§6503 — Title 41 Public Contracts | U.S. Code

Summary

When a contractor breaks a required promise in certain federal contracts, the contractor must pay set penalties to the U.S. government. The penalties include $10 per day for each worker under 16 and for each incarcerated person who was knowingly used, plus the full amount of any wages that were underpaid (including money lost to improper deductions, rebates, or refunds). The agency that made the contract can cancel it and hire others, charging any extra cost to the original contractor. The government can withhold the money from any payments due the contractor or the Attorney General can sue to get it. Money recovered for underpaid wages goes into a special account and will be paid to the worker when the Secretary orders it, but the worker must claim it within one year after the contractor was actually notified about the withholding or recovery.

Title 41, §6503

Public Contracts — Source: USLM XML via OLRC

(a)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)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 liquidated 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 employed 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)In addition to the Federal Government being entitled to damages described in subsection (b), the agency of the United States that made the contract may cancel the contract and make open-market purchases or make other contracts for the completion of the original contract, charging any additional cost to the original contractor.

(d)An amount due the Federal Government 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 Attorney General.

(e)An amount withheld or recovered under subsection (d) that is based on an underpayment 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 withheld 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.

Notes & Related Subsidiaries

Historical and Revision Notes

Revised SectionSource (U.S. Code)Source (Statutes at Large) 650341:36.June 30, 1936, ch. 881, § 2, 49 Stat. 2037. In subsection (b)(1), the words “individual under 16 years of age” are substituted for “male person under sixteen years of age or each female person under eighteen years of age” to reflect the interpretation of this provision subsequent to enactment of civil rights laws such as section 703 of the Civil Rights Act of 1964 (42:2000e–2), as carried out by the Department of Labor through 41 C.F.R. Part 50–201.104. The words “incarcerated individual” are substituted for “convict laborer” because of the exception to convict labor that satisfies the conditions of 18:1761(c). section 1761 does not apply to non-incarcerated convicts. Subsection (b)(2) is substituted for “a sum equal to the amount of any deductions, rebates, refunds, or underpayment of wages due to any employee engaged in the performance of such contract” for consistency in the chapter. In subsection (c), the words “made the contract” and “make other contracts” are substituted for “entering into such contract” and “enter into other contracts”, respectively, for consistency in the revised title. In subsection (d), the words “suit brought by the Attorney General” are substituted for “suits brought in the name of the United States of America by the Attorney General thereof ” to eliminate unnecessary words.

§6503 Breach or Violation of Required Contract Terms

Summary

Title 41, §6503

Notes & Related Subsidiaries

Historical and Revision Notes

Citations & Metadata