The undersigned certifies that he is an authorized agent of the United States of America and that the oil covered by the contract identified above is purchased for the use indicated as a lubricant in cutting and machining operations on metals. The undersigned understands that the purchaser must be prepared to establish by satisfactory evidence the actual use or disposition made of such oil, and that upon its use of the oil for a lubricating purpose other than in cutting and machining operations on metals, or upon its sale or other disposition of the oil, it is required to notify the manufacturer. The fraudulent use of this certificate for the purpose of purchasing oil tax free, rather than subject to tax at the rate of 6 cents a gallon, will subject the guilty party to a fine of not more than $10,000 or imprisonment for not more than five (5) years, or both, together with the costs of prosecution. (Signature) [31 F.R. 13336, Oct. 14, 1966] § 11.502 § 11.502-1 (c) Shipping documents indicating that shipments are in interstate or foreign commerce; (d) A State or local form indicating that supplies or services are for the exclusive use of the United States; or (e) Any other State or locally required form, certificate, or document to establish general or specific exemption. § 11.502-2 When evidence of exemption is to be furnished. (a) Unless there does not exist any reasonable basis to sustain a claimed exemption, a contractor or vendor will be furnished evidence of exemption under a: (1) Contract which contains the clause prescribed in either § 11.401-1 or § 11.401-2 in accordance with the terms of those clauses; (2) Cost-reimbursement type contract at the request of the contractor or at the discretion of the contracting officer; or (3) Contract or purchase order which contains no provision regarding taxes, at the request of the contractor or at the discretion of the contracting officer, if the contractor warrants that the contract price does not include the tax, or if he consents to a reduction in the contract price if the evidence of exemption is accepted by the taxing jurisdiction. (b) In case of disagreement as to whether there exists a reasonable basis upon which to sustain exemption of any transaction, the matter should be resolved in accordance with § 11.000. (Title) (Address) State and local taxes. Types of evidence of exemp tion Evidence appropriate to establish exemption or immunity from State or local taxes will vary depending upon the grounds of exemption or immunity claimed, the parties to the transaction, and the requirements of the taxing jurisdiction. Such evidence includes but is not limited to the following: (a) U.S. Government Tax Exemption Certificate (Standard Form 1094); (b) A copy of the contract or a portion thereof; Sec. 12.1005-4 12.1005-5 12.1005-6 12.1005-7 12.1005-8 12.1005-9 Additional classifications (con formable rates). Notice of award. Department of Labor Form SC-1. Withholding of contract pay- 12.1005-10 Cooperation with the Department of Labor. 12.1005-11 Role of the Comptroller General. 12.1006 Labor Standards Enforcement Report. AUTHORITY: The provisions of this Part 12 issued under R.S. 161, secs. 2202, 2301-2314, 70 Stat. 120, 127-133; 5 U.S.C. 301, 10 U.S.C. 2202, 2301-2314. § 12.000 Scope of part. This part (a) deals with general policies regarding labor, so far as they relate to procurements; (b) sets forth certain pertinent labor laws and requirements, indicating in connection with each its applicability and any procedures thereunder; and (c) prescribes the contract clauses with respect to each labor law or requirement. Labor standards and clauses which are applicable only to construction contracts are treated separately in Subpart G, Part 18 of this chapter. [32 F.R. 538, Jan. 18, 1967] 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) No Department shall take any independent action which would have the effect of establishing major policy with respect to labor relations matters. Approval of the Office of the Assistant Secretary of Defense (Installations and Logistics) will be obtained on major policies relating to potential and actual work stoppage matters. Recommendations for plant seizure, injunctive action or resolution of interservice disagreements would be examples of actions establishing major policy relating to work stoppage matters. Approval of the Office of the Assistant Secretary of Defense (I&L) will be obtained also on major policies relating to all other labor relations matters. (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 other govermental organization and 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 responsibilities, 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) Advising the National Office of the Federal Mediation and Conciliation Service or other appropriate mediation agency of the proposed award of a new contract, or the increase in quantities or scope of work under existing contract, totaling $5 million or more to be performed at a facility involved in an actual or imminent work stoppage. The Headquarters, Labor Relations Office of the Department concerned, will monitor information concerning proposed contract awards by using standard Departmental reports of prior notification of contract awards. The reports will be used to initiate consultation with the National Office of the Federal Mediation and Conciliation Service or other appropriate mediation agency. After such consultation, a determination will be made whether the announcement of the contract award would have a detrimental effect on labor-management negotiations. If no mediation agency is involved in the labor-management negotiations, the Labor Relations Office at Departmental level will provide advice in the above determination; or (4) 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, as amended at 35 F.R. 6834, Apr. 30, 1970] § 12.101-2 Contract pricing and administration. (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 for delays that are within his or his subcontractors' control, such as may be the case with delays precipitated by an unfair labor practice of the contractor. In addition, a delay caused by a strike 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: 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 Federal Mediation and Conciliation Service, 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; 33 F.R. 19923, Dec. 28, 1968] § 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, Attention: Labor Relations Advisor (MAT 02L); Head of the Procuring Activity concerned; cognizant contracting officers; inspection offices concerned; status control activities; and the Deputy Commander for Transportation (NAVSUP 05), Naval Supply Systems Command, 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 Hq USAF or Hq AFSC shall be submitted daily by electrical transmission to Hq AFSC (SCKML) with copies to SAMSO (SMKIP-1), Norton Air Force Base, Calif. 92409; SAMSO and AFCMD both located at Air Force Unit Post Office, Los Angeles, Calif. 90045; Hq SAC (DM6B), Offutt Air Force Base, Omaha, Nebr. 68113; and Hq USAF (AFSPPDA), 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 activity affected. (Exception: When 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 (AFSPPDA). 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 work stoppage due to a labor dispute is imminent or when such work stoppage occurs and thereafter when a significant change occurs in the dispute situation. (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 (b) above) 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, Attention: Labor Relations Advisor; for the Air Force, Headquarters USAF, AFSPPDA; 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, Production Services, OASD (Installations and Logistics), 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, Production Serv |