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down will be covered in the section dealing with payments.

If the contractor fails to comply with this provision the Government has two options. If it is to the Government's advantage to modify

the requirement, the contracting officer may approve a reduction of the percentage. If, however, it is necessary or desirable to enforce this requirement, the Government may apply the sanctions

available under Clause 31, "Non-Compliance with Contract Requirements",

of the GSA 1139. (EXHIBIT 41)

Utilization of Minority Business Enterprises (EXHIBIT 42 Modifications

of General Conditions, GSA Form 1139)

It is the policy of the Government that minority business enterprises

shall have the maximum practicable opportunity to participate in Government contracts. For this reason, you are encouraged to use

your best efforts to award subcontracts to minority business

enterprises to the fullest extent consistent with the efficient

performance of your contract work. Clause 40 of the modifications

of GSA Form 1139 requires you to establish and conduct a program

which will enable minority business enterprises to be considered fairly as subcontractors and suppliers. You are urged to read and

become familiar with this clause.

In addition, you must include

the provisions of Clause 40 in all your subcontracts which exceed


STANDARD FORM 19-A, LABOR STANDARDS PROVISIONS (Applicable to contracts in excess of $2,000) (EXHIBIT 43)

The Davis-Bacon Act (Act of March 3, 1931, as amended) applies to Federal contracts (over $2,000) for construction, alteration and repair (including painting and decorating) of public buildings or

public works in the U. S.

It requires that laborers and mechanics

employed on the site of the work be paid not less than the minimum

wages and fringe benefits as determined by the Secretary of Labor

to be prevailing in the area of the project. The wage determina

tion is included in the specifications as Section 0020.

A copy

of the wage determination is required to be posted on the construc

tion site.

The Contract Work hours and Safety Standards Act requires the payment

of one and one-half times the basic rate of pay for all work in

excess of 8 hours per day or 40 hours per workweek. Safety standards

were added to this Act in 1969 to provide that no laborer or mechanic

shall be required to work under conditions that are dangerous to

health and safety. The Department of Labor has issued specific

safety regulations for construction in 29 CFR, Part 1926.

The Apprentices and Trainees clause provides for the employment of

apprentices and trainees when they are properly registered in an

approved program.

The clause contains information on determining

an acceptable ratio of apprentices and/or trainees to journeymen.

Payrolls and Basic Records.

The contractor is required to submit

copies of his weekly payrolls and copies of his subcontractors'

payrolls to the contracting officer, showing the classifications,

rates of pay, overtime, and withholding together with a statement

that the payrolls are correct.

Compliance with Copeland Regulations (commonly known as the AntiKickback Act). This Act provides that it is illegal to induce, by

force or otherwise, any person employed in performance of the

contract to give up any part of the compensation to which he is


Withholding of Funds. The contracting officer may withhold from the

contractor's payments funds considered necessary to pay laborers

and mechanics any wages due because of underpayments by the contractor or subcontractors, and to cover liquidated damages due

the Government for failure to pay the proper rates for overtime.

Liquidated damages are computed at the rate of $10 for each


Subcontracts. Prime contractors are responsible for inserting the

labor standards provisions in all subcontracts and for obtaining

compliance therewith.

Contract Termination - Debarment.

Breach of the labor standards

provisions may be cause for termination and/or debarment.

Disputes Concerning Labor Standards.

Most disputes arising out of

labor provisions are subject to the Disputes Clause. However,

questions on proper classifications or wage rates contained in

the Wage Determination are referred to the Secretary of Labor.

Investigations may be made by representatives of the Department

of Labor and the contracting agency to determine whether contractors

are complying with the labor standards provisions.


The date of substantial completion may differ from the date of

final completion.

It should be clear that substantial completion

is not considered in terms of percentage of work in place. The

Government defines substantial completion as:

"the last day

during which work was performed to bring the project to that degree

of completion so that it is usable for the purpose intended."


is important for contractors to reach substantial completion because

it cuts off the Government's right to assess liquidated damages.


Before final close-out of a contract, steps you will be required

to take include:

1. Complete any defects and omissions.

2. Turn over all instruction manuals, spare parts, and give

any training instructions in the operation of equipment as required in the mechanical and electrical sections of the specifications.

3. Turn over all warranties including addresses of manufacturers. 4. Furnish as-built drawings showing outside utility lines and

a location plan of the facility, where applicable.

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8. Contractors may be required to keep their records available

for examination by the Comptroller General for a period of three

(3) years after final payment. Read paragraph 25 of the Modification

of General Provisions (EXHIBIT 40).


GSA desires to benefit from the experience and knowledge of

contractors in the areas of cost, new materials, new techniques

and industry standards.

Therefore the purpose of the Value

Engineering Incentive Clause is to invite contractors to challenge

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