[Code of Federal Regulations]

[Title 48, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR22.101-2]



[Page 408-409]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

                CHAPTER 1--FEDERAL ACQUISITION REGULATION

 

PART 22_APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS--Table of Contents

 

                    Subpart 22.1_Basic Labor Policies

 

Sec. 22.101-2  Contract pricing and administration.



    (a) Contractor labor policies and compensation practices, whether or 

not included in labor-management agreements, are not acceptable bases 

for allowing costs in cost-reimbursement contracts or for recognition of 

costs in pricing fixed-price contracts if they result in unreasonable 

costs to the Government. For a discussion of allowable costs resulting 

from labor-management agreements, see 31.205-6(b).

    (b) Labor disputes may cause work stoppages that delay the 

performance of Government contracts. Contracting officers shall impress 

upon contractors that each contractor shall be held accountable for 

reasonably avoidable delays. Standard contract clauses dealing with 

default, excusable delays, etc., do not relieve contractors or 

subcontractors from the responsibility for delays that are within the 

contractors' or their subcontractors' control. A delay caused by a 

strike that the contractor or subcontractor could not reasonably prevent 

can be excused; however, it cannot be excused beyond the point at which 

a reasonably diligent contractor or subcontractor could have acted to 

end the strike by actions such as--

    (1) Filing a charge with the National Labor Relations Board to 

permit the Board to seek injunctive relief in court.

    (2) Using other available Government procedures.

    (3) Using private boards or organizations to settle disputes.

    (c) Strikes normally result in changing patterns of cost incurrence 

and therefore may have an impact on the allowability of costs for cost-

reimbursement contracts or for recognition



[[Page 409]]



of costs in pricing fixed-price contracts. Certain costs may increase 

because of strikes; e.g., guard services and attorney's fees. Other 

costs incurred during a strike may not fluctuate (e.g., fixed costs such 

as rent and depreciation), but because of reduced production, their 

proportion of the unit cost of items produced increases. All costs 

incurred during strikes shall be carefully examined to ensure 

recognition of only those costs necessary for performing the contract in 

accordance with the Government's essential interest.

    (d) If during a labor dispute, the inspectors' safety is not 

endangered, the normal functions of inspection at the plant of a 

Government contractor shall be continued without regard to the existence 

of a labor dispute, strike, or picket line.



[48 FR 42258, Sept. 19, 1983, as amended at 68 FR 43866, July 24, 2003]