ing services: utility, construction, transportation, research, insurance, and fund depository. The term "government contract" does not include (1) agreements in which the parties stand in the relationship of employer and employees, and (2) federally-assisted contracts.

in

(m) The term "handicapped dividual" means any individual who has a physical or mental disability which for such individual constitutes or results in a substantial barrier to employment, provided such individual has reasonably benefited in terms of employability from any of the types of services (including certification) provided pursuant to Titles I and III of the Act or their equivalent.

(n) The term "modification" means any alteration in the terms and conditions of a contract, including supplemental agreements, amendments, and extensions.

(0) The term "person" means any natural person, corporation, partnership or joint venture, unincorporated, association, State or local government, and any agency, instrumentality, or subdivision of such a government.

(p) The term "prime contractor" means any person holding a contract, and for the purposes of Subpart B of this part, any person who has held a contract subject to the Act.

(q) The term “procurement activity" means the organizational element of a federal agency which has responsibility to contract for the procurement of personal property or non-personal services, including construction.

(r) The term "recruiting and training agency" means any person who refers workers to any contractor or subcontractor, or who provides or supervises apprenticeship or training for employment by any contractor or subcontractor.

(s) The term "rules, regulations, and relevant orders of the Secretary of Labor" used in paragraph (d) of the affirmative action clause means rules, regulations, and relevant orders of the Secretary of Labor or his designee issued pursuant to the Act.

(t) The term "Secretary" means the Secretary of Labor, U.S. Department of Labor, or his designee.

(u) The term "subcontract" means any agreement or arrangement between a contractor and any person (in which the parties do not stand in the relationship of an employer and an employee):

(1) For the furnishing of supplies or services or for the use of real or personal

property, including lease arrangements, which, in whole or in part, is necessary to the performance of any one or more contracts; or

(2) Under which any portion of the contractor's obligation under any one or more contracts is performed, undertaken, or assumed.

(v) The term "subcontractor" means any person holding a subcontract and, for the purposes of Subpart B of this part, any person who has held a subcontract subject to the Act. The term "first-tier subcontractor" refers to a subcontractor holding a subcontract with a prime contractor.

(w) The term "United States" as used herein shall include the several States, the District of Columbia, the Virgin Islands, the Commonwealth of Puerto Rico, Guam, the Panama Canal Zone, American Samoa and the Trust Territory of the Pacific Islands. § 741.3

Affirmative action clause.

Each procuring activity shall include the following affirmative action clause in each of its nonexempt Government contracts (and modifications thereof if not included in the original contract). EMPLOYMENT OF THE HANDICAPPED

(This clause applies to all nonexempt contracts and subcontracts which exceed $2,500 as follows: (1) Part A applies to contracts and subcontracts which provide for performance in less than 90 days, (2) Parts A and B apply to contracts and subcontracts which provide for performance in 90 days or more and the amount of the contract or subcontract is less than $500,000, and (3) Parts A, B, and C apply to contracts and subcontracts which provide for performance in 90 days or more and the amount of the contract or subcontract is $500,000 or more.)

PART A

(a) The contractor will not discriminate against any employee or applicant for employment because of physical or mental handicap in regard to any position for which the employee or applicant for employment is qualified. The contractor agrees to take affirmative action to employ, advance in employment and otherwise treat qualified handicapped individuals without discrimination based upon their physical or mental handicap in all employment practices such as the following: employment, upgrading, demotion or transfer, recruitment or recruitment advertising: layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship.

(b) The Contractor agrees that, if a handicapped individual files a complaint with the Contractor that he is not complying with the requirements of the Act, he will (1) investigate the complaint and take appropriate action consistent with the requirements of 20 CFR 741.29 and (2) maintain on file for three years, the record regarding the complaint and the actions taken.

(c) The Contractor agrees that, if a handicapped individual files a complaint with the Department of Labor that he has not complied with the requirements of the Act, (1) he will cooperate with the Department in its Investigation of the complaint, and (2) he will provide all pertinent information regarding his employment practices with respect to the handicapped.

(d) The Contractor agrees to comply with the rules and regulations of the Secretary of Labor in 20 CFR Ch VI, Part 741.

(e) In the event of the Contractor's noncompliance with the requirements of this clause, the contract may be terminated or suspended in whole or in part.

(f) This clause shall be included in all subcontracts over $2,500.

PART B

(g) The Contractor agrees (1) to establish an affirmative action program, including appropriate procedures consistent with the guidelines and the rules of the Secretary of Labor, which will provide the affirmative action regarding the employment and advancement of the handicapped required by P.L. 93-112, (2) to publish the program in his employee's or personnel handbook or otherwise distribute a copy to all personnel, (3) to review his program on or before March 31 of each year and to make such changes as may be appropriate, and (4) to designate one of his principal officials to be responsible for the establishment and operation of the program.

(h) The Contractor agrees to permit the examination by appropriate contracting agency officials or the Assistant Secretary for Employment Standards or his designee, of pertinent books, documents, papers and records concerning his employment and advancement of the handicapped.

(1) The Contractor agrees to post in conspicious places, available to employees and applicants for employment, notices in a form to be prescribed by the Assistant Secretary for Employment Standards, provided by the contracting officer stating contractor's obligation under the law to take affirmative action to employ and advance in employment qualified handicapped employees and applicants for employment and the rights and remedies available.

(1) The Contractor will notify each labor union or representative of workers with which he has a collective bargaining agreement or other contract understanding, that the contractor is bound by the terms of Section 503 of the Rehabilitation Act, and is

committed to take affirmative action to employ and advance in employment physically and mentally handicapped individuals.

PART C

(k) The Contractor agrees to submit a copy of his affirmative action program to the Assistant Secretary for Employment Standards within 90 days after the award to him of a contract or subcontract.

(1) The contractor agrees to submit a summary report to the Assistant Secretary for Employment Standards, by March 31 of each year during performance of the Contract, and by March 31 of the year following completion of the contract, in the form prescribed by the Assistant Secretary, covering employment and complaint experience, accommodations made and all steps taken to effectuate and carry out the commitments set forth in the affirmative action program. § 741.4 Affirmative action policy.

(a) General requirements. Under the affirmative action obligation imposed by section 503 of the Rehabilitation Act of 1973, contractors are required to take affirmative action to employ and advance in employment qualified handicapped individuals. Such action shall apply to employment practice, including, but not limited to the following: Employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship.

(b) Outreach and positive recruitment. Contractors shall review their employment practices to determine whether their programs provide the required affirmative action for employment and advancement of qualified handicapped individuals. Based upon the findings of such reviews, contractors shall undertake appropriate outreach and positive recruitment activities, such as those listed below. It is not contemplated that contractors will necessarily undertake all of the listed activities. The scope of a contractor's efforts shall depend upon all the circumstances, including the extent in which existing employment practices are adequate and the contractor's size and resources.

(1) Internal communication of the contractor's obligation to engage in affirmative action efforts to employ qualified handicapped individuals in such a manner as to foster understanding, acceptance and support among the contractor's executive, management, supervisory and all other employees and to encourage such persons to take the nec

essary action to aid the contractor in meeting this obligation.

(2) Development of reasonable internal procedures to insure that the contractor's obligation to engage in affirmative action to employ and promote qualified handicapped individuals is being fully implemented.

(3) Periodically informing all employees of the contractor's commitment to engage in affirmative action to increase employment opportunities for qualified handicapped individuals.

(4) Enlisting the assistance and support of all recruiting sources (including the State Employment Services, State vocational rehabilitation agencies or facilities, sheltered workshops, college placement officers, State education agencies, labor organizations, and social service organizations serving handicapped individuals) for the contractor's commitment to provide meaningful employment opportunities to qualified handicapped individuals. (A list of national organizations serving the handicapped, many of which have State or local affiliates, is found in the "Directory of Organizations Interested in the Handicapped", published by the People to People Committee on the Handicapped, 1146 16th Street, NW., Washington, D.C. 20036.)

(5) Engaging in recruitment activities at educational institutions which participate in training of the handicapped, such as schools for the blind, deaf, or retarded.

(6) Establishment of meaningful contacts with appropriate social service organizations, Vocational Rehabilitation agencies or facilities, for such purposes as advice, technical assistance and referral of potential employees.

(7) Reviewing employment records to determine the availability of promotable and transferrable qualified handicapped individuals presently employed, and to determine whether their present and potential skills are being fully utilized or developed.

(8) Use of appropriate media for institutional and employment advertising to indicate the contractor's commitment to nondiscrimination and affirmative action under this part.

(c) Accommodation to physical and mental limitations of employees. A contractor must attempt to make a reasonable accommodation to the physical and mental limitations of an employee or applicant unless the contractor can

§ 741.6 Certification of handicap.

(a) Any handicapped individual may request, at any time, a certification of his handicap from any Vocational Rehabilitation agency or facility listed by the Employment Standards Administration. such lists shall be available through local U.S. Department of Labor, Employment Standards Administration offices. The certification shall be in the form prescribed by the Secretary, and shall represent the determination of a facility listed by the Employment Standards Administration that the individual is handicapped and has benefited in employability from a type of service provided pursuant to Title I and III of the Act or their equivalent.

(b) Handicapped individuals filing administrative complaints under this part may do so only upon certification of their handicapping disability or condition as provided in paragraph (a) of this section.

§ 741.8 Listing of employment openings.

The mandatory listing obligation of 41 CFR Part 50-250, which requires contractors to list their job openings with State employment services offices shall be utilized by State employment security agencies to refer qualified handicapped individuals.

§ 741.9 Labor unions and recruiting and training agencies.

(a) Whenever performance in accordance with the affirmative action clause or any matter contained in the regulations in this part may necessitate a revision of a collective bargaining agreement, the labor union or unions which are parties to such agreements shall be given an adequate opportunity to present their views to the contracting agency, or, if he has assumed jurisdiction, the Assistant Secretary.

(b) The Secretary shall use his best efforts, directly and through contractors.

Each nonexempt prime contractor and subcontractor under a Government contract shall include the affirmative action clause prescribed in § 741.3 in each of their nonexempt subcontracts.

§ 741.21 Adaptation of language.

Such necessary changes in language may be made to the affirmative action clause (see § 741.3) as shall be appropriate to identify properly the parties and their undertakings.

§ 741.22 Incorporation by reference.

The affirmative action clause may be incorporated by reference in Government transportation requests, contracts for deposit of Governmental funds, contracts for issuing and paying U.S. savings bonds and notes, contracts and subcontracts less than $50,000, and such other contracts as the Assistant Secretary may designate.

(2) Contracts and subcontracts for indefinite quantities. With respect to indefinite delivery-type contracts and subcontracts (including, but not limited to, open end contracts, requirement-type contracts, Federal Supply Schedule contracts, “call-type" contracts, and purchase notice agreements), the affirmative action clause shall be included unless the procuring activity has reason to believe that the amount to be ordered in any year under such contract will not exceed $2,500. The applicability of the affirmative action clause shall be determined by the purchaser at the time of award for the first year, and annually thereafter for succeeding years, if any. Notwithstanding the above, the affirmative action clause shall be applied to such contract whenever the amount of a single order exceeds $2,000. Once the affirmative action clause is determined to be applicable, the contract shall continue to be subject to such clause for its duration, regardless of the amounts ordered, or reasonably expected to be ordered in any year.

(3) Work outside the United States. Contracts and subcontracts are exempt from the requirements of the affirmative action clause with regard to work performed outside the United States by employees who were not recruited within the United States.

(4) Contracts with State or local governments. The requirements of the affirmative action clause in any contract or subcontract with a State or local government (or any agency, instrumentality or subdivision thereof) shall not be applicable to any agency, instrumentality or subdivision of such government which does not participate in work on or under the contract or subcontract.

(5) Facilities not connected with contracts. The Assistant Secretary may exempt from the requirements of the affirmative action clause any of a prime contractor's or subcontractor's facilities which he finds to be in all respects separate and distinct from activities of the prime contractor or subcontractor related to the performance of the contract or subcontract, provided that he also finds that such an exemption will not interfere with or impede the effectuation of the Act.

(b) Waivers-(1) Specific contracts and classes of contracts. The head of an agency, with the concurrence of the Assistant Secretary, may exempt any contract or subcontract from any or all of

the affirmative action clause when he deems that special circumstances in the national interest so require. The agency head, with the concurrence of the Assistant Secretary, may also exempt groups or categories of contracts or subcontracts of the same type where it is (1) in the national interest, (ii) found impracticable to act upon each request individually, and (iii) where group exemption will substantially contribute to convenience in administration of section 503 of the Act.

(2) National security. Any requirement set forth in these regulations in this part shall not apply to any contract or subcontract whenever the head of the contracting agency determines that such contract or subcontract is essential to the national security and that its award without complying with such requirements is necessary to the national security. Upon making such a determination, the head of the agency will notify the Assistant Secretary in writing within 30 days.

(c) Withdrawal of exemption. When any contract or subcontract is of a class exempted under this section other than contracts exempted under paragraph(b) (2) of this section, the Assistant Secretary may withdraw the exemption for a specific contract or subcontract or group of contracts or subcontracts when in his judgment such action is necessary or appropriate to achieve the purposes of the Act. Such withdrawal shall not apply to contracts or subcontracts awarded prior to the withdrawal, except that in procurements entered into by formal advertising, or the various forms of restricted formal advertising, such withdrawal shall not apply unless the withdrawal is made more than 10 calendar days before the date set for the opening of the bids.

§ 741.26 Duties of contracting agencies.

(a) General responsibility. Each agency shall cooperate with the Assistant Secretary in the performance of his responsibilities under the Act.

(b) Designation of agency official. The head of each agency, or his designee. shall identify and submit to the Assistant Secretary the name, address and telephone number of the official within the agency who is primarily responsible for implementation of this program within the Agency.

(c) Certification requirement. The following certification shall be included

in all invitations for bids and requests for proposals for contracts to be awarded after January 1, 1976.

HANDICAPPED

The offeror certifies with respect to the Employment of the Handicapped clause as follows:

1. He has, has not previously been awarded a contract which included the clause (If affirmative, execute 2.)

2. The time specified for contract performance | exceeded 90 days, | | did not exceed 90 days. (If more than 90 days, execute 3.)

3. The amount of the contract was [ ] less than $500,000, [ ] more than $500.000. and he has, has not published his program for the employment of the handicapped. (If more than $500,000, ezecute 4.)

4. He [ | has. [ I has not submitted the required annual report to the Assistant Secretary of Labor for Employment Standards.

5. He [ | has, | | has not made a good faith effort to effectuate and carry out his affirmative action program.

6. He will not award subcontracts to persons or concerns that have not published programs and submitted annual reports as required by the clause.

(d) Award of contracts. Effective January 1, 1976, each agency shall follow the procedures described in this paragraph (d) before awarding any nonexempt contracts.

(1) The certification required by this section shall be executed by all offerors prior to the award of a contract.

(2) Failure to execute the certificate shall be deemed a defect in form and not in substance, and the bidder or offeror shall be permitted to satisfy the requirements prior to award (see 41 CFR 1-2.405.)

(3) Awards shall not be made where the certifications indicate that required programs have not been published or annual reports have not been submitted to the Assistant Secretary of Labor for Employment Standards, or a good faith effort has not been made to effectuate and carry out affirmative action program.

(e) Criteria for good faith efforts. By October 1, 1975, the Assistant Secretary shall promulgate criteria for defining good faith "effort" to effectuate and carry out an affirmative action program. § 741.27 Noncompliance with the Affirmative Action Clause.

Noncompliance with the prime contractor's or subconstractor's obligations