Payment of Labor and Readjustment of Contracts.
Section 10
SEC. 10. Payment of Labor and Readjustment of Contracts.—All contracts for the furnishing of materials or supplies and for the construction of any project authorized in this Act, and previous Public Works Acts, executed by any person, association or corporation with the government after the approval of this Act shall contain provisions adequately covering the prosecution of the following: The contractor shall provide and have on hand every pay-day, in addition to the usual requirement of cash outlay for the contract work, a labor fund in an amount sufficient to cover each fifteen-day labor payroll for the project and payment to the laborers and employees shall be made within three days after every pay-period. Payment of wages and salaries to laborers and employees engaged in the project shall be witnessed by the engineer-in-charge of the work or his representative, who shall certify to such payment. Upon failure of the contractor to pay his laborers and employees within the period herein stated, the Government shall forthwith make such payment out of the funds of the project, in which case the sum paid out plus a surcharge of one per cent shall be deducted from any amount due or to become due the contractor without prejudice to the right of the Government to rescind the contract. Should the Government, at any time during the effectivity of a contract, impose, abolish, modify any tax, custom duties, license, impost, fee or other similar charges, or enact, amend or repeal any law affecting the number of hours of labor permissible a day or the number of days a week or the wages or salaries to be paid to laborers and employees, which would directly increase or decrease the cost of materials or the cost of the construction work beyond or under the amount stipulated in the contract, the contract amount shall be readjusted accordingly by a mittee, hereby created for this purpose, composed of the Auditor General as Chairman, the Secretary of Public Works and Communications and the Commissioner of the Budget as members: Provided, That the party seeking adjustment shall first apply for same in writing, stating therein the reasons justifying the change as well as the data and computations in sufficient detail which determine accurately the amount of the change.