Below
are some reminders/clarifications of the requirements of the Davis-Bacon Act
(DBA, codified at 40 U.S.C. §§276a – 276a-7).
This information is intended to correct misunderstandings about the correct
way to implement DBA and Iowa public bid law requirements for school district
projects.
To
what projects does the DBA apply?
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The
DBA applies to any contract in excess of $2,000 let by a government entity,
such as a public school district, for construction where federal funds are used
in whole or in part to pay for the construction.
What
is required under the DBA?
¨
Laborers
and mechanics on a construction project for a school district must be paid – at
a minimum – the local prevailing wage and fringe benefits, as determined by the
U.S. Department of Labor. There is also
a significant paperwork obligation on the part of the contractor for such
projects.
¨
The
school district must make it known to potential bidders in the initial RFP or
other bid documents that the project is funded in whole or in part by federal
funds, and therefore, that the project is subject to the DBA. If the federal funding is still pending at
the time the initial RFP is made available to potential bidders, the initial
RFP should state that the project will be subject to DBA if the funding is
received.
What
is a “contract for construction?”
¨
A
contract is covered if it calls for construction, alteration, remodeling,
and/or repair, including painting and decorating, of public buildings or public
works. (If the school district owns it,
it’s covered.) “Construction” also
includes the manufacturing or furnishing of materials, articles, supplies, or
equipment on the site of the building or work by persons employed at the site
by the contractor or subcontractor.
To
whom must the “prevailing wage” be paid?
¨
The
prevailing wage and fringe benefits apply to “every person paid by a contractor
or subcontractor in any manner for his labor in the construction, prosecution,
completion, or repair of a public building or public work or building or work
financed in whole or in part by loans or grants from the United States. . .” [29 C.F.R. 3.2(e)]. This would include
employees of the school district that are hired by the district (contractor) to
do work under the grant secured. In other words, anyone who performs work on the “site of the work” is covered.
What
is the “site of the work?”
¨
The
“site of the work” is the physical place or places where the construction
remains after work has been completed.
However, it also applies to any other site where a significant
portion of the building or work is constructed, provided such site is
established specifically for the contract.
This includes fabrication plants, mobile factories, batch plants, borrow
pits, tool yards, headquarters, etc., IF they are located adjacent or virtually
adjacent to the “site of the work” AND they are dedicated exclusively or nearly
exclusively to the performance of the contract or project.
Does the DBA apply to the entire project, even if federal funds just pay for a portion of the project?
¨
YES. If the project is described in the
district’s grant application, the DBA applies to the project. It does not matter that the district
provided nonfederal matching dollars.
It does not matter that the district can show what components of the
project the federal dollars were used for, and which nonfederal dollars were
used for. The entire project is covered by the DBA.
Does
the DBA apply if a federal grant is received for only part of a project?
¨
If
(and this is a huge if) the grant application covers only one part of a
multi-part construction project, and if that part is separate and discrete from
the rest of the project, then and only then do the requirements of the DBA not
apply. For the sake of example only, if
a district constructs a new wing in a building at the same time as it renovates
its library in the same building, but the new wing is a demonstration
construction project (funded in part by a federal grant) and the library is paid
for solely with state and local funds, the library renovation is not covered by
the DBA. However, the district must
make sure that both of the following are true:
¨
The
library renovation is not mentioned in the grant application for the
demonstration construction funds; and
¨
The
RFP, bidding documents and contracts for each project are completely separate
and independent from each other with each being bid separately.
Ideally, these projects would not be occurring at the same time, but we realize that the construction season in Iowa is short.
Does
the DBA apply if no federal funds are involved?
¨
No. If, for example, a Vision Iowa grant is used
for a project, the DBA does not cover the project because these are nonfederal
funds.
How
is Iowa’s contract and bidding law involved?
¨
A
district must always comply with Iowa Code chapter 73A, the law regarding
public contracts and bidding procedure.
The terms in the RFP must be substantially the same as the terms in the
awarded contract. If two contracts are
ultimately to be signed, the RFP must so state. It would appear to be contrary to the provisions of this law for
a district to issue an RFP for a single construction contract and then suggest
that or require the winning bidder to sign two separate contracts, one to be
covered by the DBA and one not covered, after the contract for the project is
awarded. A publicly bid contract cannot
be changed after the award. [Apart from
the issue of whether this can even be successful under the DBA, this practice
is likely a violation of chapter 73A.]
Where
can more information be found?
¨
The
federal Department of Labor has the following web sites that provide more
information on the DBA:
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http://www.dol.gov/esa/whd/contracts/dbra.htm
¨
http://www.ArNet.gov/epls
(debarred bidders list)
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If
a district (or contractor) has additional questions, call the local office of
the federal Department of Labor, Wage and Hour Division. In Des Moines, that number is 515/284-4625.