This section is a guide to the proper contract administration of projects that require Disadvantaged Business Enterprise (DBE) participation and are subject to Davis-Bacon prevailing wage requirements.
The Prevailing Wage Laws were enacted as part of general reform efforts to improve working conditions at the end of the 19th and the beginning of the 20th centuries. The prevailing wage law requires state and local governments to pay the equivalent of union wages on most public construction projects. In addition, most public construction projects contracted by the federal government or the District of Columbia are covered by the federal prevailing wage laws, the Davis-Bacon Act.
To research laws for Project with Federal-aid - Title 29 Code of Federal Regulations, Subtitle A, Parts 1, 3 and 5.
Projects without Federal-Aid: Ohio Revised Code (ORC), Chapter 4115.
Prevailing Wage Laws are meant to ensure that wages commonly paid to construction workers in a particular region will determine the minimum wage paid to the same type of workers employed on publicly funded construction projects.
As outlined in ODOT Policy No. 26-002 (P), both State and Federal law requires the payment of prevailing wages to all contract employees performing duties of a laborer or mechanical on a project site.
Prevailing Wage means:
· The base hourly rate of pay
· The rate contribution irrevocably made by a contractor or subcontractor to a trustee or to a third person pursuant to fund, plan, or program.
· Medical or hospital care or insurance
· Pensions on retirement or death or insurance
· Supplemental unemployment benefits that are in addition to those required by Charter 4141 of the Revised Code.
· Life insurance
· Disability and sickness insurance
· Accident insurance
· Vacation and holiday pay
· Defraying of costs for apprenticeship or other similar training programs which are beneficial only to the laborers and mechanics affected.
· Other bona fide fringe benefits
The public authority must appoint a wage coordinator whose duties include:
· Establishing a monitoring process
· Maintain payroll reports and affidavit
· Receive affidavits from primes and subs
· Report delinquencies in filing payrolls and affidavits
· Dates of payments to employees
· Obtains from all prime and subcontractors copies of weekly certified payrolls
The list of work types exempt from the payment of prevailing wages includes:
· Herbicidal Spraying
· Center Line Survey
· Sign Inventory
· Tree Trimming and Tree Removal
· (With no other construction to follow)
All employee drivers working on the site of work must be paid prevailing wages.
The “site of work” is defined as follows:
It is the physical place where the building or work called for in the contract will remain; and any other site where a significant portion of the building or work is constructed, provided that such site is established specifically for the performance of the contract or project.
Job headquarters, tool yards, batch plants, borrow pits, etc. are part of the site of the work, provided they are dedicated exclusively, or nearly so, to performance of the contract or project, and provided they are adjacent or virtually adjacent (within a 1 mile radius) to the site of the work.
Not included in the site of the work are permanent home offices, branch plant establishments, fabrication plants, tool yard, etc. of a contractor or subcontractor who location and continuance in operation are determined wholly without regard to a particular federal or federally assisted contract or project.
In addition, fabrication plants, batch plants, borrow pits, job headquarters, tool yards, etc. of a commercial or material supplier, which are established by a supplier of materials for the project prior to the opening of bids and not on the site of work. Such permanent, previously established facilities are not part of the site of the work, even where the operations for a period of time may be dedicated exclusively, or nearly so, to the performance of a contract.
The boards must be displayed at a central location and must display current project prevailing wage rates and all current state or federally required postings. Company EEO policy and officers’ names must also be displayed.
For mobile operations (i.e. guardrail or asphalt), the bulletin board information may be kept in the foreman’s truck provided all employees are apprised of the location and have easy access to the material.
Disadvantaged Business Enterprise (DBE) goals are set on federally funded projects in excess of $1 million. For state funded projects, the EDGE program is used – Encouraging Diversity, Growth and Equity. They are set for projects in excess of $500,000.
On those projects for which a DBE goal has been established, ODOT personnel act as the eyes and ears on projects to ensure that those DBE subcontractors are performing a commercially useful function (CUF).
In order to perform a commercially useful function, the DBE must carry out its contract responsibilities by actually performing, managing and supervising the work on a project.
Here are some items to consider in determining if a subcontractor is performing a commercially useful function.
The DBE must schedule all work operations.
The DBE must receive quotes and order equipment and materials.
The DBE must prepare and submit certified payrolls.
The DBE must hire and fire employees.
The DBE must make all operational and managerial decisions.
The DBE must supervise daily operations either personally or with a full time, skilled superintendent under the DBE’s direct supervision.
· DBE employees are supervised by another contractor.
· The DBE provides little or no supervision of work.
· The DBE’s superintendent is not a regular employee.
· Supervision is done by the prime contractor or another firm.
· The DBE’s owner is unaware of the project’s status or the performance of the business.
The DBE firm may lease equipment if consistent with industry practices and competitive rates.
A lease agreement is required and should be for a long term.
A DBE firm may lease equipment from another contractor, but not from the prime contractor or a subsidiary.
A DBE is not permitted to lease and use equipment with the payment subtracted from the prime’s payment to the DBE.
The DBE is to have full control of the operation of equipment.
An operator may be provided if the equipment is specialized.
· The equipment used by the DBE belongs to the prime or another contractor with no formal lease agreement.
· Equipment signs and markings cover another owner’s identity, usually through the use of magnetic signs.
· A DBE trucking business uses trucks owned by the prime.
DBE firms must keep a regular workforce.
DBE firms cannot share employees with non-DBE contractors, especially a prime contractor or subsidiary.
The DBE firm is responsible for all payroll and labor compliance requirements for all employees within control of the company.
· Watch for movement of employees between contractors.
· Watch for instances of employees paid by the DBE and the prime.
The DBE must negotiate the cost, arrange delivery, take ownership and pay for the materials and supplies for a project.
The DBE must prepare the estimate, the quantity of material, and be responsible for the quality of the materials.
· Materials are ordered by or paid for by the prime.
· Two-party checks from the prime to the DBE subcontractor and supplier or manufacturer.
· Materials or supplies necessary for the DBE’s performances are delivered to, billed to or paid for by another business.
The DBE must be responsible for the performance, management and supervision of a distinct element of the work, in accordance with normal industry practice.
· The work is being done by the DBE firm and another contractor.
· The work to be done is beyond the DBE’s known experience or capability.
· Some portion of the work is done by the prime or another firm.
· The DBE firm is working without a subcontract agreement.
· The DBE prime contractor subcontracts more than customary or standard industry practice.
· The agreement between the prime and the DBE artificially inflates the DBE participation.
· The DBE works for only one prime contractor or a large portion or a large portion of the firm’s contracts are with one contractor.
· The volume of work is beyond the capacity of the DBE firm.
If a DBE subcontractor is suspected of engaging in any of the aforementioned practices, the ODOT project personnel should contact the district Equal Employment Opportunity coordinator an alert them of the suspected infractions.
Oversight of the DBE program is necessary in ODOT’s effort to reduce fraud and ensure that the DBE program benefits the truly disadvantaged businesses.
All properties to be utilized by the Contractor outside the project right-of-way must be cleared for all environmental resource impacts prior to the beginning of work. The project right-of-way consists of the right-of-way the project is being constructed upon. Environmental Resource features pertinent to the construction activity should be shown on the contract drawings. The contractor is responsible for evaluating all impacts on environmental resources outside the project right-of-way.
Environmental resources include but may not be limited to:
1. Cultural Resources
a. Buildings, structures, objects, and sites eligible for or listed on the National Register of Historic Places
2. Ecological Resources
c. Wooded areas with trees to be removed in excess of 8 inches diameter at breast height
3. Public Lands
a. Lands meeting the criteria of 49 U.S.C. 303, 23 CFR 771.I35: 4(f).
b. Lands meeting the criteria of 16 U.S.C. 4601-4, 36 CFR59.1: 6(f).
4. FEMA Mapped 100 year Floodplains
5. Hazardous Waste Areas
All areas proposed to be utilized by the Contractor outside the project construction limits shall be reviewed by environmental contractor(s) that are prequalified by the Department for each environmental resource. Have the consultant(s) certify that the proposed site to be utilized for the contractor will not impact:
· Cultural Resources
· Ecological Resources
· Public Lands
· FEMA Mapped 100 year Floodplains
· Hazardous Waste Areas
Provide all documentation and the consultant certification to the Department’s Office of Environmental Services.
Under 104.03 “Rights in and Use of Materials Found on the Work,” the Contractor has the right to all materials found in the contract work. However, the Contractor does not have the right to materials outside the plan work. For example, the Contractor does not have the right to rock found outside the cross section work. On the other hand, if the Contactor finds rock within the cross section, they can use the rock for other items of work.
In order for the Contractor to have the “fee free” right to the material, the Designer needs to detail borrow and/or waste areas in the plans prior to bid. If the locations are not shown and the Contractor receives approval to borrow and/or waste on ODOT property then a charge of $ 0.50 per cubic yard will be assessed. When borrow and/or waste areas are shown on the plans there is not a charge for the material.
This requirement was put into the specifications to even the bidding process for all Contractors.
All of the environmental requirements in 105.16 Waste and Borrow Areas and 105.17 Construction and Demolition Debris apply to on site locations. The exceptions to these requirements are detailed in 105.16 “Waste and Borrow Areas” of this manual.
Approval for Borrowing and/or Wasting on the Right of Way
All borrow and waste location requests on the right-of-way need the District Office of Production approval. The guidance document for the approval can be found at the following link:
The District Office of Production will look at the following during the approval process:
· Safety Grading and Clear Zone.
· Sight Distances.
· Future Expansion.
· Environmental Regulations (404, 401,NPDES etc.), (See Environmental Approval in 105.16 “Waste and Borrow Areas” of this manual.)
· Public Commitment.
· Effects on Utilities.
· Stability (See Stability and Settlement) in 105.16 “Waste and Borrow Areas” of this manual.
As this process evolves, there may be changes to this criterion.
The use of ODOT property for portable plants is restricted under this section of the specifications. Production may detail potential locations on the plans. If the locations are detailed on the plans then the location is fee free. If the location was not shown in the plans and the site is approved by the district for use then the Department will consider this change a Value Engineering Change Proposal.
There are four issues detailed in C&MS 107.11.C. The noise ordinances and EPA permits need approved the District Environmental Coordinator. The traffic plan needs approved by District Production.
The “fee free” use of Project Right-of-Way for staging, equipment storage, and/or office site is granted in this section.
The only restrictions are that these locations do not interfere with the work and are not otherwise restricted in the contract documents.
It is the intent of this section to recommend minimum documentation and critical inspection requirements for the above sections. All of the following documentation requirements need recorded in the project daily reports. References to the appropriate laws, specifications, and proposals and plan notes or details for all the inspector reports are required. Specifications or other requirements waived by the Project Engineer shall be noted on the daily diaries.
Regulated waste work may be inspected and documented by the District Environmental Coordinator (DEC), District Hazardous Waste Coordinator (DHWC) or Regulated Waste Project Engineer (RWPE). When the inspection is required by these individuals it will be denoted below.
In addition, clearances or reviews need to be performed by other offices or individuals in the Department will be denoted. These are as follows, District Office of Production (DOP), Office of Geotechnical Engineering (OGE).
1. Contractors operational plan approval.
2. Stability and Settlement (OGE).
3. NPDES Permit and Erosion Control (DOP).
4. 404 and 401 Permit or Evaluation (DEC).
5. Flood Plain Clearance (DEC).
6. Cultural Resource Clearance (DEC).
7. Open Burning Permit (DEC).
8. Any Disposal Requiring Manifesting (DEC, DHWC or RWPE).
9. Construction and Demolition Debris
a. Determination if Clean hard fill or Construction Debris.
b. Quantities and locations of material leaving and filling on the site.
c. Seven day notice to the local board of health or OEPA.
d. Record quantities going to the C & D landfills.
i. Manifest properly (DEC, DHWC or RWPE)
10. Landscape Wastes.
a. Record quantities and locations of materials leaving and buried on site.
b. Record what happened to the rest of the material.
i. Manifest Properly. (DEC, DHWC or RWPE)
11. Open Burning.
a. Obtain a copy of the permit.
b. Is the smoke causing a hazard?
c. Is the burning at the correct time?
d. Is an Air Curtain used?
e. Are there any fire hazards?
12. Proper Disposal of Concrete waste.
a. Three foot cover on top.
b. Eight foot cover on the sides.
c. Core mixed with 30 percent soil.
d. Is the fill stable?
13. Contractor Use of the Right of Way.
a. Approval (DOP)
b. All clearances. See 3 thru 7 above.
c. Fifty cents a cubic yard or free.
d. Portable Plant Approval (DOP)
14. Cross section the site if required for payment.
15. Owners permission statement.
a. Material not the Departments.
b. ODOT not a part of the agreement.
c. ODOT held Harmless.