Start-to-Finish Best Practices: How to Navigate Prevailing Wage

Many contractors find themselves intimidated by the complexities of prevailing wage projects. If you’ve never performed one of these projects that are subject to Davis-Bacon and Related Acts (DBRA) requirements, it can seem scary when you have absolutely no idea where to start. However, with the right knowledge and preparation, navigating these projects can be manageable and even lucrative. Let’s break down the process step by step.

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Preparing for Success: Essential Pre-Bid Steps

Before you can bid for DBRA projects, one of the first things you need to do is register with the federal government as a contractor. Below are the necessary registration steps.

Obtain Necessary Business Registrations

1. DUNS Number Acquisition: Initiate by obtaining a DUNS number, a crucial identifier for businesses worldwide. Follow the specific IRS instructions for registering.
2. SAM.gov Registration: Register with the System for Award Management, an essential requirement for bidding on federal projects. Find federal wage determinations for projects you are working or intend to bid.
3. Certification: Once qualified, consider certifying your business as an SBA (Small Business Enterprise), MBE (Minority-owned Business), WBE (Women-owned Business) or DBE (Minority or Women-Owned Business), potentially enhancing your eligibility for project bids. Agencies that receive federal funds for projects are required to set annual DBE and SBA goals, so falling into one of these categories can help contractors qualify for and win more project bids.

Research Prevailing Wage Determinations

1. Construction Type Identification: Determine the construction type and geographical location of the project to access accurate wage rates.
2. Resource Utilization: Leverage resources such as sam.gov or state websites to acquire wage determinations.

Setting the Prevailing Wage Stage: Preparing for Project Start

Appointing a Prevailing Wage Administrator

1. Designation: Select an administrator responsible for prevailing wage payroll management once you have been awarded a contract.
2. Documentation Management: Handle initial paperwork provided by the contracting agency, including wage verification forms and SF-1444 submissions if necessary. Submit a Conformance Request to designate a pay rate not listed on the wage determination.

Payroll System Setup

1. Classification Clarification: Clearly define prevailing wage job classifications and corresponding pay rates.
2. Automation Integration: Link wage determinations to the project within your payroll system for seamless processing.

In the Trenches: Managing Mid-Project Prevailing Wage Requirements

As job hours occur, you must submit certified payroll reports (CPRs) to your contracting agency, which is often a general contractor or city program administrator. CPRs gather all your weekly hours and payment information to ensure you’re following DBRA regulations. Information can be compiled manually via a WH-347 form. Keep in mind that some agencies may require electronic submission.

Certified Payroll Reports (CPRs)

1. Submission Protocol: Submit CPRs weekly, detailing hours and payment information for DBRA compliance. This is necessary even if they are “zero hours” reports.
2. Formalities: Accommodate any additional forms impacting employee pay, such as Wage Deduction Authorizations.

Compliance Displays

1. Davis-Bacon Poster: Display the WH-1321 poster prominently to inform workers of their rights.
2. Wage Determination Posting: Ensure current wage determinations are accessible to all project workers.

Crossing the Finish Line: Post-Project Obligations

Under the DBRA, contractors must maintain records for all laborers and mechanics on a prevailing wage job for no less than three years after all work on the prime contract is completed. At any time during this period, you should be able to produce records including names of all employees on the project, addresses, Social Security Numbers, worker classifications, hours worked, wage and payment information, and data regarding deductions, fringes, and apprenticeships. In essence, anything you had to provide throughout the project should be saved.

Record Maintenance

1. Regulatory Compliance: Adhere to DBRA requirements by maintaining comprehensive records for at least three years post-project completion.
2. Self-Audit: Conduct regular audits to ensure compliance and rectify any discrepancies promptly, including restitution or back pay owed.

Turning Prevailing Wage Challenges into Opportunities

While prevailing wage projects may pose challenges, meticulous preparation and adherence to regulatory requirements can transform them into lucrative ventures for contractors. By understanding and fulfilling each stage of the process, contractors can navigate prevailing wage projects with confidence and success.

The material presented here is educational in nature and is not intended to be, nor should be relied upon, as legal or financial advice. Please consult with an attorney or financial professional for advice.