HomeMy WebLinkAboutN-568 - Construction Contract ManagementCITY OF PASCO
ADMINISTRATIVE ORDERS
Administrative Order No. 568
Community & Economic Development
Subject: Construction Contract Management for Federally
Funded Block Grant Projects (Section 8)
Initial Effective Date:
February 17, 2016
Revised
Approved
I. PURPOSE:
This material describes a step-by-step process for managing construction contracts in
compliance with federal, state and local requirements. Each grantee undertaking a
Federal block grant assisted construction project of greater than $2,000 must have a
contract management system in place to ensure that contractors perform in accordance
with contract terms, conditions, specifications and applicable state and federal
requirements. The system must provide for:
A. Contract Award
B. Conduct of the preconstruction conference
C. Notice to Proceed
D. Review of contractor and subcontractor compliance with labor standards and equal
opportunity requirements:
1. Conduct Payroll Interviews
2. Use of Force Account Personnel
3. Conduct On-site Labor and Progress Interviews
4. Resolution of labor standards violations
5. On-site inspections
E. Review of change order requests
F. Processing pay requests
G. Project closeout
H. Acceptance of work
I. Release of retainage
J. Recordkeeping
Administrative Order No. 567 provides a step-by-step process for procuring construction
contracts in compliance with federal, state and local requirements. For Labor Compliance
requirements see Administrative Order No. 569 Labor Compliance Standards (Section 9).
II. DEPARTMENTS AFFECTED:
All Departments and subrecipients receiving HUD assistance for construction projects.
1. RCW 39.04, Public Works
2. PUBLIC LAW 107 -217 -AUG. 21, 2002, Davis Bacon Act
3. RCW 39.12, Prevailing Wage
4. RCW 60.28, Retainage
IV. ATTACHMENTS:
1. Attachment 8-A: Sample Preconstruction Conference Record Report Form
2. Attachment 8-B: Notification of Contract Award and Start of Construction
3. Attachment 8-C: Blank Certified Payroll and Statement of Compliance Form W11347
4. Attachment 8-1): Weekly Payroll Review Checklist
5. Attachment 8-E: Davis Bacon Guide for Local Contracting Agencies
6. Attachment 8-F: On -Site Inspection Checklist
7. Attachment 8-G: Sample Employee Interview Form HUD 1 l
8. Attachment 8-H: Labor Relations Letter LR No. 92-02
9. Attachment 8-I: Retainage Release Checklist/Contractor Letter
10. Attachment 8-J: Semi -Annual Labor Standards Compliance Report Data Form
HUD4710
11. Attachment 8-K: Davis -Bacon Applicability Side Service Connections Matrix
12. Attachment 8-L: Sample: Completed Certified Payroll and Statement of Compliance
Form WH -347
13. Attachment 8-M: RCW 39.04 Public Works
14. Attachment 8-N: Weekly Report
15. Attachment 8-0: Notice of Completion of Public Works Contract
V. DEFINITIONS:
Award means the formal decision by the City notifying a responsible bidder with the
lowest responsive bid of the City's acceptance of the bid and intent to enter into a
contract with the bidder.
Contract means a contract in writing for the execution of public work for a fixed or
determinable amount duly awarded after advertisement and competitive bid, or a contract
awarded under the small works roster process.
Municipality means every city, county, town, port district, district, or other public
agency authorized by law to require the execution of public work, except drainage
districts, diking districts, diking and drainage improvement districts, drainage
improvement districts, diking improvement districts, consolidated diking and drainage
improvement districts, consolidated drainage improvement districts, consolidated diking
improvement districts, irrigation districts, or other districts authorized by law for the
reclamation or development of waste or undeveloped lands.
Public work means all work, construction, alteration, repair, or improvement other than
ordinary maintenance, executed at the cost of the state or of any municipality, or which is
by law a lien or charge on any property. All public works, including maintenance when
performed by contract shall comply with RCW 39.12.
Responsible bidder means a contractor who meets the criteria in RCW 39.04.350.
Administrative Order No. 568 — Construction Contract Management for Federally Funded Block Grant Projects
Page 2
State means the state of Washington and all departments, supervisors, commissioners,
and agencies of the state.
Vl. PROCEDURE:
As a supplement to information provided in this Administrative Order, it is recommended
that a copy of Davis Bacon Guide for Local Contracting Agencies 4813 -LR 2011 be
obtained and review by Department Staff unfamiliar with managing federally -funded
public work contracts.
Making Davis -Bacon Work -- A Contractor's Guide to Prevailing Wage Requirements
for Federally -Assisted Construction should also be provided to the project prime
contractor if new to public works bidding and contracting. The link to the Guide can be
found at http://www.hud.gov/offices/olr.
A. CONTRACT AWARD
The City Manager, or his designee, shall be authorized to award public works
contracts to the lowest responsible bidder for projects under $50,000. For projects in
excess of $50,000 the Manager shall present all quotations/bids and recommendation
for award of the contract to the lowest qualified bidder to the City Council for
approval and award. However public works projects under $100,000, the City
Manager shall have the authority to award public works contracts without City
Council's approval, provided that the City Council shall ratify the City Manager's
approval at the next scheduled City Council Meeting.
The City Manager, or his designee, shall be authorized to award all documents related
to the acquisition, rehabilitation, and resale of real properties for the Council -
approved HOME Investment Partnerships and Neighborhood Stabilization Programs.
The Community & Economic Development Director, or his designee, is delegated
authority to sign as the buyer in submission of offers on real properties. All signature
authority not specifically withheld shall remain with the City Manager unless written
delegation of authority appends or alters it. All offers to purchase real property are
subject to the approval of the Pasco City Manager and shall be made contingent upon
the property meeting all program requirements.
B. CONDUCT THE PRECONSTRUCTION CONFERENCE
The preconstruction conference occurs after the award and signing of the contract and
before the contractor is issued a Notice To Proceed with the project. It is the
grantee's responsibility to schedule the meeting and to inform all involved and
interested parties of the conference. The grantee, or its representative, must conduct
the meeting, document the topics and information covered, and answer questions
raised by those in attendance. Attachment 8-A (Pre -Construction Conference
Record) provides the minimum subject areas and questions that should be addressed,
if applicable. The preconstruction conference must involve the prime contractor and
could include any subcontractors that have been identified at the time of contract
signing. The project engineer or architect and the local official responsible for
Administrative Order No. 568 — Construction Contract Management for Federally Funded Block Grant Projects
Page 3
contract administration, plus any other local staff who will be involved in the review
of contractor/subcontractor compliance, should also participate in the conference.
The preconstruction conference is used to:
• Review the responsibilities of the engineer, grantee jurisdiction (owner),
contractor, and any other agencies or parties contributing to or involved in the
project.
• Discuss general contract provisions, including alternative specifications (if any),
notice to proceed, completion schedule, liquidated damages, requests for time
extensions, partial payment procedures, guarantees and warranties for materials,
workmanship and installed materials, change orders, etc.
• Review project inspection and reporting responsibilities of the engineer and
grantee.
• Describe labor standards and equal opportunity requirements, including Section 3,
Title VI, Section 109, Executive Order 11246, prevailing wage rates, wage rate
agreements, apprentices and trainees, fringe benefit requirements, weekly payrolls
and on-site interviews.
• Explain requirements for final acceptance of work, special testing and/or site
cleanup.
• Distribute necessary forms (i.e., such as certified payroll), posters and
informational materials to the contractor and subcontractors.
C. SUBMIT THE PRECONSTRUCTION CONFERENCE RECORD
The grantee must provide a record of the preconstruction conference proceedings to
the Block Grant Administrator. The Pre -Construction Conference Record form,
Attachment 8-A, can be used for that purpose.
This forth is designed to cover all of the information that should normally be
addressed during the meeting and includes spaces for the grantee, contractor and
engineer to sign and verify that the material was discussed. When contractors and
subcontractors leave the conference they should understand applicable state and
federal labor standards and civil rights laws, and what is expected of them in terms of
compliance. They should also understand what documents and reports are required
and how the grantee will conduct its on-site monitoring and review processes. The
grantee must also submit notification to the Block Grant Administrator of the contract
award and start of construction (Attachment 8-13) within ten (10) days after start of
construction.
D. PROVIDE NOTICE TO PROCEED
Once the preconstruction conference has been conducted, the grantee can provide a
notice to proceed to the contractor. The notice simply conveys authorization to the
contractor to begin work on the project. This means that all insurance, bonds, and
other required forms, including Attachment 7-B, 7-C, 7-D, 7-E and 7-17, as applicable,
have been signed and submitted by the contractor, and the grantee is confident that
the actual work can begin.
Administrative Order No. 568 — Construction Contract Management for Federally Funded Block Grant Projects
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E. CONDUCT PAYROLL REVIEWS
The Federal Copeland Act requires that workers be paid at least once a week, and
without any deductions or rebates except permissible deductions (such as taxes,
deductions the worker authorizes in writing, or those required by court processes).
The Act also requires contractors to maintain payroll records and submit weekly
certified payrolls and statements of compliance (Attachment 8C) to the grantee
jurisdiction certifying wages paid and deductions made. The prime contractor is
responsible for assuring all subcontractors submit weekly certified payrolls and
otherwise comply with applicable labor standards. Grantees, in turn, must review
these payrolls and certifications to determine that employees of the contractor and
subcontractors were paid appropriate wage rates for their job classifications on a
weekly basis. The appropriate wage rates are those determined pursuant to the
federal Davis -Bacon related acts and the State Prevailing Wage Act (RCW 39.12) by
the Federal Department of Labor and the State Department of Labor and Industries,
respectively. Grantees must stipulate in the Invitation for Bid (IFB) and contract that
contractors and subcontractors pay workers the higher of the prevailing state or
federal rates for each job classification involved in the project. Further, if the rate is
not shown in the Davis -Bacon related acts, an additional classification must be
obtained from the U.S. Department of Labor through the Block Grant Administrator
(see Attachment 9-A).
Grantees must also review payrolls to determine whether or not workers on the
construction project have received appropriate rates of overtime compensation. The
Contract Work Hours and Safety Standards Act (CWHSSA) requires that laborers
and mechanics receive overtime compensation at a rate of not less than one and one-
half times their regular (base) hourly wage after they have worked 40 hours in one
week on the CDBG funded project.
The initial payroll submitted by the contractor should be reviewed to check
compliance with each of these requirements. A careful review of the initial payroll is
useful for pinpointing errors and omissions, and correcting these problems early in
the construction process. The initial payroll review should determine that the
following requirements have been met:
• The payrolls were submitted on time.
• The forms were completed properly and on the initial payroll, the names,
addresses, job classifications and social security numbers for each employee were
included.
• All "self-employed owner subcontractors" who have no employees and perform
work on HUD -funded projects must be treated as an employee and be reported on
the certified payroll of the General Contractor (if employed by him) or on the
payroll of a subcontractor who has entered into a lower -tier subcontractural
agreement. In the event a prime or subcontractor has this situation, the following
procedures must be followed:
Report owner on the certified payroll of whoever hired him.
Provide their name, address and social security number.
State their classification of work (e.g., "finish carpenter").
Indicate daily hours of work, by date, and the total hours per week.
Administrative Order No. 568 — Construction Contract Management for Federally Funded Block Grant Projects
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Show the hourly rate of pay, with the gross amount earned in the week.
Enter "Self -Employed" and their contracting license number where the payroll
asks for "deductions."
• When the owner of the company is working with his employees and is performing
work covered by the Davis -Bacon wage decisions, the owner must be included on
the certified payroll he submits for his employees. The owner must list the
following information for himself on the certified payroll:
Name, address and social security number.
- Classification of work being performed.
- Daily hours worked by date.
- Total hours worked per week.
- "Self -Employed," "Owner," or "Owner/Operator," as appropriate, should be
entered on the remainder of the line (see Attachment 8-L for example).
• The wages and, when applicable, fringes listed on the certified payroll for each
job classification agree with those identified on the statement of intent to pay
prevailing wages at the higher of the state or federal rates, and with those
identified on applicable wage determination decisions (state or federal).
• The payrolls include all classifications being utilized even if not identified on the
statement of intent to pay prevailing wages.
• The payrolls include only permissible deductions such as: medical or hospital
care, pensions on retirement or death, compensation for injuries or illness
resulting from an occupational activity, unemployment benefits, life insurance,
accident insurance, vacation or holiday pay, or defraying costs of apprenticeship
or similar programs. The first time a certified payroll shows that voluntary
deductions have been taken out of an employee's wages, a copy of the employees
written authorization to the contractor authorizing those deductions must be
provided with the certified payroll. The payroll reviewer should always check for
the written authorization when applicable.
Also, anytime it is noted that an unusually large amount is being held for routine
deductions such as FICA, state industrial, etc., further investigation should be
accomplished.
• Where fringe benefits are paid into benefit plans, block 4(a) on the back of the
certified payroll must be marked. When the hourly wage rate paid on a payroll is
the same as or greater than the hourly wage rate required by the applicable wage
decision and the "Fringe Benefit Paid Into Plan" box on the back of the payroll
form is marked, the fringe benefit requirement is complete. It should be noted
that when a wage decision lists an hourly wage (i.e. $25 per hour) plus an hourly
fringe rate of a dollar amount plus a percentage (i.e. $7.50 + 3%), the 3% means
3% of the $25 hourly wage rate and not 3% of the $7.50 fringe benefit amount.
However, any time a contractor indicates fringe benefits being provided are used
to compensate for not paying hourly wage rates in cash equal to the amount
required in the applicable wage decision, the contractor should be required to
provide documentation explaining the nature and hourly dollar value of all fringe
benefits being provided. Also, if a grantee has any reason to question whether a
Administrative Order No. 568 — Construction Contract Management for Federally Funded Block Grant Projects
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contractor is actually paying benefits as claimed, documentation should be
requested from the contractor and verified.
• Where apprentices or trainees are identified on the payroll as working under State
or Federal Bureau of Apprenticeship and Training agreements or certifications,
copies of these documents must be included with the first payroll where the
apprentices' or trainees' name appears.
• The payroll form is signed.
Subsequent payroll reviews must be made on a weekly basis. Grantees must check
for mathematical errors, payment of appropriate wage and, when applicable, fringe
rates, instances of wage underpayments or overtime violations, timelines of the
payrolls, and discrepancies between information contained in the payrolls and
information gathered during on-site employee interviews. A Weekly Payroll Review
Checklist is included as Attachment 8-D. Attachment 8-L is a completed certified
payroll provided as an example.
F. USE OF FORCE ACCOUNT PERSONNEL
Under most Davis Bacon statutes, only employees of contractors or subcontractors
and certain owner -operated businesses are subject to Davis Bacon wage requirements.
In some instances, rather than contracting or subcontracting out construction work, a
grant recipient performs the construction in-house, with its own "force account"
employees. Such force account work is not usually subject to Davis Bacon wage
requirements under statutes that cover only employees of contractors or
subcontractors. Furthermore, the Department of Labor does not consider state or
local government to be a contractor, even if it enters into a contract to perform
construction work. However, under the Housing and Community Development Act
of 1974, a private firm that receives federal assistance funds indirectly from a
recipient pursuant to a written procurement contract or subgrant agreement that
provides for the performance of construction work is considered a contractor or
subcontractor, and the force account exception does not apply to construction activity
performed by employees of such a firm.
All code cities managing construction projects must adhere to Washington State law,
RCW 39.04, Public Works. Block Grant Administrator strongly encourages any
grantee undertaking a construction project to consult with the legal department and
Block Grant Administrator to ensure compliance with federal and state procurement
laws.
G. CONDUCT ON-SITE LABOR REVIEWS
The local management procedure must provide for visits to the construction site to
determine that:
• Appropriate notices and wage determinations are posted at the job site. The
contractor must post, in a prominent location at the job site, the appropriate
Davis -Bacon poster with a copy of the applicable wage determination (usually
stapled onto the poster) and any additional wage classifications that have been
issued for the project. The poster should list the name of the local labor standards
compliance person who may receive worker inquiries or complaints regarding the
Administrative Order No. 568 — Construction Contract Management for Federally Funded Block Grant Projects
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payment of prevailing wages. In addition, if the construction contract is over
$10,000, state law requires the contractor to post a copy of the approved
Statement of Intent to Pay Prevailing Wages.
Employees are working within the proper job classifications.
Attachment 8-F provides guidance on items to check during an on-site inspection.
H. CONDUCT EMPLOYEE INTERVIEWS
Employee interviews are conducted to establish the degree of compliance with Davis -
Bacon and related acts, and the nature and extent of violations, if any. They must be
conducted to assure as a minimum at least one interview, per contractor, per trade is
accomplished.
The employee interviewed should be informed that the information given is
confidential, and that his/her name will not be disclosed to the contractor or
subcontractor without written permission. Participating in the interview process is
volun for the employee. You may wish to note on the form, however, when an
employee refuses to be interviewed. While the interviewed employee does not sign
the interview form (see Attachment 8-G), must be signed and dated by the appropriate
representative for the grantee.
In addition to noting the employee's responses about wage classification, duties and
tools used, the interviewer should observe carefully what the employee is actually
doing. Any conflict between the observation and the worker's statements should be
noted on the form. The point of the interview is to assure that what the interviewer
observes the employee doing is consistent with the employee's statements, job
classification, wage rate, etc.
Once the employee interview information is gathered and recorded on an employee
interview form (Attachment 8-G), it must be compared to the applicable wage
decision and certified payroll information to ensure:
• Employees are being paid the amounts/rates stated on the payrolls.
• Employees are being properly compensated for overtime hours.
• Employees are receiving their full wages and fringe benefits and are not being
subjected to coercion or kickback tactics by the contractor/subcontractors.
• Contractors/subcontractors are using and paying apprentices and trainees
appropriately.
Appropriate action should be quickly initiated to resolve any discrepancies. Such
actions may include a review of the contractor's actual time sheets and payroll
records (including canceled checks and/or paycheck stubs). If a wage violation is
found to exist, appropriate steps should be taken immediately, and in writing, to
correct the violation. Once resolved, the contractor must furnish proof of wage
restitution as well as revised payrolls for the time periods in question.
Administrative Order No. 568 —Construction Contract Management for Federally Funded Block Grant Projects
Page 8
I. SUBMIT FIRST WEEK LABOR STANDARDS REVIEW PACKAGE
For each prime and subcontractor performing work on-site during the first week of
construction, the grantee must provide a copy of the following documentation to the
Block Grant Administrator within 21 days after the respective contractors begin work.
• Statement of Intent to Pay Prevailing Wages
• Certified Payroll for the first week pay period
• Employee hiterview Forms for first week
Each of the above documents must show evidence that the required information has
been checked by the grantee. For more information go to the Washington State
Department of Labor and Industries website at:
www.Ini.wa.p,ov/TradesLicensin revWage/IntentAffidavits/default.M.
The purpose for submitting the above information to Block Grant Administrator is to
assure that any problems or omissions in the grantee's labor standards review process
are detected early and appropriate corrections made early while easy to implement.
This First week labor standards package must be provided to Block Grant
Administrator and any problems noted should be resolved by the grantee before
the grantee's first voucher containing contractor construction costs will be
processed and paid by the City.
J. RESOLVE OVERTIME VIOLATIONS
When a grantee determines that a contractor or subcontractor has violated CWHSSA
requirements by failing to compensate a worker appropriately for overtime, the
following steps must be taken to resolve the problem:
• Determine the number of occurrences per employee and calculate the total
amount of money due each employee.
• Inform the prime contractor (who is responsible for the correction of all
violations) in writing of the violation(s) specifying that the violations must be
corrected within 30 days and what documentation will be accepted as proof of
payment to the underpaid employees. The employer will be required to report the
restitution paid on a corrected certified payroll. The corrected payroll will reflect
the period of time for which restitution is due (for example, Payrolls #1-6, or a
beginning and ending date.) The corrected payroll will list each employee to
whom restitution is due and their work classification; the total number of work
hours involved (daily hours are usually not applicable for restitution); the
adjustment wage rate (the difference between the required wage rate and the wage
rate paid); the gross amount of restitution due; deductions; and the net amount to
be paid. A signed Statement of Compliance must be attached to the corrected
certified payroll.
• Calculate the amount of liquidated damages due (i.e., $10 per violation, per
employee, per day) and inform the prime contractor (who is responsible for the
correction of all violations) in writing of the amount and the basis for the
computations.
Administrative Order No. 568 —Construction Contract Management for Federally Funded Block Grant Projects
Page 9
• The contractor shall have 60 days to file a written request for waiver or reduction
of liquidated damages; any such request shall be accompanied by a written
statement of reasons why waiver or reduction is justified; the only grounds for
requesting waiver or reduction are that the computation of liquidated damages is
incorrect or that the violation occurred inadvertently notwithstanding the exercise
of due care; and that absent a timely waiver or reduction requested, the
determination shall be final. HUD Handbook 1344. 1, Revl, Change 1, Section 3-
4(f) provides details for completing the waiver request process.
• If the amount of violation is under $10 per worker, the violation does not have to
be reported.
• Amounts in excess of $10 per worker require copies of corrected payrolls
supplied to the grantee as confirmation of payment to all affected employees.
• If over $10, the violation must be reported in writing to the Block Grant
Administrator. Anytime violation is $10 to $999.99, grantee should use
Attachment 84 to make the report. If violation is $1,000 or more, grantee should
immediately contact the Block Grant Administrator to receive assistance in
submitting a required Labor Standards Enforcement Report. Labor Relation
Letter No. LR -92-02 (see Attachment 8-H) provides instructions regarding
completion and submission of the Labor Standards Enforcement Report.
K. RESOLVE OTHER UNDERPAYMENTS
The following steps are required to resolve mathematical errors, misclassifications, or
other errors that result in the underpayment of wage or fringe rates:
• Calculate the difference between what should have been paid and what was paid.
• Inform the prime contractor (who is responsible for the correction of all
violations) in writing of the violation(s) specifying that the violation(s) must be
corrected within 30 days and if what if any documentation the Block Grant
Administrator needs to see as proof of payment to the underpaid employees. The
employer will be required to report the restitution paid on a corrected certified
payroll. The corrected payroll will reflect the period of time for which restitution
is due (for example, Payrolls #1-6, or a beginning and ending date). The
corrected payroll will list each employee to whom restitution is due and his or her
work classification; the total number of work hours involved (daily hours are
usually not applicable for restitution); the adjustment wage rate (the difference
between the required wage rate and the wage rate paid); the gross amount of
restitution due; deductions; and the net amount to be paid. A signed Statement of
Compliance must be attached to the corrected certified payroll.
• If the amount of violation is under $10 per worker, contractor confirmation of
wage restitution is not required.
• Amounts in excess of $10 per worker require copies of corrected payrolls as
confirmation of payment to all affected employees.
• If wage restitution exceeds $10 per worker, the violation must be reported in
writing to Block Grant Administrator. Anytime restitution from $10 to $999.99 is
involved, grantee should utilize Attachment 84 to make the report. If restitution
is $1,000 or more, grantee should immediately contact the Block Grant
Administrator to receive assistance in submitting a required Labor Standards
Administrative Order No. 568 — Construction Contract Management for Federally Funded Block Grant Projects
Page 10
Enforcement Report. Labor Relation Letter No. LR -92-02 (see Attachment 8-H)
provides instructions regarding completion and submission of the Labor
Standards Enforcement Report.
L. REPORT OTHER VIOLATIONS
Any evidence of coercion or kickbacks discovered by grantees must be reported to
Block Grant Administrator in writing.
M. DAVIS-BACON APPLICABILITY TO SIDE SERVICE CONNECTIONS
Davis -Bacon labor provisions may or may not apply to installation of side service
connections (water and sewer) on private, residential property. Several factors,
including project classification, types of activities involved, whether the project
provides direct or area benefit, and who signs the installation contract, affect Davis -
Bacon applicability. Attachment 8-K provides an overview of these factors in a
matrix format. When projects include side service connections, grantees should
contact their Block Grant Administrator to discuss appropriate ways to qualify
beneficiaries and to administer the side service portion of the project.
N. CONDUCT TECHNICAL INSPECTIONS
During construction, grantees are responsible for monitoring contractor/subcontractor
progress and compliance with technical requirements of the project. Typically, this
monitoring process is the responsibility of the project engineer, consulting engineer or
architect; however, the grantee should designate someone locally with oversight
responsibility. The purpose of the technical monitoring process is to ensure that the
project is constructed as planned, within budget and estimated timeframes, and within
specified quality and quantity standards.
O. MANAGE CHANGE ORDER REQUESTS
Grantees must have a procedure for reviewing and approving change order requests
which identifies who is responsible for review, who is responsible for approval, and
what criteria will be used to evaluate requests. At a minimum, the evaluation should
consider whether the request cost is reasonableness, change is necessary, and the
procedure should provide for documentation, in writing, of the review and approval
process.
P. REVIEW PROGRESS PAYMENT REQUESTS
Progress payments should also be subject to review procedures that compare the
contract schedule and specified cost, quantity and quality performance measures to
on-site inspection reports.
Q. MAINTAIN PROJECT RECORDS
One of the most important aspects of managing contract records is the maintenance of
an adequate record keeping system. CDBG grantees are required to maintain project
records that document all financial, monitoring and inspection transactions, and
progress reviews that occur during the course of the project. Grantees must also have
records that document any problems that arise and the steps that were taken to resolve
them. Of particular importance is the grantee's ability to demonstrate that it has
Administrative Order No. 568 — Construction Contract Management for Federally Funded Block Grant Projects
Page 11
reviewed contractor and subcontractor compliance with labor standards provisions of
the contract. This includes being able to demonstrate that all weekly payrolls were
checked, required employee interviews were conducted covering all trades, employee
interview results were compared to payrolls, and all discrepancies were resolved.
R. CONDUCT PROJECT CLOSEOUT
When construction work is complete and the contractor has submitted a request for
final payment and certification of completion, the grantee must arrange for a final
inspection of the work by the project architect or engineer. Before making final
payment, the grantee must also determine that:
• All payrolls have been received and reviewed.
• All payroll issues (e.g., underpayments, missing payrolls, etc.) have been resolved
and documented.
• All other labor standards provisions have been satisfied.
• All required contract submissions and certifications have been received.
• All claims and disputes involving the contractor/subcontractor(s) have been
resolved.
• All files are in good order and complete.
• As -built plans, warranties and guarantees have been received from the contractor.
When these steps are completed, the grantee may issue an acceptance of work and
final payment, less retainage. The retainage must be placed in escrow for the
contractor.
S. CONSTRUCTION RETAINAGE RELEASE PROCESS
The final step in the management of a public works construction project is the release
of the retainage (see Attachment 8-I). The retainage may be released after the
following actions have been completed:
(1) An Affidavit of Wages Paid form approved by the state Department of Labor and
Industries (L&I) is provided to the Block Grant Administrator or grantee by the
prime contractor.
(2) The Block Grant Administrator or designee verifies that industrial insurance and
medical aid premiums have been paid by the prime contractor and each
subcontractor connected with the project. This verification can be accomplished
by going to the L&I website: https:Hfortress.wa.gov/lni/gpsi/.
(3) The Block'Grant Administrator or grantee completes a Notice of Completion of
Public Works Contract form (REV -3-0020E) and submits to:
Washington State Department of Revenue
Public Works Contracts
Post Office Box 47474
Olympia, Washington 98504-7474
Phone (360) 725-7588
After obtaining additional information from the contractor, the Department of
Revenue will verify from its records that state excise taxes have been paid by the
contractor. The Department of Revenue will then provide a release letter to the Block
Administrative Order No. 568 — Construction Contract Management for Federally Funded Block Grant Projects
Page 12
Grant Administrator or grantee. The Department of Revenue may also be contacted
by email at: pwc(Ddonwa.gov.
Once the grantee has received all appropriate releases from the state, the retainage can
be released to the contractor.
T. CONSTRUCTION CONTRACT MANAGEMENT COMPLIANCE REVIEW
PROCESS
The Block Grant Administrator will review grantee compliance with construction
contract management requirements (including labor standards and equal opportunity)
through a combination of in-house and on-site review procedures. The
preconstruction conference record will be checked to determine that all necessary
information was provided to the contractor and subcontractors prior to the start of
construction. Block Grant Administrator staff will also check for receipt of the
Notice of Contract Awards and Start of Construction. On-site, the Block Grant
Administrator will review grantee documentation for the following:
• Providing notice to proceed to the contractor.
• Conducting a sufficient number of employee interviews, comparing interview
results to payrolls and following up with steps to resolve any discrepancies.
• Conducting technical inspections.
• Conducting weekly payroll reviews.
• Appropriately correcting and reporting any labor standards violations.
• Conducting progress payment reviews.
• Setting appropriate retainage amounts, establishing escrow accounts and requiring
appropriate bonding amounts.
• Conducting final inspection and accepting completion of the project.
• Releasing retainage.
The on-site review will involve checking a sample of payrolls to test conclusions of
the grantee's monitoring process. It will also involve the review of local progress
payment procedures to verify the grantee's calculations and the basis for approval.
Where grantees have reported labor standards violations, Block Grant Administrator
staff will also conduct in-house reviews of the resolution process documentation to
determine if violations were correctly and fully identified, required notification
procedures were used, violation reports and reports of waivers were submitted, and
violations were adequately and completely resolved.
A determination of compliance will be made by Block Grant Administrator staff if all
of the requirements included in this material are met and adequate documentation is
available to support such a conclusion.
Approved:
ave Zabell, Cl'fy r Date
Administrative Order No. 568 — Construction Contract Management for Federally Funded Block Grant Projects
Page 13
ATTACHMENT 8-A (1)
PRE -CONSTRUCTION CONFERENCE RECORD
PART I - GENERAL
Name of Jurisdiction:
Address:
Name of Engineering Firm:
Address:
Name of Contractor:
Address:
Location of Pre -Construction Conference:
Date:
Names of Persons in Attendance: (Representatives of the jurisdiction, engineering firm,
contractor, other)
PART 2 — RESPONSIBILITIES OF THE PARTIES
A. Responsibilities of the Consulting Engineer: (Does not "supervise" the contractor's
employees, equipment or operations)
B. Responsibilities of the Jurisdiction: (Actual contracting organization)
C. Responsibilities of the Contractor: (Review contract terms)
D. Responsibilities of any other agency contributing to the project:
ATTACHMENT 8-A (2)
PART 3 — GENERAL DISCUSSION OF CONTRACT
A. Alternative Specifications: (Does everyone understand the alternatives applicable to the
contract as awarded?)
B. Initiating Construction: (Notice to Proceed)
C. Completion Time for the Contract: (Does everyone understand the contract requirements and
methods for computing time?)
D. Liquidated Damages:
E. Requests for Extensions of Contract Time: (How should they be handled?)
F. Procedures for Making Partial Payments:
G. Guarantee on Completed Work: (Materials, installed equipment, workmanship, etc.)
H. Other Requirements of the Contract and Specifications Which Deserve Special Discussion by
all Participants:
ATTACHMENT 8-A (3)
PART 4 — CONTRACTOR'S SCHEDULE
A. Analyze the work schedule in enough detail to enable the consulting engineer to plan his
operations: (Consideration must be given to the needs of the jurisdiction and the planned
operations of other contractors.)
B. Equipment to be used by the Contractor:
C. Contractor's plans for delivering materials to the project site: (Protection and storage of
materials)
PART5—SUBCONTRACTS
A. Review and Approval of Proposed Subcontractors: (List)
B. Review and Approval of Proposed Subcontractor Schedules:
ATTACHMENT 8-A (4)
PART 6 — STATUS OF MATERIALS TO BE FURNISHED BY THE JURISDICTION
A. Schedule for Future Deliveries:
B. Procedures to be Adopted by Contractor in Accounting for and Storing Such Materials:
PART 7 — CHANGE ORDERS
A. Procedures to be Followed in Obtaining Approval of Change Orders:
B. Description of Clearance Which Must be Obtained Before Implementing Changes:
PART 8 — STAKING OF WORK
A. Responsibilities of Engineer: (Line and grade must be furnished by the engineer.)
B. Responsibilities of the Contractor:
ATTACHMENT 8•A (5)
PART 9 — PROJECT INSPECTION
A. Functions of Consulting Engineer, Including Records and Reports:
B. Responsibilities of the Jurisdiction:
C. Safety and Sanitary Regulations:
PART 10 — ACCEPTANCE OF WORK
A. Requirements for Final Acceptance of Work:
B. Special Testing of Site Clean -Up Requirements:
PART 11— LABOR STANDARDS REQUIREMENTS
A. Equal Employment Opportunity Requirements:
1. Section 3 of the Housing and Community Development Act of 1968 (Paragraph 78 of the
CDBG General Conditions) (Required for Contracts >$100,000):
• Has a plan been submitted?
• Are applicable clauses included in agreements with Subcontractors?
• Have the groups that the Contractor has a collective bargaining agreement with been
advised of Section 3 requirements?
• Have trainees and employees been hired according to the Contractor's Section 3
Plan?
ATTACHMENT 8•A (6)
2. Title VI of the Civil Rights Act of 1964 (Paragraph 74 of the CDBG General
Conditions):
• Is the Title VI clause included in the agreement with the subcontractor?
3. Section 109 of the Housing and Community Development Act of 1974 (Paragraph 75 of
the CDBG General Conditions):
• Is the Section 109 clause included in the agreement with the subcontractor?
4. Executive Order 11246 (Paragraphs 79-82 of the CDBG General Conditions):
• Have certifications been signed?
• Are the Executive Order 11246 clauses included in the agreement with the
subcontractor?
5. List of Subcontractors: Check if. MBE WBE
B. Davis -Bacon and Related Acts:
& State Prevailing Wage Law:
1. Prevailing Wave Rates:
• Have wage rate decisions been requested and received for any classification not
included in the wage decision?
• Has an affidavit of intent to pay state prevailing wages been submitted?
2. Apprentices and Trainees: Has a copy of the contractor's apprenticeship agreement
and/or trainee program certification from the Bureau of Apprenticeship and Training
been received?
3. Weekly Payroll Forms: Identify when, where and to whom the contractor must submit
these forms:
4. Employee Interviews: Are contractors aware that employees will be periodically
interviewed on the job -site?
ATTACHMENT 8-A (7)
C. Other Requirements:
1. Notification of contract award and start of construction. Date mailed to C&ED:
2. Appropriate bonding/insurance filed with jurisdiction. Date filed:
3. Are contractors aware of requirements to complete forms, plans and certifications as
specified in Attachments 7-B, 7-C, 7-D, 7-E and 7-F of the Contractor's Manual?
PART 12 — RIGHT OF WAY AND EASEMENTS
A. Explain any Portion of the Project not Available to the Contractor:
B. Coordination with Railroad, Highway Department, Utility Companies, and Other
Organizations:
PART 13 — PLACEMENT OF PROJECT SIGNS AND POSTERS
Describe:
PART 14 — HANDLING DISPUTES
Describe Process:
NOTED AND AGREED WITH, but understood not to be a modification of any existing contract
or agreement:
Signatures of City of Pasco Representatives
Signature of Autorhized Representative Signature of Contractor
ATTACHMENT 8-B
COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
NOTIFICATION OF CONTRACT AWARD AND START OF CONSTRUCTION
AGENCY:
PROJECT NAME:
PROJECT LOCATION:
GENERAL CONTRACTOR:
BID OPENING DATE:
CONSTRUCTION START DATE:
APPLICABLE WAGE DECISION NUMBER:
MODIFICATIONS:
PRECONSTRUCTION CONFERENCE DATE:
SUBMITTED BY: (NAME AND TITLE)
Enclosure: Preconstnzction Conference Record
cc: Labor Standards File
CONTRACT
NUMBER:
CONTRACT
AMOUNT:
R,V.V.
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UNU a
ATTACHMENT 8-D
WEEKLY PAYROLL REVIEW CHECKLIST
1. Payroll Forms: Contractors and subcontractors may use the optional Form WH347, which includes a
Statement of Certification on the back of the form. They may use their own payroll forms, but must
provide all required information.
Weekly payrolls must be submitted by the contractor and all subcontractors no later than seven
working days following the pay period. Each payroll should be sequentially numbered.
2. Employer Information: Name and address of contractor or subcontractor, as well as the IRS
Employer ID number.
3. Employee Information: Each worker's address and social security number must be reported on the
first payroll on which his or her name appears. The address is not required on subsequent payrolls
unless the worker's address had changed. In addition, the wage classification for each employee must
be listed.
4. Classification and Wage Rates: Compare the classification and wage rates reported on the payroll
with the federal and state wage determinations received to ensure the contractor or subcontractor is
paying the higher of the two. Review the payroll for incidence of overtime (in excess of 40 hours in
one week) and appropriate payment of time and one-half for overtime hours worked.
If any apprentices or trainees are reported, a copy of both the approved certificate of program
registration and the employee's certification must be attached to the first payroll on which the
apprentice or trainee's name appears.
If an employee worked in more than one classification during the week being reported, his/her name
should appear twice, once to report the hours worked in each classification.
5. Computations: Payroll computation should be spot-checked for math errors.
6. Deductions: Deductions should be identified as to type. The first time a certified payroll shows that
voluntary deductions have been taken out of an employee's wages, a copy of the employees written
authorization to the contractor authorizing those deductions must be provided with the certified
payroll. The payroll reviewer should always check for the written authorization when applicable.
Also, anytime it is noted that an unusually large amount is being held for routine deductions such as
FICA, state industrial, etc., further investigation should be accomplished.
7. Fringe Benefits: Where fringe benefits are paid into benefit plans, the block 4(a) on the back of the
certified payroll should be marked
8. Signature: The statement of compliance, whether printed on the payroll form (as on Form WH -347)
or attached to another type of payroll form (such as a computer printed payroll), must be signed in ink
by the owner, officer or designated employee (such as a bookkeeper). (The signature of anyone other
than the owner or officer must be authorized in writing.) Signature authorization (see Attachment 9-
F), for persons other than principal, should be submitted with the first payroll signed by such an
agent.
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U.S. Department of Housing
and Urban Development
Labor Relations Desk Guide
LR01.DG
MAKING
B)AVIS=BACON
WORK
September 2011
Previous versions obsolete
A Practical Guide for States, Indian Tribes and Local Agencies
HUD LABOR STANDARDS
ADMINISTRATION
0
ENFORCEMENT
A Practical Guide for States,
Indian Tribes and Local
Agencies
Revised September 2011
A Practical Guide for States, Indian Tribes and Local Agencies
Section
Page
Number
HUD Labor Standards Administration and Enforcement
3
The Basics
4
Key Labor Standards Objectives
4
LCA Responsibilities for Davis -Bacon Labor Standards
5
What LCAs Need to Carry Out These Responsibilities
7
Labor Relations Reference and Guidance Materials
7
The Basic Elements — Labor Standards Administration and Enforcement
Labor Standards Administration
9
Labor Standards Enforcement
12
LCA Flexibility for Labor Standards Responsibilities
16
Appendices
20
Labor Law Synopses
21
Davis -Bacon Act (DBA)
21
Copeland Act (CA)
21
Contract Work Hours and Safety Standards Act (CWHSSA)
21
HUD Davis -Bacon Related Acts and Factors of Applicability
23
Housing and Community Development Act of 1974, as amended (HCDA)
23
National Affordable Housing Act of 1990, as amended (NAHA)
26
U.S. Housing Act of 1937, as amended (USHA)
28
Native American Housing Assistance ad Self -Determination Act of 1996, as
amended (NAHASDA)
30
NAHASDA —Hawaiian Homelands
33
Davis -Bacon Wage Determinations
35
Character of work
35
General wage decisions
35
Selecting the correct wage decision
36
Wage decision "effective" dates
36
Conformances (additional classifications)
36
LCA Guide Page 1
A Practical Guide for States, Indian Tribes and Local Agencies
LCA Guide Page 2
Compliance Principles
38
Responsibilities of employers
38
Responsibilities of the principal (prime) contractor
38
Site of work
38
Laborers and mechanics
38
Employee
39
Proper classification of work
39
Split classification
39
Apprentice
39
Trainee
39
Use of apprentices and trainees
39
Wages
40
Fringe benefits
40
Discharging prevailing wage obligations
40
Deductions
41
CWHSSA overtime
41
Payrolls and other reporting requirements
42
Certified payroll reports
43
Willful Violations/Falsification Indicators
44
Falsification appearing on CPRS
44
Willful violations that do not appear on CPRS
45
Willful violation payment schemes
45
Davis -Bacon Wage Restitution
47
Computing wage restitution for laborers an mechanics
47
Correction CPRS
47
Review of correction CPRS
47
Withholding from payments due the contractor
48
Unfound/unpaid workers
48
Acronyms/Symbols/Websites
49
Acronyms/symbols
49
Websites
51
LCA Guide Page 2
A Practical Guide for States, Indian Tribes and Local Agencies
HUD Labor Standards Administration and
Enforcement
This Guide has been developed as part of HUD's communications strategy with
you and its approximately 5,000 client agencies. It has been designed to help
you develop organizational and administrative approaches which best work for
you while still enabling you to meet your labor standards contractual
responsibilities in the administration of HUD -assisted programs as efficiently as
possible. It will also be useful to you as a training tool and ready reference for
compliance staff. While this Guide is intended to address numerous situations, it
was not written to cover every possible labor standards issue. If there is a labor
standards issue not addressed in this Guide, please contact your local HUD
Labor Relations Field Staff. Throughout this Guide, the acronym "LCA" or
"LCAs" shall mean state, tribal and local agencies.
Whom to contact...
The HUD Labor Relations Field staff is your support team and is available to
provide training and technical assistance in the administration of HUD programs
subject to Federal labor standards provisions. Please call upon the HUD Labor
Relations Field staff for your jurisdiction at any time. Also, please visit the Office
of Labor Relations at: http://www.hud.gov/offices/olr/.
At this site you will have ready access to publications, forms, the latest policy
letters, and related links which will help you administer labor standards. Most of
the publications and forms referenced in this Guide are available in the Labor
Relations Library at our website (above).
You can also obtain additional copies of this Guide and other publications by
telephone from HUD's Customer Service Center at (800)767-7468.
LCA Guide Page 3
A Practical Guide for States, Indian Tribes and Local Agencies
The Basics
The Office of Labor Relations (OLR) has identified five Key Labor
Standards Objectives - the basics of what must be accomplished in order to
protect workers' rights. We also identified all of the policies, procedures and
paperwork at our disposal - what we do ourselves and what we impose on
contractors. HUD eliminated superfluous requirements and will not institute
policies, procedures or paperwork that are not required by statute or regulation,
or that do not contribute to one or more of the Key Objectives.
Key Labor Standards Objectives
1. Apply Davis -Bacon requirements properly. Make certain that labor
standards, including Davis -Bacon prevailing wage rates, are applied where
required. Ensure any exemptions or exceptions are identified.
2. Through education and advice, support contractor compliance with
labor standards. Provide basic training and technical support to
contractors to ensure they understand their obligations under prevailing
wage and reporting requirements.
3. Monitor contractor performance. Perform reviews of certified payroll
submissions and other information to help ensure contractor compliance
with labor standards provisions and the payment of prevailing wages to
workers.
4. Investigate probable violations and complaints of underpayment.
Thoroughly explore any evidence of violations, especially allegations of
underpayment.
5. Pursue debarment and other available sanctions against repeat labor
standards violators. Carry out a no -tolerance policy toward contractors
who violate prevailing wage laws.
LCA Guide Page 4
A Practical Guide for States, Indian Tribes and Local Agencies
LCA Responsibilities for Davis -Bacon Labor
Standards
State, tribal and local contracting agencies (LCAs) that administer HUD
programs agree to administer and enforce Davis -Bacon requirements as a
condition for receiving HUD program assistance. LCAs have the following
responsibilities:
1. Designate appropriate staff (e.g. a Contract Administrator) before the
start of construction to ensure compliance with all applicable labor
standards requirements and to act for and in liaison with HUD. Provide the
name(s) of the staff to the appropriate HUD Field Office of Labor Relations.
2. Establish a construction contract management system which meets
the standards of Part 85 (24 CFR - HUD regulations), Administrative
Requirements for Grants and Cooperative Agreements to State, Local and
Federally Recognized Indian Tribal Governments.
3. Ensure all bid documents, contracts and subcontracts contain the
applicable Davis -Bacon wage decision and Federal labor standards
provisions.
4. Ensure no contract is awarded to a contractor that is ineligible (e.g.,
debarred) for Federally -assisted work.
5. Conduct on-site inspections including interviews with laborers and
mechanics employed on the construction project. Ensure that the
applicable Davis -Bacon wage decision and DOL's Davis -Bacon poster
(Form WH -1321) are displayed at the job site.
6. Review certified payroll reports and related documentation. Identify
any discrepancies and/or violations. Ensure any needed corrections are
made promptly, including the payment of wage restitution, as needed, and
the assessment and collection of liquidated damages, as appropriate.
7. Maintain full documentation of Federal labor standards administration
and enforcement activities.
8. Refer potential criminal or complex enforcement actions to HUD, in
addition to Contract Work Hours and Safety Standards Act (CWHSSA)
LCA Guide Page 5
A Practical Guide for States, Indian Tribes and Local Agencies
liquidated damages assessments for overtime violations and debarment
recommendations.
9. Comply with all HUD requirements concerning statutory, program and/or
other requirements.
10. Prepare Federal labor standards enforcement reports as required in
U.S. Department of Labor (DOL) regulations (29 CFR Part 5, Section 5.7).
LCA Guide Page 6
A Practical Guide for States, Indian Tribes and Local Agencies
What LCAs Need to Carry Out These
Responsibilities
In addition to basic knowledge about labor standards administration and
enforcement, LCAs need basic reference and guidance materials. Many of these
materials are available on-line. A complete list of website addresses referenced
in this Guide is provided in the Appendix (page 51). Also, the HUD Labor
Relations Field Staff can assist you in obtaining hard copies of any materials
offered in the Labor Relations Library on the HUD Homepage.
Labor Relations Reference and Guidance Materials
1. Specific Davis -Bacon Related Act (statute) for the program involved. The
clauses containing the Davis -Bacon labor standards provisions for each HUD
program are key to making proper decisions concerning applicability.
Determining whether Davis -Bacon wage rates are applicable in specific cases
may be the most difficult task LCAs face on a day-to-day basis. Excerpts
from the HUD Related Acts - the labor standards provisions — are offered in
the Appendix (page 23) to this Guide. In addition, we've provided treatments
explaining the factors of applicability (how the language of the labor standards
clauses is interpreted and applied in real situations) for CDBG, HOME, Public
Housing, Indian Housing, and Hawaiian Homelands Programs.
2. HUD regulations: 24 CFR, relevant Parts for the program involved. Many
times the regulations will contain further information about Davis -Bacon
aspects of the program. HUD regulations are available on-line at:
http://www.access.gpo.gov/nara/cfr/cfr-table-search.html
3. DOL regulations: 29 CFR, Parts 1, 3, 5, 6 & 7. These regulations contain
policy guidance and instructions for all agencies, including local contracting
agencies, in the administration and enforcement of Davis -Bacon wage and
reporting requirements. These DOL regulations are available on-line at the
DOL homepage at: http://www.access.gpo.gov/nara/cfr/cfr-table-search.htmi
4. Labor Relations Letters. This special directives series is designed to
provide current and thorough guidance on Davis -Bacon issues in HUD
programs. Popular topics include Davis -Bacon applicability under HOME, and
prevailing wage requirements concerning self-employed laborers and
mechanics. Labor Relations Letters are available on-line at the Labor
Relations Library.
LCA Guide Page 7
A Practical Guide for States, Indian Tribes and Local Agencies
5. Labor Relations Desk Guides. These Guides compliment the guidance and
instructions provided in HUD Handbook 1344.1, Federal Labor Standards in
HUD Programs. This Guide is for LCAs. Another is HUD's Contractor's
Guide to Prevailing Wage Requirements for Federally -assisted Construction
Projects - an easy to use resource that explains Davis -Bacon requirements
and what contractors must do to comply. These Guides are also available at
the Labor Relations Library.
6. On the Mark!. This series is also available at the Labor Relations Library.
The series contains simple, one-page suggestions containing time -saving tips
to improve efficiency and effectiveness including new technologies and
services available through the internet.
LCA Guide Page 8
A Practical Guide for States, Indian Tribes and Local Agencies
Labor Standards Administration
Labor standards administration involves the activities that take place primarily
before construction begins. Administration sets the stage for the compliance
activities that occur during the construction phase.
1. Determine Davis -Bacon applicability. The first and sometimes most
difficult step is determining whether and to what extent Davis -Bacon wage
standards apply to a particular contract or project. The Factors of Applicability
(see Appendix, page 23) should be helpful. Most HUD -assisted construction
work is covered by Davis -Bacon but there are some exceptions. The best and
safest approach is to assume that Davis -Bacon requirements will be
applicable whenever the contract/project involves construction work valued in
excess of $2,000, then look more closely to see if there's any reason for non-
coverage.
Assuming a determination has been made that Davis -Bacon wage and reporting
requirements are applicable:
2. Prepare the bid documents/contract. The contract for construction is the
vehicle to ensure contractor compliance and Davis -Bacon wage enforcement.
Therefore, the bid specifications and/or the contract for each project subject to
Davis -Bacon wage rates must contain both a Davis -Bacon wage decision and
labor standards clauses. These should be bound into the contract
specifications or incorporated by specific reference in the bid/contract
documents (see Labor Relations Letter 96-03).
a. Davis -Bacon wage decisions. The Davis -Bacon wage decision is a
listing of various construction work job classifications (such as Carpenter,
Electrician, Plumber, Laborer, etc.) and the minimum wage rates (and
fringe benefits, where prevailing) people performing work in those
classifications must be paid. (See the Appendix, page 35, for more
information regarding wage determinations and for information on how to
add trade classifications not already on a wage decision.)
Wage Determinations On -Line (http://www.wdol.gov) is the only official source
to obtain wage determinations issued by DOL for construction contracts
subject to the Davis -Bacon Act (DBA) and Related Acts (DBRA).
After logging on to wdol.gov (user names and passwords are not required),
click "Selecting DBA WDs" in the "Davis -Bacon Act" column.
LCA Guide Page 9
A Practical Guide for States, Indian Tribes and Local Agencies
"Selecting DBA WDs" connects users to a searchable database of current
Davis -Bacon general wage determinations.
The "WDs due to be revised" link connects users to information identifying
specific wage determinations that will be revised/modified in the near future.
This information alerts contracting agencies of upcoming revisions to wage
determinations that they may need to incorporate into bid solicitations and/or
contracts.
The "Sign up for alert service" provides email alerts concerning updates for
wage determinations that may be needed for upcoming procurement actions.
The alert service is specific to a wage decision(s) and can be found on the
first page of any current wage decision(s) that is retrieved at wdo!.gov (see
bottom left for the link).
b. Labor standards clauses. The labor standards clauses (aka, labor
standards provisions, stipulations) obligate the contractor to comply
with Davis -Bacon wage and reporting requirements and with the
overtime provisions of the Contract Work Hours & Safety Standards Act
(applicable only when the prime contract is valued at over $100,000).
The labor standards clauses also provide remedies and sanctions
should violations occur. HUD has standard forms containing the labor
standards clauses appropriate for different programs: the HUD -4010 for
CDBG and HOME; and the HUD -5370 and HUD -5370 -EZ for Public
and Indian housing. These forms are available on-line at:
http://portal.hud.gov/hudportal/HUD?src=/program_offices/administratio
n/hudclips/forms
3. Verify contractor eligibility. Once you have selected the contractor to
whom you want to award the contract, you must verify that the contractor is
not ineligible (e.g., debarred) from participation in Federal programs. You
only need to verify the eligibility of the prime contractor. The U.S. General
Services Administration maintains a list of ineligible contractors which can be
accessed on-line at: https://www.epls.gov (See On the Mark! OTM #6 (6/97)
for more information about on-line verification.)
4. Provide contractor training. Make certain the contractor understands its
responsibilities for Davis -Bacon compliance: The principal contractor (also
referred to as the prime or general contractor) is responsible for the full
compliance of all employers (the contractor, subcontractors and any lower -tier
subcontractors) with the labor standards provisions applicable to the project.
HUD has published a Contractor's Guide to Prevailing Wage
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Requirements for Federally -Assisted Construction Projects for this
purpose. This Guide provides basic information and instructions to
contractors concerning Davis -Bacon wage and reporting requirements. Hard
copies of the Guide are available from the HUD Labor Relations Field Staff.
In addition, the Guide is available in a download -able pdf file at the HUD
Labor Relations Library.
You may also wish to provide formal training separate from the contracting
process for contractors who are interested in performing work on your HUD -
assisted contracts and want to learn more about what is involved.
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Labor Standards Enforcement
Labor Standards Enforcement involves the activities that take place during
construction to ensure contractor compliance. Enforcement of federal labor
standards involves certain compliance principles (see Appendix, page 38)
applicable to almost every Davis -Bacon — covered project. Adhering to these
principles will promote effective LCA contract compliance.
1. Posting the wage decision and Davis -Bacon poster. The contractor is
required to display on the job site a copy of the applicable Davis -Bacon wage
decision and Department of Labor Form WH -1321, Davis -Bacon Poster. The
purpose of this posting is to provide information to the construction laborers
and mechanics working on the project about their entitlement to the prevailing
wage for their trade, and to advise them whom to contact (the contract
administrator) if they have any questions or want to file a complaint.
a. Project Wage Rate Sheet (HUD -4720). Many wage decisions are multi -
paged and cover several counties and/or more than one type of
construction. To make this vital information easier to read and understand,
contract administrators can offer a Project Wage Rate Sheet (HUD -4720) -
a one-page listing of only the wage rates applicable to the specific project
involved - for posting on the job site. This form is available in an on-screen
fillable format which can be accessed via the HUD Forms or Office of Labor
Relations websites.
b. Davis -Bacon Poster. The Davis -Bacon Poster is available in English and
Spanish via the DOL website. The poster in English is at
http://www.dol.gov/whd/programs/dbra/whl321.htm. The link to the poster
in Spanish is http://www.dol.gov/whd/regs/compliance/posters/davispan.pdf
Both versions can be accessed via the Labor Relations website.
2. Conduct on-site interviews with laborers and mechanics. The contract
administrator or a designee (such as an agency construction inspector) must
periodically conduct interviews with the construction workers on the job site.
The purpose of the interviews is to capture observations of the work being
performed and to get the workers' views on the number of hours they work,
the type of work they perform and the wages they receive. Information
gathered during the interviews is recorded on Form HUD -11, Record of
Employee Interview. Completed HUD -11s must be compared to the
corresponding contractor and subcontractor certified payrolls to test and verify
the accuracy of the payroll information. HUD -11 forms are available on-line in
English and in Spanish in a fillable format via the HUD Forms website and at
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the OLR website.
3. Review contractor and subcontractor certified payroll reports. In
addition to comparing HUD -11s to the certified payroll reports, the contract
administrator reviews the payroll reports generally to ensure all laborers and
mechanics are being paid no less than the wage rates contained on the
applicable Davis -Bacon wage decision for the classification of work they
perform. Contract administrators should be particularly alert for indications of
payroll falsification - misinformation on payrolls to conceal underpayments.
Falsification on payrolls indicates a contractor or subcontractor is aware of its
obligations, is knowingly underpaying its employees and is attempting to avoid
detection of the violations.
a. Discrepancies and/or underpayments on the payrolls. Some
underpayments and other errors can appear on the face of the payroll
records (i.e., do not involve falsification). In these cases, the contract
administrator contacts the employer and/or prime contractor and provides
instructions as to what steps should be taken to correct the payroll records
and to pay any back wages that may be due to the affected workers.
b. Indications of falsification on payrolls. The greatest threat to
construction workers entitled to statutorily -mandated prevailing wage for
their craft is from employers who know what is required, choose not to pay
the required prevailing wage rates and falsify certified payroll reports to
conceal the underpayments. Such willful violators see the workers'
underpayment as their own gain and engage in deception to increase this
gain. In addition, willful violators that successfully escape detection and
are not required to pay prevailing wages will continue to bid on Davis -
Bacon contracts until their violations are disclosed and administrative
sanctions such as debarment are imposed.
c. Falsification indicators. HUD has prepared a list and explanation of four
common falsification indicators that are detectable during payroll "spot-
checks." Information reported on payrolls that indicate falsification
suggests willful, much more serious violations in terms of the amount of
back wages that may be due and the number of employees affected. Such
cases most often warrant investigation which can include on-site
interviews, mailing questionnaires to employees, taking written statements
or complaints, and other methods to gather and assess the facts of the
case. See the Appendix (page 44) to this Guide for an explanation of
willful violations and falsification indicators.
4. Require the correction of all discrepancies, the payment of wage
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restitution found due, and the assessment and collection of CWHSSA
liquidated damages, as appropriate. Contract administrators must ensure the
full correction of all discrepancies disclosed during compliance monitoring
conducted by the LCA, HUD or DOL. This includes the collection of
documentation to demonstrate that corrective measures have been
successfully completed.
5. Examine and resolve probable violations and complaints of
underpayment. Contract administrators must explore probable violations —
particularly those involving falsification of payrolls and complaints alleging
underpayments. In addition to the HUD -11, Record of Employee Interview,
HUD has developed a questionnaire form (HUD -4730) and a complaint intake
form (HUD -4731) for HUD and LCA use. The forms are available in on-screen
fillable formats at the HUD forms website and via the Labor Relations website.
6. Refer complex issues and/or falsification cases to HUD or DOL. Some
issues may be more complex than you are able to address. HUD encourages
LCA to consult with the Labor Relations Specialist for their area to secure
appropriate guidance and support. HUD has decided, in consultation with
DOL, that it will refer to DOL cases involving falsification of payrolls or related
documents for DOL investigation. HUD strongly suggests that LCAs employ
this strategy for cases involving falsification. Contact the HUD Labor
Relations Specialist for your area for more information and guidance on such
referrals.
7. Take steps to ensure the full resolution of any monetary liability that has
or may be imposed for labor standards reasons. Contract administrators
must take prompt action to ensure that funds will be available to satisfy any
labor standards liability that may be imposed. Actions include withholding
from contract payments due to the contractor and requiring funding for an
escrow account to guarantee the satisfaction of any restitution and/or
liquidated damages assessment that may be pending at contract close-out.
8. Recommend debarment against repeat violators. HUD has implemented
a no -tolerance policy against contractors who are repeat violators of Davis -
Bacon labor standards. The first time an employer is found in violation, the
employer is required to pay full restitution to all affected workers and to pay
any CWHSSA liquidated damages (for overtime violations) which may be
assessed. In addition, the employer must provide written assurance of future
compliance. If the employer promptly completes these corrective actions,
HUD will not object if the LCA does not recommend debarment against the
employer unless there are extenuating circumstances which warrant
debarment. If the employer is found in violation again, the LCA must require
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full correction of any underpayments and payment of CWHSSA liquidated
damages assessed. A debarment recommendation made by the LCA against
the employer is expected.
9. Prepare and submit enforcement reports. In accordance with DOL
regulations (29 CFR Part 5, Section 5.7), the contract administrator must
prepare and submit to HUD an enforcement report in any case where an
employer (contractor or subcontractor) has underpaid its employees by
$1,000 or more, or where there is reason to believe the violations are
aggravated or willful; and prepare and submit to HUD semi-annual
enforcement reports concerning all Davis -Bacon labor standards
administration and enforcement activities involving all HUD -assisted
programs.
a. Employer -specific enforcement reports. These enforcement reports are
used for three general purposes. First, to report to the Secretary of Labor
on Davis -Bacon enforcement actions successfully completed in the field by
all federal, state and local agencies. Secondly, we use an enforcement
report to refer to the Wage and Hour Administrator investigative findings
which are in dispute (e.g., where the employer contests findings of
underpayment made against it and requests a hearing to appeal the
findings). Thirdly, we use an enforcement report to make
recommendations for debarment and other sanctions and for
recommendations concerning liquidated damages computed for CWHSSA
overtime violations. (See Labor Relations Letter LR -92-02 for additional
guidance concerning employer -based enforcement reports.)
10. Semi-annual Enforcement Reports. In April and October of each year,
all federal agencies must report to DOL on all covered contracts awarded, and
on all enforcement actions taken during the relevant 6 -month period. HUD
collects the reports from its client agencies and compiles a comprehensive
report to DOL covering all HUD -assisted Davis -Bacon construction activity. A
copy of the Semi -Annual Report form (HUD -4710) and instructions (HUD -
4710i) for LCAs and are available at HUDClips and at the Labor Relations
Library at www.hud.gov/offices/olr. The report may be completed on-screen,
saved and attached to an email message for submission purposes. NOTE:
States may report directly to DOL, as the state chooses. Public Housing
Authorities, Indian Housing Authorities and Tribally -designated Housing
Agencies should send data for Davis -Bacon - projects only; do not include
data relating to HUD -determined maintenance wage rate projects, or projects
subject to Tribally -determined wage rates (for construction or maintenance
work).
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LCA Flexibility for Labor Standards
Responsibilities
While some aspects of labor standards administration are inflexible, such
as which wage decision is applicable to a specific project, the following aspects
are not. For these, HUD leaves the preference of how to achieve end results
with the LCA.
1. LCAs may obtain wage decisions directly from wdoLgov. HUD expects
that LCAs have the capacity to select the correct Davis -Bacon wage decisions
from the www.wdol.govweb site for most projects they will undertake and to
determine whether the wage decision is current for the appropriate lock -in
date. LCAs that wish to continue obtaining wage decisions from HUD can
make the request by telephone, fax, mail or email. HUD can send the
applicable wage decision back to the LCA by any of these means also. LCAs
can obtain wage decisions immediately from the wdol.gov website and, in
most cases depending on the form of delivery requested by the LCA (e.g.,
email), LCAs should be able to obtain wage decisions from HUD within 24
hours or less.
2. Preconstruction Conferences for labor standards purposes are optional.
HUD acknowledges there are many good reasons to hold a preconstruction
conference (PCC) such as discussing construction inspections, progress and
contractor payment requirements, Section 3 employment and training and
other issues particular to the project. However, HUD has determined that the
time and resources used to conduct and document PCCs for labor standards
purposes do not yield measurably better results.
Many contractors have prior Davis -Bacon contract experience and have
demonstrated successful performance. These contractors don't require the
repetitive basic training such as provided at most PCCs. Basic training for
contractors new to Davis -Bacon projects can be provided more efficiently
through printed material such as HUD's Contractor's Guide to Prevailing
Wage Requirements for Federally -Assisted Construction Projects.
Contractors who intend to comply can become familiarized with the
fundamentals through the Guide and can contact the contract administrator
concerning any questions specific to the project. Contractors who understand
the requirements and who choose not to comply, will in all likelihood not be
persuaded to fully comply just because they attended a PCC.
3. Project Wage Rate Sheets may be offered for Davis -Bacon projects.
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Davis -Bacon wage decisions are incorporated into the construction contract to
obligate the full compliance of the prime contractor and any subcontractors.
There are three important uses for the applicable Davis -Bacon wage decision.
One is for the contractor's and subcontractors' understanding about the
specific wage rates that must be paid. The second is for posting at the job
site so that the laborers and mechanics know what they are supposed to be
paid. The third is for contract administrator's use in reviewing certified payroll
reports. A Project Wage Rate Sheet (HUD -4720) is a one-page, easy to read
listing of the work classifications and wage rates that are applicable to the
project. This one-page listing is much more user-friendly than the full -text
wage decision for these three uses:
a. A Project Wage Rate Sheet spells out more clearly the work classifications
and wage rates contained in the wage decision for the contractor and
subcontractors.
b. A Project Wage Rate Sheet is much easier for laborers and mechanics to
understand so that they can determine whether they are paid properly.
c. A Project Wage Rate Sheet - a one-page listing - is more helpful as a
ready reference for contract administrators reviewing payroll reports.
LCAs can prepare a Project Wage Rate Sheet for contracts using the on-
screen fillable versions in either the HUD Forms or Office of Labor Relations
websites. The Project Wage Rate Sheet should be prepared only after the
wage decision has been "locked -in" by contract award or start of construction,
as applicable. HUD Labor Relations staff is available to provide assistance to
LCAs in preparing Project Wage Rate Sheets. HUD strongly recommends
incorporation of the full wage decision text into bid solicitations and contracts,
either in hard -copy or by specific reference. (See also Labor Relations Letter
LR -96-03.)
4. LCAs may develop their own labor standards file system. HUD believes
that LCAs can best determine how to maintain their files provided that certain
minimum requirements are met. The minimum requirements include
compliance with DOL regulations that certified payrolls and basic records
relating to the payrolls are preserved not less than three years after
completion of the project and the resolution of any enforcement actions which
may carry over after completion. In addition, the files must be maintained in
such a way that the LCA can utilize them to demonstrate its own compliance
with its labor standards administration and enforcement responsibilities. For
example, the LCA must, at HUDs request, demonstrate how it has
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documented that the eligibility of the prime contractor was verified for each
contract.
5. LCAs may target on-site interviews with laborers and mechanics. HUD
is interested in using on-site interviews as a proactive enforcement tool rather
than as a means to meet a "representative sampling" quota. Instead of
conducting interviews randomly for the sake of assembling a sample, LCAs
are encouraged to target interviews to projects or groups of workers where
violations are suspected or alleged. In this way, on-site interviews can be
used to support a specific on-going enforcement action(s). HUD realizes that
this approach may mean that less on-site interviews may be conducted
randomly; and HUD considers targeting a far more efficient and effective
means of utilizing on-site interview resources.
6. Payroll reviews may be limited to spot-checks and HUD -11 comparison;
the Goal: to detect falsification. HUD believes that serious violations
involving underpaid workers and significant wage restitution may be
overlooked because the contract administrator is over -tasked with HUD -
mandated payroll review minutiae. HUD recognizes that it is not possible to
conduct 100% payroll reviews; therefore, it is not possible to identify and
correct every discrepancy and underpayment. It is also the case that the
violations disclosed behind falsified payrolls are much more egregious (both in
terms of affected workers and the amount of underpayment) than violations
that appear on the face of the payroll records. Accordingly, HUD has
prioritized payroll reviews so that the objective is to detect falsification and so
that our enforcement activities will yield the greatest impact. HUD has
developed guidance on how to detect falsification through spot-checks and
HUD -11 interview comparison. (See Willful violations/Falsification Indicators in
the Appendix, page 44.)
7. Routine payroll review results may be communicated to the prime
contractor by telephone and documented with a record to the file. Many
times, the types of deficiencies which come to the attention of the contract
administrator can be handled more efficiently and just as effectively with good
informal communication (e.g., a telephone call, email, etc.) with the
employer/prime contractor rather than with formal letters. Examples of the
types of issues that could easily be addressed informally - assuming the
cooperation of both sides - include a missing payroll report or missing
apprenticeship certificates, requests for employee authorizations for
deductions, small underpayments that appear on the face of the payroll, and
similar matters. With the prime contractor's cooperation, these matters can
be disposed of quickly with a telephone call and a brief note to the contract file
documenting the call. If the employer/prime contractor does not respond
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appropriately to this type of communication, it may be necessary to resort to
more formal means.
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Appendices
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Labor Law Synopses
Davis -Bacon Act (DBA). The Davis -Bacon Act is applicable to contracts in
excess of $2,000 for construction, alteration or repair, including painting and
decorating, of public buildings and public works to which the federal government
or District of Columbia is a party. The DBA requires (in part):
1. Payment of no less than wages (including fringe benefits) prevailing in the
locality on projects of a similar character as determined by the DOL.
2. Payment of wages not less often than once per week.
3. Posting of the applicable wage decision at the job site.
4. Other statutes (Davis -Bacon Related Acts, aka DBRA) contain provisions that
impose Davis -Bacon wage requirements on projects/contracts that are funded
or assisted (rather than contracted for directly) by federal agencies or the
District of Columbia. HUD program legislation frequently contains such
provisions and are, therefore, Davis -Bacon Related Acts.
Copeland (anti -kickback) Act (CA). The Copeland Act is applicable to
contracts/projects subject to Davis -Bacon wage requirements. The CA (in part):
1. Regulates deductions that may be taken from employee earnings.
2. Requires the certification, submission and retention of weekly payroll reports.
3. Prohibits "kickbacks" from employee earnings.
4. The anti -kickback prohibition is not applicable where the nature of federal
assistance is only insurance or a loan guarantee. All programs implemented
by LCAs are subject to the anti -kickback provision of the CA.
Contract Work Hours and Safety Standards Act (CWHSSA). The Contract
Work Hours and Safety Standards Act is applicable to prime contracts valued in
excess of $100,000. Any contracts subordinate to a covered prime contract are
likewise covered. CWHSSA (in part):
1. Mandates premium pay (time and one half on base wages, plus any fringe
benefits) for all hours worked on the site of the covered work in excess of 40
hours per week.
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2. Requires premium overtime pay only when all hours considered under
CWHSSA overtime requirements — 40 hours plus additional (O/T) hours — are
performed on CWHSSA-covered site(s) of work.
3. Includes watchmen and guards in the classes of workers entitled to premium
overtime pay requirements.
4. Imposes liquidated damages at the rate of $10 per day/violation - any
instance where an employee works in excess of 40 hours per week on a daily
basis, In addition to full wage compensation.
5. Is not applicable to projects/contracts where the nature of federal assistance
is only insurance or a loan guarantee. All programs implemented by LCAs
are subject to the overtime provisions of CWHSSA.
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HUD Program Davis -Bacon Related Acts
(DBRAs) and Factors of Applicability
Programs administered by LCAs
The five programs described in this section are those which have been funded annually
since their inception. Other funding that has Davis -Bacon implications is provided via
existing or new HUD programs from time -to -time to respond to special situations such
as natural disasters. Please contact the Office of Labor Relations staff for your
jurisdiction for information regarding the requirements for HUD programs not listed in
this section.
Housing and Community Development Act of 1974, as amended (HCDA):
Section 110* (CDBG. NSP, Section 108. EDI/BEDI)
HCDA (Title 1) statutory language:
(a) All laborers and mechanics employed by contractors or
subcontractors in the performance of construction work financed in
whole or in part with assistance received under this title shall be paid
wages at rates not less than those prevailing on similar construction
in the locality as determined by the Secretary of Labor in accordance
with the Davis -Bacon Act, as amended.... Provided, that this section
shall apply to the rehabilitation of residential property only if such
property contains not less than 8 units....
(b) Subsection (a) shall not apply to any individual that
(1) performs services for which the individual volunteered;
(2) (A) does not receive compensation for such services; or
(B) is paid expenses, reasonable benefits, or a nominal fee for
such services; and
(3) is not otherwise employed at any time in the construction work
* Section 107(e) (2) of the HCDA permits the Secretary of HUD to waive
the provisions of Section 110 in connection with grants to Indian tribes.
This waiver action was taken and can be found in HUD regulations at 24
CFR 1003.603.
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HCDA Factors of Applicability:
1. ...construction work financed... HCDA funds (e.g., CDBG) can
finance activities other than construction work which do not trigger
Davis -Bacon requirements; e.g., real property acquisition, purchase of
equipment, architectural and engineering fees, other services (legal,
accounting, construction management), other non -construction items
(furniture, business licenses, real estate taxes, tenant allowances for
such items).
Also, financing is not limited to the act of paying for the construction
work directly. Financing can mean, for example, using CDBG
assistance to pay the interest charged or to reduce the interest rate on
a construction loan (including certain collateral accounts). Generally,
"financing" also means using HCDA funds to provide permanent
financing (take-out loan) following construction.
2. ...in whole or in part... If HCDA funds finance only a portion of a
construction work, labor standards are applicable to the entire construction
work.
3. All laborers and mechanics employed by contractors or
subcontractors... Labor standards provisions do not apply to employees of
the grantee (force account workers) that may be engaged on an otherwise
covered project. Note: The construction work is covered but these force
account workers are excluded.
4. ...shall apply to the rehabilitation of residential property only if such
property contains not less than 8 units. Typically, single-family
homeowner properties are excluded under this exemption. For example, a
contract to rehabilitate any number of single family properties for
homeownership is not covered by Davis -Bacon. However, property is not
limited to a specific building. Property is defined as one or more buildings on
an undivided lot or on contiguous lots or parcels, which are commonly -owned
and operated as one rental, cooperative or condominium project. Examples
of 8+ unit properties include:
a. 5 townhouses side-by-side which consist of 2 units each.
b. 3 apartment buildings each consisting of 5 units and located on one tract of
land.
c. 8 single-family (not homeowner) houses located on contiguous lots and
operated as a single rental property.
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Further, HUD has concluded that the term "rehabilitation" as used within the
statutory language is not meant to preclude new construction from this
exemption. The Conference Report on the HCD Act of 1974 indicated that at
the time that the statute was written, residential construction was not an
eligible activity. However, subsequent changes to the statute now permit the
use of CDBG (and other Title I funds) for residential new construction.
Accordingly, residential new construction is treated in the same manner as
residential rehabilitation for Davis -Bacon purposes.
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National Affordable Housinq Act of 1990 (NAHA); Section 286 (HOME):
NAHA statutory language:
(a) IN GENERAL. Any contract for the construction of affordable
housing with 12 or more units assisted with funds made available
under this subtitle shall contain a provision requiring that not less
than the wages prevailing in the locality, as predetermined by the
Secretary of Labor pursuant to the Davis -Bacon Act..., shall be paid
to all laborers and mechanics employed in the development of
affordable housing involved,....
(b) WAIVER. Subsection (a) shall not apply if the individual receives
no compensation or is paid expenses, reasonable benefits, or a
nominal fee to perform the services for which the individual
volunteered and such persons are not otherwise employed at any
time in the construction work.
NAHA (HOME) Factors of Applicability:
1. ...affordable housing with 12 or more units assisted with funds
made available under this subtitle... Unlike CDBG, the standard for
coverage is assisted not financed - which provides for much broader
application. This means that Davis -Bacon requirements are operable
without regard to whether the HOME funds are used for construction or
non -construction activities. Non -construction activities include real
property acquisition, architectural and engineering fees, and other
professional services. In some cases, Davis -Bacon requirements may
be triggered when HOME funds are used to provide down payment
assistance to individual homebuyers. [LCAs should refer to HUD's
HOME regulations (24 CFR 92.354(a)(2)) or consult with HUD Labor
Relations Staff if their project involves down payment assistance to
homebuyers.]
This also recognizes that HOME projects can contain units that are not
assisted by HOME. The threshold applies only to the number of units
assisted by HOME. For unit threshold purposes, we use the number of
units identified as "HOME" units under the program definition whether
determined on a pro -rata basis, specific designation or other means
allowable by HUD's Office of Community Planning and Development
(CPD).
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Note also that once Davis -Bacon requirements are triggered, the labor
standards are applicable to the construction of the entire project -
including the portions of the project other than the assisted units.
2. Any contract for the construction of affordable housing with 12 or
more units assisted with funds... Davis -Bacon requirements are
applicable to contracts for construction covering 12 or more HOME -
assisted units. Davis -Bacon does not follow "construction work" or
"projects". This factor has implications in two ways:
a. First, a HOME project with 12 or more assisted units that is
constructed under multiple contracts each containing less than 12
HOME units is not covered. (Note: HOME regulations prohibit
breaking a single project into multiple contracts for the purpose of
avoiding Davis -Bacon.)
b. Second, if multiple HOME projects each containing less than 12
assisted units are grouped into a contract(s) for construction that
covers a total of 12 or more assisted units, the contract is covered.
3. Sweat Equity. HOME provides for a sweat equity program (see NAHA
Sec. 255) which permits members of an eligible family to provide labor
in exchange for acquisition of property for homeownership or to provide
labor in lieu of, or as a supplement to, rent payments. Such sweat
equity participants are exempt from Davis -Bacon prevailing wage
requirements.
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U.S. Housing Act of 1937, as amended (USHA): Section 12* (Public
Housing/Section 8):
(a) Any contract for loans, contributions, sale, or lease pursuant to
this Act ....shall also contain a provision that not less than the wages
prevailing in the locality, as predetermined by the Secretary of Labor
pursuant to the Davis -Bacon Act..., shall be paid to all laborers and
mechanics employed in the development of the project involved
(including a project with nine or more units assisted under section 8
of this Act, where the public housing agency or the Secretary and
the builder or sponsor enter into an agreement for such use before
construction or rehabilitation is commenced), and the Secretary shall
require certification as to compliance with the provisions of this
section prior to making any payment under such contract.
(b) Subsection (a) and the provisions relating to wages (pursuant to
subsection (a)) in any contract for loans, annual contributions, sale, or
lease pursuant to this Act, shall not apply to any individual that
(1) performs services for which the individual volunteered;
(2)(A) does not receive compensation for such services; or
(B) is paid expenses, reasonable benefits, or a nominal fee for such
services; and
(3) is not otherwise employed at any time in the construction work.
* Section 12(a) of the USHA also mandates the payment of HUD -
determined prevailing wage rates to all maintenance laborers and
mechanics engaged in the operation of PHA low-income housing
projects.
USHA (PHA/Sec 8) Factors of Applicability
1. Any contract for loans, contributions, sale, or lease pursuant to this
Act... Prevailing wage requirements apply through provisions required in any
contract for loans, contributions, sale or lease.... Generally, the "contract'
referenced means the Annual Contributions Contract (ACC) between HUD
and the respective PHA. (Be aware that "contract' has other relevance, some
not germane to LCAs and this Guide.) Prevailing wage applicability is not tied
to a funding source nor to a specific use of funds. This means that federal
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funding for development work is not a prerequisite to Davis -Bacon
requirements applicability.
2. ... (HUD -determined wage rates) shall be paid to all architects, technical
engineers, draftsmen, and technicians employed in the development,
and all maintenance laborers and mechanics employed in the
operation..., ...(Davis -Bacon wage rates) shall be paid to all laborers
and mechanics employed in the development....
Notice that, unlike other HUD labor standards provisions, the USHA makes no
distinction between laborers and mechanics employed by the agency and
those employed by contractors and subcontractors. This means the "force
account' labor — workers employed directly by the agency, whether on a full-
time, part-time, permanent or temporary basis — must receive the prevailing
wages applicable to the work they perform. (See Labor Relations Letter 2004-
02.)
3. ... (Davis -Bacon wage rates) shall be paid ... in the development of the
project involved (including a project with nine or more units assisted
under Section 8 of this Act, where the public housing agency or the
Secretary and the builder or the sponsor enter into an agreement for
such use ... before construction or rehabilitation is commenced)...
Notice, also, that the only applicability thresholds pertain to Section 8 projects:
there must be 9 or more Section 8 -assisted units and there must be an
agreement for the Section 8 assistance before construction begins. These
agreements are referred to as AHAPs and/or APRACs. The 9 unit threshold
refers to the number of units in the project that are Section 8 -assisted, not to
the total number of units in the project. The USHA contains no unit threshold
for public housing.
While the USHA does not contain a dollar threshold, HUD observes the
statutory Davis -Bacon Act $2,000 threshold for development work and has
implemented a $2,000 threshold for maintenance contracts.
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Native American Housing Assistance and Self -Determination Act of 1996,
as amended, (NAHASDA): Section 104(b)*:
(1) IN GENERAL. Any contract or agreement for assistance, sale, or
lease pursuant to this Act ... shall also contain a provision that not
less than the wages prevailing in the locality, as predetermined by
the Secretary of Labor pursuant to the Act of March 3, 1931
(commonly known as the Davis -Bacon Act;...); shall be paid to all
laborers and mechanics employed in the development of the
affordable housing involved, and the Secretary shall require
certification as to compliance with the provisions of this paragraph
before making any payment under such contract or agreement.
(2) EXCEPTIONS. Paragraph (1) and the provisions relating to wages
(pursuant to paragraph (1)) in any contract or agreement for assistance,
sale, or lease pursuant to this Act, shall not apply to any individual who
receives no compensation or is paid expenses, reasonable benefits, or a
nominal fee to perform the services for which the individual volunteered
and who is not otherwise employed at any time in the construction work.
(3) APPLICATION OF TRIBAL LAws.—Paragraph (1) shall not apply to any
contract or agreement for assistance, sale, or lease pursuant to this Act, if
such contract or agreement is otherwise covered by one or more laws or
regulations adopted by an Indian Tribe that requires the payment of not
less than prevailing wages, as determined by the Indian tribe.
* Section 104(b)(1) of NAHASDA also mandates the payment of HUD -
determined prevailing wage rates to all maintenance laborers and
mechanics engaged in the operation of NAHASDA-assisted affordable
housing projects.
NAHASDA (TDHE/IHA) Factors of Applicability
1. Any contract or agreement for assistance, sale, or lease pursuant to this
Act...
Similar to the USHA (public housing), prevailing wage requirements apply
through provisions required in any contract or agreement for assistance, sale,
or lease.... Prevailing wage applicability is not tied to a funding source, nor to
a specific use of any funds. This means that Federal funding for the particular
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development or operations work is not a prerequisite to Davis -Bacon or HUD -
determined wage rate applicability.
2. .... (HUD -determined wage rates) shall be paid to all architects, technical
engineers, draftsmen, and technicians employed in the development,
and all maintenance laborers and mechanics employed in the
operation..., ... (Davis -Bacon wage rates) shall be paid to all laborers and
mechanics employed in the development...
Again, NAHASDA mirrors the USHA in that it makes no distinction between
laborers and mechanics employed by the agency and those employed by
contractors and subcontractors. This means that "force account' labor —
workers employed directly by the agency, whether on a full-time, part-time,
permanent or temporary basis — must receive the prevailing wages applicable
to the work they perform.
3. Threshhold.
NAHASDA contains no dollar or number of units threshold. However, HUD
observes the statutory Davis -Bacon Act $2,000 threshold for development
work and has implemented a $2,000 threshold for maintenance contracts.
4. (HUD -determined and/or Davis -Bacon wage provisions) shall not apply
to any contract or agreement..., if such contract or agreement is
otherwise covered by one or more laws or regulations adopted by an
Indian Tribe that requires the payment of not less than the prevailing'
wages, as determined by the Indian Tribe...
This provision allows for the preemption of Federally -determined (HUD -
determined and/or Davis Bacon) wage rates where a Tribe has determined
prevailing wage rates for operations and/or development work. Note that the
tribal determination must be of rates that "prevail'' and the tribal law or
regulation must be applicable to the work in question. (See also ONAP
Program Guidance 2003-04, dated 2/4/2003.)
' HUD has not defined "prevailing" for the purposes of tribally -determined wage
rates. HUD also has not prescribed policies or procedures for the administration
or enforcement of such tribal rates. HUD defers to each Tribe to establish the
definitions, parameters and methodology for the determination, administration
and enforcement of tribally determined prevailing wage rates.
5. Sweat Equity.
HUD has concluded that, consistent with a provision in the USHA
(predecessor to NAHASDA), family members providing sweat equity labor for
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construction or rehabilitation of a home assisted under NAHASDA are
excluded from prevailing wage (HUD -determined and/or Davis -Bacon)
coverage. Sweat equity means members of an eligible family may contribute
labor toward the development of a homeownership project. These sweat
equity participants are not covered by prevailing wage requirements. (See
also, ONAP Program Guidance 2003-03, dated 2/4/2003.)
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Housinq Assistance for Native Hawaiians, Title VIII of the Native American
Housinq Assistance and Self -Determination Act of 1996, as amended,
(NAHASDA); Section 805(b)*:
(1) IN GENERAL. Any contract or agreement for assistance, sale, or
lease pursuant to this title shall contain—
(B) a provision that an amount not less than the wages prevailing
in the locality, as predetermined by the Secretary of Labor
pursuant to the Act commonly known as the 'Davis -Bacon
Act'...shall be paid to all laborers and mechanics employed in the
development of the affordable housing involved.
(2) EXCEPTIONS. Paragraph (1) and provisions relating to wages required
under paragraph (1) in any contract or agreement for assistance, sale,
or lease under this title, shall not apply to any individual who performs
the services for which the individual volunteered and who is not
otherwise employed at any time in the construction work and received
no compensation or is paid expenses, reasonable benefits, or a
nominal fee for those services.
* Section 805(b)(1) also mandates the payment of HUD -determined
prevailing wage rates to all maintenance laborers and mechanics engaged
in the operation of NAHASDA-assisted affordable housing projects.
NAHASDA (Native Hawaiian Housing): Factors of Applicability
1. Any contract or agreement for assistance, sale, or lease pursuant
to this Act...
Similar to the USHA (public housing), prevailing wage requirements apply
through provisions required in any contract or agreement for assistance, sale,
or lease.... Prevailing wage applicability is not tied to a funding source nor to
a specific use of any funds. This means that Federal funding for the particular
development or operations work is not a prerequisite to Davis -Bacon or HUD -
determined wage rate applicability.
2. .... (HUD -determined wage rates) shall be paid to all architects, technical
engineers, draftsmen, technicians employed in the development, and all
maintenance... laborers and mechanics employed in the operation...,
...(Davis -Bacon wage rates) shall be paid to all laborers and mechanics
employed in the development...
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Again, NAHASDA mirrors the USHA in that it makes no distinction between
laborers and mechanics employed by the agency and those employed by
contractors and subcontractors. This means that "force account' labor —
workers employed directly by the agency, whether on a full-time, part-time,
permanent or temporary basis — must receive the prevailing wages applicable
to the work they perform.
3. Threshhold.
NAHASDA contains no dollar or number of units threshold. However, HUD
observes the statutory Davis -Bacon Act $2,000 threshold for development
work and has implemented a $2,000 threshold for maintenance contracts.
4. Sweat Equity.
HUD has concluded that, consistent with a provision in the USHA
(predecessor to NAHASDA), family members providing sweat equity labor for
construction or rehabilitation of a home assisted under NAHASDA are
excluded from prevailing wage (HUD -determined and/or Davis -Bacon)
coverage. Sweat equity means members of an eligible family may contribute
labor toward the development of a homeownership project. These sweat
equity participants are not covered by prevailing wage requirements. (See
also, ONAP Program Guidance 2003-03, dated 2/4/2003.)
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Davis -Bacon Wage Determinations
The U.S. Department of Labor (DOL) is responsible for determining
prevailing wage rates for construction work pursuant to the Davis -Bacon Act and
publishes schedules of these wages in Davis -Bacon wage decisions. DOL
regulations pertaining to the determination, publication, use and effectiveness of
Davis -Bacon wage decisions (also known as wage determinations) are found at
29 CFR Part 1.
It is critical that the applicable Davis -Bacon wage decision and federal
labor standards provisions are incorporated, either by hard -copy or by specific
reference, into the bid specifications and contract for each project subject to
Davis -Bacon requirements.
Character of work. Davis -Bacon wage decisions are established for four (4)
broad categories (characters) of construction work (see also All Agency
Memoranda 130 and 131, available at wdol.gov):
1. Residential: Construction, rehabilitation or repair of single family homes and
apartment buildings no more than 4 stories, including incidental items such as
site work, parking areas, utilities, streets and sidewalks, unless there is an
established area practice to the contrary.
2. Building: Construction, rehabilitation or repair of apartment buildings great
than 4 stories, sheltered enclosures with walk-in access for the purpose of
housing people, machinery, equipment or supplies.
3. Highway: Construction, rehabilitation or repair of roads, streets, highways,
sidewalks, parking areas and most other paving work not incidental to
residential, building or heavy construction.
4. Heavy: A "catch-all" category which includes those projects which cannot be
classified as "residential', "building", or "highway". Examples include
dredging, sanitary and storm sewers, water mains and supply lines, dams,
and flood control projects.
General wage decisions. General wage decisions are published for specific
characters of work and by geographic location, usually a county or group of
counties. General wage decisions are available on-line at wdol.gov.
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General wage decisions may be modified from time -to -time to keep them current.
Modifications are listed numerically on the wage decision modification record
(found on the first page of the wage decision). A modification may change one or
more, or all work classifications and/or wage rates, however each modification
replaces the preceding modification in its entirety. For example, Modification #4
to a wage decision completely replaces Modification #2 of that wage decision.
Selecting the correct wage decision. LCAs must select the correct wage
decision for each project. The correct wage decision is that which is current (i.e.,
the current modification of that wage decision) and that is applicable based on
the character of the work and the geographic location. The appropriate location
is generally the county in which the project/construction work will be physically
located when completed. Contact the HUD Labor Relations Specialist if there is
no published general wage decision appropriate for the proposed work.
Wage decision "effective" dates. Wage decisions "lock -in" (i.e., become
effective) for each covered project based upon bid opening, contract award of
start of construction (see 29 CFR Part 1). After "lock -in", the wage decision is
"frozen" for the duration of the construction work, i.e., the wage decision for the
project is no longer subject to modification. Wage decisions for most LCA
projects will "lock -in" at contract award or start of construction if there is no award
except:
1. For contracts entered into pursuant to competitive bidding, the wage decision
will "lock -in" on the bid opening date provided that the contract is awarded
within 90 days.
2. If the contract is not awarded within 90 days, the wage decision must be
updated as of the date of award.
3. Modifications that are published less than 10 days before bid opening
may be disregarded if it is found that there is not a reasonable amount
of time to notify prospective bidders of the modification before bid
opening. If so, a record of the finding must be made to the contract file.
Conformances (additional classifications). At times, the wage decision
will not contain some of the work classification and wage rates that will be
needed for the construction work. In these cases, HUD may approve an
additional classification(s) and wage rates(s) for use on the project, subject
to a final decision by DOL.
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1. A request for additional classification and wage rate may be made only
after contract award. The request must originate with the
contractor/employer and must be submitted by the LCA to the HUD
Labor Relations Specialist.
2. An additional classification and wage rate will be approved by HUD
where:
a. The requested work classification is used in the area of the project by
the construction industry;
b. The work that will be performed is not performed by a work
classification already contained in the wage decision;
c. The proposed wage rate bears a reasonable relationship to the wage
rates on the wage decision; and
d. The workers that will be employed in the requested work
classification (if known), or the workers' representatives (if any),
agree with the proposed wage rate.
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Compliance Principles
There are several compliance principles, definitions and
interpretations that affect every Davis -Bacon — covered project. Adhering
to these principles will promote effective LCA contract administration and
enforcement.
Responsibilities of employers. All employers (contractors, subcontractors and
any lower -tier subcontractors) are required to pay all laborers and mechanics
employed or working on the site of the work unconditionally and not less often
than once a week, the full amount of wages and bona fide fringe benefits
computed at rates not less than those contained in the wage decision.
Employers must prepare, certify and submit weekly payroll reports reflecting all
the laborers and mechanics (employees) engaged in construction on the site of
the work. Employers may also be required to submit related documentation in
order to demonstrate compliance.
Responsibilities of the principal (prime) contractor. The principal contractor
(also referred to as the prime contractor) is responsible for the full compliance of
all employers (itself, subcontractors, and any lower -tier subcontractors) with the
labor standards provisions applicable to the project.
Site of work. The "site of work" is limited to the physical place or places where
the construction called for in the contract will remain when work on it has been
completed. "Site of work" includes other adjacent or nearby property used by the
contractor/subcontractor in the construction of the project (e.g., fabrication sites)
provided they are dedicated exclusively or nearly so to the performance of the
contract or project, and are so located in proximity to the actual construction
location that it would be reasonable to include them.
Laborers and mechanics. "Laborers" and "mechanics" are those individuals,
whose duties are manual or physical in nature, including workers who are
performing the work of a trade (e.g., Electrician). These terms include
apprentices, trainees and helpers and, for contracts subject to CWHSSA,
watchmen and guards. All laborers and mechanics may be paid no less than the
applicable prevailing wage rate for the type of work they perform.
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Employee. Every person who performs the work of a laborer or mechanic is
"employed" regardless of any contractual relationship that may be alleged to
exist between a contractor or subcontractor and such person.
Proper classification of work. Each laborer and mechanic shall be classified in
accordance with the work classifications listed on the wage decision and the
actual type of work he/she performs, and shall be paid the appropriate wage rate
and fringe benefits for the classification regardless of their level of skill.
Split classification. Laborers and mechanics that perform work in more than
one classification may be compensated at the rate specified for each
classification provided that the employer maintains time records that accurately
set forth the time spent in each classification in which the work was performed. If
accurate time records are not maintained, the employee shall be compensated at
the highest of all wage rates for the classifications in which work was performed.
Apprentice. An "apprentice" is a person employed and individually registered in
a bona fide apprenticeship program, including Step -Up apprenticeship programs
designed for Davis -Bacon construction work. Bona fide programs are those that
have been registered with DOL, Employment and Training Administration, Office
of Apprenticeship Training, Employer and Labor Services, Bureau of
Apprenticeship and Training (BAT) or with a BAT -recognized State
apprenticeship agency (SAC).
Trainee. A "trainee" is a person registered and receiving on-the-job training in a
construction occupation pursuant to a training program approved in advance by
the BAT.
Use of apprentices and trainees. Apprentices and trainees may be
compensated at rates less than those prescribed by the wage decision for their
craft only in accordance with the following parameters.
1. Registration. The apprentice or trainee shall be individually registered in a
bona fide program certified by the BAT or a SAC.
2. Wage rates. Each apprentice and trainee shall not be paid less than the
specified rate in the registered program for his/her level of progress. If the
rate specified is represented as a percentage of the journeyworker rate for
that craft, the percentage shall be applied to the corresponding wage rate
contained in the applicable wage decision.
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3. Fringe benefits. Apprentices and trainees must receive fringe benefits as
specified in the approved apprenticeship or trainee program. If the program is
silent as to fringe benefits for apprentices/trainees, the apprentices/trainees
must receive the full fringe benefit specified on the applicable wage decision
for their craft.
4. Ratio to iourneyworkers. The maximum number of apprentices or trainees
employed on the site of work may not exceed the ratio of apprentices or
trainees to journeyworkers permitted to the employer by the BAT/SAC
certified program. Apprentices or trainees who are employed at the site in
excess of the allowable ratio shall be paid the wage rate contained on the
applicable wage decision for the classification of work actually performed.
Compliance with the allowable ratio shall generally be met on a day-to-day
basis. However, back wages need not be asse ssed for minor, temporary,
and inadvertent ratio imbalances which are promptly corrected.
Wages. The term "wages" means the basic hourly rate of pay plus any
contribution irrevocably made by an employer to a bona fide fringe benefit fund,
plan or program.
Fringe benefits. Fringe benefits may include:
1. Sick, vacation or holiday pay; costs to defray expenses of
apprenticeship or similar programs; medical or hospital care;
supplemental unemployment benefits; life insurance; pensions on
retirement or death; compensation for injuries or illness resulting from
occupational activity; other bona fide fringe benefits; or insurance to
provide any of these.
2. In addition, fringe benefits may reflect the rate of costs to the employer
that may be reasonably anticipated in providing bona fide fringe
benefits pursuant to an enforceable commitment to carry out a
financially responsible program.
3. Fringe benefits do not include employer contributions or payments required
by other Federal, State or local law, such as FICA, workers' compensation, or
unemployment compensation.
Discharging prevailing wage obligations. Davis -Bacon prevailing wage rates
generally appear as a basic hourly rate plus fringe benefits, if any.
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"Prevailing wage" is made up of two interchangeable components: the basic
hourly wage and fringe benefits. The total of the basic hourly wage and fringe
benefits comprises the "prevailing wage" obligation. This obligation may be met
by any combination of cash wages and creditable "bona fide" fringe benefits
provided by the employer. For example:
The Davis -Bacon wage decision requires:
Basic Hourly Rate $10.00
Fringe Benefits 1.00
Total Prevailing Wage $11.00
Employers may comply by paying
1. $11.00 in cash wages;
2. $10.00 plus $1.00 in bona fide fringe benefits; or
3. Any combination of wages and benefits that totals $11.00 per hour
Deductions. The employer may make payroll deductions as permitted by DOL
Regulations 29 CFR Part 3. These regulations prohibit the employer from
requiring employees to "kick -back" any of their earnings. Deductions may
include employee obligations for income taxes, Social Security payments,
insurance premiums, retirement, savings accounts, and any other legally
permissible deduction authorized by the employee. Deductions may also be
made for payments on judgments and other financial obligations legally imposed
against the employee.
CWHSSA overtime. Contract Work Hour and Safety Standards Act (CWHSSA)
overtime requirements are applicable to prime contracts valued at $100,000 or
more, including any subcontracts subordinate to the prime. CWHSSA
requirements apply only to laborers, mechanics, watchmen and guards employed
on the site of work.
1. Overtime hours are defined as all hours worked at the site of work in excess
of 40 hours in any workweek.
2. CWHSSA requires the payment of time and one-half the basic rate of pay for
all hours worked in excess of 40 hours in a week.
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3. Amounts paid to fulfill the fringe benefit portion of the prevailing wages listed
in the wage determination — both contributions to bona fide benefit plans and
cash payments made to meet wage determination fringe benefits
requirements — are excluded in computing overtime obligations under
CWHSSA.
4. CWHSSA requires the payment of overtime premium pay only if the laborer or
mechanic works in excess of 40 hours in a work week on the CWHSSA-
covered contract(s). Overtime hours worked, which are not subject to
CHWSSA, may be subject to Fair Labor Standards Act overtime pay.
5. CWHSSA overtime violations are subject to liquidated damages calculated at
the rate of $10 per day, per violation.
Payrolls and other reporting requirements. Payrolls and basic records
relating to such payrolls shall be maintained by each employer with respect to
his/her own workforce employed on the site of the work. The prime contractor
shall maintain such records relative to all laborers and mechanics working on the
site of the work. Payrolls and related records shall be maintained during the
course of the construction work and preserved by the agency (HUD or LCA), the
prime contractor and all employers for at least three years following the
completion of the work. Such records shall contain:
1. The name and a individually identifying 4 -digit number for each laborer and
mechanic;
Note: Employers must maintain each employee's address and full social
security number (SSN) at all times during the construction of the project and
for no less than three years following its completion. This information must be
made available to the prime contractor, HUD and/or the LCA upon request.
2. His or her correct work classification(s);
3. Hourly rates of pay, including rates of contributions or costs anticipated for
fringe benefits;
4. Daily and weekly number of hours worked, including any overtime hours;
5. Gross earnings, deductions made, and actual net wages paid;
6. Evidence pertaining to any fringe benefit programs; and
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7. Evidence of the approval of any apprenticeship or trainee program, the
registration of each apprentice or trainee, and the ratios and wage rates
contained in the program.
Certified payroll reports. Weekly certified payroll reports (CPRs) shall be
submitted for each week any contract work is performed. Each employer shall
prepare and certify such payroll reports to demonstrate compliance with the labor
standards requirements.
1. CPR format. CPR information may be submitted in any format provided that
the LRS can reasonably interpret the information to monitor employer
compliance with the labor standards. Employers are encouraged to utilize
DOL Payroll Form WH -347. Employers who choose to use other formats
must ensure that all information from the WH -347 is included in their format.
The WH -347 form is available on-line at the OLR web site (Labor Relations
Forms), at HUDClips, and at: www.dol.gov/dol/esa/programs/drba/forms.htm
2. Submission requirements. CPRs shall be submitted for each employer
beginning with the first week such employer performs work on the site of the
work. CPRs shall be submitted promptly following the close of each such pay
week.
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Willful Violations/Falsification Indicators
"Spot-checks" of certified payroll reports (CPRs) and related documents
are conducted to monitor the compliance status of employers engaged on
projects covered by prevailing wage requirements. Spot-checks are intended to
disclose obvious, face -of -the -record violations and, more importantly, to detect
evidence of willful violations and payroll falsification.
In many of the more egregious noncompliance cases, the violating
employer will attempt to conceal underpayments on payroll reports by falsifying
the data. HUD has chosen to focus particularly on falsification because such
conduct by employers, generally, involves substantial amounts of wage
underpayments and may lead to debarment, and criminal prosecution or fines for
willful violations and/or making false statements.
The following indicators describe patterns that suggest the payroll data
have been falsified to conceal willful violations. Other willful violations may not
involve what appears on CPRS but, rather, what is not reported on CPRs. These
are also described in this Appendix, page 45.
Falsification appearing on CPRs.
1. Ratio of laborers to mechanics. Except for concrete, landscaping and similar
trades, the ratio of laborers to mechanics should not exceed 1 : 1. A higher
ratio of laborers to mechanics normally indicates misclassification. That is,
the workers classified and paid as laborers are, instead, performing the work
of a mechanic which requires a wage higher than that of a laborer. Therefore,
these workers are underpaid. The false information on the CPR may be
limited to the classification of work.
2. Too few or irregular hours. Most workers are employed on a regular 40 hour
per week basis. CPRs that consistently reflect less than 40 hours per week
for all or certain groups of employees, or that reflect erratic work schedules
(e.g., the crew works only a few hours per day scattered throughout the work
week), indicate that the hours may have been reduced to give the appearance
of compliance. The falsification in these cases may be limited to the hours
worked.
3. Discrepancies in wage computations. CPRs that reflect frequent
discrepancies in wage computations, e.g., gross wage payments in round
numbers ($400/week) computed from an uneven hourly wage rate
($15.67/hour), indicate that the employees may be working on a piece rate
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basis, or at an even (e.g., $15/hour) wage rate. Here, the falsification may
involve the hours worked, the rate of pay, or both.
4. Extraordinary deductions. Unexplained or unusually high deductions may
indicate that employees are being required to kick -back a portion of their
earnings. While this would indicate willful violations, it does not necessarily
indicate falsification. The information on the CPR may otherwise be accurate.
Willful violations that do not appear on CPRs.
1. Compliance excess. Some violating employers attempt to "boost" their
compliance factor by submitting "labor releases" and other documents that are
not required or requested. Such documents, offered without request, suggest
that the employer may be attempting to distract the compliance officer
(LRS/LCA) from actual violations.
2. "Ghost" workers. In some instances, employees are working on the project
but these employees do not appear on the CPRs at all. In these cases, the
employer may carry a core group of employees that is reported on the CPR.
But the employer also has a second group of employees, perhaps day -
workers or other temporary employees, and this second group of employees
doesn't appear on CPRs at all. The core group may be permanent
employees; they are usually paid more than the temporary employees. The
second group of employees is underpaid but, because the second group does
not appear on the CPRs, they are "invisible" to the compliance officer
(LRS/LCA). The compliance officer can't assess compliance with labor
standards with respect to the "ghost" workers.
Willful violation payment schemes. In some cases, worker or other complaints
may be the only way that some willful violations are revealed. Examples of willful
underpayment schemes that will not appear on a CPR include:
1. Wages paid in cash. Employers may attempt to conceal underpayments by
making wage payments in cash. It does not matter what is reported on the
CPR, the cash in the pay envelope is less than what is reported and required.
2. Employer "cashes" paychecks. Employers may issue payroll checks but the
employer will require employees to endorse/turnover the paycheck to the
employer in exchange for a lesser amount in cash.
3. Employer facilitates employee "cashing" of paychecks. Employers may issue
payroll checks and take action to ensure that the checks are processed
(cashed) through the bank. In such cases the employer instructs the
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A Practical Guide for States, Indian Tribes and Local Agencies
employees to cash the paychecks and then requires the employees to kick-
back a portion of the check proceeds to the employer in cash.
LCA Guide Page 46
A Practical Guide for States, Indian Tribes and Local Agencies
Davis -Bacon Wage Restitution
When underpayments of wages have occurred, the employer must pay
wage restitution due to the affected workers. Wage restitution must be made
promptly and in the full amounts due, less permissible and authorized
deductions.
If a violation of labor standards requirements results in an underpayment of
wages to employees, the LCA should notify the prime contractor to either make
wage restitution, or direct its subcontractor to do so. Where restitution amounts
are in excess of $10 per worker, the employer must attest to wage restitution
paid on a correction certified payroll.
Computing wage restitution for laborers and mechanics. Prevailing wages
earned are based upon the wage rate for the classification of work actually
performed, multiplied by the total number of covered hours worked. Wage
restitution may be computed as follows:
1. Total hours worked times (x) adjustment rate (DB rate — rate paid) = wage
restitution due; or
2. Total wages earned minus total wages paid = wage restitution due.
Correction CPRS. The employer shall be required to report the restitution on a
correction CPR. The correction CPR shall reflect the previous CPRs or period of
time for which restitution is due (e.g., Payrolls #1 through #6; or a beginning and
ending date). The correction CPR shall list each employee to whom restitution
was paid, and their work classification; the total number of work hours involved;
the adjustment wage rate (the difference between the required wage rate and the
wage rate paid); the gross amount of restitution due; deductions; and the net
amount paid. A properly executed Statement of Compliance shall accompany
the correction CPR.
Note: In the course of basic enforcement and corrections, the employer
need only submit a correction CPR to evidence wage restitution paid.
Other documentation such as copies of checks; copies of cancelled
checks; receipts signed by the employees; employee signatures on the
correction CPR; etc., is not required.
Review of correction CPRs. The LCA must compute the amounts of restitution
due and compare his/her computations to the correction CPR to ensure that full
restitution was made. The employer must be notified of any discrepancies, and
LCA Guide Page 47
A Practical Guide for States, Indian Tribes and Local Agencies
required to make additional payments, if needed, evidenced on a correction
CPR, within 30 days.
Withholding from payments due the contractor. If wage violations are not
corrected within 30 days after notification to the prime contractor, the LCA may
cause withholding from payments due to the contractor in the amount needed to
ensure the full payment of restitution and, if applicable, liquidated damages
computed for CWHSSA overtime violations. Only the amounts necessary to
meet the potential back wage and CWHSSA liquidated damages liabilities should
be withheld.
Unfound/unpaid workers. The gross amount of wages due to any employee
who is entitled to wage restitution and is not paid for any reason must be placed
in a labor standards escrow account as a condition for final closing/close-out.
The LCA holds the funds on behalf of the underpaid worker(s) and attempts to
locate and pay the amounts due to them. After reasonable efforts to locate the
workers are exhausted, the LCA must turn over the gross amount due to any
unfound workers to HUD. Contact the HUD Labor Relations Specialist for your
area if you encounter this situation.
LCA Guide Page 48
A Practical Guide for States, Indian Tribes and Local Agencies
Acronyms/Symbols/Websites
Acronyms/Symbols
AAM
All Agency Memorandum (DOL)
AHAP
Agreement to Enter Into a Housing Assistance Payments
Contract
ALJ
Administrative Law Judge
APRAC
Agreement to Enter Into a Project Rental Assistance Contract
BAT
Bureau of Apprenticeship and Training
BEDI
Brownfields Economic Development Initiative
CBA
Collective Bargaining Agreement
CDBG
Community Development Block Grant
CFR
Code of Federal Regulations
CPD
Community Planning and Development
CPR
Certified Payroll Report
CWHSSA
Contract Work Hours and Safety Standards Act
DBA
Davis -Bacon Act
DBRA
Davis -Bacon and Related Acts
DHHL
Department of Hawaiian Home Lands
DOL
Department of Labor
EDI
Economic Development Initiative
FHA
Federal Housing Administration
FLSA
Fair Labor Standards Act
FOH
Field Operations Handbook (DOL)
LCA Guide Page 49
A Practical Guide for States, Indian Tribes and Local Agencies
FOIA
Freedom of Information Act
HAP
Housing Assistance Payments Contract
HCDA
Housing and Community Development Act of 1974
HFA
Housing Finance Agency
HQLR
Headquarters Office of Labor Relations
HUD
Housing and Urban Development
IHA
Indian Housing Authority
IHBG
Indian Housing Block Grant
LCA
(State, tribal or) Local Contracting Agency(ies)
LDP
Limited Denial of Participation
LRS
Labor Relations Specialist(s)
MWD
Maintenance Wage Determination
NAHA
National Affordable Housing Act
NAHASDA
Native American Housing Assistance and Self-determination
Act
NHHBG
Native Hawaiian Housing Block Grant
NHA
National Housing Act
NRM
Nonroutine Maintenance
OA
Office of Apprenticeship
ODOC
Office of Departmental Operations and Coordination
OLR
Office of Labor Relations
ONAP
Office of Native American Housing
OJT
Overtime
LCA Guide Page 50
A Practical Guide for States, Indian Tribes and Local Agencies
PA
Portal to Portal Act
PHA
Public Housing Agency
PIH
Public and Indian Housing
PRAC
Project Rental Assistance Agreement
PW
Prevailing Wage
RLRO
Regional Labor Relations Officer
S/T
Straight -time
SAC
State Apprenticeship Council/Agency
SCA
Service Contract Act of 1965
SRO
Single room occupancy
TDHE
Tribally -Designated Housing Entity
TDW(s)
Tribally -determined Wage Rates
USHA
U.S. Housing Act of 1937
§
Section
¶
Paragraph
Websites
HUD Office of Labor Relations
www.hud.gov/offices/olr
HUD Regulations
www.access.gpo.gov/nara/cfr/cfr-table-
search.html
HUDClips
Forms and Publications
www.hud.gov/offices/adm/hudclips/index.cfm
DOL Davis -Bacon and Related
Acts Homepage
www.dol.gov/whd/contracts/dbra.htm
DOL Regulations
www.dol.gov/dol/allcfr/Title
29/toc.htm
LCA Guide Page 51
A Practical Guide for States, Indian Tribes and Local Agencies
Davis -Bacon Wage Decisions
www.wdol.gov
DOL Forms
www.dol.gov/whd/programs/dbra/forms.htm
GSA List of Parties Excluded
from Federal Procurement and
Non -Procurement Programs
Debarred List
http://ep[s.arnet.gov
LCA Guide Page 52
U.S. Department of Housing and Urban Development
Office of Departmental Operations and Coordination
Washington, DC 20410
Email: www.hud.gov/offices/olr
Labor Relations Desk Guide
LR01.DG
QSMENTpF
O
=
ti pP EOURL HOUSING
B5N DE4`°�" OPPORTUNITY
ATTACHMENT 8-F
ON-SITE INSPECTION CHECKLIST
Posting: The contractor must post, in a prominent location at the job site, the appropriate
Davis -Bacon poster with a copy of the applicable wage determination (usually stapled onto
the poster). The poster should list the name of the local labor standards compliance person
who may receive worker inquiries or complaints regarding the payment of prevailing wages.
In addition, if the construction contract is over $10,000, state law requires the contractor to
post a copy of the approved Statement of Intent to Pay Prevailing Wages.
2. Worker Interviews: Employee interviews must be conducted to establish the degree of
compliance with Davis -Bacon and related acts, and the nature and extent of violations, if any.
Interviews are to be "representative" of all classifications of workers on the project; the
general rule of thumb is that every trade is covered once a month for each contractor during
construction. Key points regarding worker interviews:
• Form HUD -11 maybe used to record information gained during the interview.
• The employee interviewed should be informed that the information given is confidential,
and that his/her name will not be disclosed to the contractor or subcontractor without
written permission. Participating in the interview process is voluntary for employees.
You may wish to note on the form, however, when an employee refuses to be
interviewed.
In addition to noting the employee's response to questions about wage classification,
duties and tools used, the interviewer should observe carefully what the employee is
actually doing. Any conflict between the observation and the worker's statements should
be noted on the form.
3. Comparison of Interview Information with Certified Payrolls: The payroll reviewer should
compare the information gained from the worker interviews against the applicable wage
determination and applicable payroll, recording any discrepancies.
4. Appropriate action should be quickly initiated to resolve any discrepancies. Such actions
may include a review of the contractor's actual time sheets and payroll records (including
cancelled checks and/or paycheck stubs).
5. If a wage violation is found to exist, appropriate steps should betaken immediately, and in
writing, to correct the violation. Once resolved, the contractor must furnish proof of wage
restitution as well as revised payrolls for the time periods in question.
AI IAGNMtNI S -G
Record of U.S. Department of Housing OMB Approval No. 2501-0009
and Urban Development (exp. 04/30/2005)
Employee Office of Labor Relations
Interview
Public reporting burden for this collection of information is estimated to average 15 minutes per response, including the time for reviewing instructions,
searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. This agency
may not collect this information, and you are not required to complete this form, unless it displays a currently valid OMB control number.
The information collected in recording interviews with construction laborers and mechanics is to assist in achieving compliance wiht the prevailing wage
requirements of the Davis -Bacon and related Acts.
Sensitive Information. The information collected on this form is considered sensitive and is protected by the Privacy Act. The Privacy Act requires that
these records be maintained with appropriate administrative, technical, and physical safeguards to ensure their security and confidentiality. In addition,
these records should be protected against any anticipated threats or hazards to their security or integrity which could result in substantial harm,
embarrassment, inconvenience, or unfairness to any individual on whom the information is maintained.
Project Number
Contractor or Subcontractor (Employer)
Project Name
1. Name of Employee
2. Home Address and Zip Code
3a. Last date you worked on project before today
3b. Number of hours worked on project on that date
4. Your hourly pay rate
5. Your job classification(s) (list all) (continue any answers on a separate sheet if necessary) Apprentice?
Yes
No
o
I—)
6. Your duties
7. Tools or equipment used
8. Paid at least time and one-half for all hours worked in excess of 40 in a week? Yes No
(If overtime premium pay is not required, enter "inapplicable") IF --i 11
9. Ever threatened, intimidated, or coerced into giving up any part of pay? Yes�es� NNo�o�
L__7 L_.....�i
10. Duties observed by interviewer Conform to Classification?
11. Remarks (Continue on a separate sheet if needed)
12.Signature of Interviewer
Examination
13.Remarks (Continue on a separate sheet if needed)
14.Signature of Payroll Examiner
Date of interview
Date
Previous editions are obsolete. form HUD -11 (06/2002)
ATTACHMENT 8-H (1)
Submission Requirements for Labor
Standards
Date: July 10, 1992 Letter No. LR -92-02
Subject: Submission requirements for §5.7 Labor Standards
Enforcement Reports (Davis -Bacon and Related Acts)
U. S. Department of Labor (DOL) Regulations (29 CFR 5.7) require Federal agencies to submit a
report to the Secretary of Labor on all enforcement actions where underpayments by a contractor
or subcontractor total $1,000 or more, or where there is reason to believe that the violations are
aggravated or willful. These reports must be famished to the DOL within 60 days after the
completion of the investigation. (Note that the $1,000 threshold refers to the underpayments of a
single employer to his/her entire workforce and not to individual employees.)
HUD Handbook 1344.1 (REV -1, CHG-1) separates the reports into two categories: those which
may be submitted to the DOL by the HUD Regional Labor Relations Officer and those that must
be submitted through Headquarters. The reporting distinction is made based upon three criteria.
A report may be submitted directly to the DOL by the Regional Office if the following
conditions exist:
1) There is no reason to believe that the violations were aggravated or willful; and
2) Full restitution and required payments (e.g., liquidated damages) have been made; and
3) No further action (e.g., debarment) is recommended.
Where the Regional Office submits the report directly to the DOL, a copy of the report must be
provided to Headquarters Labor Relations.
In all other cases, the report must be submitted to the DOL through Headquarters Labor
Relations. (See Handbook, Chapter 6, Reports.) Note that all referrals for §5.11(b) hearings, all
recommendations for debarment, and all referrals for decisions concerning the assessment of
liquidated damages for CWHSSA overtime violations must be accompanied by a detailed §5.7
report.
Contracting agencies (e.g., PHAs, CDBG recipients, etc.) are also required to submit reports of
enforcement activity [see Handbook, Chapter 3, 3-4(g)]. Enforcement reports from contracting
agencies must be forwarded to the DOL through HUD in accordance with these guidelines. This
requirement should be discussed during training sessions and made a part of routine technical
assistance.
Timing of the Report
DOL regulations require submission of enforcement reports within 60 days after the completion
of the investigation. "Investigation" for the purpose of this discussion is broadly defined as
ranging from routine payroll reviews to "full-scale" investigations. Additionally, in this use
http://www.hud.gov/offices/oir/olr-9202.cfrn
ATTACHMENT 8•H (2)
"investigation" is meant to include all actions taken by the agency or contractor toward
disposition of the case including settlement by restitution or refusal to pay and/or a request for a
hearing under §5.1 l (b). Therefore, the §5.7 enforcement report should not be prepared until after
final disposition at the local level (e.g., restitution, request for a hearing, request for a waiver or
reduction of CWHSSA liquidated damages) has been reached. It is not necessary, however, to
wait until all of the underpaid workers are located or until disbursement is completed to prepare
the report.
Where the report must be submitted to the DOL through Headquarters, the Regional Office must
furnish the report to this office (Headquarters) sufficiently in advance of the due date to ensure
timely submission to the DOL (i.e., within 60 days after completion of the investigation).
Consequently, these reports must be received in this office not later thanforty-five (45) days after
completion of the investigation which will allow fifteen (15) days for Headquarters review and
transmittal to DOL. (See also Handbook, Chapter 4, HUD Labor Standards Investigations.)
Content of the Report
The amount of detail needed in the report and any exhibits is directly related to the purpose the
report will serve. Each report should contain basic coverage information, a description of the
violation(s), and the disposition of the case, and must be accompanied by a schedule of the
wages found due. A report submitted directly to the DOL by the Regional Office (i.e., where
restitution has been paid, and there is no evidence of willful or aggravated action with respect to
the violations, and no administrative sanctions are recommended) can be brief Reports that refer
a request for a hearing or that recommend debarment must be much more detailed in narrative
and must be accompanied by exhibits which, together, are sufficient to substantiate the violations
and document the investigative actions of the agency. Judgment must be used to determine the
amount of detail and documentation that is appropriate in each case.
A sample format for §5.7 labor standards enforcement reports is attached. The basic format
should be adequate in most cases where restitution has been paid and no further administrative
action is recommended. Modifications may be made to appropriately reflect the circumstances of
specific cases. The format will need to be expanded where a more detailed report is required
(e.g., debarment recommendations, §5.11(b) hearing requests).
The LRAP software currently in development is expected to contain an enforcement report
component. If necessary, the instructions contained in this Letter will be modified to ensure
consistency.
http://www.hud.gov/offices/olr/olr-9202.cfm
ATTACHMENT
MEMORANDUM FOR:
FROM:
SUBJECT: Section 5.7 Enforcement Report
I. Coverage
Project Name:
Project No.:
Location:
Wage Decision:
Program Area/Statute:
Prime Contractor:
Subcontractor:
II. Violations
ATTACHMENT 8-H (3)
SAMPLE
Wage restitution in the total amount of $ has been paid to employees by the
contractor(s) named above. (See attached schedule of Wages Found Due.)
Were any of the violations willful? YES NO (Circle one.)
(If yes, see attached detailed report.)
Were CWHSSA liquidated damages computed? YES NO (Circle one.)
(If yes, see attached detailed report.)
Are the administrative sanctions recommended? YES NO (Circle one.)
(If yes, see attached detailed report.)
The wage underpayments were discovered through:
http://www.hud.gov/offices/olr/oir-9202.cfrn
City
County State
City
County State
City
County State
Wage restitution in the total amount of $ has been paid to employees by the
contractor(s) named above. (See attached schedule of Wages Found Due.)
Were any of the violations willful? YES NO (Circle one.)
(If yes, see attached detailed report.)
Were CWHSSA liquidated damages computed? YES NO (Circle one.)
(If yes, see attached detailed report.)
Are the administrative sanctions recommended? YES NO (Circle one.)
(If yes, see attached detailed report.)
The wage underpayments were discovered through:
http://www.hud.gov/offices/olr/oir-9202.cfrn
ATTACHMENT 8-H (4)
The types of violations were:
III. Disposition
(Narrative)
http://www.hud.gov/offices/olr/olr_9202.cfrn
ATTACHMENT 8-1 (1)
RETAINAGE RELEASE
CHECKLIST
Basic Information
Project Name:
Project #:
Contractor's Name:
Retainage Status
❑ Escrow Agreement
❑ Agency Holding Retainage
❑ Retainage Bond
Dates
Substantial Completion Date
Final Acceptance Date
45 Days from Final Acceptance
Documentation Reauired
Description:
Responsible Party:
Date Recvd
or Com ltd:
Acceptance Notices
❑
Final Acceptance Letter (to Contractor)
❑
Notice of Completion of Public Works Contract to DOR
❑
Notice of Completion of Public Works Contract to ESD
❑
Notice of Completion of Public Works Contract to L&I
Releases from State Agencies
❑
Department of Revenue
Certificate of Payment of State Excise Taxes by Public Works Contractor
Revenue
❑
Employment Security Department
Certificate of Payment of Contribution, Penalties & Interest on Public Works Contract
Employment Security
❑
Department of Labor and Industries
Release
❑ Contractor
E] All Subcontractors
Prevailing Wages
❑
Statements of Intent to Pay Prevailing Wages
E] Contractor
E] All Subcontractors
❑
Affidavits of Wages Paid
❑ Contractor
El All Subcontractors
Other
❑
Certificate of Payment of Labor and Materials
Contractor
Claims and Liens Against the Retainage and Payment Bond
Type of Action*
Claimant
Amount
Date Received
*Claim, Renewal, Release
GASWR Manual Revision\New Folder\11 - Retainage Release Checklist.doc
September 29, 2006
Page 42
ATTACHMENT 8-J
SEMI-ANNUAL LABOR STANDARDS COMPLIANCE REPORT DATA FORM
Agency Name and A
Description of Work:
HUD Program or Source of Funds:
Prime Contractor:
Contract Amount:
Pre -Construction Conference Date: Location:
(Labor Standards Provisions) included in Specs? Form #: HUD 4010
Was a Wage Determination Included in the Specs? Number:
Number of Modifications:
Have all Contractor -Subcontractor Certifications been received?
Are Contractor(s) Payroll Certifications Submissions Current and Complete?
Number of Construction Wage Interviews (HUD -11) Completed:
Number of Trades Interviewed:
Were any Violations Discovered and Resolved? Number:
Number of Employees Involved: # of Subs Involved:
Total Amount of Underpayments: D -B: CWHSSA:
Briefly describe any Labor Standards Complaints and Resolutions:
Is any Contractor Retainage Held at this Time? Amount:
SUBCONTRACTOR(S) WHO WORKED ON THIS CONTRACT
NAME ADDRESS CONTRACT AMOUNT TYPE OF WORK
NOTE: PLEASE USE REVERSE SIDE OF THIS FORM OR AN ATTACHMENT FOR ANY
ADDITIONAL INFORMATION.
I CERTIFY TO THE BEST OF MY KNOWLEDGE THAT ALL LABORERS AND MECHANICS
EMPLOYED ON THIS CONSTRUCTION CONTRACT WERE PAID IN ACCORDANCE WITH THE
LABOR PROVISIONS, EXCEPT AS NOTED. THERE ARE NO OUTSTANDING OR UNRESOLVED
LABOR STANDARDS UNDERPAYMENTS, COMPLAINTS OR DISPUTES.
SIGNA
ATTACHMENT 8-K
DAVIS-BACON APPLICABILITY TO SIDE SERVICE CONNECTIONS
WHO HOLDS
ACTIVITY
BENEFICIARIES
DAVIS-
TYPE OF
REHAB
BACON
CONTRACT
CONTRACT
Jurisdiction
side service
AREA: all
Yes
Construction
connections
connections **
Jurisdiction
side service
DIRECT: LMI
Yes
Construction
connections
connections
Subrecipient
side service
LMI: all connections
Yes
Construction
connections
Homeowner;
side service
AREA: all
NA
Housing Rehab
Jurisdiction provides TA
connections
connections
Homeowner; Jurisdiction
side service
DIRECT: LMI
NA
Housing Rehab
provides TA
connections
connections
Homeowner;
side service
AREA: all
NA
Housing Rehab
Subrecipient provides
connections
connections
TA
Homeowner;
side service
DIRECT: LMI
NA
Housing Rehab
Subrecipient provides
connections
connections
TA
Jurisdiction
system
AREA: all
YES
Construction
improvements
improvements and
and side
connections
service
connections
Jurisdiction
system
AREA: all
YES
Construction
improvements
improvements
and LMI side
service
DIRECT: LMI
connections
connections
Subrecipient
system
AREA: all
YES
Construction
improvements
improvements and
and sides
connections
service
connections
**While Davis -Bacon Labor Standards could be applicable to all side service connections
in the project, CDBG can only be used to fund side service connections for low- and
moderate -income households.
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ATTACHMENT 8•M (1)
RCW 39.04.155
Small works roster contract procedures — Limited public works process — Definition.
(1) This section provides uniform small works roster provisions to award contracts for construction, building,
renovation, remodeling, alteration, repair, or improvement of real property that may be used by state
agencies and by any local government that is expressly authorized to use these provisions. These
provisions may be used in lieu of other procedures to award contracts for such work with an estimated cost
of three hundred thousand dollars or less. The small works roster process includes the limited public works
process authorized under subsection (3) of this section and any local government authorized to award
contracts using the small works roster process under this section may award contracts using the limited
public works process under subsection (3) of this section.
(2)(a) A state agency or authorized local government may create a single general small works roster, or may
create a small works roster for different specialties or categories of anticipated work. Where applicable,
small works rosters may make distinctions between contractors based upon different geographic areas
served by the contractor. The small works roster or rosters shall consist of all responsible contractors who
have requested to be on the list, and where required by law are properly licensed or registered to perform
such work in this state. A state agency or local government establishing a small works roster or rosters may
require eligible contractors desiring to be placed on a roster or rosters to keep current records of any
applicable licenses, certifications, registrations, bonding, insurance, or other appropriate matters on file with
the state agency or local government as a condition of being placed on a roster or rosters. At least once a
year, the state agency or local government shall publish in a newspaper of general circulation within the
jurisdiction a notice of the existence of the roster or rosters and solicit the names of contractors for such
roster or rosters. In addition, responsible contractors shall be added to an appropriate roster or rosters at
any time they submit a written request and necessary records. Master contracts may be required to be
signed that become effective when a specific award is made using a small works roster.
(b) A state agency establishing a small works roster or rosters shall adopt rules implementing this
subsection. A local government establishing a small works roster or rosters shall adopt an ordinance or
resolution implementing this subsection. Procedures included in rules adopted by the *department of general
administration in implementing this subsection must be included in any rules providing for a small works
roster or rosters that is adopted by another state agency, if the authority for that state agency to engage in
these activities has been delegated to it by the *department of general administration under chapter 43_19
RCW. An interlocal contract or agreement between two or more state agencies or local governments
establishing a small works roster or rosters to be used by the parties to the agreement or contract must
clearly identify the lead entity that is responsible for implementing the provisions of this subsection.
(c) Procedures shall be established for securing telephone, written, or electronic quotations from contractors
on the appropriate small works roster to assure that a competitive price is established and to award
contracts to the lowest responsible bidder, as defined in RCW 39.04.010. Invitations for quotations shall
include an estimate of the scope and nature of the work to be performed as well as materials and equipment
to be furnished. However, detailed plans and specifications need not be included in the invitation. This
subsection does not eliminate other requirements for architectural or engineering approvals as to quality and
compliance with building codes. Quotations may be invited from all appropriate contractors on the
appropriate small works roster. As an alternative, quotations may be invited from at least five contractors on
the appropriate small works roster who have indicated the capability of performing the kind of work being
contracted, in a manner that will equitably distribute the opportunity among the contractors on the
appropriate roster. However, if the estimated cost of the work is from one hundred fifty thousand dollars to
three hundred thousand dollars, a state agency or local government that chooses to solicit bids from less
than all the appropriate contractors on the appropriate small works roster must also notify the remaining
contractors on the appropriate small works roster that quotations on the work are being sought. The
government has the sole option of determining whether this notice to the remaining contractors is made by:
(i) Publishing notice in a legal newspaper in general circulation in the area where the work is to be done; (ii)
mailing a notice to these contractors; or (iii) sending a notice to these contractors by facsimile or other
electronic means. For purposes of this subsection (2)(c), "equitably distribute" means that a state agency or
local government soliciting bids may not favor certain contractors on the appropriate small works roster over
other contractors on the appropriate small works roster who perform similar services.
(d) A contract awarded from a small works roster under this section need not be advertised
ATTACHMENT 8•M (2)
(e) Immediately after an award is made, the bid quotations obtained shall be recorded, open to public
inspection, and available by telephone inquiry.
(3) In lieu of awarding contracts under subsection (2) of this section, a state agency or authorized local
government may award a contract for work, construction, alteration, repair, or improvement projects
estimated to cost less than thirty-five thousand dollars using the limited public works process provided under
this subsection. Public works projects awarded under this subsection are exempt from the other
requirements of the small works roster process provided under subsection (2) of this section and are exempt
from the requirement that contracts be awarded after advertisement as provided under RCW 39.04.010.
For limited public works projects, a state agency or authorized local government shall solicit electronic or
written quotations from a minimum of three contractors from the appropriate small works roster and shall
award the contract to the lowest responsible bidder as defined under RCW 39.04.010. After an award is
made, the quotations shall be open to public inspection and available by electronic request. A state agency
or authorized local government shall attempt to distribute opportunities for limited public works projects
equitably among contractors willing to perform in the geographic area of the work. A state agency or
authorized local government shall maintain a list of the contractors contacted and the contracts awarded
during the previous twenty-four months under the limited public works process, including the name of the
contractor, the contractor's registration number, the amount of the contract, a brief description of the type of
work performed, and the date the contract was awarded. For limited public works projects, a state agency or
authorized local government may waive the payment and performance bond requirements of chapter 39_08
RCW and the retainage requirements of chapter 60_28 RCW, thereby assuming the liability for the
contractor's nonpayment of laborers, mechanics, subcontractors, materialpersons, suppliers, and taxes
imposed under Title 82 RCW that may be due from the contractor for the limited public works project,
however the state agency or authorized local government shall have the right of recovery against the
contractor for any payments made on the contractor's behalf.
(4) The breaking of any project into units or accomplishing any projects by phases is prohibited if it is done
for the purpose of avoiding the maximum dollar amount of a contract that may be let using the small works
roster process or limited public works process.
(5)(a) A state agency or authorized local government may use the limited public works process of subsection
(3) of this section to solicit and award small works roster contracts to small businesses that are registered
contractors with gross revenues under one million dollars annually as reported on their federal tax return.
(b) A state agency or authorized local government may adopt additional procedures to encourage small
businesses that are registered contractors with gross revenues under two hundred fifty thousand dollars
annually as reported on their federal tax returns to submit quotations or bids on small works roster contracts.
(6) As used in this section, "state agency" means the *department of general administration, the state parks
and recreation commission, the department of natural resources, the department of fish and wildlife, the
department of transportation, any institution of higher education as defined under RCW 286.10.016, and any
other state agency delegated authority by the "department of general administration to engage in
construction, building, renovation, remodeling, alteration, improvement, or repair activities.
[2009 c 74 § 1; 2008 c 130 § 17. Prior: 2007 c 218 § 87; 2007 c 210 § 1; 2007 c 133 § 4; 2001 c 284 § 1;
2000 c 138 § 101; 1998 c 278 § 12; 1993 c 198 § 1; 1991 c 363 § 109.]
Notes:
*Reviser's note: The "department of general administration" was renamed the "department of enterprise
services" by 2011 1 st sp.s. c 43 § 107.
Intent -- Finding — 2007 c 218: See note following RCW 1.08.130.
Purpose -- 2000 c 138: "The purpose of this act is to establish a common small works roster procedure that
state agencies and local governments may use to award contracts for construction, building, renovation,
remodeling, alteration, repair, or improvement of real property." [2000 c 138 § 1.]
ATTACHMENT 8-M (3)
Part headings not law -- 2000 c 138: 'Part headings used in this act are not any part of the law." [2000 c
138 § 302.]
Purpose -- Captions not law -- 1991 c 363: See notes following RCW 2.32.180.
Competitive bids -- Contract procedure: RCW 36.32.250.
ATTACHMENT 8-M (4)
RCW 39.08.010
Bond required — Conditions— Retention of contract amount in lieu of bond — Contracts of one hundred
thousand dollars or less.
*** CHANGE IN 2013 *** (SEE 1420-S.SLI ***
Whenever any board, council, commission, trustees, or body acting for the state or any county or
municipality or any public body shall contract with any person or corporation to do any work for the state,
county, or municipality, or other public body, city, town, or district, such board, council, commission, trustees,
or body shall require the person or persons with whom such contract is made to make, execute, and deliver
to such board, council, commission, trustees, or body a good and sufficient bond, with a surety company as
surety, conditioned that such person or persons shall faithfully perform all the provisions of such contract
and pay all laborers, mechanics, and subcontractors and material suppliers, and all persons who supply
such person or persons, or subcontractors, with provisions and supplies for the carrying on of such work,
which bond in cases of cities and towns shall be filed with the clerk or comptroller thereof, and any person or
persons performing such services or furnishing material to any subcontractor shall have the same right
under the provisions of such bond as if such work, services, or material was furnished to the original
contractor: PROVIDED, HOWEVER, That the provisions of RCW 39.08.010 through 39.08.030 shall not
apply to any money loaned or advanced to any such contractor, subcontractor or other person in the
performance of any such work: PROVIDED FURTHER, That on contracts of thirty-five thousand dollars or
less, at the option of the contractor the respective public entity may, in lieu of the bond, retain fifty percent of
the contract amount for a period of thirty days after date of final acceptance, or until receipt of all necessary
releases from the department of revenue and the department of labor and industries and settlement of any
liens filed under chapter 60_28 RCW, whichever is later: PROVIDED FURTHER, That for contracts of one
hundred thousand dollars or less, the public entity may accept a full payment and performance bond from an
individual surety or sureties: AND PROVIDED FURTHER, That the surety must agree to be bound by the
laws of the state of Washington and subjected to the jurisdiction of the state of Washington.
[2007 c 218 § 88; 2007 c 210 § 3; 1989 c 145 § 1; 1982 c 98 § 5; 19751st ex.s. c 278 § 23; 1967 c 70 § 2;
1915 c 28 § 1; 1909 c 207 § 1; RRS § 1159. Prior: 1897 c 44 § 1; 1888 p 15 § 1.)
Notes:
Reviser's note: This section was amended by 2007 c 210 § 3 and by 2007 c 218 § 88, each without
reference to the other. Both amendments are incorporated in the publication of this section under RCW
1.12.025(2). For rule of construction, see RCW 1.12.025(1).
Intent -- Finding -- 2007 c 218: See note following RCW 1.08.130.
Construction -- Severability -- 1975 1st ex.s. c 278: See notes following RCW 11.08.160.
State highway construction and maintenance, bond and surety requirements: Chapter 47.28 RCW.
Weekly Report of
Subcontractors
on the Job Site
Development Address
Firm Name
Signature of General Contractor
DB5 (12/2013)
ATTACHMENT 8-N (1)
Block Grant Programs
HOME Program
Week Ending:
Sun I Mon I Tue I Wed I Thurs
Date
Fri I Sat
ATTACHMENT 8-0 (1)
NOTICE OF COMPLETION OF PUBLIC WORKS CONTRACT
Name & Address of Public Aaenc-
Number:
Contractor's UBI Number:
Date:
Department Use
Assigned to:
Date Assigned:
Notice is herebv given relative to the completion of contract or vroiect described below
Pro,iect Name
Contract Number
Job Order Contracting
❑ Yes ❑ No
Description of Work Done/Include Jobsite Address(es)
Federally funded road transportation project? ❑ Yes
No
Contractor's Name
Telephone Number
Affidavit ID*
Contractor Address
If Retainage is Bonded, List Surety's Name (or attach a copy)
Surety Agent's Address
Date Contract Awarded
Date Work Commenced
Date Work Completed
Date Work Accepted
Contract Amount $
Additions ( +) $ Liquidated Damages $
Reductions (-) $ Amount Disbursed $
Sub -Total $ Amount Retained $
Amount of Sales Tax Paid at
(II'various rates apply, please send a breakdown) $
TOTAL $ TOTAL$
NOTE: These two totals must be equal
Please List all Subcontractors and Sub -tiers Below:
bcontractor's Name:
avarmnI
Rev 31 0020e (07,'06n2) Continued on page 2
Please List all Subcontractors and Sub -tiers Below:
Subcontractor's Name: UBI Number: (Required) Affidavit ID*
Comments:
Contact Name: Title:
hmall Andress: Phone Number
Note: The Disbursing Officer must submit this completed notice immediately after acceptance of the work done under this contract.
NO PAYMENT SHALL BE MADE FROM RETAINED FUNDS until receipt of all release certificates.
Affidavit ID* - Provide known ones at this time. No LNI release will be granted until all affidavits are completed.
Submitting Form: Please submit the completed form to all three agencies below. For a faster response, please submit by e-mail.
/��
//�
I `
Washington State
Department of Revenue
Public Works Section
PO Box 47474
Olympia WA98504-7474
(360) 725-7588
FAX (360) 6644159
PWC@dor.m.gov
Washington State
Department of Labor and Industries
.' Contract Release
PO Box 44274
Olympia, WA 98504-4272
(360) 902-5772
FAX (360) 902-6897
ContractRelease@Ini.wa.gov
' Washington State
=06--
f—Employment Security Department
Registration, Inquiry, Standards S
Coordination Una
PO Box 9046
Olympia WA 98507-9046
(360) 902-9450
Fax (360) 902-9287
publicworks@esd.wa.gov
For tax assistance or to request this document in an alternate format, visit ht4):Hdor.wa.gov or call 1-800-647-7706.
Teletype (TTY) users may call (360) 705-6718.
F215-038-000 07-2012
REV 31 0020e (07/06/12)