41 U.S.C. § 6705 — Violations

Page 175 TITLE 41—PUBLIC CONTRACTS § 6705 SEC. 8. Enforcement. (a) The Secretary shall have the authority to investigate potential violations of, and ob- tain compliance with, this order. In such proceedings, the Secretary shall have the authority to issue final or- ders prescribing appropriate sanctions and remedies, including, but not limited to, orders requiring employ- ment and payment of wages lost. The Secretary may also provide that, if a contractor or subcontractor has failed to comply with any order of the Secretary or has committed willful violations of this order or the regu- lations issued pursuant thereto, the contractor or sub- contractor, and its responsible officers, and any firm in which the contractor or subcontractor has a substan- tial interest, may be ineligible to be awarded any con- tract of the United States for a period of up to 3 years. Neither an order for debarment of any contractor or subcontractor from further Federal Government con- tracts under this section nor the inclusion of a con- tractor or subcontractor on a published list of noncom- plying contractors shall be carried out without afford- ing the contractor or subcontractor an opportunity to present information and argument in opposition to the proposed debarment or inclusion on the list. (b) This order creates no rights under the Contract Disputes Act, 41 U.S.C. 7101 et seq., and disputes regard- ing the requirements of the contract clause prescribed by section 3 of this order, to the extent permitted by law, shall be disposed of only as provided by the Sec- retary in regulations issued under this order. SEC. 9. Revocation. Executive Order 13897 of October 31, 2019 (Improving Federal Contractor Operations by Revoking Executive Order 13495) [formerly set out above], is revoked. Executive Order 13495 of January 30, 2009 (Nondisplacement of Qualified Workers Under Service Contracts) [formerly set out above], remains revoked. SEC. 10. Severability. If any provision of this order, or the application of any provision of this order to any person or circumstance, is held to be invalid, the re- mainder of this order and its application to any other person or circumstance shall not be affected thereby. SEC. 11. Effective Date. This order shall become effec- tive immediately and shall apply to solicitations issued on or after the effective date of the final regulations issued by the FAR Council under section 7 of this order. For solicitations issued between the date of this order and the date of the action taken by the FAR Council under section 7 of this order, or solicitations that have already been issued and are outstanding as of the date of this order, agencies are strongly encouraged, to the extent permitted by law, to include in the relevant so- licitation the contract clause described in section 3 of this order. SEC. 12. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect: (i) the authority granted by law to an executive de- partment or agency, or the head thereof; or (ii) the functions of the Director of the Office of Man- agement and Budget relating to budgetary, administra- tive, or legislative proposals. (b) This order shall be implemented consistent with applicable law and subject to the availability of appro- priations. (c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforce- able at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person. J.R. BIDEN, JR. § 6704. Limitation on minimum wage (a) IN GENERAL.—A contractor that makes a contract with the Federal Government, the prin- cipal purpose of which is to furnish services through the use of service employees, and any subcontractor, may not pay less than the min- imum wage specified under section 6(a)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C. 206(a)(1)) to an employee engaged in performing work on the contract. (b) VIOLATIONS.—Sections 6705 to 6707(d) of this title are applicable to a violation of this section. (Pub. L. 111–350, § 3, Jan. 4, 2011, 124 Stat. 3813.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 6704 ............ 41:351(b). Pub. L. 89–286, § 2(b), Oct. 22, 1965, 79 Stat. 1034; Pub. L. 94–489, § 1(b), Oct. 13, 1976, 90 Stat. 2358. § 6705. Violations (a) LIABILITY OF RESPONSIBLE PARTY.—A party responsible for a violation of a contract provi- sion required under section 6703(1) or (2) of this title or a violation of section 6704 of this title is liable for an amount equal to the sum of any de- duction, rebate, refund, or underpayment of compensation due any employee engaged in the performance of the contract. (b) RECOVERY OF AMOUNTS UNDERPAID TO EM- PLOYEES.— (1) WITHHOLDING ACCRUED PAYMENTS DUE ON CONTRACTS.—The total amount determined under subsection (a) to be due any employee engaged in the performance of a contract may be withheld from accrued payments due on the contract or on any other contract between the same contractor and the Federal Government. The amount withheld shall be held in a deposit fund. On order of the Secretary, the compensa- tion found by the Secretary or the head of a Federal agency to be due an underpaid em- ployee pursuant to this chapter shall be paid from the deposit fund directly to the under- paid employee. (2) BRINGING ACTIONS AGAINST CONTRAC- TORS.—If the accrued payments withheld under the terms of the contract are insuffi- cient to reimburse a service employee with re- spect to whom there has been a failure to pay the compensation required pursuant to this chapter, the Federal Government may bring action against the contractor, subcontractor, or any sureties in any court of competent ju- risdiction to recover the remaining amount of underpayment. Any amount recovered shall be held in the deposit fund and shall be paid, on order of the Secretary, directly to the under- paid employee. Any amount not paid to an em- ployee because of inability to do so within 3 years shall be covered into the Treasury as miscellaneous receipts. (c) CANCELLATION AND ALTERNATIVE COMPLE- TION.—In addition to other actions in accordance with this section, when a violation of any con- tract stipulation is found, the Federal agency that made the contract may cancel the contract on written notice to the original contractor. The Federal Government may then make other con- tracts or arrangements for the completion of the original contract, charging any additional cost to the original contractor. (d) ENFORCEMENT OF SECTION.—In accordance with regulations prescribed pursuant to section 6707(a)–(d) of this title, the Secretary or the head of a Federal agency may carry out this sec- tion. Page 176 TITLE 41—PUBLIC CONTRACTS § 6706 (Pub. L. 111–350, § 3, Jan. 4, 2011, 124 Stat. 3814.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 6705(a) ........ 41:352(a) (1st sen- tence). Pub. L. 89–286, §§ 3, 5(b), Oct. 22, 1965, 79 Stat. 1035. 6705(b)(1) .... 41:352(a) (2d–last sentences). 6705(b)(2) .... 41:354(b) 6705(c) ........ 41:352(c). 6705(d) ........ 41:352(b). In subsection (c), the words ‘‘to other actions in ac- cordance with this section’’ are added for clarity. § 6706. Three-year prohibition on new contracts in case of violation (a) DISTRIBUTION OF LIST.—The Comptroller General shall distribute to each agency of the Federal Government a list containing the names of persons or firms that a Federal agency or the Secretary has found to have violated this chap- ter. (b) THREE-YEAR PROHIBITION.—Unless the Sec- retary recommends otherwise because of un- usual circumstances, a Federal Government con- tract may not be awarded to a person or firm named on the list under subsection (a), or to an entity in which the person or firm has a sub- stantial interest, until 3 years have elapsed from the date of publication of the list. If the Sec- retary does not recommend otherwise because of unusual circumstances, the Secretary shall, not later than 90 days after a hearing examiner has made a finding of a violation of this chapter, forward to the Comptroller General the name of the person or firm found to have violated this chapter. (Pub. L. 111–350, § 3, Jan. 4, 2011, 124 Stat. 3814.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 6706(a) ........ 41:354(a) (1st sen- tence). Pub. L. 89–286, § 5(a) (1st sen- tence), Oct. 22, 1965, 79 Stat. 1035. 6706(b) ........ 41:354(a) (2d–last sentences). Pub. L. 89–286, § 5(a) (2d–last sentences), Oct. 22, 1965, 79 Stat. 1035; Pub. L. 92–473, § 4, Oct. 9, 1972, 86 Stat. 790. In subsection (b), the word ‘‘entity’’ is substituted for ‘‘firm, corporation, partnership, or association’’ to use a single broad term clarifying that the prohibition ap- plies to any kind of organization in which the person or firm has a substantial interest. The words ‘‘containing the name of such persons or firms’’ are omitted as un- necessary. The word ‘‘person’’ is substituted for ‘‘indi- vidual’’ for consistency in the subsection. § 6707. Enforcement and administration of chap- ter (a) ENFORCEMENT OF CHAPTER.—Sections 6506 and 6507 of this title govern the Secretary’s au- thority to enforce this chapter, including the Secretary’s authority to prescribe regulations, issue orders, hold hearings, make decisions based on findings of fact, and take other appro- priate action under this chapter. (b) LIMITATIONS AND REGULATIONS FOR VARI- ATIONS, TOLERANCES, AND EXEMPTIONS.—The Secretary may provide reasonable limitations and may prescribe regulations allowing reason- able variation, tolerances, and exemptions with respect to this chapter (other than subsection (f)), but only in special circumstances where the Secretary determines that the limitation, vari- ation, tolerance, or exemption is necessary and proper in the public interest or to avoid the seri- ous impairment of Federal Government busi- ness, and is in accord with the remedial purpose of this chapter to protect prevailing labor stand- ards. (c) PRESERVATION OF WAGES AND BENEFITS DUE UNDER PREDECESSOR CONTRACTS.— (1) IN GENERAL.—Under a contract which suc- ceeds a contract subject to this chapter, and under which substantially the same services are furnished, a contractor or subcontractor may not pay a service employee less than the wages and fringe benefits the service employee would have received under the predecessor contract, including accrued wages and fringe benefits and any prospective increases in wages and fringe benefits provided for in a col- lective-bargaining agreement as a result of arm’s-length negotiations. (2) EXCEPTION.—This subsection does not apply if the Secretary finds after a hearing in accordance with regulations adopted by the Secretary that wages and fringe benefits under the predecessor contract are substantially at variance with wages and fringe benefits pre- vailing in the same locality for services of a similar character. (d) DURATION OF CONTRACTS.—Subject to limi- tations in annual appropriation acts but not- withstanding any other law, a contract to which this chapter applies may, if authorized by the Secretary, be for any term of years not exceed- ing 5, if the contract provides for periodic ad- justment of wages and fringe benefits pursuant to future determinations, issued in the manner prescribed in section 6703 of this title at least once every 2 years during the term of the con- tract, covering each class of service employee. (e) EXCLUSION OF FRINGE BENEFIT PAYMENTS IN DETERMINING OVERTIME PAY.—In determining any overtime pay to which a service employee is entitled under Federal law, the regular or basic hourly rate of pay of the service employee does not include any fringe benefit payments com- puted under this chapter which are excluded from the definition of ‘‘regular rate’’ under sec- tion 7(e) of the Fair Labor Standards Act of 1938 (29 U.S.C. 207(e)). (f) TIMELINESS OF WAGE AND FRINGE BENEFIT DETERMINATIONS.—It is the intent of Congress that determinations of minimum wages and fringe benefits under section 6703(1) and (2) of this title should be made as soon as administra- tively feasible for all contracts subject to this chapter. In any event, the Secretary shall at least make the determinations for contracts under which more than 5 service employees are to be employed. (Pub. L. 111–350, § 3, Jan. 4, 2011, 124 Stat. 3815.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 6707(a)–(d) .. 41:353. Pub. L. 89–286, § 4, Oct. 22, 1965, 79 Stat. 1035; Pub. L. 92–473, § 3, Oct. 9, 1972, 86 Stat. 789.