Wednesday, September 30, 2009

When Must a Public Agency Obtain the "Affidavit of Wages Paid" from Contractors?

In Washington State, a public agency must obtain an Affidavit of Wages Paid, approved by the Department of Labor and Industries, from the contractor and each subcontractor (of any tier) after work has been performed.

The Affidavit includes information about the classification of workers actually utilized on a public works project and notes the hourly wage actually paid to such workers. The hourly wages must be at least the prevailing wages applicable for the project (based on the bid submittal deadline) before Labor & Industries will approve the Affidavit.

RCW 39.12.040 (1)(b) is more specific as to the timing for obtaining Affidavits of Wages Paid. They must be submitted after final acceptance of the project, but prior to release of retainage.

Here's the language from the state law:

"Following the final acceptance of a public works project, it shall be the duty of the officer charged with the disbursement of public funds, to require the contractor and each and every subcontractor from the contractor or a subcontractor to submit to such officer an "Affidavit of Wages Paid" before the funds retained according to the provisions of RCW 60.28.011 are released to the contractor."

Some public agencies have made it a practice to delay final acceptance of a project until they have received all of the Affidavits, a practice that doesn't appear to be supported by RCW 39.12.040 (1)(b).

Public agencies should require submittal of Affidavits of Wages Paid after final acceptance and prior to release of retainage.

Tuesday, September 29, 2009

When May a Contractor Pay a Worker Less than the Prevailing Wage Rate?

Contractors and subcontractors in the State of Washington may pay workers less than the journey level prevailing wage rate on public works projects when the worker is enrolled in a state Department of Labor and Industries approved apprenticeship training program. All other workers, even if unskilled, must be paid journey level prevailing wages on public works projects.

Some public agencies in the State of Washington have apprenticeship utilization programs on their public works projects that require a certain percentage of the total labor hours on the project be performed by workers enrolled in a state approved apprenticeship training program. Some agencies have implemented such a program voluntarily. Other agencies are required by RCW 39.04.320 to have such an apprenticeship utilization program (Washington State Department of Transportation, Washington State Department of General Administration, all school districts, and institutions of higher education).

Monday, September 28, 2009

New Print Friendly Feature Added to Blog

I have added a "Print Friendly" button to each blog posting to make it easier for you to print the content of blog entries you are interested in. Look for the green "Print Friendly" button with each entry.

Lean Process Implementation Strategies in Capital Projects

The Cascadia Chapter of the Lean Construction Institute is hosting an evening dinner meeting to discuss "Lean Process Implementation Strategies in Capital Projects."

When: Thursday, October 1, 2009 (5:00 p.m. to 9:00 p.m.)

Turner Construction offices (840 4th Ave. S, 5th Floor Penthouse, Seattle, WA)

Speaker: Mike Hogan, Consultant,
ValuMetrix Services

For more information and to register,
click here.

Sunday, September 27, 2009

How to Check if a Contractor is Debarred

Many states maintain an online list of contractors who have been debarred from bidding on and being awarded public works contracts for various violations of state laws, including but not limited to prevailing wage infractions.

The federal government also has a comprehensive online database of contractors and other businesses prohibited from bidding on or being awarded federally funded contracts.

In addition, some local jurisdictions maintain a list of debarred contractors.

Failure of public agencies to check state and/or federal debarment lists is a frequent audit finding against public agencies. After checking whether a contractor is debarred, a public agency must maintain documentation in the contract file with a printout from the applicable website indicating the contractor is not debarred.

Failure to check the appropriate list of debarred contractors may result in a public agency using a contractor with a poor performance record that may result in significant problems in the administration of a project.

Federal Government

Thursday, September 24, 2009

Can a Contractor File an "Affidavit of Wages Paid" for a Subcontractor?

The Washington State Department of Labor and Industries has published a "prevailing wage policy memorandum" addressing the limited circumstances in which a contractor on a public works project may file an "Affidavit of Wages Paid" for one of their subcontractors.

L&I has outlined three circumstances in which this may occur:
  1. The subcontractor has gone out of business
  2. The subcontractor has file for bankruptcy and will not continue in business
  3. The subcontractor refuses to file the form
The policy memorandum goes on to describe documentation required to prove that one of the circumstances above has occurred.

Contractors filing on behalf of a subcontractor must also follow specific instructions in completing the Affidavit of Wages Paid, which must be filed manually as opposed to using L&I's online system.

Presumably, although not stated in L&I's policy memorandum, the same procedure would apply if a contractor failed to file the Affidavit of Wages Paid, and the public agency required the contractor's bonding company to file the Affidavit on behalf of the contractor.

L&I's policy memorandum on filing an Afffidavit form "on behalf of" a subcontractor is posted on L&I's website, and may be accessed by clicking the following link:

Another Guilty Plea in the Tulsa Public Works Bribery Scandal

A sixth defendant pleaded guilty in federal court to procurement bribery charges in Tulsa, Oklahoma.

Stuart Jay Franklin, an accountant with an engineering firm paid a $6,150 bribe to Tulsa field engineering manager, Albert Martinex, as part of a scheme to influence Martinez's vote in awarding an engineering inspection services contract to FBS, Inc. As part of the September 16, 2009 guilty plea, Stuart Jay Franklin, agreed to pay $52,000 in restitution to the City of Tulsa.

Other details about the Tulsa procurement and contracting bribery scandal are available on a previous blog entry of mine. Click here to view the previous blog posting with more details.

Tuesday, September 22, 2009

New Retainage Release Form Announced by Department of Labor and Industries

In response to legislation (SHB 1555), approved by the State of Washington Legislature in the spring of 2009, the Department of Labor and Industries announced a new Request for Contract Release form and procedures to implement a portion of the new law.

Notify L&I and Obtain Release. Among other things, SHB 1555 requires that public agencies notify the Department of Labor and Industries upon final acceptance of a public works project, and that they obtain a release from L&I that the contractor and all subcontractors are current and have paid workers compensation premiums.

L&I Claims Against Retainage. In the event of non-payment of premiums, the new law gives L&I the right to require public agencies to pay the unpaid premiums from the 5% retainage withheld by the public agency from the contractor.

Priority of Claims Against Retainage. The chart above describes the priority of various claimants for the retainage funds, comparing the law in effect prior to July 26, 2009 and the current law. The priority order is important in the event there are claims against the retainage in an amount that exceeds the funds available in the retainage.

New Procedures and Form Effective September 30, 2009. On September 22, 2009, L&I provided the Request for Contract Release form for public agencies to use in requesting L&I's review of premiums paid. In an announcement accompanying the new form, L&I stated that the new procedure will be effective for all public works projects over $35,000 that are completed after September 30, 2009.

Other Releases Also Required. In reading L&I's announcement and Request for Contract Release form, it is important to remember that L&I's release is not the only release that public agencies must obtain prior to release of retainage to the contractor.

Upcoming Class on Contract Close-out. I will be teaching a class on the public works contract close-out process, addressing the new requirements of SHB 1555, the purpose of bonding and retainage, how claims against the bonds and retainage should be handled by public agencies, when public agencies should pay claimants, and when public agencies may release the retainage.

The class is tentatively scheduled for November 4, 2009 in Federal Way, WA.

Questions. If you are interested in attending this four hour training workshop, or have questions about it, please contact me by e-mail or call me at (206) 295-1464. Cost will be $100 per attendee. Attendance will be limited to 25 students. I will be sending out additional details on the class later next week.

Monday, September 21, 2009

Auditor Publishes Tips on ARRA Funding and Other Matters

The Washington State Auditor's Office has published its summer 2009 newsletter, Audit Connections. The newsletter has short articles on the following:
  • Preparing for an audit of ARRA (American Recovery and Reinvestment Act) funded projects.
  • Who must report Recovery-funded activities to the federal government and when?
  • Purchasing authority of code cities - ethical issues
  • Audit frequency changes for some local governments
  • New tool to report fraud
Click here to view the six page newsletter.

Training: Insurance in the Construction Industry

Training Seminar: Insurance in the Construction Industry

When: October 16, 2009

Times: 9:00 a.m. to 5:15 p.m.

Where: The Grand Hyatt Seattle (Seattle, Washington)

  • $495
  • $395 (government employee)
For more information and to register:
Sponsored by: The Seminar Group

  • Richard T. Beal, Jr.
  • Gregory L. Harper
  • Mark N. Thorsrud
  • Thomas F. Ahearne
  • Jacquelyn A. Beatty
  • Mary DeYoung
  • Ronald S. Dinning
  • Todd C. Hayes
  • Dale L. Kingman
  • William F. Knowles
  • Thomas Lether
  • Zachary O. McIsaac
  • James P. Wagner
  • Karen S. Weaver
  • Angelica D. Wesch
Topics to be covered include the following:
  • Commercial Property Insurance
  • General Liability Insurance
  • Additional Insured Requirements
  • What's New in Exclusionary Endorsements
  • Duty to Defend
  • Insurance Fair Conduct Act
  • The "Globalization" of Puget Sound Construction: What Law Governs Disputes Involving Out-of-State Builders and Insurers?
  • Allocation of Indemnity between Primary, Additional Insured and Umbrella Insurance
  • Insurers' Responsibilities Before the Suit
  • Insurance for Condominium Claims

Sunday, September 20, 2009

Spaces Available in Class on Writing Effective Technical Specifications

The City of Bellevue (Washington) is sponsoring a class I will be teaching on "Writing Effective Technical Specifications" geared primarily for public works projects.

When: Wednesday, September 30, 2009

Times: 9:00 a.m. to 3:00 p.m.

Where: Bellevue City Hall (City Council Chambers)

Instructor: Mike Purdy (Principal, Michael E. Purdy Associates)

To see a condensed version of the PowerPoint presentation for the class,
click here.

For more information about registration and cost, contact Mayvis Schwab at the City of Bellevue at (425) 452-4870 or by e-mail at

Design-Build Conference on Water-Wastewater

Conference: Design-Build in Water-Wastewater

When: April 19 - 21, 2010

Where: Dallas, Texas

Sponsored by:
Design-Build Institute of America (DBIA)

For more information and to register, visit the website of DBIA.

Thursday, September 17, 2009

Design-Build Sales Double in 4 Years

According to an article in the September 2009 edition of the Design-Build Dateline magazine (the Journal of the Design-Build Institute of America), "Between 2004 and 2008, domestic design-build sales doubled from $30.5 billion to $64.4 billion." The information in the article came from the June 2009 edition of Engineering News Record.

Southern California CMAA Events

The Southern California Chapter of the Construction Management Association of America (CMAA) is sponsoring the following two programs:
  • Transportation Night - Capital Program Updates from a variety of owners. Thursday, October 22, 2009 from 5:30 p.m. to 8:00 p.m. in Long Beach, California. For more information, visit

  • Breakfast of Champions. An informal discussion and meeting with Art Leahy, CEO of the Los Angeles County Metropolitan Transportation Authority (Metro). Mr. Leahy will discuss some of the mega-projects Metro is embarking on including the I-405 Design-Build and the upcoming EXPO Phase II. Friday, November 13, 2009 from 8:00 a.m. to 10:00 a.m. Downtown Los Angeles Marriott. For more information, visit

Audit Reveals Non-Compliance with Federal Requirements

An audit of Whatcom County's administration of a federally funded improvement project found that the county failed to verify that the selected contractor was not debarred from doing business under federally assisted projects. The county also failed to obtain and monitor weekly certified payroll reports from the contractor to ensure payment of prevailing wages under the Davis-Bacon Act.

The county, located in the State of Washington, spent $154,962 of a federal grant under the Help America Vote Act to remodel its election facilities. At the time the project was bid, the federal grant had not yet been awarded, and once it was awarded, the county was simply not aware of their responsibilities to check for debarment and obtain payroll reports.

To read the complete audit report from the Washington State Auditor's Office, click here.

Wednesday, September 16, 2009

UW Cunningham Hall Move Hits Temporary Snag

The plan was to finish the move of the historic 1909 University of Washington Cunningham Hall building in the early morning hours of September 16, 2009. Those plans went awry when one of the trucks pulling the 350,000 pound building up a slight incline broke down.

The continuation of the move got back underway in the early afternoon of September 16, 2009. However, the trucks or dollies placed under the building to stabilize it were geared for a much heavier building with the result that the building could only move forward about ten feet at a time before workers had to straighten out the tires that were no longer pointing straight ahead. The building and support system were resting on 256 tires as it slowly inched forward.

By 4:30 p.m. today (September 16, 2009), it was nearing its final home but still had a ways to go. By the time you read this, no doubt the building will have been placed at its new location next to Parrington Hall.

Certified Payroll Software for QuickBooks

Contractors and subcontractors performing work on public works projects are often required, especially if the project is federally funded, to prepare and submit weekly certified payroll reports to the public agency. In addition, there are often requirements to complete and submit a multitude of other forms.

I recently became aware of a software product for contractors who use QuickBooks for their normal payroll and accounting functions that will automatically generate a variety of required reports using previously entered data, eliminating the need for duplicate entry.

Software packages published by Sunburst Software Solutions, Inc. (established in August 2000) include the following:

Based in Vermont, Sunburst Software Solutions, Inc. is an Intuit Gold Developer specializing in the creation of QuickBooks integrated applications, all of which utilize standard payroll and job costing information that has already been entered into QuickBooks.

For additional information visit Sunburst also offers a free 30-Day, no obligation trial of their software.

WSDOT Issues RFQ for $1 Billion Design-Build Project

The Washington State Department of Transportation (WSDOT) issued on September 15, 2009 a Request for Qualifications (RFQ) for Design-Build firms for the SR 99 Bored Tunnel Project (also known as the Alaskan Way Tunnel project). The project cost is estimated at approximately $1 billion.

Qualifications are due on November 16, 2009. This is the first of two parts of the procurement process. In the second step, WSDOT will issue a Request for Proposals (RFP) from the top rated short-listed firms. All firms submitting a responsive proposal will receive a $2 million stipend to help compensate them for the cost of responding to the RFP.

Click on this link to WSDOT's website for a copy of the RFQ.

Tuesday, September 15, 2009

Emergency Declared for Potential Flooding Threat

The King County Council (Washington) on September 10, 2009 declared an emergency in order to permit the county to respond to potential flooding this fall.

The proactive and somewhat unusual step was taken in response to the weakened capacity of the Howard Hanson Dam on the Green River. The council action enables the county to waive procurement and contracting regulations in order to address the emergency. Usually, emergencies are only declared after an event has occurred.

For further information:

Monday, September 14, 2009

Design-Build Conference on Transporation

Conference: Design-Build on Transportation

When: April 21 - 23, 2010

Where: Dallas, Texas

Sponsored by:
Design-Build Institute of America (DBIA)

For more information and to register, visit the website of DBIA.

Historic Building Partially Moved

Cunningham Hall on the University of Washington (Seattle) campus was moved to a temporary location last week. The left hand picture shows the 1909 building after the short move last Wednesday (September 9, 2009) night.

The picture at the far right shows the building at the 1909 Alaska-Yukon-Pacific Exposition that was held in Seattle.

Late in the evening of Tuesday, September 15, 2009 and into the early morning hours of Wednesday, September 16, 2009, the building will be moved to its new home on the lawn next to Parrington Hall. The move is necessary to make way for the construction of a new Molecular Engineering Building.

Sunday, September 13, 2009

Public Works Contracting Bribery Case in Tulsa

As a result of a federal investigation and grand jury indictment stemming from early in 2009, the former owner of a Tulsa, Oklahoma construction company pleaded guilty last week to paying bribes to a City of Tulsa employee to approve and pay fraudulently inflated invoices.

Under the scheme, Max E. Wolf, who founded and was then president of Horizon Construction Co., Inc., would invoice the City of Tulsa for additional amounts above and beyond the work that was actually performed. He then paid City of Tulsa field engineering manager Albert Martinez bribes to process and pay the inflated applications for payment. Martinez has already pleaded guilty. Wolf has agreed to pay $939,000 of restitution in the case.

Wolf will be sentenced on December 14, 2009 and could face up to five years in prison and a fine of $250,000.

Others were involved too in the wide ranging procurement scandal that included bribes for influencing decisions to award consulting contracts. There have been five guilty pleas so far with one more guilty plea expected this week.

Here are some links to other information and news articles about the case:
It is important for public agencies to develop processes with checks and balances to prevent such fraudulent activities. Please contact me if you are interested in a pre-audit of control systems your agency currently has in place.

The Economy's Effect on Local Public Agencies

Evening Presentation: The Economy's Effect on Local Public Agencies

The Pacific Northwest Chapter of the Construction Management Association of America (CMAA) is sponsoring a dinner meeting this Thursday, September 17, 2009 to hear a panel of representatives from three local agencies discuss how changes in the economy have affected local agency's budgets, projects, and priorities. The panel will present and discuss how their agencies are dealing with the changes in the economic climate.

Panelists: When: Thursday, September 17, 2009

Time: 5:30 p.m. to 8:00 p.m.

Where: Rock Salt Steak House, 1232 Westlake Ave. North, Seattle, WA

Cost: $40.00

To register, contact Allen Wycoff at

Thursday, September 10, 2009

Emergency Public Works: Audit Finds County Skipped Steps

The Washington State Auditor's Office issued findings that Grays Harbor County failed to comply with basic federal and state public works contracting requirements on three public works emergency contracts.

The County entered into three contracts with one contractor for a total of $141,140. The federal disaster funds came from a U.S. Department of Homeland Security grant to assist with debris cleanup from a windstorm.

According to the audit, the County failed to comply with the following requirements:
  • Debarment: Verify that the contractor was not on the federal debarment list. Public agencies should check the federal Excluded Parties List System (EPLS) online at, and print documentation from the search that the vendor is not debarred from doing business under federal grants (Title 2, CFR, Section 180.300). This is one of the most common audit findings for public agencies administering contracts with federal funds.

  • Performance Bond: Obtain a performance bond for the work of the three contracts. Not only is this required under the applicable federal regulations cited in the audit (28 CFR, Section 66.36, Procurement), but it is also required under Washington state law (chapter 39.08 RCW).

  • Retainage: Withhold 5% of each progress payment as retainage for the protection of parties listed in RCW 60.28.011.
Emergency public works contracting requires diligence to comply with applicable provisions, while at the same time protecting the public's safety and health by responding quickly.

To read the audit report,
click here.

Design-Build Contract & Risk Management Training

Training: Design Build Contracting & Risk Management

When: September 24, 2009 (7:00 a.m. to 5:00 p.m.)

Instructor: Robynne Thaxton Parkinson. Robynne is very knowledgeable and an extremely engaging speaker. I highly recommend her.

  • Seattle, Washington
  • Groff Murphy Trachtenberg & Everard PLLC (300 East Pine St.)
Sponsored by: Design Build Institute of America, Northwest Region

  • $475 for DBIA members
  • $775 for non-members
For more information and to register, visit the website of the Northwest Region of DBIA.

Wednesday, September 9, 2009

Sound Transit Seeks Approval to Use GC/CM

Sound Transit has submitted an application to State of Washington Project Review Committee seeking approval to use the General Contractor/Construction Manager (GC/CM) alternative public works delivery method for the construction of the station planned at the University of Washington.

Their application will be considered by the Project Review Committee at the September 24, 2009 meeting of PRC.

To view Sound Transit's application,
click here.

California Capital Program Updates for Transportation Projects

The Southern California Chapter of the Construction Management Association of America (CMAA) will hear from a variety of public owners at their "Transportation Night" dinner meeting on October 22, 2009 from 5:30 p.m. to 8:00 p.m.

Owners who are expected to attend and provide updates on capital projects include the following:
  • Alameda Corridor-East Construction Authority
  • ARTIC (City of Anaheim / OCTA)
  • California High Speed Rail Authority
  • Los Angeles County MTA
  • Los Angeles World Airports
  • OCTA
  • Omnitrans
  • Metrolink / SCRRA
  • Caltrans District 7
For more information and to register, visit CMAA's Southern California Chapter website.

Tuesday, September 8, 2009

Is Failure to Acknowledge Addenda a Material Irregularity?

If a bidder fails to acknowledge addenda on the bid form when submitting their bid to a public agency, is their bid automatically non-responsive or should it be evaluated on a case-by-case basis?

In short, it should be evaluated on a case-by-case basis. At the heart of determining whether a bid is non-responsive and should be rejected is whether the irregularity gives the bidder an advantage or benefit not enjoyed by other bidders.

When a bidder fails to acknowledge addenda on the bid form, public agencies must look at the nature of the addenda they failed to acknowledge. If the addenda deal with material issues related to the bid, such that failure to have reviewed the addenda would have an impact on the bidder's price, their understanding of the scope of work, or the schedule, then the bid should be rejected as non-responsive.

If, on the other hand, the addenda do not deal with material issues (perhaps just adding a new product as an approved equal), then the failure to acknowledge the addenda would be immaterial and the bid could be considered by the public agency.

One of the key issues to consider is whether the failure to acknowledge the addenda somehow would give the bidder an advantage not enjoyed by other bidders. If the bidder could, after bid opening, choose whether to accept the award of the contract or not based on their comfort level with their bid price, that would be an advantage.

Here are the two possible scenarios:
  1. After reviewing all of the bid prices and realizing their bid was too low, can the bidder argue that their bid was non-responsive because they failed to acknowledge the addenda? This ability to choose would be an advantage.

  2. After bid opening and determining their bid price is reasonable, can the bidder argue that their bid is responsive even though they failed to acknowledge the addenda because they did have the information available in the addenda? This ability to choose would be an advantage.
It is important for the public agency to be the one to decide whether a bid is responsive or not, based on the materiality (or importance) of the addenda that were not acknowledged.

Again, careful evaluation of the failure to acknowledge addenda is required on a case-by-case basis.

CPARB Meeting Scheduled for September 10, 2009

The Capital Projects Advisory Review Board (CPARB) will meet this Thursday (September 10, 2009) in Olympia, Washington. Among the items on the agenda are the following:
  • Presentation on Job Order Contracting from the King County Director's Association

  • Discussion of data collection efforts on Job Order Contracting usage in the state

  • Reports from various task forces: a) UW Husky Stadium Contracting Method - Evaluation, b) Developing guidelines for the use of Design-Build-Operate-Maintain projects and revised guidelines for the Project Review Committee, c) Integrated Project Delivery and Best Value Procurement.

  • Use of bidder responsibility criteria on Design-Bid-Build public works projects, and use of subcontractor eligibility on GC/CM projects.

  • Discussion of CPARB's legislative priorities and work plan for the 2010 session.
The meeting will be held from 9:00 a.m. until 3:00 p.m. in Conference rooms B and C in the John A. Cherberg Building.

Monday, September 7, 2009

Errors in Prevailing Wage Rates Corrected

The Washington State Department of Labor and Industries announced that the new prevailing wage rates effective on, and published just prior to, September 2, 2009 contained errors.

Affected Classifications and Counties: Between August 27, 2009 and September 2, 2009, L&I's website included incorrect information for Soft Floor Layers and/or Residential Soft Floor Layers for any county. Also the wages for Clallam, Jefferson, Island, King, Kitsap, San Juan, Skagit, Snohomish and Whatcom counties may have included incorrect information.

Emergency Corrections Made: On the afternoon of September 2, 2009, the prevailing wages were corrected on L&I's website. The effective date of the corrected wage rates is still September 2, 2009 through the emergency provisions of WAC 296-127-011(1).

View Correct Wages: Anyone who accessed wage rates between August 27, 2009 and September 2, 2009 should return to L&I's website to view and print the corrected prevailing wage rates.

Historic Building to be Moved This Week

Cunningham Hall on the University of Washington campus in Seattle was built in 1909 for the Alaska Yukon Pacific Exposition. Originally called the Women's Building for the Exposition, it was renamed in 1983 in honor of Imogen Cunningham, a 1907 UW graduate and internationally known photographer.

This week, the historic building will begin the first leg of a move to another location on campus. Late Wednesday night and early Thursday morning, moving crews will move the building a short distance away. Then, late in the evening of September 15th and the early morning of September 16th, the building will be moved the final distance to its new home near Parrington Hall.

The building is being moved to make way for the new Molecular Engineering Building to be constructed on Cunningham Hall's current site. The University has selected Hoffman Construction Company as the GC/CM for the Molecular Engineering Building project.

Thursday, September 3, 2009

Issues and Trends in Public Project Delivery

I will be giving a speech on "Issues and Trends in Public Project Delivery" next week at the dinner meeting of the Construction Specifications Institute (CSI) - Puget Sound Chapter.

When: Thursday, September 10, 2009

Times: 6:00 p.m. to 8:30 p.m.

Cost: $35 (includes dinner)

Where: Swedish Cultural Center (1920 Dexter Avenue N, Seattle, WA)

For more information and to register, click here.

Outline of Speech: I will address current issues and trends related to the following contracting and delivery methods:

  • Design-Bid-Build
  • General Contractor/Construction Manager (GC/CM)
  • Job Order Contracting
  • Integrated Project Delivery (IPD)
  • Public-Private Partnerships
  • Maintenance Contracts

Wednesday, September 2, 2009

Effective Date for Prevailing Wages on GC/CM Projects

Washington State law and regulations do not address the effective date for prevailing wages on General Contractor/Construction Manager (GC/CM) projects, an alternative public works delivery method authorized by chapter 39.10 RCW.

The existing regulations only address traditional Design-Bid-Build projects, stating that the prevailing wages are those in effect on the bid submittal deadline. Of course, under GC/CM, there is no bid submittal deadline as the GC/CM is selected based on a combination of qualifications, interview, and prices for overhead and profit (Percent Fee) and Specified General Conditions costs.

I recently proposed language to the Department of Labor and Industries to amend the Washington Administrative Code to recognize GC/CM contracts and provide guidance on the effective date of prevailing wages for these contracts.

My suggestion, and my practice over the years, has been that the effective date of prevailing wages on GC/CM projects should be the bid submittal deadline for each of the subcontract bid packages.

Thus, for any one GC/CM projects, in theory, there could be multiple state prevailing wages, depending on when the subcontract bid package bids are due. The Department of Labor and Industries updates prevailing wage rates twice a year, in March and August.

I have developed language that I have included in Requests for Final Proposals from GC/CM firms that states the following: "As a matter of information, the Owner has included a copy of the most recent prevailing wage rates issued by the Washington State Department of Labor and Industries. The prevailing wages in effect on the bid submittal deadline for each subcontract bid package will be the wages applicable for that subcontract bid package."

Please contact me by e-mail or call me at (206) 295-1464 if you have any questions about how to apply prevailing wages on a GC/CM project.

Tuesday, September 1, 2009

Federal Prevailing Wage Payroll Form

Federally funded public works projects over $2,000 are subject to federal prevailing wages under what is known as the Davis-Bacon Act.

One of the requirements that goes along with federal funding is that contractors and subcontractors must submit weekly certified payroll reports to the public agency.

The payroll reports must list, among other items of information, the following: the names of the individuals employed on the project, their classification of labor, the hourly wage and overtime rates paid, the gross pay, the deductions made, and the net pay.

The U.S. Department of Labor publishes a standard payroll report form that conforms to their requirements for submission of payrolls. The WH-347 form may be obtained online from the U.S. Department of Labor by clicking here.