Georgia Tech Procurement Assistance Center

The Infrastructure Plan and The Davis Bacon Act

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It’s coming.  From all outward signs, it appears that the Biden Administration may be planning to use the “American Jobs Plan” – otherwise known as the proposed infrastructure plan – to expand the Davis Bacon Act (“DBA”) and require the use of prevailing wages on all projects funded by any infrastructure bill ultimately passed by Congress.

The Davis Bacon Act (40 U.S.C. §§ 3141-3148), requires employers performing construction work under contract with the federal or District of Columbia government valued at more than $2,000 to pay their laborers and mechanics a prevailing wage and fringe benefits, at levels set on a regional or local level by the U.S. Department of Labor.  Noncompliance with the DBA can potentially lead to severe penalties, including suspension, debarment, and even False Claims Act civil and/or criminal liability.

Continue reading at:  Husch Blackwell

Local, state and federal prevailing wage obligations vary greatly

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Contractors, developers, architects, owners, project managers, and even public bodies often ask the same obvious question when dealing with any type of prevailing wage ordinance or law, “what are my obligations?”  While everyone involved in public construction projects want to comply with prevailing wage mandates, more often than not those involved in such projects are either oblivious to their responsibilities or are mistaken in their belief as to such responsibilities.  This is not surprising in light of the great variance in prevailing wage laws, related rules, and interpretations of such rules and laws on a local, state, and federal level.  It’s unfortunate that there is no set standard or guidebook on the subject.  And, that’s the point of this alert!

What a GC or subcontractor must do under California’s prevailing wage law is entirely different with respect to Illinois law.  Likewise, what a developer or owner needs to ensure on a prevailing wage project under Ohio law is different than pursuant to New York mandates.  There are also great variations in the types of forms required (including the certified transcript of payroll), written notifications and/or legal disclaimers, contract provisions, wage and fringe benefit responsibilities, actual rate determinations per trade and area, potential liabilities, and actual compliance standards.  These variations are controlled on a local and state level where prevailing wage requirements still exist.  For a summary of where state prevailing wage mandates still are in play, the U.S. Department of Labor’s quick summary is quite helpful.

Continue reading at:  JD Supra

Subcontractor agrees to pay damages after failing to pay prevailing wages on VA construction projects

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Acting United States Attorney Jennifer Arbittier Williams announced that S.A. Taylor, LLC (“S.A. Taylor”) has agreed to settle claims under the False Claims Act and to pay $561,411.72 based on allegations that the company caused the submission of falsified payroll records as part of two United States Department of Veterans Affairs (the “VA”) construction projects.

S.A. Taylor, a Virginia-based construction company, bid on and was awarded subcontracts to work on two VA construction projects under the prime contractor, CTA, I, LLC.  Because the construction work was performed for the federal government, all contractors and subcontractors were required, by law, to pay their workers prevailing wages.  At the time, the prevailing wage was between $57 to $91.50 per hour, depending on the worker’s classification.

The government contends that S.A. Taylor paid its workers significantly less than the prevailing wage, but that it submitted falsified payroll records to make it seem as if the prevailing wage had been paid.  CTA, unaware of the falsity, submitted the payroll to the VA which, in turn, reimbursed S.A. Taylor.  Under this scheme, S.A. Taylor pocketed the difference while its workers were shorted wages they were legally due.  CTA discovered the falsity during a subsequent arbitration when S.A. Taylor produced two sets of payroll records—one showing the prevailing wages which should have been paid and one showing the actual, lower wages which had actually been paid.

Continue reading at:  U.S. Department of Justice

DOL targeting government contractors for wage enforcement

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U.S. Labor Department leaders are planning to ramp up enforcement of wage standards on federally funded construction and service projects, aiming to reverse a recent trend that has been compounded by attrition of seasoned investigators, according to four sources briefed on the initiative.

The changes the DOL’s Wage and Hour Division is formulating—which could rank among its biggest initial policy moves under the new administration—would support the infrastructure and jobs package President Joe Biden is planning to roll out.

As the administration readies those big-ticket legislative proposals, which would increase government investment in projects developed by private companies, the department has begun preparations to expand its investigative capacity under two statutes that require government contractors to pay workers prevailing wages and benefits, as determined by the DOL.

The building trades and service unions have long called for the department to crack down on what they have described as government contractors’ persistent non-compliance with the two laws: the Davis-Bacon Act, which covers public construction projects, and the McNamara-O’Hara Service Contract Act, which applies to government spending on services, such as janitorial work and food preparation.

Continue reading at:  Bloomberg Law

Find Davis-Bacon in federal construction contracts, not in a supermarket

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There is hickory bacon.  There is turkey bacon.  And then there is Davis Bacon.

The first two can be found in the meat department of your local supermarket.

The last one — Davis Bacon — is found in federally-funded construction contracts.  If you’re bidding on a federal contract or subcontract, you’d better educate yourself about this requirement.

The federal Davis-Bacon Act (DBA) applies minimum prevailing wage classifications for all federally-funded or assisted construction projects.  (Note that the Federal Acquisition Regulation – the FAR – now refers to the Davis Bacon Act as “Wage Rate Requirements – Construction.”)

The U.S. Department of Labor creates wage classifications by the type of project for a specific type of worker.   (Although not the case in Georgia, also be aware of the fact that some state governments have adopted “little DBAs” requiring prevailing wages on state-funded public works projects.)

The worker classifications are crafted with broad job scopes, in order to be over-inclusive.  These classifications have drawn the ire of many private construction firms, who complain about what they consider over-payment for non-specialized labor (i.e., paying a wire runner as a journeyman electrician).  So, while many favor the DBA’s heavy wages – it can be crippling to an unprepared private firm’s profit margin.

In order to prepare, a construction professional must read and absorb the federal wage classifications that apply on their project – before bidding.  Wage classifications are prepared by state and by project, and are included in all federally-funded construction work.

If you are bidding a contract in the State of Georgia, you’ll need to check out the Georgia classifications.  For example, if you were building a non-residential structure, such as a government building, in Bibb County, you can see the applicable wage rates here.

If your Bibb County bid needs to include ironworkers to install your structural steel, you would need to bid them per hour at $24.04, plus $9.86 in fringe benefits (insurance, fringe, or even cash).  There are no real boundaries here – if a worker is involved in structural steel work, that worker is to be paid as an ironworker. If a contractor does not plan for this broad application, you’ll be facing penalties that are spelled-out under the Wage & Hour Act or Contract Work Hours and Safety Standards Act.  The penalties are stiff, providing for up to two times the amount of the unpaid or underpaid wages, plus interest.

The lesson here?  Like with all things involving government contracting, do your homework before jumping in with both feet.  To obtain assistance, check with a representative of the Georgia Tech Procurement Assistance Center (GTPAC) nearest you.  With proper preparation, you’ll be able to bid correctly, win a contract or subcontract, and then be able to bring home the real bacon.

© 2010-2017 –  Georgia Tech Procurement Assistance Center – All Rights Reserved.

Labor Dept. resumes providing guidance on wage and hour laws

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The U.S. Department of Labor is reinstating the issuance of opinion letters.  The letters, issued by the department’s Wage and Hour Division, is one of its methods the department uses to provide guidance to covered employers and employees.

An opinion letter is an official, written opinion by the Wage and Hour Division of how a particular law applies in specific circumstances presented by an employer, employee or other entity requesting the opinion. The letters were a division practice for more than 70 years until being stopped and replaced by general guidance in 2010.

“Reinstating opinion letters will benefit employees and employers as they provide a means by which both can develop a clearer understanding of the Fair Labor Standards Act and other statutes,” says Labor Secretary Alexander Acosta. “The U.S. Department of Labor is committed to helping employers and employees clearly understand their labor responsibilities so employers can concentrate on doing what they do best: growing their businesses and creating jobs.”

The division has established a webpage where the public can see if existing agency guidance already addresses their questions or submit a request for an opinion letter. The webpage explains what to include in the request, where to submit the request, and where to review existing guidance. The division will exercise discretion in determining which requests for opinion letters will be responded to, and the appropriate form of guidance to be issued.

Federal court rules against Labor Department in wage case

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The nation’s second most powerful court ruled against the Department of Labor (DoL) Tuesday in a case challenging when construction workers are entitled to prevailing wages on public projects.

Davis BaconThe U.S. Court of Appeals for the D.C. Circuit said the workers who built CityCenterDC, a mixed-use development in the heart of the District of Columbia (D.C.), were not entitled to prevailing wages under the Davis-Beacon Act.

The federal law applies to construction contracts that cities enter into for public works projects.

In affirming the lower court’s decision, the D.C. Circuit, however, said CityCenterDC, which features upscale retail stores like Louis Vuitton, high-end restaurants, a large private law firm and luxury residences, is not a “public work.”

“To qualify as a public work, a project must possess at least one of the following two characteristics: public funding for the project’s construction or government ownership or operation of the completed facility, as with a public highway or public park,” Judge Brett Kavanaugh wrote in the court’s decision. “Here, CityCenterDC’s construction was not publicly funded and CityCenterDC is not a government-owned or government-operated facility. So CityCenterDC is not a public work.”

Keep reading this article at: http://thehill.com/regulation/court-battles/275195-federal-court-rules-against-labor-department-in-wage-case

See more details at: http://www.constructiondive.com/news/court-rules-against-dol-in-prevailing-wage-case-due-to-massive-atextual/416908/

Contractor to pay government upwards of $675,000 for failure to pay proper wages

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Justice Dept. sealGovernment contractor Paige Industrial Services, Inc. has agreed to pay the United States between $450,000 and $675,000 to resolve allegations under the False Claims Act that the company submitted false claims to the Department of Health and Human Services.

In a related parallel criminal proceeding involving a Paige subcontracting company, construction company owner Luis Alonso Valle, age 46, of Silver Spring, Maryland, pleaded guilty on February 11, 2016 to an illegal pattern and practice of hiring unauthorized aliens.

This settlement resolves allegations that Paige Industrial Services submitted claims from 2006 to 2013 falsely certifying that it had complied with the Davis-Bacon Act.  The Davis-Bacon Act required Paige to pay certain prevailing wages and fringe benefits to its employees, or the employees of its subcontractors, while working under a government contract performing construction at the National Institute of Health (NIH) campus in Bethesda, Maryland.  Paige, which provided construction and maintenance services to government agencies, allegedly failed to meet the requirements of the statute while certifying that it had.  Paige denies the allegations.

“Contractors are required be truthful in their certifications to federal agencies,” said U.S. Attorney Rod J. Rosenstein.

“This office is committed to investigating allegations of fraud involving the Davis-Bacon Act, which requires that contractors and subcontractors pay prevailing wages to their workers on government projects,” stated Acting SAC John Dolce, U.S. Department of Labor’s Office of Inspector General – Washington Regional Office. “The joint criminal and civil resolutions announced today reflect the seriousness with which our agency and its law enforcement partners pursue allegations of wrongdoing that affect the American workforce.”

As part of the settlement, Paige has agreed to make additional payments above a minimum settlement payment of $450,000, depending on the financial performance of the company over the next five years.

The civil settlement resolves a lawsuit filed in the District of Maryland under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. (U.S. ex rel. Brandon Owens and Stevan Reba v. Gilbane, Inc, Gilbane Building Company, Inc, and Paige Industrial Services, Inc.) The claims resolved by this settlement are allegations only, and there has been no determination of liability.

In a related parallel criminal proceeding, Valle Services, LLC., was a subcontractor to Paige at the NIH campus in Bethesda.  According to his plea agreement, Luis Valle owned and operated Valle Services, a construction company that provided unskilled laborers to clean up after demolition projects.  From at least January 2010 to June 2013, Valle paid some of his employees by handwritten checks without withholding required payroll taxes of at least $54,641.  Additionally, Valle failed to pay a matching employer share of the payroll tax of at least $54,641.  These wages were not included on W-2 forms distributed to the employees at the end of the year.

Furthermore, from March 2008 to August 2013, Valle hired at least 19 illegal aliens to work in the United States, and paid them weekly through checks that he typically distributed in person from his vehicle at a parking lot.  Valle approved the hiring of at least five of the illegal aliens to work on a federal contract at the Bethesda NIH campus, which contract was subject to the provisions of the Davis-Bacon Act.

U.S. District Judge Paul W. Grimm sentenced Valle on February 11, 2016 to three years’ probation and imposed the condition that Valle not employ any unauthorized aliens.  Judge Grimm also entered an order that Valle forfeit $57,000, which represents a $3,000 fine for each of the 19 unauthorized aliens that he illegally hired.

Source: http://www.justice.gov/usao-md/pr/paige-industrial-services-agrees-resolve-false-claims-act-allegations

Labor Dept. to require paid sick leave for workers of federal contractors

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Dept. of LaborThe Department of Labor (DOL) is requiring federal contractors, subcontractors and certain parties who contract with the Federal Government to provide their employees with up to 7 days of paid sick leave annually, implementing Executive Order 13706, which was signed by President Obama on September 7, 2015.

The proposed rule applies to new contracts or contract-like instruments, if:

(i)(A)  it is a procurement contract for services or construction; (B) a contract covered by the Service Contract Act; (C)  a contract for concessions; and (D) a contract entered into with the Federal government in connection with Federal property or lands related to offering services for Federal employees, their dependents, or the general public; and

(ii) the wages of employees under such contract are governed by the Davis-Bacon Act, the Service Contract Act, or the  Fair Labor Standards Act (FLSA), including employees who qualify for an exemption from the FLSA.

DOL estimates that the proposed rule will cost each small business $150-$650 for the first year in implementation costs and payroll costs.

Comments are due to the DOL by March 28, 2016.     

 

Minimum wage for federal contractor workers to increase Jan. 1, 2016

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On February 14, 2014, President Obama issued an executive order requiring certain federal contractors and subcontractors to pay an increased hourly minimum wage as mandated by the secretary of labor, who was also to determine increases to the wage rate on an annual basis.

Dept. of LaborOn September 16, 2015, the Secretary of Labor Announced that, effective Jan. 1, 2016, new minimum wages for employees of federal contractors will be increased from $10.10 to $10.15 per hour and that the rate for tipped employees will rise from $4.90 to $5.85 per hour.

What Contracts Are Covered?

Keep reading this article at: http://www.oanow.com/news/business/article_b09cf56e-5f2b-11e5-b780-d3ebd138a752.html

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