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Secretary of the Department in which the Coast Guard is oper-
ating certifies to the employer to be necessary to the national de-
fense. 
CHAPTER 65—CONTRACTS FOR MATERIALS, SUPPLIES, 
ARTICLES, AND EQUIPMENT EXCEEDING $10,000 
Sec. 
6501.
Definitions. 
6502.
Required contract terms. 
6503.
Breach or violation of required contract terms. 
6504.
Three-year prohibition on new contracts in case of breach or violation. 
6505.
Exclusions. 
6506.
Administrative provisions. 
6507.
Hearing authority and procedures. 
6508.
Authority to make exceptions. 
6509.
Other procedures. 
6510.
Manufacturers and regular dealers. 
6511.
Effect on other law. 
§ 6501. Definitions 
In this chapter— 
(1) AGENCY OF THE UNITED STATES.—The term ‘‘agency of the 
United States’’ means an executive department, independent establish-
ment, or other agency or instrumentality of the United States, the Dis-
trict of Columbia, or a corporation in which all stock is beneficially 
owned by the Federal Government. 
(2) PERSON.—The term ‘‘person’’ includes one or more individuals, 
partnerships, associations, corporations, legal representatives, trustees, 
trustees in cases under title 11, or receivers. 
(3) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of 
Labor. 
§ 6502. Required contract terms 
A contract made by an agency of the United States for the manufacture 
or furnishing of materials, supplies, articles, or equipment, in an amount 
exceeding $10,000, shall include the following representations and stipula-
tions: 
(1) MINIMUM WAGES TO BE PAID.—All individuals employed by the 
contractor in the manufacture or furnishing of materials, supplies, arti-
cles, or equipment under the contract will be paid, without subsequent 
deduction or rebate on any account, not less than the prevailing min-
imum 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 pur-
chases or contracts relating to industries that have been the subject 
matter of a determination by the Secretary. 
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(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 employer 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 individual will be employed by the contractor in 
the manufacture or furnishing of materials, supplies, articles, or equip-
ment under the contract, except that this section, or other law or exec-
utive order containing similar prohibitions against the purchase of 
goods by the Federal Government, does not apply to convict labor that 
satisfies the conditions of section 1761(c) of title 18. 
(4) STANDARDS OF PLACES AND WORKING CONDITIONS WHERE CON-
TRACT PERFORMED.—No part of the contract will be performed, and 
no materials, supplies, articles, or equipment will be manufactured or 
fabricated under the contract, in plants, factories, buildings, or sur-
roundings, or under working conditions, that are unsanitary, haz-
ardous, 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 evidence of compliance with 
this paragraph. 
§ 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 damages for any other breach 
of the contract, the party responsible for a breach or violation described in 
subsection (a) is liable to the Federal Government for the following liq-
uidated damages: 
(1) An amount equal to the sum of $10 per day for each individual 
under 16 years of age and each incarcerated individual knowingly em-
ployed in the performance of the contract. 
(2) An amount equal to the sum of each underpayment of wages due 
an employee engaged in the performance of the contract, including any 
underpayments arising from deductions, rebates, or refunds. 
(c) CANCELLATION AND ALTERNATIVE COMPLETION.—In addition to the 
Federal Government being entitled to damages described in subsection (b), 
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the agency of the United States that made the contract may cancel the con-
tract and make open-market purchases or make other contracts for the com-
pletion of the original contract, charging any additional cost to the original 
contractor. 
(d) RECOVERY OF AMOUNTS DUE.—An amount due the Federal Govern-
ment 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 At-
torney General. 
(e) EMPLOYEE REIMBURSEMENT FOR UNDERPAYMENT OF WAGES.—An 
amount withheld or recovered under subsection (d) that is based on an un-
derpayment of wages as described in subsection (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 with-
held or recovered. However, an employee’s claim for payment under this 
subsection may be entertained only if made within one year from the date 
of actual notice to the contractor of the withholding or recovery. 
§ 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 stip-
ulation included in a contract under section 6502 of this title. 
(b) THREE-YEAR PROHIBITION.—Unless the Secretary recommends oth-
erwise, a contract described in section 6502 of this title may not be awarded 
to a person named on the list under subsection (a), or to a firm, corpora-
tion, partnership, or association in which the person has a controlling inter-
est, until 3 years have elapsed from the date of the determination by the 
Secretary that a breach or violation occurred. 
§ 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 PRODUCTS.—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 Agriculture for the purchase 
of agricultural commodities or products of agricultural commodities. 
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(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 railway line where published tariff rates are in effect; 
or 
(2) common carriers subject to the Communications Act of 1934 (47 
U.S.C. 151 et seq.). 
§ 6506. Administrative provisions 
(a) IN GENERAL.—The Secretary shall administer this chapter. 
(b) REGULATIONS.—The Secretary may make, amend, and rescind regu-
lations as necessary to carry out this chapter. 
(c) USE OF GOVERNMENT OFFICERS AND EMPLOYEES.—The Secretary 
shall use Federal officers and employees and, with a State’s consent, State 
and local officers and employees as the Secretary finds necessary to assist 
in the administration of this chapter. 
(d) APPOINTMENTS.—The Secretary shall appoint an administrative offi-
cer and attorneys, experts, and other employees from time to time as the 
Secretary finds necessary for the administration of this chapter. The ap-
pointments are subject to chapter 51 and subchapter III of chapter 53 of 
title 5 and other law applicable to the employment and compensation of offi-
cers and employees of the Federal Government. 
(e) INVESTIGATIONS.—The Secretary, or an authorized representative of 
the Secretary, may make investigations and findings as provided in this 
chapter and may, in any part of the United States, prosecute an inquiry 
necessary to carry out this chapter. 
§ 6507. Hearing authority and procedures 
(a) RECORD
AND HEARING REQUIREMENTS
FOR WAGE DETERMINA-
TIONS.—A wage determination under section 6502(1) of this title shall be 
made on the record after opportunity for a hearing. 
(b) AUTHORITY TO HOLD HEARINGS.—The Secretary or an impartial 
representative designated by the Secretary may hold hearings when there is 
a complaint of breach or violation of a representation or stipulation included 
in a contract under section 6502 of this title. The Secretary may initiate 
hearings on the Secretary’s own motion or on the application of a person 
affected by the ruling of an agency of the United States relating to a pro-
posal or contract under this chapter. 
(c) ORDERS TO COMPEL TESTIMONY.—The Secretary or an impartial 
representative designated by the Secretary may issue orders requiring wit-
nesses to attend hearings held under this section and to produce evidence 
and testify under oath. Witnesses shall be paid fees and mileage at the same 
rates as witnesses in courts of the United States. 
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