Prevailing Wage Resource Book 2002 - WDOL.gov

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  • PREVAILING WAGE RESOURCE BOOKU.S. Department of LaborEmployment Standards AdministrationWage and Hour Division

  • PREVAILING WAGE RESOURCE BOOKNovember 2002

    U.S. Department of LaborElaine L. Chao, Secretary

    Employment Standards AdministrationVictoria A. Lipnic, Assistant Secretary

    Wage and Hour DivisionTammy D. McCutchen, Administrator

    This publication contains materials developedprimarily for use in prevailing wage trainingconferences. The contents are designed to enhancethe knowledge of procurement personnel and otherswhose responsibilities include work with the ServiceContract Act and the Davis-Bacon and related Acts.Study of this volume should facilitate disseminationof information to those who are interested in theadministration and enforcement of these laws. Thispublication is intended to provide practical guidanceto procurement personnel and the general publicrather than definitive legal advice.

  • U.S. DEPARTMENT OF LABOR TABLE OFPREVAILING WAGE RESOURCE BOOK 11/2002 CONTENTS

    TABLE OF CONTENTS

  • U.S. DEPARTMENT OF LABOR TABLE OFPREVAILING WAGE RESOURCE BOOK 11/2002 CONTENTS

    RESOURCE BOOK TABLE OF CONTENTS(BY TAB NUMBER & SUBSECTIONS)

    1. INTRODUCTION TO THE LABOR STANDARDS STATUTES COVERAGE

    2. SCA SURVEYS BUREAU OF LABOR STATISTICS PROGRAM

    3. SCA WAGE DETERMINATIONS

    4. SCA HEALTH AND WELFARE BENEFITS

    5. NATIONAL TECHNICAL INFORMATION SYSTEM (NTIS)ELECTRONIC ACCESS TO SCA WAGE DETERMINATIONS

    6. SCA CONFORMANCE PROCESS

    7. REVIEW & RECONSIDERATION OF SCA WAGE DETERMINATIONSAND CONFORMANCE ACTIONS

    8. ADMINISTRATIVE HEARINGS REGARDING APPLICATION OFSECTION 4(c) -- "SUBSTANTIAL VARIANCE" AND "ARM'S-LENGTH" NEGOTIATIONS

    9. SCA ADMINISTRATIVE EXEMPTIONS

    10. SCA COMPLIANCE PRINCIPLES

    11. INVESTIGATIVE PROCESS UNDER SCA/CWHSSA

    12. WITHHOLDING OF FUNDS TO ENFORCE COMPLIANCE WITHDBRA AND SCA LABOR STANDARDS REQUIREMENTS

    13. DAVIS-BACON SURVEYS

    14. SAMPLE MATERIALS RELATED TO DAVIS-BACON SURVEYS

    15. DAVIS-BACON ACT WAGE DETERMINATIONS

    16. SAMPLE MATERIALS RELATED TO DAVIS-BACONWAGE DETERMINATIONS

  • U.S. DEPARTMENT OF LABOR TABLE OFPREVAILING WAGE RESOURCE BOOK 11/2002 CONTENTS

    17. DAVIS-BACON ADDITIONAL CLASSIFICATIONS PROCESS(CONFORMANCE)

    18. EXAMPLES OF DAVIS-BACON ADDITIONAL CLASSIFICATIONREQUESTS AND RESPONSES, AND SF-1444

    19. APPEALS REGARDING DAVIS-BACON WAGE DETERMINATIONSAND CONFORMANCE ACTIONS

    20. DBA/DBRA COMPLIANCE PRINCIPLES

    21. INVESTIGATIVE PROCEDURES UNDER DBRA/CWHSSA

    22. STATUTES: SCA, CWHSSA, DBA & COPELAND ANTI-KICKBACK ACTS

    23. REGULATIONS: 29 CFR Parts 1, 3, 4, 5, 6, 7 & 8

    24. ALL AGENCY MEMORANDA (AAMS):Nos. 130 & 131, 155, 166, 176, 182, 185, 187, 188, 189, 190 and 195

    25. STAFF LISTINGS AND WEB CONTACTS

    26. SCA CONFORMANCE GUIDE

  • U.S. DEPARTMENT OF LABOR LABOR STANDARDSPREVAILING WAGE RESOURCE BOOK 11/2002 COVERAGE

    INTRODUCTION TO THE

    LABOR STANDARDS STATUTES

    COVERAGE

  • U.S. DEPARTMENT OF LABOR LABOR STANDARDSPREVAILING WAGE RESOURCE BOOK 11/2002 COVERAGE

    THE DAVIS-BACON ACT(DBA)

    DAVIS-BACON RELATED ACTS(DBRA)

    FAIR LABOR STANDARDS ACT OF 1938, AS AMENDED

    CONTRACT WORK HOURS AND SAFETY STANDARDS ACT(CWHSSA)

    COPELAND ANTI-KICKBACK ACT(CA)

    WALSH-HEALEY PUBLIC CONTRACTS ACT(PCA)

    THE MCNAMARA-O'HARA SERVICE CONTRACT ACT(SCA)

  • U.S. DEPARTMENT OF LABOR LABOR STANDARDSPREVAILING WAGE RESOURCE BOOK 11/2002 COVERAGE

    1

    THE DAVIS-BACON ACT (DBA)

    Davis-Bacon Act (DBA)

    Enacted in 1931, amended in 1935 and 1964

    1935 amendments - predetermination language1964 amendments - fringe benefits

    Purpose of the DBA

    To protect communities and workers from the economic disruption caused bycompetition arising from non-local contractors coming into an area andobtaining federal construction contracts by underbidding local wage levels.

    Requirements of the DBA

    Requires payment of locally prevailing wages and fringe benefits to laborersand mechanics employed on federal government contracts in excess of $2,000for construction, alteration, or repair (including painting and decorating) ofpublic buildings or public works.

    Examples:

    1. General Services Administration contracts to build federal officebuildings.

    2. Department of Defense contracts to build military housing.

    Prevailing wages are determined in advance by the Department of Labor (DOL)National Office and included in the bid specifications for covered contracts.(See DB Wage Determinations tab below.)

    The language of the Davis-Bacon Act requires contractors and subcontractorsto pay all laborers and mechanics employed directly upon the site of thework, unconditionally not less often than once a week, and without subsequentdeduction or rebate on any account, the full amount accrued at the time ofpayment, computed at wage rates not less than those in the advertisedspecifications, regardless of any contractual obligation which may be allegedto exist between the contractor or subcontractor and such laborers andmechanics.

    DBA requirements apply to contractors and subcontractors.

    Laborers or mechanics must be paid at least prevailing wages.

  • U.S. DEPARTMENT OF LABOR LABOR STANDARDSPREVAILING WAGE RESOURCE BOOK 11/2002 COVERAGE

    2

    DBA applies only to employment on the site of the work.

    The laborers and mechanics must be paid weekly.

    Persons performing the duties of laborers and mechanics must be paid theprevailing wage rate regardless of any contractual arrangement, e.g., anindependent contractor or owner-operator relationship.

    Coverage of the DBA

    The statute applies to contracts in excess of $2,000 to which the United Statesor the District of Columbia is a party for construction, alteration, and/orrepair, including painting and decorating, of public buildings or publicworks of the United States or the District of Columbia.

    In considering Davis-Bacon coverage on contracts in excess of $2,000, threecriteria apply:

    (1) Is the agreement a contract to which the United States or the District ofColumbia is a party?

    (2) Is the agreement a contract for construction?

    (3) Is the contract for construction a contract for the construction of apublic building or public work of the United States or the District ofColumbia?

    In this connection, DOL Regulations at 29 CFR 5.2(k), defines publicbuilding or public work as a building or work, the construction,prosecution, completion, or repair of which, as defined above, is carriedon directly by authority of or with funds of a federal agency to servethe interest of the general public regardless of whether title thereof is in afederal agency.

    The Act applies to public buildings or public works of the United States or theDistrict of Columbia within the geographic limits of the States of the Unionand the District of Columbia.

    The DBA does not apply to federal construction contracts in Guam, PuertoRico, the Virgin Islands or other territories; however, some related Actswhich provide federal assistance to local governmental bodies in the territoriesdo require the payment of DB prevailing wage rates.

  • U.S. DEPARTMENT OF LABOR LABOR STANDARDSPREVAILING WAGE RESOURCE BOOK 11/2002 COVERAGE

    3

    Lease Construction Contracts

    On June 22, 1994, the Wage and Hour Division (Wage and Hour) issued AllAgency Memorandum No. 176, advising the contracting agencies that theapplication of the Davis-Bacon Act to any lease contract can be determined onlyby reviewing the specific facts of the particular contract. Factors to beconsidered in determining whether a lease contract is subject to the Act include:

    Length of the lease,

    The extent of government involvement in the construction project(e.g., the building is built to government specifications and the workis subject to periodic inspection by the government),

    The extent to which the building is used for private rather than public purposes,

    The extent to which the costs of the construction will be paid for bythe lease payments, and

    Whether the contract is written to avoid application of theDavis-Bacon Act.

  • U.S. DEPARTMENT OF LABOR LABOR STANDARDSPREVAILING WAGE RESOURCE BOOK 11/2002 COVERAGE

    4

    DAVIS-BACON RELATED ACTS (DBRA)

    Davis-Bacon Related Acts (DBRA)

    Congress has extended Davis-Bacon prevailing wage requirements to other laws --related Acts -- which provide federal assistance for construction through:

    Grants

    Loans

    Loan guarantees

    Insurance

    (as contrasted with direct federal government contracts for construction).

    Most of the related Acts are listed in 29 CFR 5.1(a). These laws include byreference the requirements for payment of prevailing wages set in accordance withthe Davis-Bacon Act.

    Examples:

    Federal Highway Administration provides grants to states for thereconstruction of roads and bridges on federal-aid highways.

    U.S. Department of Housing and Urban Development (HUD) finances theconstruction of low income residences on housing authority projects.

    Other federal agencies which assist construction through grants, loans,loan guarantees and insurance include the Departments of Health andHuman Services and Education and the Environmental Protection Agency.

    At the present time the following DBRA statutes are most frequently used tofund/assist construction:

    National Housing ActHousing Act of 1950Federal Aid to Highways ActsFederal Water Pollution Control ActPostal Reorganiz