U.S. Department of Labor 
Employment Standards Administration
Wage and Hour Division
Washington, D.C. 20210
MAY 20 1983
MEMORANDUM NO. 135
TO: ALL GOVERNMENT CONTRACTING AGENCIES OF
THE FEDERAL GOVERNMENT AND THE DISTRICT
OF COLUMBIA
FROM: WILLIAM M. OTTER 
Administrator
SUBJECT: Revisions of the Davis-Bacon Regulations,
29 CFR Part 1 and Part 5, Subpart A
Copies of the above final Davis-Bacon regulations, which were
published in the Federal Register on April 29, 1983, are
attached.
BACKGROUND
On May 28, 1982, the Department of Labor (DOL) issued revised
final regulations under the Davis-Bacon and Related Acts with
a scheduled effective date of July 27, 1982. Memorandum No.
133 transmitted copies of the revised regulations and provided
implementing instructions for contracting agencies.
However, a suit was filed against the Department in U.S.
District Court for the District of Columbia seeking to
prevent the implementation of the revised regulations.
On July 22, 1982, the Court issued a preliminary injunction
enjoining the Department from implementing certain provisions
of the revised regulations pending a decision on the merits
(Building and Construction Trades Department, AFL-CIO, et al.,
v. Raymond J. Donovan, et al., 543 F. Supp. 1282). As a
result, Memorandum No. 134 was issued on July 23, 1982 which
deferred the implementation of the regulations as published
in the Federal Register on May 28, 1982 (29 CFR Part 1 (47
FR 23644), 29 CFR Part 5, Subpart A (47 FR 23658), and 29
CFR Section 3.3(b) (47 FR 23678)) until further notice.
(See 47 FR 32070 (July 26, 1982).)





















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On December 23, 1982, the Court issued a permanent injunction
with respect to a number of these regulatory revisions. The
injunction covered all of the issues which were preliminarily
enjoined except the redefinition of "prevailing wage" in
29 CFR 1.2(a) (i.e., elimination of the "30% rule"). The
Government appealed this ruling and argument was heard by the
U.S. Court of Appeals for the District of Columbia on May 6,
1983.
Immediately prior to the hearing in the Court of Appeals, as
indicated above, the Department republished those portions of
the May 28, 1982 regulations which had not been enjoined.
These regulations become effective June 28, 1983.
The enjoined sections of the May 28, 1982 regulations continue
to be deferred. If the injunction is subsequently lifted as a
result of the appeal, the enjoined sections will be implemented
at that time.
Highlighted below are the major changes which supplement the
information contained in the regulatory text and preamble
sections. We offer this information so that contracting
agencies will be aware of their obligations and DOL operating
policies under the Davis-Bacon and Related Acts. Agencies are
reminded of the need to make appropriate changes in their
procurement regulations and contract documents to conform to
these revisions to the regulations. For your convenience,
we note that the provisions of section 1.6 (10se and effective-
ness of wage determinations) of Part I and sections 5.2
(Definitions) and 5.5 (Contract clauses) of Part 5 are
applicable to contracts entered into pursuant to invitations
for bids issued or negotiations concluded on or after June 28,
1983; the remaining provisions of Part I are applicable to
wage surveys completed on or after June 28, 1983. The
revisions to sections 5.1 and 5.6 through 5.17 are procedural
or administrative in nature and are effective on June 28, 1983.
29 CFR PART 1
1. Section 1.2(a) - Definition of Prevailing Wage
This section has been revised to eliminate the "30 percent
rule" contained in the previous regulations. Under the new
regulations, if a single rate is paid to a majority of the
employees in a given classification and locality, it is
adopted as prevailing. If no single rate is paid to a
majority, then the weighted average of all rates paid is
adopted as the prevailing wage.














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2. Section 1.6(a)(1) - Expiration Date of Project Wage
Determinations
This section now provides that project wage determinations
are effective for 180 days from their date of issuance,
unless an extension of the expiration date has been requested
by an agency and approved by the Administrator.
3. Section 1.6(b) - Use of Wage Determinations-
Section 1.6(b) states that contracting agencies are responsible
for insuring that only the appropriate wage determinations are
incorporated in bid solicitations and contracts, and for
designating the work to which each wage determination applies.
This provision is intended to eliminate confusion regarding
the use of "multiple schedules" in certain contracts. The
section also provides that questions regarding the application
of wage schedules should be referred to the Administrator
of the Wage and Hour Division who shall give foremost
consideration to local area practices in resolving such
questions.
4. Section 1.6(c) - "l0-day Rule"
The revised regulations require that contracting agencies
accept modifications to wage determinations received less
than 10 days before bid opening unless (in the case of
competitive procurements) the agency finds that there is not
sufficient time to notify bidders of the change, in which
case such finding must be documented in the contract file,
and submitted to the Wage-Hour Administrator upon request.
This change emphasizes the responsibility of contracting
agencies to use wage determination modifications made before
award in all cases where it will not unduly disrupt the
procurement process.
5. Section 1.6(c)(3)(iv) - "90-Day Rule"
Section 1.6(c)(3)(iv) now provides that if a contract to which
a general wage determination has been applied is not awarded
within 90 days after bid opening, any modification published
prior to contract award shall be effective unless the agency
obtains an extension of the 90-day period from the
Administrator.



















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6. Section 1.6(e) - Correction of Wrong or Erroneous Wage
Determinations
This section provides that if the Department of Labor finds
that a bid solicitation contains the wrong wage determination
or wrong schedule, or if a wage determination is withdrawn
as a result of a decision by the Department's Wage Appeals
Board, notification to the contracting agency of such
findings shall be effective immediately, without regard to
the provisions of section 1.6(c), provided such notification
is made prior to contract award.
7. Section 1.6(f) - Incorporation of Wage Determinations
After Award
Section 1.6(f) requires contracting agencies to utilize a
wage determination after award if the Wage-Hour Administrator
finds that the agency has failed to include any wage deter-
mination in a covered contract or has used a wage determination
which clearly does not apply to the contract. This is to be
accomplished through either termination and resolicitation
of the procurement or incorporation through contract
modification or change order. However, the regulation also
provides that the method of incorporation should be in
accordance with procurement law, and that if the wage
determination is incorporated through contract modification
or change order, the contractor must be compensated for any
increases in wage costs which may result.
8. Section 1.6(g) - Approval of Federal Funding After
Contract Award
Section 1.6(g) contains guidelines for the application of
wage determinations in situations where Federal funding or
assistance is not approved until after contract award (or
after the start of construction where there is no contract
award).
29 CFR PART 5
9. Section 5.2(1) - Definition of "Site of Work"
The regulations now basically incorporate the Department's
longstanding interpretation of the "site of work" on which
Davis-Bacon prevailing wages must be paid. The definition



















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is essentially similar to those contained in DAR 18-701(b)(2)-(4)
and FPR 1-18.701-l(b)(2), but specifies that operations of a
"commercial supplier" or "materialman" established in
proximity to but not on the actual site of the work prior
to the opening of bids are not covered by the Act even if
dedicated exclusively to the Federal project for a time.
10. Section 5.5(a)(1)(ii) - Conformance Procedures
This section has been revised to clarify the criteria which
must be met before a contracting officer may approve a
conformed rate, and to require that conformed rates must
be agreed to by the affected employees or their representatives.
It also provides that all proposed conformance agreements
must be forwarded to the Department of Labor for approval,
and that the Department wi11 act upon such cases, as well
as those cases where the interested parties cannot agree,
within 30 days, unless it advises the agency that additional
time is needed.
11. Sections 5.5(a)(2) and 5.5(b)(3} - Cross-Withholding
These sections provide that where the funds remaining on a
contract under which Davis-Bacon Act or Contract Work Hours
and Safety Standards Act violations are alleged to have
occurred are insufficient to cover the amount of back wages
due, the contracting agency shall, upon its own initiative
or at the request of the Department of Labor, withhold or
cause to be withheld such additional funds as may be necessary
from any other Federal contract or any other Federally
assisted contract subject to Davis-Bacon prevailing wage
(or CWHSSA, as appropriate) requirements which is held by
the same prime contractor.
12. Section 5.5(a)(3)(ii) - Submission of Wage Payment
Information
This section continues the current requirement that
contractors and subcontractors submit weekly a copy of all
payrolls, together with a statement certifying compliance
with the Davis-Bacon and Copeland Acts. While the required
payroll information may be submitted in any form, Optional
Form WH-347 is available for this purpose but is not a
mandatory requirement.


















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13. Sections 5.5(a)(4)(i) and (ii) - Apprentices and Trainees
Sections 5.5(a)(4)(i) and (ii) now codify the Department's
policy that if an apprenticeship or trainee program is silent
with regard to payment of fringe benefits, such employees
must be paid the full amount of fringe benefits for the
corresponding journeyman classifications as listed on the
wage determination, unless DOL determines that a different
practice prevails. This section has also been revised to
allow contractors to follow the ratios and wage rates
(percentages) for approved apprentice and trainee programs
in their "home" area rather than requiring contractors to
observe the ratios and wage rates in the area where the
construction project is performed.
14. Section 5.5(a)(7) - Contract Termination; Debarment
This revised section provides that a violation of the contract
labor standards (29 CFR 5.5) may be grounds for termination of
the contract, and for debarment in the capacity of a prime
contractor as well as a subcontractor.
15. Section 5.5(a)(9) - Disputes Concerning Labor Standards
Section 5.5(a)(9) specifies that disputes arising out of the
labor standards provisions of the contract are not subject
to the general disputes clause of the contract, but rather
to the procedures in 29 CFR Parts 5, 6, and 7.
16. Section 5.5(a)(10) - Certification of Eligibility
This section requires contractors to certify that they are
not ineligible to be awarded a contract by virtue of
debarment under section 3(a) of the Davis-Bacon Act or
29 CFR 5.12(a)(1), and prohibits contractors from awarding
subcontracts to debarred firms.
17. Sections 5.6(b) and 5,7(a)
Section 5.6(b) provides that the Department of Labor will
submit reports of its investigations to the contracting
agency where violations total $1,000 or more, or where
liquidated damages may be assessed under the Contract Work
Hours and Safety Standards Act, or where debarment may be
considered. In other violation cases, a letter summarizing
the investigation findings will be submitted.



















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Section 5.7(a) requires contracting agencies to submit to DOL
detailed reports of their investigations in all cases where
wage underpayments total $1,000 or more. Where the amount
of violations is less than $1,000, a factual summary will
suffice if back wages have been paid and future compliance
assured and if the criteria for consideration of debarment
are not present. However, in the latter cases in which the
investigation was initiated at the request of the Department
of Labor, a full report is required to be submitted.
18. Section 5.8 - Liquidated Damages Under the Contract
Work Hours and Safety Standards Act
Section 5.8 now provides that where the Agency Head finds
that the criteria for a reduction or waiver of liquidated
damages administratively determined to be due have been
met, the concurrence of the Department of Labor in such
reduction or waiver must be sought only if the amount of
such damages exceeds $500.
19. Section 5.11 - Disputes Concerning Payment of Wages
As revised, this section provides that in all cases involving
a dispute concerning prevailing wage rates, overtime pay, or
classification where there are relevant facts at issue, the
contractor or subcontractor will be offered an opportunity
for a hearing before an Administrative Law Judge in accordance
with procedures set forth in proposed 29 CFR Part 6, which
should be published in the Federal Register as a final rule
in the near future. It also provides that debarment may be
considered at such hearings where appropriate.
20. Sections 5.12 (a) and (b) - Debarment Proceedings
These sections contain revised rules for debarment proceedings.
They specify that in all cases where debarment may occur, the
contractor or subcontractor will be offered an opportunity for
a hearing before an Administrative Law Judge in accordance
with 29 CFR Part 6. As noted under section 5.11 above, such
hearings will be held in conjunction with hearings on disputes
concerning payment of wages, etc. where it is appropriate to
do so. In addition, these sections provide that debarred
persons and firms are ineligible to perform contract work as
either a prime contractor or a subcontractor while on the
debarred bidders list.

















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21. Section 5.12(c) - Removal From Debarred List
Section 5.12(c) provides that any person or firm debarred
under section 5.12(a) for violations of a Davis-Bacon Related
Act (but not those debarred under the Davis-Bacon Act itself)
may petition the Administrator for removal from the debarment
list after a period of six months. The section also sets
forth the-criteria to be used in deciding whether requests
for removal will be granted.
22. Section 5.12(d) - Debarment of Affiliated Firms
This section contains the procedures to be used in determining
whether a person or firm debarred under the Davis-Bacon Act
has "an interest" in another firm, corporation, partnership,
or association, and whether a person or firm debarred under
29 CFR 5.12(a) has "a substantial interest" in another firm,
corporation, etc. As provided in section 3(a) of the
Davis-Bacon Act and in 29 CFR 5.12(a)(1), if a debarred person
or firm is found to have "an interest" or "a substantial
interest", respectively, in such other firm, corporation,
etc., that other firm or corporation shall also be placed on
the debarment list.
Attachments