U.S. DEPARTMENT OF LABOR OFFICE OF THE SOLICITOR WASHINGTON 25 July 29, 1963 MEMORANDW # 54 TO: AGENCIES ADMINISTERING STATUTES REFERRED TO IN 29 CFR, SUBTITLE A, PART 5. FROM: E. Irving Manger Associate Administrator SUBJECT: Opinions on application of the Davis-Bacon and related Acts. Enclosed with previous covering memoranda, copies of opinions on the application of the Davis-Bacon and related Acts were furnished you for information and guidance in your enforce- ment programs under those Acts. We are now enclosing a copy of a recent opinion on this name general subject, which we are sure will be of further interest and assistance to you. Enclosure DB-39 U.S. DEPARTMENT OF LABOR OFFICE OF THE SOLICITOR WASHINGTON 25 June 26, 1963 Mr. Rex M. Whitton Federal Highway Administrator Bureau of Public Roads Department of Commerce Washington 25, D. C, Dear Mr. Whitton: This is with further reference to my letter of February 15, 1963, and to subsequent conferences between representatives of our respective staffs regarding the applicability of the Davis-Bacon Act requirements to demolition work and, more especially, to demolition work which any be related to the initial construction of the Interstate highway systems We have reviewed the proposed amendment to your Labor Compliance Manual, Federal-Aid Construction, {copy enclosed), and find, that it is in accord- ance with our views on the issues here involved. With the exception of demolition work performed under U1rban Renewal pro- jects authorized pursuant to the Housing Act of 1949, as amended, it has been our position that demolition, standing alone, is not subject to the prevailing wage requirements of the Davis-Bacon and related Acts. For example, the demolition of a building because such structure is no longer needed would not in itself be deemed a covered construction activ- ity; however, where this existing building is being demolished as a phase of a covered construction project, the demolition would be deemed covered. Applying the above principles to demolition work performed as part of the initial construction of a project under the Interstate highway pro- gram, it is our view that such demolition would be subject to the pre- vailing wage requirements of Section 113, Title 23, .United States Code. The term "initial construction", as here used with respect to demolition work, encompasses all demolition operations carried on relative to Interstate highway programs for which a claim for. Federal participation in the cost thereof has been or will be made by the State highway depart- ment. In. such situations, the minimum wages for the classifications of Mr. Rex M. Whitton Page 2 work to be performed, as determined by the Secretary of Labor, would be applicable to the demolition operations. It is our understanding that, in submitting requests for wage determina- tions, you will indicate on the Form DB-11(a) those contracts which will involve demolition. In that way, this Department will be in a position to include in its wage determinations classifications and rates for the demolition work which, depending on the practice in the areas under con- sideration, may or may not be the same as the classifications and wage rates recognized for building, heavy, or highway work in those areas. We appreciate very much the continued cooperation received from you and your staff in these matters of mutual interest and importance. Yours sincerely, Charles Donahue Solicitor of Labor Enclosure D-2-1V.3 Demolition Projects: (a) General: The Solicitor of Labor has ruled that demolition, standing alone, is not subject to the prevailing wage requirements of the Davis- Bacon and related acts; for example, the demolition of a temporary building because it is no longer needed would not be covered except in the case where it is being demolished as a phase of con- struction. It is we11 established that demolition work becomes a phase of construction, subject to the prevailing wage requirements, where the purpose of this activity is to clear the land and thereby facilitate the orderly and timely progress of a construction project. Demolition work performed as part of the initial construction of a project is clearly covered by the Davis-Bacon and related acts. The term "initial construction," as used relative to demo- lition work, encompasses all demolition operations carried on relative to .Interstate highway programs for which a claim for .Federal participation in the cost thereof, has been or will be made by the State highway department. In such situations, the minimum wages for the classifications of work to be carried out, as determined by the secretary of Labor, are applicable to the demolition operations. (b) Purpose of the contract: In general, contracts for demolition, destruction, and/or removal of buildings, etc., from highway right-of-way in connection with the initial construction of an Interstate project must contain a prevailing wage determination of the Secretary of Labor pursuant to section 113 of Title 23, United States Code. The fact that .the demolition phase of construction is separate in point of time from the other planned construction operations or under a separate contract does not affect this requirement. Further, the fact that, because of the value of the salvageable materials available, the contractor pays the state for the privilege of accomplishing the demolition works in return for title to all of the salvageable D-2-IV.3 Continued material, does not eliminate the necessity for obtaining, and enforcing the prevailing wage determinations with respect to such work. (c) Nature of Transaction: 1. When (in the State's agreement for the pur- chase of the 1and) the property owner, as part of the consideration f6r the transfer of title to the land involved, retains title to the home and improvements, with the right to remove same from the right-of-way, pre- vailing wage determinations would not apply to work undertaken by the property owner, either personally or by contract, subsequently let by the property owner to effect the .removal of the improvements reserved to the property owner as an element of the consideration for the State's acquisition of legal title to the right-of-way. Likewise the activities of the State, or of a State contractor, in relocating structures for the benefit of the grantor pur- suant to the right-of-way agreement, do not constitute construction withiin the meaning of Sectioq.101, Title 23, United States Code. 2. State contracts for Demolition or Removal Sub- sequent to Acquisition of Title to Right-of- way: When the State takes title to the improve- ments and thereafter deals with-them separately as State property, work done in connection with the removal or demolition of such improvements is considered "construction" within the con- templation of the Davis-Bacon Act and related acts, whether it is accomplished by bids for the demolition work, or contracts of sale, requiring removal of the improvements. The D-2-IV.3 Continued laborers and mechanics employed in connection with such work are covered by the prevailing wage requirements of those acts. 3. When the State, or government, takes title to the land including all improvements, timber, orchards, crops, etc., and does not dispose of such severable property by separate contract, [a) Any work performed by the construction contractors, or subcontractors, with their own forces for the purpose of removal, demolition, destruction or salvage of such severable assets is construction within the meaning of the prevailing wage requirements. (b) If the construction contractor or sub- contractor disposes of such severable assets by sale in place, with an obli- gation on the purchaser to remove the severable property from the right-of- way, such demolition and removal oper- ation constitutes construction. All activities which are performed by such purchaser after removal from the right- of-way are not construction inasmuch as such activities are not governed or required by the construction contract. [c) When the construction contractor or sub- contractor accomplishes the demolition and sells the severed materials to pur- chasers who take delivery on the project site, the demolition is covered but the loading and removal by the purchaser is not covered. This is similar to the sit- uation where the contractor sells a piece of construction equipment at the site of 4 D-2-IV.3 Continued the project with the responsibility being on the purchaser to load and remove the piece of equipment involved in the sale transaction. [d) Activities Engaged in by Demolition Contractors on Project Site Apart from and/or in addition to Demolition Work: The Solicitor of Labor has ruled that where covered demolition contractors (see above) are permitted to engage in activities on the project site that are peculiar to their business of salvaging materials, and that are apart from and in addition to those activities necessary to demolition and clearing of the site, such additional activity does not constitute covered work, subject to the prevailing wage requirements. For example, where a demolition contractor used the project site to clean brick salvaged from the demolition, for commercial resale in his normal used materials business, it was held that the cleaning of brick was not a requirement of the demolition-work, and the brick cleaners were not covered by the prevailing wage requirements.