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

$500,000.

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 determination is included in the specifications as Section 0020. A copy

of the wage determination is required to be posted on the construction 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 entitled.

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 violation.

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.

SUBSTANTIAL COMPLETION

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." It is important for contractors to reach substantial completion because it cuts off the Government's right to assess liquidated damages.

FINAL CLOSE-OUT OF A CONTRACT

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.

5. Complete submission of all payrolls.

6. Furnish executed Certification of Payments to Subcontractors

and Suppliers.

7. Furnish an executed release of claims.

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).

VALUE ENGINEERING INCENTIVE CLAUSE (EXHIBIT 44)

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