48 CFR §222.406-9

1. (a)Withholding from contract payments. The contracting officer shall contact the labor advisor for assistance when payments due a contractor are not available to satisfy that contractor's liability for Construction Wage Rate Requirements or CWHSS statute wage underpayments or liquidated damages.
2. (c)Disposition of contract payments withheld or suspended—(3) Limitation on forwarding or returning funds. When disposition of withheld funds remains the final action necessary to close out a contract, the Department of Labor will retain withheld funds pending completion of an investigation or other administrative proceedings.
   1. (4)Liquidated damages.
      1. (A)The agency head may adjust liquidated damages of $500 or less when the amount assessed is incorrect or waive the assessment when the violations—
         1. (1)Were nonwillful or inadvertent; and
         2. (2)Occurred notwithstanding the exercise of due care by the contractor, its subcontractor, or their agents.
      2. (B)The agency head may recommend to the Administrator, Wage and Hour Division, that the liquidated damages over $500 be adjusted because the amount assessed is incorrect. The agency head may also recommend the assessment be waived when the violations—
         1. (1)Were nonwillful or inadvertent; and
         2. (2)Occurred notwithstanding the exercise of due care by the contractor, the subcontractor, or their agents.