Overview
This section prescribes the mandatory procedures for federal agencies to monitor, investigate, and enforce labor standards—primarily the Construction Wage Rate Requirements statute (formerly Davis-Bacon Act)—on construction contracts. It establishes the responsibilities of Contracting Officers to ensure laborers receive correct wages, fringe benefits, and overtime through payroll reviews, on-site inspections, and formal enforcement actions.
Key Rules
- Agency Responsibility: Contracting agencies must maintain an active enforcement program, including preconstruction conferences, weekly payroll reviews, on-site inspections, and employee interviews (utilizing Standard Form 1445).
- Wage and Fringe Benefit Credits: Contractors may meet wage determination requirements through a combination of cash and "bona fide" fringe benefits (e.g., pension, health insurance). Overtime must be paid at 1.5 times the basic hourly rate, excluding fringe benefit contributions.
- Additional Classifications: If a required job classification is missing from the wage determination, the contractor must submit Standard Form (SF) 1444 to the Department of Labor (DOL) for approval of a reasonably related rate.
- Weekly Payroll Submissions: Contractors must submit weekly payrolls and "Statements of Compliance" within seven calendar days of the pay date. Failure to submit these records is grounds for the Contracting Officer to withhold contract payments.
- Enforcement and Withholding: The government has the authority to withhold funds from the current contract—or any other federal contract held by the same prime contractor—to satisfy unpaid wages and liquidated damages.
- Dispute Resolution: Unique to labor standards, disputes regarding classifications or wage rates are handled by the DOL under the clause at FAR 52.222-14, rather than the standard "Disputes" clause (FAR 52.233-1).
- Investigation Thresholds: Agencies must provide a detailed enforcement report to the DOL if underpayments exceed $1,000 or if violations are deemed "willful or aggravated."
Practical Implications
- Administrative Burden: Prime contractors must implement rigorous oversight of all subcontractors to ensure weekly payrolls are accurate and submitted on time, as a single subcontractor's failure to comply can result in the government withholding the prime contractor's entire progress payment.
- Jurisdictional Complexity: Because the Department of Labor retains final authority over wage disputes and classifications, contractors cannot use the standard Board of Contract Appeals or Court of Federal Claims process to resolve these specific labor issues.
- Cross-Contract Liability: Prime contractors face "cross-withholding" risks, where the government may legally seize funds from one project to pay for labor violations discovered on a completely different federal project.