00-738. Federal Acquisition Regulation; Liquidated Damages  

  • [Federal Register Volume 65, Number 9 (Thursday, January 13, 2000)]
    [Proposed Rules]
    [Pages 2272-2276]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 00-738]
    
    
    
    [[Page 2271]]
    
    
    
    Part III
    
    Department of Defense
    
    General Services Administration
    
    National Aeronautics and Space Administration
    _______________________________________________________________________
    
    
    
    48 CFR Parts 11, 22, et al.
    
    
    
    Federal Acquisition Regulation; Liquidated Damages; Proposed Rule
    
    Federal Register / Vol. 65, No. 9 / Thursday, January 13, 2000 / 
    Proposed Rules
    
    [[Page 2272]]
    
    
    
    DEPARTMENT OF DEFENSE
    
    GENERAL SERVICES ADMINISTRATION
    NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
    
    48 CFR Parts 11, 22, 36, 49, and 52
    
    [FAR Case 1999-003]
    RIN 9000-AI63
    
    
    Federal Acquisition Regulation; Liquidated Damages
    
    AGENCIES: Department of Defense (DoD), General Services Administration 
    (GSA), and National Aeronautics and Space Administration (NASA).
    
    ACTION: Proposed rule.
    
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    SUMMARY: The Civilian Agency Acquisition Council and the Defense 
    Acquisition Regulations Council (Councils) are proposing to amend the 
    Federal Acquisition Regulation (FAR) to rewrite guidance on liquidated 
    damages in plain language.
    
    DATES: Interested parties should submit comments in writing on or 
    before March 13, 2000 to be considered in the formulation of a final 
    rule.
    
    ADDRESSES: Interested parties should submit written comments to: 
    General Services Administration, FAR Secretariat (MVRS), 1800 F Street, 
    NW, Room 4035, ATTN: Laurie Duarte, Washington, DC 20405.
        Address e-mail comments submitted via the Internet to: 
    farcase.1999-003@gsa.gov. Please submit comments only and cite FAR case 
    1999-003 in all correspondence related to this case.
    
    FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS 
    Building, Washington, DC, 20405, at (202) 501-4755 for information 
    pertaining to status or publication schedules. For clarification of 
    content, contact Ms. Victoria Moss, Procurement Analyst, at (202) 501-
    4764. Please cite FAR case 1999-003.
    
    SUPPLEMENTARY INFORMATION:
    
    A. Background
    
        The proposed rule amends guidance on liquidated damages in FAR 
    Parts 11, 22, 36, and 49 and associated clauses at FAR Part 52. The FAR 
    guidance on liquidated damages, particularly that at 11.502, is 
    difficult to understand. We have amended the guidance using the plain 
    language guidelines in a White House memorandum, Plain Language in 
    Government Writing, dated June 1, 1998.
        This rule was not subject to Office of Management and Budget review 
    under Section 6(b) of Executive Order 12866, Regulatory Planning and 
    Review, dated September 30, 1993. This rule is not a major rule under 5 
    U.S.C. 804.
    
    B. Regulatory Flexibility Act
    
        This proposed rule is not expected to have a significant economic 
    impact on a substantial number of small entities within the meaning of 
    the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule 
    does not change existing practices. An Initial Regulatory Flexibility 
    Analysis has, therefore, not been performed. Comments are invited from 
    small businesses and other interested parties. The Councils will 
    consider comments from small entities concerning the affected FAR 
    subparts in accordance with 5 U.S.C. 610. Interested parties must 
    submit such comments separately and should cite 5 U.S.C. 601, et seq. 
    (FAR case 1999-003), in correspondence.
    
    C. Paperwork Reduction Act
    
        The Paperwork Reduction Act does not apply because the changes to 
    the FAR do not impose information collection requirements that require 
    the approval of the Office of Management and Budget under 44 U.S.C. 
    3501, et seq.
    
    List of Subjects in 48 CFR Parts 11, 22, 36, 49, and 52
    
        Government procurement.
    
        Dated: January 7, 2000.
    Edward C. Loeb,
    Director, Federal Acquisition Policy Division.
    
        Therefore, DoD, GSA, and NASA propose that 48 CFR parts 11, 22, 36, 
    49, and 52 be amended as set forth below:
        1. The authority citation for 48 CFR parts 11, 22, 36, 49, and 52 
    continues to read as follows:
    
        Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
    U.S.C. 2473(c).
    
    PART 11--DESCRIBING AGENCY NEEDS
    
        2. Revise Subpart 11.5 to read as follows:
    
    Subpart 11.5--Liquidated Damages
    
    Sec.
    11.500 Scope.
    11.501 Policy.
    11.502 Procedures.
    11.503 Contract clauses.
    
    
    11.500  Scope.
    
        This subpart prescribes policies and procedures for using 
    liquidated damages clauses in solicitations and contracts for supplies, 
    services, research and development, and construction. This subpart does 
    not apply to liquidated damages for subcontracting plans (see 19.705-7) 
    or liquidated damages related to the Contract Work Hours and Safety 
    Standards Act (see subpart 22.3).
    
    
    11.501  Policy.
    
        (a) The contracting officer must consider the potential impact on 
    pricing, competition, and contract administration before using a 
    liquidated damages clause. Use liquidated damages clauses only when--
        (1) The time of delivery or timely performance is so important that 
    the Government may reasonably expect to suffer damage if the delivery 
    or performance is delinquent; and
        (2) The extent or amount of such damage would be difficult or 
    impossible to estimate accurately or prove.
        (b) Liquidated damages are not punitive and are not negative 
    performance incentives (see 16.402-2). Liquidated damages are used to 
    compensate the Government for probable damages. Therefore, the 
    liquidated damages rate must be a reasonable forecast of just 
    compensation for the harm that is caused by late delivery or untimely 
    performance of the particular contract. Use a maximum amount or a 
    maximum period for assessing liquidated damages if these limits reflect 
    the maximum probable damage to the Government. Also, the contracting 
    officer may use more than one liquidated damages rate when the 
    contracting officer expects the probable damage to the Government to 
    change over the contract period of performance.
        (c) The contract officer must take all reasonable steps to mitigate 
    liquidated damages. If the contract contains a liquidated damages 
    clause and the contracting officer is considering terminating the 
    contract for default, the contracting officer should seek expeditiously 
    to obtain performance by the contractor or terminate the contract and 
    repurchase (see subpart 49.4). Prompt contracting officer action will 
    prevent excessive loss to defaulting contractors and protect the 
    interests of the Government.
        (d) The amount of liquidated damages assessed under a contract is a 
    unilateral decision made solely at the discretion of the Government.
        (e) The head of the agency may reduce or waive the amount of 
    liquidated damages assessed under a contract, if the Commissioner, 
    Financial Management Service, or designee approves (see Treasury Order 
    145-10).
    
    
    11.502  Procedures.
    
        (a) Include the applicable liquidated damages clause and liquidated 
    damages rates in solicitations when the contract
    
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    will contain liquidated damages provisions.
        (b) Construction contracts with liquidated damages provisions must 
    describe the rate(s) of liquidated damages assessed per day of delay. 
    The rate(s) should include the estimated daily cost of Government 
    inspection and superintendence. The rate(s) should also include an 
    amount for other expected expenses associated with delayed completion 
    such as--
        (1) Renting substitute property; or
        (2) Paying additional allowance for living quarters.
    
    
    11.503  Contract clauses.
    
        (a) Use the clause at 52.211-11, Liquidated Damages--Supplies, 
    Services, or Research and Development, in fixed-price solicitations and 
    contracts for supplies, services, or research and development when the 
    contracting officer determines that liquidated damages are appropriate 
    (see 11.501(a)).
        (b) Use the clause at 52.211-12, Liquidated Damages--Construction, 
    in solicitations and contracts for construction, other than cost-plus-
    fixed-fee, when the contracting officer determines that liquidated 
    damages are appropriate (see 11.501(a)). If the contract specifies more 
    than one completion date for separate parts or stages of the work, 
    revise paragraph (a) of the clause to state the amount of liquidated 
    damages for delay of each separate part or stage of the work.
        (c) Use the clause at 52.211-13, Time Extensions, in solicitations 
    and contracts for construction that use the clause at 52.211-12, 
    Liquidated Damages--Construction.
    
    PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
    
        3. Revise section 22.302 to read as follows:
    
    
    22.302  Liquidated damages and overtime pay.
    
        (a) When an overtime computation discloses under-payments, the 
    responsible contractor or subcontractor must pay the affected employee 
    any unpaid wages and pay liquidated damages to the Government. The 
    contracting officer must assess liquidated damages at the rate of $10 
    per affected employee for each calendar day on which the employer 
    required or permitted the employee to work in excess of the standard 
    workweek of 40 hours without paying overtime wages required by the Act.
        (b) If the contractor or subcontractor fails or refuses to comply 
    with overtime pay requirements of the Act and the funds withheld by 
    Federal agencies for labor standards violations do not cover the unpaid 
    wages due laborers and mechanics and the liquidated damages due the 
    Government, make payments in the following order--
        (1) Pay laborers and mechanics the wages they are owed (or prorate 
    available funds if they do not cover the entire amount owed); and
        (2) Pay liquidated damages.
        (c) If the head of an agency finds that the administratively 
    determined liquidated damages due under paragraph (a) of this section 
    are incorrect, or that the contractor or subcontractor inadvertently 
    violated the Act despite the exercise of due care, the agency head 
    may--
        (1) Reduce the amount of liquidated damages assessed for liquidated 
    damages of $500 or less;
        (2) Release the contractor or subcontractor from the liability for 
    liquidated damages of $500 or less; or
        (3) Recommend that the Secretary of Labor reduce or waive 
    liquidated damages over $500.
        (d) After the contracting officer determines the liquidated damages 
    and the contractor makes appropriate payments, disburse any remaining 
    assessments in accordance with agency procedures.
        4. Sections 22.406-8 and 22.406-9 are revised to read as follows:
    
    
    22.406-8  Investigations.
    
        Conduct labor standards investigations when available information 
    indicates such action is warranted. In addition, the Department of 
    Labor may conduct an investigation on its own initiative or may request 
    a contracting agency to do so.
        (a) Contracting agency responsibilities. Conduct an investigation 
    when a compliance check indicates that substantial or willful 
    violations may have occurred or violations have not been corrected.
        (1) The investigation must--
        (i) Include all aspects of the contractor's compliance with 
    contract labor standards requirements;
        (ii) Not be limited to specific areas raised in a complaint or 
    uncovered during compliance checks; and
        (iii) Use personnel familiar with labor laws and their application 
    to contracts.
        (2) Do not disclose contractor employees' oral or written 
    statements taken during an investigation or the employee's identity to 
    anyone other than an authorized Government official without that 
    employee's prior signed consent.
        (3) Send a written request to the Administrator, Wage and Hour 
    Division, to obtain--
        (i) Investigation and enforcement instructions; or
        (ii) Available pertinent Department of Labor files.
        (4) Obtain permission from the Department of Labor before 
    disclosing material obtained from Labor Department files, other than 
    computations of back wages and liquidated damages and summaries of back 
    wages due, to anyone other than Government contract administrators.
        (b) Investigation report. The contracting officer must review the 
    investigation report on receipt and make preliminary findings. The 
    contracting officer normally must not base adverse findings solely on 
    employee statements that the employee does not wish to have disclosed. 
    However, if the investigation establishes a pattern of possible 
    violations that are based on employees statements that are not 
    authorized for disclosure, the pattern itself may support a finding of 
    noncompliance.
        (c) Contractor Notification. After completing the review, the 
    contracting officer must do the following:
        (1) Provide the contractor any written preliminary findings and 
    proposed corrective actions, and notice that the contractor has the 
    right to request that the basis for the findings be made available and 
    to submit written rebuttal information within a reasonable period of 
    time.
        (2) Upon request, provide the contractor with rationale for the 
    findings. However, under no circumstances will the contracting officer 
    permit the contractor to examine the investigation report. Also, the 
    contracting officer must not disclose the identity of any employee who 
    filed a complaint or who was interviewed, without the prior consent of 
    the employee.
        (3)(i) The contractor may rebut the findings in writing within 60 
    days after it receives a copy of the preliminary findings. The rebuttal 
    becomes part of the official investigation record. If the contractor 
    submits a rebuttal, evaluate the preliminary findings and notify the 
    contractor of the final findings.
        (ii) If the contracting officer does not receive a timely rebuttal, 
    the contracting officer must consider the preliminary findings final.
        (4) If appropriate, request the contractor to make restitution for 
    underpaid wages and assess liquidated damages. If the request includes 
    liquidated damages, the request must state that the contractor has 60 
    days to request relief from such assessment.
        (d) Contracting officer's report. After taking the actions 
    prescribed in
    
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    paragraphs (b) and (c) of this subsection--
        (1) The contracting officer must prepare and forward a report of 
    any violations, including findings and supporting evidence, to the 
    agency head. Standard Form 1446, Labor Standards Investigation Summary 
    Sheet, is the first page of the report; and
        (2) The agency head must process the report as follows:
        (i) The contracting officer must send a detailed enforcement report 
    to the Administrator, Wage and Hour Division, within 60 days after 
    completion of the investigation, if--
        (A) A contractor or subcontractor underpaid by $1,000 or more;
        (B) The contracting officer believes that the violations are 
    aggravated or willful (or, also, there is reason to believe that the 
    contractor has disregarded its obligations to employees and 
    subcontractors under the Davis-Bacon Act);
        (C) The contractor or subcontractor has not made restitution; or
        (D) Future compliance has not been assured.
        (ii) If the Department of Labor expressly requested the 
    investigation and none of the conditions in paragraph (d)(2)(i) of this 
    subsection exist, submit a summary report to the Administrator, Wage 
    and Hour Division. The report must include--
        (A) A summary of any violations;
        (B) The amount of restitution paid;
        (C) The number of workers who received restitution;
        (D) The amount of liquidated damages assessed under the Contract 
    Work Hours and Safety Standards Act;
        (E) Corrective measures taken; and
        (F) Any information that may be necessary to review any 
    recommendations for an appropriate adjustment in liquidated damages.
        (iii) If none of the conditions in paragraphs (d)(2)(i) or (ii) of 
    this subsection are present, close the case and retain the report in 
    the appropriate contract file.
        (iv) If substantial evidence is found that violations are willful 
    and in violation of a criminal statue, (generally 18 U.S.C. 874 or 
    1001), forward the report (supplemented if necessary) to the Attorney 
    General of the United States for prosecution if the facts warrant. 
    Notify the Administrator, Wage and Hour Division, when the report is 
    forwarded for the Attorney General's consideration.
        (e) Department of Labor investigations. The Department of Labor 
    will furnish the contracting officer an enforcement report detailing 
    violations found and any corrective action taken by the contractor, in 
    investigations that disclose--
        (1) Underpayments totaling $1,000 or more;
        (2) Aggravated or willful violations (or, when the contracting 
    officer believes that the contractor has disregarded its obligations to 
    employees and subcontractors under the Davis-Bacon Act); or
        (3) Potential assessment of liquidated damages under the Contract 
    Work Hours and Safety Standards Act.
        (f) Other investigations. The Department of Labor will provide a 
    letter summarizing the findings of the investigation to the contracting 
    officer for all investigations that are not described in paragraph (e) 
    of this subsection.
    
    
    22.406-9  Withholding from or suspension of contract payments.
    
        (a) Withholding from contract payments. If the contracting officer 
    believes a violation exists (see 22.406-8), or upon request of the 
    Department of Labor, the contracting officer must withhold from 
    payments due the contractor an amount equal to the estimated wage 
    underpayment and estimated liquidated damages due the United States 
    under the Contract Work Hours and Safety Standards Act. (See 22.302.)
        (1) Contracting officers must, if the contracting officer believes 
    a violation exists or upon request of the Department of Labor, withhold 
    funds from any current Federal contract or Federally assisted contract 
    with the same prime contractor, that is subject to either Davis-Bacon 
    Act or Contract Work Hours and Safety Standards Act requirements.
        (2) If a subsequent investigation confirms violations, the 
    contracting officer must adjust the withholding as necessary. However, 
    if the Department of Labor requested the withholding, the contracting 
    officer must not reduce or release the withholding without written 
    approval of the Department of Labor.
        (3) Use withheld funds as provided in paragraph (c) of this 
    subsection to satisfy assessed liquidated damages, and unless the 
    contractor makes restitution, validated wage underpayments.
        (b) Suspension of contract payments. If a contractor or 
    subcontractor fails or refuses to comply with the labor standards 
    clauses of the Davis-Bacon Act and related statutes, the agency upon 
    its own action or upon the written request of the Department of Labor, 
    must suspend any further payment, advance, or guarantee of funds until 
    the violations cease or until the agency has withheld sufficient funds 
    to compensate employees for back wages, and to cover any liquidated 
    damages due.
        (c) Disposition of contract payments withheld or suspended. (1) 
    Forwarding wage underpayments to Secretary of the Treasury. Upon final 
    administrative determination, if the contractor or subcontractor has 
    not made restitution, the contracting officer must forward to the 
    appropriate disbursing office Standard Form (SF) 1093, Schedule of 
    Withholdings Under the Davis-Bacon Act (40 U.S.C. 276(a)) and/or 
    Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333). 
    Attach to the SF 1093 a list of the name, social security number, and 
    last known address of each affected employee; the amount due each 
    employee; employee claims if feasible; and a brief rationale for 
    restitution. Also, the contracting officer must indicate if restitution 
    was not made because the employee could not be located. The Government 
    may assist underpaid employees in preparation of their claims. The 
    disbursing office must submit the SF 1093 with attached additional data 
    and the funds withheld (by check) to the Secretary of the Treasury.
        (2) Returning of withheld funds to contractor. When funds withheld 
    exceed the amount required to satisfy validated wage underpayments and 
    assessed liquidated damages, return the funds to the contractor.
        (3) Limitation on forwarding or returning funds. If the Department 
    of Labor requested the withholding or if the findings are disputed (see 
    22.406-10(e)), the contracting officer must not forward the funds to 
    the Secretary of the Treasury, or return them to the contractor without 
    approval by the Department of Labor.
        (4) Liquidated damages. Upon final administrative determination, 
    the contracting officer must dispose of funds withheld or collected for 
    liquidated damages in accordance with agency procedures.
    
    PART 36--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS
    
    
    36.206  [Amended]
    
        5. Amend section 36.206 by removing ``shall'' and adding ``must'' 
    in is place.
    
    PART 49--TERMINATION OF CONTRACTS
    
        6. In section 49.402-7, revise paragraph (a); and amend paragraph 
    (b) by removing ``shall'' and inserting ``must'' in its place. The 
    revised text reads as follows:
    
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    49.402-7  Other damages.
    
        (a) If the contracting officer terminates a contract for default or 
    follows a course of action instead of termination for default (see 
    49.402-4), the contracting officer promptly must assess and demand any 
    liquidated damages to which the Government is entitled under the 
    contract. Under the contract clause at 52.211-11, these damages are in 
    addition to any excess repurchase costs.
    * * * * *
        7. Revise section 49.404 to read as follows:
    
    
    49.404  Surety-takeover agreements.
    
        (a) The procedures in this section apply primarily, but not solely, 
    to fixed-price construction contracts terminated for default.
        (b) Since the surety is liable for damages resulting from the 
    contractor's default, the surety has certain rights and interests in 
    the completion of the contract work and application of any undisbursed 
    funds. Therefore, the contracting officer must consider carefully the 
    surety's proposals for completing the contract. The contracting officer 
    must take action on the basis of the Government's interest, including 
    the possible effect upon the Government's rights against the surety.
        (c) The contracting officer should permit surety offers to complete 
    the contract, unless the contracting officer believes that the persons 
    or firms proposed by the surety to complete the work are not competent 
    and qualified or the proposal is not in the best interest of the 
    Government.
        (d) There may be conflicting demands for the defaulting 
    contractor's assets, including unpaid prior earnings (retained 
    percentages and unpaid progress estimates). Therefore, the surety may 
    include a ``takeover'' agreement in its proposal, fixing the surety's 
    rights to payment from those funds. The contracting officer may (but 
    not before the effective date of termination) enter into a written 
    agreement with the surety. The contracting officer should consider 
    using a tripartite agreement among the Government, the surety, and the 
    defaulting contractor to resolve the defaulting contractor's residual 
    rights, including assertions to unpaid prior earnings.
        (e) Any takeover agreement must require the surety to complete the 
    contract and the Government to pay the surety's costs and expenses up 
    to the balance of the contract price unpaid at the time of default, 
    subject to the following conditions:
        (1) Any unpaid earnings of the defaulting contractor, including 
    retained percentages and progress estimates for work accomplished 
    before termination, must be subject to debts due the Government by the 
    contractor, except to the extent that the unpaid earnings may be used 
    to pay the completing surety its actual costs and expenses incurred in 
    the completion of the work, less its payments and obligations under the 
    payment bond given in connection with the contract.
        (2) The surety is bound by contract terms governing liquidated 
    damages for delays in completion of the work, unless the delays are 
    excusable under the contract.
        (3) If the contract proceeds have been assigned to a financing 
    institution, the surety must not be paid from unpaid earnings, unless 
    the assignee provides written consent.
        (4) The contracting officer must not pay the surety more than the 
    amount it expended discharging its liabilities under the defaulting 
    contractor's payment bond. Payments to the surety to reimburse it for 
    discharging its liabilities under the payment bond of the defaulting 
    contractor must be only on authority of--
        (i) Mutual agreement among the Government, the defaulting 
    contractor, and the surety;
        (ii) Determination of the Comptroller General as to payee and 
    amount; or (iii) Order of a court of competent jurisdiction.
    
    PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
    
        8. Revise sections 52.211-11 through 52.211-13 to read as follows:
    
    
    52.211-11  Liquidated Damages--Supplies, Services, or Research and 
    Development.
    
        As prescribed in 11.503(a), insert the following clause in 
    solicitations and contracts:
    
    Liquidated Damages--Supplies, Services, or Research and Development 
    (Date)
    
        (a) If the Contractor fails to deliver the supplies or perform 
    the services within the time specified in this contract, the 
    Contractor shall, in place of actual damages, pay to the Government 
    liquidated damages of $ ______________ per calendar day of delay 
    [Contracting Officer insert amount].
        (b) If the Government terminates this contract in whole or in 
    part under the Default--Fixed-Price Supply and Service clause, the 
    Contractor is liable for liquidated damages accruing until the 
    Government reasonably obtains delivery or performance of similar 
    supplies or services. These liquidated damages are in addition to 
    excess costs of repurchase under the Termination clause.
        (c) The Contractor will not be charged with liquidated damages 
    when the delay in delivery or performance is beyond the control and 
    without the fault or negligence of the Contractor as defined in the 
    Default--Fixed-Price Supply and Service clause in this contract.
    
    (End of clause)
    
    
    52.211-12  Liquidated Damages--Construction.
    
        As prescribed in 11.503(b), insert the following clause in 
    solicitations and contracts:
    
    Liquidated Damages--Construction (Date)
    
        (a) If the Contractor fails to complete the work within the time 
    specified in the contract, the Contractor shall pay liquidated 
    damages to the Government in the amount of ______________ 
    [Contracting Officer insert amount] for each calendar day of delay 
    until the work is completed or accepted.
        (b) If the Government terminates the Contractor's right to 
    proceed, liquidated damages will continue to accrue until the work 
    is completed. These liquidated damages are in addition to excess 
    costs of repurchase under the Termination clause.
    
    (End of clause)
    
    
    52.211-13  Time Extensions.
    
        As prescribed in 11.503(c), insert the following clause:
    
    Time Extensions (Date)
    
        Time extensions for contract changes will depend upon the 
    extent, if any, by which the changes cause delay in the completion 
    of the various elements of construction. The change order granting 
    the time extension may provide that the contract completion date 
    will be extended only for those specific elements related to the 
    changed work and that the remaining contract completion dates for 
    all other portions of the work will not be altered. The change order 
    also may provide an equitable readjustment of liquidated damages 
    under the new completion schedule.
    
    (End of clause)
    
        9. Revise section 52.222-4 to read as follows:
    
    
    52.222-4  Contract Work Hours and Safety Standards Act--Overtime 
    Compensation.
    
        As prescribed in 22.305, insert the following clause:
    
    Contract Work Hours and Safety Standards Act--Overtime Compensation 
    (Date)
    
        (a) Overtime requirements. No Contractor or subcontractor 
    employing laborers or mechanics (see Federal Acquisition Regulation 
    22.300) shall require or permit them to work over 40 hours in any 
    workweek unless they are paid at least 1\1/2\ times the basic rate 
    of pay for each hour worked over 40 hours.
        (b) Violation; liability for unpaid wages; liquidated damages. 
    The responsible Contractor and subcontractor are liable for unpaid 
    wages if they violate the terms in paragraph (a) of this clause. In 
    addition, the Contractor and subcontractor are liable for liquidated 
    damages payable to the Government. The Contracting Officer will 
    assess such liquidated damages at the rate of
    
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    $10 per affected employee for each calendar day on which the 
    employer required or permitted the employee to work in excess of the 
    standard workweek of 40 hours without paying overtime wages required 
    by the Contract Work Hours and Safety Standards Act.
        (c) Withholding for unpaid wages and liquidated damages. The 
    Contracting Officer will withhold from payments due under the 
    contract sufficient funds required to satisfy any Contractor or 
    subcontractor liabilities for unpaid wages and liquidated damages. 
    If amounts withheld under the contract are insufficient to satisfy 
    Contractor or subcontractor liabilities, the Contracting Officer 
    will withhold payments from other Federal or federally assisted 
    contracts held by the same Contractor that are subject to the 
    Contract Work Hours and Safety Standards Act.
        (d) Payrolls and basic records. (1) The Contractor and its 
    subcontractors shall maintain payrolls and basic payroll records for 
    all laborers and mechanics working on the contract during the 
    contract and shall make them available to the Government until 3 
    years after contract completion. The records shall contain the name 
    and address of each employee, social security number, labor 
    classifications, hourly rates of wages paid, daily and weekly number 
    of hours worked, deductions made, and actual wages paid. The records 
    need not duplicate those required for construction work by 
    Department of Labor regulations at 29 CFR 5.5(a)(3) implementing the 
    Davis-Bacon Act.
        (2) The Contractor and its subcontractors shall allow authorized 
    representatives of the Contracting Officer or the Department of 
    Labor to inspect, copy, or transcribe records maintained under 
    paragraph (d)(1) of this clause. The Contractor or subcontractor 
    also shall allow authorized representatives of the Contracting 
    Officer or Department of Labor to interview employees in the 
    workplace during working hours.
        (e) Subcontracts. The Contractor shall insert the provisions set 
    forth in paragraphs (a) through (d) of this clause in subcontracts 
    exceeding $100,000 and require subcontractors to include these 
    provisions in any lower tier subcontracts. The Contractor shall be 
    responsible for compliance by any subcontractor or lower tier 
    subcontractor with the provisions set forth in paragraphs (a) 
    through (d) of this clause.
    
    (End of clause)
    
    [FR Doc. 00-738 Filed 1-12-00; 8:45 am]
    BILLING CODE 6820-EP-P
    
    
    

Document Information

Published:
01/13/2000
Department:
National Aeronautics and Space Administration
Entry Type:
Proposed Rule
Action:
Proposed rule.
Document Number:
00-738
Dates:
Interested parties should submit comments in writing on or before March 13, 2000 to be considered in the formulation of a final rule.
Pages:
2272-2276 (5 pages)
Docket Numbers:
FAR Case 1999-003
RINs:
9000-AI63
PDF File:
00-738.pdf
CFR: (4)
48 CFR 11.500
48 CFR 11.501
48 CFR 11.502
48 CFR 11.503