§ 29-1.315 Use of liquidated damages provisions in procurement contracts. § 29-1.315-2 Policy. (a) Determination as to the use of liquidated damages provisions in a contract, and of the rate of such damages, is solely the responsibility of the contracting officer. In making the determination, the contracting officer shall obtain essential facts from the requisitioning office and be guided by a strict application of the criteria set forth in § 1-1.315-2 of this title and by the following general policies: (1) Liquidated damages provisions will not be used routinely in DOL contracts, but they may be used when failure to meet the completion or delivery schedule will likely cause DOL to suffer substantial damages, the amount of which is difficult or impossible to determine or prove. (2) Where the quantity of an item being procured includes a number of items the need for which is urgent, care shall be taken to have the liquidated damages provisions apply only to the urgently needed quantity. However, where rates are applied to quantities or groups, assessment of damages will not be prorated for delay of partial quantities. (3) Liquidated damages provisions generally should not be used: (i) In contracts for supplies or services required for routine administrative purposes; (ii) in contracts for standard commercial or "off-the-shelf" items; (iii) in any contract where time of performance is not a primary factor; (iv) in small purchases (under $10,000); (v) in study, experimental, development, or research contracts including equipment contracts requiring developmental work; and (vi) where the delivery schedule does not reflect the date the item is actually needed but the date the item is desired. (4) A fixed formula, based on percentage of value, shall not be used to establish the rate of damages. Consideration shall be given to the following factors in establishing the rate of damages: (i) The number of programs affected; (ii) the importance of the item in relation to the program for which it is intended; (iii) the relative impor tance of the program or programs in the overall mission of DOL; (iv) the reasonableness of the lead time for delivery in the contract schedule; and (v) any unusual damages that can be anticipated. (5) Unless it is clear that partial delivery will proportionately reduce the extent of probable damages, rates shall not be applied to individual units of an item, but rather to quantities of an item or to groups of items which are required for delivery or completion at the same time. Rates should generally be expressed in terms of even dollars per day of delay per unit of the quantity of units to which the clause is applicable. When making partial or progress payments due anytime after the delivery date has passed for undelivered items covered by a liquidated damages provision, deductions for liquidated damages should be made for the actual number of days of delay that have elapsed from the time of the scheduled delivery to the time the partial or progress payment was due to the contractor. (b) Any contract providing for liquidated damages shall contain a maximum dollar limitation on contractor's total liability as a result of the liquidated damages clause, which limit shall be appropriate for the circumstances of the particular procurement. In no event, however, shall such a dollar limit exceed the total amount of dollars the Government would have owed the contractor for full, complete, timely, and satisfactory performance. (c) When liquidated damages provisions are used in a contract, the contracting officer is responsible for the adequacy of documentation in the file showing why delivery is critical, the nature of the damage that would be suffered by the Government if the contractor failed to make delivery and why the amount of such damages is either impossible to ascertain or prove either at the time the contract is awarded or within a reasonable time thereafter. (d) Where liquidated damage provisions are used, they shall be strictly enforced. In such cases where the contractor's delay was clearly caused, at least in part, by the Government 30 110 0 "x 11 which contributed, substantially if not exclusively, to the contractor's delayed delivery, the contracting officer shall 'take such matters into consideration as well as any other legal excuse of the contractor and shall make findings appropriate to the situation. However, it shall be the contractor's responsibility to give notice of delays in connection with any request for contract time extension or request for remission of damages, in whole or in part. In either event, the request shall be amply documented by the contractor. If it is determined that the liquidated damages are applicable, the contracting officer shall have no authority to waive any Government rights in the matter. This does not preclude the contracting officer's initiating recommendations for remission of liquidated damages by the Comptroller General. (e) A submission to the Comptroller General recommending the remission of liquidated damages in accordance with 41 U.S.C. 256a shall be prepared for the signature of the Assistant Secretary for Administration and Management. All relevant facts and documents shall accompany the submission, e.g.: (1) Conditions which prompted the assessment of damages, (2) findings and decisions of the contracting officer, and (3) the decision of the Board of Contract Appeals, if any. (f) On a default termination of a fixed price supply contract, liquidated damages continue to accrue, even after default, until the DOL can reasonably obtain delivery of the items through reprocurement. This is in addition to any other DOL remedy under the Default provision for recovering the excess costs to DOL of reprocuring from other sources the items that were to have been obtained in the terminated contract. If, however, the DOL does not reprocure the items, liquidated damages shall not be assessed against the contractor. [36 FR 3054, Feb. 17, 1971, as amended at 42 FR 40198, Aug. 9, 1977] § 29-1.318 Disputes clause. § 29-1.318-1 Contracting officer's decision under a Disputes clause. When a final decision of the contracting officer involves a dispute that is or may be subject to the Disputes clause, the paragraph set forth below shall be included in the decision: This decision is made in accordance with the Disputes clause and shall be final and conclusive as provided therein, unless within 30 days from the date of receipt of this decision, a written notice of appeal (in triplicate) addressed to the Secretary of Labor is mailed or otherwise furnished to the Contracting Officer. The notice of appeal, which is to be signed by you as the contractor, or by an attorney acting on your behalf, and which may be in letter form, should indicate that an appeal is intended, shall refer to this decision, and shall identify the contract by number. The notice of appeal should include a statement of the reasons why the decision is considered to be erroneous, a concise specification of the errors complained of, and a statement of the relief sought. § 29-1.350 Buying in. some "Buying in" refers to the practice, in procurements involving price competition, of a contractor's attempting to obtain a contract award by knowingly offering a price lower than the contractor's anticipated cost of performance. The usual motive is the expectation by the contractor of either (a) increasing the contract price during the period of performance through change orders or other means, or (b) receiving future "followon" contracts at prices high enough to recover any losses on the original "buy-in" contract. It occurs sometimes in response to requests for proposals for cost reimbursement type contracts. While the contractor's deliberately understating anticipated costs may not, in itself, result in a contract award, nevertheless it can exert a favorable influence toward that contractor's selection. Such a practice is not illegal. However, it should not be encouraged since any apparent savings offered are frequently illusory, especially where its long term effect may diminish competition or where it may lead to poor contract performance resulting from the stinting use of the contractor's re sources in the contractor's attempting to minimize losses resulting from the award. Where there is reason to believe that "buying in" has occurred, contracting officers shall assure that amounts thereby excluded in the contractor's development of the original contract price are not recovered in the pricing of change orders or in followon procurements subject to cost analysis. In cases of suspected "buying in," the contracting officer shall attempt to eliminate the contractor's motive for "“buying in." Failing that, the contracting officer shall substantially reduce the contractor's benefit from the practice. Some techniques for neutralizing a contractor's benefit from "buying in" include: analyzing future needs for recurring items to determine if either the techniques of "multiyear procurement" or the inclusion within the contract of priced options for the purchase by the Government of additional quantities is warranted; pricing out with extreme care any change orders or any noncompetitive procurement for additional quantities from the same contractor; attempting to continue competition for new quantities of the same item; insuring that direct costs incurred by the contractor are not subsequently borne indirectly in the form of overhead or other indirect costs; and initially negotiating the specification and details of the contractor's performance as specifically as possible. [36 FR 3054, Feb. 17, 1971, as amended at 42 FR 40198, Aug. 9, 1977] § 29-1.351 Refunds from contractors. (a) General. A refund is a payment or credit, not required by any contractual or other legal obligation, made to the Government by a contractor or subcontractor. A refund is processed either as a separate payment or as an adjustment under one or more contracts or subcontracts. Refunds can be made wholly at the initiative of the contractor or solicited by the Department. The refund could arise during or after contract performance. It could be based on compensating the Government for: An overcharge to the Government; failure by the contractor or subcontractor to adequately compen sate the Government for the use of Government-owned property; proceeds from the disposition of contractor inventory; or otherwise, where retention of the money by the contractor or subcontractor would be contrary to good conscience and equity. Prior to the solicitation of a refund or the acceptance of a voluntary refund initiated by the contractor, the head of the procuring activity responsible for administering the contract shall first obtain the advice of the Solicitor to determine whether the Government's rights would be jeopardized or impaired by the contracting officer's proposed action. (b) Disposition of refunds. (1) If a refund is offered prior to final payment, it is preferable that the contract price be appropriately modified to reflect the refund. In such a case, the amount of the refund shall be credited to the applicable appropriation cited in the contract. (2) In cases where the refund is to be made by check separate from, rather than by an adjustment in, the contract price, the check shall be made payable to the Department of Labor and shall be forwarded immediately to the disbursing office, the address of which shall be supplied by the contracting officer responsible for administering the contract. When forwarded, the check shall be accompanied by a letter from the contractor identifying it as a voluntary refund, giving the number of the contract or contracts involved and, where possible, giving the account number of the appropriation to which the refund should be credited. § 29-1.354 Violations of law. In the event DOL procurement personnel have reason to believe there is evidence of a violation of law of any nature whatsoever in bids or proposals received, including a violation of the antitrust laws, they shall prepare, for the signature of the head of the procuring activity, a complete report addressed to the Solicitor. In the case of a possible violation of antitrust laws, a report from procurement personnel through the same channels shall be prepared for the Attorney General, complying with the requirements of Subpart 1-1.9 of this title. Subpart 29-1.4-Procurement Responsibility and Authority § 29-1.400 Scope of subpart. This subpart deals with the procurement responsibility and authority of the head of the agency as defined in § 29-1.204, and also the head of the procuring activity and contracting officer, the selection of the latter, their designation and the degree and manner with which procurement authority is delegated to them and their right of redelegation. [38 FR 15964, June 19, 1973] § 29-1.401 Responsibility of the head of the procuring activity. (a) First tier delegation. In the DOL, contracting officer and grant officer authority and procurement responsibility have been delegated from the Secretary of Labor through the Assistant Secretary for Administration and Management to the following officials or officers acting in their behalf: (1) The Assistant Secretary for Employment and Training. (2) The Assitant Secretary for Occupational Safety and Health (3) The Assistant Secretary for Employment Standards. (4) The Deputy Under Secretary for International Affairs. (5) The Commissioner of Labor Statistics. (6) The Regional AdministratorsOffice of the Assistant Secretary for Administration and Management (OASAM). (7) The Director, Administrative Programs and Services, OASAM. (b) Delegations and limitations. Exfor the restriction set forth in § 291.401 (c)(5)(ii), the delegations noted in paragraph (a) of this section may be further redelegated within limitations by these officers within their respective areas of assigned responsibility. However, prior to such redelegations, contracting officers should consider the following factors to determine the extent to which authority should be redelegated: Volume of procurement programs; presence of, or capability of obtaining adequately trained personnel; consolidation of smaller procurement programs and offices on a geographical basis; and the overall strengthening of the procurement process by the selection of qualified personnel. In accordance with § 291.404-2, copies of every further redelegation must be furnished to the Assistant Secretary for Administration and Management, Attention: ABA. (c) Responsibilities. The responsibilities of the delegations above are described as follows: (1) The Assistant Secretary for Employment and Training, or an officer acting in that capacity, is assigned the responsibility for procurement and the issuance of grants for program property and services, except as otherwise delegated under paragraph (c)(7) fo this section, required to fulfill the statutory and regulatory responsibilities imposed on the Assistant Secretary for Employment and Training. (2) The Assistant Secretary for Occupational Safety and Health, or an officer acting in that capacity, is assigned the following responsibilities: (i) Reimbursement to States, pursuant to section 7(c)(1) of the Occupational Safety and Health Act of 1970, as amended (Pub. L. 91-596, 84 Stat. 1590), for services, facilities, and personnel of the States used to carry out the statutory and regulatory responsibilities imposed on the Assistant Secretary for Occupational Safety and Health. (ii) Reimbursement to States, pursuant to section 7(c)(1) of the Occupational Safety and Health Act of 1970, as amended (Pub. L. 91-596, 84 Stat. 1590), for services facilities, and personnel of the States used to carry out the statutory and regulatory responsibilities imposed on the Assistant Secretary for Occupational Safety and Health. (iii) Issuance of grants, pursuant to section 21(b) of the Act, for the conduct of short-term training of personnel. (3) The Assistant Secretary for Employment Standards, or an officer acting in that capacity, is assigned the responsibility for medical supplies and services required under the Federal Coal Mine Health and Safety ACt of 1969, as amended (Pub. L. 91-173, 84 Stat. 742). (4) The Deputy Under Secretary for International Affairs, or an officer acting in that capacity, is assigned the responsibility for procurement of supplies and services, except as otherwise delegated under paragraph (c)(7) of this section, required for economic research services in support of foreign economic and trade policy formulation: training and orienation of foreign nationals; and overseas exhibitions required to fulfill the statutory and regulatory responsibilities imposed on the Deputy Under Secretary for International Affairs. (5) The Commissioner of Labor Statistics, or an officer acting in that capacity, is assigned the following responsibilities: (i) Procurement of statistical and economics research services, including grants, except for those delegated under paragraph (c)(7) of this section, required to fulfill the statutory and regulatory responsibilities imposed on the Commissioner of Labor Statistics. (ii) Procurement needed for operation of the National Office of the Bureau of Labor Statistics: (A) Using FEDSTRIP for General Servicxes Administration (GSA) common cataloged and supplied office furnishings, equipment, and supplies; (B) using GSA Federal Supply Schedule contracts for all items except automatic data processing (ADP) hardware and software, office copiers, and ADP communication devices; and (C) using the imprest fund for small purchase items in accordance with § 29-3.604. This authori ty may be redelegated only to officials in the National Office. (iii) Sale of special statistics developed by the Bureau of Labor Statistics in accordance with the Act of April 13, 1934 (29 U.S.C., 9 (1970)). (6) The Regional AdministratorsOASAM, or officers acting in that capacity, are assigned the following responsibilities within their respective regions: (i) Procurement of property and services required for the regional offices, including all imprest fund purchases and GSA Federal Supply Schedule purchases. Purchases of office machines, e.g., typewriters, adding machines, and calculators, must be written against blanket purchase orders maintained for such equipment by the Director, Administrative Programs and Services, OASAM. (ii) Procurement of all automatic data processing (ADP) hardware and software for the regional offices, with prior approval from the Director, Office of Grants, Procurement and ADP Management Policy. (7) The Director Administrative Programs and Services, OASAM, or and officer acting in that capacity, is assigned the following responsibilities: (i) Procurement of all property and srvices required for the operation of the DOL, and program-related property and services not specifically delegated to other officials in paragraphs (c) (1), (2), (3), (4), (5), and (6) fo this section. (ii) Procurement of all supplies and services, including program-related, through the imprest fund and from GSA Federal Supply Schedules required for the DOL National Office, except for authority delegated in § 29.1.401(c)(5); and the purchases of advertising required for the DOL National Office. (iii) Procurement of all automatic data processing (ADP) hardware and software for the DOL National Office, only with prior approval from the Director, Office of Grants, Procurement and ADP Management Policy, OASAM. (8) The Director Office of Grants, Procurement and ADP Management Policy, OASAM, or an officer acting in |