Section 8.4 Bidding and Contracting Requirements

Grant Administration: Section 8.4 Bidding and Contracting Requirements

A grantee or the grant administrator must be sure to include all applicable labor standards, equal opportunity, and other language in the bid specifications and contract documents, in addition to verifying contractor/subcontractor eligibility (as described in Chapter 7: Procurement). The grantee is responsible for obtaining all required documentation, monitoring project compliance, and maintaining appropriate files.

Preparing Bid Packages to Meet Federal and State Labor Standards Provisions
Once a construction project becomes subject to federal labor standards provisions, the following steps must be taken to ensure compliance. The Labor Standards Officer typically takes responsibility for these steps.

Step 1: Obtain Applicable Federal Wage Rate Decision
The grantee should access the federal wage rate decisions through the Internet at www.wdol.gov. Note that federal wage determinations are issued for four categories: Building, Residential, Heavy, and Highway. When evaluating the type of wage determination to request, it is important to understand the differences to avoid paying wages from an inappropriate determination.

Building construction generally includes construction of sheltered enclosures with walk-in access for the purpose of housing persons, machinery, equipment or supplies; all construction of such structures; the installation of utilities and of equipment, both above and below grade levels; as well as incidental grading, utilities and paving. Such structures need not be “habitable” to be building construction. Also, the installation of heavy machinery and/or equipment does not generally change the project’s character as a building.

Residential projects involve the construction, alteration or repair of single-family houses or apartment buildings no more than four stories tall. This includes all incidental items such as site work, parking areas, utilities, streets, and sidewalks.

NOTE: Floors below ground level used for storage, parking, mechanical systems/equipment, etc., are considered basement floors which are not used in determining a building’s height. If the usage of the lowest floor does not meet this definition, contact CDFA for assistance in determining its classification.

Highway projects include construction, alteration or repair of roads, streets, highways, runways, taxiways, alleys, trails, paths, parking areas, and other similar projects not incidental to building or heavy construction.

Heavy construction includes those projects that are not properly classified as either “building,” “highway,” or “residential.” Unlike these classifications, heavy construction is not a homogenous classification. Because of this catch-all nature, projects within the heavy classification may sometimes be distinguished on the basis of their particular project characteristics, and separate schedules may be issued for dredging projects, water and sewer line projects, dams, major bridges, and flood control projects.

CDFA staff should be consulted if there are questions about properly identifying the type of construction on the project and the wage determination necessary, including those instances where the grantee is required to request “multiple” wage determinations from the Department of Labor. Multiple wage determinations may be required when the project contains separate and distinguishable components that fall into different categories of construction, for example a large mixed-use project.

If the website does not contain a wage decision applicable for your project, the grant administrator should submit a Request for Wage Determination Form to DOL, see Attachment 8-3: DOL Request for Wage Determination Form.

Step 2: Add Federal Construction Contract Provisions to the Bid Package
The wage rate decision must be a part of the bid package. The bid package must contain the labor standards requirements, which are summarized below and separately in Attachment 8-4: Federal Labor Standards Provisions (HUD 4010).

• Davis-Bacon provisions;
• Contract Work Hours and Safety Standards clause;
• Copeland Anti-Kickback clause;
• Employment of Apprentices/Trainee clause;
• Equal Employment Opportunity requirements.

Caution: If the grantee fails to include the correct wage rate determination(s), the grantee will be responsible for paying any difference between the applicable wage rates and the wages paid by the contractor based upon the information provided in the bid package. The grantee’s financial obligation for such restitution is specified in federal regulations.

Step 3: Procurement Requirements
Once the bid document is prepared, it is time to advertise for construction bids. Refer to Chapter 7: Procurement for specific instructions on how to proceed with the bidding process.

Step 4: Wage Determination Lock-in and Contracting
Because the U.S. Department of Labor (DOL) continually monitors the economic conditions of the construction contracting profession, the wage rates are subject to change. It is essential that the grant administrator verify that the most current rates are being utilized. The Davis-Bacon Wage Determination that is in effect no more than 6 days prior to the bid opening is the wage decision that must be used for all construction related activities on that federally funded project. Therefore, the following actions must be taken:

1. The federal Department of Labor does not require modification of wage rates for any updated wage determination issued when there is insufficient time to notify potential bidders. CDFA has determined that it will not require modifications of wage rates updated less than 6 days prior to bid opening. Therefore, the grant administrator must obtain the wage decision no earlier than 6 days prior and provide it to the project architect or engineer to be forwarded to all prospective bidders.

2. The Labor Standards Officer must maintain documentation of the wage decisions at lock-in date. The Wage Determination Lock-In Notice should be used for documentation and reporting to CDFA (see Attachment 8-5: Wage Determination Lock-in Notice).

3. Wage Determinations are only effective for 90 calendar days after the bid opening. On the 91st day, the previously issued determination expires. If the contract is not awarded within 90 calendar days of the bid opening, the wage decision that is in effect on the date that the construction contract is signed is the decision that will be utilized for the entire project. The Labor Standards Officer must obtain an updated wage determination and notify the contractor and engineer or architect of the new wage decision that is applicable to the project. The Labor Standards Officer must maintain record of the new lock-in decision, revising the Wage Determination Lock-In Notice if that procedure is used by the grantee.

4. The construction contract must contain the lock-in wage decision and labor standards clauses required by DOL (Attachment 8-4).