INTERNAL_GUIDANCE_FOR_DAVIS-BACON_WAGE_DECISIONS.docx

City of Pembroke Pines

INTERNAL GUIDANCE FOR

DAVIS-BACON WAGE DECISIONS

Procurement Specialist shall review this information with their supervisor and the project manager to determine the correct Davis-Bacon Wage Determinations to be added as an attachment to the bid package.

Note – 10 days prior to bid opening, the Procurement Specialist should check to see if the Prevailing Wages have changed on the Sam.gov site. If they have, the Procurement Specialist shall issue an addendum with the new Prevailing Wages.

The following information generally comes from the HUD Handbook 1344.1 Rev-3 entitled Federal Labor Standards Requirements in Housing and Urban Development Programs, issued and effective January 2023. The information is provided as a general guide to assist bidders, however bidders shall confirm accuracy of the information contained herein via the Department of Labor, U.S. Department of Housing and Urban Development and any other agency that oversees the applicable Davis-Bacon Wage Decisions as information and guidance may change from time to time.

1. Introduction. The U.S. Department of Labor (DOL) is responsible for determining prevailing wage rates for construction work pursuant to the Davis-Bacon Act and publishes schedules of these wage rates online. The term “wage decision” includes the original decision and any subsequent decisions that modify, supersede, correct, or otherwise change the provisions of the original decision. A wage decision is a schedule of construction work classifications, wage rates, and fringe benefits that represent the minimum rates that must be paid to workers employed in those classifications. General wage decisions are established for defined geographic areas, usually by county, and the four characters of construction work.

2. This project falls under the following character of construction work:

a. ☐ ☐ Residential. Residential construction includes the construction, alteration, or repair of single-family houses or apartment buildings of no more than four (4) stories in height. This typically includes all incidental items such as site preparation work, utilities, and sidewalks, unless there is an established area practice to the contrary.

i. First story (floor).

1. A lowermost story is considered a first story (floor) if it is:

a. Primarily above exterior grade on one or more sides; and,

b. Contains at least 50% living accommodations or related nonresidential uses (e.g., laundry space, recreation/hobby rooms, commercial use, and/or corridor space).

2. A lowermost story is considered a first story (floor) without regard to a percentage test if it is primarily above ground on two or more sides.

3. A lowermost story is considered a first story (floor) if it contains the main entrance to the building.

4. A lowermost story is considered a first story (floor) without regard to exterior grade if it is used for apartment space in a way substantially similar to the upper floors.

ii. Basement. Stories below grade used for storage, parking, mechanical systems/equipment, etc., are considered basement stories which are not used in determining the building’s height.

iii. Attic. An attic is an unfinished space located immediately below the roof. Such space is not used in determining a building’s height even if used for storage purposes.

iv. Half-story. A half-story over the building’s fourth story classifies the character of construction as building. A half-story is a story finished as living accommodations located wholly or partially within the roof frame with floor space at least half as large as the story below. (Space with less than five (5) feet clear headroom shall not be considered as floor area.)

v. Top story. The top story, not finished for living accommodations, between the uppermost floor and the ceiling or the roof above, with floor space as large as the story below, is considered a story for purposes of determining a building’s height.

vi. Housing unit requirements. For assisted living properties, a Residential wage decision will apply if the property is four (4) stories or less and each assisted living unit has its own kitchen and bathroom. Additional considerations include:

1. For assisted living projects with memory care units, and/or units that do not have self-contained kitchens and bathrooms, a Building wage decision may apply based on AAMs 130, 131, and 236.

2. If an assisted living project that is four (4) stories or less has a mix of independent living and memory care units, and/or a mix of units with and without self-contained kitchens and bathrooms, the LLS or LCA must determine if one component of the mix of units is substantial. If so, Residential rates and Building rates may be required.

3. Single room occupancy (SRO) projects are exempt from these criteria. SRO projects are not required to have a kitchen and bathroom in each housing unit.

vii. Mixed-use projects. Some projects may contain elements of different construction characters that are separate in function to each other. For example, a three-story building and a five-story building in a multifamily project each has an independent purpose and function and are not incidental to the other. In such cases, it is appropriate to identify more than one character of work and to assign multiple wage decisions, i.e., a wage decision(s) covering each character of work involved.

e. Notes: In certain cases, a single project may contain separate and distinguishable components that fall into different categories of construction.

i. Incidental construction items are elements of a project whose function is to support the principal purpose and do not change the overall character of work. Examples of incidental items include sidewalks and handrails installed to support residential or building projects. While sidewalks, in and of themselves, constitute “highway” construction, this element installed in conjunction with a residential or building project is considered to be incidental to the principal purpose of the construction and is subject to the same wage decision that applies to the principal purpose.

ii. Substantial items are defined by DOL in All Agency Memorandum 236 as construction items that exceed either $2.5 million or 20% of the total project cost*. Additional general wage decisions may be applicable to a project that contains substantial construction items that fall into different categories of construction.

1. *AAM 236 states that to ensure that the monetary threshold, currently $2.5 million, continues to be a reliable indicator of when construction items in a different category are substantial, the Wage and Hour Division will re-evaluate annually whether an update to the monetary threshold is warranted by inflation and rising costs. If WHD updates the monetary threshold, the most recent WHD monetary threshold should be used in determining whether a construction category is substantial. Note that WHD may update the monetary threshold; the 20% threshold will remain the same.

iii. End result refers to the outcome of the construction activity determining the character of work. This is a factor only in rehabilitation projects. For example, if an existing 4-story office building is undergoing rehabilitation and the end result is an apartment building that is four (4) stories or less, the character of work is Residential. Conversely, if a single family-home is renovated and the end result is a community center, the character of work is Building.

3. Multiple wage decisions. “Multiple wage decisions” refers to the responsible contracting officer or administrator selecting more than one general wage decision for a single project.

a. The responsible contracting officer initially selects the primary category of construction applicable to the covered project by identifying the category most consistent with the primary purpose of the project.

i. a. For example, in HUD’s multifamily housing programs, the primary component of the project is residential housing units, and as such, the LSS should select either Residential (4 stories or less) or Building (5 stories or more) as the primary category of construction, and select the corresponding Residential or Building general wage determination for inclusion in the project’s construction contract.

b. The responsible contracting officer then evaluates whether to select an additional wage decision for construction items of a separate category, e.g. if Residential is the primary category of construction, determining if Building, Highway, or Heavy also apply to the project.

i. In instances where functionally incidental construction items would be in a different category of construction, as those categories are defined in AAM 130, if constructed alone, and (b) meet or exceed the AAM 236 thresholds for substantial cost, the contracting officer will generally apply the wage determination for the different category in addition to the wage determination for the overall project.

ii. However, where the cost of construction items in a different category is not significantly greater than $2.5 million* or 20% of the total project cost, HUD will undertake additional analysis and consult with DOL to determine whether HUD’s selection of a separate wage decision is appropriate and consistent with local area practice.

c. For HUD Staff: The Deputy Director will consult with HQLS for approval of multiple wage decisions for a housing development project. It is important to note that for these types of projects, multiple wage decisions come through HQLS, which in turn will consult with DOL, as needed. HQLS will interact with the DOL National Office on the final decision as necessary.

d. For LCA staff: Be aware of potential multiple wage decision possibilities. Projects should be closely scrutinized for substantial work components that might fall into different categories of construction requiring separate wage decisions if the components exceed either $2.5 million* or 20% of the total project cost. Given the numerous possibilities for multiple wage decisions, LCA staff are encouraged to consult with their LSS counterparts at HUD for guidance whenever needed.

e. Examples include:

i. A mixed-use project.

ii. A four-story apartment complex with an adjacent two-story parking garage that costs $3 million. In this case, residential wage rates apply to the apartment complex and building wage rates apply to the parking garage.

iii. A five-story apartment building with a playground and outdoor pool or other structures. Building wage rates apply to the apartment building. Heavy construction wage rates apply to the playground and pool if their costs exceed either $2.5 million* or 20% of the total project cost.

4. Incorporation of Wage Rates:

a. Incorporation of wage decision and labor standards provisions in bid specifications and contracts. The applicable Davis-Bacon wage decision, prior to the issuance of the bid specifications are hereby incorporated as an attachment to these bid specifications and can be found online at https://sam.gov under:

i. Wage Determinations

1. Public Building or Works (Wage rates for laborers and mechanics)

a. State: Florida

b. County/Independent City: Broward

c. Construction Type:

d. Davis-Bacon Act WD #: FL20230197

i. Modification Number: 2

ii. Published Date: Jan 20, 2023

b. Modifications. General wage decisions and project wage decisions may be modified from time to time to keep them current, correct errors, and for other purposes. Modifications may be limited to one or more particular work classifications and wage rates. Modifications are effective to a project if the notice of the modification is published at https://sam.gov prior to the lock-in date. Modifications to a project wage decision expire on the same date as the original project wage decision. A modification to a general wage determination remains in effect until it is superseded by a subsequent modification, or the original general wage decision is superseded or cancelled.

c. Incorporation by reference. As a result bidders must obtain the official wage decisions and modifications online at www.sam.gov. This is the only official online publication of general wage decisions. The official website provides both current and previous general wage decisions and modifications.

5. Use of the wrong wage decision/failure to include a wage decision or contract labor standards provisions. The use of the wrong wage decision and/or labor standards provisions in the bid documents/contract specifications, or the failure to include the required wage decision and appropriate labor standards provisions does not relieve the prime contractor from potential liabilities for compliance and enforcement actions related to meeting the obligations of the proper wage decision and labor standards.

6. Incorporation in contracts and subcontracts. Every ensuing construction contract or subcontract, and any lower-tier subcontracts must include the applicable Davis-Bacon wage decision and its modifications, and the federal labor standards provisions. The prime contractor is responsible for ensuring the incorporation of the wage decision and labor standards provisions in all subcontracts.

7. Lock-in dates, use and effectiveness of wage decisions. General and project wage decisions become effective or “locked-in” for a particular contract or project usually not later than the date construction starts. Once a wage decision is “locked-in”, subsequent modifications or supersedeas wage decisions are not effective for that contract/project. However, prior to the “lock-in” date, modifications and supersedeas wage decisions shall be considered to ensure consistency with DOL regulations.

Project wage decisions shall be monitored to ensure that the “lock-in” date occurs before the project wage decision expires. The “lock-in” date is also referred to as the “wage decision effective date.” (See also DOL Regulations at 29 CFR § 1.6.)

General and project wage decisions shall be effective (locked-in) on the date the contract is awarded or the date construction starts, whichever may occur first, except as follows:

a. Contracts entered into pursuant to competitive bidding. General wage decisions shall be locked-in on the date that bids are opened provided that the contract is awarded within 90 days after bid opening. If the contract is awarded more than 90 days after bid opening, the general wage decision shall be updated as of the date of award unless an extension is obtained. A project wage decision shall be locked-in at contract award. Modifications to a general or project wage decision published at https://sam.gov prior to the lock-in date shall be effective with respect to the contract/project.

b. Exception for competitive bid procedures ONLY: A modification to a general or project wage decision published or received less than 10 days before bid opening may be disregarded if it is found that there is not a reasonable amount of time to notify prospective bidders of the modification before bid opening. A record of such finding must be made to the contract/project file.

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