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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: December 23, 2003

SUBJECT: Federal Acquisition Regulation (FAR); Labor Standards for Contracts Involving Construction

SOURCE: Federal Register, December 23, 2003, Vol. 68, No. 246 page 74403

AGENCIES: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA)

ACTION: Proposed Rule

SYNOPSIS: It is proposed that FAR Subpart 22.4, Labor Standards for Contracts Involving Construction, and corresponding clauses in FAR Part 52 be amended to implement the Department of Labor's (DOL) revised definitions of "construction" and "site of the work," to clarify several definitions relating to labor standards for contracts involving construction, and to make requirements for flow-down of labor clauses more precise.

EDITOR'S NOTE: For more on DOL's revised definitions, see the December 20, 2000, FEDERAL CONTRACTS DISPATCH "Department of Labor; Labor Standards Provisions Applicable to Federally Financed and Assisted Construction Contracts."

DATES: Comments on the proposed rule are due on or before February 23, 2004.

ADDRESSES: Submit comments to General Services Administration, FAR Secretariat (MVP), 1800 F Street, NW, Room 4035, ATTN: Laurie Duarte, Washington, DC 20405, or by e-mail to farcase.2002-004@gsa.gov. Cite "FAR Case 2002-004" in all correspondence related to this proposed rule.

FOR FURTHER INFORMATION CONTACT: Linda Nelson at 202-501-1900.

SUPPLEMENTAL INFORMATION: On December 20, 2000, DOL published revisions to its definitions for "construction, prosecution, completion, or repair" and "site of the work" to conform them with three appellate court decisions and subsequent decisions of DOL's Administrative Review Board regarding the transportation of supplies and materials to or from the construction site. DOL further revised its "site of the work" definition to include secondary sites, other than the project's final resting place, which are established specifically for the performance of a contract covered by the Davis-Bacon Act and at which a significant portion of the public building or work is constructed.

To conform the FAR to the revised DOL definitions, the following changes are proposed:

• FAR 22.401, Definitions, would be revised as follows:
  
  
  • The definitions of "apprentice" in paragraph (2)(i) of the "laborers or mechanics" definition, and "trainee" in paragraph (2)(ii) of the "laborers or mechanics" definition would become separate definitions.
    
    
  • The definition of "construction, alteration, or repair" would be revised to: "All types of work done by laborers and mechanics employed by the construction contractor or construction subcontractor on a particular building or work at the site thereof, including without limitations -- (l) altering, remodeling, installation (if appropriate) on the site of the work of items fabricated off-site; (2) painting and decorating; (3) manufacturing or furnishing of materials, articles, supplies, or equipment on the site of the building or work; (4) transportation of materials and supplies between the site of the work...and a facility which is dedicated to the construction of the building or work and is deemed part of the site of the work...; and (5) transportation of portions of the building or work between a secondary site where a significant portion of the building or work is constructed, which is part of the 'site of the work' definition..., and the physical place or places where the building or work will remain..." (emphasis added).
    
    
  • The definition of "site of the work" would be revised to state that the definition covers "any secondary site where a significant portion of the building or work is constructed, provided that such site is established specifically for the performance of the contract or project."
  
  
• To paragraph (c) of FAR 22.404-3, Procedures for Requesting Wage Determinations, which addresses the time for submission of requests, would be added the following subparagraph: "Agencies should promptly submit to the Department of Labor an offeror's request for a project wage determination for a secondary site of the work. The contracting officer shall not extend the due date for receipt of offers as a result of such a request."
  
  
• To provide clarity when the requirements do not apply to the wage determination for the secondary site of the work, the phrase "for the primary site of the work" would be added after "wage determination" in paragraphs (a), (b), and (c) of FAR 22.404-4, Solicitations Issued Without Wage Determinations For the Primary Site of the Work (the title would be revised as well); and paragraphs (b)(1), (b)(2), (b)(2)(i), (c)(2), (c)(3), and (c)(4) of FAR 22.404-5, Expiration of Project Wage Determinations; paragraphs (a)(2), (a)(3), (b)(3), and (b)(4) of FAR 22.404-6, Modifications of Wage Determinations.
  
  
• In paragraphs (b)(1), (b)(2), and (c) of FAR 22.404-8, Notification of Improper Wage Determination Before Award, the phrase "of an improper wage determination for the primary site" would be added after "notification."0
  
  
• In paragraph (c) of FAR 22.406-9, Withholding From or Suspension of Contract Payments, "Comptroller General" would replace "Secretary of the Treasury." This would correct Item (3) of Federal Acquisition Circular (FAC) 97-19, which erroneously redirected the transfer of withheld funds under the Davis-Bacon Act to the Secretary of the Treasury instead of the Comptroller General of the General Accounting Office (GAO). Section 3(a) of the Davis-Bacon Act specifically provides that "the Comptroller General of the United States is authorized and directed to pay directly to laborers and mechanics from any accrued payments withheld under the terms of the contract any wages found to be due laborers and mechanics pursuant to this Act." This would restore the FAR language to that which existed prior to FAC 97-19. (EDITOR'S NOTE: For more on FAC 97-19, see the July 26, 2000, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Circular (FAC) 97-19, Miscellaneous Amendments.")
  
  
• The first sentence in paragraph (e) of FAR 52.222-4, Contract Work Hours and Safety Standards Act -- Overtime Compensation, would be revised from "The Contractor shall insert the provisions set forth in paragraphs (a) through (d) of this clause in subcontracts exceeding $100,000 and require subcontractors to include these provisions in any lower-tier subcontracts" to "The Contractor shall insert the provisions set forth in paragraphs (a) through (d) of this clause in subcontracts that may require or involve the employment of laborers and mechanics including watchmen and guards and require subcontractors to include these provisions in any such lower tier subcontracts" (emphasis added). This clarifies that the clause is included in construction contracts exceeding $100,000 but it flows down to subcontracts that may require or involve the employment of laborers and mechanics without regard to the value of the subcontract.
  
  
• FAR 52.222-6, Davis-Bacon Act, would be revised as follows:
  
  
  • The definition of "site of the work" from FAR 22.401 would be added as new paragraph (a).
    
    
  • The following would be added as part of redesignated paragraph (b)(1) (currently paragraph (a)): "Any wage determination subsequently incorporated for a secondary site of the work shall be effective from the first day on which work under the contract was performed at that site and shall be incorporated without any adjustment in contract price or estimated cost." This proposed revision is based on the premise that secondary sites are initiatives of the offeror that can be instituted before or after contract award.
    
    
  • Paragraph (b)(1) would be further revised to state the following: "Laborers employed by the construction contractor or construction subcontractor that are transporting portions of the building or work between the secondary site of the work and the primary site of the work shall be paid in accordance with the wage determination applicable to the primary site of the work."
    
    
  • Paragraph (b)(4) (also currently part of paragraph (a)) would be revised to state, "The wage determination applicable to the respective site of the work (including any additional classifications and wage rates conformed under paragraph (c) of this clause) and the Davis-Bacon poster (WH-1321) shall be posted at all times by the contractor and its subcontractors at the primary site of the work and the secondary site of the work, if any, in a prominent and accessible place where it can be easily seen by the workers."
  
  
• FAR 52.222-11, Subcontracts (Labor Standards), would be revised to add the definition of "construction, alteration or repair" from FAR 22.401.
  
  
• New FAR 52.222-XX, Davis-Bacon Act -- Secondary Site of the Work, would be added, and would be required to be included in solicitations in excess of $2,000 for construction within the United States. If the offeror intends to perform work at any secondary site and the wage determination provided by the government for work at the primary place of performance is not applicable to the secondary site(s), it would require the offeror to either (1) obtain a general wage determination for the secondary site from the Internet and provide it to the government for inclusion in any subsequent contract (see the November 14, 2003, FEDERAL CONTRACTS DISPATCH "Department of Labor; Introduction of Wage Determination Online (WDOL) Program"); or (2) if a general wage determination is not available for the secondary site, request that the contracting officer obtain a project wage determination from DOL. "The offeror should request the project wage determination for the secondary site as soon as possible. The due date for receipt of offers will not be extended as a result of an offeror's request for a project wage determination for a secondary site of the work."
  
  
• Standard Form 1413, Statement and Acknowledgment, would be revised to require that the contractor state whether its contract contains FAR 52.222-4 so that the subcontractor certification will only cover FAR 52.222-4 if the contractor has indicated it is in the contract.

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

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