Prevailing Wages on GC/CM Projects

What is the effective date for determining the applicable prevailing wages on a GC/CM project (General Contractor/Construction Manager)?

The Washington Administrative Code (WAC) adopted by the Department of Labor and Industries does not address GC/CM projects in this regard and so public agencies are left to figure out what is most appropriate.

WAC 296-127-011 (3)(a) states that "for all public works contracts...the applicable prevailing wage rates shall be the rates that are in effect on the date when bids by prime contractors are due for submission to contract awarding agencies. These rates shall remain in effect for the duration of the contract."

The difficulty with this approach is that under a GC/CM contract, the prime contractor does not submit a bid to the public agency, at least not for the full construction amount. Contractors do submit a bid for the percent fee and specified general conditions costs, but this bidding occurs months and often years before construction actually begins, and the contractor's pricing of these items has nothing to do with prevailing wages.

WAC 296-127-011 (4) further states that "if a contract for public work is not awarded pursuant to bids, the applicable prevailing wage rates shall be those that are in effect on the date when the contract is executed. These rates shall remain in effect for the duration of the contract."

GC/CM contracts are not awarded pursuant to bids, but the contractor is selected partially based on qualifications and partially based on the price for the percent fee and specified general conditions work. But to establish the effective date for prevailing wages for a GC/CM contract on the date when the contract is executed doesn't make sense since the contractor may not actually conduct the subcontract bidding until sometime after execution of the contract.

It seems to me that the Department of Labor and Industries should establish a separate WAC to address the effective date of prevailing wages for a GC/CM project. I've had discussions with L&I on this subject in the past, but the issue ended up getting dropped when a key staff member retired.

In the interim, my advice is to establish the prevailing wages as of the bid opening date for each separate subcontract bid package that the GC/CM bids. This most closely parallels the intent of the prevailing wage law. But it's probably also a good idea to include the current prevailing wage rates in the RFP for selecting the GC/CM in order to technically comply with the law, and to describe that the applicable wages will be those in effect on the bid opening date for each subcontract bid package.