw, raw cotton, green coffee, petroleum, agricultural liming materials, tea, and raw or unmanufactured cotton linters), there are alternative definitions of regular dealers. The qualifications required under the alternative definitions are listed in the regulations of the Secretary of Labor (41 CFR 50-201.101 (b)). § 12.603-3 Coal dealers. Coal dealers are exempt from the regBular dealer requirements if they meet the terms and conditions set forth by the Secretary of Labor in his regulation (41 CFR 50-201.604(a)). If these terms and conditons are not met, coal dealers must meet the requirements set forth in § 12.603-2 in order to be considered regular dealers. A manufacturer or regular dealer may bid, negotiate, and contract through an authorized agent if the agency disclosed, and the agent acts and contracts in the name of his principal. In this connection, see the clause entitled "Covenant Against Contingent Fees" set forth in §7.103-20 of this chapter and the procedures prescribed for obtaining inforImation concerning contingent or other = fees, as set forth in Subpart E, Part 1 of this chapter. § 12.604 Responsibilities of contracting officers. The responsibility for applying the eligibility requirements set forth in §§ 12.601 and 12.603 rests, in the first instance, with the contracting officer. The Department of Labor does not conduct pre-award investigations, nor render final determinations of eligibility until the contracting officer has initially determined whether the eligibility requirements have been met. When the eligibility of a bidder or offeror is challenged before award, it should be treated in a manner similar to a protest before award (see §§ 2.407-9 and 3.509 of this chapter). The contracting officer should make an initial determination and should process the protest in accordance with applicable procedures for submission to the Department of Labor for a final determination. Whenever the WalshHealey Public Contracts Act is applicable, the contracting officer shall, pursuant to regulations or instructions issued by the Secretary of Labor and in accordance with procedures prescribed by each respective Military Department: (a) Inform prospective contractors of the applicability of minimum wage determinations; (b) Furnish to the contractor a poster (Form PC-13) and a form letter (Form PC-12) explaining the Walsh-Healey Act (forms are available through normal publication supply channels); (c) Prepare and transmit three copies of DD Form 350 as provided in § 16.803-2 (c) of this chapter; when a contract of $10,000 or less is modified to exceed $10,000, the report on DD Form 350 shall be prepared and transmitted. (d) Report to the Department of Labor any violation of the representations or stipulations required by the Walsh-Healey Act. [30 F.R. 14092, Nov. 9, 1965] § 12.605 Contract clause. The contract clause required by this subpart shall be as follows: WALSH-HEALEY PUBLIC CONTRACTS ACT If this contract is for the manufacture of materials, supplies, articles, or equipment in an amount which exceeds or may exceed $10,000 and is otherwise subject to the Walsh-Healey Public Contracts Act, as amended (41 U.S.C. 35-45), there are hereby incorporated by reference all representations and stipulations required by said Act and regulations issued thereunder by the Secretary of Labor, such representations and stipulations being subject to all applicable rulings and interpretations of the Secretary of Labor which are now or may hereafter be in effect. § 12.606 Procedure for obtaining exemptions with respect to stipulations required by the Act. Section 7 of the Act permits the Secretary of Labor to make exceptions to the requirement that the representations and stipulations of Section 1 of the Act be included in contracts which are subject to the Act. Applications for such exceptions shall be submitted through procurement channels with pertinent data and recommendation to the Labor Advisor, OASA (I&L) for the Army; Chief of Naval Material for the Navy; Hq., USAF (AFSPPDB) for the Air Force; Directorate, Procurement and Production, DSAH-P, for the Defense Supply Agency. [30 F.R. 6009, Apr. 29, 1965] § 12.607 Wage and Hour and Public Contracts Divisions of the United States Department of Labor Regional Offices-geographical jurisdictions and addresses of Regional Directors. Region I: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont-18 Oliver Street, Boston, Mass., 02110. Region II: New Jersey and New York-341 Ninth Avenue, New York, N.Y., 10001. Region III: Delaware, District of Columbia, Maryland, Pennsylvania-Wolf Avenue and Commerce Street, Chambersburg, Pa., 17201. Region IV: Alabama, Arkansas, Louisiana, Mississippi-American Liberty Insurance Co. Building, 1401 South 20th Street, Birmingham, Ala., 35205. Region V: Michigan, Ohio-216 Engineers Building, 1365 Ontario Street, Cleveland, Ohio, 44114. Region VI: Illinois, Indiana, Minnesota, Wisconsin-11th Floor, Bankers Building, 105 West Adams Street, Chicago, Ill., 60603. Region VII: Colorado, Iowa, Kansas, Missouri, Nebraska, North Dakota, South Dakota, Wyoming-2000 Federal Office Building, 911 Walnut Street, Kansas City, Mo., 64106. Region VIII: New Mexico, Oklahoma, Texas Room 222, 1114 Commerce Street, Dallas, Region IX: Alaska, Arizona, California, Region X: Kentucky, Tennessee, Virginia, District of Columbia: 14th Street and Constitution Avenue NW., Washington, D.C., 20210. [30 F.R. 6009, Apr. 29, 1965] Subpart G-Fair Labor Standards Act of 1938 SOURCE: The provisions of this Subpart G appear at 25 F.R. 14273, Dec. 31, 1960. § 12.701 Basic statute. The Fair Labor Standards Act of 1938 (Act of June 30, 1938; 29 U.S. Code 201219), as amended, provides for the establishment of minimum wage and maximum hour standards, creates a Wage and Payments made pursuant to the provisions of the Fair Labor Standards Act are usually reimbursable under cost or Concost-plus-a-fixed-fee contracts. sequently, each military department has a direct interest in claims and suits under said Act which are made or brought in connection with such contracts. In this connection, procedures have been established, by agreement between the Department of Justice on the one hand and the military departments on the other hand, governing the defense of such Fair Labor Standards Act suits. These procedures in general contemplate the defense of Fair Labor Standards Act suits by private counsel employed by the contractor, the employment of whom is approved by the military department concerned. These procedures must be followed if contractors are to be reimbursed for the amount of any judgment under said Act, or for any litigation expenses (including the reasonable fees of such private counsel). § 12.703 Rulings on applicability or interpretation. Contractors or contractor employees who inquire concerning applicability or interpretation of the Fair Labor Standards Act shall be advised that rulings concerning such matters fall within the jurisdiction of the Department of Labor, and shall be given the address of the appropriate Regional Director of the Wage and Hour and Public Contracts Divisions of the Department of Labor. Subpart H-Nondiscrimination in Employment § 12.801 Policy. Executive Order No. 10925, dated 6 March 1961, as amended by Executive Order No. 11114, dated 22 June 1963, states that discrimination because of race, creed, color or national origin is contrary to the Constitutional principles and policies of the United States, and that it is the plain and positive obligation of the U.S. Government to promote and insure equal opportunity for all qualified persons, without regard to race, creed, color or national origin, employed by, or seeking employment with, Government contractors. To carry out this policy, the President's Committee on Equal Employment Opportunity was created by the Executive Order to provide regulations, guide lines and instructions to Government agencies. The head of each contracting agency was made primarily responsible for obtaining compliance by any contractor or subcontractor with the provisions of the Executive Order and the rules, regulations, and orders of the President's Committee. Although initial emphasis for obtaining compliance should be placed upon methods of conference, conciliation, mediation and persuasion, if such measures do not succeed in obtaining the necessary degree of progress, consideration will be given to invoking the appropriate sanctions as set forth in § 12.806–8. [28 FR. 12572, Nov. 23, 1963] § 12.802 Basic requirement. (a) Except as set forth in paragraph (d) of this section and in § 12.803, each Department shall include in each of its contracts the following clause: EQUAL OPPORTUNITY (Apr. 1964) (The following clause is applicable unless this contract is exempt under the rules and regulations of the President's Committee on Equal Employment Opportunity (41 CFR Chapter 60). Exemptions include contracts and subcontracts (i) not exceeding $10,000, (ii) not exceeding $100,000 for standard commercial supplies or raw materials, and (ii) under which work is performed outside the United States and no recruitment of workers within the United States is involved. During the performance of this contract, the Contractor agrees as follows: (a) The Contractor will not discriminate against any employee or applicant for employment because of race, creed, color, or national origin. The Contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, creed, color, or national origin. Such action shall include but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruit ment advertising; lay-off or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The Contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by the Contracting Officer setting forth the provisions of this nondiscrimination clause. (b) The Contractor will, in all solicitations or advertisements for employees placed by or on behalf of the Contractor, state that all qualified applicants will receive consideration for employment without regard to race, creed, color, or national origin. (c) The Contractor will send to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding, a notice, to be provided by the Agency Contracting Officer, advising the said labor union or workers' representative of the Contractor's commitments under this nondiscrimination clause, and shall post copies of the notice in conspicuous places available to employees and applicants for employment. (d) The Contractor will comply with all provisions of Executive Order No. 10924 of March 6, 1961, as amended, and of the rules, regulations, and relevant orders of the President's Committee on Equal Employment Opportunity created thereby. (e) The Contractor will furnish all information and reports required by Executive Order No. 10925 of March 6, 1961, as amended, and by the rules, regulations, and orders of the said Committee, or pursuant thereto, and will permit access to his books, records, and accounts by the contracting agency and the Committee for purposes of investigation to ascertain compliance with such rules, regulations, and orders. (f) In the event of the Contractor's noncompliance with the nondiscrimination clause of this contract or with any of the said rules, regulations, or orders, this contract may be cancelled, terminated, or suspended in whole or in part and the Contractor may be declared ineligible for further Government contracts in accordance with procedures authorized in Executive Order No. 10925 of March 6, 1961, as amended, and such other sanctions may be imposed and remedies invoked as provided in the said Executive Order or by rule, regulation, or order of the President's Committee on Equal Employment Opportunity, or as otherwise provided by law. (g) The Contractor will include the provisions of paragraphs (a) through (g) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the President's Committee on Equal Employment Opportunity issued pursuant to section 303 of Executive Order No. 10925 of March 6, 1961, as amended, so that such provisions will be binding upon each subcontractor or vendor.* The Contractor will take such action with respect to any subcontract or purchase order as the contracting agency may direct as a means of enforcing such provisions, including sanctions for noncompliance: Provided, however, That in the event the Contractor becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such direction by the contracting agency, the Contractor may request the United States to enter into such litigation to protect the interest of the United States. (b) Supplemental agreements that increase the scope of the contract work shall include the clause set forth above, unless exempt in accordance with § 12.803 or unless the clause is contained in the existing contract. Change orders, price redeterminations, and unilateral contract modifications are not included in this requirement. (c) Prime contractors and subcontractors may make necessary modifications in language in the clause as shall be appropriate to identify properly the parties and their undertakings. Subcontractors may incorporate by reference the above contract clause. (d) All indefinite quantity contracts, requirements contracts, and basic ordering agreements, which are to extend for more than one year or continue indefinitely; unless exempt under § 12.803, shall, in addition to the clause set forth in paragraph (a) of this section, contain the following statement: The Equal Opportunity clause contained in this contract shall be applicable upon written notice by the Contracting Officer. [30 F.R. 6009, Apr. 29, 1965] § 12.803 Applicability and exemptions. (a) The clause set forth in § 12.802 shall not be included in the following: (1) Contracts or subcontracts not involving the employment of persons. (2) Contracts, or subcontracts for $10,000 or less, except Government bills of lading. (3) Contracts or subcontracts for standard commercial supplies or raw ma *Unless otherwise provided, the "Equal Opportunity" clause is not required to be inserted in subcontracts below the second tier, except for subcontracts involving the performance of "construction work" at the "site of construction" (as those terms are defined in the Committee's rules and regulations) in which case the clause must be inserted in all such subcontracts. Subcontracts may incorporate by reference the "Equal Opportunity" clause. terials not in excess of $100,000, except when the Executive Vice Chairman, to achieve the purposes of the Executive Orders, has withdrawn such exemption in whole or in part with regard to any specified articles or raw materials, and except that contracts or subcontracts shall not be awarded for less than usual quantities to avoid applicability of the equal opportunity clause. (4) Contracts or subcontracts to be performed outside the United States where no recruitment of workers within the United States is involved (where a contract involves performance of work or recruitment of workers both within and outside the United States, the Equal Opportunity clause shall be included in the contract but shall be applicable only to work and recruitment within the United States); United States as used herein includes the Commonwealth of Puerto Rico, the Panama Canal Zone, and the possessions of the United States. (5) Contracts for the sale of Government real or personal property, where no appreciable amount of work is involved. (6) Each requirements or indefinite quantity contract and subcontract thereunder, and each basic ordering agreement, under the following circumstances: (i) When it is not to extend for more than one year and the contracting officer (or in the case of subcontractors, the prime contractor or subcontractor issuing the subcontract) determines that the amounts to be ordered are reasonably not expected to exceed $100,000 in the case of standard commercial supplies and raw materials, or $10,000 in all other cases; or (ii) When it is to extend for more than one year or continue indefinitely and the contracting officer (or in the case of subcontractors, the prime contractor or subcontractor issuing the subcontract) knows in advance that the amounts to be ordered in any year will not exceed the dollar limitations set forth in subdivision (i) of this subparagraph. A determination to exclude the contract clause pursuant to subdivisions (i) and (ii) of this subparagraph above shall be effective through the life of the contract or agreement even though the amounts actually ordered exceed the above dollar limitations, unless the scope of the contract or agreement is increased, in which case an appropriate determination for the modified contract or agreement, if |