Monday, October 1, 2012

Agency Fails to Comply With Federal Funding Requirements

Clark County (Washington) was recently hit with an audit finding from the Washington State Auditor's Office for a failure to follow federal funding requirements.

What went wrong?  The contract in question was for $426,273 of renovation work, and was paid for by a grant through the American Recovery and Reinvestment Act (ARRA). Funding from a federal grant brings with it many requirements, two of which the county did not comply with:
  • Prevailing wages:  For federally funded construction projects over $2,000, agencies must comply with the Davis-Bacon Act requiring payment of prevailing wages to workers on the project. The agency must include a provision in the original contract requiring the contractor to pay prevailing wages and must also collect weekly "certified payrolls," which include a statement that the contractor paid prevailing wages along with the actual payroll. (See my many other posts about prevailing wages.) 
  • Debarment and suspension:  Contracts exceeding $25,000 with federal funding requires that agencies verify that contractors are not prohibited from doing business with the federal government. This can be accomplished with a clause in the contract, a separate certification, or an independent checking the database of excluded parties issued by the General Services Administration (previously via the Excluded Parties List System (EPLS - and known as SAM), which is currently in the process of being replaced). 
Why did it happen?  It seems that Clark County's situation was largely the result of communication problems between different departments and individuals collaborating on a new project, along with inadequate training for staff members involved. It is critical that agencies receiving federal dollars clearly assign responsibility for complying with the accompanying requirements to individuals with proper training and understanding of the issues. 

Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

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