of prison inmates in the performance of Government contracts.

(c) Such approvals may be for an individual contract, project, or program, or for a plant, division, or company, as most practicable. 81-12.102-5 Other authorized overtime.

(a) Approved overtime premiums or shift premiums may be paid for work, without the approval required by $ 112.102-4:

(1) When 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;

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

(3) 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

(4) When lower overall cost to the Government will result.

(b) The cost of such overtime premiums or shift premiums may be allowed, or considered in pricing, only to the extent the amount thereof is reasonable and properly allocable to the work involved.

8 1-12.201 General.

(a) Executive Order 11755, December 29, 1973, states as follows: “The development of the occupational and educational skills of prison inmates is essential to their rehabilitation and to their ability to make an effective return to free society. Meaningful employment serves to develop those skills. It is also true, however, that care must be exercised to avoid either the exploitation of convict labor or any unfair competition between convict labor and free labor in the production of goods and services."

(b) The Act of February 23, 1887 (18 U.S.C. 436), provided that all officers or agents of the United States were as a matter of public policy forbidden, under appropriate penalties, to hire or contract out the labor of any criminals who might thereafter be confined in any prison, jail, or other place of incarceration for the violation of any laws of the Government of the United States.

(c) Public Law 89-176 (18 U.S.C. 4082(c)(2)) empowers the Attorney General to authorize Federal prisoners to work at paid employment in the community during their terms of imprisonment under conditions that protect against both the exploitation of convict labor and unfair competition with free labor.

8 1-12.103 Federal and State labor re

quirements. Executive agencies should cooperate, and require contractors to cooperate, to the fullest extent possible, with Federal and State agencies responsible for enforcing labor requirements with respect to such matters as safety, health, and sanitation, maximum hours and minimum wages, equal pay for women, and child and convict labor,

§ 1-12.202 Basic requirement.

Pursuant to the policy originally set forth in the Act of February 23, 1887, and in accordance with the require. ments of Executive Order 11755, all contracts involving the use of appropriated funds which shall hereafter be entered into by any department or agency of the Executive branch for performance in any State, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, or the Trust Territory of the Pacific Islands shall, unless otherwise provided by law, contain a clause forbidding, in the performance of such contracts, the employment of persons undergoing sentences of imprisonment which have

Subpart 1-12.2—Convict Labor

SOURCE: 39 FR 24009, June 28, 1974, unless otherwise noted.

8 1-12.200 Scope.

This subpart prescribes policies and procedures regarding the employment

been imposed by any Federal Court or court of a State, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, or the Trust Territory of the Pacific Islands.

§ 1-12.203 Applicability.

(a) The requirement in § 1-12.202 applies, except as stated in this $ 112.203, to all contracts where performance involves the employment of labor within any State, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, or the Trust Territory of the Pacific Islands.

(b) The requirement does not apply to contracts:

(1) Subject to the provisions of the Walsh-Healey Public Contracts Act (see Subpart 1-12.6) which contains its own requirement that “no convict labor will be employed by the contractor in the manufacture or production or furnishing of any of the materials, supplies, articles, or equipment included in such contract” (As interpreted by the Secretary of Labor, the term convict labor does not prohibit the employment of Federal or State prisoners on (i) parole, (ii) probation, or (iii) employed under work release programs, meeting the same conditions applicable to the Federal program.);

(2) For the purchase of supplies or services from Federal Prison Industries, Inc.; or

(3) For the purchase from any State prison of finished supplies which may be secured in the open market or from existing stocks as distinguished from supplies requiring special fabrication.

(c) The requirement does not prohibit the employment by a contractor in the performance of such contracts of:

(1) Persons on parole or probation to work at paid employment during the term of their sentence;

(2) Persons who have been pardoned or who have served their terms; or

(3) Federal prisoners authorized by the Attorney General under 18 U.S.C. 4082(c)(2) to work at paid employment in the community during the term of their imprisonment if:

(i) The worker is paid or is in an approved work training program on a voluntary basis;

(ii) Representatives of local union central bodies or similar labor union organizations have been consulted;

(iii) Such paid employment will not result in the displacement of employed workers, or be applied in skills, crafts, or trades in which there is a surplus of available gainful labor in the locality, or impair existing contracts for seryices; and

(iv) The rates of pay and other conditions of employment will not be less than those paid or provided for work of a similar nature in the locality in which the work is being performed.

(4) Non-Federal prisoners under the conditions provided in § 1-12.203(c)(3) where the Attorney General has certified that the work release laws or regulations of the jurisdiction are in conformity with the requirements of Executive Order 11755. The order also provides that after notice and opportunity for hearing, the Attorney General shall revoke any such certification if he finds that the work-release program of the jurisdiction involved is not being conducted in conformity with the requirements of Executive Order 11755 or with its intent or purpose.

8 1-12.204 Contract clause.

The contract clause required is as follows:

CONVICT LABOR

In connection with the performance of work under this contract, the Contractor agrees not to employ any person undergoing sentence of imprisonment except as provided by Public Law 89-176, September 10, 1965 (18 U.S.C. 4082(c)(2)) and Executive Order 11755, December 29, 1973.

Subpart 1-12.3—Contract Work Hours

and Safety Standards Act (Other Than Construction Contracts)

8 1-12.300 Scope of subpart.

This subpart deals with the requirements of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333) insofar as they apply to contracts other than construction contracts dealt with in Subpart 1-12.4.

(38 FR 6673, Mar. 12, 1973)

Kwajalein Atoll, Johnston Island, and the Canal Zone.

(e) Contracts under which all work to be performed is subject to the provisions of the Walsh-Healey Public Contracts Act.

(f) Any other contracts exempt under regulations of the Secretary of Labor (29 CFR 5.14).

(29 FR 10264, July 24, 1964, as amended at 34 FR 5655, Mar. 26, 1969)

8 1-12.301 Statutory requirement.

The Contract Work Hours and Safety Standards Act provides that the wages of every laborer and mechanic employed by any contractor or subcontractor in his performance of work on any contract of the character specified in section 103 of that Act shall be computed on the basis of a standard workday of 8 hours and a standard workweek of 40 hours. Work in excess of such standard workday or workweek is permissible, provided that the wages of any laborer or mechanic so employed include compensation at

rate not less than one and one-half times the basic rate of pay for all hours worked in any workweek in excess of 8 hours in any calendar day or in excess of 40 hours in the workweek, as the case may be. "Laborers and mechanics” include apprentices, trainees, watchmen, guards, and workmen, other than seamen, performing services in connection with dredging or rock excavation in rivers or harbors. (38 FR 6674, Mar. 12, 1973]

§ 1-12.303 Contract clause.1

The contract clause set forth in § 112.303 shall be included in contracts in accordance with the provisions of $$ 112.301 and 1-12.302. The clause may be modified

as necessary in order to comply with the provisions of $ 112.304(b).

CONTRACT WORK HOURS AND SAFETY STANDARDS ACT-OVERTIME COMPENSATION

§ 1-12.302 Applicability.

The requirement set forth in § 112.301 applies, except as stated in this § 1-12.302, to all contracts which may require or involve the employment of laborers or mechanics either by a prime contractor or subcontractor. The requirement does not apply to the following:

(a) Contracts of $2,500 or less (but see Subpart 1-12.4 as to construction contracts over $2,000).

(b) Contracts for the purchase of supplies or materials or articles ordinarily available in the open market.

(c) Contracts for transportation by land, air, or water, or for the transmission of intelligence.

(d) Contracts under which work is to be performed solely within a foreign country or within a territory under the jurisdiction of the United States other than a State of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, Outer Continental Shelf Lands defined in the Outer Continental Shelf Lands Act (43 U.S.C. 1331), American Samoa, Guam, Wake Island, Eniwetok Atoll,

This contract, to the extent that it is of a character specified in the Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333), is subject to the following provisions and to all other applicable provisions and exceptions of such Act and the regulations of the Secretary of Labor thereunder.

(a) Overtime requirements. No Contractor or subcontractor contracting for any part of the contract work which may require or involve the employment of laborers, mechanics, apprentices, trainees, watchmen, and guards shall require or permit any laborer, mechanic, apprentice, trainee, watchman, or guard in any workweek in which he is employed on such work to work in excess of 8 hours in any calendar day or in excess of 40 hours in such workweek on work subject to the provisions of the Contract Work Hours and Safety Standards Act unless such laborer, mechanic, apprentice, trainee, watchman, or guard receives compensation at a rate not less than one and one-half times his basic rate of pay for all such hours worked in excess of 8 hours in any calendar day or in excess of 40 hours in such workweek, whichever is the greater number of overtime hours.

(b) Violation; liability for unpaid wages, liquidated damages. In the event of any violation of the provisions of paragraph (a), the Contractor and any subcontractor responsible therefor shall be liable to any affected employee for his unpaid wages. In addition, such Contractor and subcontractor

See Temporary Regulation 70 in the appendix to Chapter 1 for temporary changes to $ 1-12.303.

amount exceeding $10,000 (a) will be with manufacturers or regular dealers, and (b) shall incorporate by reference the representations and stipulations required by said Act pertaining to such matters as minimum wages, maximum hours, child labor, convict labor, and safe and sanitary working conditions.

§ 1-12.602 Applicability.

shall be liable to the United States for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer, mechanic, apprentice, trainee, watchman, or guard employed in violation of the provisions of paragraph (a) in the sum of $10 for each calendar day on which such employee was required or permitted to be employed on such work in excess of 8 hours or in excess of his standard workweek of 40 hours without payment of the overtime wages required by paragraph (a).

(c) Withholding for unpaid wages and liquidated damages. The Contracting Officer may withhold from the Government Prime Contractor, from any moneys payable on account of work performed by the Contractor or subcontractor, such sums as may administratively be determined to be necessary to satisfy any liabilities of such Contractor or subcontractor for unpaid wages and liquidated damages as provided in the provisions of paragraph (b).

(d) Subcontracts. The Contractor shall insert paragraphs (a) through (d) of this clause in all subcontracts, and shall require their inclusion in all subcontracts of any tier.

(e) Records. The Contractor shall maintain payroll records containing the information specified in 29 CFR 516.2(a). Such records shall be preserved for 3 years from the completion of the contract. (38 FR 6674, Mar. 12, 1973)

8 1-12.602-1 General.

The requirement set forth in 112.601 applies to contracts for the manufacture or furnishing of “materials, supplies, articles, and equipment” which are to be performed within the United States, Puerto Rico, or the Virgin Islands, and which exceed or may exceed $10,000 in amount unless exempt pursuant to § 1-12.602-2 or exempted by the Secretary of Labor (see § 1-12.602-3(a)).

8 1-12.304 Variations and tolerances.

Variations and tolerances from the provisions of this subpart which are granted under section 105 of the Contract Work Hours and Safety Standards Act by the Secretary of Labor in the case of any contract work for which such variations and tolerances have been provided (29 CFR 5.14) shall be deemed to satisfy the requirements of § 1-1.009. (38 FR 6674, Mar. 12, 1973)

8 1-12.602-2 Statutory exemptions.

(a) The following transactions are exempt from the Walsh-Healey Public Contracts Act:

(1) Purchases of generally available commercial items, negotiated pursuant to the authority set forth in § 1-3.202 or pursuant to similar authority under other laws;

(2) Purchases of perishables including dairy, livestock, and nursery products;

(3) Purchases of agricultural or farm products processed for first sale by the original producers; and

(4) Purchases of agricultural commodities or the products thereof made by the Secretary of Agriculture under the Agricultural Adjustment Act program or for purposes within the general scope and aim of that program, such as stabilization and increase of market prices to farmers.

(b) Contracting officers are cautioned to refer to the Department of Labor regulations and interpretations (see § 1-12.602-3(a)) in order to ascertain the applicability of the exemptions.

Subparts 1-12.4-1-12.5—[Reserved]

Subpart 1-12.6—Walsh-Healey Public

Contracts Act

§ 1-12.601 Statutory requirement.

In accordance with the requirement of the Walsh-Healey Public Contracts Act (41 U.S.C. 35-45), all contracts subject to said Act entered into by any executive agency for the manufacture or furnishing of supplies in any

8 1-12.603 Determinations of eligibility as

manufacturer or regular dealer.

§ 1-12.602-3 Department of Labor regula

tions and interpretations. (a) Pursuant to the Walsh-Healey Public Contracts Act, the Secretary of Labor has issued detailed regulations and interpretations as to the coverage of said Act, and exemptions and procedures thereunder. The regulations are issued in the Code of Federal Regulations, Title 41, Chapter 50. The interpretations are compiled in a document entitled “Walsh-Healey Public Contracts Act, Rulings and Interpretations."

(b) Attention is directed to the following which give the substance of certain Department of Labor opinions:

(1) 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 Public Contracts Act after date of such modification; and 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. (Opinion of August 9, 1944.)

(2) When a contract awarded to a primary contractor contains a provision making him an agent of the Government, the primary contractor is required to include the stipulations of the Walsh-Healey Public Contracts Act in contracts he awards for and on behalf of the Government for materials, supplies, articles, or equipment in excess of $10,000 to be used in the construction and equipment of Government facilities. (Opinion of September 6, 1941.)

(3) The stipulations of the WalshHealey Public Contracts Act, incorporated into and made a part of Government contracts for the manufacture and furnishing of materials, supplies, articles, or equipment, awarded to persons or companies operating Government-owned facilities, affect the employees of such contractors in the same manner and to the same extent as those affecting employees of contractors operating privately-owned facilities. (Opinion of August 21, 1942.)

1-12.603-1 Manufacturer.

As used in § 1-12.601 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 (a) that he is an established manufacturer of the particular goods or goods of the general character sought by the Government, or (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; however, this interpretation is not intended to qualify a firm whose arrangements to use space, equipment, or personnel are contingent upon the award of a Government contract.

8 1-12.603-2 Regular dealer.

(a) Except as set forth in paragraph (b) of this § 1-12.603-2, as used in § 112.601 a regular dealer is a person who owns, operates, or maintains a store, warehouse, or other establishment in which materials, 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