Overview
This section prescribes the policies and procedures for identifying, requesting, and incorporating Department of Labor (DOL) wage determinations into federal construction contracts. It ensures that the "prevailing wage" for specific construction types—Building, Residential, Highway, and Heavy—is applied to all laborers and mechanics working at the site of performance.
Key Rules
- Types of Determinations:
- General Wage Determinations: Used for specific geographical areas, have no expiration date, and are the preferred method.
- Project Wage Determinations: Issued for specific projects when no general determination applies; these expire after 180 days.
- Incorporation Requirements: Contracting officers (COs) must physically include the full wage determination in solicitations and contracts; inclusion by reference is strictly prohibited.
- Effective Dates and Modifications:
- For sealed bidding, modifications are generally effective if received 10 or more days before bid opening.
- For negotiated acquisitions, modifications are effective if received any time before contract award.
- The 90-Day Rule: In sealed bidding, if an award is not made within 90 days of bid opening, any modification published before the award becomes effective for that contract.
- Option Exercises: COs must incorporate the most current wage determination every time an option to extend the contract term is exercised.
- Correction of Errors: If a contract is awarded with the wrong wage determination or none at all, it must be modified retroactively to include the correct determination, often requiring an equitable adjustment to the contract price.
- Site Posting: Contractors are legally required to post the applicable wage determination and DOL Form WH-1321 in a prominent, accessible location at the worksite.
Practical Implications
- Monitoring Responsibility: COs must utilize the "Alert Service" on SAM.gov to track updates to general wage determinations, as failure to include a timely modification can lead to post-award price disputes.
- Cost Risk Management: Because new wage determinations must be incorporated at the exercise of an option, contractors must carefully choose their pricing strategy (e.g., separate option prices or economic price adjustments) to mitigate the risk of rising labor costs.
- Classification Sensitivity: Precise classification of work (e.g., distinguishing "Heavy" from "Highway") is critical; incorrect classification can lead to DOL enforcement actions or retroactive contract price increases.