(2) The original and one duplicate original copy of the contract documents shall be executed by an authorized official of the SBA and the contracting officer of the procuring agency. The original executed contract (and such additional authenticated, conformed, or reproduced copies as may be required by the procuring agency) shall be retained by the procuring agency and distribution shall be made in accordance with its internal regulations and procedures. The duplicate original copy of the contract (and such additional authenticated, conformed, or reproduced copies as may be required by SBA) shall be forwarded by the procuring agency to SBA for distribution in accordance with its internal regulations and procedures.

(e) Provisions of subcontracts awarded by SBA. (1) The subcontract which will be executed by SBA and its subcontractor shall be prepared by the procuring agency on Standard Form 33, Solicitation, Offer, and Award, or on Standard Form 26, Award/Contract, as appropriate, and Standard Form 36, Continuation Sheet. It shall be prepared in the same detail as would be required for a normal procurement contract awarded by the procuring agency, recognizing at the same time, however, that the subcontract is to be executed by SBA and its subcontractor. In addition to the terms and conditions, including price, delivery and performance dates, and other pertinent information which have been agreed upon and incorporated in the contract between SBA and the procuring agency, and which, in turn, have been agreed upon during the negotiations between the SBA and its subcontractor, Standard Form 32, General Provisions, and other appropriate procuring agency forms and special provisions shall also be incorporated in the subcontract. Unless otherwise agreed upon between the SBA and the procuring agency, the following clause (or a similar clause) shall also be incorporated in the subcontract:

SPECIAL 8(a) SUBCONTRACT CONDITIONS (a) The Small Business Administration (SBA) has entered into Contract No. (insert

number of contract) with the (insert name of procuring agency) to furnish the supplies or services as described therein. A copy of said contract is attached hereto and made a part hereof. As used in this subcontract, the reference to "the Secretary or his duly authorized representative" in the "Disputes" clause of this subcontract (Article 12 of Standard Form 32, General Provisions) shall be deemed to mean, respectively, the (insert Secretary or Administrator) of the (insert name of procuring agency) and the Board of Contract Appeals of the (insert name of procuring agency).

(b) The (insert name of the subcontractor), hereafter referred to as the subcontractor, agrees and acknowledges as follows:

(1) That he will, for and on behalf of the SBA, fulfill and perform all of the requirements of Contract No. (insert number of contract) for the consideration stated therein and that he has read and is familiar with each and every part of said contract.

(2) That the SBA has delegated responsibility for the administration of this subcontract to the (insert name of procuring agency) with complete authority to take any action on behalf of the Government under the terms and conditions of this subcontract.

(3) That he will not subcontract the performance of any of the requirements of this subcontract to any lower tier subcontractor without the prior written approval of the SBA and the designated contracting officer of the (insert name of procuring agency).

(c) Payments, including any progress payments, under this subcontract will be made directly to the subcontractor by the (insert name of procuring agency).

con

(2) The original and two duplicate original copies of the subcontract shall be executed by the subcontractor and an authorized official of the SBA. The original executed subcontract and such additional authenticated, formed, or reproduced copies as may be required by SBA shall be retained by SBA for internal distribution in accordance with its regulations and procedures. One duplicate original copy of the executed subcontract and such additional authenticated, conformed, or reproduced copies as may be required by the procuring agency shall be furnished to the procuring agency for internal distribution in accordance with its regulations and procedures. The second duplicate original copy of the executed subcontract, together with an attached copy of the contract between the SBA and the procuring

agency shall be furnished to the subcontractor.

(f) Special services. The requirements set forth in §§ 1-1.713-3(d)(1) and 1-1.713-3(e)(1) concerning the terms and conditions to be included in contracts between the SBA and procuring agencies and in subcontracts between the SBA and eligible concerns may be modified as appropriate for contracts and subcontracts involving specialized types of services such as building services, food services, and business concessions.

[37 FR 1038, Jan. 22, 1972]

§ 1-1.713-4 Procurement of construction.

(a) Information furnished by SBA. In subcontracts for construction (including maintenance, repair, and alteration), it is the policy of the Small Business Administration to award subcontracts under the section 8(a) program only to those concerns which have been approved by SBA as supporting the policy objectives of § 11.713-2. In the execution of this policy, the SBA will furnish to the procuring agency its request for a commitment showing at least the following information:

(1) The various categories of maintenance, repair, alteration, and construction work in such specific work project categories as mechanical, electrical, heating and air conditioning, demolition, building painting, paving, earth work, waterfront work, or general construction work; and

(2) The individual identification of the estimated dollar value in each category.

(b) Evaluation of SBA requests. The procuring agency will evaluate the SBA request for a commitment and determine to what extent the agency has proposed work projects for which funding is available in those requested categories. In the evaluation of the SBA request for a commitment, the matters considered shall include the following:

(1) The extent to which work projects of the type requested by SBA are planned for procurement in the current fiscal year and, to the extent known, future fiscal years; and

(2) Work projects of similar complexity and nature if there are no known work projects of the specific type requested.

(c) Lists of construction projects. In addition to specific individual requests by the SBA, the procuring agency shall furnish to the SBA, in accordance with a mutually acceptable schedule, lists of construction work projects which it deems to be suitable for subcontracting by SBA under the section 8(a) program.

(d) Cost or pricing data. When required by § 1-3.807-3, the SBA shall secure from its prospective subcontractor cost or pricing data, together with any necessary supporting certificate.

(e) Notification. After completing its review of the SBA request for a commitment, the procuring agency shall notify the SBA of the extent to which a section 8(a) contract will be placed with the SBA and the time frames within which the contract actions need to be completed in order to satisfy its program responsibilities. This notification represents a firm commitment by the procuring agency to award a contract to SBA under mutually acceptable terms and conditions, provided there is no material change in requirements, availability of funds, or other pertinent factors. The notification should contain the following information with regard to the work projects:

(1) A summary of the proposed work;

(2) Plans and specifications;

(3) Required performance schedules; (4) Any other pertinent and reasonably available data, wage determination by the Secretary of Labor, if required; and

(5) Available detailed Government cost estimates, including:

(i) Material quantities and unit costs;

(ii) Labor costs (identified with the specific item of material to be placed or operation to be performed);

(iii) Construction equipment (hours and rates);

(iv) Workmen's compensation and public liability insurance; (v) Overhead and profit;

(vi) Employment taxes under FICA and FUTA; and

(vii) Bonds.

(f) Time limitations. In the notification to the SBA, the procuring agency may also fix a time limit (generally not less than 30 days after receipt of the notification) within which the SBA must establish contact with the designated procuring activity and initiate negotiations of the section 8(a) contract. If negotiations are not completed within the time frame established by the procuring agency, the designated procuring activity may notify the SBA that it intends to proceed with the procurement without further regard to the section 8(a) procedures, unless additional time is requested by SBA and granted by the procuring activity after due consideration for the urgency of the proposed procurement.

(g) Provisions of contracts with SBA. The procuring agency shall prepare two sets of contract documents as provided by this paragraph (g) after: (1) The SBA has completed negotiations with the eligible concern pursuant to the commitment made by the procuring agency; (2) the SBA and the procuring agency have reached mutual agreement concerning all terms and conditions (including price) to be inIcluded in the contract to be awarded by the procuring agency to SBA; and (3) the SBA and the procuring agency have agreed upon all the terms and conditions (including price) to be inIcluded in the subcontract to be awarded by SBA to the eligible concern.

(1) The contract to be executed between the SBA and the procuring agency shall be prepared by the procuring agency on Standard Form 19, Invitation, Bid, and Award (Construction, Alteration or Repair), Standard Form 23, Construction Contract, as may be appropriate. Authority for negotiation of the contract shall be cited as 41 U.S.C. 252(c)(15) and 15 U.S.C. 637(a). The contract shall be prepared in the same detail as would be required for a normal procurement contract to be awarded by the procuring agency to a private business, recognizing at the same time, however, that the contract documents are to be ex

ecuted by the SBA and the procuring agency. No requirement for the SBA to furnish payment and performance bonds shall be included in the contract. In addition to including the terms and conditions (including price) which have been mutually agreed upon between SBA and the procuring agency, there shall also be incorporated in the contract Standard Form 19A, Labor Standards Provisions Applicable to Contracts in Excess of $2,000, if the contract is in excess of $2,000, and Standard Form 23-A, General Provisions (Construction Contract), or the General Provisions on Standard Form 19, whichever is appropriate, together with such other procuring agency forms and special conditions as may be required. The contract shall also contain a provision that the SBA shall not be entitled to any commission on work performed by its subcontractor or any lower tier subcontractor. Unless otherwise agreed upon between the SBA and the procuring agency, the following additional clause (or a similar clause) shall be incorporated in contracts prepared on Standard Form 19 or Standard Form 23.

SPECIAL 8(a) Contract Conditions The Small Business Administration (SBA) agrees as follows:

(a) SBA will perform the work set forth in this contract according to the specifications and drawings and the terms and conditions hereof by subcontracting with an eligible concern pursuant to the provisions of section 8(a) of the Small Business Act, as amended (15 U.S.C. 637(a)).

(b) If SBA does not award a subcontract for the work hereunder, this contract may be terminated without cost to either party. (c) The SBA hereby delegates to the (insert name of procuring agency) responsibility for administering the subcontract to be awarded hereunder with complete authority to take any action on behalf of the Government under the terms and conditions of the subcontract.

(d) Progress payments to be made under the subcontract awarded under this contract shall be made directly to the subcontractor by the (insert name of procuring agency). However, final payment under the subcontract will be made only upon the written authorization of the SBA and after receipt of an executed release of claims from the subcontractor.

(e) The subcontractor awarded a subcontract hereunder shall have the right of

appeal from decisions of the contracting of. ficer under the "Disputes" clause of the subcontract, which shall be identical to Clause 3 on Standard Form 19 or to Clause 6 on Standard Form 23-A, whichever is applicable. Further, the subcontract to be executed between the SBA and its subcontractor pursuant to this contract shall contain the following clause:

For the purpose of this subcontract, the reference to the "head of the Federal

agency" and "his duly authorized representative" in the "Disputes" clause of this subcontract (Article 3 of Standard Form 19 or Article 6 of Standard Form 23-A, whichever is applicable) shall be deemed to mean, respectively, the (insert Secretary or Administrator) of the (insert name of procuring agency) and the Board of Contract Appeals of the (insert name of procuring agency).

(2) The original and one duplicate copy of the contract documents shall be executed by an authorized official of the SBA and the contracting officer of the procuring agency. The original executed contract (and such additional authenticated, conformed, or reproduced copies as may be required by the procuring agency) shall be retained by the procuring agency and distribution shall be made in accordance with its internal regulations and procedures. The duplicate original copy of the contract (and such additional authenticated, conformed, or reproduced copies as may be required by SBA) shall be forwarded by the procuring agency to SBA for distribution in accordance with its internal regulations and procedures.

(h) Provisions of subcontracts awarded by SBA. (1) The subcontract which will be executed by SBA and its subcontractor shall be prepared by the procuring agency on Standard Form 19, Invitation, Bid, and Award (Construction, Alteration or Repair), or Standard Form 23, Construction Contract, as appropriate. It shall be prepared in the same detail as would be required for a normal procurement contract awarded by the procuring agency, recognizing at the same time, however, that the subcontract is to be executed by the SBA and its subcontractor. A provision shall be included in the subcontract which requires the subcontractor to furnish a performance bond on Standard Form 25, Performance Bond, and a payment bond

Payment

on Standard Form 25A, Bond, as required by the Miller Act (40 U.S.C. 270a-270e). Applicable policies and procedures regarding the use of these bonds appear in §§ 1-10.104-1 and 1-10.105-1. In addition to incorporating the terms and conditions (including price) which have been agreed upon and incorporated in the contract between SBA and the procuring agency, and which, in turn, have been agreed upon during the negotiations between SBA and its subcontractor, the following shall also be incorporated in the subcontract: (i) Standard Form 19-A, if the subcontract is in excess of $2,000, (ii) Standard Form 23-A. General Provisions (Construction Contract), or the General Provisions on Standard Form 19, as appropriate, and (iii) such other procuring agency forms and special conditions as may be required. Unless otherwise agreed to by the SBA and the procuring agency, the following clause (or a similar clause) shall be included in the subcontract:

SPECIAL 8(a) Subcontract CONDITIONS

(a) The Small Business Administration (SBA) has entered into Contract No. (insert contract number) with the (insert name of procuring agency) to perform the work as described therein. A copy of said contract is attached hereto and made a part hereof.

(b) The Small Business Administration and (insert name of subcontractor), hereinafter called the subcontractor, agree as follows:

(1) The subcontractor shall, for and on behalf of the SBA, fulfill and perform all of the requirements of Contract No. (insert contract number) for the consideration stated therein. The subcontractor acknowledges that it has read and is familiar with each and every part of said contract.

(2) The SBA has delegated responsibility for the administration of this subcontract to the (insert name of procuring agency) with complete authority to take any action on behalf of the Government under the terms and conditions of this subcontract.

(3) The term "Contracting Officer" as used in the General Provisions (Standard Form 19 or Standard Form 23-A, whichever applies) means the person designated by the (insert name of procuring agency) as contracting Officer. The Contracting Officer designated for this subcontract shall be (name), (address), (insert name of procuring activity and the name of the procuring

agency) or his duly appointed successor or authorized representative.

(4) The term "Contractor" as used in the General Provisions (Standard Form 19 or Standard Form 23-A, whichever applies) means the "subcontractor" who has entered into this subcontract with SBA for the performance of all of the work under this subcontract.

(5) The reference to the "head of the Federal agency" and to "his duly authorized representative" in the "Disputes" clause of this subcontract (General Provisions, Article 3 of Standard Form 19 or Article 6 of Standard Form 23-A, whichever applies) shall be deemed to mean, respectively, the (insert Secretary or Administrator) of the (insert name of procuring agency) and the Board of Contract Appeals of the (insert name of procuring agency).

(6) The subcontractor will not subcontract the performance of any of the requirements of this subcontract to a lower tier subcontractor without the prior written approval of the SBA and the designated Contracting Officer of the (insert name of procuring agency), or his duly appointed successor or authorized representative.

(7) Nothing contained in this contract shall be construed as creating any contractual relationship between the Government and any second or lower tier subcontractor which may be authorized by the SBA and the Contracting Officer. The divisions or sections of the specifications are not intended to control the subcontractor in dividing the work among any duly authorized second tier subcontractors, or to limit the work of any trade.

(8) The subcontractor shall be responsible to the Government for the acts or omissions of his own employees and of any duly authorized lower tier subcontractors and their employees. He shall also be responsible for the coordination of the work of the trades, any duly authorized lower tier subcontractors, and suppliers.

(9) Any progress payments to be made under this subcontract will be made directly to the subcontractor by the (insert name of procuring agency). However, the final payment under the subcontract will be made only upon the written authorization of the SBA and after receipt of an executed release of claims from the subcontractor.

(2) The original and two duplicate original copies of the subcontract shall be executed by the subcontractor and an authorized official of the SBA. The original executed subcontract (and such additional authenticated, conformed, or reproduced copies as may be required by SBA) shall be retained by SBA for internal distribution in ac

cordance with its regulations and procedures. One duplicate original copy of the executed subcontract (and such additional authenticated, conformed, or reproduced copies as may be required by the procuring agency) shall be furnished to the procuring agency for internal distribution in accordance with its regulations and procedures. The second duplicate original copy of the executed subcontract (together with an attached copy of the contract between the SBA and the procuring agency) shall be furnished to the subcontractor.

[37 FR 1039, Jan. 22, 1972]

Subpart 1-1.8-—Labor Surplus Area Concerns

§ 1-1.800 Scope of subpart.

This subpart sets forth policies and procedures for aiding labor surplus areas in the United States, its territories and possessions, Commonwealth of Puerto Rico, the Trust Territory of the Pacific Islands, and the District of Columbia. This subpart implements Defense Manpower Policy 4A, October 27, 1977 (32A CFR Part 134), and U.S. Department of Labor Regulations, (20 CFR Part 654).

[43 FR 26009, June 16, 1978]

§ 1-1.801 Definitions.

(a) The term "labor surplus area" means a geographical area identified by the Department of Labor as an area of concentrated unemployment or underemployment or an area of labor surplus.

(b) The term "concern located in labor surplus area" means a labor surplus area concern.

(c) The term "labor surplus area concern" means a concern that together with its first-tier subcontractors will perform substantially in labor surplus areas.

(d) The term "perform substantially in labor surplus areas" means that the costs incurred on account of manufacturing, production, or appropriate services in labor surplus areas exceed 50 percent of the contract price.

(e) The term "Labor Surplus Area Restricted Advertising" means a spe