Subpart 6-Walsh-Healey Public Contracts Act

12.601 Statutory Requirement. In accordance with the requirements of the Walsh-Healey Public Contracts Act (41 U.S.C. 35-45), all contracts subject to said Act entered into by NASA for the manufacture or furnishing of supplies in any amount exceeding $10,000 (i) will be with manufacturers or regular dealers, and (ii) 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.

12.602 Applicability.

12.602-1 General. The requirement set forth in 12.601 applies to contracts (including, for this purpose, basic ordering agreements and blanket purchase agreements (see 3.410-2 and 3.605)) 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 12.602-2 or exempted by the Secretary of Labor (see 12.602-3).

12.602-2 Statutory Exemptions. The following transactions are exempt from the Walsh-Healey Public Contracts Act:

(i) purchases of generally available commercial items, negotiated pursuant to the authority set forth in 3.202;

(ii) purchases of perishables including dairy, livestock, and nursery products; and

(iii) purchases of agricultural or farm products processed for first sale by the original producers.

12.602-3 Department of Labor Regulations and Interpretations. 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. These regulations and interpretations are compiled in a document entitled "Walsh-Healey Public Contracts Act, Rulings and Interpretations," which may be obtained from the Department of Labor Regional Offices listed in 12.607. In addition to the interpretations stated in that document, attention is directed to an opinion of the Department of Labor that 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 WalshHealey Public Contracts Act after date of such modifications; and that 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. Also, in the case of a basic ordering agreement or blanket purchase agreement such amount shall be the aggregate amount of all orders estimated to be placed thereunder for one year after the effective date of the agreement. If a basic ordering agreement continues or is extended, such estimate shall be made annually for each year after the first and the agreement modified accordingly.

12.603 Determinations of Eligibility as Manufacturer or Regular Dealer.

12.603-1 Manufacturer. As used in 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

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12.603-1

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specifications. In order to qualify as a manufacturer, a bidder must be able to show before the award that he is (i) an established manufacturer of the particular goods or goods of the general character sought by the Government, and (ii) 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.

12.603-2 Regular Dealer.

(a) Except as set forth in (b) below, as used in 12.601 a regular dealer is a person who owns, operates, or maintains 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:

(i) 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;

(ii) 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;

(iii) 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;

(iv) 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;

(v) 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

(vi) 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 busi

ness.

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(b) For certain specific products (lumber and lumber products, machine tools, hay, grain, feed or straw, raw cotton, green coffee, petroleum, agricultural liming materials, tea, and raw or unmanufactured cotton linters), 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 C.F.R. 50-201.101(b)).

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 regulation (41 C.F.R. 50-201.604(a)). If these terms and conditions are not met, coal dealers must meet the requirements set forth in 12.603-2 in order to be considered regular dealers.

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 1.503 and the procedures prescribed for obtaining information concerning contingent or other fees, as set forth in Part 1, Subpart 5. 12.604 Responsibilities of Contracting Officers.

(a) The responsibliity for applying the eligibility requirements set forth in 12.601 and 12.603 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 2.407-8 and 3.111). The contracting officer should make an initial determination and should process the protest in accordance with applicable procedures for submission to the Department of Labor for a final determination.

(b) Whenever the Walsh-Healey Public Contracts Act is applicable, the contracting officer, pursuant to regulations or instructions issued by the Secretary of Labor, shall:

(i) inform prospective contractors of the applicability of minimum wage determinations;

(ii) furnish to the contractor Labor Department Form PC-13, a combination Letter and Poster, explaining the application of the WalshHealey Public Contracts Act and giving instructions for display of the Poster;

(iii) furnish to the contractor Labor Department Form PC-16, "Minimum Wage Determinations under the Walsh-Healey Public Contracts Act", for ascertaining the mimimum wage determinations applicable to his contract;

(iv) prepare and transmit to the Department of Labor the original and one copy of revised Standard Form 99, "Notice of Award of Contract" immediately upon award of the contract (For detailed instructions on completing and submitting the Form, see U.S. Department of Labor Circular Letter No. 2-65, dated December 10, 1965), and

(v) report to the Department of Labor any violations of the representations or stipulations required by the Walsh-Healey Public Contracts Act. 12.605 Contract Clause. The contract clause required by this Subpart 6 is as follows:

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12.605

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WALSH-HEALEY PUBLIC CONTRACTS ACT (SEPTEMBER 1962)

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.C. 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.

12.606 Procedure for Obtaining Exemptions With Respect to Stipulations Required by the Act. Section 6 of the Walsh-Healey Public Contracts Act permits the Secretary of Labor to make exceptions to the requirement that the representations and stipulations of Section 1 of the Act be included in contracts which are subject to the Act. Applications for such exceptions shall be submitted in writing through the contracting officer with pertinent data and recommendation to the Director, NASĂ Office of Industrial Relations, NASA Headquarters (Code QL).

12.607 Wage and Hour and Public Contracts Divisions of the United States Department of Labor Regional Offices-Geographical Jurisdictions and Addresses of Regional Directors.

Atlanta Region (Florida, Georgia, North Carolina, South Carolina): Room 331, 1371 Peachtree Street NE., Atlanta, Georgia 30309.

Birmingham Region (Alabama, Arkansas, Louisiana, Mississippi): 1931 9th Avenue South, Birmingham, Alabama 35205.

Boston Region (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont): John Fitzgerald Kennedy Federal Building, Government Center, Boston, Massachusetts 02203.

Chicago Region (Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin): United States Courthouse and Federal Office Building, 7th Floor, 219 South Dearborn Street, Chicago, Illinois 60604.

Dallas Region (New Mexico, Oklahoma, Texas): 340 Mayflower Building, 411 North Akard Street, Dallas, Texas 75201.

Kansas City Region (Colorado, Iowa, Kansas, Missouri, Montana, Nebraska, North Dakota, South Dakota, Utah, Wyoming): 2000 Federal Office Building, 911 Walnut Street, Kansas City, Missouri 64106.

Nashville Region (Kentucky, Tennessee, Virginia, West Virginia): United States Court House Building, 801 Broad Street, Nashville, Ten

nessee 37203.

New York Region (New Jersey, New York): 907 United States Parcel Post Building, 341 Ninth Avenue, New York, New York 10001.

Philadelphia Region (Delaware, District of Columbia, Maryland, Pennsylvania): Room 1524, Jefferson Building, 1015 Chestnut Street, Philadelphia, Pennsylvania 19107.

San Francisco Region (Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Washington): Room 10431, 450 Golden Gate Avenue, Box 36018, San Francisco, California 94102.

Puerto Rico: 7th Floor, Condominio San Alberto Building, 1200 Ponce de Leon Avenue, Stop 17, Santurce, Puerto Rico 00907.

12.606

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Subpart 7-Fair Labor Standards Act of 1938

12.701 Basic Statute. The Fair Labor Standards Act of 1938 (Act of June 30, 1938; 29 U.S.C. 201-219), as amended, provides for the establishment of minimum wage and maximum hour standards, creates a Wage and Hour Division in the Department of Labor for purposes of interpretation and enforcement (including investigations and inspections 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 (i) interstate commerce or foreign commerce, (ii) the production of goods for such commerce, or (iii) any closely related process or occupation essential to such production.

12.702 [Reserved]

12.703 Rulings on Applicability or Interpretation. Contractors or contractor employees who inquire concerning applicability or interpretation of the Fair Labor Standards Act of 1938 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 Director of the Wage and Hour and Public Contracts Divisions of the Department of Labor.

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