shall be issued not less than 14 calendar days prior to the bid opening date, which date shall be extended if necessary to cover the 14-day period.

(d) Use of wage determinations. Wage determinations expire 120 days after the date thereof, and may not be incorporated in contracts awarded thereafter, unless extended in accordance with section 5.4a of the regulations of the Secretary of Labor. All actions by the Secretary of Labor changing or modifying original wage determinations prior to the award of the contract shall be applicable thereto, except that modifications received by the agency later than 10 days before the opening of bids shall not be effective.

(e) Apprentice wage rates. Department of Labor regulations require that invitations to bid on construction contracts in excess of $2,000 include the provision regarding employment of apprentices, Article 3 of Standard Form 19A. Apprentices shall be paid wage rates established in the applicable apprenticeship program. Questions concerning payment of apprentices shall be referred through channels to the Department of Labor.

[34 FR 146, Jan. 4, 1969, as amended at 42 FR 20468, Apr. 20, 1977]

§ 4-18.5002 Nonrebate of wages-Copeland Act.

The Copeland Act, also known as the "Kick-Back Act" (18 U.S.C. 874) makes it unlawful to prevent anyone employed in the construction, alteration, or repair of buildings or works financed in whole or in part by the United States from receiving the rates of pay legally due. This Act, unlike the Davis-Bacon Act, applies regardless of the contract amount. The required contract provision is stated in Clause 5 of Standard Form 19A. (See § 116.901-19A of this title.)

[34 FR 146, Jan. 4, 1969, as amended at 42 FR 20468, Apr. 20, 1977]

§ 4-18.5003 Contract Work Hours and Safety Standards Act.

The Contract Work Hours and Safety Standards Act (40 U.S.C. 327333) relates to the 8-hour day, 40-hour week, overtime compensation of labor

(a) When performance and payment bonds are received, they should be administratively approved as to form and sufficiency by the Contracting Officer. See 84-10.152 of this Title for instructions on approval and filing of bonds.

(b) If the contractor fails to furnish acceptable performance and payment bonds, the contract is subject to termination for default. (See § 1-18.803 of this title.) See also §§ 1-10.104-1(d) and 1-10.105-1(d) of this title.

[42 FR 20468, Apr. 20, 1977]

§ 4-18.5102 Notice to proceed.

When the contract is returned by the contractor, it should be checked for appropriate signatures. Upon approval of the contract and bonds by the contracting officer, the notice to proceed should be issued as provided in the contract. Ordinarily, this will be by letter directing the contractor to proceed with the work within the period of time after date of receipt of the notice to proceed, as stated in the contract. This notice should be sent by registered or certified mail with return receipt in order to determine the starting date of contract time.

§ 4-18.5103 Changes in construction contracts.

(a) Contract provision. In accordance with Clause 3 of Standard Form 23A and Clause 1 of Standard Form 19, the contracting officer may at any time, by a written order, make changes in the drawings and/or specifications of the contract, if within the general scope thereof.

(b) Determination of contract adjustment. If changes cause an increase or decrease in the contractor's cost of, or in the time required for, performance of the contract, an equitable ad

justment in the amount to be paid the contractor and/or in the time of performance shall be made by the contracting officer in accordance with § 418.5107.

(c) Change order. The change shall be made by means of a written change order which may be by letter or on agency forms. The order shall cite the changes clause of the contract as the basis and authority for ordering the change. As a general rule, the order setting forth the changed work and the adjustment in price and/or time should be issued before commencement of the changed work. Only where time is not available and the changed work must proceed without delay may the change be initiated by a "two-part" change order. Part I will then be issued, setting forth the scope of the change, stating that the contractor is to proceed with the work as changed and that adjustments in contract price and/or time will be made at an early date. Part II would be issued as soon as adequate data is developed to enable making the equitable adjustment. Provision should also be made for receipt and acceptance of the change order(s) by the contractor, including his agreement to the adjustment in contract price and/or time specified therein. No conditions shall be extended by the contracting officer for nonacceptance, such as withholding of otherwise due payments, agreements on items in dispute, etc. Failure to agree on terms of the change shall be handled as a dispute. Prior to issuance of a change order increasing the contract amount, the contracting officer must have written assurance that funds are available and reserved for the proposed action. Also, the surety should be advised of the change, although this is not required by the contract terms.

(d) Authorized changes. The cited contract provision includes any structural changes to the total work which can be said to have been fairly and reasonably within the contemplation of the parties at the time the contract was made. It includes nonstructural changes necessary to carry on the work such as changes in sequence of operations, acceleration of work, and

changes in Government furnished materials.

(e) Timeliness. Contract performance may be suspended or delayed by the contracting officer for a reasonable time, where necessary to work out the details of a proposed change and issue a change order. What is a reasonable time depends upon the extent of the change and other material circumstances. In any event, the contracting officer should proceed with contract changes, and adjustments thereunder, in a manner calculated to minimize any adverse effect on the contractor.

(f) Disputes. If the contractor does not agree with the adjustment in the change order, he must nonetheless proceed with the prosecution of the work as ordered. He is allowed a period of 30 days from the date of receipt of the change order by the changes provision of the contract within which to claim further adjustment. However, if the contracting officer determines that the facts justify such action, i.e., that the delay is not prejudicial to the Government, and evidence is available to determine the merits of the claim, he may consider and adjust any such claim if asserted at any time prior to the date of final payment under the contract. Upon receipt of such a claim, the contracting officer shall consider the facts and make whatever further adjustment in the contract is justified in accordance with the procedures for equitable adjustments stated in § 4-18.5107.

§ 4-18.5104 Differing site conditions.

(a) Contract provisions. Clause 4 of Standard Form 23A provides that the contractor shall promptly, and before such conditions are disturbed, notify the Contracting Officer in writing of (1) subsurface or latent physical conditions at the site differing materially from those indicated in the contract, or (2) unknown physical conditions at the site of an unusual nature, differing materially from those ordinarily encountered and generally recognized as inhering in work of the character provided for in the contract. Similar language appears in Clause 1 of Standard Form 19. These standard forms provide that if such conditions cause

an increase in the cost of, or in the time required for, performance of any part of the work under the contract, whether or not changed as a result of such conditions, an equitable adjustment in the amount to be paid the contractor and/or in the time of performance shall be made by the contracting officer, unless the contractor fails to give the required notice and the contracting officer does not consider waiver of the notice to be justified.

(b) What constitutes a differing site condition—(1) Misrepresented conditions. The first category of conditions cognizable under the differing site conditions clause is those physical conditions differing materially from that indicated by the invitation and contract, including all plans, drawings, specifications, logs, charts, and other parts thereof. If the Government intentionally or unintentionally misrepresented what had been found in the course of its site investigative work, or found otherwise, or withheld pertinent information which could have had a substantial bearing on the contractor's bid calculations and the contractor

was therefore damaged through his reasonable reliance upon the information provided by the Government, he is entitled to an equitable adjustment. In such a case, the usual contract clauses warning the bidder to inspect the site, and at the same time disclaiming responsibility of the Government for inaccuracy of information supplied, are insufficient to overcome the Government's failure to supply available, accurate information. On the other hand, if the Government shows fairly, honestly, and completely what it has found, the fact that what it does show may not be representative of the conditions later found to exist will not enable the contractor to be relieved because of misrepresentation. :(2) Unanticipated conditions. This category of conditions includes those -existing at the time the contract was made which were unknown to both parties, and of such unusual nature that a competent contractor would not have anticipated their presence under the circumstances. Relief does not depend upon a comparison of the con

ditions found with the contract documents, but rather on whether the actual conditions encountered do differ substantially from what a contractor should reasonably have expected, based not only upon the information furnished by the Government, but also upon the conclusions which would reasonably be drawn from generally known conditions of the surrounding area and the nature of the job to be done. Statements in the invitation that the contractor is responsible for informing himself of conditions at the site, or that disclaim responsibility of the Government for unknown conditions cannot detract from the right given the contractor by the Differing Site Conditions Clause to an equitable adjustment if he encounters conditions which he could not reasonably be expected to have foreseen under the circumstances. However, if the bidder is given an opportunity to inspect the site and fails to do so, he cannot obtain relief on the basis of ignorance of conditions of which he could have been warned by a thorough visual inspection. Unusual weather conditions are not considered differing physical conditions within the meaning of this clause.

(c) Determination of contract adjustment. Upon receipt of notice of a differing site condition from the contractor, the contracting officer shall promptly investigate the conditions and if he finds that such conditions do so materially differ and cause an increase or decrease in the cost of, or the time required for, performance of any part of the work under the contract, he shall determine and make an equitable adjustment as provided in § 4-18.5107. No claim for adjustment shall be allowed unless the contractor has given written notice of the differing conditions prior to their being disturbed, unless the Government actually knew of the conditions, or where its interests were not prejudiced by failure to give notice at the time required, or where evidence is available to establish the merits of the claim.

(d) Disputes. If the contractor does not agree with the adjustment made by the contracting officer, he may so notify the contracting officer, who

then shall prepare a finding of fact and make a decision, as provided in § 4-50.104 of this chapter. In accordance with the contract Disputes Clause, the contractor may appeal from the decision of the contracting officer within 30 days from the date of receipt thereof.

(e) Contract provisions for estimated quantities. (1) Where quantities of items, such as earth excavation, rock removal, etc., are estimated, consideration should be given to including in the contract a special provision establishing the point at which overruns or underruns of such estimated quantities shall be considered as entitling the Government or the contractor to an equitable adjustment in the contract price. The following language is prescribed for such a provision:

QUANTITY VARIATIONS

(a) Where the quantity of work shown for an item in the schedule of items, including any modification thereof, is estimated, no adjustment of the contract price nor of the performance time shall be made for overruns or underruns which are within twentyfive (25) percent of the estimated quantity of any such item.

(b) For overruns of more than twenty-five (25) percent, the Contracting Officer shall reestimate the quantity for the item, establish an equitable contract price for the overrun of more than twenty-five (25) percent, adjust contract performance time equitably, and modify the contract in writing accordingly; this clause to thereafter be applicable to the total reestimated item quantity.

(c) For underruns of more than twentyfive (25) percent, the Contracting Officer shall determine the quantity for the item, establish an equitable contract price therefor, adjust contract performance time equitably, and modify the contract in writing accordingly.

Additional language may be included limiting application of the provision to major items in the contract.

§ 4-18.5105 Work orders.

The term "work orders" is used for a variety of actions which are within the general scope of the contract, but which do not increase or decrease the amount due under the contract or the time required for its performance. Any situation involving a "Change" or "Differing Site Conditions," as described in §§ 4-18.5103 and 4-18.5104,

requires a change order signed by the contracting officer whether or not there is a change in the contract amount or time of performance. Work orders would be used for any situation where it is advisable to direct the contractor in writing to fulfill some contract requirement in a specific way, such as when he ignores verbal directions, or to order performance of work for which a contingent sum is set up in the schedule of items of work and which is not covered by the notice to proceed, or to establish specifications for portions of work which the contract provides shall be at the direction of the engineer, etc. Work orders are a part of the official actions under a contract and as such are to be retained as a part of the contract file.

§ 4-18.5106 Amendment.

All changes in contract work within the general scope contemplated by the contract will be ordered by change orders. When additional work outside the scope of the contract is required, and it is determined that the contractor is the only reasonable source, such additional work may be included in the contract by an amendment in the form of a supplemental agreement which must be signed by the contractor. The contract file must contain a statement adequately supporting the execution of the agreement as being within the exceptions to the statutory advertising requirements.

§ 4-18.5107 Equitable adjustment.

(a) Authority. The standard contract clauses such as for "Changes", "Differing Site Conditions", "Disputes", etc., provide for the making of equitable adjustments in contract price and time.

(b) Determination. The method cf determining the equitable adjustment varies, dependent upon whether work is, or is to be, completed, and upon the adequacy of contractor's accounts, the nature of the work, etc. While rigid rules applicable to all circumstances cannot be given, these are some rules of general application:

(1) The costs that will be reasonably experienced by the contractor should be used. The costs of a more experi

enced company should not be used as a standard.

(2) Profit is allowable unless the contract provision specifically limits recovery to costs. However, anticipated profit on work deleted may not be included.

(3) Adjustments may be based on fair and reasonable approximations of the costs made by experts.

(4) The mere difference between the originally estimated cost of performance and the actual cost of performing changed work is not of itself an acceptable basis for making the adjustment. What would be reasonable costs of performing the work must be determined.

(5) Adjustments in both time and price should be made concurrently. Any adjustment in contract time is a recognition that cost of performance may be subject to adjustment.

(c) Documentation. The final determination of an equitable adjustment, including the basis therefor, must be in writing. Agreement thereto in writing by the contractor must be obtained when the contract requires such agreement. Documented agreement is desirable in any case.

(d) Disputes. Failure to agree upon an adjustment in the contract shall be settled in accordance with procedures stated in Subpart 4-50.1 of this chapter.

§ 4-18.5108 Work progress reports and invoices.

As a minimum, the contracting officer should be advised once each month as to the progress of construction work in such terms as to enable him to judge whether satisfactory progress under the contract is being obtained. The work progress report may be in the form of an estimate of work accomplished under each item which, if in appropriate detail, may be used by the contractor as his invoice.

§ 4-18.5109 Extension of contract time.

Extension of contract time may be authorized only when contract general provisions (such as clauses 3, 4, and/or 5 of SF-23A) provide specific authority therefor. When an extension of contract time is requested because of

delays due to causes as specified in the contract, the contracting officer shall ascertain the facts and prepare and furnish to the contractor a report of his findings and decision. (See § 18.602-3 of this title.)

§ 4-18.5110 Claims arising out of breach of contract by the Government.

(a) Claims by contractors arising out of breach of contract by the Government may not be settled administratively.

(b) If the Contracting Officer determines, based upon the facts surrounding the alleged breach, that responsibility should clearly rest with the Government; and, if the claim is reasonable, just, and agreed to by both parties as to amount, it should be submitted to the General Accounting Office for settlement.

(c) All such claims shall be accompanied by all available evidence and shall extend only to the actual costs incurred which are in excess of the costs which reasonably would have been incurred but for the breach of contract by the Government.