Finding Text
2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for Appendix II to 2 C.F.R. § 200 which states that, in addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable:
(D)Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 C.F.R. Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency.
29 C.F.R. § 5.5(a)(3)(ii)(A) provides, in part, that the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). The required weekly payroll information may be submitted in any form desired. Optional Form WH–347 is available for this purpose from the Wage and Hour Division Web site at http://www.dol.gov/esa/whd/forms/wh347instr.htm or its successor site. The prime contractor is responsible for the submission of copies of payrolls by all subcontractors. 29 C.F.R. § 5.5(a)(3)(ii)(B) requires each payroll submitted be accompanied by a “Statement of Compliance,” signed by the contractor or subcontractor or his or her agent who pays or supervises the payment of the persons employed under the contract.
29 C.F.R. § 5.6 states that furthermore, no payment, advance, grant, loan, or guarantee of funds shall be approved by the Federal agency after the beginning of construction unless there is on file with the agency a certification by the contractor that the contractor and its subcontractors have complied with the provisions of § 5.5 or unless there is on file with the agency a certification by the contractor that there is a substantial dispute with respect to the required provisions.
The School District had eight construction projects paid with Elementary and Secondary School Emergency Relief Funds. Two projects were selected for testing, and the following items were noted in regards to prevailing wages with these projects:
• Boiler and HVAC Phase III Project – This project involved four subcontractors that performed worked during the fiscal year. However, the School District only received prevailing wage documentation for two of the four subcontractors;
• South Boiler Project – The School District received prevailing wage documentation for the primary contractor; however, two subcontractors were utilized and the School District did not receive prevailing wage documentation for them.
The School District should implement procedures to ensure that all weekly payroll certification reports are received from the contractors and subcontractors. The School District should also review these reports to ensure that prevailing wages are properly paid. Additionally, the School District should ensure that all contractors and subcontractors are notified that prevailing wages must be paid as required by this compliance requirement.
Officials’ Response: See Corrective Action Plan