The second post in the Davis-Bacon series focuses on pertinent contract terms and FAR clauses associated with the Act. It is important for general contractors and subcontractors to have a clear understanding of the regulations to maintain compliance with the Act.
Purpose of contract terms:
22.407 Solicitation provisions and contract clauses
FAR clause 22.407 prescribes a series of FAR clauses to be inserted in solicitations and contracts exceeding $2,000 for construction within the United Sates.
52.222-5 Davis-Bacon Act – Secondary site of the work
- The company shall notify the Government if it intends to perform work at any secondary site of work as defined in 52.222-6 (a)(1)(ii). If the company is unsure if it meets or doesn’t meet the criteria a request for determination shall be forwarded to the Contracting Officer. Additionally, if the labor categories provided by the government don’t fit for the secondary site work the company shall request a wage determination from the Contracting Officer.
- The due date for receipt of offers will not be extended as a result of an offeror’s request for a wage determination for a secondary site of work, if the requests are submitted during the proposal phase.
52.222-6 Davis Bacon Act
This is the main FAR clause for the DBA and is organized in two main sections. Sections one and two cover the definition of the “primary site of the work” and the “secondary site of the work” and sections three through five address the rules and regulations of how workers shall be paid to include fringes.
“Site of the work”
- Primary site of work: The physical place stipulated in the contract where the construction will occur and will remain when completed. The primary site of the work also includes any fabrication plants, mobile factories, batch plants, job headquarters, or tool yard provided – they are dedicated exclusively, or nearly so, to performance of the contract; and they are adjacent or virtually adjacent to the “primary site of the work”.
- Secondary site of work:
- The establishment of any additional site where a significant portion of the building or work is constructed and that site is located in the United States; and
- Established specifically for the performance of the contract or project.
- The “primary or secondary site of the work” does not include permanent home offices, branch plant establishments, fabrication plants, and tools yards of the contractor or subcontractor whose locations and continuance in operation are determined wholly without regard to a particular Government contract. Additionally, similar facilities established by a commercial or material supplier before opening of bids and not on the project site are not included in the “site of the work”, even if they are dedicated exclusively to the performance of the contract for a period of time.
- The DBA requires that contractors and subcontractors pay all laborers and mechanics employed or working directly upon the site (defined above) unconditionally the locally prevailing wage rates as determined by the Department of Labor (DOL), and not less than once per week. The “prevailing wage” consists of the following (see Figure 1):
- The total, including any fringe benefits listed for the classification. May be paid entirely as cash wages;
- Payments made or costs incurred by the contractor for “bona fide” fringe benefits may be creditable towards fulfilling the requirement; or
- A combination of cash wages paid and “bona fide” fringe benefits may be used together to meet the required prevailing wage.
- The wage determination, including additional classifications and the Davis-Bacon poster shall be prominently posted at all times by the contractor and all applicable subcontractors. The information shall be posted at the primary and secondary site of the work.
- The project staff will have to work closely with the Contracting Officer to gain approval for classifications required on the job site, but not listed in the wage determination (See attachment SF 1442_2 “REQUEST FOR AUTHORIZATION OF ADDITIONAL CLASSIFICATION AND RATE”).
52.222-11 Subcontracts (Labor Standards) Compliance with Davis-Bacon and Related Act Regulations
- As prescribed in FAR 22.407(a) and in accordance with the site of work rules (52.222-6), this clause requires the contractor to insert the following clauses in any subcontracts for construction, alterations, or repairs:
- Davis-Bacon Act
- Contract Work Hours and Safety Standards Act
- Apprentices and Trainees
- Payrolls and Basic Records
- Compliance with Copeland Act Requirements
- Withholding Funds
- Subcontracts (Labor Standards)
- Contract Termination (Debarment)
- Disputes Concerning Labor Standards
- Compliance with Davis-Bacon Act and Related Act Regulations
- Certification and Eligibility
- The prime contractor shall be responsible for compliance by any subcontractor or any lower tier subcontractor performing construction within the United States with all the contract clauses cited above. Within 14 days of contract award the company is required to deliver a completed Standard Form (SF) 1413 (see attachment SF 1413 “STATEMENT AND ACKNOWLEDGEMENT”), Statement and Acknowledgement, for each subcontract for construction. It will include the subcontractor’s signed and dated acknowledgement that the clauses set forth have been included in the subcontract.
Additionally, within 14 days of each subsequently awarded subcontract the prime contractor is required to deliver to the Contracting Officer an updated completed SF 1413.
The remaining FAR clause related to the DBA govern the mechanism to handle price adjustments and contract term extensions in accordance with the contract type (fixed-price or cost-reimbursable type) and the appropriate adjustment method. Each particular clause is very short and will be handled on a case by case basis depending on the particular scenario clause incorporated. The three clauses are:
- 52.222-30 Davis-Bacon Act – Price Adjustment (None or Separately Specified Method)
- Davis-Bacon Act – Price Adjustment (Percentage Method)
- Davis-Bacon Act – Price Adjustment (Actual Method)
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