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DIVISION D-DEFENSE CONVERSION, REINVESTMENT, AND TRANSITION ASSISTANCE

TITLE XLIV–PERSONNEL ADJUSTMENT, EDUCATION,

AND TRAINING PROGRAMS

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Subtitle F-Job Training and Employment and Educational

Opportunities

SEC. 4471. (10 U.S.C. 2501 note] NOTICE TO CONTRACTORS AND EM

PLOYEES UPON PROPOSED AND ACTUAL TERMINATION
OR SUBSTANTIAL REDUCTION IN MAJOR DEFENSE PRO-

GRAMS. (a) NOTICE REQUIREMENT AFTER ENACTMENT OF APPROPRIATIONS ACT.—Each year, not later than 60 days after the date of the enactment of an Act appropriating funds for the military functions of the Department of Defense, the Secretary of Defense, in accordance with regulations prescribed by the Secretary

(1) shall identify each contract (if any) under major defense programs of the Department of Defense that will be terminated or substantially reduced as a result of the funding levels provided in that Act; and

(2) shall ensure that notice of the termination of, or substantial reduction in, the funding of the contract is provided

(A) directly to the prime contractor under the contract; and

(B) directly to the Secretary of Labor. (b) NOTICE TO SUBCONTRACTORS.-Not later than 60 days after the date on which the prime contractor for a contract under a major defense program receives notice under subsection (a), the prime contractor shall

(1) provide notice of that termination or substantial reduction to each person that is a first-tier subcontractor under that prime contract for subcontracts in an amount not less than $500,000; and (2) require that each such subcontractor

(A) provide such notice to each of its subcontractors for subcontracts in an amount in excess of $100,000; and

(B) impose a similar notice and pass through requirement to subcontractors in an amount in excess of $100,000

at all tiers. (c) CONTRACTOR NOTICE TO EMPLOYEES AND STATE DISLOCATED WORKER UNIT.—Not later than two weeks after a defense contractor receives notice under subsection (a), the contractor shall provide notice of such termination or substantial reduction to—

(1)(A) each representative of employees whose work is directly related to the defense contract under such program and who are employed by the defense contractor; or

(B) if there is no such representative at that time, each such employee; and

(2) the State dislocated worker unit or office described in section 311(b)(2) of the Job Training Partnership Act (29 U.S.C. 1661(b)(2)) and the chief elected official of the unit of general local government within which the adverse effect may occur.

(d) CONSTRUCTIVE NOTICE.—The notice of termination of, or substantial reduction in, a defense contract provided under subsection (c)(1) to an employee of a contractor shall have the same effect as a notice of termination to such employee for the purposes of determining whether such employee is eligible for training, adjustment assistance, and employment services under section 325 or 325A of the Job Training Partnership Act (29 U.S.C. 1662d, 1662d1), except where the employer has specified that the termination of, or substantial reduction in, the contract is not likely to result in plant closure or mass layoff. Any employee considered to have received such notice under the preceding sentence shall only be eligible to receive services under section 314(b) of such Act (29 U.S.C. 1661c(b)) and under paragraphs (1) through (14), (16), and (18) of section 314(c) of such Act (29 U.S.C. 1661c(c)).

(e) 1 LOSS OF ELIGIBILITY.—An employee who receives a notice of withdrawal or cancellation of the termination of, or substantial reduction in, contract funding shall not be eligible for training, adjustment assistance, and employment services under section 325 or 325A of the Job Training Partnership Act (29 U.S.C. 1662d, 1662d-1) beginning on the date on which the employee receives the notice. (f) DEFINITIONS.—For purposes of this section:

(1) The term “major defense program” means a program that is carried out to produce or acquire a major system (as defined in section 2302(5) of title 10, United States Code).

(2) The terms "substantial reduction" and "substantially reduced”, with respect to a defense contract under a major defense program, mean a reduction of 25 percent or more in the total dollar value of the funds obligated by the contract.

1 Margin of subsection (e) so in law.

NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEARS 1992

AND 1993

(P.L. 102–190, approved Dec. 5, 1991)

TITLE VIII-ACQUISITION POLICY, ACQUISITION

MANAGEMENT, AND RELATED MATTERS

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SEC. 806. [10 U.S.C. 2302 note] PAYMENT PROTECTIONS FOR SUB

CONTRACTORS AND SUPPLIERS. (a) REGULATIONS.—The Secretary of Defense shall prescribe in regulations the following requirements:

(1) INFORMATION PROVIDED BY DEPARTMENT OF DEFENSE RELATING TO PAYMENT.—(A) Subject to section 552(b)(1) of title 5, United States Code, upon the request of a subcontractor or supplier of a contractor performing a Department of Defense contract, the Department of Defense shall promptly make available to such subcontractor or supplier the following information:

(i) Whether requests for progress payments or other payments have been submitted by the contractor to the Department of Defense in connection with that contract.

(ii) Whether final payment to the contractor has been made by the Department of Defense in connection with that contract.

(B) This paragraph shall apply with respect to any Department of Defense contract that is in effect on the date which is 270 days after the date of enactment of this Act (Dec. 5, 1991] or that is awarded after such date.

(2) INFORMATION PROVIDED BY DEPARTMENT OF DEFENSE RELATING TO PAYMENT BONDS.(A) Upon the request of a subcontractor or supplier described in subparagraph (B), the Department of Defense shall promptly make available to such subcontractor or supplier any of the following:

(i) The name and address of the surety or sureties on the payment bond.

(ii) The penal amount of the payment bond.

(iii) A copy of the payment bond. (B) Subparagraph (A) applies to

(i) a subcontractor or supplier having a subcontract, purchase order, or other agreement to furnish labor or material for the performance of a Department of Defense contract with respect to which a payment bond has been furnished to the United States pursuant to the Miller Act;

and

(ii) a prospective subcontractor or supplier offering to furnish labor or material for the performance of such a Department of Defense contract.

(C) With respect to the information referred to in subparagraphs (A)(i) and (A)(ii), the regulations shall include authority for such information to be provided verbally to the subcontractor or supplier.

(D) With respect to the information referred to in subparagraph (A)(iii), the regulations may impose reasonable fees to cover the cost of copying and providing requested bonds.

(E) This paragraph shall apply with respect to any Department of Defense contract covered by the Miller Act that is in effect on the date which is 270 days after the date of enactment of this Act [Dec. 5, 1991) or that is awarded after such date.

(3) INFORMATION PROVIDED BY CONTRACTORS RELATING TO PAYMENT BONDS.(A) Upon the request of a prospective subcontractor or supplier offering to furnish labor or material for the performance of a Department of Defense contract with respect to which a payment bond has been furnished to the United States pursuant to the Miller Act, the contractor shall promptly make available to such prospective subcontractor or supplier a copy of the payment bond.

(B) This paragraph shall apply with respect to any Department of Defense contract covered by the Miller Act for which a solicitation is issued after the expiration of the 60-day period beginning on the effective date of the regulations promulgated under this subsection.

(4) PROCEDURES RELATING TO COMPLIANCE WITH PAYMENT TERMS.—(A) Under procedures established in the regulations, upon the assertion by a subcontractor or supplier of a contractor performing a Department of Defense contract that the subcontractor or supplier has not been paid by the prime contractor in accordance with the payment terms of the subcontract, purchase order, or other agreement with the prime contractor, the contracting officer may determine the following:

(i) With respect to a construction contract, whether the contractor has made progress payments to the subcontractor or supplier in compliance with chapter 39 of title 31, United States Code.

(ii) With respect to a contract other than a construction contract, whether the contractor has made progress or other payments to the subcontractor or supplier in compliance with the terms of the subcontract, purchase order, or other agreement with the prime contractor.

(iii) With respect to either a construction contract or a contract other than a construction contract, whether the contractor has made final payment to the subcontractor or supplier in compliance with the terms of the subcontract, purchase order, or other agreement with the prime contractor.

(iv) With respect to either a construction contract or a contract other than a construction contract, whether any certification of payment of the subcontractor or supplier accompanying the contractor's payment request to the Government is accurate.

(B) If the contracting officer determines that the prime contractor is not in compliance with any matter referred to in clause (i), (ii), or (iii) of subparagraph (A), the contracting officer may, under procedures established in the regulations

(i) encourage the prime contractor to make timely payment to the subcontractor or supplier; or

(ii) reduce or suspend progress payments with respect to amounts due to the prime contractor.

(C) If the contracting officer determines that a certification referred to in clause (iv) of subparagraph (A) is inaccurate in any material respect, the contracting officer shall, under procedures established in the regulations, initiate appropriate administrative or other remedial action.

(D) This paragraph shall apply with respect to any Department of Defense contract that is in effect on the date of promulgation of the regulations under this subsection or that is awarded after such date.

(b) INAPPLICABILITY TO CERTAIN CONTRACTS.-Regulations prescribed under this section shall not apply to a contract for the acquisition of commercial items (as defined in section 4(12) of the Office of Federal Procurement Policy Act).

(c) GOVERNMENT-WIDE APPLICABILITY.—The Federal Acquisition Regulatory Council (established by section 25(a) of the Office of Federal Procurement Policy Act) shall modify the Federal Acquisition Regulation (issued pursuant to section 25(c)(1) of the Office of Federal Procurement Policy Act (41 U.S.C. 421(C)(1)) to apply Government-wide the requirements that the Secretary is required under subsection (a) to prescribe in regulations applicable with respect to the Department of Defense contracts.

(d) ASSISTANCE TO SMALL BUSINESS CONCERNS.—[Amended paragraph (5) of section 15(k) of the Small Business Act (15 U.S.C. 644(k)(5).]

(e) GAO REPORT.1) The Comptroller General of the United States shall conduct an assessment of the matters described in paragraph (2) and submit a report pursuant to paragraph (3).

(2) In addition to such other related matters as the Comptroller General considers appropriate, the matters to be assessed pursuant to paragraph (1) are the following:

(A) Timely payment of progress or other periodic payments to subcontractors and suppliers by prime contractors on Federal contracts by

(i) identifying all existing statutory and regulatory provisions, categorized by types of contracts covered by such provisions;

(ii) evaluating the feasibility and desirability of requiring that a prime contractor (other than a construction prime contractor subject to the provisions of sections 3903(b) and 3905 of title 31, United States Code) be required to

(I) include in its subcontracts a payment term requiring payment within 7 days (or some other fixed

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