Standard Form (SF) 1413 Statement and Acknowledgement Compliance Tips

Overview

On 30 August 2013 I wrote an article describing submission requirements and compliance considerations for SF 1413s.  Since that time I have assisted a number of clients completing SF 1413s (for all tiers) and the post has had over a 1000 views, so I thought it is time to provide several additional tips.  As I mentioned in August, the SF 1413 is used by all executive agencies for all applicable subcontractors at all tiers to acknowledge they are aware of the required clauses stipulated in Federal Acquisition Regulation (FAR) 52.222-11.  Unfortunately there is very little published guidance available to assist contractors in completing the form.  The good news is it isn’t a complex form and with a few helpful tips the process can be more easily understood.

Compliance Tips

In the example below “Prime Contractor, Inc.” is the prime contractor, “1st Tier Subcontractor” is a first tier subcontractor, and “XYZ Plumbing” is a second tier contractor under “1st Tier Subcontractor”.  As this example progresses, I will highlight how lower tier subs are added to the process.

  1.  The Prime Contractor always goes in block 4 and executes blocks 10a through 12.  The subcontractor, regardless of tier, signing and acknowledging intent to comply with the listed clauses “Part II – Acknowledgement of Subcontractor” goes in block 5.SF 1413_EXAMPLE_1st tier Sub - Part I Graphic
  2. The firm awarding the work to the Subcontractor in block 5 is listed in 7.a. – “Name of Awarding Firm”.  At this point in the process it is “Prime Contractor, Inc.
  3. Any lower tier subcontractors are added in block 14:SF 1413_EXAMPLE_1st tier Sub - Part II Graphic
  4. Lower tier subcontractors listed in block 14 must complete a SF 1413 Statement and Acknowledgement form.  It is with the lower tier subcontractors I see the most mistakes made.  The prime contractor remains listed in block 4, however the new lower tier subcontractor, XYZ Plumbing, is now list in block 5.  The subcontractor (1st Tier Subcontractor) awarding the contract to XYZ Plumbing is listed in block 7a:SF 1413_EXAMPLE_2nd tier sub part I_Graphic
  5. XYZ Plumbing completes blocks 15 – 17 and forwards the prime contractor to complete the process and submit to the contracting officer.  According to regulation, the SF 1413s are required to completed within 14 days of subcontract award.

SF 1413_EXAMPLE_2nd tier sub part II_Graphic

Resources:

Several state level contracting offices, such as Arizona or Wisconsin, have published guidance on completing the form for their contracts.  In addition, the USACE Sacrmento District and the Fort Worth have published some guidance, but both documents are 12 and 14 years old, respectively.

Advertisements

Office of Federal Contract Compliance Programs (OFCCP) Compliance and Reporting

The summer break is over after a trip to the Delaware beaches to celebrate America’s Independence and a spectacular drive along the Beartooth Highway through Wyoming and Montana.  The Beartooth Highway is probably one of the most scenic drives I have taken.  But, back to Federal contracting reality…

The objective to this post is to provide a general overview of the OFCCP, with a focus on the construction industry, while covering a few specific areas to improve your company’s understanding of the compliance requirements.

EEO Poster Clip 2

What is OFCCP

OFCCP was created by Executive Order 11246 in 1965 and expanded by the Rehabilitation Act (1973) and the Vietnam Veterans’ Readjustment Assistance Act (1974).  OFCCP provides compliance enforcement and oversight for contractors and subcontractors compliance with the three laws.  Further, they must not discriminate in their employment practices on the basis of gender, race, color, religion, national origin, disability, or status as a protected veteran.

OFCCP is an agency within the Department of Labor with a national network of offices.  The National Office is located in Washington DC and there are six regional offices located in large metropolitan areas (Northeast, Mid-Atlantic, Southeast, Midwest, Southwest & Rocky Mountain, and Pacific).  Each region contains numerous district offices that carry out the mission of OFCCP.

The OFCCP mission

“The purpose of the Office of Federal Contract Compliance Programs is to enforce, for the benefit of job seekers and wage earners, the contractual promise of affirmative action and equal employment opportunity required of those who do business with the Federal government.”

In the context of OFCCP’s mission, it provides the following services:

Compliance Assistance

To minimize violations OFCCP has an extensive compliance assistance program to assist Federal contractors.  OFCCP uses its national network of regional, district, and area offices to provide compliance assistance to contractors.  OFCCP conducts seminars and workshops around the country, maintains a website with resources and tips, operates a help desk line during work hours, and provides an e-mail address for inquiries and feedback.  OFCCP also facilitates agreements between contractors and Department of Labor job training programs to help contractors identify and recruit qualified workers.

Compliance Evaluations

To monitor and ensure Federal contractors are in compliance with the EEO laws, OFCCP conducts compliance evaluations that review contractors’ employment practices.  Contractors are scheduled for review on a periodic basis, generally not more frequently than every two years.  OFCCP examines whether the contractor maintains hiring and employment practices that are nondiscriminatory, and determines whether the contractor is taking affirmative action to ensure that applicants and employees have an equal employment opportunity without regard to race, color, religion, sex, national origin, disability, or status as a protected veteran.  Typical practices reviewed include: job placement, employee training, promotion, compensation, and termination.  OFCCP also occasionally conducts other types of compliance evaluations, such as a Corporate Management Compliance Evaluation to determine whether qualified minorities, women, persons with disabilities, and protected veterans have encountered artificial barriers to advancement into mid-level and senior corporate management.

Complaint Investigations

OFCCP conducts investigations of complaints of discrimination filed by applicants or employees against Federal contractors.  OFCCP works in coordination with the EEOC when processing discrimination complaints.  OFCCP’s website provides information regarding how to file a complaint and how it will be processed at http://www.dol.gov/esa/ofccp/regs/compliance/pdf/pdfstart.htm.

Conciliation and Enforcement Action

If a compliance evaluation or complaint investigation yields a finding that a contractor violated any part of the regulations, OFCCP will attempt to first negotiate with the contractor to reach an appropriate remedy (“conciliation process”).  Generally, if the conciliation process is successful the contractor and OFCCP will sign a Conciliation Agreement.  The contractor will be expected to comply with the Agreement’s terms. If conciliation efforts fail, OFCCP and the Department of Labor’s Office of the Solicitor may pursue an enforcement action.

Basic Compliance Requirements

In most situations a company can remain compliant following the basic EEO requirements outlined in the Small Business Guide:

  • Don’t discriminate
  • Post an EEO poster
  • Include the EEO tagline in employment advertising:  “Federal contractors are required to state in all solicitations or advertisements for employment that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, or national origin.”
  • Keep detailed records
  • Open your books and records to OFCCP during an investigation or evaluation
  • File the required reports

References

Davis-Bacon Part III

The last part of the Davis-Bacon series provides an overview of compliance tips, a wage calculation review, and helpful references.  A useful reference I use regularly is Chapter 15 of the Department of Labor’s Field Operations Handbook (FOH).  The FOH provides an easy to understand review of the Act as well as the related Acts.  It also offers practical examples of exclusions and interpretations of labor categories.

Construction Worker_3

Coverage and Compliance Principals:

  1. Does the Government furnished wage determination meet the project’s needs?
  2. To whom do the Davis-Bacon prevailing wage requirements apply?
  3. Was each laborer and mechanic paid the proper predetermined prevailing rate?
  4. Did employees receive one and one-half their basic rates of pay for hours worked on the contract over 40 hours per week?
  5. Were laborers and mechanics employed on the site properly?
  6. Were contributions to “bona fide” fringe benefit plans creditable towards meeting the prevailing rate requirements?

Required Records To Be Maintained:

Under the DBA, covered contractors must maintain payrolls and basic records and submit certified weekly payrolls.  The Form WH-347 (attached) is optional, however it satisfies the requirements of Parts 3 & 5 29 CFR Subtitle A.  In connection with submitted payrolls the following are required to be maintained:

  1. Name, address, and social security number of each employee;
  2. Each employee’s work classification(s);
  3. Hourly rate(s) of pay (including rates of contributions or costs anticipated for bona fide fringe benefits or cash equivalents);
  4. Daily and weekly numbers of hours worked;
  5. Deductions made; and
  6. Actual wages paid

Subcontractor Compliance Checklist:

When the subcontractor submits their monthly billing (pay request), review for the following:

  1. Ensure that properly titled and approved “Certified Payroll” documents were provided.
  2. Compare the individual worker’s Straight Time Work Classifications and Pay Rates to the corresponding Wage Determination rates on the project Wage Scale.
  3. Utilize your familiarity of the workers to determine that they are performing the proper work duties for their Work Classifications.
  4. Ensure that hours were recorded on a daily basis, per worker.
  5. Determine that workers received one and one-half times their Straight Time rates of pay for all hours worked over 40 hours per week.

Wage Determination Example:

DBA Article C Graphic

References:

  1. Department of Labor Field Operations Handbook – Chapter 15 (10/25/2010)
  2. Prevailing Wage Resource Book (November 2002)
  3. Federal Government Construction Contracts, 2nd Edition 2010
  4. Federal Acquisition Regulations (FAR)

FAR contract clauses referenced:

  1. 22.407             Solicitation provision and contract clauses
  2. 52.222-5          Davis-Bacon Act – Secondary site of the work (FAR 22.407(h))
  3. 52.222-6          Davis Bacon Act (22.407(a)) (40 U.S.C. 3141)
  4. 52.222-11        Subcontracts (Labor Standards) (FAR 22.407(a)
  5. 52.222-13        Compliance with Davis-Bacon and Related Act Regulations
  6. 52.222-30        Davis-Bacon Act – Price Adjustment (None or Separately Specified Method) (22.407(e))
  7. 52.222-31        Davis-Bacon Act – Price Adjustment (Percentage Method) (22.407(f))
  8. 52.222-32        Davis-Bacon Act – Price Adjustment (Actual Method) (22.407(g))

Davis-Bacon Compliance: Part II

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.

Construction Worker

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

  1. 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.
  2. 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

  1. 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”.
  2. Secondary site of work:
    1. 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
    2. Established specifically for the performance of the contract or project.
    3. 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.
  3. 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):
    1. The total, including any fringe benefits listed for the classification. May be paid entirely as cash wages;
    2. Payments made or costs incurred by the contractor for “bona fide” fringe benefits may be creditable towards fulfilling the requirement; or
    3. A combination of cash wages paid and “bona fide” fringe benefits may be used together to meet the required prevailing wage.
  4. 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.
  5. 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

  1. 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:
    1. Davis-Bacon Act
    2. Contract Work Hours and Safety Standards Act
    3. Apprentices and Trainees
    4. Payrolls and Basic Records
    5. Compliance with Copeland Act Requirements
    6. Withholding Funds
    7. Subcontracts (Labor Standards)
    8. Contract Termination (Debarment)
    9. Disputes Concerning Labor Standards
    10. Compliance with Davis-Bacon Act and Related Act Regulations
    11. Certification and Eligibility
  1. 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:

  1. 52.222-30 Davis-Bacon Act – Price Adjustment (None or Separately Specified Method)
  2. Davis-Bacon Act – Price Adjustment (Percentage Method)
  3. Davis-Bacon Act – Price Adjustment (Actual Method)