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Transcripts for Wage and Hour Division Prevailing Wage Conference Videos

Tuesday, October 4, 2011 Session - Morning

  • Welcome and Logistics
  • Overview of Federal Wage Laws

  • Contract Provisions and Agency Responsibilities

  • Wage Determinations, Conformances, WDOL.GOV

  • Questions and Answers

TRANSCRIPT BEGINS:

Hello and greetings to all of you.

We are live here at the auditorium at the United States department of labor in Washington D.C. and it is my sincere pleasure to welcome you to the 2011 Davis bacon act webinar specifically designed for contracting officers and contracting agencies.

Before we get started in the program I just want to introduce myself, I'm Tim helm, chief of government contract enforcement with the department of labor.

I'll introduce our other presenters in just a minute.

Before we get started I would like to give you logistics how today's webinar is going to take place.

This morning we're going to have two hours of training specifically on an overview of the government contract statutes, we're going to cover Davis bacon wage determinations, conformances as well as the contracting agency responsibilities to administer and enforce the Davis bacon act.

We'll then take some questions from the audience.

We'll have a break in between sessions and come back to you later this afternoon for a second session that will deal primarily with compliance principles under the Davis bacon act as well as an exercise on how to review certified payrolls.

So we're just really happy that you have joined us today.

The response to our webcast invitation has been unbelievable.

We have over 5,000 folks watching from coast to coast.

And we're just pleased that you have taken the time today to join us.

During the webcast if you have questions that you would like answered, we cohave a mechanism for you to do that.

You can simply send an email with your question to WHDPWC@DOL.gov.

That's the same email address you used for registering for today's event.

At the end of both the morning session and the afternoon session we'll answer as many of your questions as we're able to in the time allotted.

Before I get started I would like to introduce our presenters for today.

To my left is Rex Elliott, Mr. Elliott is contractor industrial relations officer for the national aeronautics and space administration, NASA.

To his is jade banks, United States adviser for housing and development.

We're pleased to be partnering with these agencies as we proceed on this Davis bacon webinar for the contracting agencies.

Now I'd like to take a moment and have a welcome to you from our secretary of labor, Hilda SOLIS.

>> Greetings from the department of labor and welcome to the government contracting officials prevailing wage conference webcast.

The department of labor's wage and hour division is hosting this free webcast exclusively for federal state and willcal contracting agencies.

Our purpose is to highlight the important role that you play in administering the reVailing wage provisions of both the Davis bacon act and the service contract act.

At the department of labor we know that well-informed federal contracting community is needed to ensure our work is received the wages guaranteed to them by law.

We're committed to developing partnerships with our contracting officials to make sure workers receive a lawful livable wage.

Since 2009 the department's wage and hour division under leadership of deputy administrator Nancy LEPPING executed an ambitious program to provide key stakeholders like you with compliance assistance.

We have hosted prevailing wage conferences in cities throughout the United States.

We appreciate those of you who have joined us at one of these gatherings and for those of you who haven't, we hope to see you at future meetings.

As secretary of labor I believe it's more important than ever to enforce prevailing wage laws.

Davis bacon helped our construction and service workers since the great depression.

Especially during these difficult economic times, it's crucial that local workers not have their livelihoods undercut when carrying out public works projects.

We believe in a proactive two-step strategy.

Step 1 is to make sure contractors are educated on prevailing wage obligations.

Step 2 is to oversee an enhanced enforcement process that curtails violations and promotes an efficient and orderly procurement process.

I'm proud that my department of labor doubled investigations of Davis bacon violations.

We have collected millions of dollars in back wages OWED to workers and debarred contractors who break the law.

I appreciate your efforts on behalf of the American workers.

Working together I know we can administer our laws efficiently an effectively and correct problems wherever we find them.

On behalf of all of us here at the department of labor, thank you for your participation in this webcast.

>> Thank you, Madam secretary, for those kinds words of welcome as indeed, we are very pleased that all of you have joined us today.

It's time to get to work.

The first session that we're going to talk about today is an overview of all the federal prevailing wage law statutes.

As we have done prevailing wage conferences across the country the past two years, we have learned that receiving an overview of the federal prevailing wage laws has simply been helpful in further understanding the Davis-bacon act.

In addition we're government officials here, we tend to use acronyms.

So this is an opportunity for you to associate the acronyms to the actual acts as we get further into the presentation so that you'll be better able to understand some of the topics that we're going to be discussing today.

The first slide we have here is the Internet sites and we'll be showing several slides throughout our conference on various resources that are available to all of you on the Internet.

Wage determinations online at WDOL.gov.

We'll spend an amount of time this morning going through that website and assisting you in understanding how to locate wage determinations as well as all the other resources that are available on that website.

And indeed, there are other website addresses there for you as contracting officers I'm sure you're looking at the parties list system to make sure contractors are eligible to be working on projects.

We have the HUD address there for -- that has a wealth of information regarding related act programs administered by our agency at the housing an urban development.

There are regulations that involve all of our programs and these are department of labor regulations that have a direct impact on the Davis-bacon act.

In addition we also have regulations that pertain to other statutes that are covered in this opening presentation including the service contract act as well as the fair labor standards act.

These sites are all available to you.

So let's get into the main teaching.

Hopefully you've been able to locate the Powerpoints that are on our DOL live website, if you have downloaded those, we'll be following those slides throughout the presentation.

So if you want to take notes but you're welcome to do that.

If you would rather follow along the presentation that will work too.

We know a number of folks have emailed us telling us the offices are joining together to watch this webcast so we hope you're enjoying your group time together and we'll be throwing you a couple of quiz questions as we go along so you can see how you're doing with respect to the overall learning that we're trying to achieve here today.

So without further adieu, let's look at the Davis-bacon act.

Davis-bacon act is the reason that we're here and the Davis-bacon act was enacted in 1931.

It was amended in 1935 and '64.

The 1964 amendments incorporated the fringe benefit requirements into the statute.

The purpose of the Davis-bacon act is protect communities and workers from non-local contractors underbidding local wage levels.

As you know, the Davis-bacon act or DBA as the acronym that we use, is provides for the payment of prevailing wages and fringe benefits for all labors an mechanics as determined by the department of labor.

It applies to direct contracts with the Federal Government as well as covered under the District of Columbia's procurement rules.

DBA requirement, labor and mechanics employed by contractors and subcontractors, you must be performing on the site of the work in order to be covered.

Davis-bacon requires you be paid weekly and the wage scale or determination must be posted at the job site.

Coverage under Davis-bacon requires any contract in excess of $2,000 to which the Federal Government or the District of Columbia is a party, for construction, alteration or repair, including painting or deck crating of public buildings or public works is a covered contract under the Davis-bacon act.

So what are criteria for coverage under Davis-bacon?

One, it has to be a -- the contract has to be an agreement to which the United States or the District of Columbia is a party.

It has to inChrud a contract for construction and the contract for construction must be for a public building or a public work.

So that's the straight up Davis-bacon.

For all you federal contracting agencies, you're probably familiar with direct Davis-bacon covered contracts where GSA is awarding a contract of constructing a federal office building.

We also have what is known as the Davis bacon and related acts.

That's what we're going to move to now.

The acronym we use for this section is DBRA.

The Davis-bacon related acts.

In this case, the Davis-bacon provisions have been extended to numerous related act provisions that may provide federal assistance in the form of a loan, a grant, a loan guarantee, or insurance.

Some examples of related act programs, we have a number of folks participating from local housing authorities on our webcast today.

You know that many of the programs administered by HUD have related act provisions so that when the financing flows from HUD down through to the local housing authorities, the local housing authority has the requirement to include Davis-bacon and an applicable wage determination in that contract.

The federal highway administration provides a great deal of funding to the state highway departments for constructions of roads, high bays -- highways and bridges.

And the federal highway act is a related act and that provision requires that all these contracts, not awarded by the Federal Government but awarded by a state or local agency, also must flow down the Davis-bacon provisions.

So how do you know the difference between Davis-bacon and Davis-bacon related act from apologetics?

Here are some examples of direct Davis bacon projects.

We're doing a lot of construction of new veterans administration hospitals.

The VA directly contracting for the construction of those hospitals that's direct Davis-bacon.

Federal office buildings by GSA, military housing by the Department of Defense, as well as projects awarded by the national park service and the department of interior for road work in our national parks.

Those are all direct Davis bacon projects.

Related act projects would be HUD finance or construction project and the environmental protection agency awards a great deal of funds to state, local communities for waste water treatment plan construction under the federal water pollution control act, a related act, that local entity must include Davis-bacon when they're awarding contracts for construction under that program.

So that's the difference between Davis-bacon and Davis-bacon and related acts.

Let's take a look now at lease construction and how lease construction can sometimes involve Davis-bacon coverage.

We're the federal agency for which the Federal Government will use, leases can sometimes also include the Davis bacon requirements.

The General Services Administration has good policies understanding when a lease project must include Davis-bacon, these are some of the factors that the department of labor published for consideration of when a lease is also a contract for construction under Davis-bacon.

So that's the Davis-bacon act, DBA.

The related act DBRA, let's look at some of the other laws that the Federal Government and specifically wage and hour enforce and administer that requirement, that require the payment of wages an prevailing wages.

The first is the fair labor standards act.

FLSA.

Many of you know that to be the federal minimum wage law.

There are terms in the FLSA that have direct impact to our Davis-bacon program.

So it's worthwhile for us to take a minute to talk about those because the rules that we use under FLSA have direct application when considering compliance under Davis-bacon.

For example, a work week is defined as a period of 168 hours or seven conservative work days.

Hours worked, employees must be paid for all hours work in a work week.

The hourly rate is that rate that an employee is paid by the hour for his or her work.

FLSA requires the payment of minimum wage, requires the payment of overtime after more than 40 hours in a week.

Requires a number of records be maintained by the employer to show that workers were paid in compliance.

There are exceptions and exemptions to the FLSA and they're covered in 29-CFR-5-point -- 525 and 541.

The current minimum wage, $7.25.

That's the federal minimum wage, there are some states that have a higher minimum wage and of course those states would be responsible for administering that higher requirement.

But for federal purposes the wage and hour division enforces a minimum wage rate of $7.25 an hour.

What are exemptions to the FLSA requirement?

There are some that provide for non-payment of minimum wage and overtime.

There are oftentimes based on the duty -- on the activities and not the titles and they apply on a work week basis.

We typically look at these folks as 541 or salary exempt individuals.

And we'll soon learn if you are salary exempt under the FLSA you are also not covered by the Davis-bacon act provisions.

So understanding a bit of the exemptions under the FLSA has great import as we move through our Davis bacon training today.

What's the purpose for record-keeping under the FLSA?

To provide protections to the employer to demonstrate that the employer has paid workers in compliance.

They don't have to be kept in any particular form but they do must accurately reflect the hours and work time the employee worked.

They have to be maintained for three years and there is a fair labor standards poster available on wage and hours website that can be downloaded and printed and that must be made available where workers can see the FLSA poster.

Independent contractors.

There's a lot of talk these days about independent contractors and what's called the misclassification of workers who perhaps should be considered employees by -- for IRS purposes but are being called 1099 workers by employers.

And these are some factors that we use to determine whether somebody meets the test of approximate independent contractor.

So we have the fair labor standards act FLSA.

We have covered Davis bacon and related acts.

Let's take a look now at the contract work hours and safety standards act.

The acronym here is CWHSSA.

We only talked ab the requirement to pay the prevailing wage rate.

There was no requirement under Davis-bacon for overtime.

It's CWASSA that requires payment of overtime on government contract laws.

It was enacted in 1962 and actually combined a number of overtime laws that were currently in existence.

For any of you -- who were around back then, in those days we had an eight-hour requirement for overtime.

If you worked more than eight hours in a day federal law required overtime pay on government contracts.

Those rules were repealed in 1986.

So for right now, we're looking at the 40-hour work week for overtime calculations under the FLSA as well as under CWSSA.

So CWSSA requires the payment of overtime to laborers, mechanics, as well as guards and watchmen at the rate of one and one-half times their regular rate of pay for hours worked in excess of 40 hours in a work week on covered Davis-bacon from apologetics.

In addition, if a contractor does not comply with the CWSSA requirements the department of labor and the contracting agency can assess liquidated damages of $10 per day per violation for each labor an mechanic who is not paid the correct overtime.

For CWSSA coverage it has to be a contract over $100,000.

And involves the employment of labors and mechanics.

So we'll have CWSSA coverage on Davis-bacon and Davis-bacon and related act contracts and if you're going to attend our webinar tomorrow on the service contract act, you'll learn the SEA also is under the umbrella of CWSSA and SEA contracts also have overtime protections provided by CWSSA.

That's self-executing even the if not in the contract, the wage and hour division can enforce the from visions of CWSSA.

CWSSA has no site of work limitation unlike Davis-bacon where workers are only covered on this side of the work.

We'll discuss the site of the work this afternoon when we get to compliance principles but for site of the work purposes for CWSSA, there is no limitation.

So work hours at a home facility is also going to count for CWSSA computation.

So before we get to the Copeland anti-kick back act we talked about the threshold for Davis bacon of being $2,000 for a contract, and the threshold for CWSSA being $100,000.

So the question true or false is can a Davis-bacon contract be excluded from CWSSA coverage?

Yes, if you have a Davis-bacon project that only was for the amount of $50,000 for example, the threshold for CWSSA coverage wouldn't be met.

That project would only be subject to Davis bacon.

Of course the fair labor standards act has an overtime provision, likely those workers would be protected for overtime pay under the FLSA.

Let's look now at the Copeland anti-kick back act.

The copeland anti-kick back act has primary purpose of prohibiting the kick back of wages or back wages paid to workers.

It also requires that contractors and subcontractors submit the beloved certified payroll record on a weekly basis.

And they also recognize that there are certain deductions permissible for contractors to take on Davis-bacon jobs an system other deductions that require approval of the department of labor before those deductions can be made.

Let's look at these deductionsch these are deductions under 29-CFR-3.5 that do not require permission from the department of labor.

As long as the criteria are met in that section these deductions can be made without any approval from my office.

And these are deductions that if you see the list are ones that you normally associate with typical payroll deductions of a worker.

These are additional deductions that also do not require approval from the department of labor as long as the criteria listed in 3.5 are met.

There are some deductions, however, that do require the department of labor I approval before the contractor can make those deductions.

Here are the criteria that we look at in determining whether a deduction is going to be approved by the wage and hour division.

One, the contractor cannot make a direct or indirect profit from the deduction.

The deduction is not prohibited by law.

It's voluntary, consented to by the worker or the worker's representative and it's for the convenience and interest of the employee.

For example, we get quite a few deduction requests in my office.

We get many deduction requests for employers who are asking for a uniform cleaning service, the employees have asked for service to clean the uniforms because they don't want the take them home or they may not have the proper washing facilities at home.

If that meets the convenience an interest of the employee the contractor is not making a profit on that.

A uniform cleaning service is when that we would regularly approve.

When submitting a request for deduction, it's important your letter affirm that you comply with all the provisions in 3.6.

If you don't make that affirmation in your letter to us, we're going to have to write back to you and ask you to please affirm that you meet these tests.

Let me just give an example and say a worker comes to a contractor and says I would like to take out $100 loan before payday because I'm a little short and we had a family emergency and the employer says yes, I'll loan you $100.

But the employer says I'm also going to charge you $10 in interest so that when payday comes I'm going to deduct $110 from your pay.

Does that meet the criteria that you see listed there for deduction under 3.6?

No.

Because the contractor is making a profit from that deduction.

That $10 interest fee.

So in that case that deduction would not be permissible.

If the contractor did not charge any fees for the deduction, that would be one that we would approve.

Let's look at the Walsh Heeley public contracts act.

We looked at Davis bacon that deals with construction, we have looked at the contract work hours in safety standards act.

We have looked at the copeland anti-kick back act.

I want to mention the copeland anti-kick back act is serious.

It has a criminal provision included in it, so where a contractor has affirmed or certified to the department of labor that it paid the back wages and submitted evidence that indeed that was done, but then ask for the workers to return a portion of those wages, that's a kick back.

It's a potential criminal violation and should you as a contracting officer encounter situations of alleged kick backs?

We certainly would ask you to contact the wage an hour division at your earliest moment and convenience because kick back violations are ones that we find to be very egregious an serious and we're going to investigate them as soon as we are able to.

Workers, we have instances of where workers were literally transported by a contractor to a local bank.

The workers went and cashed their paychecks then came back to the van an remitted back to the contractor a portion of their wages in an envelope.

That's a classic kick back and where we have instances of those we're going to not only investigate for compliance under Davis-bacon and copeland act but also partner with the U.S. attorney's office to ensure that if there are any criminal possible violations that they will be fully prosecuted.

Let's get to the Walsh Heeley public contract act.

PCA.

PCA applies to contracts for manufacturing of goods, supplies or services.

If you have been around a while you might have noticed that the PCA used to have a threshold of $10,000.

It's now $15,000 for manufacturing and supply of goods, supply, articles or equipment.

It establishes a minimum wage, overtime and health standards for covered contracts and also has a prohibition of employment of youth under the age of 16.

As well as a prohibition, against the use of convict labor on these covered contracts.

The PCA typically we see PCA contracts now for the manufacture of military uniforms an military equipment.

That is a contract primarily for manufacturing and the prevailing wage rate under the PCA is the federal minimum wage.

Workers on a PCA-covered contract must be paid no less than $7.25.

Let's look at the Mcna Mara O'Hara service contract act.

It was enacted in January of 1966.

It's one of the most recent government contract labor provisions and it's administered by my agency the wage and hour division.

The purpose of the SCA was literally to close the gap.

Back when the SCA was enacted we had coverage under the Davis bay condition act for construction work.

We had coverage under the PCA for manufacturing.

But we didn't have any federal labor standards law that protected the workers that provide services so the Federal Government.

Hence the SCA was enacted to close the gap.

Its primary purpose is to remove wages as a bidding factor in the competition for federal service contracts.

The requirements of SCA, any contract in excess of $2,500 must contain the monetary wages and benefits determined by the department of labor as record-keeping and posting requirement, also safety and health provisions and it also must include a statement of rates paid for federal employees.

So what contracts are covered under the SCA?

These have to be federal contracts or contracts with the District of Columbia, District of Columbia is named in the Davis bacon act and a service contract act as a covered entity.

The service contract act can only apply to contracts to services to which the Federal Government party.

If it's a state or local entity, the SCA will not apply because it has a federal contracting requirement.

Principally for services must have work performed in the United States and has to have work that's going to be through the use of service employees.

These are some examples of federal agencies covered by the SCA including the postal service, military exchange posts, and of course we mention the District of Columbia.

So what are examples of service contracts?

I always like to use our headquarters here at the department of labor, the the Perkins building because we have a number of service contracts underway here that help support our mission of protecting American workers.

Our cafeteria on the 6th floor is a service contract, our snack bar in the fourth floor, the workers employed there are protected by the SCA.

Our security guard forces, that's a service contract.

We also have housekeeping and cleaning and supply and moving contracts, all those workers covered and protected by the SCA.

This is a definition of what in the USA applies to for the SCA we get a number of inquiries in my office for folk whose have gone to Afghanistan or some other places in the Middle East working on quote unquote service contract type work in a foreign land.

Only workers performing work in the United States are protected by the SCA.

Workers who maybe employed on service type contracts in a foreign country they're protected only by agreement they may have between themselves and their employer.

Here are examples of contracts that are not service contract covered.

And you can read them on your own.

I think I made that through in pretty good time.

What do you think, gang?

I would like to now introduce jade banks.

Jade banks labor adviser with the U.S. department of housing and you are wan development who -- urban development who will go through the important agency contracting responsibilities as we move forward in our presentation.

>> Thank you.

Good morning, everyone.

Agency responsibilities is a very important area to cover.

The reorganization plan, number 14 of 1950 made the department of labor responsibility and gave the authority to coordinate the administration and enforcement of Davis bacon wage requirements across all the federal agencies.

The department of labor establishes prevailing wage rates, set standards, issues regulations an prescribes procedures for all federal agencies to follow.

All federal agencies, because the plan also reiterated that the actual performance of enforcement activities remain the responsibility of the federal agency that awarded the contract or that provides the federal assistance.

So DOL holds us accountable for the proper execution of those duties.

DOL wants us to succeed so they provide training, notably the prevailing wage conferences that have been conducted over the past three years and again, today, a webcast that is designed specifically for federal, state and local contracting agencies.

Now, some agencies like HUD administer programs under the related acts.

And in those cases, where HUD isn't actually awarding the contract, we have made the state and local agencies administering those programs responsible for labor standards.

So we hold those agencies responsible.

Now, I might argue that all the work that we do is important.

But there are certain things that we do and it's absolutely crucial that we do them right.

When we don't it can get messY, very expensive, and leave us or agency holding the bag for making it right including funding back wage payments.

So the things that are important for us to do.

Do we have the clicker around here?

Okay.

Cool.

The things that are important for us to do, preparinged by documents and contract specifications that is critical.

We have got to get it right.

Number one, we have make sure the applicable wage decision and contract clauses are in those documents.

The causes are found at 29-CFR-5.5.

That may not be modified without DOL's approval.

HUD because we have a variety of programs and a variety of program participants, we have created some causes that are specific to our needs and they have been approved by the department of labor.

The first is the HUD 4010 federal labor standard provisions and we use that for community development programs.

Programs like the CDBG program, neighborhood stabilization, and home.

Another form that we have is the HUD 5370.

And those I think are conditions for the general contract, I don't recall the name off the top of my head, in any case, we use that form for public and Indian housing programs.

So that's the first thing.

Making sure that those documents are in the contract.

Another crucial task is selecting the correct wage decision.

We need to make certain that we select a wage decision based on the location of the project, the type of construction involved, and the effective date or the lock-in date for that wage decision.

We need to make certain that contractors are aware of what wage rates on the wage decision apply to their work and what work is performed by various classifications.

For example, sometimes wage decisions carry both residential and building wage rates.

A contractor is going to find a rate that looks best to them.

So a contractor might see on a wage decision that a residential wage rate is more attractive to them than the building wage rate.

And thinking well, they're only working on the first an second floors of a 6 story building, they can use the residential rate.

We all know that's not the case.

Just to show you how bad this can get, I have a few examples from HUD.

Many HUD programs generate apartment complexes.

And apartment complexes are typically four stories or less.

Meaning they fall under residential construction.

A lot of residential wage decisions have not been updated many years.

They're being updated now but remain stagnant for many years.

I guess we grew complacent.

Some program participants might have always also.

So we weren't careful about making sure we had -- we checked for updates.

We just used the same wage decision that we use for the past ten years because it ever hadn't changed.

For whatever project we issued a residential wage decision.

The wage decision was updated before its effective date, before it locked in.

HUD didn't check for updates.

And as you can imagine when you're updating a wage decision to cover ten years, those increases can be quite dramatic.

Well, while HUD was working to sort that out, we found out that this wasn't a four story or less building.

No, this was five and six stories.

So we had not only correct the wage decision because it was outdated, it was for the wrong construction.

We in the end calculated $8,000 due to 800 workers employed on that project.

Because it was HUD's mistake, HUD was liable for payment of the back wages in that case.

Another example, we had an agency that decided that four stories of stick-built apartments on top of an above-ground garage was still four stories of stick built construction and they use the residential wage decision.

Obviously that's not correct and that caused that agency roughly no more than $1 million.

As a final example, we had an owner of a property that decided that certain aspects of work that was being done in conjunction with some construction work would not be subject to Davis bacon.

That work was wiring for telecommunications.

They learned that it actually was subject to Davis bacon requirements.

In a sincere effort to correct that mistake, they took the wage decision and they selected two classifications for that work.

A cable splicer and a groundsmen.

And the average cost for those classifications ran $22 an hour.

They calculated that would cost them about $415,000 more for that contract work.

They weren't happy about it but thought they could live with that.

Trouble is, the classifications and wage rates that they chose were under line construction so they were not applicable to the interior inside telecommunications wiring.

That work is properly classified as electricians work.

That rate on the wage decision is $46.54.

And now they calculated the restitution they're going to have to fund is in excess of $702,000.

You can see mistakes in this area can really, really hurt and so this is one area I would stress you in part because of HUD's own experience it's critical that the contract documents are prepared correctly and is also critical that we select the correct wage decision.

The next slide concerns reorganization plan number 14 regarding DOL's responsibilities and we have already covered that so I think Rex we could probably go ahead and move to the agency's responsibilities.

>> Thank you, jade.

The reorganization plan that jade talked about had impact on agency responsibilities as well.

It established that the contracting agencies, or in this case in the case of HUD, other grant-making agencies the financial assistance agencies have responsibilities for enforcement of Davis-bay coon act -- Davis-bacon act.

Here is a list that come under enforcement, stipulations is a term used for grant making agencies but for contracting awarding agencies we use the term clauses or prescriptions.

Actually getting the wage determinations, making sure that the contractor posts the correct poster for Davis-bacon enforcement.

We viewing weekly certified payrolls.

Employee interviews an investigations in the field talking to the workers that are doing the work finding out this is what you're being paid in comparing that to what the weekly payroll says, the only way to ensure that is accurate is to go in the field and do that.

And forwarding any refusal to pay situations to the department of labor for appropriate action.

There's twice a year enforcement reports given to department of labor on al-qaedas we taken forcing the Davis bacon act.

The Davis bacon labor standards and contract stipulations uses the term labor standards.

What that means is that all the various laws that Tim talked about, Davis-bacon, CWSSA, copeland act as well as company regulations in title 29 of code of federal regulations, all that together refers to labor standards.

I think it's useful for us as civil servants to remind ourselves when we became civil servants we took an oath to support and defend the constitution of the United States and defended against enemies foreign and domestic.

I point that out because each of us who is a civil servant has taken an oath we will flow what the law says.

Congress makes these laws and we're obliged to follow them.

We have taken an oath for basic integrity.

In addition to that Congress made the administrative procedures act of 1946 that said federal agencies, whatever rules you operate by, write them down and get the public an opportunity to see and comment on them.

And that's what led to the code of federal regulations.

Which the federal acquisition regulation is part of.

So by extension we have all taken an oath we will follow the FARR as well.

So we're in that crunch trying to accomplish whatever the mission is for our agency, remember we have taken an oath.

We'll follow the rules.

Accomplish the mission.

We'll deal with constraint what have the rules say you have to do.

52 22-6 is the clause in most contracts awarded donor the Davis-bacon act N. addition far-22404-12 lists four methods you can use for doing contract price adjustments under Davis bacon act contract.

Now I'm going to talk about wage determinations.

I'm going to move to the podium that Tim was using.

Davis-bacon had has contacting agency that we just talked about but we'll also talk about surveys, and how to interpret those wage determinations.

Let's talk about Davis bacon act survey process.

Davis bacon act surveys conduct for the purpose of obtaining what the prevailing wages are in a given area.

Department of labor has five regional offices and they do wage surveys that try to assess what the prevailing wages are.

There's a schedule how they do this.

That's available at this website that the wage and hour division has.

The Davis bacon act requires the secretary of labor to determine whatever the locally prevailing wages are and that includes fringe benefits.

Those are supposed to be included inned by solicitations an covered contracts.

The wages are paid to laborers an mechanics that are employed on similar construction projects in a local area.

Usually county by county that this varies.

The act for seeing completeness of the survey depends on survey participation and what level of construction activities are in the given area.

Department ofly boar tries to have representative sample for each county.

And that's why survey participation is so important.

Some will have -- it's common to have large and small business, union shops or open shops.

All them have an incentive to participate in these surveys.

The contractors should be completing the survey forms and sendening the data.

If you don't get accurate data, you won't get an accurate wage determination.

It's important for us as federal contracting agencies to encourage contractors to participate.

It's in their self-interest and it will result in more accurate contracting.

Now the department of labor prepare ad crosswalk.

They have title 29 in the code of federal regulations as department of labor REGS.

The title is federal acquisition regulation.

It's at DOL website shows you which regulations are -- whether the common topics are covered in each of these two sets of regulations.

Let's talk for a while about selecting the appropriate wage determination.

Federal agencies are required to ensure that the proper wage determinations are applied.

Supposed to also advise contractors which applies to the various construction items like jade talked about in the example of HUD.

Which applies for that part of that project or job.

Advise the contractors their duties also performed various crafts in the wage determination.

Now, the rules in part 1 of title 29 of the code of federal regulations governed procedures for application of the pre-determined wage rates.

These are addressed specifically in those references that are in the slide that you're looking at as well.

Now, where do you get the wage determination?

We go to a separate site, www.WDOL.gov.

Remember that W, it's not part of the department of labor's website, it's actually by a separate group that's administered by the Department of Commerce.

So remember the W in WDOL.

There's two basic kinds of wage determinations.

General and project.

Most of the time you're going to use a general wage determination on a contract award, sometimes these are called area wage determinations because they refer to a geographic area, usually a county.

Sometimes it's a statewide or sometimes even a nationwide wage determination.

There's a geographic area involved.

A project wage determination are a little rarer.

They're done for a specific project, they requested by the agency and there's some other peculiarities to them as well.

First talking more about general wage determinations.

Here is that official site for getting your general wage determinations.

Www.WDOL.gov.

Issued for each major type of construction and most counties have specific wage determination though sometimes it's nationwide.

The neat thing is you can go to this website and download them.

You done have to go through the department of labor to get the appropriate wage determination.

A project wage determinations are for a specific project.

It's -- they're used when there's no general wage determination really appropriate for that project or when there's a particular classification that does almost 100% of the work on the project.

For example, roofers or something like that.

To way to get one is to send a standard form 308 to the wage and hour division and a project wage determination is effective for a period of 180 days.

Let's talk selecting the applicable wage determination.

It varies by state and county, and it should be for projects of a similar character and there's four basic types of wage determinations that we'll talk about.

Under Davis bacon act.

It's very important to get the most current wage determination because the latest wage determination supersedes the previous ones.

Now, we said there's four basic types of wage determinations.

The one I use is BHHR.

The alphabetic order of these.

Building heavy, highway or residential.

We'll go through them one at a time.

My agency, most of the wage determinations under Davis-bacon act that we use are for building.

Any structure that's used to house people or equipment, machinery.

And includes the installation of ewe until Itys -- utilities an equipment to those as well.

In mine that's the most common wage determination weal use.

Residential wage determinations are used as jade said, single family houses, town homes and apartment buildings up to four stories in height.

It guess above, you'll be using a building wage determination.

Highways is for more than just highways but it includes roads, parking lots, trails, pathways, alleyways, lots of things.

Sometimes we ice that in my agency, others it's the principle wage determination they use.

Heavy is kind of a catch-all of various things.

For large-scale projects like water and sewer line projects, building plants, my agency will maybe we'll develop a launch site which rockets are launched.

That's a heavy construction.

The Army corp of engineers will award dams and lock constructions using heavy wage determinations.

How do you know which of these to apply?

The department of labor has these all agency memorandas, AAMs, and there's two in particular that help determine which are property of these four to pick.

The -- sometimes there will be more than one that apply to a particular project.

You try not to get that to happen because that leads to confusion and be administratively difficult.

But if there's work that's more than incidental to the principle type of construction you would be appropriate to have more than one wage determination.

Multiple schedule as ply to different construction on a project but the criteria to use, if the secondary construction is 20% or more of the total project cost, or that secondary construction is worth 1 million-dollar or more, it's appropriate to have a second wage determination on that project, on that contract.

For that same area.

Place of performance.

All agency memoranda 130 and 131 talk about this.

The memoranda 130 talks how to apply the standard of comparison between projects of a similar character and all agency memorandum number 131 clarifies how the agencies are supposed to use this -- apply these.

And those are available at the department of labor's website that's referenced there.

Now, selecting the current wage determinations are very important because it's supposed to be the wage determination in effect on the date of contract award.

And that probably scares some of you in the contracting field because you probably didn't attach the -- if there's an update to the wage determination since you issued the solicitation, how do you deal with that?

We'll talk about that a little bit.

Typically construction projects are awarded under using sealedded by procedures in part 14 of the far.

There, there's not as much a gap between when bids come in and when the contract is awarded.

However, if you use part 15 for negotiated procurement there's often a gap in time.

Wage decisions that are issued less than ten days before thed by opening apply unless there is a reasonable time to available for -- to notify bidders.

In my experience there's always a scramble when you have a publicked by opening.

And think it's unusual to be able to notify offers in less -- less than ten days befored by opening.

But so that's good to have that flexibility.

Now, the wage -- one thing to keep in mind is the department -- I'm sorry, the WDOL website has a feature that will tell you when a wage determination is due to be revised.

There is a schedule form.

You go to this chart and you'll see okay, this wage determination, that's the one I put in my solicitation and DOL says they'll update soon.

I better keep my eyes open for this.

Because I don't want it to impact the award of my contract.

In addition to that, on this same site you can select when to be -- send an email message to be notified whenever a particular wage determination is updated.

You can specify how long you want those notifications to happen.

If you think, well, I'll probably be awarded this contract within three months of when I put the solicitation out, put in four, five, six months.

WDOL will send you a notification whenever that particular wage determination is updated.

In addition, department ofly boar has a procedure for extensions.

If the contract is not awarded within 90 days of ad by opening you can get an extension from the department of labor.

Here is the regulatory citations for that as well.

Selecting the appropriate -- sometimes the wage determination has to be applied after contract award.

When that happens it's because the wage did he recall nation was put in initially.

Sometimes it was wrong building heavy highway or residential.

Sometimes it was the wage determination got updated and the agency forgot to update solicitation in the contract.

So when that happens you want to -- you'll have a pricing action to take place.

When I was contracting officer I would ask the contractor to price out the price impact of this wage update and decide determine as part of a contract mod what was the reasonable amount to adjust the contract price for.

There's also a procedure for when the -- some clerical errors got into wage determination, how -- the agency can request or the department of labor can issue its own letter of inadvertense to correct the error.

Any corrections that apply toed by solicitations and contracts that are adjusted retroactively to the start of construction.

There's the regulatory citations for that.

Okay.

Let's talk about interpreting the wage determinations under Davis bacon act.

There's four types things we're going to talk about in this section.

We'll talk the cover sheet of the wage determination and what's in the body, the various classification rates and fringe benefits.

We'll also talk about con conformance requirements tan appeals process.

Here is the cover sheet of a wage determination.

You can see that it shows the state that it's issued for.

Before we get to that you can see the number of the wage determination, that's important because we'll talk a little bit more later what you can talk from that number.

It's issued from the state of Louisiana, it's a residential determination.

It shows specific counties, in Louisiana called Parrishs to which the determination applies.

It shows a series of modifications made to wage determination.

You of course want the latest one.

The highest number mod to that wage determination.

That's how the wage determinations are issued for a particular year so you want to know what is the year that that mod or wage determination itself was issued.

The new wage determination numbers reflect a new year.

The cover sheet shows the state, county and type of construction, gives a description of a construction.

It may have particular crafts or trades that are included or excluded from that particular wage determination.

For example, say you have a highway wage determination.

It does not include any building structures and rest areas.

That one stated on the wage determination.

So you have a heavy wage determination.

Includes flood control water and sewer lines, water wells but specifically excludes elevated storage tanks, industrial processing plants and refineries.

Say you issued a contract with a building wage determination that does not include treatment plants or single family homes.

That's what the building wage determination typically excludes.

We talked about the record of modifications, which can also tell from the number of the wage determination is whether the wage determination was based on union labor rates or as a result of a survey conducted by the department of labor.

These are part of the identifiers and we're going to go into that.

Look at this chart that shows the number of wage determinations is ELED 0101A.

That tells you that it is the elevator's union that -- on which collective bargaining agreement which the wage determination was based.

It was the local 101 of the particular union and revision A of whatever -- that's the internal processing number to show the particular sequence of wage determination.

The collective bargaining agreement was negotiated the take effect on tour -- October 15th of 2006.

There's a lot of information in that number.

You can see on another wage determination, this on the hecktrition's union -- electricians union local 194, a collective bargaining agreement was taking effect on September 6, 2007.

Here it shows the particular Parrishs.

It has to be the state of Louisiana.

Under which this determination takes effect.

It shows the wages for an electrician with those exclusions -- with those inclusions of duties based on hourly rate of $22.35, fringe rate of $8.56.

Those are based on the collective bargaining agreement.

Here is the other kind of identifier.

Whenever you see an SU in front of the wage determination that tells you it was based on a survey.

Survey done state of Louisiana done in 2004, internal number 12, and submitted for publication June 15th this year.

This wage determination remains in effect until it's superseded by another wage determination.

Prevailing wages for can't tear there $11.70 base hourly rate.

They didn't have any data for fringes for the carpenter or the laborer's rate.

Sometime there's unlisted classifications that need to be worked.

In fact we have a dynamic work force in this country, not unusual to have labor classifications created.

There's a process for that.

There's also an appeals process, has there been an initial decision on the matter, whether there was an existing publish wage determination, whether a survey was the underlying part of the wage determination or whether the department of labor's wage and hour division set for the provision of the determination.

Jade will brief you now about the process of conformances.

>> Thank you very much.

>> Hello again.

Conformances.

We'll talk about some things we absolutely have to get right.

And conformance is one of them.

It's important to go over these.

So sometimes the wage decision will not contain the work classifications needed to complete the project.

In those cases DLO pub classified in conformance with the wage decision.

This procedure is called the conformance process, it's also known as additional classifications and wage rates.

So in this segment I'm going to refer to agency and by that I'm going to mean federal state or local, not any particular level.

When I talk about employers it's going to mean whatever contractor or subcontractor will be utilizing the classification that's requested.

The contacting officer or the contacted minister, again that would be the agency federal state or local, may approve an additional classification an wage rate only when.

There we go.

Sorry about that one.

When the work performed is not already performed by a classification that is on the wage decision.

When the proposed wage rate bears a reasonable relationship to the other wage rates on the wage decision.

And that's utilized in that area by the construction industry.

The agency decision is subject to DOL review and final decision.

There are some things that the agency cannot do.

The thing we cannot do is we cannot overlook or ignore the need for conformances.

It may seem at times it's a knew sense, it may seem at times it doesn't matter.

You already know what DOL will say.

It may seem that way sometimes but sometimes it can again get very, very messY and so we want to make sure we dot all the Is and cross the Ts and making sure we have a wage rate for every classification needed is one of those things.

The agency also cannot pull a classification from a neighboring county or classification from the building wage decision.

Just like horseshoes an darts, close does not matter.

The only wage decision we can use is applicable to that particular project.

The last thing we cannot do, we cannot refuse to send a conformance request forward.

We may not agree or approve it but we don't have the authority to simply refuse to send that request through.

So what do we want to do?

We want to start early agency or perspective bidders or contractors.

The pre-award or pre-ed by segment is a good time to do that.

Sometimes a missing classifications can be obvious.

You have a building and it's going to have an elevator.

You're going to need an elevator constructtor.

Or most buildings I know have.

Chances are you're going to need a roofer.

So if those classifications aren't on the wage decision, then mark them for conformance so that you'll be prepared once you are in a place to begin the process.

Some may not be obvious and those are classifications that may not show up until you get payroll reports in.

So you need to stay alert to look for those.

Sometimes contractors will complain they can't get classification until after the contract is awarded or difficulty bidding for the project because they don't have a classification an don't know what rate they'll be required to pay.

It's not ideal, but we can get them an idea of what to expect.

When the contractors understand what's coming down the road for them, they can make more informed decisions.

Conformances are not processed for bona fide apprentices an trainees.

Their wages an employment practices are always set out -- already set out in the approved apprenticeship and training program.

Conformances are not used for welders.

That is considered more like a tool of the trade so that the welding is incidental to the work that's being performed by the craft that is actually doing the welding.

This is the top half of the standard form 1444.

This form is required for use by federal agencies who are doing direct Davis-bacon work.

It can also be used by agencies administering related act projects.

Again, because HUD has a variety of programs and a variety of program participants, we have made our own form a HUD 4230A which is suitable to our -- the way our programs operate.

The standard form 1444 is available at WDOL and if HUD 4230A is available at HUD labor relations website.

Agency process.

Again, we cannot begin the conformance process until after contract award or whatever event that it is that makes that wage decision effective.

But we do need to remain alert to detect classifications that are needed for project.

There are several sources we might use.

Certified payroll reports for example, may show work classifications that are not on the wage decision.

On-site enterrues may reveal other classify cases on the job site that again are not on the wage decision.

And the contract may even contact you and ask what is it I'm supposed to be pay something so there are lots of ways where these can come to your attention.

The next three slides describe the contractor's responsibility.

I'm going to skip ahead to the second one.

The contractor's process.

Here is a list of thing it is contractor needs to supply on the SF-1444 or whatever comparable form it is agency uses.

Before we go into that in detail let's talk general principles.

When we look at conformances or additional classifications, it's really the employers request.

It's not our request.

So when additional classification is needed T first question should go to the employer.

That will be what do you normally pay?

Presumably because the wage decision represents prevailing wage rates, there's a good chance whatever that employer is already paying would be conformable and can be approved.

Second the employer can ask for whatever they want.

We don't have to agree with it but they can ask for it.

They can ask for wage below minimum wage, they can ask for something that is absolutely ridiculous.

It doesn't matter, it's their request and we need to make sure we send it forward.

A noten that one local agencies must submit conformance requests to the federal funding agency they're working with.

And that means that local agencies will be sending their request forward to the federal agency.

States on the other hand have the option of processing these requests through the federal agency or state consist go directly to the department of labor.

As to the list on the 1444, there are things important to note, one is both the time and the employer are required to sign the 1444.

And there maybe a disagreement even at this stage.

It's possible that the prime and the employer don't agree on the wage rate that should be paid.

If that's the case you'll need the collective views from the prime and the employer and consider that in your review.

At HUD we don't require the employer or the prime to fill out the additional classification form.

We do require that the employer submit their request in writing and submit the request through the prime contractor.

Okay.

The next slide talks about the contractor sending it -- the request forward so let's move on to the agency's responsibilities.

Okay.

We have got the request, what's next?

Now it's time for agency to do its review.

And this is a real important part of the process.

The better we evaluate the merit of the employers request, the easier it is for DOL to render its decision.

So we consider the request against the criteria for approval and that is that the work isn't performed by a classification that's already on the wage decision.

That the proposed wage rate bears a reasonable relationship to the other rates on the wage decision, and that the classification requested is used in that area by the construction industry.

We done refuse it forward, one thing we can do however is we can call the employer or the contractor.

Explain to them what we think is problematic about the request and offer some suggestions on how that might be fixed.

We want to work with the employer to find an approvable decision to DOL.

It's easier an probably faster for DO -- easier and faster for DOL to approve a conformable rate than deny a rate that can't be conformed.

The employer maybe adamant and refuse to modify request.

They want it to go through as they submitted it and okay, it's they request that's what we'll do.

We document findings.

Whether we found that request meets the criteria or not and why.

And if there's a dispute at earlier stage meanwhile whether we agree with a proposal or not the employer can pay classification and wage rate it requested pending a decision from DOL provided the employer understands they have to make restitution if the DOL decision came out higher than requested.

So the agency sends a request to the department of labor, along with a copy of the applicable wage decision.

And with a cover letter if needed to provide clarification.

Again, if there are issues in dispute, the agency wants to present the views of the opposing parties.

DOL accomplished an email box to receive conformance requests and they prefer that we use that method of delivery.

So what we need to do then is convert our documents to a PDF and email them to the address you'll see on the slide.

Please make note of a slight correction on that email address.

Between the words conformance and incoming that should be an underscore, not a dot.

When you send your request by email you'll receive a conformation that your message was received.

Otherwise, you can fax your request to the number on the slide.

When DOL gets a request they'll begin their review.

And again they're going to evaluate the request against the required criteria.

When they reach a decision, DOL will send a letter to the agency, either approving or denying the request.

Very often if it's the rate not approved DOL will offer an alternative.

For example, we can't allow you the pay that rate or we can't approve that rate.

But we wouldn't take exception if you used this rate instead.

So we get an idea then about what we might be able to do to correct that.

The letter will also provide instructions, if any should interested party wants to request reconsideration, they don't agree with DOL's decision.

So DOL uses the same criteria that we use.

And we talked earlier about being able to anticipate what wage rate DOL would approve including the proposed wage rate there's a reasonable relationship to what's in the wage decision.

So let's take a look at reasonable relationship.

Okay.

In general, wage rates will not be conformed that are below the unskilled laborer's wage rate.

Then the proposed rate is compared to the wage decision, it's compared trade to trade.

In other words, skilled craft is skilled trapped.

Laborers to laborers, power equipment operators to power equipment operators and truck drivers to truck drivers.

If the proposed rate is at least as much as the lowest rate on the wage decision for that grouping, then that wage rate will likely be approved.

For example, if look for a skilled craft and we need an electrician and there's no electricians classification or rate on the wage decision, but the lowest rate on the wage decision for a skilled craft is a sheet metal worker at $20 an hour.

Then as long as what is proposed is at least $20 an hour, it's very likely that that will be approved.

So DOL's decision continued.

When the agency receives DOL letter we share that decision with the contractor or the employer.

And again, the letter will contain language, advising that reconsideration can be requested.

Lastly and most importantly any conformance approved for the project must be posted at the job site with the wage decision review and reconsideration and appeals to the ARB.

Hopefully this is not something that you will encounter frequently.

So rather than offering much in instructions I think I would rather offered a vice.

That is if you find yourself in a place where a wage decision, a survey or conformance is being challenged, the first thing to do is to contact the deciding official at DOL.

That would mean then for a survey you contact the wage and hour regional office and if it's a dispute about a wage decision or conformance, that should go to the national office of the wage and hour -- the national office for the branch of construction wage determinations.

So before taking any further steps I would walk to the -- talk to department of labor.

No doubt they will have advice they can give you and they never steered me wrong.

Now I think it's time to talk WDOL with Rick.

Thank you.

-- with Rex.

Thank you.

>> Thanks, jade.

The last thing we do before the question-and-answer session of this morning is talk about the WDOL.gov website.

It's very important to remember that W N. WDOL.

Wage determinations online.

It has links to the service contract act and Davis bacon wage determinations current ones, ones archived and tells you which wage determinations are scheduled to be revised soon.

There's also a library of various resources for labor administration.

Here is what the home page looks like, if you go to www.WDOL.gov.

You can see they have the three main sections there, ones for SCA, one for Davis-bacon act.

One list it is agency labor advisers and principle contracting agencies should have a labor adviser listed there.

There's a library of various resources and a direct link to the department of labor wage and hour division website.

There's frequently asked questions available there.

There's a user side how to use it though it's pretty -- it's easy to mess up.

Let me put it that way.

Once you have done it, it's -- you realize this is pretty good.

But it's easy to get the wrong wage determination.

For small timers like me that remember the old process, what it was like to put together standard form 98 and send to the department of labor and wait for your wage determination this is a God send.

I work for high-tech agency and when you find a technology that works so well that you can't remember how you got by without it before, that's a sign of a real success.

WDOL is a success.

Used to be standard lead time of 45 days.

To get your wage determination.

From the department of labor's point of view they were swamped.

They did what they could but now you can get it instantly.

So it's a different world.

Here is -- there's the list the agency labor advisers, the -- if you go to the online site you get more up to date version than this.

The regularly changing because the folks that do this work are getting rarer, I guess.

Selecting the right wage determination, there will be a question-and-answer sequence you'll go through.

Shows with links to the library as well.

Be sure to select the printer-friendly version of the wage determination and then you have actually print off that wage determination.

You attach that to your contract.

Most contracts I do or did when I was a contracting officer, will be an attachment in section J where you attach wage determination in full text.

You can also scan it, create a PDF and put in electronic library for your particular procurement.

It also shows you wage determinations due to be revised are listed.

It has archived wage determinations.

Sometimes you need to do that.

Say you're adjusting the contract for something a while ago, this is no longer the current wage determination.

How do I get hold of it?

Go o the archive section.

Usually it's there.

If it's not that meanious probably have to go to the department of labor to get it, there's a reason it wouldn't be posted.

It's there as active one or archive wage determination.

There's lots of links on this site.

Go to various contracting agencies pre-award activities.

The excluded parties list systems link there, the service contract director of operationsch standard form 1444 for conformance.

department of labor all agency memoranda.

The prevailing wage resource book we talked about earlier, there's a link there.

Various state apprenticeship offices, acronyms an glossary.

Lots of stuff there.

It's helpful.

The crosswalk we talked about earlier is available there too.

Here is some of the Internet sites that are available.

This department of labor prevailing wage resource book is an invaluable guide.

That's where you get guidance whether a project has 1 million or more in value it's appropriate to have the same wage determination for that same contract if at the same site. There's also specific website for the stimulus act and place to put emails.

The wage determination itself, administrative law judges library, administrative review board.

Debarred bidders list.

The HUD site.

One thing I was going to mention, currently the Department of Commerce administers DWOL.gov, it's migrated to the General Services Administration as part of an overall egovernment project called system or system for award management.

That also includes the exclued party list system as well as several other things.

This disclaimer was put in here for reasons that are I'm not aware of.

It was recommended by council.

That concludes the morning session of the substance except for the Q and A so it I'll turn it back over to Tim.

>> Thank you Rex and jade.

Thank you to all of you out there, I understand that we are unfortunately having some streaming issues for some of you online.

I'm told from our technical folks upstairs that we have 9,000 people that have logged in and apparently that's challenging our system.

I want to remind you this is being recorded and will be available online and I'll give you a date specific when I'm able to do that.

But for the moment, I apologize because we have been getting reports of some stops and starts on the streaming.

And we're working to correct that.

Before we sign off this morning I'll let you know if we have been able to correct that before the afternoon.

For those of you not able to watch, we have been fantastic up here.

So I'm sure that you may have missed some of it.

But we did get questions.

So panel, we're going to do some questions here.

You have not seen these questions.

Therefore, the pressure is on you to answer them.

We'll do the best we can.

Jade, the first one is for you.

The question is, why does HUD have different rules for their funding?

Other than department of agriculture world development or EPA funding.

And this comes to us from somebody writing to us from -- pat, it comes from pat in WYSETH.

>> Pat, good question.

The reason HUD has different ways of managing its spending is because that's how Congress set it up pretty much.

We have roughly 12 related acts that means that we have 12 separate statutes authorizing programs that have Davis-bacon provisions in them.

Those related acts all carry different thresholds.

Sometimes applicability is determined by the number of units, residential units that might be in a project.

Sometimes it's the amount of money that's being spent.

Sometimes it's where the moneys are being spent, sometimes it has nothing to do with either one, how many units are in a contract.

And sometimes Davis-bacon will always apply because there is no unit threshold.

Other than the $2,000, HUD has many other layers of thresholds to contend with.

Those are flesh holds set by Congress when they pass the legislation.

Good question.

>> Excellent.

Thank you, jade.

Rex, I'm going to give you this next question.

Question is, are certified payrolls required from subs of subs, lower tier subcontractors for example?

The prime contractor has an electrical sub who also has a sub on the side working for them.

Does this second tier subcontractor need to provide certified payrolls and do even lower tier subs need to provide payroll?

>> The answer is it goes to all levels of subs, second, third, forth level subs, is the person cooing the work a labor mechanic listed on the wage determination?

If so the prime contractors responsibility for submitting a set of certified payrolls that encompass ray boars and mechanics on the job?

Whether employees of the crime, first tier, second tier, third tier or independent contractors?

If they're covered by the Davis-bacon act wage determination listed as a labor mechanic they have to be paid those Davis bacon act wages regardless of the contractual arrangement.

>> This comes from Jeremy out of Allen town, Pennsylvania.

If the Federal Government construction project is greater than $2,000 what would be some reasoning on why the project did not include Davis-bacon wage causes and the wage determination?

Does the federal agency have final discretion on determining Davis-bacon applicability to wage requirements for federal construction projects?

>> For me?

>> ?

>> Sure.

Give it a shot.

>> The contracting officer makes the determination of whether the contract is subject to Davis-bacon act but that is subject to appeal on the department of labor can overrule that decision.

What I recommend contract officers to do is do a file on what your rationale is on why this was or wasn't subject to Davis bacon or service contract act and the department of labor wants the subject of DBA when the subject of TBA and service contract act since that puts enforcement responsibility on the agencies.

That's my advice for those situations.

>> And Rex, under the reorganization plan that we covered earlier today, we know that while the federal agency has primary responsibility for administration of Davis bacon, it's the department of labor that has the finance authority.

So should an agency unfortunately make a wrong decision in not applying Davis bacon, the department of labor can direct that agency to take corrective action to enincorporate Davis bacon into a solicitation or unfortunately if the contract is already been awarded to a contract and require them to retroactively apply those provisions to that contract.

We discussed this prior, jade a little bit under regulations and the far as well in 1.6 F and G, if the agency fails to incorporate they not only have to retroactively apply it but also have to address any additional cost to the contractor for that modification.

Those are situations we want to avoid at all costs.

That's why your federal labor advisers as well as my team is available to talk to you prior to contract award.

After the contracts been awarded, the methodology for correcting that can be challenge and we all know that next year's budgets from many agencies are not going to be ones with a lot of flexibility.

So it's very, very important proper decisions are made in the solicitation process, not only to maintain a level floor so all contractors are competing on the correct wage requirements but also that the agency protects itself from any further claims that maybe presented to it.

By the prime contractor.

Let's see what else we got here.

This comes from St. John in -- John in St. Louis, Missouri.

John's question is, apprentice and journeymen ratios are difficult to obtain and sometimes not explicit when we do get them.

And or contrary to the minimum one to one ratio that DOL supposedly requires.

If DOL approves an apprenticeship program why there's not a sense of uniformity concerning the ratio language?

More importantly, why can DOL not post a given labor union's ratio online?

We have cases where DOL say it is ratio is one thing while the union says something else, which can create contentious arguments between us and our subcontractors.

Anybody want to field that one?

>> I'll start it.

Okay.

First of all, the ratios of apprentices or trainees to journey men are set to apprenticeship standards.

Should be explicit how many are allowed based on number of journey men employed on the site.

One of the things that I think maybe impacting a lack of uniformity is that DOL doesn't approve all the apprenticeship programs.

Many states have their own apprenticeship councils recognized by the bureau of apprenticeship an training when the state does, then that apprenticeship council approves the programs for that state.

So they're going to have their own views of course and the -- that's probably why you don't see uniformity there.

It probably also contributes to why there isn't one place online where you can find the ratio.

As far as a minimum ratio, I'm not aware of one, one to one.

But the ratio will be stated in the apprenticeship standards.

That was the start.

If I covered it all.

>> Yes.

I think generally we just know that based upon the craft, the degree of difficulty, that different apprenticeship programs have different ratios.

Electricians tend to have a tighter ratio requirement because of the nature of the work that they perform.

Again, ratios are specific to the plan and quite frankly, I understand some of your concerns but the apprenticeship or training plan should be very explicit as to the ratio requirement.

If there is a question to what the appropriate ratio requirement is in the plan it's the state agency that approved it or our own bureau of apprenticeship and training here at the department of labor that would be the ultimate source for clarification of the ratio

requirements.

When do our certified payroll exercise this afternoon you'll hear advice we have if you're a prime contractor or agency and the first time you have seen a contractor on the work site that is using apprentices or trainees.

We think it's a great tool to ask for the apprenticeship plan as well as individual registration form so you can make a determination of what the ratio requirement is as well as what level that particular apprentice is at so you can make a determination as to whether he or she is being paid the proper prevailing wage rate.

Excellent.

Questions continue to come here.

So let's continue on.

This is a good one.

This comes from Anna in Troy, Michigan.

And Anna says if CWSSA applies on a Davis way con project but workers don't work 40 hours on that specific project, we oversee, she is a contracting officer, can we even enforce CWSSA, if the worker works 38 hours on other projects comes to you are Davis bacon project and works Friday and Saturday, what would be overtime, how am I supposed to know?

How does that particular contracting officer enforce overtime in that situation?

>> Want me to take that one?

>> Give ate whirl.

>> Sure, why not.

We're talking CWSSA.

And in the example you provided you have workers that have put 38 hours in on your job which is CWSSA covered and they go somewhere else and work another 8 hours.

So the first thing is is that CWSSA overtime?

I think we can be clear there was overtime worked but it's not CWSSA overtime.

If there is an overtime implication, it will be fair fair labor standards act.

In order to be CWSSA overtime, all the hours have to be worked on the CWSSA covered job.

In terms of the -- how you would know that there are other hours being worked, the employer when they fill out the payroll report should be including for the hours only what's showing up on the Davis-bacon covered job.

But when you get into earnings, there should be a difference from the gross wages earned on this project is over gross wages earned other projects.

So now you know if the figures are different and the all project number is greater then the employee must have worked at some other site that bears more review on your part.

But in that case, CWSSA overtime would not be applicable.

>> I believe we have some charts in the afternoon when we're -- Tim and I are talking compliance that talk about calculation of overtime as well.

>> This maybe a situation where the contracting officer may need to contact wage and hour because if this is a contractor who may be using the different agencies and reporting certified payroll separately, and not combining all hours for overtime purposes that quite frankly would be a more appropriate for wage and hour to investigate since we'll look at that contractors performance on all their Davis bacon covered contracts.

So should you receive information on that, that would be an appropriate referral to our agency so that we could investigate the overall contractor compliance with CWSSA.

This one is a little complicated.

Thinking hats on?

>> On.

>> This comes from Louise in Houston, Texas.

We've had a solicitation that closed in June which we're getting ready to award.

They're waiting for FY 12 funding which I believe we all are.

But the latest wage determination was incorporated the date of solicitation was released.

So they were current on the date of the solicitation released.

However, as they're waiting a new wage determination was published and it's a little bit higher.

Do they have to incorporate that latest wage determination?

And request a wage rate adjustment from the contractor.

>> Short answer is yes.

Wage determination is supposed to be the wage that's on the contract is the one that was applicable at the time of contract award.

And there's a ten day flexibility that I talked about.

If an updated wage determination comes out within 10 days before contract award, there's flexibility there.

But otherwise you have to plan it.

You have to have the current wage determination at the time of award.

Let me go back a bit.

In the old days when I was requesting wage determinations and I would take 45 days standard to get one I would often issue a solicitation that had what I call a DUMMY wage determination, one that different offerers would use, price it, send in proposals and we make a selection on that basis.

When the real wage determination came from the department of labor we do a contract price adjustment mod that would be applicable only to the selected offerer.

We award the contract with the DUMMY wage determination but we had to do a contract mod to adjust it.

There's rigks to that.

Since you said the solicitation that you're doing and negotiated contract rather than a sealed bid, you could have an offer allege jeez, if I had known I had to had the opportunity to adjust my prices on the updated wage determination that could have changed the way my proposal and could have jeopardized the selection.

I could have been selected.

That offer has the burden of proof to prove that would have affected selection but you want to watch and make sure any contract price you're doing doesn't jeopardize the integrity of the selection process.

In addition, you want to make sure the contract price adjustment fits you mod -- that you mod the contract with is only for the effect of that new wage determination.

That should be wages and certain fringe benefits only.

You don't apply overhead, you don't apply G&A, fee or profit.

Only the effect of that particular wage determination.

It's not an opportunity for the contractor to get well from some underrun or overrun they built into their price.

So those are the two things you watch for.

I personally would rather do it in a post award basis.

Award the contract with whatever you have so you done have revised proposals an adjust the contract later but make sured that adjustment doesn't jeopardize the integrity of your selection.

A long-winded answer but there's some legal things you got to be cautious of in this scenario, it's not unusual particularly as we go to more best value selections of offerers and do fewer sealed bid selections.

>> I'll flip it for you.

Suppose this was a a competitively bid contract.

What obligation the agency has if that put in the correct wage determination at bid opening time.

>> You could handle it two ways.

You can allow all offerers the adjust their bids and prior the award seems like more work to me or if you have already had your bid opening then you have an apparent low offerer and you can -- I would deal post award by updating the contract with the modification and adjusting for any price that way.

Less chance of that happening doing sealed bid but in your case you got funding so you have a several month gap so I can see that happening.

>> Is there a time frame between the selection of the wage determination in a competitively bid environment until the contract is out -- actually awarded, an obligation to included a new wage determination at a particular time.

>> Tough have updated wage determination unless you have the authority to do otherwise.

There's a ten day window, you can get the 90 day extension from the department of labor of you have to do -- or you have to do a post award adjustment.

Or pre-award adjustment and allow all offerers to adjust bids accordingly.

So those are the only options that I can see.

>> Ms. Banks, projects.

Why is it that there's some related act projects under HUD for which CWSSA does not apply?

>> Good question.

You may recall that CWSSA is applicable when the nature of federal assistance is only in that of a loan guarantee or insurance.

So HUD has programs specifically FHA insurance program where there's no federal assistance, no federal money going into it.

All HUD is doing is ensuring the mortgage.

In that case QWSSA doesn't apply.

Our related act programs that administered by state and local agencies are subject to CWSSA if the amount of prime contract exceeds $100,000.

Good question, though.

>> Excellent.

What is DOL's policy regarding pursuance of debarment against a general or prime contractor based on its subcontractor's prevailing wage violations?

And what guidance can you offer to general contractors regarding implementation of a compliance program to -- that assesses satisfactory to the department of labor, that comes to us from Gregory in New Jersey.

Yes.

Indeed we are currently pursuing several cases against the prime contractors not primarily for the violations that they committed, but for violations committed by their subcontractors.

For me the most important thing that I emphasize in our conferences is the requirement in the labor standards provision that the Davis-bacon clauses and wage determination must flow through the agency to the prime to the subcontractors and all the way down to the lower tiered subcontractors.

When those causes and wage determinations stop where along the line that's the type of situation where a prime contractor faces some responsibilities.

Because they were responsible for making sure that their subcontractors and lower tier subcontractors were one, aware of their obligations under Davis-bacon, and two, received the appropriate wage determinations for which they needed to comply.

In the instances that we're looking at for debarment now, these are instances where we believe the prime contractor may have known quite frankly what they were doing by not slowing down the clauses.

So to answer your second part of your question, failing to ensure clauses flow all the way down and for me in enforcement posture, the thing that's troubling to me is a contractor should know when the causes haven't flowed down, how show they know that?

They're not receiving the weekly certified payroll records from all their subcontractors and lower tier subcontractors.

They should be coming into them every week.

And if you're not aware of the subs an lower tiers that are on your project, and not getting a certified payroll, that should be a very hard signal to you that somewhere along the line that chain got broken.

I think the prime has to take immediate responsibility to find out where that is so that the lower, lower tier contractors can be informed of their responsibilities.

I'm sympathetic when we have a lower, lower tier subcontractor, usually a small business that bid on a project not knowing that there was Davis-bacon requirements, bid based upon wage rates that weren't conducive or in correlation with our wage determination and then along comes the prime saying oh, there was a wage determination, you didn't have it but I'm going to withhold funds from you for your failure the pay the Davis-bacon wages.

For us at the department we hold the contractor responsibility to fail to flow down the causes so where that chain break, that's where we look at for compliance monitoring purposes.

But so that's one thing.

I think in addition implementing a program where certified payrolls are reviewed on a regular and reoccurring basis we have situations where a lower tier sub subcontractor submitted incorrect certified payrolls where they misread the wage determination.

And those certified payrolls were submitted faithfully week after week but the prime contractor didn't know on the record underpayment of wages for months until after the first certified payroll came in.

So having an active program monitoring the payrolls is a critical step for any contractor to make sure they can demonstrate to the department of labor and federal agency in contracting officer they are taking Davis bacon requirements seriously and conducting reviews of certified payrolls as well as spot checks on the site as to the number of workers being reported in a faithful manner.

The number of steps of prime contractors can take and the afternoon session jade will go through Davis bacon compliance issues with you and some additional suggestions what a prime contractor can do to make sure they are demonstrating their commitment to Davis bacon compliance.

>> I could add a point as well.

We use the term certified payrolls.

That's a big deal.

Certification is a big deal.

It means the personal who is signing this certification states that the submittal is complete and accurate.

And there's potential penalties for that failing to do that.

My experience as a contracting officer it's noted there are two groups of people very took certifications seriously.

Senior company officials and prosecutors.

It's not done lightly.

It's a big deal that it's certified payrolls.

>> Here is a question to you jade.

This comes from van sing from location unknown.

Looks like Maryland based on the area code.

Does a salaried foreman have to be paid at least a Davis bacon rate for classification of work performed?

A foreman doing electrical work?

Does his or her salary have to be at least the electrical rate in the Davis bacon wage determination?

>> Oh, boy.

First of all, foremen that perform less than -- spend less than 20% of their time doing mechanics work are not covered by Davis bacon, they're excluded.

So I guess it would come down to how much time is the foreman spending doing the mechanics work.

That I think unless Tim wants to add something on 941 stuff I don't know.

>> 541.

>> 541 stuff I don't know.

That's it.

>> Working foreman are paid an hourly wage.

Some of their work involves some reporting recordkeeping on the job site.

But they also are oftentimes involved in doing skilled craft work.

As laborer or a mechanic.

If an individual is exempt under the fair labor standards act, they're paid a guaranteed salary and they're duties include the ability to hire and fireworkers they oversee the supervision on the project, those individuals can be classified as 541 exempt.

And in those cases even when those workers perform a little bit or some construction work on the job site, there's no requirement they be paid.

Our regulation specifically state 541 exempt workers are not laborers or mechanics defined by Davis bacon.

So the question you ask is this a working foreman who is often paid hourly based upon hours in the week?

Or is this the overall superintendent or supervisor on the project who may get involved with construction work on a periodic basis but is paid a guaranteed salary and meets the requirements of our executive professional or administrative exemptions under the FLSA.

If that's ooh the case that individual wouldn't be entitled to Davis bacon wages for that portion or piece of time when they perform labor mechanics duties.

Is this -- comes from Jason in Austin, Texas.

Is the ten day lock-in period for wage rates, are they calendar days or business day?

The answer, Jason, is they are regular calendar days, not business days.

>> Somewhere it says unless the far specifies otherwise you're to presume days in the far are calendar days.

So there used to be confusion about that but that was fixed years ago.

So it's always calendar days unless otherwise stated.

>> Okay.

This is for both of you and then we have one more and we'll do some wrap up until this afternoon.

Here is the question.

With the requirement of assuring the proper wage determination is applied the a contract, does this require the actual insertion of the wage determination in the contract?

Can the contract simply contain a description of the proper wage determination to include the decision number, date, construction classification, et cetera instead of printing the entire wage determination.

This comes from Columbia, Missouri.

>> Wonderful.

I'll start with that one.

HUD has issued a labor relations letter stating it is not necessary to incorporate the entire wage decision physically into the contract.

That you can refer to it by very specific means saying that it is this particular wage decision with this particular date and this particular modification.

And a hard copy that wage decision must be available on request.

>> Why one you wan the full copy?

Usually less than ten pages.

>> Our wage decisions can cover, one in California covers 49 counties and it goes page of page after page.

So many times think for the sake of saving trees we refer to it specifically and because they're available on DWOL they include by reference.

>> We have an agreement that it would be inappropriate to simply say go to WDOL.gov and find something that looks right.

>> Or Davis bacon applies, that's not enough.

>> You need to be very specific as to the way determination is applied.

Some folks do a link.

>> Uh-huh.

>> I'm being told two minutes Stanley says which means he's hungry.

This is going to wrap up the morning session.

Again, apologies to those of you who have had streaming problems, our technical folks are walking in the room now and they tell me they're going to reboot some systems so that we can get this thing back up and running this afternoon in the manner that we had hoped for.

Again, I remind you that we are recording this so for those portions that you may have unfortunately missed this morning, they are going to be available to you on the Internet in a short time period.

For this afternoon, if you go on our live web link there is an exercise, about eight pages on certified payrolls.

I I ask you to print it out during the break because we'll use that exercise in part B this afternoon.

We reconvene at what time this afternoon?

2 o'clock.

>> 2 o'clock Eastern Time.

And at that point in time we'll go through some compliance principles, how to monitor Davis-bacon compliance on a project and we'll do an exercise on reviewing an actual certified payroll.

Until then, that concludes the morning session.

Thank you all for participating.

We'll see you this afternoon.

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>> Greetings from the department of labor.

Welcome to the government contracting officials prevailing wage conference webcast.

The department of labor's wage and hour division is hosting this free webcast exclusively for federal, state and local contracting agencies.

Our purpose is to highlight the important role that you play in administering the prevailing wage provisions of both the Davis-Bacon act and the service contract act.

At the department of labor, we know that a well-informed federal contracting community is needed to ensure our work is received the wages guaranteed to them by law.

We're committed to developing partnerships with our contracting officials, to make sure workers receive a lawful livable wage.

Sin 2009 the department wage and hour division under the leader ship of deputy Nancy lepping.

Has executed its program to provide key shareholders with compliance assistance.

We have hosted prevailing wage conferences in cities throughout the United States.

We appreciate those of you who have joined us at one of these gathering, and for those who haven't we hope to see you at future meetings.

As secretary of labor it's more important than ever to enforce prevailing wage laws.

Davis-Bacon has helped our construction and service workers since the great depression.

Especially during these difficult economic times, it's crucial that local workers not have their livelihoods undercut when carrying out public works projects.

We believe in a proactive two step strategy.

Step one to make sure contractors are educated on a prevailing wage obligations.

Step two is to oversee an enhance enforcement process that curtails violations an promotes efficient orderly procurement process.

I'm proud that my department of labor has doubled investigations of Davis-Bacon violations.

We have collected millions of dollars in back wages OWED to workers an debarred contractors who break the law.

I appreciate your efforts on behalf of the American worker.

Together I know we can administer our laws efficiently and effectively.

And correct problems wherever we fine them.

On behalf of us here at the department of labor, thank you for your participation in this webcast.

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>> Welcome to the government contracting officials prevailing wage webcast.

The department of labor wage and hour division is hosting this free webcast exclusively for federal state and local contracting agencies.

Our purpose is to highlight the important role you play in administering the prevailing wage --

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