(5) The commission of an act of bankruptcy; the Government, without limiting any rights which it may otherwise have, may in its discretion and upon written notice to the contractor and bank, withhold further withdrawals from the Special Bank Account and withhold further payments on this con: tract. Upon the continuance of any such events of default for a period of 30 days after such written notice to the contractor and bank, the Government may, in its discretion, and without limiting any other rights which the Government may have, take the following additional actions as it may deem appropriate in the circumstances:

(1) Withdraw all or any part of the balance in the Special Bank Account by checks made payable to the Bureau of Indian Affairs, signed solely by an official of the Bureau of Indian Affairs authorized in writing by the contracting officer to take such action, and apply such amounts in reduction of the advance payment(s) then outstanding hereunder and in reduction of any other claims of the Government against the contractor;

(1) Demand immediate repayment of the unliquidated balance of the advance payment(s) hereunder; or,

(111) Take possession of and, with or without advertisement, sell at public sale at which the Government may be the purchaser. or at a private sale, all or any part of the property on which the Government has a llen under this contract and, after deducting any expenses incident to such sale, apply the net proceeds of such sale in reduction of the unliquidated balance of the advance payment(s) hereunder and in reduction of any other claims of the Government against the contractor

un

(1) Prohibition against assignment. Notwithstanding any other provision of this contract, the contractor shall not, while any part of the advance payment(s) liquidated, pledge, or otherwise assign any monies due under this contract, or any claim arising thereunder, to any party or parties, bank, trust company, or other financing institution.

(m) Information-access to records. The contractor shall furnish to the contracting officer signed or certified balance sheets and profit and loss statements monthly, if required by the contracting officer, together with a monthly bank statement for the Special Bank Account and such other information concerning the operation of the contractor's business as may be requested. The contractor shall afford to authorize representatives of the Government facilities for inspection of the contractor's books, records, and accounts.

(n) Designations and determinations. (1) Amount. The amount of the advance payment (s) at any time outstanding hereunder shall not exceed the amount authorized in the Findings, Determinations, and Authorization for the advance payment(s).

(2) Depository. The advance payment(s) shall be deposited in the bank with which the Agreement for Special Bank Account is established

(0) Other security. The terms of this contract shall be considered adequate security for advance payment(s) hereunder.

To

(p) Representations and warranties. Induce the making of the advance payment(s), the contractor represents and warrants that:

(1) No litigation or proceedings are presently pending or threatened against the contractor.

(2) None of the provisions herein contravenes or is in conflict with the authority under which the contractor is doing business or with the provision of any existing agreement of the contractor.

(3) The contractor has the power to enter into this contract and accept an advance

PROPOSED RULES

payment(s) hereunder, and has taken all necessary action to authorize such ACceptance under the terms and conditions of this contract.

(4) None of the assets of the contractor is subject to any lien or encumbrance of any character except for current taxes not delinquent. There has been no assignment of claims under any contract affected by these advance payment provisions, or if there has been any asignment, such assignments have been terminated.

(5) All information furnished by the contractor to the contracting officer in connection with the request for an advance payment is true and correct.

(6) These representations and warranties shall be continuing and shall be deemed to have been repeated by the submission of any subsequent request for additional advance payment(s) under this contract.

(q) Subadvances. Subject to the prior written approval of the contracting officer, funds from the Special Bank Account may be used by the contractor to make advance payment(s) or down payments to subcontractors and suppliers of material in advance of performance by the subcontractor or suppliers of material. Such subadvances shall not exceed the subcontract price or estimated cost as the case may be. The subcontractors or suppliers of material to whom such advance payment(s) is made shall furnish adequate security therefor. Unless other security is required by the contracting officer, convenants in subcontracts, expressly made for the benefit of the Government providing for a Special Bank Account for the subadvance with Government lien thereon. and providing for a Government llen, paramount to all other liens, on all property under such subcontract, and imposing upon the subcontractor and the depository bank substantially the same duties and giving the Government substantially the same rights as are provided herein (and in the Agreement for Special Bank Account supplemental hereto) between the Government, the contractor, and the bank may be considered as adequate for such subadvance(s), unless adequate justification is first furnished to and approval obtained by the contracting officer.

(r) Covenants. During the period of time that an advance payment(s) made hereunder remains unliquidated, the contractor shall not, without prior written consent of the contracting officer:

(1) Mortgage, pledge, or otherwise encumber, or suffer to be encumbered, any of the assets of the contractor now owned or

hereinafter acquired by it, or permit any pre-existing mortgages, liens, or other encumbrances to remain on or attach to any assets of the contractor which are allocated to the performance of this contract and with respect to which the Government has a llen hereunder;

(2) Sell, assign, transfer, or otherwise dispose of accounts receivable, notes, or claims for money due or to become due.

(3) Declare or pay any dividends, execpt dividends payable in stock of the corporation, or make any other distribution on account of any shares of its capital stock, or purchase, redeem, or otherwise acquire for valve any such stock, except as required by sinking fund or redemption arrangements reported to the contracting officer incident to the establishment of these advance payment(s) provisions;

(4) Sell, convey, or lease all or a substantial part of its assets;

(5) Acquire for value the stock or other securities of any corporation, municipality, or governmental authority, except direct obligations, of the United States.

(6) Make any advance or loan to or incur any liability as guarantor,

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(7) Permit a writ of attachment or any similar process to be issued against its property without procuring release thereof or bonding the same within 30 days after the entry of the writ of attachment or any similar process;

(8) Pay any salaries, commissions, bonuses, or other remuneration in any form or manner to its directors, officers, or key employees in excess of existing rates of payments, or of rates provided by this contract, or in existing agreements, in connection

with which notice has been given to the contracting officer, or accrue such excess remuneration without first obtaining an reement subordinating the same to all clains of the Government hereunder.

(9) Make any substantial change in management, ownership, or control of the organization with which this contract is made.

(10) Merge or consolidate with any other firm or corporation, change the type of its business, or engage in any transaction outside the ordinary course of its business as presently conducted;

(11) Deposit any of its funds except in a bank or trust company insured by the Federal Deposit Insurance Corporation; or,

(12) Create or incur indebtedness, borrow money or advances other than advances to be made hereunder, except as specified

herein.

(c) The following clause will be used in all contracts in which the advance payment will be made by Letter of Credit:

ADVANCE PAYMENT

At the request of the contractor, and subject to the conditions set forth herein, and to Treasury Fiscal Requirements Manual, Department Circular 1075, the Government shall make advance payments to the contractor by Letter of Credit.

(a) The contractor agrees to comply with all the requirements and conditions set forth in Treasury Fiscal Requirements Manual, Department Circular 1075, a copy of which is attached and made a part of this contract.

(b) The contractor agrees to initiate cash disbursements. draw-downs only when actually needed for its

(c) The contractor agrees to report to the contracting officer cash disbursements and balances monthly not later than 15 days after the end of the month covered by the report.

(d) Failure to adhere to the provisions of this clause may cause the unobligated por tion of the Letter of Credit to be dissolved by the contracting officer or the Department of the Treasury.

the

(a) Funds other than those appropriated during the fiscal year in which the contract commenced, that are included in the contract amount are subject to availability of appropriations from Congress and there shall be no legal liability on the part of the Government in regard to such funds unless and until they are appropri ated. Funds appropriated during the fiscal year in which the contract commenced that are included in the contract amount but not expended at the end of such fiscal year may be carried over and used for contract purposes in the succeeding fiscal year of the contract's operation, when the contract funds were appropriated pursuant to the Act of November 2, 1921 (42 Stat. 208), except as otherwise specifically provided in appropriation acts, or may be used to provide addi

GOVERNMENT FURNISHED PROPERTY

(a) The Government will deliver to the contractor the property described in the Schedule and may, at its option, furnish other supplies or equipment as it may from time to time deem necessary or desirable for use in performing the work under this contract. All property furnished by the Government, together with all property acquired or furnished by the contractor with contract funds, title to which vests in the Government under this article, is subject to the provisions of this clause and is hereinafter collectively referred to as "Government property."

(b) The title of each item of equipment purchased with funds made available under this contract, the cost of which is reimbursable to the contractor under the contract, shall pass to and vest in the Government upon:

(1) Issuance for use of such property and in the performance of this contract; or,

(2) Commencement of processing or use of such property in the performance of this contract, or,

(3) Reimbursement of the cost thereof by the Government, whichever first occurs. A simple record listing all items of equipment purchased with funds made available under this contract showing such property by names manufacturers, serial number (U any), and the cost of the equipment, will be furnished to the contracting officer by the contractor. Each item of Government property shall be given an identification number, be subject to accountability, and become a part of the Bureau's property inventory, all a provided by the Bureau Manual.

(c) Title to Government property shall remain in the Government and shall be unaffected by the incorporation or attachment thereof to any property not owned by the Government, nor shall Government property or any part thereof be or become a fixture or lose its identity as personal property by reason of affixation to any reality. Except as otherwise specifically provided in this contract, the contractor:

(1) Shall not pledge, assign, or transfer title to any Government property; nor to allow or suffer anything to be done whereby any Government property may be seized, taken in execution, attached, destroyed or injured, and

(2) Shall not remove or otherwise part with possession of, or permit the use by others of, any Government property.

(d) The contractor shall maintain and administer. in accordance with sound industrial practice, a program for the maintenance, repair, protection and preservation of Government property.

(e) Except as may be otherwise provided for herein. Government property shall be used only for the performance of this contract unless written permission is granted by the contracting officer.

(1) Upon completion or termination of the contract, the contractor shall make such disposition of Government property then in his possession or custody as the contracting omcer shall direct.

(g) The contractor shall be responsible for the care and safekeeping of Government property, and for the return or delivery of the

PROPOSED RULES

same in the condition in which received or appropriated for the contract, except for reasonable wear and tear, and except to the extent such property in consumed in the performance of this contract.

§ 14H-70.615 Annual reporting.

ANNUAL REPORTING

(a) Within 90 days of the end of each fiscal year of this contract's term, the Indian tribe that requested the contract shall furnish the contracting officer a report that includes but is not limited to an accounting of the amounts and purposes for which the contract funds were expended and information on the conduct of the program or services and the extent to which the goals and objectives of the tribe were accomplished.

(b) When the contractor is the governing body of the Indian tribe that requested the contract, the report shall be submitted directly to the contracting officer.

(c) When the contractor is a tribal organization other than the governing body of the tribe, the tribal governing body that requested the contract shall submit the report. However, at the option of the tribe, the contractor shall prepare the report and submit it to the tribe for review and approval prior to the tribe submitting the report to the contracting officer.

(d) When the contract benefits more than one tribe, the contractor shall prepare the report and submit it to each of the tribes. Each of the tribes will endorse and make any comments they consider applicable before submitting the report to the contracting officer.

(e) Notwithstanding this requirement for an annual report, the contracting officer may request the contractor to furnish such other reports at such intervals as is deemed necessary.

§ 14H-70.616 Reassumption

grams.

of

REASSUMPTION OF PROGRAMS

pro

(a) Upon written notice to the contractor, the contracting officer may rescind the contract in whole or in part and assume or resume control or operation of the program, activity or service involved if it is determined that the contractor's performance involves (1) the violation of the rights, or endangerment of the health, safety or welfare of any person; or (2) gross negligence or mismanagement in the handling or use of funds provided the contractor under the contract; or (3) when the contractor falls to perform the work required under the contract.

(b) If it is determined, under paragraph (a) of this clause, that there is an immediate threat to safety the contracting officer may by written notice to the contractor immediately rescind the contract or that portion thereof that poses such threat and assume or reassume operation of the program activity or service involved. Within 10 calendar days of the date the contract was rescinded, the contracting officer will schedule a hearing at a time and place mutually agreed to by the parties. When the contractor is other than the governing body of the Indian tribe that requested the contract, the tribe will be advised of the contract rescission at the same time as the contractor and invited to attend the hearing and present its views. The time and place of the hearing will be coordinated with the tribe. If agreement on corrective measures is not reached at the hearing, the contracting officer shall reduce the issues to writing and mail or otherwise furnish a copy thereof to the contractor within 30 calendar days from the date of the hearing. The contractor may appeal the issues as provided for in Subpart C of 43 CFR Part 4.

(c) When there is no immediate threat to safety, the contracting officer shall provide written notice to the contractor of intent to rescind the contract which will include the reason why contract recission is contemplated, what corrective measures are considered necessary and a reasonable time period in which corrective measures must be accomplished. If the contractor does not take corrective action within the time specified, the contracting officer may rescind the contract. However, the contractor has a right to a hearing and appeal as provided in paragraph (b) of this clause.

§ 11H-70.617 Fair and uniform services. FAIR AND UNIFORM SERVICES The contractor agrees that any services or assistance provided to Indians under the contract shall be provided in a fair and uniform manner.

§ 14H-70.618 Disputes.

DISPUTES

(a) Except as otherwise provided in this contract, any dispute concerning a question of fact arising under this contract which is not disposed of by agreement shall be decided by the contracting officer, who shall reduce his decision to writing and mail or otherwise furnish a copy thereof to the contractor. The decision of the contracting officer shall be final and conclusive unless within thirty (30) days from the date of receipt of such copy, the contractor malls or otherwise furnishes to the contracting officer a written appeal addressed to the Secretary. The decision of the Secretary or his duly authorized representative for the determination of such appeals shall be final and conclusive unless determined by a court of competent jurisdiction to have been fraudulent, or capriclous, or arbitrary or so grossly erroneous as necessarily to imply bad faith, or not supported by substantial evidence. In connection with any appeal proceeding under this clause, the contractor shall be afforded an opportunity to be heard and to offer evidence In support of his appeal. Pending final decision of a dispute hereunder, the contractor shall proceed diligently with the performance of the contract and in accordance with the contracting officer's decision.

(b) This "Disputes" clause does not preclude consideration of law questions in connection with decisions provided for in paragraph (a) above. However, nothing in this contract shall be construed as making final the decision of any administrative official, representative, or board on a question of law. § 14H-70.619 Officials not to benefit.

OFFICIALS NOT TO BENEFIT

No members of Congress, or Resident Commissioner, shall be admitted to any share or part of this contract, or to any benefit that may arise therefrom: but this provision shall not be construed to extend to this contract if made with a corporation for its general benefit.

tract, the matter shall be resolved as prescribed in 25 CFR 401.63, 25 CFR 401.64 and 25 CFR 401.65.

(b) In addition, all cost-reimbursement contracts over $10,000 shall contain the following clause:

FUNDING CHANGES

If for any reason beyond the control of the contracting office, the amount of funds allocated for the program operated under this contract are reduced by an amount or by a percentage resulting in 8 specific amount, the contract will be modified accordingly after consultation with the contractor Such modification shall be made without penalty to the Government and shall not constitute basis for a claim under this contract.

§ 14H-70.621 Bid guarantee and bonds. The following clause shall be included in all construction contracts with a tribal organization, in accordance with § 110.103, 1-10.104-1(a) and 1-10.1041(b) of this title, when it is estimated that the amount of the contract will exceed $2,000:

BID GUARANTEE AND BONDS

(a) The contractor shall require a bid guarantee from all (sub) contractors who submit bids (proposals) for performing work under the contract in accordance with the policy set forth in 1-10.103-1 of the Federal Procurement Regulations (41 CFR 1). When the bid guarantee is in the form of a bid bond, it may be submitted on other than the standard Government form: Provided, that the bond binds the Principal and the Surety (les) in the same manner As they would be bound had the bid (proposal) been

submitted to the Government.

(b) The contractor shall require the successful bidder (offerer) to furnish performance and payment bonds in the amounts set forth in the Miller Act (40 U.S.C. 270a-270e) and in accordance with the policies in 1-10.104 and 1-10.105 of the Federal Procurement regulations (41 CFR 1) as a condition precedent to the award of the (sub) contract. The bonds may be submitted on other than the standard Government form: Provided, that the form used binds the Principal and the Surety (les) in the same manfer that they would be bound were the (sub) contract with the Government.

§ 14H-70.622 Certificate of nonsegregated facilities.

CERTIFICATE OF NONSEGREGATED FACILITIES By signing the contract, the contractor certifies that he does not maintain or provide for his employees any segregated facilities at any of his establishments, and that he does not permit his employees to perform their services at any location, under his control, where segregated facilities are maintained. He certifies further that he will not maintain or provide for his employees any segregated facilities at any of his establishments, and that he will not permit his employees to perform their services at any location, under his control, where segregated facilities are maintained. The contractor agrees that a breach of this certification is a violation of the Equal Opportunity clause in this contract. As used in this certification, the term "segregated facilities means any waiting rooms, work areas, rest rooms and wash rooms, restaurants and other eating areas, time clocks, locker rooms and other storage or dressing areas, parking lots, drinking fountains, recreation or entertainment areas, transportation, and housing facilities provided for employees which are segregated by explicit di

PROPOSED RULES

rective or are in fact segregated on the basis of race, color, religion, or national origin, because of habit. local custom, or otherwise. He further agrees that (except where he has obtained identical certifications from proposed subcontractors for specific time periods) he will obtain identical certifications from proposed subcontractors prior to the award of subcontracts exceeding $10,000 which are not exempt from the provisions of the Equal Opportunity clause; that he will retain such certifications in his files; and that he will forward the following notice to such proposed subcontractors (except where the proposed subcontractors have submitted identical certifications for specific time

periods):

NOTICE TO PROSPECTIVE SUBCONTRACTORS OF REQUIREMENT FOR CERTIFICATIONS OF NONSEGREGATED FACILITIES

A certification of nonsegregated facilities must be submitted prior to the award of a subcontract exceeding $10,000 which is not exempt from the provisions of the Equal Opportunity clause. The certification may be submitted either for each subcontract or for all subcontracts during a period (ie., quarterly, semiannually, or annually).

§ 14H-70.623 Convict labor.

CONVICT LABOR

In connection with the performance of work under this contract, the contractor agrees not to employ any person undergoing sentence of imprisonment except as provided by Public Law 89-176, September 10, 1965 (18 US.C. 4082 (c) (2)) and Executive Order 11755, December 29, 1973.

§ 14H-70.624 Limitation of costs. LIMITATION OF COSTS

(a) It is estimated that the total costs to the Government for the performance of the work specified in this contract, will not exceed the estimated costs set forth in the Schedule. The contractor agrees to use its best efforts to perform this contract within the estimated total amount so specified, but neither the Government nor the contractor guarantees the accuracy of such estimate. If at any time the contractor has reason to believe that the costs which it expects to incur in the performance of this contract in the next succeeding thirty (30) days, when added to all costs previously incurred, will exceed eighty-five percent (85%) of the estimated costs then set forth in the Schedule, or if at any time the contractor has reason to believe that the total costs for the performance of this contract, will be greater or substantially less than the then estimated cost thereof, the contractor shall notify the contracting officer in writing to that effect, giving the revised estimate of such total cost for the performance of this contract.

(b) The Government shall not be obliged to reimburse the contractor for costs incurred in excess of the estimated costs set forth in the Schedule, and the contractor shall not be obliged to continue performance under the contract or to incur costs in excess of such estimate, unless and until the contracting officer has notified the contractor in writing that such estimated cost has been increased, and has specified in such notice a revised estimated cost, which shall thereupon constitute the estimated cost of performance of this contract When, and to the extent that, the estimated cost has been increased, any costs previously incurred by the contractor in excess of such estimated cost shall be allowable to the same extent as if such costs are incident to and necessary for the performance of work specifically authorized under this contract at the time incurred.

(1) Appendix A to 25 CFR 406 as in effect on the date of this contract.

(11) The terms of this contract. (b) Once each month (or at more frequent intervals as may be specified elsewhere, or if approved by the contracting officer), the contractor may submit to the contracting officer or his authorized representative, in such form and reasonable detall as may be required, an invoice or public voucher supported by a statement of cost incurred by the contractor in the performance of this contract and claimed to constitute allowable cost.

(c) Promptly after receipt of each invoice or voucher, the Government shall make payment of the allowable costs incurred subJect to the provisions of (d) below.

(d) At any time or times prior to final payment under this contract, the contracting officer may cause to be made such audit of the invoices or vouchers and statements of cost as shall be deemed necessary Each payment made before that time shall be subject to reduction to the extent that amounts included in the related invoice or vouchers and statement of cost are found by the contracting officer not to constitute allowable cost, and shall also be subject to reduction for overpayments or to increase for underpayments on preceding invoices or vouchers.

(e) On receipt and approval of the voucher or invoice designated by the contractor as the "completion voucher" or "completion invoice" and statement of cost, which shall be submitted by the contractor as promptly as may be practicable following completion of the work under this contract but no later than six (6) months (or such longer period as the contracting officer may in his discretion, approve in writing) from the date of such completion, and following compliance by the contractor with all provisions of this contract, the Government shall as promptly as may be practicable pay to the contractor any balance of allowable cost.

(f) Any cost incurred by the contractor under the terms of this contract which would constitute allowable cost under the provisions of this clause shall be included in determining the amount payable under this contract, notwithstanding any provisions contained in the specification or other documents incorporated in this contract by reference, designating services to be performed or materials to be furnished by the contractor at its expense or without cost to the Government.

§ 14H-70.626 Negotiated overhead rates. NEGOTIATED OVERHEAD RATES

(a) Notwithstanding the provisions of the clause of this contract entitled "Allowable Cost and Payment," the allowable indirect costs under this contract shall be obtained by applying negotiated overhead rates to

41034

bases agreed upon by the parties, as specified below.

(b) The contractor, as soon as possible, but not later than six (6) months after the expiration of each of the contractor's financial years or such other period as may mutually be agreed upon by the Government and the contractor shall submit to the contracting officer, with a copy of the cognizant audit agency, a proposed final overhead rate or rates for that period based on the contractor's costs experience during that period, together with supporting cost data. Negotiation of final overhead rates by the contractor and the contracting officer shall be undertaken as promptly as practicable after receipt of the contractor's proposal.

(c) Allowability of costs and acceptability of cost allocation methods shall be determined in accordance with Appendix A of 25 CFR 406, as in effect on the date of this contract.

(d) The results of each negotiation shall be set forth in an amendment to this contract, which shall specify (1) the agreed final rates, (2) the bases to which the rates apply, (3) the periods for which the rates apply, and (4) the specific items treated as direct costs or any changes in the items previously agreed to be direct costs.

(e) Pending establishment of final overhead rates for any period, the contractor shall be reimbursed either at negotiated provisional rates as provided in this contract or at billing rates acceptable to the contracting officer, subject to appropriate adjustment when the final rates for that period are established. To prevent substantial over or under payment, the provisional or billing rates may, at the request of either party, be revised by mutual agreement, either retroactively or prospectively. Any such revision of negotiated provisional rates provided in this contract shall be set forth in an amendment to this contract.

(f) Any failure by the parties to agree on any Anal rate or rates under this clause shall be considered a dispute concerning a question of fact for decision by the contracting officer within the meaning of the clause of this contract entitled "Disputes." § 14H-70.627 Assignment of claims. ASSIGNMENT OF CLAIMS

Pursuant to the provisions of the Assignment of Claims Act of 1940, as amended (31 US.C. 203, 41 U.S.C. 15). if this contract provides for payments aggregating $1,000 or more, claims for moneys due or to become due the contractor from the Government under this contract may be assigned to a bank, trust company, or other financing institution, including any Federal lending agency, and may thereafter be further assigned and reassigned to any such institution. Any such assignment shall cover all amounts payable under this contract and not already paid, and shall not be made to more than one party, except that any such assignment or reassignment may be made to one party as agent or trustee for two or more parties participating in such financing.

§ 14H-70.628 Payment of interest on contractor's claims.

PAYMENT OF INTEREST ON CONTRACTOR'S CLAIMS

(a) If an appeal is filed by the contractor from a final decision of the contracting offcer under the disputes clause of this contract, denying a claim arising under the contract, simple interest on the amount of the claim finally determined owed by the Government shall be payable to the contractor. Such interest shall be at the rate determined by the Secretary of the Treasury pur suant to Pub. L. 9241, 85 Stat. 97, from the

PROPOSED RULES

date the contractor furnishes to the contracting officer his written appeal under the disputes clause of this contract, to the date of (1) a final judgment by a court of competent jurisdiction, or (2) mailing to the contractor of a supplemental agreement for execution either confirming completed negotiations between the parties or carrying out a decision of a board of contract appeals.

(b) Notwithstanding (a) above. (1) interest shall be applied only from the date payment was due, if such date is later than the filing of appeal, and (2) interest shall not be paid for any period of time that the contracting officer determines the contractor has unduly delayed in pursuing his remedies before a board of contract appeals or a court of competent jurisdiction.

§ 14H-70.629

Audit and records.
AUDIT AND RECORDS

(a) The contractor shall maintain books, records, documents, and other evidence and accounting procedures and practices, suffclent to reflect properly all direct and indirect costs of whatever nature claimed to have been incurred and anticipated to be incurred for the performance of this contract. The foregoing constitute "records" for the purposes of this clause.

(b) The contractor's facilities, or such part thereof as may be engaged in the performance of this contract, and his records shall be subject at all reasonable times to inspection and audit by the contracting offcer or his authorized representatives. In addition, for purpose of verifying that cost or pricing data submitted, in conjunction with the negotiation of this contract or any contract change or other modification involving an amount in excess of $100,000, were accurate, complete and current, the contracting officer, or his authorized representative, shall, until the expiration of 3 years from the date of final payment under this contract, or of the time periods for the particular records. specified in Part 1-20 of the Federal Procurement Regulations (41 CFR Part 1-20), whichever expires earlier, have the right to examine those books. records, documents, papers, and other supporting data which involve transactions related to this contract or which will permit adequate evaluation of the cost or pricing data submitted, along with the computations and projections used therein.

(c) The contractor shall preserve and make available his records (1) until the expiration of 3 years from the date of final payment under this contract, or of the time period for the particular records specified in 41 CFR Part 1-20, whichever expires earlier, and (2) for such longer period, if any, as is required by applicable statute, or by other clauses of this contract, or by (c) (2) (1) or (1) below.

(1) If the contract is completely or par tially cancelled the records relating to the work terminated shall be preserved and made available for a period of 3 years from the date of any resulting final settlement.

(11) Records which relate to (A) appeals under the "Disputes" clause of this contract, (B) litigation or the settlement of claims arising out of the performance of this contract, or (C) costs and expenses of this contract as to which exception has been taken by the contracting officer or any of his duly authorized representatives, shall be retained until such appeals, litigation, claims, or exceptions have been disposed of.

(d) (1) The contractor shall insert the substance of this clause, including the whole of this paragraph (d), in each subcontract hereunder that is not firm-fixed-price or fixedprice with escalation. When so inserted, changes shall be made to designate the

higher-tier subcontractor at the level involved in place of the contractor; to add "of the Government prime contract" after "contracting officer"; and to substitute "the Gov ernment prime contract" in place of "this contract" in (B) of paragraph (c) (2) (11) above.

§ 14H-70.630 Contract Work Hours and Safety Standards Act-Overtime Compensation.

CONTRACT WORK HOURS AND SAFETY STANDARDS ACT-OVERTIME COMPENSATION

This contract is subject to the Contract Work Hours and Safety Standards Act and to the applicable rules, regulations, and the interpretations of the Secretary of Labor.

(a) Overtime requirements. No contracto. or subcontractor contracting for any part of the contract work which may require or involve the employment of laborers or mechanics shall require or permit any laborer or mechanic in any work-week in which he is employed on such work to work in excess of eight hours in any calendar day or in excess of forty hours in such work-week on work subject to the provisions of the Contract Work Hours Standards Act unless such laborer or mechanic receives compensation at a rate not less than one and one-half times his basic rate of pay for all such hours worked in excess of eight hours in any calendar day or in excess of forty hours in such work-week, whichever is the greater number of overtime hours.

(b) Violation, liability for unpaid wages, liquidated damages. In the event of any violation of the provisions of paragraph (a), the contractor and any subcontractor responsible therefor shall be liable to any affected employee for his unpaid wages. In addition, such contractor and subcontractor shall be liable to the United States for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer or mechanic employed in violation of the provisions of paragraph (a) in the sum of $10 for each calendar day on which such employee was required or permitted to be employed on such work in excess of eight hours or in excess of the standard work-week of forty hours without payment of the overtime wages required by paragraph (a).

(c) Withholding for unpaid wages and liquidated damages. The contracting officer may withhold from the Government prime contractor, from any moneys payable on account of work performed by the contractor or subcontractor, such sums as may administratively be determined to be necessary to satisfy any liabilities of such contractor or subcontractor for unpaid wages and liquidated damages as provided in the provision of paragraph (b).

(d) Subcontracts. The contractor shall insert paragraphs (a) through (d) of this section in all subcontracts, and shall require their inclusion in all subcontracts of any

tier.

(e) Records. The contractor shall maintain payroll records containing the information specified in 29 CFR 516.2(a). Such records shall be preserved for three years from the completion of the contract.

§ 14H-70.631 Price reduction for defective cost or pricing data.

The following clause shall be included in all contracts where cost and pricing data is required in accordance with 14H-70.407.

PRICE REDUCTION FOR DEFECTIVE COST OR PRICING DATA

(a) If the contracting officer determines that any price negotiated in connection with this contract or any cost reimbursable under

or

or

this contract was increased by any signincant sums because the contractor, or any subcontractor pursuant to the clause of this contract entitled "Subcontractor Cost Pricing Data" or "Subcontractor Cost Pricing Data-Price Adjustments," or any subcontract clause therein required, furnished incomplete or inaccurate cost or pricing data or data not current as certified in his Contractor's Certificate of Current Cost or Pricing Data, then such price or cost shall be reduced accordingly and the contract shall be modified in writing to reflect such reduction.

(b) Failure to agree on a reduction shall be a dispute concerning a question of fact within the meaning of the "Disputes" clause of this contract.

(NOTE: Since the contract is subject to reduction under this clause by reason of defective cost or pricing data submitted in connection with certain subcontracts, it is expected that the contractor may wish to include a clause in each such subcontract requiring the subcontractor to appropriately indemnify the contractor. It is also expected that any subcontractor subject to such indemnification will generally require substantially similar Indemnification for defective cost or pricing data required to be submitted by his lower tier subcontractors.)

The following clause should be included in all contracts, when the subcontracts of the type and size described herein are contemplated.

SUBCONTRACTOR COST AND PRICING DATA

(a) The contractor shall require subcontractors here under to submit in writing cost or pricing data under the following circumstances:

(1) Prior to award of any cost-reimbursed type, time and material, labor-hour. Incentive, or price redeterminable subcontract the price of which is expected to exceed $100,000; and

(2) Prior to the award of any other subcontract, the price of which is expected to exceed $100,000, or to the pricing of any subcontract change or other modification for which the price adjustment is expected to exceed $100,000, where the price or price adjustment is not based on adequate price competition, established catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation.

(b) The contractor shall require subcontractors to certify, in substantially the same form as that used in the certificate by the Prime Contractor to the Government, that, to the best of their knowledge and belief, the cost and pricing data submitted under (a) above are accurate, complete, and current as of the date of the execution, which date shall be as close as possible to the date of agreement on the negotiated price of the subcontract or subcontract change or modification.

(c) The contractor shall insert the substance of this clause including this paragraph (c) in each of his cost-reimbursement type, time and material, labor-hour, price redeterminable, or incentive subcontracts hereunder, and in any other subcontract hereunder which exceed $100,000 unless the price thereof is based on adequate price competition, established catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation. In each such excepted subcontract hereunder which exceed

PROPOSED RULES

$100,000, the contractor shall insert the substance of the following clause:

SUBCONTRACTOR COST AND PRICING DATA-PRICE ADJUSTMENTS

(a) Paragraphs (b) and (e) of this clause shall become operative only with respect to any change or other modification made pursuant to one or more provisions of this contract which involves a price adjustment in excess of $100,000. The requirements of this clause shall be limited to such price adjustments.

(b) The contractor shall require subcontractors hereunder to submit cost or pricing data under the following circumstances.

(1) Prior to award of any cost-reimbursement type, time and material, labor-hour, Incentive, or price redeterminable subcontract, the price of which is expected to exceed $100,000; and

(2) Prior to award of any other subcontract, the price of which is expected to exceed $100,000, or to the pricing of any subcontract change or other modification for which the price adjustment is expected to exceed $100,000, where, the price or price adjustment is not based on adequate price competition, established catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation.

(c) The contractor shall require subcontractors to certify, in substantially the same form as that used in the Certificate by the Prime Contractor to the Government, that, to the best of their knowledge and bellef, the cost and pricing data submitted under (b) above are accurate, complete, and current as of the date of the execution, which date shall be as close as possible to the date of agreement on the negotiated price of the contract modification.

(d) The contractor shall insert the substance of this clause including this paragraph (d) in each subcontract hereunder which exceeds $100,000.

§ 14H-70.633

Buy American Act.
BUY AMERICAN ACT

(a) The Buy American Act (41 US.C. 10d) requires, with certain exceptions, that in the procurement of supplies and services only domestic source end products shall be acquired for public use.

(b) The provisions of Part 1-6 of the Federal Procurement Regulations (41 CFR 1-6) Ideals with the Buy American Act and its application to Government contracts.

(c) The provisions of Part 1-6 of the Federal Procurement Regulations (41 CFR 1-6) are applicable to this contract and any subcontracts entered into under the contract. Questions concerning the Buy American Act and its applicability in specific circumstances should be directed to the contracting officer.

§ 14H-70.634 Anti-Kickback Act.

ANTI-KICKBACK ACT

(a) Pub. L. 86-695, September 2, 1960 (41 U.S.C. 51-54) among other things, prohibits the payment, directly or indirectly, by or on behalf of a subcontractor in any tier under any Government negotiated contract of any fee, gift, or gratuity to the prime contractor or any higher tier subcontractor or any offcer, agent, partner or employee thereof, as an inducement or acknowledgement for the award of a subcontract or order.

(b) The provisions of Pub. L. 86-895, are set forth in more detall in § 1-1.320 of the Federal Procurement Regulations (41 CFR 1-1) and are applicable to this contract and any subcontracts entered into under the contract.

The settlement of any contracts cancelled or reassumed for the reasons set forth in 14H-70.701 shall be as mutually agreed to by the Bureau and the contractor. If mutual agreement cannot be reached, the principles set forth in Subpart 1-8.6 of this title shall be used to arrive at the settlement. Subpart 14H-70.8-Bonds and Insurance § 14H-70.801 Scope of subpart.

This subpart deals with the requirement for tribal organizations to furnish bid guarantees, performance bonds and payment bonds on contracts for construction.

§ 14H-70.802 Policy on use of bid guar

antees.

Bid guarantee will not be required in connection with construction contracts negotiated on a sole source basis with an Indian tribe or an Indian organization serving as a governmental instrumentality of an Indian tribe: Provided that such tribe or tribal organization shall require any potential subcontractor to furnish a bid guarantee in the amount and manner set forth in § 1-10.103-2 of this title.

§ 14H-70.803 Performance bonds,

(a) Performance bonds will not be required from an Indian tribe or Indian organization serving as a governmental instrumentality or an Indian tribe: Provided that such tribe or tribal organization shall require any subcontractor performing work under the contract to provide a performance bond in the amount and manner set forth in § 1-10.104.1 of this title.

(b) The clause to be included in construction contracts with Indian tribes and Indian organizations relative to performance bonds is set forth in 14H70.621.

§ 14H-70.804 Payment bonds.

(a) Payment bonds will not be required from an Indian tribe or Indian organization serving as a governmental instrumentality, of an Indian tribe: However, such tribe or tribal organization shall require any subcontractor performing work under the contract to provide a payment bond in the amount and manner set forth in § 1-10.104-1 of the Federal Procurement Regulations.