(e) In the event the contractor fails or refuses to meet the requirement of paragraph (a) of this section, it is expressly agreed that the contract price will be reduced by 15 percent of the value of that portion of the percentage requirement which is accomplished by others. For the purposes of this provision, it is agreed that 15 percent is an acceptable estimate of the Contractor's overhead and profit, or mark-up, on that portion of the work which he fails or refuses to perform, with his own forces, in accordance with paragraph (a) of this section.

[29 F.R. 9829, July 22, 1964, as amended at 31 F.R. 7178, May 17, 1966]

§ 8-7.650-5 Inspection and acceptance. Clause 10, General Provisions, SF 23A is supplemented as follows:

(a) No inspection of materials and finished articles will be made at place of production, manufacture, or shipment, unless otherwise noted in specifications. Samples must be submitted for approval as hereinafter noted, but inspection of materials, etc., will be made by the Resident Engineer upon delivery at site.

(b) Final inspection and acceptance of work shown by drawings and specifications forming a part of this contract shall not be binding or conclusive upon the United States if it shall be shown (1) that the contractor has willfully or through collusion with persons or firms engaged in the performance of the contract, or with an employce of the Federal Government, supplied inferior materials or workmanship, or (2) that the contractor has otherwise departed from the terms of the contract. The foregoing will not prevent reliance upon any other legal basis for rejection. If defects of any kind should develop during period that guaranties covering such workmanship or materials are in force, the United States shall have the right, notwithstanding such final acceptance and payment, to have the work removed and to cause the work to be properly performed and satisfactory material supplied to such extent as in the opinion of the Contracting Officer may be necessary to complete the work in accordance with the drawings and specifications therefor at the cost and expense of the contractor and the sureties on his bond, and shall have the right to recover against the contractor and his sureties the cost of such work, together with such other damages as the United States may suffer because of default of the contractor in the premises, the same as though such acceptance and final payment had not been made.

(c) Final inspection will not be made until the contract work is ready for beneficial use or occupancy. The Contractor shall notify the Contracting Officer, through the Resident Engineer, fifteen (15) days prior to the date on which the work will be ready for final inspection. Should it develop that the work

installed does not justify such inspection at that time, or that the character of material or workmanship is such that reinspection is found necessary, the cost of such reinspection including salary of the inspector(s), his traveling and other expenses, shall be borne by the Contractor and will be deducted from any money due him on his contract. [29 F.R. 9829, July 22, 1964]

§ 8-7.650-6 Guaranty.

Guaranty

(a) Except when a different period is specifically prescribed, all work under this contract shall be guaranteed for a period of one (1) year from the date the work is completed, as established by the Government. All guaranties embraced in or required by this contract are subject to the terms of this paragraph unless otherwise expressly agreed in writing by parties to this contract.

(b) Whenever work is required to be done under this guaranty, the contractor whenever notified by the contracting officer, must immediately:

(1) Place in satisfactory condition in every particular any of the guaranteed work, and

(2) Make good all damage to buildings and grounds, or equipment or contents thereof if such unsatisfactory condition or damage develops within period stipulated by guaranty and is due to use of materials or workmanship which are inferior, defective, or not in accordance with this contract, and must make good any work or materials, or equipment and contents of said buildings or grounds, which are disturbed in fulfilling requirements of this contract or of any guaranty embraced in or required hereby. If this Contractor disturbs any work under another contract, he must restore such disturbed work to a condition satisfactory to the Contracting Officer and guarantee such restored work.

(c) Upon the Contractor's failure to comply with the terms of any guaranty under this contract or still running upon work originally executed by other contractors, the Contracting Officer may:

(1) Have such work performed as he deems necessary to fulfill such guaranties, or

(2) Allow such damaged or defective work or portion of buildings or grounds or contents or equipment of building or work disturbed in fulfilling guaranties or guaranteed work, which shows such a condition as to make any such guaranty operative, to remain in such unsatisfactory condition. Provided, that in either event the Contractor shall promptly pay the United States such sums as were (in first instance) expended so as to fulfill such guaranty or as it would have been (in second instance) necessary to expand to fulfill such guaranty.

(d) Unless otherwise specifically prescribed in a particular guaranty, usual wear and tear and the result of accident not chargeable to the Contractor or his agents are excepted from the requirements of this clause. Everything done in fulfillment of any guaranty shall be without additional expense to the United States.

[28 F.R. 2337, Mar. 12, 1963, as amended at 29 F.R. 9830, July 22, 1964]

§ 8-7.650-7 Correspondence.

All correspondence relative to this contract shall bear Specification Number, Project Number, Veterans Administration Contract Number, title of project and name of station. [29 F.R. 9830, July 22, 1964]

§ 8-7.650-9

Government supervision.

(a) The work will be under the direction of the Veterans Administration Contracting Officer, who may designate another VA employee to act as Resident Engineer at the construction site.

(b) Except as provided below, the Resident Engineer's directions will not conflict with or change contract requirements.

(c) Within the limits of any specific authority delegated to him by the Contracting Officer, the Resident Engineer may by written direction make changes in the work. The Contractor shall be advised of the extent of such authority.

[29 F.R. 9830, July 22, 1964]

§ 8-7.650-10 Daily report of workmen and material.

The contractor shall furnish to the Resident Engineer each day a consolidated report for the preceding work day in which is shown the number of laborers, mechanics, foremen and pieces of heavy equipment used or employed by himself and his subcontractors. The report shall bear the name of the firm, the branch of work which they perform such as concrete, plastering, masonry, plumbing, sheet metal work, etc. Report shall give breakdown of employees by crafts, location where employed, and work performed. The report shall also list materials delivered to the site on the date covered by the report.

[29 F.R. 9830, July 22, 1964]

§ 8-7.650-13 Subcontracts.

Subcontracts

(a) Nothing contained in this contract shall be construed as creating any contractual relationship between any subcontractor and the Government. Divisions or sections of specifications are not intended to control the Contractor in dividing work among subcontractors, or to limit work performed by any trade.

(b) The Contractor shall be responsible to the Government for acts and omissions of his

own employees, and of the subcontractors and their employees. He shall also be responsible for coordination of the work of the trades, subcontractors, and materialmen. (c) The Government or its representatives will not undertake to settle any differences between the Contractor and his subcontractors, or between subcontractors.

(d) The Government reserves the right to refuse to permit employment on the work or require dismissal from the work of any subcontractor who, by reason of previous unsatisfactory work on Veterans Administration projects or for any other reason, is considered by the Contracting Officer to be incompetent or otherwise objectionable. [28 F.R. 2337, Mar. 12, 1963, as amended at 29 F.R. 9830, July 22, 1964]

§ 8-7.650-14 Payments to contractors. Clause 7, General Provisions SF 23A is amended to include the following:

(a) The Contractor shall submit a schedule of cost to the Contracting Officer for approval. Such schedule will be signed and submitted in quadruplicate. The approved schedule will be the basis of estimating progress payments to the Contractor for work completed and will be a condition precedent to making such payments. This schedule shall show cost by the branches of work for each building or unit of the contract, as instructed by the Resident Engineer.

(1) The branches shall be subdivided into as many subbranches as are necessary to cover all component parts of the contract work.

(2) Costs as shown by this schedule must be true costs and, should the Resident Engineer so desire, he may require the Contractor to submit his original estimate sheets or other information to substantiate detail makeup of schedule.

(3) The sum of subbranches, as applied to each branch, shall equal the total cost of such branch. The total costs of all branches shall equal the contract price.

(4) Bonds, insurance and similar items shall be prorated and included in the cost of each branch of the work.

(b) In addition to this cost schedule, the Contractor shall submit such unit costs as may be specifically requested. The unit costs shall be those used by the Contractor in preparing his bid and will not be binding as pertaining to any contract changes.

(c) The Government reserves the right to withhold payment until samples, shop drawings, Engineer's certificates, additional bonds, payrolls, weekly statements of compliance, nondiscrimination compliance reports, or any other things required by this contract, have been submitted to the satisfaction of the Contracting Officer.

(d) As a part of final settlement of this contract, the Contractor will be required to furnish a Release of Claims to the Government.

[29 F.R. 9830, July 22, 1964]

(a) Davis-Bacon Act. (40 U.S.C. 276a-a (7)) No increase in the contract price will be allowed or authorized because of payment of wage rates in excess of those listed.

(b) Apprentices. The evidence required by Clause 3, Standard Form 19A, will be furnished by the contractor at the time the apprentice's name first appears on his or his subcontractor's payroll. Evidence may consist of:

(1) A true or photostatic copy of registered or approved apprenticeship agreement,

or

(2) A true or photostatic copy of apprenticeship certificate, showing approval of apprenticeship by appropriate registration agency, or

(3) A list of apprentices approved by appropriate registration agency showing name and trade of each apprentice and date of registration, or

(4) A written statement from a member of joint apprenticeship committee, not a party to project contract, certifying the named apprentices are employed under supervision of the joint apprenticeship committee, and are registered with the designated State or Federal apprenticeship agency.

(5) The contractor shall also furnish evidence of the apprentices' period of apprenticeship. Working ratio of apprentices to journeymen for a particular trade shall not

exceed ratio permitted by controlling apprenticeship agreement. Contractor shall furnish Government's Resident Engineer a copy of such agreement establishing apprenticeship ratio.

(c) Payrolls and basic records. The contractor shall submit copies of payrolls required by Clause 4(b) of Standard Form 19-A to the Contracting Officer through the Resident Engineer or Engineer Officer, when acting in that capacity, within seven (7) days after the close of the weekly payroll period. Said payroll shall show:

(1) The name of the contractor or subcontractor;

(2) The employee's full name, address, and social security number. (The employee's address need only be shown on the first payroll unless there is a subsequent change of address);

(3) The employee's classification;

(4) Hourly wage rate and where applicable overtime hourly rate:

(5) The daily and weekly hours worked in such classification, including actual overtime hours worked (not adjusted);

(6) The itemized deductions made; and (7) The net wages paid.

(d) Copeland (Anti-Kickback) Act—Nonrebate of wages. The Contractor shall, and shall cause each subcontractor engaged at the site of the work to furnish, with his above mentioned weekly payroll, a statement in duplicate, with regard to the wages paid. The statement shall be executed by the Contractor or subcontractor as appropriate, or by an authorized officer or employee of the Contractor or subcontractor who supervises payment of wages, and shall be in the following form:

(Contractor or subcontractor) from the full weekly wages earned by any person and that no deductions have been made either directly or indirectly from the full weekly wages earned by any person, other than permissible deductions as defined in Regulations, Part 3 (29 CFR Part 3), issued by the Secretary of Labor under the Copeland Act, as amended (48 Stat. 948, 63 Stat. 108, 72 Stat. 967; 40 U.S.C. 276c), and described below:

(2) That the payrolls submitted for the above period are correct and complete, that the wage rates for laborers or mechanics contained therein are not less than the applicable wage rates contained in the wage determination decision of the Secretary of Labor incorporated into the contract; that the classifications set forth therein for each laborer or mechanic conform with the work he performed.

(3) That all apprentices employed on the contract during the above payroll period are duly registered in a bona fide apprenticeship program registered with a State apprenticeship agency recognized by the Federal Committee on Apprenticeship, U.S. Department of Labor, or if no such recognized agency exists in a State, are registered with the Bureau of Apprenticeship, U.S. Department of Labor.

(Signature and Title)

[29 F.R. 9830, July 22, 1964, as amended at 31 F.R. 7178, May 17, 1966] § 8-7.650-19 laws.

Workmen's compensation

The Act of June 25, 1936, 49 Stat. 1938 (40 U.S.C. 290) authorizes the constituted authority of the several states to apply their workmen's compensation laws to all lands and premises owned or held by the United States.

[29 F.R. 9831, July 22, 1964]

§ 8-7.650-20 Safety requirements, accident prevention, etc.

Safety Requirements, Accident Prevention,

Etc.

(a) In order to protect the lives and health of employees and others, the Contractor in performance of this contract shall take such safety precautions as are required by insurance underwriters, and shall comply with all provisions of Department of Army, Corps of Engineers, U.S. Army, "General Safety Requirements," EM 385-1-1, 13 March 1958, as amended prior to the date of this contract. If compliance with a provision of said "General Safety Requirements," would cause the Contractor to be in noncompliance with a requirement of the insurance underwriters, then the requirement of the insurance underwriters, in that specific instance, shall govern.

(b) The Contractor shall maintain an accurate record of, and shall report to the Contracting Officer through the Resident Engineer in the manner and on forms prescribed by the Contracting Officer, all cases of death, occupational disease, and traumatic injury arising out of, or in course of performance of this contract.

(c) The Contracting Officer, through the Resident Engineer, will notify the Contractor in writing of any noncompliance with the General Safety Requirements and necessary corrective action to be taken. Upon receipt of such notice, the Contractor will immediately correct the conditions to which attention has been directed.

(d) If the Contractor fails to promptly comply with the Contracting Officer's demand for necessary corrective action, as mentioned in the preceding paragraph, the Contracting Officer may order a stoppage of all or any part of the work and have corrective action taken by others and the cost of such corrective action shall be charged to the Contractor. Work stoppage(s), issued hereunder, will be lifted when necessary corrective action has been taken by the Contractor or the Government. Work stoppage(s) issued hereunder shall not be the basis of a claim for time lost or for any delays directly or indirectly attributable to Contractor's failure to comply with the above specified safety requirements.

(e) The General Safety Requirements, mentioned above, may be obtained from the Contracting Officer.

[29 F.R. 18013, Dec. 18, 1964]

Clause 3. Changes and Clause 4, Changed Conditions of General Provisions of SF 23A are supplemented as follows:

(a) When requested by the Contracting Officer, the Contractor shall submit proposals for changes in work to the resident engineer. Proposals shall be in legible form, original and five copies with an itemized breakdown that will include material quantities and unit prices, labor costs (separated into trades), construction equipment, etc. (Labor costs are to be identified with specific material placed or operation performed.)

(b) Allowances not to exceed 10% each for overhead and profit for the party performing the work will be based upon the value of labor, material and use of construction equipment required to accomplish the change. As the value of the change increases, a declining scale will be used in negotiating the percentage of overhead and profit.

(c) When the work is done by a subcontractor, the prime contractor's fee will be based upon the net increased cost to the prime contractor. The fee will be negotiated and will follow a declining scale which will not exceed 10% on the first $10,000 of the change and not exceed 7% % over $10,000.

(d) Where the contractor or subcontractor's portion of a change involves credit items, such items must be deducted prior to adding overhead and profit for the party performing the work. Where a change involves credit items only, such items will be net, i.e., overhead, profit and fee are excluded. The contractor's fee is limited to the net increase to him of subcontractors' portions computed in accordance herewith.

(e) Cost of Federal Old Age Benefit (Social Security) tax and of Workmen's Compensation and Public Liability insurance appertaining to changes are allowable. While no percentage will be allowed thereon for overhead or profit, prime contractor's fee will be allowed on such items in subcontractor's proposals.

(f) Overhead and contractor's fee percentages shall be considered to include insurance other than mentioned herein, field and office supervisors and assistants, watchman, use of small tools, incidental job burdens, and general home office expenses, and no separate allowance will be made therefor.

(g) Bond premium adjustment, consequent upon changes ordered, will be made as elsewhere specified at the time of final settlement under the contract and will not be included in the individual change. [29 F.R. 9831, July 22, 1964]

washing required by the several technical sections of the specifications satisfactory to the Contracting Officer.

[29 F.R. 9831, July 22, 1964]

§ 8-7.650-23 Release of claims.

As a part of the final settlement, the Veterans Administration requires the Contractor to furnish the release referred to in Clause 7, SF 23A General Provisions. This release will be in the following form:

Release Pursuant Clause 7 (SF 23A)

For and in consideration of the payments heretofore made, and payment of the above recited sum now due by reason of performance of the above contract, the undersigned Contractor hereby releases and discharges the United States of America of and from all liabilities, obligations, and claims whatsoever under or arising out of said contract, except the following:

(a) Claims which are the subject of appeal, pending disposition by the Veterans Administration Contract Appeals Board.

(b) Unresolved matters as indicated in the above statement of account.

(c) Other specific claims: (List below. If none, so state.)

All other terms and conditions of the above mentioned contract remain in full force and effect.

In witness whereof, this release has been duly executed this day of 19--.

§ 8-7.651

By: Title:

(Contractor)

Clauses for fixed price construction contracts estimated to exceed $2,000 but not to exceed $10,000.

§ 8-7.651-1 Bond premium adjustment. Insert the clause set forth in § 8-10.5002.

(a) The Government reserves the following rights: To refuse to permit employment on the work or require dismissal from the work any of the Contractor's employees or agents or Subcontractor's, who, by reason of previous unsatisfactory work on VA projects, or for any other reason, are considered by the Contracting Officer to be incompetent or otherwise objectionable;

(b) To withhold payment until samples, shop drawings, certificates, or such other things as are required by this contract have been properly submitted to the satisfaction of the Contracting Officer.