In projecting your budget, be advised that any construction or renovation contracts in excess of $2,000 awarded by recipients or subrecipients funded by federal funds, in whole or in part, are subject in their entirety to the Davis-Bacon Act as amended, (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). Grant recipients are required by law to furnish assurances to the Secretary of Labor that all laborers and mechanics employed by contractors or subcontractors on Endowment-supported construction projects shall be paid wages at rates that are not less than those prevailing on similar construction in the locality, as determined by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. See 2 CFR 200 Appendix II – Contract Provisions for Non-Federal Entity Contracts Under Federal Awards for additional information.
Additional information is available by contacting the U.S. Department of Labor, Wage and House Division, Division of Contract Standards and Operations, 200 Constitution Avenue, NW, Washington, D.C., 20210; 1 (866) 487-2365 or 1 (202) 693-0087.
Bid Guarantees and Bonding Requirements
Recipients whose contracts for construction or facility improvements exceed the simplified acquisition threshold* are required to obtain a bid guarantee from each bidder equivalent to 5 percent of the bid price. The “bid guarantee” must consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder will, upon acceptance of the bid, execute such contractual documents as may be required within the time specified. The recipient must also require contractors to have both performance and payment bonds for 100 percent of the contract price (2 CFR §200.325 Bonding requirements). “The cost-plus-a-percentage-of-cost” or “percentage of construction cost” methods of contracting must not be used (2 CFR §200.323(d)).
*Simplified acquisition threshold: for grants awarded before December 26, 2014, the threshold was $100,000; for grants awarded December 26, 2014 through June 19, 2018, the threshold was $150,000; for grants awarded after June 20, 2018, the threshold is $250,000.
This page is an excerpt from Responsibilities of Award Recipients