Davis-Bacon Compliance Principles

1. Davis-Bacon Compliance Principles This section of the presentation covers policies regarding a contractor�s compliance with the DBA/DBRA minimum monetary wage (MW) and fringe benefit (FB) requirements listed in Wage Determinations (WD) issued for application to covered construction contract work. (29 CFR Part 5) This section of the presentation covers policies regarding a contractor�s compliance with the DBA/DBRA minimum monetary wage (MW) and fringe benefit (FB) requirements listed in Wage Determinations (WD) issued for application to covered construction contract work. (29 CFR Part 5)

2. DBA/DBRACompliance Principles Laborers and mechanics Site of the work Truck drivers Apprentices and Trainees Helpers Area Practice Prevailing Wages The material discussed here will answer questions such as: ? To whom do Davis-Bacon prevailing wage requirements apply? ? Was each laborer and mechanic paid properly for the classification of work performed? ? Did employees receive one and one-half their basic rates of pay for hours worked on the contract over 40 per week? ? Were laborers and mechanics employed on the site of the work correctly? ? Did the contractors use a disproportionate number of laborers and/or apprentices or trainees? ? Did the firm make contributions to bona fide FB plans that were creditable toward meet the prevailing rate requirements? (29 CFR Part 5) The material discussed here will answer questions such as: ? To whom do Davis-Bacon prevailing wage requirements apply? ? Was each laborer and mechanic paid properly for the classification of work performed? ? Did employees receive one and one-half their basic rates of pay for hours worked on the contract over 40 per week? ? Were laborers and mechanics employed on the site of the work correctly? ? Did the contractors use a disproportionate number of laborers and/or apprentices or trainees? ? Did the firm make contributions to bona fide FB plans that were creditable toward meet the prevailing rate requirements? (29 CFR Part 5)

3. Laborers and Mechanics Includes workers whose duties are manual or physical in nature Includes apprentices, trainees, and helpers For CWHSSA, includes watchmen and guards next page The term �laborer and mechanic� includes those workers whose duties are manual or physical in nature (including those workers who use tools or who are performing work of a trade), as distinguished from mental or managerial. Apprentices, trainees, and helpers are included in the term laborers and mechanics. In the case of construction contracts subject to CWHSSA, the term also includes watchmen and guards. The DBA requires the payment of the applicable prevailing wage rate to all laborers and mechanics �regardless of any contractual relationship which may be alleged to exist.� Thus, it applies to individuals who perform laborer or mechanic duties regardless of whether they are allegedly independent contractors (or have an ownership interest in a company unless their duties are primarily managerial). (DBA/DBRA: 29 CFR 5.2(m) and 5.2(o); CWHSSA: Section 103 of the Act, as amended (40 U.S.C. 327-332)) The term �laborer and mechanic� includes those workers whose duties are manual or physical in nature (including those workers who use tools or who are performing work of a trade), as distinguished from mental or managerial. Apprentices, trainees, and helpers are included in the term laborers and mechanics. In the case of construction contracts subject to CWHSSA, the term also includes watchmen and guards. The DBA requires the payment of the applicable prevailing wage rate to all laborers and mechanics �regardless of any contractual relationship which may be alleged to exist.� Thus, it applies to individuals who perform laborer or mechanic duties regardless of whether they are allegedly independent contractors (or have an ownership interest in a company unless their duties are primarily managerial). (DBA/DBRA: 29 CFR 5.2(m) and 5.2(o); CWHSSA: Section 103 of the Act, as amended (40 U.S.C. 327-332))

4. Laborers and Mechanics Does Not Include: Timekeepers, inspectors, architects, and engineers Bona fide executive, administrative, or professional employees as defined by the FLSA Working foremen are generally non-exempt and must be paid the Davis Bacon (DB) rate for the classification of work performed Workers are considered not to be laborers and mechanics when their duties are primarily administrative, executive, professional, or clerical. Examples are timekeepers, inspectors, architects, and engineers. Persons employed in a bona fide executive, administrative, or professional capacity as defined in the Regulations, 29 CFR Part 541, are not deemed to be laborers and mechanics. These regulations, issued under the FLSA, define the scope of exemption for executive, administrative, and professional employees, and include DOL interpretations of these terms. Working foremen who devote more than 20 percent of their time during a workweek to mechanic or laborer duties, and who do not meet the exemption criteria of the FLSA Regulations, 29 CFR Part 541, are laborers and mechanics for the time so spent. Such a working foreman is due the prevailing wage listed in the contract WD for the classification of work performed for the hours spent as a laborer or mechanic. (DBA/DBRA: 29 CFR 5.2(m); FLSA: 29 CFR Part 541. Workers are considered not to be laborers and mechanics when their duties are primarily administrative, executive, professional, or clerical. Examples are timekeepers, inspectors, architects, and engineers. Persons employed in a bona fide executive, administrative, or professional capacity as defined in the Regulations, 29 CFR Part 541, are not deemed to be laborers and mechanics. These regulations, issued under the FLSA, define the scope of exemption for executive, administrative, and professional employees, and include DOL interpretations of these terms. Working foremen who devote more than 20 percent of their time during a workweek to mechanic or laborer duties, and who do not meet the exemption criteria of the FLSA Regulations, 29 CFR Part 541, are laborers and mechanics for the time so spent. Such a working foreman is due the prevailing wage listed in the contract WD for the classification of work performed for the hours spent as a laborer or mechanic. (DBA/DBRA: 29 CFR 5.2(m); FLSA: 29 CFR Part 541.

5. Site of the Work Davis-Bacon applies only to laborers and mechanics employed �directly upon the site of the work� A three-part definition applies to determine the scope of the term �site of the work� next page The Davis-Bacon applies only to laborers and mechanics employed �directly upon the site of work.� Off-site manufacturing work or work in an off-site shop is not covered. A three-part definition of the �site of the work,� in the regulations (29 CFR 5.2(l)) applies to determining the scope of the term �site of the work.� Regulatory revisions that took effect in 2001 recognized the effect of three appellate court decisions and to address certain construction situations previously not contemplated. (29 CFR 5.2(l) published in the Federal Register (65 FR 80268-80278 on December 20, 2000) (DBA: 40 U.S.C. 276a - 276a-7; DBRA: 29 CFR Part 5.1 for listing; CWHSSA: 40 U.S.C. 327-332; CA 40 U.S.C. 276c and 18 U.S.C. 874; PCA: 41 U.S.C. 35-45; and SCA: 41 U.S.C. 351-358) The Davis-Bacon applies only to laborers and mechanics employed �directly upon the site of work.� Off-site manufacturing work or work in an off-site shop is not covered. A three-part definition of the �site of the work,� in the regulations (29 CFR 5.2(l)) applies to determining the scope of the term �site of the work.� Regulatory revisions that took effect in 2001 recognized the effect of three appellate court decisions and to address certain construction situations previously not contemplated. (29 CFR 5.2(l) published in the Federal Register (65 FR 80268-80278 on December 20, 2000) (DBA: 40 U.S.C. 276a - 276a-7; DBRA: 29 CFR Part 5.1 for listing; CWHSSA: 40 U.S.C. 327-332; CA 40 U.S.C. 276c and 18 U.S.C. 874; PCA: 41 U.S.C. 35-45; and SCA: 41 U.S.C. 351-358)

6. Site of the Work Definition #1 DBA applies only to workers on the �site of the work� The physical place or places where the construction called for in the contract will remain after work has been completed; and, Any other site where a significant portion of the building or work is constructed, provided that such site is established specifically for the contract next page �Site of the work� includes: ? The physical place or places where the building or work called for in the contract will remain after the work is completed. For example, if a small building is being erected, the site will normally include no more than the building itself and its grounds. In the case of larger contracts, such as a long, continuous stretch of highway construction, the site of the work will include the entire stretch of highway in which the construction activity takes place. ? 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. For example, where a very large segment of the dam is constructed up-river and floated downstream to be affixed onto a support structure, the secondary construction site would be within the meaning of �site of the work� for Davis-Bacon purposes, if it was established for and dedicated to the dam construction project.) (29 CFR 5.2(l)(1) and (3)) �Site of the work� includes: ? The physical place or places where the building or work called for in the contract will remain after the work is completed. For example, if a small building is being erected, the site will normally include no more than the building itself and its grounds. In the case of larger contracts, such as a long, continuous stretch of highway construction, the site of the work will include the entire stretch of highway in which the construction activity takes place. ? 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. For example, where a very large segment of the dam is constructed up-river and floated downstream to be affixed onto a support structure, the secondary construction site would be within the meaning of �site of the work� for Davis-Bacon purposes, if it was established for and dedicated to the dam construction project.) (29 CFR 5.2(l)(1) and (3))

7. Site of the Work Definition #2 �Site of the work� also includes job headquarters, tool yards, batch plants, borrow pits, etc., provided they are: Located adjacent or virtually adjacent to the �site of the work� described in Paragraph 1 and Dedicated exclusively or nearly so to the performance of the contract or project Except if they are excluded by paragraph 3 next page Job headquarters, tool yards, batch plants, borrow pits, etc., are considered part of the �site of the work� provided they meet two tests -- a geographic test of being adjacent or virtually adjacent to the site of the work defined in paragraph (1), and a functional test of being �dedicated exclusively, or nearly so, to the performance of the contract or project.� (29 CFR 5.2(l)(2)) Job headquarters, tool yards, batch plants, borrow pits, etc., are considered part of the �site of the work� provided they meet two tests -- a geographic test of being adjacent or virtually adjacent to the site of the work defined in paragraph (1), and a functional test of being �dedicated exclusively, or nearly so, to the performance of the contract or project.� (29 CFR 5.2(l)(2))

8. Site of the Work Definition #3 �Site of the work� does not include a contractor�s or subcontractor�s Permanent home office, branch locations, fabrication plants, tool yards, etc., whose location and continuance in operation are determined without regard to a particular covered project. next page Certain facilities of a contractor or subcontractor are not on �the site of the work� if their location and continuing operation were not established to service the Davis-Bacon covered construction project. (29 CFR 5.2(l)(3)) Certain facilities of a contractor or subcontractor are not on �the site of the work� if their location and continuing operation were not established to service the Davis-Bacon covered construction project. (29 CFR 5.2(l)(3))

9. Definition #3 (Cont�d.) Also not included in the �site of the work� are: Fabrication plants, batch plants, job headquarters, tool yards, etc., of a commercial supplier established by a supplier of materials Before the opening of bids for a project, and Are not located on the actual site of the 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 �site of the work� definition excludes commercial supplier operations established prior to bid opening of the Davis-Bacon covered contract and not located on, adjacent to, or virtually adjacent to the job site. (29 CFR 5.2(l)(3)) The �site of the work� definition excludes commercial supplier operations established prior to bid opening of the Davis-Bacon covered contract and not located on, adjacent to, or virtually adjacent to the job site. (29 CFR 5.2(l)(3))

10. Truck Drivers Truck drivers of the contractor or subcontractor are covered by Davis-Bacon for time: Spent driving on the �site of the work,� and Spent loading or unloading materials and supplies on the �site of the work,� if such time is more than de minimis next page As discussed in the preamble that accompanied regulatory changes made in 2001, these changes were made in recognition of court rulings involving material delivery truck drivers and the scope of the �site of the work� definition. The DOL does not assert coverage for material truck drivers who come on the �site of the work� for only a few minutes at a time to drop off construction materials. (29 CFR Part 5.2(j), and Preamble (pages 80275-6) as published in the Federal Register on December 20, 2000, (65 FR 80268-80278)) As discussed in the preamble that accompanied regulatory changes made in 2001, these changes were made in recognition of court rulings involving material delivery truck drivers and the scope of the �site of the work� definition. The DOL does not assert coverage for material truck drivers who come on the �site of the work� for only a few minutes at a time to drop off construction materials. (29 CFR Part 5.2(j), and Preamble (pages 80275-6) as published in the Federal Register on December 20, 2000, (65 FR 80268-80278))

11. Truck Drivers Truck drivers are also covered when: Transporting materials and supplies between a facility that is part of the �site of the work� and the actual construction site; or Transporting portions of a building or work between a site where a significant portion of the project is being constructed and the physical place where the building or work will remain next page Truck drivers are covered if they are on the site of the work or traveling between two site-of-work locations on the same project or contract. Truck drivers are also covered when they are transporting portions of a building or work between two covered sites. (29 CFR 5.2(j)) Truck drivers are covered if they are on the site of the work or traveling between two site-of-work locations on the same project or contract. Truck drivers are also covered when they are transporting portions of a building or work between two covered sites. (29 CFR 5.2(j))

12. Truck Drivers Truck drivers are not covered in the following instances: Material delivery truck drivers while off the �site of the work� Truck drivers of a contractor or subcontractor traveling between a commercial facility and the Davis-Bacon job when they are off the �site of the work� Truck drivers whose time spent on the �site of the work� is de minimis for pick-up or drop off Material delivery truck drivers who are off the site of the work, or who come onto the site of the work for only a few minutes at a time merely to pick up or drop off construction materials or supplies are not covered. (29 CFR Part 5.2(j)) Material delivery truck drivers who are off the site of the work, or who come onto the site of the work for only a few minutes at a time merely to pick up or drop off construction materials or supplies are not covered. (29 CFR Part 5.2(j))

13. Truck DriversOwner-Operators DOL has an enforcement position with respect to bona fide owner-operators of trucks who are independent contractors (an owner-operator is a person who owns and drives a truck). Certified payrolls including the names of such owner-operators do not need to show the hours worked or the rates paid, only the notation �owner-operator�. This position does not apply to owner-operators of other equipment such as bulldozers, cranes, etc. See the standard Davis-Bacon contract clause at 29 CFR 5.5(a)(3); and the CA certified payroll requirements applicable to Davis-Bacon covered construction projects at 29 CFR 3.3 and 3.4. See the standard Davis-Bacon contract clause at 29 CFR 5.5(a)(3); and the CA certified payroll requirements applicable to Davis-Bacon covered construction projects at 29 CFR 3.3 and 3.4.

14. Apprentices Are persons individually registered in a bona fide apprenticeship program registered with DOL or a DOL approved State apprenticeship agency Are individuals in their first 90 days of probationary employment as an apprentice DOL Regulations, 29 CFR 5.2(n)(1) and 5.5(a)(4)(i) Apprentices may be paid rates below those listed in the Davis-Bacon WD if they are employed and individually registered in a bona fide apprenticeship program registered with the U.S. Department of Labor, Employment Training Administration, Office of Apprenticeship Training, Employer and Labor Services, or with a State apprenticeship agency recognized by the Office of Apprenticeship Training, Employer and Labor Services. The same is true for an individual in the first 90 days of probationary employment as an apprentice in such an apprenticeship program, who is not individually registered in the program, but who has been certified by the Office of Apprenticeship Training, Employer and Labor Services, or an approved State apprenticeship agency, to be eligible for probationary employment as an apprentice. (29 CFR 5.2(n)(1) and 5.5(a)(4)(i)) Apprentices may be paid rates below those listed in the Davis-Bacon WD if they are employed and individually registered in a bona fide apprenticeship program registered with the U.S. Department of Labor, Employment Training Administration, Office of Apprenticeship Training, Employer and Labor Services, or with a State apprenticeship agency recognized by the Office of Apprenticeship Training, Employer and Labor Services. The same is true for an individual in the first 90 days of probationary employment as an apprentice in such an apprenticeship program, who is not individually registered in the program, but who has been certified by the Office of Apprenticeship Training, Employer and Labor Services, or an approved State apprenticeship agency, to be eligible for probationary employment as an apprentice. (29 CFR 5.2(n)(1) and 5.5(a)(4)(i))

15. Trainees Are persons registered and receiving on-the-job training in a construction occupation under a program which has been approved in advance by DOL�s Employment Training Administration (ETA)  DOL Regulations, 29 CFR 5.2(n)(2) and 5.5(a)(4)(ii) Trainees may be paid rates below those listed in the Davis-Bacon WD if they are receiving on-the-job training in a construction occupation under a program which has received prior approval as evidenced by a formal certification of the approval by the Department of Labor�s Employment and Training Administration. Unlike apprenticeship programs, State apprenticeship agencies have no authority to approve training programs that will be recognized on Davis-Bacon covered contract work. (29 CFR 5.2(n)(2) and 5.5(a)(4)(ii)) Trainees may be paid rates below those listed in the Davis-Bacon WD if they are receiving on-the-job training in a construction occupation under a program which has received prior approval as evidenced by a formal certification of the approval by the Department of Labor�s Employment and Training Administration. Unlike apprenticeship programs, State apprenticeship agencies have no authority to approve training programs that will be recognized on Davis-Bacon covered contract work. (29 CFR 5.2(n)(2) and 5.5(a)(4)(ii))

16. Apprentices and Trainees Are laborers and mechanics, but are not listed on the WD They are permitted to be used on covered projects and paid less than the journeyman rate when: Individually registered in an approved apprenticeship or trainee program Paid the percentage of hourly rate required by the apprenticeship or training program next page Apprentices and trainees in approved programs are permitted to work on covered projects only under the terms of the approved plan. They must be paid at the rate specified in the program for their level of progress as a percentage of the journeyman hourly rate. The individual must be paid at least that percentage of the hourly rate listed in the applicable Davis-Bacon WD. (29 CFR 5.2(n) and 5.5(a)(4)(i) and (ii)) Apprentices and trainees in approved programs are permitted to work on covered projects only under the terms of the approved plan. They must be paid at the rate specified in the program for their level of progress as a percentage of the journeyman hourly rate. The individual must be paid at least that percentage of the hourly rate listed in the applicable Davis-Bacon WD. (29 CFR 5.2(n) and 5.5(a)(4)(i) and (ii))

17. Apprentices and Trainees Paid the FB�s specified in the approved program, or the full amount of FB�s listed on the WD, if the program is silent; and, Within the allowable ratio specified in the approved program for the number of apprentices/trainees to journeyman Fringe benefits (FB�s) should be paid to apprentices and trainees in accordance with the provisions of the approved program. If the program does not mention FB�s, apprentices and trainees must be paid the full amount of the FB�s listed in the WD for their journeyman classification. The contractor is limited in the number of apprentices and trainees permitted on a covered project based on the allowable ratio of apprentices and trainees to journeymen specified in the approved program. The allowable ratio is determined on a daily, not weekly, basis. If a contractor has both an apprentice and a trainee program, the trainees must be counted together with the apprentices in determining compliance with the allowable ratio (i.e., the journeymen may not be counted twice). Allowable ratios are applied in terms of whole number increments for the journeyman and not in terms of fractions thereof, unless specified in the approved program. Employment of a properly registered apprentice by more than one employer does not affect the status of that apprentice. The transfer of apprentices from one employer to another to provide varied work and training is an accepted construction industry practice. Apprenticeship programs are portable, while training programs are not. (29 CFR 5.5(a)(4)(i) and (ii)) Fringe benefits (FB�s) should be paid to apprentices and trainees in accordance with the provisions of the approved program. If the program does not mention FB�s, apprentices and trainees must be paid the full amount of the FB�s listed in the WD for their journeyman classification. The contractor is limited in the number of apprentices and trainees permitted on a covered project based on the allowable ratio of apprentices and trainees to journeymen specified in the approved program. The allowable ratio is determined on a daily, not weekly, basis. If a contractor has both an apprentice and a trainee program, the trainees must be counted together with the apprentices in determining compliance with the allowable ratio (i.e., the journeymen may not be counted twice). Allowable ratios are applied in terms of whole number increments for the journeyman and not in terms of fractions thereof, unless specified in the approved program. Employment of a properly registered apprentice by more than one employer does not affect the status of that apprentice. The transfer of apprentices from one employer to another to provide varied work and training is an accepted construction industry practice. Apprenticeship programs are portable, while training programs are not. (29 CFR 5.5(a)(4)(i) and (ii))

18. Helpers May be employed if: Duties are clearly defined and distinct from other classifications on the WD An established prevailing practice in the area, Not employed in an informal training program May be added to WD if all the above conditions are met Helpers may be employed on a Davis-Bacon covered construction project only if the helper classification is listed on or added to the applicable WD pursuant to the conformance process specified in the contract clauses (29 CFR 5.5(a)(1)(ii)). To be listed on the WD or added by conformance, the helper must meet the three conditions set forth in the slide. (29 CFR 5.2(n)(4) (published in the Federal Register on November 20, 2000, 65FR 69674-69693) and 5.5(a) (l)(ii); Federal Acquisition Regulations (FAR) 48 CFR 52.222-6) Helpers may be employed on a Davis-Bacon covered construction project only if the helper classification is listed on or added to the applicable WD pursuant to the conformance process specified in the contract clauses (29 CFR 5.5(a)(1)(ii)). To be listed on the WD or added by conformance, the helper must meet the three conditions set forth in the slide. (29 CFR 5.2(n)(4) (published in the Federal Register on November 20, 2000, 65FR 69674-69693) and 5.5(a) (l)(ii); Federal Acquisition Regulations (FAR) 48 CFR 52.222-6)

19. Area Practice Surveys Used to determine proper classification of workers on Davis-Bacon projects Limited Area Practice survey is acceptable when the prevailing practice is clear based upon preliminary data Full Area Practice Survey is necessary when preliminary data indicate varied classification practices Questions as to the proper classification of work performed by laborers or mechanics are resolved by making an area practice survey. The proper classification is determined based upon the prevailing classification practice of the firms -- union or non-union -- whose wage rates were found to be prevailing in the area covered by the applicable WD. (See Wage Appeals Board Case No. 76-7, June 14, 1977 (Fry Brothers Corp.).) The extent of the information required for making area practice determinations will depend on the facts in each case. If, for example, in gathering preliminary data, all of the parties consulted in a �limited� area practice survey agree as to the proper classification, the area practice is on that basis. If the parties consulted in such a survey do not agree, a �full� area practice survey involving the collection of project-by-project data will be necessary to determine which classification performed the work in question. The survey will include similar projects in the locality during the year prior to the WD lock-in-date (i.e., the date of contract award, bid opening, or other date established by 29 CFR 1.6(c)). Regardless of which type of survey is needed, the information to be collected depends on the sources of the wage rates in the applicable WD for the classifications of workers that may perform the work in question. Questions as to the proper classification of work performed by laborers or mechanics are resolved by making an area practice survey. The proper classification is determined based upon the prevailing classification practice of the firms -- union or non-union -- whose wage rates were found to be prevailing in the area covered by the applicable WD. (See Wage Appeals Board Case No. 76-7, June 14, 1977 (Fry Brothers Corp.).) The extent of the information required for making area practice determinations will depend on the facts in each case. If, for example, in gathering preliminary data, all of the parties consulted in a �limited� area practice survey agree as to the proper classification, the area practice is on that basis. If the parties consulted in such a survey do not agree, a �full� area practice survey involving the collection of project-by-project data will be necessary to determine which classification performed the work in question. The survey will include similar projects in the locality during the year prior to the WD lock-in-date (i.e., the date of contract award, bid opening, or other date established by 29 CFR 1.6(c)). Regardless of which type of survey is needed, the information to be collected depends on the sources of the wage rates in the applicable WD for the classifications of workers that may perform the work in question.

20. Conducting a �Limited� Area Practice Survey Involving Union Rates Contact unions that may have jurisdiction over the work in question to determine if union workers did the work on similar projects in same county during the year prior to the lock-in date of the WD applied to the contract Survey each union about how workers were classified If the unions agree, confirmation should be obtained from the collective bargaining representatives of contractors If the applicable WD reflects union rates for the classifications involved in the review, the unions whose members may perform the work in question should be contacted to determine whether they performed the work in question on similar projects in the area during the year prior to the lock-in-date for the WD applied to the contract. Each union should be asked how the individuals who performed the work were classified. Confirmation of the information provided by the unions should be sought from the contractors or their representatives signatory to the collective bargaining agreements (CBA�s). If all parties are in agreement as to the proper classification for the work in question, the prevailing area practice is established. The affected employees on the project on which the dispute arose should be classified and paid accordingly. If the applicable WD reflects union rates for the classifications involved in the review, the unions whose members may perform the work in question should be contacted to determine whether they performed the work in question on similar projects in the area during the year prior to the lock-in-date for the WD applied to the contract. Each union should be asked how the individuals who performed the work were classified. Confirmation of the information provided by the unions should be sought from the contractors or their representatives signatory to the collective bargaining agreements (CBA�s). If all parties are in agreement as to the proper classification for the work in question, the prevailing area practice is established. The affected employees on the project on which the dispute arose should be classified and paid accordingly.

21. Conducting a �Limited� Area Practice Survey Involving Open-Shop Rates Contact open-shop contractors to determine if they worked on similar projects in the same county during the year prior to the lock-in date of the WD applied to the contract If so, ask how workers were classified If all or a majority of contractors agree, the prevailing area practice is established Where the WD reflects open-shop rates for the classifications in question, open-shop contractors are contacted and asked for information concerning their classification(s) of workers who performed the work in question on similar projects during the year prior to the WD lock-in-date. If all the contractors agree, or if a clear majority of the contractors agree, then the area practice is established. Where the WD reflects open-shop rates for the classifications in question, open-shop contractors are contacted and asked for information concerning their classification(s) of workers who performed the work in question on similar projects during the year prior to the WD lock-in-date. If all the contractors agree, or if a clear majority of the contractors agree, then the area practice is established.

22. Conducting a �Limited� Area Practice Survey Involving Mixed Rates Union and open-shop rates in the WD are involved in the area practice question For the classification that has a union rate, contact the appropriate union and union contractors to determine if union workers performed the work in question on similar projects in the same county during the year prior to the lock-in date of the WD applied to the contract For the classification that has an open-shop rate, contact open-shop contractors to determine if open-shop workers performed the work in question on similar projects in the same county during the year prior to the WD lock-in date If all parties, or a clear majority agree, the area practice is established If the applicable WD reflects a mix of both union and open-shop rates for the classification(s) involved in the review, the union(s) and union contractors as well as open-shop contractors should be contacted to determine who performed the work at issue on similar projects in the area during the survey time frame. If all parties agree, or if a clear majority of the parties agree on the classification, then the area practice is established. If the applicable WD reflects a mix of both union and open-shop rates for the classification(s) involved in the review, the union(s) and union contractors as well as open-shop contractors should be contacted to determine who performed the work at issue on similar projects in the area during the survey time frame. If all parties agree, or if a clear majority of the parties agree on the classification, then the area practice is established.

23. Conducting a �Full� Area Practice Survey Identify similar projects in the same geographical area as the project in question that were in progress one year prior to the WD lock-in-date Determine what firms performed the work in question and contact those that are either open-shop or union based upon the wage rates issued in the WD From each firm contacted, determine the week in which the greatest number of employees performed the work in question and determine how such employees were classified and paid next page If the area practice question is not resolved by a limited area practice survey (e.g., jurisdictional dispute between the unions, or there is no clear majority of relevant contractors in agreement regarding local practice), then a �full� area practice survey will be conducted to determine the prevailing practice. The full area practice survey will collect and compile data on a project-by-project basis to determine the numbers of workers who performed the work duties in question and their respective classifications. Information that is out-of-scope for the survey should be disregarded in compiling the survey data. For example, if the dispute is over whether a union carpenter�s rate versus an open-shop roofer�s rate applies to certain work, only data for union carpenters and open-shop roofers should be tallied to determine the proper classification. When a full area practice survey is needed, the contracting agency should contact the Wage and Hour Regional Wage Specialist for assistance, guidance, and coordination in the conduct of the survey. If the area practice question is not resolved by a limited area practice survey (e.g., jurisdictional dispute between the unions, or there is no clear majority of relevant contractors in agreement regarding local practice), then a �full� area practice survey will be conducted to determine the prevailing practice. The full area practice survey will collect and compile data on a project-by-project basis to determine the numbers of workers who performed the work duties in question and their respective classifications. Information that is out-of-scope for the survey should be disregarded in compiling the survey data. For example, if the dispute is over whether a union carpenter�s rate versus an open-shop roofer�s rate applies to certain work, only data for union carpenters and open-shop roofers should be tallied to determine the proper classification. When a full area practice survey is needed, the contracting agency should contact the Wage and Hour Regional Wage Specialist for assistance, guidance, and coordination in the conduct of the survey.

24. Conducting a �Full� Area Practice Survey Compile the relevant information received and total the number of employees in each classification which performed the work in question The classification which has the clear majority (60%) of employees is the proper classification Once the relevant information has been compiled, the classification that has the clear majority of employees performing the work in question becomes the �proper� classification. If the data do not show that at least 60% of the workers who performed the duties in question were classified in the same classification, contact the Wage and Hour Division for further guidance. Once the relevant information has been compiled, the classification that has the clear majority of employees performing the work in question becomes the �proper� classification. If the data do not show that at least 60% of the workers who performed the duties in question were classified in the same classification, contact the Wage and Hour Division for further guidance.

25. Wages & Fringe Benefits The term �wages� means: The basic hourly rate (BHR) Contributions irrevocably made by a contractor to a trustee or third party pursuant to a bona fide fringe benefit (FB) fund, plan, or program The rate of costs the contractor may reasonably anticipate for providing bona fide FB�s where certain conditions are met FB�s are a component of the statutory definition of �wages� As used in the Act, the term �wages,� �scale of wages,� �wage rates,� �minimum wages,� and �prevailing wages� shall include-- (1) the basic hourly rate of pay; and (2) the amount of-- (A) the rate of contribution irrevocably made by a contractor or subcontractor to a trustee or to a third person pursuant to a fund, plan, or program; and (B) the rate of costs to the contractor or subcontractor which may be reasonably anticipated in providing benefits to laborers and mechanics pursuant to an enforceable commitment to carry out a financially responsible plan or program which was communicated in writing to the laborers and mechanics affected, for medical or hospital care, pensions on retirement or death, compensation for injuries or illness resulting from occupational activity, or insurance to provide any of the foregoing, for unemployment benefits, life insurance, disability and sickness insurance, or accident insurance, for vacation and holiday pay, for defraying costs of apprenticeship or other similar programs, or for other bona fide fringe benefits, but only where the contractor or subcontractor is not required by other Federal, State, or local law to provide any such benefits. (40 U.S.C. 276a(b)) As used in the Act, the term �wages,� �scale of wages,� �wage rates,� �minimum wages,� and �prevailing wages� shall include-- (1) the basic hourly rate of pay; and (2) the amount of-- (A) the rate of contribution irrevocably made by a contractor or subcontractor to a trustee or to a third person pursuant to a fund, plan, or program; and (B) the rate of costs to the contractor or subcontractor which may be reasonably anticipated in providing benefits to laborers and mechanics pursuant to an enforceable commitment to carry out a financially responsible plan or program which was communicated in writing to the laborers and mechanics affected, for medical or hospital care, pensions on retirement or death, compensation for injuries or illness resulting from occupational activity, or insurance to provide any of the foregoing, for unemployment benefits, life insurance, disability and sickness insurance, or accident insurance, for vacation and holiday pay, for defraying costs of apprenticeship or other similar programs, or for other bona fide fringe benefits, but only where the contractor or subcontractor is not required by other Federal, State, or local law to provide any such benefits. (40 U.S.C. 276a(b))

26. Fringe Benefits The WD obligation may be satisfied by: Paying the BHR and FB�s in cash Contributing payments to a bona fide plan Any combination of the two A contractor or subcontractor performing covered construction work subject to a Davis-Bacon wage determination (WD) may discharge the �prevailing wage� obligation to covered workers by (1) paying wages, including FB�s, in cash, (2) making payments or incurring costs for bona fide FB�s, or (3) by a combination of cash payment for wages and contributions/incurring costs for bona fide FB�s. (29 CFR 5.31.) In making payments or incurring costs for bona fide FB�s, the DBA allows a contractor to get credit for funding FB�s in two ways: ? Periodic payments made irrevocably, at least quarterly, to a third party, such as a pension plan trustee or insurance company for a retirement plan or health benefits that are funded this way; or, ? The contractor may provide paid holiday or vacation benefits under a plan communicated to employees where the company made an enforceable commitment to provide such benefits and sets aside funds to ensure that the benefits will be available when the workers are eligible for the benefits. Such benefits are planned, the costs can be anticipated, and credit against the hourly prevailing wage requirement can be taken. (29 CFR 5.23 - 5.29) A contractor or subcontractor performing covered construction work subject to a Davis-Bacon wage determination (WD) may discharge the �prevailing wage� obligation to covered workers by (1) paying wages, including FB�s, in cash, (2) making payments or incurring costs for bona fide FB�s, or (3) by a combination of cash payment for wages and contributions/incurring costs for bona fide FB�s. (29 CFR 5.31.) In making payments or incurring costs for bona fide FB�s, the DBA allows a contractor to get credit for funding FB�s in two ways: ? Periodic payments made irrevocably, at least quarterly, to a third party, such as a pension plan trustee or insurance company for a retirement plan or health benefits that are funded this way; or, ? The contractor may provide paid holiday or vacation benefits under a plan communicated to employees where the company made an enforceable commitment to provide such benefits and sets aside funds to ensure that the benefits will be available when the workers are eligible for the benefits. Such benefits are planned, the costs can be anticipated, and credit against the hourly prevailing wage requirement can be taken. (29 CFR 5.23 - 5.29)

27. Fringe Benefits Must be paid weekly for all hours worked Cash wages paid in excess of the BHR may offset or satisfy the FB�s obligation (unlike under SCA) Under the DBA/DBRA (unlike the SCA) cash wages paid in excess of the BHR may be used to offset, credit, or satisfy the fringe benefit obligation. The Act and Regulations require that employees be paid not less often than weekly the full amount of wages and bona fide FB�s due at the time of payment. The Regulations, at section 5.5(a)(1)(i), allow that regular contributions made or costs incurred for more than a weekly period (but not less often than quarterly) under plans, funds, or programs which cover the particular weekly period, are deemed to be constructively made or incurred during such weekly period. If contributions to a plan, fund, or program are made on an annual basis, such contributions should be set aside in a separate account, not less often than quarterly, in amounts sufficient to meet the annual contribution requirement. (40 U.S.C. 276(a); 29 CFR 5.5(a)(1)(i) and 5.31) Under the DBA/DBRA (unlike the SCA) cash wages paid in excess of the BHR may be used to offset, credit, or satisfy the fringe benefit obligation. The Act and Regulations require that employees be paid not less often than weekly the full amount of wages and bona fide FB�s due at the time of payment. The Regulations, at section 5.5(a)(1)(i), allow that regular contributions made or costs incurred for more than a weekly period (but not less often than quarterly) under plans, funds, or programs which cover the particular weekly period, are deemed to be constructively made or incurred during such weekly period. If contributions to a plan, fund, or program are made on an annual basis, such contributions should be set aside in a separate account, not less often than quarterly, in amounts sufficient to meet the annual contribution requirement. (40 U.S.C. 276(a); 29 CFR 5.5(a)(1)(i) and 5.31)

28. Fringe Benefit Example BHR $10.00 FB�s: $ 1.00 Total prevailing wage $11.00 The contractor may comply by paying: $11.00 in cash wages $10.00 in cash wages plus $1.00 in FB�s $ 9.00 in cash wages plus $2.00 in FB�s wages and FB�s: The contractor or subcontract can comply with the �prevailing wage� requirements for the payment of both ? ? $11.00 per hour in cash wages; or ? ? $10.00 per hour in cash wages plus $1.00 per hour for health insurance contributions or other bona fide FB�s; or ? ? $9.00 per hour in cash wages plus $1.00 per hour for health insurance and $1.00 per hour in pension contributions, or to any combination of bona fide FB�s. Note: Overtime pay must be computed based on at least one and one-half times the basic hourly rate of $10.00. (40 U.S.C. 276a(b)) wages and FB�s: The contractor or subcontract can comply with the �prevailing wage� requirements for the payment of both ? ? $11.00 per hour in cash wages; or ? ? $10.00 per hour in cash wages plus $1.00 per hour for health insurance contributions or other bona fide FB�s; or ? ? $9.00 per hour in cash wages plus $1.00 per hour for health insurance and $1.00 per hour in pension contributions, or to any combination of bona fide FB�s. Note: Overtime pay must be computed based on at least one and one-half times the basic hourly rate of $10.00. (40 U.S.C. 276a(b))

29. Examples of Fringe Benefits Life Insurance Health Insurance Pension Vacation Holiday Sick Leave Examples of conventional FB�s common to the construction industry that are paid directly to the employees in cash or into a third-party fund, plan, or program. Such FB�s are recognized under the Davis Bacon Act and may be credited toward meeting the �prevailing wage� requirements. Contractors may not take credit for any benefit required by Federal, State, or local law such as Workers� Compensation, Unemployment Compensation, and Social Security contributions. (40 U.S.C. 276(a)(b); 29 CFR 5.23 and 5.29) Examples of conventional FB�s common to the construction industry that are paid directly to the employees in cash or into a third-party fund, plan, or program. Such FB�s are recognized under the Davis Bacon Act and may be credited toward meeting the �prevailing wage� requirements. Contractors may not take credit for any benefit required by Federal, State, or local law such as Workers� Compensation, Unemployment Compensation, and Social Security contributions. (40 U.S.C. 276(a)(b); 29 CFR 5.23 and 5.29)

30. Funded Fringe Benefit Plans Contractors may take credit (without prior approval from DOL) for bona fide FB fund contributions made to third-party trustees or insurers that: Are irrevocably paid; and, Are made regularly, not less often than quarterly Credit is for payments made for individual workers eligible to participate in the plan, program, or fund Generally, the FB�s listed in the DBA are considered bona fide. (A plan that fails to meet the requirements of the Employee Retirement Income Security Act (ERISA), is not considered a bona fide fringe benefit.) To be credited towards prevailing wages, employer contributions must be paid or costs incurred with respect to the individual laborer or mechanic. Thus, the amount contributed for each employee is determined separately, and credit taken on an individual basis (not based on average premium paid or average contribution made per employee). Credit may not be taken for FB contributions for employees not eligible to participate in a plan. However, it is not required that all employees participating in a FB plan be entitled to receive benefits from the plan at all times (e.g, during an initial 30-day waiting period for health benefits when an employee comes into a health insurance plan, contributions may count). Some pension plans contain �vesting� requirements that require a certain length of service before the employee has a non-forfeitable right to benefits based on the employer�s contributions. (Forfeited Davis-Bacon contributions may not revert to the employer, but may go to remaining plan participants, e.g., as increased pension benefits.) (29 CFR 5.5(a) and 5.20 through 5.31) Generally, the FB�s listed in the DBA are considered bona fide. (A plan that fails to meet the requirements of the Employee Retirement Income Security Act (ERISA), is not considered a bona fide fringe benefit.) To be credited towards prevailing wages, employer contributions must be paid or costs incurred with respect to the individual laborer or mechanic. Thus, the amount contributed for each employee is determined separately, and credit taken on an individual basis (not based on average premium paid or average contribution made per employee). Credit may not be taken for FB contributions for employees not eligible to participate in a plan. However, it is not required that all employees participating in a FB plan be entitled to receive benefits from the plan at all times (e.g, during an initial 30-day waiting period for health benefits when an employee comes into a health insurance plan, contributions may count). Some pension plans contain �vesting� requirements that require a certain length of service before the employee has a non-forfeitable right to benefits based on the employer�s contributions. (Forfeited Davis-Bacon contributions may not revert to the employer, but may go to remaining plan participants, e.g., as increased pension benefits.) (29 CFR 5.5(a) and 5.20 through 5.31)

31. Unfunded Fringe Benefit Plans May be allowed if they meet the following criteria: Can be reasonably anticipated to provide benefits described in the Act Represent an enforceable commitment Can be carried out under a financially responsible plan Have been communicated in writing to affected workers These criteria are used to determine whether an unfunded plan or program -- one funded from the general assets of the contractor -- can be considered bona fide for the purpose of crediting anticipated costs towards the Davis-Bacon �prevailing wage� requirements. These criteria for plans where a contractor may take credit for �reasonably anticipated� FB costs protect against use of the provision as a means of avoiding the Act�s requirements and assure that the benefit funds will be available to pay promised benefits. As in the case of other FB payable under the Act, an unfunded plan or program must be bona fide and not a mere sham for avoiding compliance. To ensure that an unfunded plan or program is clearly financially responsible in compliance with the Act, the contractor may be directed to set aside, in an escrow account, sufficient assets to meet the future obligations of the plan or program. (29 CFR 5.28) These criteria are used to determine whether an unfunded plan or program -- one funded from the general assets of the contractor -- can be considered bona fide for the purpose of crediting anticipated costs towards the Davis-Bacon �prevailing wage� requirements. These criteria for plans where a contractor may take credit for �reasonably anticipated� FB costs protect against use of the provision as a means of avoiding the Act�s requirements and assure that the benefit funds will be available to pay promised benefits. As in the case of other FB payable under the Act, an unfunded plan or program must be bona fide and not a mere sham for avoiding compliance. To ensure that an unfunded plan or program is clearly financially responsible in compliance with the Act, the contractor may be directed to set aside, in an escrow account, sufficient assets to meet the future obligations of the plan or program. (29 CFR 5.28)

32. Annualization Principle Applies to benefits of a continuous nature (e.g., health insurance, pension plans) Determines the hourly rate of contribution that is creditable against an employer�s Davis-Bacon prevailing wage obligation by: Dividing the total annual contributions by the total annual hours worked (both Davis-Bacon and non-Davis-Bacon work); and Allocating fringe benefit credits so that Davis-Bacon work would not be used to fund benefits on private (non-Davis-Bacon) work The annualization principle is a computation strategy to determine the hourly rate of contribution that is creditable against an employer�s prevailing wage obligation. It establishes the Davis-Bacon credit by an amount equal to the hourly cost of the benefit averaged over all hours an employee works (both Davis-Bacon hours and non-Davis-Bacon hours). This method ensures that a contractor does not fund a FB plan that provides benefits/coverage to an employee for all hours (both Davis-Bacon hours and non-Davis-Bacon hours) that the employee works -- solely, or disproportionately, with wages earned on Davis-Bacon projects. This method may be applied to FB plans that provide for annual payments, such as apprenticeship training plans, vacation plans, health insurance, and most pension plans. The annualization principle was upheld by the United States Court of Appeals for the Eleventh Circuit in Miree Construction Corp. v. Dole, F.2d 1536, 1545-1546 (11th Cir. 1991). The annualization principle is a computation strategy to determine the hourly rate of contribution that is creditable against an employer�s prevailing wage obligation. It establishes the Davis-Bacon credit by an amount equal to the hourly cost of the benefit averaged over all hours an employee works (both Davis-Bacon hours and non-Davis-Bacon hours). This method ensures that a contractor does not fund a FB plan that provides benefits/coverage to an employee for all hours (both Davis-Bacon hours and non-Davis-Bacon hours) that the employee works -- solely, or disproportionately, with wages earned on Davis-Bacon projects. This method may be applied to FB plans that provide for annual payments, such as apprenticeship training plans, vacation plans, health insurance, and most pension plans. The annualization principle was upheld by the United States Court of Appeals for the Eleventh Circuit in Miree Construction Corp. v. Dole, F.2d 1536, 1545-1546 (11th Cir. 1991).

33. AnnualizationDefined Contribution Pension Plans Davis-Bacon credit is based on the effective annual rate of contributions for all hours worked in a year (both Davis-Bacon and non-Davis-Bacon work) An exception to the annualization principle applies to plans that provide immediate participation and essentially immediate vesting (100% vesting after an employee works 500 or fewer hours). It allows full credit for the amount of contributions made on Davis-Bacon work A defined contribution pension plan is typically one where the employer contributes a percentage of payroll to individual employee accounts. The annualization principle has always applied to defined contribution plans in general and to defined contribution pension plans that do not provide for immediate or essentially immediate vesting. See example on next slide. The DOL has made an exception to the annualization principle for contributions to defined contribution pension plans which provide for immediate participation and immediate or essentially immediate vesting (100% vesting after an employee works 500 or fewer hours) and also to certain supplemental unemployment benefit plans. The exception allows a contractor to take full non-annualized credit for contributions made during Davis-Bacon work when employees are immediately vested in 100% of the amount contributed on their behalf as the higher contributions result in an increase in the value of an individual employee account. The amount of contributions should be in conformance with any limitation imposed by the Internal Revenue Code. A defined contribution pension plan is typically one where the employer contributes a percentage of payroll to individual employee accounts. The annualization principle has always applied to defined contribution plans in general and to defined contribution pension plans that do not provide for immediate or essentially immediate vesting. See example on next slide. The DOL has made an exception to the annualization principle for contributions to defined contribution pension plans which provide for immediate participation and immediate or essentially immediate vesting (100% vesting after an employee works 500 or fewer hours) and also to certain supplemental unemployment benefit plans. The exception allows a contractor to take full non-annualized credit for contributions made during Davis-Bacon work when employees are immediately vested in 100% of the amount contributed on their behalf as the higher contributions result in an increase in the value of an individual employee account. The amount of contributions should be in conformance with any limitation imposed by the Internal Revenue Code.

34. Annualization Example Defined Contribution Pension Plan A firm�s contribution for an employee�s pension plan that does not provide for immediate vesting was computed at $2,000 a year. The employee worked 1,500 hours on a Davis-Bacon project and 500 hours on other jobs not Davis-Bacon covered Credit per hour: $2,000 / 2000 (hours) = $1.00 The hourly cash equivalent may be determined by dividing the cost of the FB by the total number of working hours (both Davis-Bacon covered and non-covered work) to which the cost is attributable. For example, a firm�s contribution for a pension plan that does not provide for immediate or essentially immediate vesting was computed to be $2,000 a year for a particular employee. The employee worked during the year 1,500 hours on a Davis-Bacon covered project and 500 hours on other jobs not covered by Davis-Bacon. Under the annualization method, $1.00 per hour would be creditable towards meeting the firm�s obligation to pay the �prevailing wage� (the BHR plus FB�s) listed in the applicable wage determination. The hourly cash equivalent may be determined by dividing the cost of the FB by the total number of working hours (both Davis-Bacon covered and non-covered work) to which the cost is attributable. For example, a firm�s contribution for a pension plan that does not provide for immediate or essentially immediate vesting was computed to be $2,000 a year for a particular employee. The employee worked during the year 1,500 hours on a Davis-Bacon covered project and 500 hours on other jobs not covered by Davis-Bacon. Under the annualization method, $1.00 per hour would be creditable towards meeting the firm�s obligation to pay the �prevailing wage� (the BHR plus FB�s) listed in the applicable wage determination.

35. Annualization ExampleMedical Insurance Employer provides medical insurance at $200 per month, $2,400 a year, to an electrician on a Davis-Bacon project. WD requires $12.00 plus $2.50 in FB�s, or $14.50 an hour. Employee works 40 hours a week, 2,080 hours per year $2,400/2,080 hours = $1.15 (credit per hour) No other benefit provided Electrician is due: $13.35 an hour ($12.00 + $1.35, i.e., the remaining balance of FB�s) In determining cash equivalent credit for FB payments, the period of time to be used is the period covered by the contribution. For example, an employee works as an electricians where the WD rate is $12.00 plus $2.50 in FB per hour. The employer provides the electrician with medical insurance in the amount of $200 per month (or $2,400 per year). The employer may compute the allowable FB credit by dividing the total annual cost of the benefit by the hours worked during the year, i.e., $2,400 by 2,080 hours (40 hours x 52 weeks) equals $1.15 per hour. If the employee in this example received no other bona fide FB, then for each hour worked on a covered contract the employee is due: Basic hourly rate $12.00 Medical insurance 1.15 Additional cash* 1.35 Total per hour $14.50 *Equals the difference between the $2.50 per hour FB required by the wage determination and the credit allowed for the medical insurance benefit provided. In determining cash equivalent credit for FB payments, the period of time to be used is the period covered by the contribution. For example, an employee works as an electricians where the WD rate is $12.00 plus $2.50 in FB per hour. The employer provides the electrician with medical insurance in the amount of $200 per month (or $2,400 per year). The employer may compute the allowable FB credit by dividing the total annual cost of the benefit by the hours worked during the year, i.e., $2,400 by 2,080 hours (40 hours x 52 weeks) equals $1.15 per hour. If the employee in this example received no other bona fide FB, then for each hour worked on a covered contract the employee is due: Basic hourly rate $12.00 Medical insurance 1.15 Additional cash* 1.35 Total per hour $14.50 *Equals the difference between the $2.50 per hour FB required by the wage determination and the credit allowed for the medical insurance benefit provided.

36. INTERACTION AMONGGOVERNMENT CONTRACTS LAWS Contracts Requiring PCA & DBA PCA covered contract(s) must have more than incidental amount of construction work DBA applies to construction work Construction includes: �construction, alteration and repair, including painting and decorating� See FAR 48 C.F.R. � 22.402(b).

37. INTERACTION AMONGGOVERNMENT CONTRACTS LAWS Cont. PCA & DBA � Example 1 Contract for supply of security system Davis-Bacon applies to: Replacement of existing conduit, Laying cable, and Tearing out and replacing walls. next page

38. INTERACTION AMONGGOVERNMENT CONTRACTS LAWS Cont. PCA & DBA � Example 2 Contract for supply and installation of modular furniture DBA applies to: Bolting furniture or fixtures to floors, walls and/or ceilings, Modifying walls, floors and/or ceilings to accommodate shelving, Installing electrical connections for desk area outlets. next page

39. INTERACTION AMONGGOVERNMENT CONTRACTS LAWS Cont. PCA & DBA � Example 3 Lighting retrofit contract for supply and installation of energy-efficient lighting fixtures: DBA applies to installing new ballasts and/or lighting fixtures.