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posal to his own engineering sources for review and recommendation.
(2) Wage rates and trends. tors should be required to provide current wage rates by type of direct labor included in the proposal. If the wage rates used exceed current rates, contractors should be required to show the basis for the change in trend.
(3) Burden rates. Contractors should be required to show the basis used in establishing whatever burden rates are included; such basis should relate to recent past experience and the reliability of projections should be supported.
(4) Material. Contractors should provide a listing, including prices and sources, of raw stock, purchase parts, and subcontracted items. The method, if any, for handling of spoilage and scrap should be explained. Where material costs are a significant part of the contract price, review and recommendations by Agency engineering personnel should be obtained.
(5) Tooling and test equipment. Proposals for production contracts should list and price any items of tooling and special test equipment required for performance. Negotiation should be directed toward having the contractor capitalize the cost of these items. Where this is impracticable, the reliability of the pricing should be examined, the disposition of any items paid for or furnished by the Government should be determined, and proper controls should be established.
(6) Pre-production costs. In posed contracts for $100,000 or other involving "first-run" or "pre-production" quantities, separate breakdowns should be provided by the contractor of the start up or pre-production costs, and of the production costs.
(7) General and administrative costs. Contractors will indicate the basis on which general and administrative costs are calculated and distributed. Such presentation should indicate whether such costs are related to the value of direct labor, cost of sales or other.
(8) Other costs. Proposals should clearly establish the basis and necessity, if any, for special costs such as travel, sales commissions, royalties, or manufacturer's excise tax.
AUTHORITY: § 2-9.5000 and § 2-9.5001 issued under secs. 303, 313, 72 Stat. 747, 752; 49 U.S.C. 1344, 1354.
§ 2-9.5000 Scope of subpart.
This Subpart codifies, in FAPR, Federal Aviation Agency Order 56, which sets forth the Agency policy with respect to the retention of rights and recovery of costs in connection with negotiated contracts where research or development is a significant part of the work.
[25 F.R. 14031, Dec. 31, 1960, as amended at 26 F.R. 9675, Oct. 13, 1961]
In negotiating contracts under which the Government pays a part of all of the costs of research or development, it is the policy of the Federal Aviation Agency to retain, for the benefit of the United States, rights to data and patent rights, in reasonable proportion to the contributions of the Agency and the contractor; and to recover the Federal Aviation Agency's contribution toward such research and development through royalties to the Government upon commercial exploitation of the products developed thereby.
[ 25 F.R. 14031, Dec. 31, 1960]
Delegation of authority by contracting officer.
Subpart 2-12.6-Walsh-Healey Public Contracts Act 2-12.602-2 Department of Labor regulations and interpretations. 2-12.650
Delegation of responsibility.
AUTHORITY: §§ 2-12.450 through 2-12.650 issued under secs. 303, 313, 72 Stat. 747, 752; U.S.C. 1344, 1354.
SOURCE: §§ 2-12.450 to 2-12.650 appear at 26 F.R. 11904, Dec. 13, 1961.
Subpart 2-12.4-Labor Standards in Construction Contracts
§ 2-12.450 Scope of subpart.
This subpart deals with the labor, standards for construction contracts as' prescribed by the statutes and regulations set forth in this section, and defines the authority and responsibilities of the contracting officer and his representative in the area of labor standards; and provides instructions for assuring labor standards compliance, routine enforcement activities, special investigations, and for reporting violations. § 2-12.451 Statutory requirements. § 2-12.451-1 Davis-Bacon Act (Act of March 3, 1931, as amended, 40 U.S.C. 276a).
All construction contracts in excess of $2,000, executed by FAA, under which laborers or mechanics are employed directly upon the site of the work, are subject to the Davis-Bacon Act which provides for:
(a) Payment of laborers or mechanics not less often than once a week;
(b) Payment of wages in accordance with the prevailing minimum wage rates prescribed by the Secretary of Labor;
(c) Payment of wages without deductions except as authorized by law;
(d) Posting of wage rates and Form SOL-155 at the job site in a prominent place during construction;
(e) Withholding from contractors of amounts considered necessary to pay laborers or mechanics any discrepancies between the amounts received and the amounts due (SF-1093); and
(f) Termination of work for failure to pay required minimum wages. § 2-12.451-2 Copeland Act (Act of June 13, 1934, as amended, 18 U.S.C. 874; 40 U.S.C. 276c).
The Copeland (Anti-Kickback) Act makes it illegal for anyone to make unauthorized deductions, or to exact rebates from, the wages of any person employed in a construction project that is financed in whole or in part by loans or grants from the United States. Further, it requires the Secretary of Labor to make reasonable regulations for contractors and subcontractors engaged in such work, including provisions that each such contractor shall furnish a weekly statement with respect to the wages paid each employee during the preceding week.
§ 2-12.451-3 Eight-hour law (Act of June 19, 1912, as amended, 40 U.S.C. 321-326).
The Eight-hour law provides that all contracts to which the United States is a party, except supply contracts covered by the Walsh-Healey Public Contracts Act and other exclusions set forth in § 2-12.452-2, shall contain a provision making it illegal for the contractor or subcontractor to employ laborers or mechanics, on the work contemplated by the contract, more than 8 hours in one day unless all hours in excess of this limit be compensated at least one and one-half times the basic rate of pay. § 2-12.451-4 Department of Labor regulations.
Pursuant to the foregoing statutes and also the Reorganization Plan No. 14 of 1950 (15 F.R. 3176), the Secretary of Labor has issued two sets of regulations relating to the administration and enforcement of these statutes: (1) Regulations, Part 3, Title 29, Subtitle A, Code of Federal Regulations (Copeland Act); and (2) Regulations, Part 5, Title 29, Subtitle A, Code of Federal Regulations (Davis-Bacon Act). These regulations are contained in the FAA Labor Standards Handbook.
§ 2-12.452 Applicability.
The requirements set forth in § 212.451 are applicable to construction
contracts. Construction contracts include work that involves the construction, alteration or repair, including painting and decorating of public buildings or public works. The statutes and regulations are applicable irrespective of whether the contract was entered into as a result of formal advertising or negotiation, or whether it is a fixed-price or cost-reimbursement type contract. The requirements under the DavisBacon Act apply only to work performed in the United States, while the EightHour laws and the Copeland Act apply not only to such work but also to work in other areas over which the United States has direct legislative control. § 2-12.452-1 Noncoverage (DavisBacon and Copeland Acts).
(a) The requirements set forth in § 212.451 in respect to the Davis-Bacon and Copeland Acts do not apply to the following:
(1) Contracts for furnishing supplies and equipment, including installation, where the installation requires only an incidental amount of work (as defined in (b) below) that would otherwise be considered construction, alteration and/or repair of a public building or work.
(2) Contracts for servicing or maintenance work in an existing plant, including installation or movement of machinery or other equipment, and plant rearrangement which involve only an incidental amount of work (as defined in (b) below) that would otherwise be considered construction, alteration and/ or repair.
(3) Contracts for demolition, except where indispensable and preliminary to schedule new construction.
(4) Contracts with a state or political subdivision thereof (although the requirements do apply, and the contract must so provide, to a subcontract thereunder with a private person or firm which involves the construction, alteration and/or repair of public buildings or public works).
(b) As used in (a) (1) and (a) (2) above, "an incidental amount of work" is defined as work directly related to the installation, movement or rearrangement of equipment or machinery, relatively small in amount, and which does not include changes in a facility affecting its architectural or structural strength, stability, safety, size, or function as a public work.
§ 2-12.452-2 Noncoverage (eight-hour law).
The requirements set forth in § 212.451 in respect to the eight-hour law do not apply to the following:
(a) Contracts with a state or political subdivision thereof (although the requirement does apply, and the contract must so provide, to a subcontract there.. under with a private person or firm);
(b) Contracts (or portions thereof) for materials or articles usually bought in the open market, other than armor or armor plate, or for supplies in connection with which any required services are merely incidental to the sale and do not require substantial employment of laborers or mechanics;
(c) Contracts to which the provisions of the Walsh-Healey Public Contracts Act are clearly applicable for the complete performance of the contract;
(d) Contracts for transportation by land or water; and
(e) Contracts for transmission of intelligence.
§ 2-12.453 Penalties (Davis-Bacon and
Copeland Acts, and eight-hour law). (a) Violations under the Davis-Bacon Act are punishable in the following ways:
(1) Termination of the contractor's right to proceed with the work or such part of the work where there has been a failure to pay the required wages, with the contractor and his sureties being liable to the Government for any excess completion costs occasioned the Government thereby.
(2) Withholding of funds for direct payment of required wages to underpaid employees by the Comptroller General. (See GAO Policy & Procedures Manual, 4 G.A.O. 4500 and 7 G.A.O. 3530. The procedures set forth in the GAO Manual supersede the Comptroller General's letter A-34106 of February 28, 1936, cited in Department of Labor regulations.)
(3) Ineligibility for Government contracts for 3 years. (For reporting procedures see GAO Policy and Procedures Manual, 4 G.A.O. 4500 and 7 G.A.O. 3530.)
(4) Suits against the contractor by employees to recover unpaid portion of wages due them where insufficient funds have been withheld to pay required wages. (See Section 3, Davis-Bacon Act, 40 U.S.C. 276a.)
(b) Violations under the Copeland Act are punishable in the following ways:
(1) The weekly compliance statement is subject to Section 1001 of Title 18 of the United States Code (Criminal Code and Criminal Procedure) which provides, among other things, that any false, fictitious or fraudulent statement is subject to a $10,000 fine or five years imprisonment, or both.
(2) Anyone who unlawfully exacts rebates is subject to a $5,000 fine or five years imprisonment, or both.
(c) Violations under the eight-hour law are punishable in the following ways: (1) Government officials, contractors, or subcontractors that employ, direct, or control any laborer or mechanic in connection with dredging or rock excavation in any river or harbor in the United States are subject to a $1,000 fine or six months imprisonment, or both.
(2) For each violation in every applicable contract, a penalty of $5 is imposed for each laborer or mechanic for each day in which he shall be required or permitted to work more than eight hours without overtime pay.
Except as provided in § 2-12.454-3, every construction contract for $2,000 or less within the United States shall include the Labor Standards Provisions appearing as clause 10 on page 2 of Standard Form 19. (See § 1-16.901-19.) § 2-12.454-3 Contracts with a State or political subdivision.
In the case of contracts with a State, or political subdivision thereof, which involves construction, the contract clauses required by Standard Form 19, or Standard Form 19A, as applicable, shall be inserted therein, and such clauses shall be prefaced by the following provision: "The contractor agrees to insert the following in all subcontracts hereunder with private persons or firms". § 2-12.455
Administration and enforce
(a) The responsibilities of the contracting officer in the discharge of duties relative to labor standards are the following:
(1) Secure wage determinations from the Secretary of Labor and include them in the appropriate contract documents whenever work subject to the coverage of the Davis-Bacon Act is to be performed. The substitution of a blanket provision, in specifications, that contractors shall pay minimum wage rates, regardless of whether the wage rate determination is received before or after award, is not permitted.
(i) Requests for wage determinations should be made on Form DB-11, directly to the Secretary of Labor at least 30 days before advertisement of specifications or the beginning of negotiations for the contract for which the determination is sought.
(ii) In urgent cases, the Department of Labor will act immediately to compile a determination on a telephonic or telegraphic request. Such a request should be followed with a confirmation on Form DB-11. The use of this privilege should be kept to a minimum.
(iii) If a construction program in a given area requires that several contracts be awarded within a 90-day period, a blanket wage determination may be secured to cover all contracts. Such an exception, however, requires the approval of the Solicitor of Labor and must be adequately justified. (See § 2-12.455-2(a) (8) (iv).)
(iv) In general, the Davis-Bacon Act rates applicable to a contract at the time it is awarded continue in effect during its term regardless of whether it is a fixed-price or cost-type contract. Any substantial addition to a properly awarded contract, made more than 90 days from the date of the determination being used, requires a new determination for such additional work. If the wage determination expires before award of a contract, a current determination shall be secured.
(v) In the event any class of laborers or mechanics are employed which are
not listed in the wage determination, the contracting officer, contractor, and employee (or union as the case may be) shall agree on the classification or reclassification. The report of the administrative action taken, or notice of dispute with recommendation, shall be submitted directly to the Secretary of Labor. (29 CFR 5.6(c).)
(2) Provide to the contractor posters (SOL-155) with appropriate information inserted together with copies of the wage determinations.
(3) Obtain from the contractor certification of compliance or of the existence of an honest dispute. (29 CFR 5.6(a).)
(4) Obtain and examine payrolls and preserve them 3 years from date of completion of contract. (29 CFR 5.6(d).) Form SOL-184 and the continuation sheet SOL-185, available to the contractor at the Government Printing Office, are recommended for use. In checking the payroll reports, the contracting officer should:
(i) Look for violation of the Copeland Act, bearing in mind that payroll deductions may be made only in accordance with 3.5 of regulations of Secretary of Labor, Part 3. (29 CFR 3.5.)
(ii) Determine if any employee who worked more than 8 hours in any one day was duly compensated for such work in accordance with the eight-hour law.
(iii) Determine the correctness of job classifications and payment according to the Secretary of Labor's determinations. A review of the job classifications, with knowledge of the construction involved, may reveal misassignment of employees or incorrect payment.
(iv) Determine whether apprentices are duly registered and whether the number employed is disproportionate to the journeymen. According to the Solicitor of Labor's letter of May 23, 1956, "The duties of the contracting officer do not extend beyond the establishment of bona fide registration. In other words, the contracting officer has no responsibility to determine whether or not the apprentice is receiving the training called for by the program under which he is registered." (See also 29 CFR 5.6(e).)
(5) Make investigations for compliance with labor standards, stipulations and applicable laws. On-the-job investigations, including observation of the work and employee interviews, shall be made as necessary to insure compliance. Full-scale investigations shall be made
on a selective basis, or when the Agency is put on notice of any violations which are not readily adjustable or are of a serious nature. Full-scale investigations should also be made when requested by the Secretary of Labor. (29 CFR 5.6(e).) For full-scale investigation procedure, see Part II, Investigation and Enforcement Manual With Respect to Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction Pursuant to Regulations, Part 5, of the Secretary of Labor.
(6) Cooperate with any representative of the Secretary of Labor making an authorized inspection. (29 CFR 5.10(a).)
(7) Deal with the appropriate Regional office of the Department of Labor in the day-to-day administration and enforcement of labor standards provisions. Cases not involving the consideration of ineligibility or criminal sanctions should be processed to completion on a local basis.
(8) Submit to the Materiel Policy Division, Office of Management Services, the following:
(i) Reports of violations including findings and recommendations on cases involving the consideration of ineligibility or criminal sanctions. (29 CFR 5.6(b), 5.7 and 5.9(b).)
(ii) Recommendations for a hearing by the Secretary of Labor. (29 CFR 5.10(b).)
(iii) Requests for rulings or interpretations by the Secretary of Labor. (29 CFR 5.11.)
(iv) Requests for initial approval for the use of blanket wage determinations. (§ 2-12.455-2(a) (1) (iii).)
(b) The responsibilities of the Materiel Policy Division, Office of Management Services, in coordinating the activities under this subpart are the following:
(1) Establishment and maintenance of controls for the application and enforcement of the Davis-Bacon Act.
(2) Maintenance of liaison with the Department of Labor, and with national employer and employee organizations as required.
(3) Submission of requests to the Department of Labor for rulings, interpretations, hearings, etc.
§ 2-12.455-3 Delegation of authority by contracting officer.
(a) Pursuant to Agency Practice 4-4, the contracting officer is permitted to delegate to technical personnel various