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Davis-Bacon Act (DBA)

Eva AumanOffice of the Assistant General Counsel

for Labor and Pension Law (GC-63)November 18, 2014

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Labor Standards

The Davis-Bacon Act (DBA) Davis-Bacon and Related Acts (DBRA) Contract Work Hours and Safety Standards Act

(CWHSSA) Copeland “Anti-Kickback” Act (CA) Walsh-Healey Public Contracts Act (PCA) McNamara-O’Hara Service Contract Act(SCA) Miller Act (MA) Fair Labor Standards Act (FLSA)

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Purpose Protects communities and workers from

non-local contractors underbidding local wage levels.

Implements socio-economic goals in the war against poverty.

Davis-Bacon Act – 1931(Last amended in 1964)

The Davis-Bacon Act (DBA), 40 U.S.C. 3141 et seq., is applicable to contracts of the United States in excess of $2,000 for the construction, alteration, and/or repair (including painting and decorating) of public buildings or public works, but not routine maintenance.

U.S. consists of the States and the District of Columbia, not the territories

For grants subject to DBA, the threshold $2,000 attaches to the grant, not to each individual contract.

The DBA requires all contractors and subcontractors to pay

laborers and mechanics employed on a covered contract wages and fringe benefits determined by the Secretary of Labor to be prevailing for corresponding classes of employees engaged on similar projects in the locality.

DOL regulations found at 29 CFR Parts 1, 3, and 5.

Requires payment of wages weekly.

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Davis-Bacon Related Acts(DBRA) Davis-Bacon Act requirements extend to

numerous “related Acts” (such as the Recovery Act) that provide federal assistance by: Grants Loans Loan Guarantee Insurance

*Note: Congress oftenextends DBRAs to the Territories.

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DBRA

The Davis-Bacon provisions apply to more than public buildings when Congress includes prevailing wage requirements in Acts.

Since 1931, Congress has extended the Davis-Bacon prevailing wage requirements to some 60 related Acts (called Davis-Bacon Related Acts (DBRA)) which provide federal assistance for construction through loans, grants, loan guarantees, and insurance.

These Acts include by reference the requirements for payment of the prevailing wages in accordance with the Davis-Bacon Act.

  Examples of the related Acts are the American Recovery and

Reinvestment Act of 2009, the Federal-Aid Highway Acts, the Housing and Community Development Act of 1974, and the Federal Water Pollution Control Act.

The American Recovery and Reinvestment Act of 2009 (Recovery Act), provides as follows:

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Recovery Act – Prevailing Wage Language for Grants

Section 1606: Not withstanding any other provision of law and in a manner consistent with other provisions in this Act, all laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the Federal Government pursuant to this Act shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of Title 40, United States Code.

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There is No Requirement that the Project be a Public Building or Public Work

The Recovery Act makes the DBA requirements applicable to “projects funded directly by or assisted in whole or in part by the Federal Government. . .”  There is no requirement under the Recovery Act that the project be a public building or public work.  Thus, Congress made the DBA requirements applicable to all construction work involved in a project, including non-public buildings and works. 

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DOL Recovery Act Guidance

DOL - All Agency Memoranda (AAMs) http://www.wdol.gov/aam.aspx

AAM No. 207-May 29, 2009:DOL guidance on applying Davis-Bacon labor standards to federal and federally assisted construction projects funded in whole or in part by the Recovery Act, Division A, appropriations.

AAM No. 208-May 5, 2010: DOL guidance on applying Davis-Bacon labor standards to construction projects funded in whole or in part with tax-favored bonds specified in Recovery Act, Division B, section 1601.

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Contract Work Hours &Safety Standards Act CWHSSA, 40 U.S.C. Chapter 37 The Act applies to federal service contracts and

DBA covered contracts over $150,000, and requires contractors and subcontractors on covered contracts to pay laborers and mechanics employed in the performance of the contracts one and one-half times their basic rate of pay for all hours worked over 40 in a workweek.

This Act also prohibits unsanitary, hazardous, or dangerous working conditions on federal and federally financed and assisted construction projects.

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Copeland “Anti-Kickback” Act

The Copeland “Anti-Kickback” Act of 1934, codified at 18 U.S.C. 874.

Requires contractors to pay all wages owing. Requires that Contractors provide a

statement of compliance. Prohibits contractors from requiring an

employee to give up any part of compensation.

Watch for illegal deductions.

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DOL Responsibilities Determine “prevailing wages” in the locality

Issue regulations and standards to be observed by contracting agencies and recipients of loans, financial assistance, grants, etc. DBA Regulations found at 29 CFR Parts 1, 3, and 5.

Perform oversight function - has independent authority to conduct investigations

Compute any back wages and liquidated damages

Debar contractor (contractor is ineligible for future contracts for a period of up to 3 years).

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Flow-Down Responsibilities DOE OGC has lead on Labor Standards for DOE DOE CO has the authority to determine whether

DBA applies to a specific project For Recovery Act - DOE CO have delegated

oversight to State grantees/recipients (with DOL approval)

All grant and contracts must contain labor standards clauses

All grantees must collect and retain weekly certified payrolls for three years after completion of projects for purposes of DOL requirements.

DOE Project Officers must monitor grantees performance under DBA.

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DOE Responsibilities Recovery Act Grants

Retains the authority to investigate, monitor, and enforce DBA requirements.

Will conduct compliance audits with the Recipient

Investigate potential violations or complaints

Monitors DBA compliance

Report semi-annually to DOL regarding dollar value of awards/contracts, number of investigations, number of complaints, results of the investigations, and any back pay owed to laborers and mechanics.

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Recipient Responsibilities(when Recipient is governmental entity)

Receive Original Certified Payrolls and Review Is the correct wage determination being used? Has the contractor paid the correct rate for

the job classification stated on payroll record? Has the contractor paid fringe benefits

appropriately? Is the certification included AND signed? Check the math – does the number of hours of

DB work correlate to the gross wages paid? Are deductions appropriate Perform site visits and interview workers

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DOE Responsibilities on its contracts for construction Receive Original Certified Payrolls and

Review Is the correct wage determination being used? Has the contractor paid the correct rate for

the job classification stated on payroll record? Has the contractor paid fringe benefits

appropriately? Is the certification included AND signed? Check the math – does the number of hours of

DB work correlate to the gross wages paid? Are deductions appropriate Perform Site Visits and Interview workers

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Responsibilities Continued

Employee Interviews: Information provided is confidential Interview statements should contain:

Place and date of interview Name and address of employer/employee Employment status and classification Alleged violations

May Use Form SF-1445 Conduct Interviews of Sub-contractors

Workers for DBA Covered Work

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Grantee/Recipient Records Retention Requirement Recipients must maintain DBA records pursuant to

OMB Circular A-110/10 CFR 600.242. Even though the Department of Labor regulations provide the records are to be kept for 3 years from the end of the contract.

DOE grant award terms tell the Recipients to follow 10 CFR 600.242 (by reference), which requires the Recipient to maintain all supporting documentation for 3 years after the submission of the final cost report - usually 90 days after the end of the Grant Project Period.

Since contracts/sub-grants fall within the overall Grant Agreement Project Period, the Recipient would need to maintain the DBA payroll records for the longer period of the Grant award and not just 3 years after the contract/subgrant ends.

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Wage Determinations Government Construction: CO is responsible for

attaching the appropriate Wage Determination at the time a contract for construction is contemplated. CO finds the WD at www.wdol.gov

In Recovery Act-funded grants to Governmental Recipient the responsibility for Attaching appropriate WD is flowed down and the State entity attaches the appropriate Wage Determination at time a contract for construction is contemplated under its grant. If in doubt – contact the CO.

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Employer Responsibilities Notices and Posters

Every employer performing work covered by DBA/DBRA must post the WH-1321 “Employee Rights Under the Davis-Bacon Act” Poster: http://www.dol.gov/whd/programs/dbra/wh1321.htm at the site of the work in a prominent and accessible place where it may be easily seen by employees.  There is no particular size requirement. 

The wage determination(s) must be similarly posted with the Poster.

Determines the classifications of workers needed to perform the work.

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Employer/Contractor ResponsibilitiesRecordkeepingUnder the DBRA, covered contractors must maintain payroll and basic records for all laborers and mechanics during the course of the work and for a period of three years thereafter. Records to be maintained include: Name, address, and Social Security number of each employee Each employee's work classifications Hourly rates of pay, including rates of contributions or costs

anticipated for fringe benefits or their cash equivalents Daily and weekly numbers of hours worked Deductions made Actual wages paid If applicable, detailed information regarding various fringe benefit

plans and programs, including records that show that the plan or program has been communicated in writing to the laborers and mechanics affected

If applicable, detailed information regarding approved apprenticeship or trainee programs

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Wage DeterminationFirst – What is the Type of Construction?

There are four construction classification types: building, highway, residential and heavy. The following provides a brief overview of each type:

Building Construction includes construction of sheltered enclosures with walk-in access for the purpose of housing persons, machinery, equipment or supplies; all construction of such structures; the installation of utilities and of equipment, both above and below grade levels; as well as incidental grading, utilities and paving. Such structures need not be “habitable” to be building construction. Also, the installation of heavy machinery and/or equipment does not generally change the project’s character as a building.

Highway Construction includes construction, alteration or repair of roads, streets, highways, runways, taxiways, alleys, trails, paths, parking areas, and other similar projects not incidental to building or heavy construction.

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Construction Types Residential Construction includes the construction, alteration or

repair of single-family houses, and multi-family apartment or condominium buildings of no more than four stories in height. This includes all incidental items such as site work, parking areas, utilities, streets, and sidewalks. For residential multi-family buildings over 4 stories in height, use the Building Construction classification.

Heavy Construction includes those projects that are not properly classified as either “building”, “highway”, or “residential.” Unlike these classifications, heavy construction is not a homogenous classification. Because of this catch-all nature, projects within the heavy classification may sometimes be distinguished on the basis of their particular project characteristics, and separate schedules may be issued for dredging projects, water and sewer line projects, dams, bridges, and other projects.

For additional and more detailed guidance, please refer to DOL All Agency Memorandums (AAM) 130 and 131. All Agency Memorandums may be found at: http://www.wdol.gov/aam.aspx.

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Wage DeterminationSecond – Where is the work to be performed?

The www.wdol.gov website –

First you choose the State.

Second, the County, but may be a City or, in the case of Hawaii, an Island.

Third – Type of Construction.

The website will give you the current WD

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Wage Determination General Decision Number: AR140084 10/10/2014 AR84 Superseded General Decision Number: AR20130084 State: Arkansas Construction Type: Building Building Construction County: Clay County in Arkansas.

BUILDING CONSTRUCTION PROJECTS (does not include single family homes or apartments up to and including 4 stories).

Modification Number Publication Date 0 01/03/20141 01/31/2014 2 10/10/2014

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WD

BOIL0069-001 01/01/2014 Rates Fringes

BOILERMAKER...................... $ 25.37 20.58 --------------------------------------------------------------------------------------------------ELEC1516-001 09/01/2013

Rates Fringes ELECTRICIAN...................... $ 24.24 10.33 ------------------------------------------------------------------------------------------------ IRON0167-010 05/01/2013

Rates Fringes IRONWORKER, STRUCTURAL.... $ 22.29 12.97 -------------------------------------------------------------------------------------------------- PLUM0155-008 08/01/2014

Rates FringesPIPEFITTER……………………. $ 24.22 8.78

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WD

SUAR2008-081 11/20/2008 Rates Fringes

BRICKLAYER................................ $16.00 0.74 CARPENTER, Includes Acoustical Ceiling Installation, Drywall Hanging, and Form Work........................... $13.70 0.00 CEMENT MASON/CONCRETE FINISHER……………...$13.47 2.53 IRONWORKER, REINFORCING.....$20.46 4.53 LABORER: Common or General....................$15.00 0.00Mason Tender - Brick……………...$ 9.25 0.00 OPERATOR: Backhoe/Excavator......................$12.50 1.97 OPERATOR: Bulldozer....................$11.08 0.00 OPERATOR: Crane.........................$15.00 0.00

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Classification Missing from WD Contractor cannot use a classification on the Certified Payroll Report (CPR) that is

not listed on the wage determination.

The contractor will have to go through the “Conformance Process” to obtain the additional classification(s) needed for the project.

The contractor submits an SF-1444, Request for Additional Classification, to the Contracting Officer, and may use the proposed classification and pay the proposed wage + fringe while waiting on DOL.

The SF-1444 is available at: http://www.gsa.gov/portal/forms/download/115906  The directions are available at: http://www.wdol.gov/db_confrmnce.aspx

For Recipient’s, the contractor submits the form is submitted through the Recipient to the DOE Contracting Officer who submits to DOL.

DOL has 30 days to respond and will send the DOE Contracting Officer the response so that it can be added to the contract/grant.

DOL has provided guidance on determining whether an additional classification is necessary and how to determine wage rate and fringe in All Agency Memorandum 213.

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DBA Pay Requirements The Davis‐Bacon Act requires that “all laborers and

mechanics” be paid unconditionally not less often than once a week.

The companion Copeland “Anti-Kickback” Act requires that the contractor and subcontractors submit certified payrolls within 7 days of the Payroll date. The certified payroll may be submitted on the form prescribed (WH-347) or on the company’s regular payroll form, so long as all required information is included.

The payroll must be accompanied by a “Statement of Compliance” with an original (may be electronic) signature.

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Certified Payroll Contractors MAY use Optional WH-347. May use any

form as long as everything that is set forth on the WH-347 is present on the form the contractor uses.

Contractors MUST pay employees weekly pursuant to statute.

Employees MUST be paid within 7 days of end of employers payroll period.

Contractors MUST send original certified payroll to the Recipient within 7 days of paying employees.

33Payroll Record – WH-347

34Statement of Compliance

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Electronic Payroll System Legislative enactments promoting electronic

commerce, FAR 4.5 (d), provides that agencies may accept electronic signatures and records in connection with Government contracts. The Department of Labor allows the use of electronic filing of payrolls as long as agency access and record retention requirements are satisfied.

Army, Navy, and Army Corps of Engineers now require their contractors to use Electronic Payroll Systems.

DOE has no requirement, but encourages their use.

Several States have developed these systems and used them for their Recovery Act grants.

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Electronic Payroll SystemSome Benefits of Using an Electronic Payroll System

Reduces payroll submission errors. Reduces review time, storage costs, and postage. Eliminates resubmission costs. Allows general contractors to review subcontractor

payroll submissions. Alerts general contractors of payroll

omissions/errors. Requires only a browser and an internet

connection (no software to install or maintain).

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Signatures Electronic Signatures: Certified Electronic Payroll

Reporting is acceptable if the DOE reviewing official has access and the documents can be maintained in the Electronic System with DOE having access for more than 3 years from end of grant period.

Scanned Hard Copies: Do not carry the same legal effect as handwritten signatures for DOL enforcement purposes. Therefore, where there is not an certified electronic payroll system, the paper signed payroll records must be maintained.

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Maintain CPRs & Supporting Documents If the CPR & supporting documents

starts as an electronic payroll document it can be maintained in the electronic payroll format.

If the CPR is in paper format with a hand signature it must be maintained in the paper/original form.

Semi-Annual Report

DOE must report semi-annually to DOL the dollar value of awards/contracts, number of investigations, number of complaints, results of the investigations, and any back pay owed to laborers and mechanics. October 1 through March 31 April 1 through September 30

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Semi-Annual Report Contractors/grantees Submit by April 21

and October 21 each year. Contractors submit to their local

Contractor Human Resource Specialist or as instructed by CO.

Grantees submit a copy to their assigned Project Officer.

Project Officers & CHRD Specialists review and submit to: DBAEnforcementReports@hq.doe.gov

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Resources – GC-63 Website Office of the Assistant General Counsel

for Labor and Pension Law:http://www.energy.gov/gc/services/technology-transfer-and-procurement/office-assistant-general-counsel-labor-and-pension

DOE DBA Deskguide DBA Frequently Asked Questions Semi-Annual DBA Enforcement Report

Form A copy of these slides

42GC-63 Site Leads

Eva M. Auman, Attorney-Adviser202-287-5630 Grant Programs Legacy/Closure Sites Hanford Moab National Energy Testing Laboratory National Renewable Energy Laboratory Pacific Northwest National Laboratory Waste Isolation Pilot Project (Carlsbad Field Office)------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Thomas D. O’Connor, Attorney-Adviser202-586-6952 Loan Guarantee Program Idaho Operations Office Savannah River Site The Power Authorities (WAPA, SWPA, ) West Valley----------------------------------------------------------------------------------------------------------------------------------------------------------------------- Jeanne Teng Lupardo, Attorney-Advisor202-586-1695 Ames Laboratory Argonne National Laboratory Brookhaven National Laboratory Fermi National Accelerator Laboratory Lawrence Berkeley National Laboratory Oak Ridge Reservation Paducah Gaseous Diffusion Plant Portsmouth Gaseous Diffusion Plant Princeton Plasma Physics Laboratory SLAC National Accelerator Laboratory Strategic Petroleum Reserve Thomas Jefferson National Accelerator Facility

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Contacts & Resources www.dol.gov/whd/

DBA Grant Program Grantees should contact Project Officer or Contracting Officer/Contracting Specialist

Send me an email with your questions and I will add them to our FAQs eva.auman@hq.doe.gov

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Questions?