Overview
FAR Subpart 22.4 implements labor standards for federal construction, alteration, or repair contracts exceeding $2,000. It primarily focuses on the Construction Wage Rate Requirements statute (formerly the Davis-Bacon Act), ensuring that laborers and mechanics are paid prevailing wages and fringe benefits while providing guidelines for wage determinations and compliance.
Key Rules
- Monetary Threshold: Requirements apply to all construction-related contracts exceeding $2,000.
- Laborer/Mechanic Definition: Applies to those performing manual or physical work. Working foremen are covered if they spend more than 20% of their time performing manual labor.
- Site of the Work: Coverage extends beyond the primary construction site to include secondary sites (e.g., dedicated batch plants or fabrication yards) if they are established specifically for the contract and are adjacent or virtually adjacent to the work site.
- Prevailing Wages: Contractors must pay the prevailing wage rates determined by the Secretary of Labor. If the Executive Order 14026 minimum wage ($15.00/hr as of 2022) is higher than the prevailing wage, the EO rate takes precedence.
- Copeland (Anti-Kickback) Act: Prohibits contractors from inducing employees to give up any part of their compensation and requires the submission of weekly statements of compliance (certified payrolls).
- Overtime: Under the Contract Work Hours and Safety Standards statute, laborers must be paid 1.5x their basic rate for any hours worked over 40 in a workweek.
- Segregable Work: For non-construction contracts (like service or R&D), these labor standards apply if the construction work is "substantial," "segregable," and exceeds the $2,000 threshold.
Responsibilities
- Contracting Officers (CO):
- Must incorporate the correct wage determinations into solicitations and contracts.
- Designate which work applies to which wage schedule (Building, Heavy, Highway, or Residential).
- Request "Project Wage Determinations" via SF 308 if a general determination is unavailable.
- Department of Labor (DOL):
- Responsible for issuing general and project wage determinations.
- Setting annual adjustments for Executive Order minimum wages.
- Handling appeals regarding wage classifications.
- Contractors and Subcontractors:
- Must pay applicable prevailing wages and fringe benefits.
- Required to submit weekly payroll records and statements of compliance.
- Responsible for ensuring all subcontractors at every tier comply with these labor standards.
Practical Implications
- Lead Time for Procurement: If a "Project Wage Determination" is needed (because no general determination exists on SAM.gov), Contracting Officers must submit requests to the DOL at least 45 to 60 days before issuing a solicitation to avoid delays.
- Mixed-Use Contracts: In "Service" contracts that include construction (e.g., installing a large generator that requires a concrete pad), the CO must determine if the work is "incidental" or "substantial." If it is substantial and can be performed separately, construction labor standards must be applied to that portion of the contract.
- Site-Specific Risks: Contractors should be aware that off-site fabrication at a permanent, pre-existing commercial facility is generally not covered by these wage requirements. However, if a contractor sets up a dedicated mobile factory specifically for a federal project near the site, that facility and its workers will likely be subject to Davis-Bacon wages.
- Wage Determination Updates: General wage determinations are modified periodically on SAM.gov. The CO must ensure the most current determination is used when exercising contract options.