stores, sea stores, or legitimate equipment on vessels of war of the United States or of a foreign nation, including aircraft owned by the United States or by a foreign nation and constituting a part of the armed forces thereof.

The undersigned understands that if the article or articles are used for any purpose other than as stated in this certificate, or are resold or otherwise disposed of, the purchaser must report such fact to the manufacturer; or, in the case of special motor fuel, that if the fuel is sold or used otherwise than as stated in this certificate and for a taxable purpose specified in section 4041 (b) of the Internal Revenue Code, liability for the tax upon such sale or use will attach. The undersigned also understands that the purchaser must be prepared to establish by satisfactory evidence the purpose for which the article was used.

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 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.

Evidence appropriate to establish exemption or immunity from State or local taxes will vary depending upon the grounds of exemption or immunity

Types of evidence of ex

1-12.102

1-12.102-1

1-12.102-2

Policy.

1-12.102-3

1-12.102-4

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;

(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. § 1-11.502-2 When evidence of exemp

tion 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 §§ 1-11.401-1 or 1-11.401-2 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 con

1-12.201

1-12.202 1-12.203

Federal and State labor requirements.

Meeting manpower

ments.

require

Location allowances at unfa

vorable sites.

Description.

Policy.

Procedures.

Subpart 1-12.2-Convict Labor

Basic requirement.

Applicability.

Contract clause.

1-12.1000

1-12.1001

1-12.1002

1-12.1003

Age

Scope of subpart.
Policy.

Implementation of policy.
Handling of complaints.

AUTHORITY: The provisions of this Part 1-12 issued under sec, 205 (c), 63 Stat. 390; 40 U.S.C. 486 (c).

SOURCE: The provisions of this Part 1-12 appear at 29 F.R. 10264, July 24, 1964, unless otherwise noted.

§ 1-12.000 Scope of part.

This part deals with general policies regarding labor, so far as they relate to procurement; sets forth certain pertinent labor laws and requirements, indicating in connection with each its applicability and any procedures thereunder; and prescribes the contract clauses with respect to each labor law or requirement. Subpart 1-12.1-Basic Labor Policies § 1-12.100 General.

The policies and procedures stated in this Subpart 1-12.1 are recommendatory and are for the guidance of executive agencies.

from taking a position on, the merits of a dispute between labor and private management. No procuring activity should undertake the conciliation, mediation, or arbitration of a labor dispute.

§ 1-12.101-2 Contract pricing and administration.

(a) Nothing in § 1-12.101-1 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 no 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 1-15, particularly § 1-15.205-6(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 of delays that are not beyond his control or, with respect to delays of subcontractors, that are not beyond the control of both the contractor and the subcontractor. A delay caused by a strike which is an unfair labor practice, as identified in the National Labor Relations Act, as amended (29 U.S.C. 158), and 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 taking action toward 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 other available Government procedures; or

(3) Use of private boards or organizations for the settlement of disputes.

§ 1-12.102 Overtime, extra-pay shifts, and multi-shift work.

§ 1-12.102-1 Definitions.

As used in this § 1-12.102, the following terms shall have the meanings set forth:

(a) "Normal workweek" and "normal workday" mean, generally, a workweek of 40 hours and a workday of 8 hours, respectively. 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 considered normal if (1) such workweek or workday does not exceed that which is normal for such area, as determined by local custom, tradition, or law, and (2) 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) "Shift premium" means the difference between the compensation paid to an employee at the contractor's regular rate of pay for the base or regular work shift and that paid at the regular rate of pay for extra-pay-shift work.

(d) "Overtime premium" means the difference between the compensation paid to an employee at the contractor's regular rate of pay for the work period or shift involved and that paid for hours worked overtime.

§ 1-12.102-2 Policy.

Where the cost to the Government may be affected, contracts should be performed, so far as practicable, without the use of overtime, extra-pay shifts, or multi-shifts, and, in particular, without the use of overtime as a regular employment practice. Any required overtime, extra-pay shifts, and multishifts should be limited to the minimum needed for accomplishment of the specific work.

the procurement should use his best efforts (1) to ascertain the extent to which proposals and quotations are based on the payment of overtime premiums and shift premiums, and (2) to negotiate contract prices or estimated costs which are not based on the payment of overtime premiums or shift premiums, taking into consideration the practicability of procurement from other sources of all or part of the requirement.

(c) All contracts, other than firm fixed-price contracts or fixed-price contracts with escalation (which do not provide for any labor escalation), should provide that payment of overtime premiums and shift premiums shall be allowed, or considered in pricing, only to the extent approved in accordance with § 1-12.102-4, or as provided in § 1-12.102-5.

(d) Overtime for which overtime premiums would be at Government expense should not be approved under a contract where the contractor is already obligated, without the right to additional compensation, to meet the required delivery date.

(e) Where overtime premiums or shift premiums are being paid at Government expense in connection with the performance of Government contracts, the continued need therefor should be subject to periodic review in accordance with agency procedures.

§ 1-12.102-4 Approvals.

(a) In the three following situations, overtime premiums and shift premiums at Government expense may be considered proper for approval when determined in writing by the agency head, or his designee or designees, that approval:

(1) Is necessary to meet delivery or performance schedules, and such schedules are determined to be extended to the maximum consistent with essential program objectives;

(2) Is necessary to make up for delays which are beyond the control and without the fault or negligence of the contractor and, in construction contracts, which result from unforeseeable causes;

or

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

(b) Approvals should ordinarily be prospective, but may be retroactive where justified by the circumstances.