Finding Text
2 CFR 3474.1 gives regulatory effect to the Department of Education for Appendix II to 2 CFR ? 200 Paragraph D which states the Davis-Bacon Act, as amended (40 U.S.C. 3141-3148) requires all prime construction contracts in excess of $2,000 awarded by non-Federal entities to include a provision for compliance with the Davis-Bacon Act as supplemented by Department of Labor regulations (29 CFR 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. The contracts must also include a provision for compliance with the Copeland ?Anti-Kickback? Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, ?Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States?). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. 2 CFR - ? 176.190 Award term - Wage rate requirements under Section 1606 of the Recovery Act indicates when issuing announcements or requesting applications for Recovery Act programs or activities that may involve construction, alteration, maintenance, or repair the agency shall use the award term described in the following paragraphs: (a) Section 1606 of the Recovery Act requires that all laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the Federal Government pursuant to the Recovery Act shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code. Lack of proper internal controls over Federal grants management led to the District expending $351,738 of its Education Stabilization Fund (ESSER) Federal grant funds for the roof replacement at the administration building without complying with the above requirements. The District?s contract with the vendor for these updates did not include a provision to ensure the contractor complied with Federal wage rate requirements. Additionally, the District did not obtain certified payroll reports from the vendor to verify prevailing wages were paid. Without proper controls over wage rate requirements, there is an increased risk that the District and its contractors and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. The District should ensure contracts for construction in excess of $2,000 paid with federal grant monies contain a provision the contractor comply with the wage rate requirements and ensure certified payroll reports are provided weekly by the contractor. The District should also review the certified payroll reports and report all suspected or reported violations to the Federal awarding agency.