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[30 F.R. 6004, Apr. 29, 1965, as amended at 30 F.R. 14092, Nov. 9, 1965; 33 F.R. 7401, May 18, 1968; 34 F.R. 13846, Aug. 29, 1969; 35 F.R. 6834, Apr. 30, 1970]

§ 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 requiremen 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; and

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

(c) Reports of impact shall be made to the Office of the Assistant Secretary of Defense (Installations and Logistics):

(1) Upon specific request; or

(2) When considered by the Military Department to be of sufficient urgency to warrant the attention of the Assistant Secretary of Defense (Installations and Logistics).

(d) Reports submitted in accordance with paragraph (c) of this section shall be developed by the Headquarters Labor Relations Office concerned and shall cover the following areas of fact, as appropriate:

(1) Description of military program, project, or service. Identify item, project, or service which will be or is being affected by the work stoppage, describing its normal use and current functions in combat, combat support, or deterrent operations. For components or raw materials identify the end item(s) for which used.

(2) Requirements and assets. State requirements and assets in appropriate detail in terms commonly used by the DOD component.

(i) For "production programs" include requirements for each using military service. Where applicable, state in detail production schedules, inventory objectives, assets against these objectives, and critical shortages. For spares and highly expendable items, such as ground and air ammunition, show usage (consumption) rates and assets in absolute terms and in terms of daily, weekly, or monthly supplies. For components, include requirements for spares.

(ii) For "projects" describe the potential adverse effects of a delay in meeting schedules and explain how a security disadvantage would result from such a delay. Attention should be given to feature any relative loss in balance of strength vis-a-vis potential enemies' capabilities.

(iii) For "services," describe how a loss or interruption affects ability to support defense operations in terms of traffic requirements, assets, testing programs, etc.

(3) Possible measures to minimize strike impact. Describe: (i) Capabilities, if any, to substitute items or to use alternate sources. (Note how many other facilities are available and the relative capabilities of such facilities in meeting total requirements.);

(ii) How much time would be required to replace the loss of the facilities or service affected by a work stoppage; and

(iii) Feasibility of transfer of assets from theater to theater to relieve deficits in some areas of urgency.

(4) Conclusion; impact on operations of a 15-30, of a 30-60, and of a 60-90 day work stoppage. Degree of criticality of a program, project or service resulting from a work stoppage will be projected on

a calendar basis, indicating the increased impact, if any, as the stoppage lengthens. Criticality is measured by the time required for the work stoppage to have an effect on operational capability. This time must be stated in terms of days. [35 F.R. 6834, Apr. 30, 1970]

§ 12.101-5

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

(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 urgent and critical to an important program, may be obtained in accordance with procedures set forth below:

(1) Subject to § 12.101-1(d), the procuring contracting officer or his representative, upon the direction of the Departmental Headquarters Labor Relations Office, shall furnish a written request for removal of the material to Contract Administration Office (CAO) having cognizance over the plant. The Commander of the cognizant CAO or his representative shall attempt to work out an arrangement agreeable to both management and the labor representatives involved for shipment by normal means of urgently required material. Prior to making any removal, the Departmental Headquarters Labor Relations Office will solicit the opinion of the National Office of the Federal Mediation and Conciliation Service or other appropriate mediation agency as to the effect the movement of items would have on negotiations. The procuring contracting officer's request will include the following:

(i) A statement as to the urgency and criticality of the system, subsystem or item needed;

(ii) Description of items to be moved (Nature of item, amount, approximate weight and cubic feet, contract number, item number, etc.);

(iii) Mode of transportation by which items are to be moved if different from contract and whether by Government or commercial bill of lading; and

(iv) Destination of material if different than contract.

(2) If an arrangement in accord with subparagraph (1) cannot be made, the Commander of the CAO 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 concurrences, he may proceed to make necessary arrangements to move the material.

(3) If satisfactory arrangements under subparagraph (1) and (2) cannot be made, the matter shall be referred to the responsible Departmental 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 to the Director, Production Sevices, Office of the Assistant Secretary of Defense (Installations and Logistics).

(4) Upon review and verification that the material is urgently or critically needed and cannot be moved with the consent of the parties, the OASD (Installations and Logistics) may request the Secretary of the Department to order removal of the material from the plant or plants involved.

(c) When the requirements of two or more departments are or may become involved in the movement or removal of the material, the CAO shall coordinate such requirements with the departments concerned.

[30 F.R. 6005, Apr. 29, 1965, as amended at 35 F.R. 6834, Apr. 30, 1970]

§ 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 handled 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. Such offices shall report the action taken to the Industrial Relations Advisor, OASD (I&L).

[30 F.R. 6005, Apr. 29, 1965, as amended at 35 F.R. 6835, Apr. 30, 1970]

§ 12.102 Overtime.

[32 F.R. 12099, Aug. 23, 1967] § 12.102-1 Definitions.

As used throughout §§ 12.102-12.102-7: (a) "Normal workweek" and "normal workday" mean, generally, a workweek of 40 hours and a workday of 8 hours, respectively: Provided, That in any area outside the United States, its possessions, and Puerto Rico, a workweek longer than 40 hours, or a workday longer than 8 hours, will be considiered normal (1) if such workweek or workday 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 workweek, or 8 in such workday, 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 workweek or normal workday.

(c) "Overtime premium" means the difference between the contractor's regular rate of pay to an employee for the shift involved and the higher rate paid for overtime. It does not include shift premium which is 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.

[32 F.R. 12099, Aug. 23, 1967]

§ 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, except where lower overall costs to the Government will result. Contractors should utilize whatever work schedule results in the lowest overall cost to the Government consistent with contract delivery and performance requirements. Extra-pay shifts and multi-shift work should be scheduled, as required, to achieve these objectives. In the negotiation of contracts, overtime premiums will be recognized in establishing a fixed price or estimated cost only to the extent consistent with the needs of the Government for the supplies or services being procured. [32 F.R. 12099, Aug. 23, 1967]

§ 12.102-3 Approval of overtime pre

miums.

(a) Approval of overtime premiums is required:

(1) By the contracting officer under time and material and labor-hour contracts (see paragraph (a) (3) of the clause set forth in § 7.901-6 of this chapter); and

(2) By the approving official (see § 12.102-4(e)), (1) prior to execution of cost reimbursement type contracts containing the clause set forth in § 12.102-6, for any overtime to be included in paragraph (d) of the clause, and (ii) prior to modification of such a contract for any increase in the overtime included in paragraph (d) of the clause.

(b) Approval of overtime premiums under contracts other than those referenced in paragraph (a) of this section shall not be required.

[32 F.R. 12099, Aug. 23, 1967]

§ 12.102-4 Approval of overtime premiums in certain cost-reimbursement type contracts.

(a) To prevent uneconomic use of overtime, at Government expense, the clause set forth in § 12.102-6 shall be included in all cost-reimbursement type contracts in excess of $100,000, except cost-reimbursement type contracts for the operation of vessels and cost-plus-incentive-fee contracts having a cost incentive which provides for a swing from target fee of at least ±3 percent and a contractor's share of cost of at least 10

percent. Whenever this clause is used, the procedural requirements of this section shall be followed.

(b) An amount for overtime premiums at Government expense may be included in paragraph (d) of the clause set forth in § 12.102-6 when the use of overtime has been approved by an official designated as provided in paragraph (e) of this section. Only overtime premiums for work in those departments, sections, etc., of the contractor's plant which have been individually evaluated and the necessity for overtime confirmed, will be considered for approval, and then only for overtime premiums not reimbursable under the exceptions contained in paragraph (a) (ii) of the clause. Approval may be granted when such official determines in writing that overtime is necessary:

(1) To meet delivery or performance schedules, and such schedules are determined to be consistent with essential military objectives;

(2) To make up for delays beyond the control and without the fault or negligence of the contractor; or

(3) To eliminate foreseeable production bottlenecks of an extended nature which cannot be eliminated in any other way.

(c) When, during negotiation, it becomes apparent that overtime will be required during the performance of the contract and the contract will contain the clause in § 12.102-6, the PCO shall secure from the contractor a request substantially in accordance with the request procedures in paragraph (c) of such provision for all overtime to be used during the life of the contract, to the extent that it can be estimated with reasonable certainty. If the contemplated overtime premium could affect the costing of other work performed by the contractor or is significant in amount, the PCO may avail himself of the advisory services of the cognizant Defense Contract Audit Agency office to determine the proper accounting treatment of such premium. The PCO shall request from the appropriate official designated, as provided in paragraph (e) of this section, approval for overtime premiums at Government expense. Upon receipt of such approval, the PCO shall complete paragraph (d) of the clause.

(d) During contract performance, requests for overtime, submitted pursuant to the clause in § 12.102-6, will be subImitted to the ACO who shall evaluate

the need for such overtime and forward the request, with his comments, as expeditiously as possible to the PCO. Thereupon, the PCO, if he desires that the requested overtime be approved in whole or in part, shall, unless a prior authorization is sufficient to cover the overtime requested, request the approval of the appropriate official designated as provided in paragraph (e) of this section and, as expeditiously as possible, modify paragraph (d) of the clause to reflect the approval.

(e) The Deputy or Assistant Deputy for Procurement, Office of the Assistant Secretary of the Army (Installations and Logistics), for the Army; the Deputy Chief of Naval Material (Procurement), for the Navy; the Director of Procurement Policy, Headquarters, USAF, for the Air Force; and the Executive Director for Procurement and Production, for the Defense Supply Agency, are authorized, without power of delegation, to designate without power of redesignation, officers and civilian officials for the purpose of approving overtime premiums at Government expense. Such approval may be for an individual contract, project, or program, or for a plant, division, or company, as most practicable, and shall ordinarily be prospective, but may be retroactive when justified by the circumstances. When two or more purchasing offices have current contracts at a single facility, and the approval of overtime by one purchasing office will affect the performance or cost of contracts of another, the approving official will obtain the concurrence of other appropriate approving officials and seek agreement as to the contracts under which overtime premiums will be approved. If the approving officials do not agree within a reasonable time as to the action to be taken, a decision shall be obtained through normal channels. Ordinarily, in the absence of evidence to the contrary, a purchasing office may rely on the contractor's statement that such approval will not affect the performance, or payments in connection with any contract of another purchasing office.

[32 F.R. 12100, Aug. 23, 1967, as amended at 36 F.R. 7949, Apr. 28, 1971]

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§ 12.102-6, shall be allowed only to the extent the amount thereof is reasonable and properly allocable to the work under the contract, in accordance with § 15.201 of this chapter.

(b) In administration of contracts under which overtime has been approved pursuant to § 12.102-4, the ACO and the cognizant audit activity shall review periodically the use of such overtime to assure that it is reasonable and properly allocable to work under the contract. [32 F.R. 12100, Aug. 23, 1967]

§ 12.102-6 Payment of overtime premiums clause.

The following clause shall be used when required by § 12.102-4(a).

PAYMENT FOR OVERTIME PREMIUMS
(JUNE 1967)

(a) Allowable cost shall not include any amount on account of overtime premiums except when (i) specified in (d) below or (ii) 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.

(c) Any request for overtime, in addition to any amount specified in (d) below, will be for all overtime which can be estimated with reasonable certainty shall be used for the remainder of the contract, and shall contain the following:

(i) Identification of the work unit, such as the department or section in which the requested overtime will be used, together with present workload, manning and other data of the affected unit, sufficient to permit an evaluation by the Contracting Officer of the necessity for the overtime;

(ii) The effect that denial of the request will have on the delivery or performance schedule of the contract;

(iii) Reasons why the required work cannot be performed on the basis of utilizing multi-shift operations or by the employment of additional personnel; and

(iv) The extent to which approval of overtime would affect the performance or payments in connection with any other Government contracts, together with any identification of such affected contracts.

(d) The Contractor is authorized to perform overtime, in addition to that performed under (a) (ii), to the extent that the overtime premium does not exceed*.

*Insert the amount, in dollars, agreed to during negotiations as representing the overtime premiums applicable to overtime not reimbursable under the exceptions contained in (a) (ii) of the clause. If it was agreed that the contract could be performed without the use of additional overtime, insert "Zero." [32 F.R. 12100, Aug. 23, 1967]

§ 12.102-7

Construction contracts.

See § 18.111 of this chapter regarding expediting actions involving additional costs.

[32 F.R. 12100, Aug. 23, 1967]

§ 12.103 Federal and State labor requirements.

[30 F.R. 6005, Apr. 29, 1965]

§ 12.103-1 General.

The Department of Defense shall cooperate and encourage contractors to cooperate, to the fullest extent practicable, 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. [30 F.R. 6005, Apr. 29, 1965]

§ 12.103-2 Applications for relaxation of requirements.

(a) Military Departments shall not initiate applications of any kind for suspension or relaxation of labor requirements. They may, however, support such applications by contractors or suppliers when all of the following circumstances and conditions have been met:

(1) The interested contractor or supplier has filed his application for relaxation of the laws, orders or regulations involved with the appropriate Governmental official charged with the enforcement of such labor requirements applicable to the contract involved;

(2) The required products or services are in short supply and unless the application is granted, production schedules for critically needed military material cannot be met;

(3) There is no alternative source of supply reasonably available to furnish

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