41 U.S.C. § 6503 — Breach or violation of required contract

Page 167 TITLE 41—PUBLIC CONTRACTS § 6503 terials, supplies, articles, or equipment, in an amount exceeding $10,000, shall include the fol- lowing representations and stipulations: (1) MINIMUM WAGES TO BE PAID.—All individ- uals employed by the contractor in the manu- facture or furnishing of materials, supplies, articles, or equipment under the contract will be paid, without subsequent deduction or re- bate on any account, not less than the pre- vailing minimum wages, as determined by the Secretary, for individuals employed in similar work or in the particular or similar industries or groups of industries currently operating in the locality in which the materials, supplies, articles, or equipment are to be manufactured or furnished under the contract, except that this paragraph applies only to purchases or contracts relating to industries that have been the subject matter of a determination by the Secretary. (2) MAXIMUM NUMBER OF HOURS TO BE WORKED IN A WEEK.—No individual employed by the contractor in the manufacture or furnishing of materials, supplies, articles, or equipment under the contract shall be permitted to work in excess of 40 hours in any one week, except that this paragraph does not apply to an em- ployer who has entered into an agreement with employees pursuant to paragraph (1) or (2) of section 7(b) of the Fair Labor Standards Act of 1938 (29 U.S.C. 207(b)(1) or (2)). (3) INELIGIBLE EMPLOYEES.—No individual under 16 years of age and no incarcerated indi- vidual will be employed by the contractor in the manufacture or furnishing of materials, supplies, articles, or equipment under the con- tract, except that this section, or other law or executive order containing similar prohibi- tions against the purchase of goods by the Federal Government, does not apply to con- vict labor that satisfies the conditions of sec- tion 1761(c) of title 18. (4) STANDARDS OF PLACES AND WORKING CON- DITIONS WHERE CONTRACT PERFORMED.—No part of the contract will be performed, and no ma- terials, supplies, articles, or equipment will be manufactured or fabricated under the con- tract, in plants, factories, buildings, or sur- roundings, or under working conditions, that are unsanitary, hazardous, or dangerous to the health and safety of employees engaged in the performance of the contract. Compliance with the safety, sanitary, and factory inspection laws of the State in which the work or part of the work is to be performed is prima facie evi- dence of compliance with this paragraph. (Pub. L. 111–350, § 3, Jan. 4, 2011, 124 Stat. 3807.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 6502 (matter before par. (1)). 41:35 (matter before subsec. (a) less words related to definition of ‘‘agency of the United States’’). June 30, 1936, ch. 881, § 1 (matter before subsec. (a) less words related to defi- nition of ‘‘agency of the United States’’), (a), 49 Stat. 2036; Pub. L. 103–355, title VII, § 7201(1), Oct. 13, 1994, 108 Stat. 3378. 6502(1) ........ 41:35(a). HISTORICAL AND REVISION NOTES—CONTINUED Revised Section Source (U.S. Code) Source (Statutes at Large) 41:45. June 30, 1936, ch. 881, § 13, formerly § 11, 49 Stat. 2039; renumbered § 12, June 30, 1952, ch. 530, title III, § 301, 66 Stat. 308; renumbered § 13, Pub. L. 104–106, div. D, title XLIII, § 4321(f)(1)(B), Feb. 10, 1996, 110 Stat. 675. 6502(2)–(4) ... 41:35(b)–(d). June 30, 1936, ch. 881, § 1(b)–(d), 49 Stat. 2036; May 13, 1942, ch. 306, 56 Stat. 277; Pub. L. 90–351, title I, § 819(b), formerly § 827(b), as added Pub. L. 96–157, § 2, Dec. 27, 1979, 93 Stat. 1215 and renumbered § 819(b), Pub. L. 98–473, title II, § 609B(f), Oct. 12, 1984, 98 Stat. 2093; Pub. L. 99–145, title XII, § 1241(b), Nov. 8, 1985, 99 Stat. 734; Pub. L. 103–355, title VII, § 7201(1), Oct. 13, 1994, 108 Stat. 3378. In the matter before paragraph (1), the words ‘‘and entered into’’ are omitted as unnecessary. In paragraph (1), the words ‘‘under the contract’’ are substituted for ‘‘used in the performance of the con- tract’’ in 41:35(a) to eliminate unnecessary words and for consistency in the chapter. The words ‘‘Sections 35 to 45 of this title shall apply to all contracts entered into pursuant to invitations for bids issued on or after ninety days from June 30, 1936’’ in 41:45 are omitted as obsolete. In paragraph (2), the words ‘‘under the contract’’ are substituted for ‘‘used in the performance of the con- tract’’ to eliminate unnecessary words and for consist- ency in the chapter. In paragraph (3), the words ‘‘No individual under 16 years of age’’ are substituted for ‘‘no male person under sixteen years of age and no female person under eight- een years of age’’ to reflect the interpretation of this provision subsequent to enactment of civil rights laws such as section 703 of the Civil Rights Act of 1964 (42:2000e–2), as carried out by the Department of Labor through 41 C.F.R. Part 50–201.104. The words ‘‘incarcer- ated individual’’ are substituted for ‘‘convict labor’’ the first time the words appear because the term ‘‘convict labor’’ is ambiguous and may be interpreted to include individuals who are not incarcerated. This would be an inappropriate interpretation because 41:35(c) provides an exception for ‘‘convict labor’’ that satisfies the con- ditions of 18:1761(c) regarding certain non-Federal pris- on work projects. The words ‘‘or production’’ are omit- ted for consistency with the source provisions for para- graphs (1) and (2) and because, in this context, the con- cept of ‘‘production’’ is included in the words ‘‘manu- facture or furnishing’’. The words ‘‘under the contract’’ are substituted for ‘‘included in such contract’’ for con- sistency in the chapter. § 6503. Breach or violation of required contract terms (a) APPLICABLE BREACH OR VIOLATION.—This section applies in case of breach or violation of a representation or stipulation included in a contract under section 6502 of this title. (b) LIQUIDATED DAMAGES.—In addition to dam- ages for any other breach of the contract, the party responsible for a breach or violation de- scribed in subsection (a) is liable to the Federal Government for the following liquidated dam- ages: (1) An amount equal to the sum of $10 per day for each individual under 16 years of age and each incarcerated individual knowingly employed in the performance of the contract. (2) An amount equal to the sum of each un- derpayment of wages due an employee engaged Page 168 TITLE 41—PUBLIC CONTRACTS § 6504 in the performance of the contract, including any underpayments arising from deductions, rebates, or refunds. (c) CANCELLATION AND ALTERNATIVE COMPLE- TION.—In addition to the Federal Government being entitled to damages described in sub- section (b), the agency of the United States that made the contract may cancel the contract and make open-market purchases or make other contracts for the completion of the original con- tract, charging any additional cost to the origi- nal contractor. (d) RECOVERY OF AMOUNTS DUE.—An amount due the Federal Government because of a breach or violation described in subsection (a) may be withheld from any amounts owed the contractor under any contract under section 6502 of this title or may be recovered in a suit brought by the Attorney General. (e) EMPLOYEE REIMBURSEMENT FOR UNDER- PAYMENT OF WAGES.—An amount withheld or re- covered under subsection (d) that is based on an underpayment of wages as described in sub- section (b)(2) shall be held in a special deposit account. On order of the Secretary, the amount shall be paid directly to the underpaid employee on whose account the amount was withheld or recovered. However, an employee’s claim for payment under this subsection may be enter- tained only if made within one year from the date of actual notice to the contractor of the withholding or recovery. (Pub. L. 111–350, § 3, Jan. 4, 2011, 124 Stat. 3808.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 6503 ............ 41:36. June 30, 1936, ch. 881, § 2, 49 Stat. 2037. In subsection (b)(1), the words ‘‘individual under 16 years of age’’ are substituted for ‘‘male person under sixteen years of age or each female person under eight- een years of age’’ to reflect the interpretation of this provision subsequent to enactment of civil rights laws such as section 703 of the Civil Rights Act of 1964 (42:2000e–2), as carried out by the Department of Labor through 41 C.F.R. Part 50–201.104. The words ‘‘incarcer- ated individual’’ are substituted for ‘‘convict laborer’’ because of the exception to convict labor that satisfies the conditions of 18:1761(c). Section 1761 does not apply to non-incarcerated convicts. Subsection (b)(2) is substituted for ‘‘a sum equal to the amount of any deductions, rebates, refunds, or un- derpayment of wages due to any employee engaged in the performance of such contract’’ for consistency in the chapter. In subsection (c), the words ‘‘made the contract’’ and ‘‘make other contracts’’ are substituted for ‘‘entering into such contract’’ and ‘‘enter into other contracts’’, respectively, for consistency in the revised title. In subsection (d), the words ‘‘suit brought by the At- torney General’’ are substituted for ‘‘suits brought in the name of the United States of America by the Attor- ney General thereof ’’ to eliminate unnecessary words. § 6504. Three-year prohibition on new contracts in case of breach or violation (a) DISTRIBUTION OF LIST.—The Comptroller General shall distribute to each agency of the United States a list containing the names of persons found by the Secretary to have breached or violated a representation or stipulation in- cluded in a contract under section 6502 of this title. (b) THREE-YEAR PROHIBITION.—Unless the Sec- retary recommends otherwise, a contract de- scribed in section 6502 of this title may not be awarded to a person named on the list under subsection (a), or to a firm, corporation, part- nership, or association in which the person has a controlling interest, until 3 years have elapsed from the date of the determination by the Sec- retary that a breach or violation occurred. (Pub. L. 111–350, § 3, Jan. 4, 2011, 124 Stat. 3808.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 6504 ............ 41:37. June 30, 1936, ch. 881, § 3, 49 Stat. 2037. In this section, the words ‘‘or firms’’ are omitted be- cause of the definition of ‘‘person’’ in 41:41, restated in section 6501 of the revised title. In subsection (a), the words ‘‘or violated’’ are added for consistency in the chapter. In subsection (b), the words ‘‘contract described in section 6502 of this title’’ are substituted for ‘‘con- tracts’’ to clarify the scope of the prohibition. The words ‘‘the date of the determination by the Secretary that a breach or violation occurred’’ are substituted for ‘‘the date the Secretary of Labor determines such breach to have occurred’’ to clarify that the three-year period begins with the date of the Secretary’s deter- mination and not with the date of the breach or viola- tion. The words ‘‘or violation’’ are added for consist- ency in the chapter. § 6505. Exclusions (a) ITEMS AVAILABLE IN THE OPEN MARKET.— This chapter does not apply to the purchase of materials, supplies, articles, or equipment that may usually be bought in the open market. (b) PERISHABLES AND AGRICULTURAL PROD- UCTS.—This chapter does not apply to any of the following: (1) Perishables, including dairy, livestock and nursery products. (2) Agricultural or farm products processed for first sale by the original producers. (3) Contracts made by the Secretary of Agri- culture for the purchase of agricultural com- modities or products of agricultural commod- ities. (c) CARRIAGE OF FREIGHT OR PERSONNEL.—This chapter may not be construed to apply to— (1) the carriage of freight or personnel by vessel, airplane, bus, truck, express, or rail- way line where published tariff rates are in ef- fect; or (2) common carriers subject to the Commu- nications Act of 1934 (47 U.S.C. 151 et seq.). (Pub. L. 111–350, § 3, Jan. 4, 2011, 124 Stat. 3809.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 6505 ............ 41:43. June 30, 1936, ch. 881, § 9, 49 Stat. 2039. Editorial Notes REFERENCES IN TEXT The Communications Act of 1934, referred to in sub- sec. (c)(2), is act June 19, 1934, ch. 652, 48 Stat. 1064,