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applicability and any procedures thereunder, and (c) prescribes the contract

I clauses with respect to each labor law or requirement.

[25 F.R. 14268, Dec. 31, 1960]

Subpart A-Basic Labor Policies

§ 12.101 Labor relations. =[27 F.R. 3453, Apr. 11, 1962] = § 12.101-1 General.

(a) Military procurement depends on industry and labor for uninterrupted performance of contracts to meet defense objectives. Each Military Department must establish and maintain sound working relationships with industry and labor to assure prompt receipt of information involving labor relations matters which may affect adversely military procurement and to assure that procurement actions are carried on without delay and at reasonable costs to the Government.

(b) All problems arising out of the labor relations of contractors and all communications with labor organizations or Federal agencies relative thereto shall be handled in accordance with the procedures prescribed in this part. Industrial security matters concerning contractor employees are governed by the Armed Forces Industrial Security Regulation (AR 380-130, OPNAV Instructions 5540.8c, AFR 205-4).

(c) With respect to labor relations matters in general, no Department shall take any independent action whose result would have the effect of establishing major policy, or unless approval of the Office of the Assistant Secretary of Defense (Manpower) has been obtained. -Each Department must determine for itself what actions involve major policy. Recommendations for plant seizure or for injunctive action against labor or management would be examples of actions establishing major policy.

(d) Heads of procuring activities or subordinate commands or their representatives shall obtain authorization from the responsible Departmental headquarters office prior to initiating any contact on labor relations matters with a national office of any labor organization, Government department, agency or and other govermental organization = shall promptly notify such headquarters office of each contact by the national office of any of these organizations.

(e) Military Departments shall remain impartial in, and refrain from taking a position on the merits of, any labor dispute, and shall refrain from the conciliation, mediation or arbitration of any such dispute. They shall, however, act to avoid or minimize the impact of labor disputes on important procurement by assuring, to the extent practicable, that the parties to the dispute utilize all available methods for resolving the dispute, including the services of the National Labor Relations Board, Federal Mediation and Conciliation Service, National Mediation Board and other appropriate Federal, state, local, or private agencies.

(f) Each Department shall take other action in connection with labor relations problems which is consistent with its procurement responsibilties, as for example:

(1) Giving notice of the existence of a labor dispute, which affects, or threatens to affect, procurement of supplies or services, to the Government agency which has responsibility for conciliation, mediation, arbitration, or other action with respect thereto;

(2) Advising the Government agency responsible for action with respect to labor disputes, or the parties to a labor dispute, of factual information pertaining to procurement of the supplies or services involved, to the extent consistent with security regulations; or

(3) Seeking to obtain such voluntary agreement between management and labor as will permit, notwithstanding the general continuance of the dispute, uninterrupted procurement of military supplies and services, provided such activity does not involve the Department in the merits of a labor difference or dispute.

[30 F.R. 6003, Apr. 29, 1965] § 12.101-2

istration.

Contract pricing and admin

(a) Nothing in § 12.101-1 should be construed to relieve a contracting officer from his responsibility to achieve efficient contract pricing and administration.

(b) Contractor labor policies and compensation practices, whether or not they are provided for in labor-management agreements, are not an acceptable basis for allowance of cost in cost-reimbursement-type contracts or for recognition of

costs in pricing fixed-price-type contracts if and insofar as they result in unreasonable costs to the Government. Part 15 of this subchapter particularly § 15.205-6(a) explains that the term "unreasonable costs" includes costs resulting from practices that are discriminatory against the Government or unwarranted in the context of the particular contract work.

(c) In some cases, labor disputes may give rise to work stoppages which cause delays in the timely performance of important contracts. The contracting officer should impress on the contractor that he will be held accountable for delays that are reasonably avoidable. It should be emphasized that the standard contract clauses dealing with default, excusable delays, etc., do not relieve the contractor of delays that are not beyond his or his subcontractors' control. A delay caused by a strike which is an unfair labor practice and which the contractor could not reasonably prevent can be excused only to the extent that it does not go beyond the point at which a reasonably diligent contractor could resume the delayed performance by ending the strike by such means as:

(1) Filing a charge with the National Labor Relations Board so as to permit the NLRB to seek injunctive relief in court;

(2) Recourse to the procedures of the Missile Sites Labor Commission, or other available Government procedures; or

(3) Use of the National Joint Board for the Settlement of Jurisdictional Disputes, or other private Boards or organizations for the settlement of disputes.

(d) The normal and regular functions of inspection at the plant of a military supplier, as required during the performance of a contract, shall be continued without regard to the existence at such plant of a labor dispute, strike, or picket line. Inspection should not be performed if there is reason to believe that the physical safety of the individual inspector may be endangered thereby. It is emphasized that inspection personnel in the discharge of their duties, consistent with the policy of § 12.101-1 (e), shall refrain from taking or expressing a position upon the merits of any dispute between labor and private management. [27 F.R. 3453, Apr. 11, 1962, as amended at 30 F.R. 6004, Apr. 29, 1965]

§ 12.101-3 Reporting of labor disputes.

(a) The responsible military commander or contracting officer or the representative of either shall obtain and transmit information relating to potential or actual labor disputes which may interfere with performance of any contract within his cognizance.

(b) Whenever it is determined that such an interference is likely to occur, he shall notify all offices listed below for the affected Department, except as provided in paragraph (d) of this section:

1) Reports involving Army contracts. Reports shall be submitted to the Head of the Procuring Activity concerned with information copies to intermediate procurement offices. Simultaneously, copies of each report shall be sent directly to the Assistant Secretary of the Army (Installations and Logistics), ATTN: Labor Advisor, and to ODCSLOG, ATTN: Chief, PEMA Execution Division. (2) Reports involving Navy contracts. Reports shall be submitted simultaneously to the Chief of Naval Material, a ATTN: Labor Relations Advisor; Head of the Procuring Activity concerned; cognizant contracting officers; inspection offices concerned; status control activities; and the Director, Transportation Division (H1), Bureau of Supplies and Accounts, when contracts involve (i) packing, crating, and drayage of household goods; and (ii) stevedoring services at naval activities.

(3) Reports involving Air Force contracts. The responsible military commander, the contracting officer, or the representative of either, shall submit reports as follows:

(i) Reports relating to any missile or test site or other high-priority Air Force program as designated by Headquarters, USAF, or Headquarters AFSC shall be submitted daily by electrical transmission to Headquarters AFSC (SCKML), with copies to BSD, SSD, and WCMR, Air Force Unit Post Office, Los Angeles, Calif., 90045; Headquarters, SAC, Offutt Air Force Base, Omaha, Nebr., 68113; and Headquarters, USAF (AFSPPDB). Washington, D.C., 20330.

(ii) Reports of disputes not directly affecting missile or test sites or other high-priority programs shall be submitted when the dispute arises and weekly thereafter to the major air command responsible for the program, contract, or

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strikes affect AFLC programs, contracts, or activities, a copy of the report shall be sent directly to the AFLC buying activity. No copies shall be sent to Headquarters AFLC unless specifically requested.) An information copy of initial and weekly reports shall be sent to Headquarters, AFSC (SCKML), Andrews Air Force Base, Washington, D.C., 20331. Consolidated weekly reports shall be submitted by AFSC to Headquarters USAF (AFSPPDB). Initial and subsequent reports containing all the information immediately available shall be submitted promptly after a work stoppage occurs.

(4) Reports involving Defense Supply Agency contracts. Reports shall be submitted to the head of the procuring activity concerned. Only those disputes, stoppages, or threatened stoppages which, in the opinion of the head of the procuring activity, are of sufficient importance to warrant attention of higher authority shall be reported, in duplicate, to the labor advisor, Defense Supply Agency, as prescribed in § 12.101-4.

(c) Labor disputes should be reported on DD Form 1507, Work Stoppage Report. An initial report should be submitted when a dispute occurs and not less than weekly thereafter for the duration of the dispute, showing only new or changed information. Where a more rapid means of transmission is required the report shall follow the order indicated by DD Form 1507. The final report shall include important terms of agreement, strike settlement date, and date of resumption of work. Where the work stoppage involves a missile or test site or Army Corps of Engineers contract, the approximate number of man-days lost shall be reported.

(d) In cases where the responsible individual originating the report is outside the Military Department which placed the contract, he shall give notice to the procuring office (which shall process the notice in accordance with paragraph (b) of this section) and to the appropriate Departmental headquarters labor relations office (for the Army, the Labor Advisor, OASA (I&L); for the Navy, Chief of Naval Material, ATTN: Labor Relations Advisor; for the Air Force, Headquarters USAF, AFSPPDB; for Defense Supply Agency, Labor Advisor, DSA).

(e) Reports shall be made to the Office of the Secretary of Defense:

case

(1) Individual cases. In any where a Military Department determines that a labor dispute significantly affects, or threatens to affect, an important procurement, the Department concerned shall notify the Director, Industrial Relations, OASD (Manpower) by furnishing an information copy of DD Form 1507.

(2) Weekly reports. A weekly report shall be made by each Military Department to the Director, Industrial Relations, OASD (Manpower) briefly indicating those disputes which threaten important military programs and any actions taken in connection therewith. Negative reports are not required.

[30 F.R. 6004, Apr. 29, 1965, as amended at 30 F.R. 14092, Nov. 9, 1965]

§ 12.101-4

Impact of labor disputes on defense programs.

(a) Each Military Department shall determine the degree of impact of potential or actual labor disputes on its own programs and requirements, considering among others the following factors:

(1) Whether the dispute involves a product, project, or service which must be obtained in order to meet schedules for urgently needed military programs or requirements; or

(2) Whether alternative sources of supply for the product, project, or service involved are reasonably available to fulfill the requirement or program in time to maintain essential military schedules.

(b) Within each Military Department, the procuring activity involved shall obtain and develop data reflecting the impact of a dispute on requirements and programs. Upon determining the impact, the head of the procuring activity shall submit through appropriate channels a report of his findings, together with recommendations, to the headquarters labor relations office originally notified pursuant to § 12.101-3 (b). Such reports shall be in narrative form and shall include the following information:

(1) Location of dispute and name of contractor or subcontractor involved;

(2) A statement indicating the degree of impact, relating specific items or construction involved to the programs or requirements affected;

(3) Identity of alternate sources available to furnish supply or service within the time required;

(4) A description of any action taken to reduce impact;

(5) Where need for removal of material is indicated, the report should include the following information:

(i) How soon the material can be obtained;

(ii) Description of items to be moved (nature of items, amount, approximate weight and cubic feet, purchase order number, shop order number, etc.);

(iii) Amount of work required to move items (include need for finishing work, and crating and shipping preparations);

(iv) Mode of transportation by which items are to be moved and whether by government or commercial bill of lading; and

(v) Destination of items. [30 F.R. 6004, Apr. 29, 1965]

§ 12.101-5

Movement and removal of items from facilities affected by work stoppage.

(a) It is the policy of the Department of Defense with respect to the movement of items from facilities affected by work stoppages to avoid the use of force or the appearance of force and to prevent the occurrence of incidents which will detrimentally affect relations with labor and management.

(b) Materials which the contractor is unable to deliver because of a work stoppage at the plant, and the delivery of which is necessary to an important program, may be obtained in accordance with procedures set forth below:

(1) Subject to § 12.101-1 (d), the contracting officer or his representative may work out an arrangement agreeable to both management and the labor representatives involved for shipment by normal means of urgently required material.

(2) If an arrangement in accord with subparagraph (1) of this paragraph cannot be made, the contracting officer or his representative, after obtaining approval from the responsible Departmental headquarters labor relations office, may seek the concurrence of parties to the dispute to permit movement of the required material by military vehicles with military personnel to the extent needed. On receipt of such concurrence, he may proceed to make necessary arrangements to move the material.

(3) If satisfactory arrangements under subparagraphs (1) or (2) of this paragraph cannot be made, the matter shall be referred to the responsible De

partmental headquarters labor relations office with the information required by § 12.101-4(b). If that office is unsuccessful in obtaining the voluntary concurrences of the parties for movement of the material involved and further action to obtain the material is deemed necessary, the matter shall be referred 1 to the Director, Industrial Relations, OASD (Manpower).

(4) If after

consultation between OASD (Manpower) and the Military Department concerned, it appears that the items involved are critically needed and cannot be moved with the consent of the parties, the case shall be returned to the Secretary of the Military Department, n who may order removal of the material.

(c) Where two or more Military Departments are or may become involved in the movement or removal of the material, the departments concerned, where practicable, shall designate a single department to make arrangements in accord with paragraph (b) of this section. [30 F.R. 6005, Apr. 29, 1965]

§ 12.101-6 Procurement of stevedoring services during labor disputes.

Where stevedoring services are furnished by a contractor to a Military Department, and the performance under the contract, although urgently required. is delayed through a labor dispute, the following procedures shall be utilized in the order of priority listed. Each successive procedure shall be used only when the preceding steps are inadequate.

(a) An attempt shall be made to have management and labor voluntarily agree to exempt military supplies from the labor dispute by continuing the movement of such material.

(b) Vessels shall be diverted to alternate ports able to provide necessary stevedoring services.

(c) Consideration shall be given to contracting with reliable alternative sources of supply within the stevedoring industry.

(d) Civil Service stevedores shall be utilized to perform the work theretofore performed by contract stevedores.

(e) Military personnel shall be utilized to handle the cargo which was being har.dled by contract stevedores prior to the labor dispute.

(f) Where the exigencies of a situation require deviation from the procedures outlined above, Departmental labor relations headquarters offices set forth in § 12.101-3(d) shall be notified promptly.

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I

(a) "Normal work week" and "normal work day" mean, generally, a work week of 40 hours and a work day of 8 hours, respectively: Provided, That, in any area I outside the United States, its Territories, its possessions, and Puerto Rico, a work week longer than 40 hours, or a work day à longer than 8 hours will be considered : normal (1) if such work week or work day does not exceed that which is normal for such area, as determined by local custom, tradition, or law, and (2) if hours worked in excess of 40 in such work week, or 8 in such work day, are not compensated at a premium rate of pay.

(b) "Overtime" means time worked by a contractor's employee in excess of the employee's normal work week or normal work day.

(c) "Shift premium" means the difference between the compensation paid to an employee at the contractor's regular rate of pay for the base shift and that paid at the regular rate of pay for extra-pay-shift work.

(d) "Overtime premium" means the difference between the compensation paid to an employee at the contractor's regular rate of pay for the shift involved and that paid for hours worked overtime. 125 F.R. 14268, Dec. 31, 1960] § 12.102-2

Policy.

It is the policy of the Department of Defense that all contracts will be performed, so far as practicable, without the use of overtime, particularly as a regular employment practice. Overtime shall be limited to and be the minimum needed for the accomplishment of specific work. Contractors shall utilize whatever work schedule results in the lowest overall cost to the Government consistent with contract delivery and performance requirements. Extra-pay shifts and multishift work should be scheduled, as required, to achieve these objectives. [27 F.R. 3453, Apr. 11, 1962]

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(a) Allowable cost shall not include any amount on account of overtime premiums, except to the extent that they either (i) are approved in writing on behalf of the Government or (ii) are paid for work—

(A) Necessary to cope with emergencies such as those resulting from accidents, natural disasters, breakdowns of production equipment, or occasional production bottlenecks of a sporadic nature;

(B) By indirect labor employees such as those performing duties in connection with administration, protection, transportation, maintenance, standby plant protection, operation of utilities, or accounting;

(C) In the performance of tests, industrial processes, laboratory procedures, loading or unloading of transportation media, and operations in flight or afloat, which are continuous in nature and cannot reasonably be interrupted or otherwise completed; or (D) Which will result in lower overall cost to the Government.

(b) The cost of overtime premiums otherwise allowable under (a) above shall be allowed only to the extent the amount thereof is reasonable and properly allocable to the work under this contract.

(b) Where overtime premiums are being paid in connection with the performance of Government contracts (and approval is required), the continued need therefor shall be subject to periodic review.

(c) Where two or more Military contracting activities have concurrent contracts at a single facility and the approval of payments of overtime premiums by one such activity is likely to affect the performance of, or payments in connection with, contracts of another such activity, the activities concerned will agree as to which will represent them in (1) determining whether such payments shall be approved pursuant to § 12.102-4 and (2) scheduling of periodic reviews. Decisions of such representative shall be binding upon all contracting activities concerned. Ordinarily, in the absence of evidence to the

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