modified as necessary in order to comply with the provisions of § 1-12.304(b).

CONTRACT WORK HOURS AND SAFETY STANDARDS ACT-OVERTIME COMPENSATION This contract, to the extent that it is of a character specified in the Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333), is subject to the following provisions and to all other applicable provisions and exceptions of such Act and the regulations of the Secretary of Labor thereunder.

(a) Overtime requirements. No Contractor or subcontractor contracting for any part of the contract work which may require or involve the employment of laborers, mechanics, apprentices, trainees, watchmen, and guards shall require or permit any laborer, mechanic, apprentice, trainee, watchman, or guard in any workweek in which he is employed on such work to work in excess of 8 hours in any calendar day or in excess of 40 hours in such workweek on work subject to the provisions of the Contract Work Hours and Safety Standards Act unless such laborer, mechanic, apprentice, trainee, watchman, or guard receives compensation at a rate not less than one and one-half times his basic rate of pay for all such hours worked in excess of 8 hours in any calendar day or in excess of 40 hours in such workweek, whichever is the greater number of overtime hours.

(b) Violation; liability for unpaid wages; liquidated damages. In the event of any violation of the provisions of paragraph (a), the Contractor and any subcontractor responsible therefor shall be liable to any affected employee for his unpaid wages. In addition, such Contractor and subcontractor shall be liable to the United States for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer, mechanic, apprentice, trainee. watchman, or guard employed in violation of the provisions of paragraph (a) in the sum of $10 for each calendar day on which such employee was required or permitted to be employed on such work in excess of 8 hours or in excess of his standard workweek of 40 hours without payment of the overtime wages required by paragraph (a).

(c) Withholding for unpaid wages and liquidated damages. The Contracting Officer may withhold from the Government Prime Contractor, from any moneys payable on account of work performed by the Contractor or subcontractor, such sums as may administratively be determined to be necessary to satisfy any liabilities of such Contractor or subcontractor for unpaid wages and liquidated damages as provided in the provisions of paragraph (b).

(d) Subcontracts. The Contractor shall insert paragraphs (a) through (d) of this clause in all subcontracts. and shall require their inclusion in all subcontracts of any tier.

(e) Records. The Contractor shall maintain payroll records contaning the information specified in 29 CFR 516.2(a). Such rec

ords shall be preserved for 3 years from the completion of the contract. [38 FR 6674, Mar. 12, 1973]

§ 1-12.304 Variations and tolerances.

Variations and tolerances from the provisions of this subpart which are granted under section 105 of the Contract Work Hours and Safety Standards Act by the Secretary of Labor in the case of any contract work for which such variations and tolerances have been provided (29 CFR 5.14) shall be deemed to satisfy the requirements of § 1-1.009. [38 FR 6674, Mar. 12, 1973]

Subpart 1-12.6-Walsh-Healey
Public Contracts Act

§ 1-12.601 Statutory requirement.

In accordance with the requirement of the Walsh-Healey Public Contracts Act (41 U.S.C. 35-45), all contracts subject to said Act entered into by any executive agency for the manufacture or furnishing of supplies in any amount exceeding $10,000 (a) will be with manufacturers or regular dealers, and (b) shall incorporate by reference the representations and stipulations required by said Act pertaining to such matters as minimum wages, maximum hours, child labor, convict labor, and safe and sanitary working conditions.

§ 1-12.602 Applicability. § 1-12.602-1 General.

The requirement set forth in § 112.601 applies to contracts for the manufacture or furnishing of "materials, supplies, articles, and equipment" which are to be performed within the United States, Puerto Rico, or the Virgin Islands, and which exceed or may exceed $10,000 in amount unless exempt pursuant to § 1-12 602-2 or exempted by the Secretary of Labor (see § 1-12.602-3(a)). § 1-12.602-2 Statutory exemptions.

(a) The following transactions are exempt from the Walsh-Healey Public Contracts Act:

(1) Purchases of generally available commercial items negotiated pursuant to the authority set forth in § 1-3.202 or pursuant to similar authority under other laws;

(2) Purchases of perishables including dairy, livestock, and nursery products;

(3) Purchases of agricultural or farm products processed for first sale by the original producers; and

(4) Purchases of agricultural commodities or the products thereof made by the Secretary of Agriculture under the Agricultural Adjustment Act program or for purposes within the general scope and aim of that program, such as stabilization and increase of market prices to farmers.

(b) Contracting officers are cautioned to refer to the Department of Labor regulations and interpretations (see § 1-12.602-3(a)) in order to ascertain the applicability of the exemptions.

§ 1-12.602-3 Department of Labor regulations and interpretations.

(a) Pursuant to the Walsh-Healey Public Contracts Act, the Secretary of Labor has issued detailed regulations and interpretations as to the coverage of said Act, and exemptions and procedures thereunder The regulations are issued in the Code of Federal Regulations, Title 41, Chapter 50. The interpretations are compiled in a document entitled "Walsh-Healey Public Contracts Act, Rulings and Interpretations."

(b) Attention is directed to the following which give the substance of certain Department of Labor opinions:

(1) Contracts which are originally $10,000 or less, but are subsequently modified to increase the price to an amount in excess of $10,000, are subject to the Walsh-Healey Public Contracts Act after date of such modification; and contracts in an amount exceeding $10.000, which are subsequently modified to a figure of $10.000 or less, are not subject to said Act with respect to work performed after such modification, if modification is effected by mutual agreement (Opinion of August 9, 1944).

(2) When a contract awarded to a primary contractor contains a provision making him an agent of the Government. the primary contractor is required to include the stipulations of the WalshHealey Public Contracts Act in contracts he awards for and on behalf of the Government for materials, supplies. articles, or equipment in excess of $10.000 to be used in the construction and equipment of Government facilities (Opinion of September 6, 1941).

(3) The stipulations of the WalshHealey Public Contracts Act. incorporated into and made a part of Government contracts for the manufacture and

furnishing of materials, supplies, articles, or equipment, awarded to persons or companies operating Governmentowned facilities, affect the employees of such contractors in the same manner and to the same extent as those affecting employees of contractors operating privately-owned facilities. (Opinion of August 21, 1942).

§ 1-12.603 Determinations of eligibility as manufacturer or regular dealer.

§ 1-12.603-1 Manufacturer.

As used in § 1-12.601 a manufacturer is a person who owns, operates, or maintains a factory or establishment that produces on the premises the materials, supplies, articles, or equipment required under the contract and of the general character described by the specifications. In order to qualify as a manufacturer, a bidder must be able to show before the award (a) that he is an established manufacturer of the particular goods or goods of the general character sought by the Government, or (b) if he is newly entering into such manufacturing activity, that he has made all necessary prior arrangements for space, equipment, and personnel to perform the manufacturing operations required for the fulfillment of the contract. A new firm which, prior to the award of the contract, has made such definite commitments in order to enter a manufacturing business which will later qualify it, shall not be barred from receiving the award because it has not yet done any manufacturing; however, this interpretation is not intended to qualify a firm whose arrangements to use space, equipment, or personnel are contingent upon the award of a Government contract.

§ 1-12.603-2 Regular dealer.

(a) Except as set forth in paragraph (b) of this § 1-12.603-2, as used in § 112.601 a regular dealer is a person who owns, operates, or maintains a store, warehouse, or other establishment in which materials, supplies, articles, or equipment of the general character described by the specifications and required under the contract are bought, kept in stock, and sold to the public in the usual course of business. In order to qualify as a regular dealer, a bidder must be able to show before the award:

(1) That he has an establishment or leased or assigned space in which he regularly maintains a stock of goods in which he claims to be a dealer; if the

space is in a public warehouse, it must be maintained on a continuing, and not on a demand, basis;

(2) That the stock maintained is a true inventory from which sales are made; the requirement is not satisfied by a stock of sample or display goods, or by a stock consisting of surplus goods remaining from prior orders, or by a stock unrelated to the supplies which are the subject of the bid, or by a stock maintained primarily for the purpose of token compliance with the Act from which few, if any, sales are made;

(3) That the goods stocked are of the same general character as the goods to be supplied under the contract; to be of the same general character the items to be supplied must be either identical with those in stock or be goods for which dealers in the same line of business would be an obvious source;

(4) That sales are made regularly from stock on a recurring basis: they cannot be only occasional and constitute an exception to the usual operations of the business; the proportion of sales from stock that will satisfy the requirements will depend upon the character of the business:

(5) That sales are made regularly in the usual course of business to the public, i.e.. to purchasers other than Federal, State, or local government agencies: this requirement is not satisfied if the contractor merely seeks to sell to the public but has not yet made such sales; if government agencies are the sole purchasers, the bidder will not qualify as a regular dealer; the number and amount of sales which must be made to the public will necessarily vary with the amount of total sales and the nature of the business; and

(6) That his business is an established and going concern; it is not sufficient to show that arrangements have been made to set up such a business.

(b) For certain specific products, there are alternative definitions of regular dealers. The qualifications required under the alternative definitions are listed in the regulations of the Secretary of Labor (41 CFR 50-201.101(b)). § 1-12.603-3 Coal dealers.

Coal dealers are exempted from the regular dealer requirements if they meet the terms and conditions set forth by the Secretary of Labor in his regulations (41 CFR 50–201.604(a)). If these terms and conditions are not met, coal deal

ers must meet the requirements set forth in § 1-12.603-2 in order to be considered regular dealers.

§ 1-12.603-4 Agents.

A manufacturer or regular dealer may bid, negotiate, and contract through an authorized agent if the agency is disclosed, and the agent acts and contracts in the name of his principal In this connection, see the clause entitled "Covenant Against Contingent Fees" set forth in § 1-1.503 and the procedures prescribed for obtaining information concerning contingent fees, as set forth in Subpart 1-1.5.

§ 1-12.604 Responsibilities of contracting officers.

The responsibility for applying the eligibility requirements set forth in § 112.601 rests, in the first instance, with the contracting officer The Department of Labor does not conduct pre-award investigations. nor render final determinations of eligibility until the contracting officer has initially determined whether the eligibility requirements have been met. When the eligibility of a bidder or offeror is challenged before award, it should be treated in a manner similar to a protest before award (see § 1-2.4078) The contracting officer should make an initial determination and should process the protest in accordance with agency procedures for submission to the Department of Labor for a final determination. Whenever the Walsh-Healey Public Contracts Act is applicable, the contracting officer shall. pursuant to regulations or instructions issued by the Secretary of Labor and in accordance with procedures prescribed by each respective executive agency:

(a) Inform prospective contractors of the applicability of minimum wage determinations;

(b) Furnish to the contractor Form PC-13, Letter and Poster (issued 1965), explaining the application of the WalshHealey Public Contracts Act and giving instructions for display of the Poster;

(c) Furnish to the contractor Form PC-16 (issued 1965), Minimum Wage Determinations, under the Walsh-Healey Public Contracts Act, for ascertaining the minimum wage determinations applicable to his contract;

(d) Prepare and transmit to the Department of Labor two copies of the Notice of Award (Revised Standard Form 99) immediately on award of the contract; and

The following clause shall be used as required by this Subpart 1-12.6:

WALSH-HEALEY PUBLIC CONTRACTS ACT

If this contract is for the manufacture or furnishing of materials, supplies, articles, or equipment in an amount which exceeds or may exceed $10,000 and is otherwise subject to the Walsh-Healey Public Contracts Act, as amended (41 U.S. Code 35-45), there are hereby incorporated by reference all representations and stipulations required by said Act and regulations issued thereunder by the Secretary of Labor, such representations and stipulations being subject to all applicable rulings and interpretations of the Secretary of Labor which are now or may hereafter be in effect.

Subpart 1-12.7-Fair Labor Standards Act of 1938

The Fair Labor Standards Act of 1938 as amended (29 U.S.C. 201-219), provides for the establishment of minimum wage and maximum hour standards. creates a Wage and Hour Division in the Department of Labor for puruposes of interpretation and enforcement (including investigation and inspection of Government contractors), prohibits oppressive child labor and, under an amendment contained in the Equal Pay Act of 1963 (77 Stat. 56, 29 U.S.C. 206), prohibits discrimination on the basis of sex The Fair Labor Standards Act applies to all employees, unless otherwise exempted who are engaged in (a) interestate com. merce or foreign commerce, (b) the production of goods for such commerce, or (c) any closely related process or occupation essential to such production (30 F.R. 16111. Dec. 28, 1965]

§ 1-12.702 Rulings on applicability or interpretation.

Contractors or contractor employees who inquire concerning applicability or interpretation of the Fair Labor Standards Act shall be advised that rulings concerning such matters fall within the jurisdiction of the Department of Labor, and shall be given the address of the appropriate regional office of the Wage and Hour and Public Contracts Divisions of the Department of Labor.

Subpart 1-12.8-Equal Opportunity in Employment

SOURCE: The provisions of this Subpart 1-12.8 appear at 33 F.R. 10715, July 27, 1968 unless otherwise noted.

CROSS REFERENCE: For a temporary regulation relating to equal opportunity in employment, see Temporary Reg. 19, 35 F.R. 14747, Sept. 22, 1970.

§ 1-12.800 Scope of subpart.

This subpart sets forth policies and procedures for carrying out the requirements of Executive Order No. 11246 of September 24, 1965 (30 F.R. 12319), Executive Order No. 11375 of October 13, 1967 (32 F.R. 14303), and the rules and regulations of the Secretary of Labor (33 F.R. 7804). The provisions of this subpart shall be employed by agencies with respect to Government contracts and subcontracts and may be adopted by agencies for use in connection with programs involving Federal assistance. § 1-12.801 General.

(a) Executive Order No. 11246 sets forth policies regarding equal employment opportunity. It provides in section 201 that "the Secretary of Labor shall be responsible for the administration of Parts II and III of this Order and shall adopt such rules and regulations and issue such orders as he deems necessary and appropriate to achieve the purposes thereof." Parts II and II of the Ordex concern "Nondiscrimination in Employment by Government Contractors and Subcontractors" and "Nondiscrimination Provisions in Federally Assisted Construction Contracts," respectively.

(b) The regulations of the Secretary of Labor (see § 1-12.800) apply to all contracting agencies of the Government and to contractors and subcontractors who perform under Government contracts, to the extent set forth in 41 CFR Part 60-1, Obligations of Contractors and Subcontractors. The regulations also apply to all agencies of the Government administering programs involving Federal financial assistance which may include a construction contract, and to all contractors and subcontractors performing under construction contracts which are related to any such programs. The procedures set forth in those regulations govern all disputes relative to a contractor's compliance with his obligations under the equal opportunity clause regardless of whether or not his contract

contains a "Disputes" clause (see § 1-12.805-10).

(c) The rights and remedies of the Government under the rules and regulations of the Secretary of Labor are not exclusive and do not affect rights and remedies provided elsewhere by law, regulation, or contract; neither do the regulations limit the exercise by the Secretary or Government agencies of powers not therein specifically set forth, but granted to them by the Order.

(d) The functions vested in the Secretary of Labor by Executive Order No. 11246 were previously exercised by the President's Committee on Equal Employment Opportunity pursuant to Executive Order No. 10925 of March 6, 1961, and Executive Order No. 11114 of June 22, 1963 (3 CFR, 1959-1963 Comp., pages 448 and 774, respectively). The rules and regulations prescribed by the committee in 41 CFR Part 60-1 for the administration of those orders were adopted by the Secretary of Labor on October 24, 1965 (30 F.R. 13441), pending the promulgation of revised rules and regulations. Such revised rules and regulations subsequently were adopted by the Secretary of Labor (see § 1-12.800).

§ 1-12.802 Definitions.

As used in this subpart, the following terms have the meanings stated.

(a) "Administering agency" means any department, agency, and establishment in the executive branch of the Government, including any wholly owned Government corporation, which administers a program involving federally assisted construction contracts.

(b) "Agency" means any contracting or any administering agency of the Government.

(c) "Applicant" means an applicant for Federal assistance involving a construction contract or other participant in a program involving a construction contract as determined by regulation of an administering agency. The term also includes such persons after they become recipients of such Federal assistance.

(d) "Compliance agency" means the agency designated by the Director on a geographical, industry, or other basis to conduct compliance reviews and to undertake such other responsibilities in connection with the administration of the Order as the Director may determine to be appropriate. In the absence of such

a designation, the compliance agency will be determined as follows:

(1) In the case of a prime contractor not involved in construction work, the compliance agency will be the agency whose contracts with the prime contractor have the largest aggregate dollar value;

(2) In the case of a subcontractor not involved in construction work, the compliance agency will be the compliance agency of the prime contractor with which the subcontractor has the largest aggregate value of subcontracts or purchase orders for the performance of work under contracts;

(3) In the case of a prime contractor or subcontractor involved in construction work, the compliance agency for each construction project will be the agency providing the largest dollar value for the construction project; and

(4) In the case of a contractor who is both a prime contractor and subcontractor, the compliance agency will be determined as if such contractor is a prime contractor only.

(e) "Construction work" means the construction, rehabilitation, alteration, conversion, extension, demolition, or repair of buildings, highways, or other changes or improvements to real property, including facilities providing utility services. The term also includes the supervision, inspection, and other onsite functions incidental to the actual construction.

(f) "Contract" means any Government contract or any federally assisted construction contract.

(g) "Contracting agency" means any department, agency, establishment, or instrumentality in the executive branch of the Government, including any wholly owned Government corporation, which enters into contracts.

(h) "Contractor" means, unless otherwise indicated, a prime contractor or subcontractor.

(1) "Director" means the Director, Office of Federal Contract Compliance, U.S. Department of Labor, or any person to whom he delegates authority under this Subpart 1-12.8.

(j) "Equal Opportunity clause" means the contract provisions set forth in § 1-12.803-2 or § 1-12.803-4, as appropriate.

(k) "Federally assisted construction contract" means any agreement, or