Title 41-Public Contracts, Property Management

Subpart 1-12.7-Fair Labor Standards Act of

Rulings on applicablity or in-
terpretation.

Subpart 1-12.8-Equal Opportunity in

Federally assisted construction
contracts.

s S

Equal Opportunity (Applicant)
clause.

Incorporation by reference.
Incorporation by operation of
the Order and agency regula-
tions.

bidders regarding preaward equal opportunity

1-12.803-10 Elimination of segregated facil

Facilities not connected with
contracts.

§ 1-12.000 Scope of part.

This part deals with general policies regarding labor, so far as they relate to procurement; sets forth certain pertinent labor laws and requirements, indicating in connection with each its applicability and any procedures thereunder; and prescribes the contract clauses with respect to each labor law or requirement. Subpart 1-12.1-Basic Labor Policies

§ 1-12.100 General.

The policies and procedures stated in this Subpart 1-12.1 are recommendatory and are for the guidance of executive agencies.

§ 1-12.101 Labor relations.

(a) With respect to Government contract activities, procurement agencies should maintain and encourage the best possible relations with industry and labor in order that the Government may procure needed supplies and services without delay. All problems arising out of the Government contract labor relations of private contractors, and all communications with labor organizations or Federal agencies relative thereto, shall be handled in accordance with agency procedures.

§ 1-12.102-1

includes costs resulting from practices
that are discriminatory against the Gov-
ernment or unwarranted in the context
of the particular contract work.

(c) In some cases, labor disputes may
give rise to work stoppages which cause
delays in the timely performance of im-
portant contracts. The
officer should impress on the contractor
contracting
that he will be held accountable for de-
lays that are reasonably avoidable. It
should be emphasized that the standard
contract clauses dealing with default,
excusable delays, etc., do not relieve the
contractor of delays that are not beyond
his control or, with respect to delays of
subcontractors, that are not beyond the
control of both the contractor and the
subcontractor. A delay caused by a
strike which is an unfair labor practice,
as identified in the National Labor Re-
lations Act, as amended (29 U.S.C. 158),
and which the contractor could not rea-
sonably prevent can be excused only to
the extent that it does not go beyond
the point at which a reasonably diligent
contractor could resume the delayed per-
formance by taking action toward ending
the strike by such means as:

(b) Procurement agencies should remain impartial in, and should refrain from taking a position on, the merits of a dispute between labor and private management. No procuring activity should undertake the conciliation, mediation, or arbitration of a labor dispute.

§ 1-12.101-2 Contract pricing and administration.

(a) Nothing in § 1-12.101-1 should be construed to relieve a contracting officer from his responsibility to achieve efficient contract pricing and administration.

(b) Contractor labor policies and compensation practices, whether no not they are provided for in labor-management agreements, are not an acceptable basis for allowance of cost in cost-reimbursement type contracts or for recognition of costs in pricing fixed-price type contracts if and insofar as they result in unreasonable costs to the Government. Part 1-15, particularly 1-15.205-6(a), explains that the term "unreasonable costs"

(1) Filing a charge with the National Labor Relations Board so as to permit the NLRB to seek injunctive relief in court;

(2) Recourse to other available Gov-
ernment procedures; or

(3) Use of private boards or organi-
zations for the settlement of disputes.
§ 1-12.102 Overtime, extra-pay shifts,
and multi-shift work.

§ 1-12.102-1 Definitions.

As used in this § 1-12.102, the following terms shall have the meanings set forth:

(a) "Normal workweek” and “normal workday" mean, generally, a workweek of 40 hours and a workday of 8 hours, respectively. In any area outside the United States, its possessions, and Puerto Rico, a workweek longer than 40 hours, or a workday longer than 8 hours, will be considered normal if (1) such workweek or workday does not exceed that which is normal for such area, as determined by local custom, tradition, or law, and (2) hours worked in excess of 40 in such workweek, or 8 in such workday, are not compensated at a premium rate of pay.

(b) "Overtime" means time worked by a contractor's employee in excess of the employee's normal workweek or normal workday.

(c) "Shift premium" means the difference between the compensation paid to an employee at the contractor's regular rate of pay for the base or regular work shift and that paid at the regular rate of pay for extra-pay-shift work.

(d) "Overtime premium" means the difference between the compensation paid to an employee at the contractor's regular rate of pay for the work period or shift involved and that paid for hours worked overtime.

§ 1-12.102-2 Policy.

Where the cost to the Government may be affected, contracts should be performed, so far as practicable, without the use of overtime, extra-pay shifts, or multi-shifts, and, in particular, without the use of overtime as a regular employment practice. Any required overtime, extra-pay shifts, and multishifts should be limited to the minimum needed for accomplishment of the specific work.

§ 1-12.102-3 Procedures

(a) To the extent practicable, invitations for bids and requests for proposals shall not specify delivery or performance schedules which may be reasonably anticipated to necessitate overtime, at Government expense.

(b) In the negotiation of contracts in excess of $10,000, the contracting officer, consistent with the nature and size of the procurement should use his best efforts (1) to ascertain the extent to which proposals and quotations are based on the payment of overtime premiums and shift premiums, and (2) to negotiate contract prices or estimated costs which are not based on the payment of overtime premiums or shift premiums, taking into consideration the practicability of procurement from other sources of all or part of the requirement.

(c) All contracts, other than firm fixed-price contracts or fixed-price contracts with escalation (which do not provide for any labor escalation), should provide that payment of overtime premiums and shift premiums shall be allowed, or considered in pricing, only

to the extent approved in accordance with 81-12.102-4, or as provided in §1-12.102-5.

(d) Overtime for which overtime premiums would be at Government expense should not be approved under a contract where the contractor is already obli gated, without the right to additional compensation, to meet the required delivery date.

(e) Where overtime premiums or shift premiums are being paid at Government expense in connection with the performance of Government contracts, the continued need therefor should be subject to periodic review in accordance with agency procedures.

§ 1-12.102-4 Approvals.

(a) In the three following situations, overtime premiums and shift premiums at Government expense may be consid ered proper for approval when determined in writing by the agency head, or his designee or designees, that approval:

(1) Is necessary to meet delivery or performance schedules, and such schedules are determined to be extended to the maximum consistent with essential program objectives;

(2) Is necessary to make up for delays which are beyond the control and without the fault or negligence of the con tractor and, in construction contracts which result from unforeseeable causes; or

(3) Is necessary to eliminate foreseeable production bottlenecks of an extended nature which cannot be eliminated in any other way.

(b) Approvals should ordinarily be prospective, but may be retroactive where justified by the circumstances.

(c) Such approvals may be for an individual contract, project, or program, or for a plant, division, or company, as most practicable.

§ 1-12.102-5 Other authorized over. time.

(a) Approved overtime premiums or shift premiums may be paid for work, without the approval required by § 1

12.102-4:

(1) When necessary to cope with emergencies, such as those resulting from accidents, natural disasters, breakdowns of production equipment, or occasional

production bottlenecks of a sporadic nature;

(2) When by indirect labor employees such as those performing duties in connection with administration, protection, transportation, maintenance, standby

plant protection, operation of utilities, or accounting;

(3) In the performance of tests, industrial processes, laboratory procedures, loading or unloading of transportation media, and operations in flight or afloat, which are continuous in nature and cannot reasonably be interrupted or otherwise completed; or

(4) When lower overall cost to the Government will result.

(b) The cost of such overtime premiums or shift premiums may be allowed, or considered in pricing, only to the extent the amount thereof is reasonable and properly allocable to the work involved.

§ 1-12.103 Federal and State labor requirements.

Executive agencies should cooperate, and require contractors to cooperate, to the fullest extent possible, with Federal and State agencies responsible for enforcing labor requirements with respect to such matters as safety, health, and sanitation, maximum hours and minimum wages, equal pay for women, and child and convict labor.

Subpart 1-12.2-Convict Labor SOURCE: 39 FR 24009, June 28, 1974, unless otherwise noted.

§ 1-12.200 Scope.

This subpart prescribes policies and procedures regarding the employment of prison inmates in the performance of Government contracts.

§ 1-12.201

General.

(a) Executive Order 11755, December 29, 1973, states as follows: "The development of the occupational and educational skills of prison inmates is essential to their rehabilitation and to their ability to make an effective return to free society. Meaningful employment serves to develop those skills. It is also true, however, that care must be exercised to avoid either the exploitation of convict labor or any unfair competition between convict labor and free labor in the production of goods and services."

(b) The Act of February 23, 1887 (18 U.S.C. 436), provided that all officers or

agents of the United States were as a matter of public policy forbidden, under appropriate penalties, to hire or contract out the labor of any criminals who might thereafter be confined in any prison, jail, or other place of incarceration for the violation of any laws of the Government of the United States.

(c) Public Law 89-176 (18 U.S.C. 4082 (c) (2)) empowers the Attorney General to authorize Federal prisoners to work at paid employment in the community during their terms of imprisonment under conditions that protect against both the exploitation of convict labor and unfair competition with free labor.

§ 1-12.202 Basic requirement.

Pursuant to the policy originally set forth in the Act of February 23, 1887, and in accordance with the requirements of Executive Order 11755, all contracts involving the use of appropriated funds which shall hereafter be entered into by any department or agency of the Executive branch for performance in any State, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, or the Trust Territory of the Pacific Islands shall, unless otherwise provided by law, contain a clause forbidding, in the performance of such contracts, the employment of persons undergoing sentences of imprisonment which have been imposed by any Federal Court or court of a State, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, or the Trust Territory of the Pacific Islands.

§ 1-12.203 Applicability.

(a) The requirement in § 1-12.202 applies, except as stated in this § 1-12.203, to all contracts where performance involves the employment of labor within any State, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, or the Trust Territory of the Pacific Islands.

(b) The requirement does to apply to contracts:

(1) Subject to the provisions of the Walsh-Healey Public Contracts Act (see Subpart 1-12.6) which contains its own requirement that "no convict labor will be employed by the contractor in the manufacture or production or furnishing of any of the materials, supplies, articles, or equipment included in such

contract" (As interpreted by the Secretary of Labor, the term convict labor does not prohibit the employment of Federal or State prisoners on (i) parole, (ii) probation, or (iii) employed under work release programs, meeting the same conditions applicable to the Federal program.);

(2) For the purchase of supplies or services from Federal Prison Industries, Inc.; or

(3) For the purchase from any State prison of finished supplies which may be secured in the open market or from existing stocks as distinguished from supplies requiring special fabrication.

(c) The requirement does not prohibit the employment by a contractor in the performance of such contracts of: (1) Persons on parole or probation to work at paid employment during the term of their sentence;

(2) Persons who have been pardoned or who have served their terms; or

(3) Federal prisoners authorized by the Attorney General under 18 U.S.C. 4082 (c) (2) to work at paid employment in the community during the term of their imprisonment if:

(i) The worker is paid or is in an approved work training program on a voluntary basis;

(ii) Representatives of local union central bodies or similar labor union organizations have been consulted;

(iii) Such paid employment will not result in the displacement of employed workers, or be applied in skills, crafts, or trades in which there is a surplus of available gainful labor in the locality, or impair existing contracts for services; and

(iv) The rates of pay and other conditions of employment will not be less than those paid or provided for work of a similar nature in the locality in which the work is being performed.

(4) Non-Federal prisoners under the conditions provided in § 1-12.203 (c) (3) where the Attorney General has certified that the work release laws or regulations of the jurisdiction are in conformity with the requirements of Executive Order 11755. The order also provides that after notice and opportunity for hearing, the Attorney General shall revoke any such certification if he finds that the work-release program of the jurisdiction involved is not being conducted in conformity with the requirements of Execu

In connection with the performance of work under this contract, the Contractor agrees not to employ any person undergoing sentence of imprisonment except as provided by Public Law 89-176, September 10, 1965 (18 U.S.C. 4082 (c) (2)) and Executive Order 11755, December 29, 1973. Subpart 1-12.3-Contract Work Hours and Safety Standards Act (Other Than Construction Contracts)

§ 1-12.300 Scope of subpart.

This subpart deals with the requirements of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327333) insofar as they apply to contracts other than construction contracts dealt with in Subpart 1-12.4.

[38 FR 6673, Mar. 12, 1973]

§ 1-12.301 Statutory requirement.

The Contract Work Hours and Safety Standards Act provides that the wages of every laborer and mechanic employed by any contractor or subcontractor in his performance of work on any contract of the character specified in section 103 of that Act shall be computed on the basis of a standard workday of 8 hours and a standard workweek of 40 hours. Work in excess of such standard workday or workweek is permissible, provided that the wages of any laborer or mechanic so employed include compensation at a rate not less than one and one-half times the basic rate of pay for all hours worked in any workweek in excess of 8 hours in any calendar day or in excess of 40 hours in the workweek, as the case may be. "Laborers and mechanics" include apprentices, trainees, watchmen, guards, and workmen, other than seamen, performing services in connection with dredging or rock excavation in rivers or harbors. [38 FR 6674, Mar. 12, 1973]

§ 1-12.302 Applicability.

The requirement set forth in § 1-12.301 applies, except as stated in this § 1-12.302, to all contracts which may require or involve the employment of laborers or mechanics either by a prime contractor or subcontractor. The requirement does not apply to the following: