RD Instruction 1940-C

Table of Contents

Page 1

PART 1940 - GENERAL

Subpart C - Davis-Bacon and Related Acts

## [TABLE OF CONTENTS]{.underline}

[Sec]{.underline}. [Page]{.underline}

1940.101 Purpose. 1

1940.102 Policy and scope. 1

1940.103 Definitions. 2

1940.104 Wage determination. 3

\(a\) Types of wage determinations. 3

\(b\) Requesting wage determinations. 3

\(c\) Period of wage determinations. 4

\(d\) Modifications. 5

1940.105 Construction contract provisions. 5

1940.106 Determination of compliance. 6

\(a\) Coordination. 6

\(b\) Preapplication conference. 6

\(c\) Contract review. 6

\(d\) Preconstruction conference. 6

\(e\) During construction. 7

\(f\) Suspension of funds. 7

1940.107 Semiannual reports. 8

1940.108 Recordkeeping. 8

1940.109 - 1940.150 \[Reserved\] 8

Exhibit A - Labor Standards Provisions

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RD Instruction 1940-C

PART 1940 - GENERAL

Subpart C - Davis-Bacon and Related Acts

§ 1940.101 [Purpose]{.underline}.

This instruction provides administrative guidance regarding the
requirements and procedures contained in the Davis-Bacon and Related
Acts, as published in the U.S. Department of Labor (DOL) regulations (29
CFR parts 1, 3, and 5). This instruction also includes the labor
standards provisions that are imposed on construction projects subject
to these Acts.

§ 1940.102 [Policy and scope]{.underline}.

\(a\) The Acts identified in the DOL regulations apply to all
construction, repair and alteration contracts in excess of \$2,000 on
projects assisted with the following type of loans or grants:

\(1\) Farm Labor Housing grants in subpart D of part 1944;

\(2\) Supplemental grants under the Appalachian Regional Development Act
of 1965 made through the Agency;

\(3\) Title V Regional commission grants managed by the Agency;

\(4\) Supplemental grants under the Public Works and Economic
Development Act of 1965 made through the Agency; and

\(5\) Rural Rental Housing loans for new construction of projects with
nine or more units assisted by the Housing and Urban Development Section
8 Housing Assistance Payments Program.

\(b\) The Federal Acquisition Regulation prescribes labor standards
requirements for contracts in excess of \$2,000 for construction,
alteration, or repair, including painting and decorating, of public
buildings and public works. (Revised 04-20-05, PN 385.)

\(c\) These Acts are not applicable to force account work performed by
the applicant, sponsor, or owner\'s employees. (Revised 04-20-05,\
PN 385.)

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## Distribution: WSAL Loan and Grantmaking

##  General

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## 1

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RD Instruction 1940-C

§ 1940.103 [Definitions]{.underline}.

For purposes of this instruction the following definitions apply:

[Administrator]{.underline}. The Administrator of the Wage and Hour
Division, Employment Standards Administration, U.S. Department of Labor,
or authorized representative.

[Agency]{.underline}. Any of the following agencies within the Rural
Development mission area of the U.S. Department of Agriculture: Rural
Housing Service; Rural Business-Cooperative Service; and, Rural
Utilities Service.

[Apprentice]{.underline}.

\(a\) A person employed and individually registered in a bona fide
apprenticeship program registered with the U.S. Department of Labor,
Employment and Training Administration, Bureau of Apprenticeship and
Training, or with a State Apprenticeship Agency recognized by the
Bureau; or

\(b\) A person 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 Bureau of
Apprenticeship and Training or a State Apprenticeship Agency (where
appropriate) to be eligible for probationary employment as an
apprentice.

[Contract]{.underline}. Any contract within the scope of this
instruction which is entered into for the actual construction,
prosecution, completion, or repair of a public building or public work,
or building or work financed either directly by authority of or with
funds of the Agency to serve the interest of the general public.

[Contracting Officer]{.underline}. The individual, a duly appointed
successor, or authorized representative who is designated and authorized
to enter into contracts on behalf of the applicant, sponsor or owner.

[Trainee]{.underline}. A person registered and receiving on-the-job
training in a construction occupation under a program which has been
approved in advance by the U.S. Department of Labor, Employment and
Training Administration as meeting its standard for on-the-job training
programs and which has been so certified by that Administration.

[Wage determination]{.underline}. Includes the original decision and any
subsequent decisions modifying, superseding, correcting or otherwise
changing the provisions of the original decision.

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## (Revision 2) 

RD Instruction 1940-C

§1940.104 [Wage determination]{.underline}.

\(a\) [Types of wage determinations]{.underline}.

\(1\) General wage determinations are published weekly in the Federal
Register and are current until revised. These decisions are issued for
those counties within a State where there is a high volume of
construction activity.

\(2\) General wage determinations are also issued by DOL upon request
for those counties where general or area wage decisions are not
published in the Federal Register.

\(3\) Project wage determinations are issued by DOL on a
project-by-project basis.

\(b\) [Requesting wage determinations]{.underline}.

\(1\) [Action by Community Development Manager or Rural Development
Manager]{.underline}. At least 60 days before bid opening, the Community
Development Manager (CDM) or Rural Development Manager (RDM) should
notify the State Office of the anticipated dates of advertising and bid
opening. If the Contracting Officer (CO) has a list of crafts that will
be required to complete construction of the project, it should be
forwarded to the State Office along with:

\(i\) A sufficiently detailed description of the work to indicate the
type of construction involved;

\(ii\) Location of the proposed project; and

\(iii\) Additional pertinent information.

\(2\) [Action by State Director]{.underline}. If appropriate general
wage

decisions are not available in the Federal Register, the State Director
will request a wage determination under the Davis-Bacon Act or any of
its related statutes by submitting Standard Form (SF) 308, \"Request for
Determination and Response to Request,\" to: U.S. Department of Labor,
Employment Standards Administration, Wage and Hour Division, Branch of
Construction Contract Wage Determination, Washington, D.C. 20210. The
time required for processing requests for wage determinations varies
according to the facts and circumstances in each case. The Agency should
anticipate that such processing in the DOL will take at least 30 days.

## 

\(i\) Care should be exercised in completing SF-308 to assure that only
those classifications which will be needed in the

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RD Instruction 1940-C

§1940.104(b)(2)(i) (Con.)

performance of the work have been checked (inserting a note

such as \"entire schedule\" or \"all applicable classifications\"

is not sufficient). Additional classifications needed which are not on
the form may be typed in the blank spaces or on a separate list and
attached to the form. Do not list classifications which can be fitted
into classifications on the form, or classifications which are not
generally recognized in the area or in the construction industry.

\(ii\) Such requests for a wage determination shall be accompanied by
any pertinent wage payment information which may be available. This
information need not accompany a request in areas where the wage
patterns are clearly established.

\(iii\) Whenever the wage patterns in a particular area for a particular
type of construction are well established and whenever it may be
reasonably anticipated that there will be a large volume of procurement
in that area for such a type of construction, the Administrator, upon
the request of the Agency, may issue a general wage determination. The
Agency request should be initiated 45 days prior to the date the wage
rate information is needed. Determinations for several counties can be
obtained on a single request by entering \"Multiple Request\" in the
\"County\" block and then listing all the appropriate counties by name
on the back of SF-308.

\(c\) [Period of wage determinations]{.underline}.

\(1\) Project wage determinations or general wage determinations not
published in the Federal Register are effective for 180 calendar days
from the date of such determinations. The wage determination must be in
effect the date of contract award or where there is no actual contract
(i.e., Owner-builder method of construction as defined in subpart A of
part 1924) the date construction starts. If such a wage determination is
not used in the period of its effectiveness, it is void. If it appears
that a wage determination may expire between bid opening and award, the
Agency shall request a new wage determination sufficiently in advance of
the bid opening to assure receipt prior thereto. However, when due to
unavoidable circumstances a determination expires before award and after
bid opening, the Agency may request the Administrator to extend the
expiration date of the wage determination in the bid specifications
instead of issuing a new wage determination. Such request shall be
supported by a written finding which shall include a brief statement of
the factual support, that the extension of the expiration date of the
determination is necessary and proper in the public interest to

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RD Instruction 1940-C

§1940.104(c)(1) (Con.)

prevent injustice, or undue hardship, or to avoid serious impairment in
the conduct of Government business.

\(2\) General wage determinations published in the Federal Register
contain no expiration date.

\(d\) [Modifications]{.underline}.

\(1\) All actions modifying a project wage determination received by the
Agency before contract award (or the start of construction where there
is no contract award) shall be applicable thereto. However,
modifications received by the Agency less than 10 days before the
opening of bids will not be effective if the Agency finds that there is
not a reasonable time before bid opening in which to notify bidders of
the modification. Documentation of the Agency\'s findings will be
inserted in the docket and a copy shall be made available to the
Administrator upon request. A modification will not continue in effect
beyond the effective period of the wage determination to which it
relates.

\(2\) Modifications to general wage determinations are published in the
Federal Register. The State Director should monitor the Federal Register
in order to maintain a file of the current decisions for those areas
within the State Office jurisdiction.

\(3\) All actions modifying a general wage determination decision shall
be applicable thereto. However, modifications published in the Federal
Register less than 10 days before the opening of bids will not be
effective if the Agency finds that there is not a reasonable time before
bid opening in which to notify bidders of the modification.
Documentation of the Agency\'s findings will be inserted in the docket
and a copy shall be made available to the Administrator upon request.

§1940.105 [Construction contract provisions]{.underline}.

\(a\) Information for bidders, which is a part of the contract
documents, should include a statement similar to the following: \"The
contractor must comply with the minimum rates for wages for laborers and
mechanics as determined by the Secretary of Labor in accordance with the
provisions of the Davis-Bacon and Related Acts.\"

> \(b\) Labor standards provisions (Title 29, subtitle A, part 5,
> section 5, paragraph (a), subparagraphs (1) through (10); and
> paragraph (b), subparagraphs (1) through (4) of the Code of Federal
> Regulations) are provided in exhibit A of this Instruction. They will
> be made a part of

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RD Instruction 1940-C

§1940.105(b) (Con.)

the contract documents. Any modifications to the labor standards
provisions in exhibit A of this Instruction must be approved by DOL.

§1940.106 [Determination of compliance]{.underline}.

\(a\) [Coordination]{.underline}. The Agency will consult with the
Secretary of Labor and the Administrator when necessary to coordinate
the administration and enforcement of the labor standards provisions in
exhibit A of this Instruction.

\(b\) [Preapplication conference]{.underline}. The applicant will be
informed at the preapplication conference that wage rates paid for labor
must not be less than the prevailing area wages as determined by the
Secretary of Labor and that these wages must be embodied in all
construction contracts.

\(c\) [Contract review]{.underline}. The State Director will assure that
the contract documents contain the clauses contained in exhibit A of
this Instruction.

\(d\) [Preconstruction conference]{.underline}. The CO, contractor,
engineer, architect and other project participants will be informed at
the preconstruction conference that:

\(1\) Project or resident inspectors, on behalf of the CO, will be
responsible for monitoring the contractor\'s adherence to the contract
provisions including compliance with the labor standards provisions.

\(2\) The contract may be terminated or the contractor debarred. A
breach of the labor standards provisions may be grounds for termination
of the contract, and for debarment as provided in 29 CFR part 5, or
subpart M of part 1940.

\(3\) The enforcement of labor standards provisions is the same as
enforcement of other requirements of the contract and may result in
penalties being imposed upon the contractor.

\(4\) It will not be necessary, ordinarily, to conduct employee
interviews or make detailed audits of payrolls and time sheets. By
reviewing progress reports, contractor payroll records, and contractor
apprentice agreements, the project or resident inspector should be able
to obtain sufficient information to determine whether or not the
contractor is in compliance with the labor standards provisions.

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RD Instruction 1940-C

§1940.106(d) (Con.)

\(5\) The Agency will provide the contractor with the required
Davis-Bacon poster (Form WH 1321, \"Notice to All Employees Working on
Federal or Federally Financed Construction Projects) to display at the
work site with the wage determination. Copies of the poster may be
obtained from the Finance Office or by writing to DOL.

\(e\) [During construction]{.underline}.

\(1\) No payment advance, grant, or loan of funds shall be approved by
the Agency after the beginning of construction unless there is on file a
certification by the contractor that the contractor and the
subcontractors have complied with the Davis-Bacon and Related Acts and
copies of payroll records have been provided covering the period during
which the work being considered for payment was performed.

\(2\) The project or resident inspector, on determining that the
contractor is not in compliance with the labor standards provisions,
should immediately notify the CO, the architect or engineer, and the CDM
or RDM. The CDM or RDM will then contact the State Director for advice
and further instructions. The State Director will review the information
and determine whether there has been underpayment to laborers of \$1,000
or more, or whether other labor provisions have been violated.

\(3\) Where the underpayment is \$1,000 or more, or where there is
reason to believe that the violations are aggravated or willful, or if
the contractor has disregarded its obligations to employees and
subcontractors, the Agency will furnish within 60 days after completion
of its investigation, a detailed enforcement report, including it's
findings, recommendations, and requests for further guidance, to the
Administrator.

\(f\) [Suspension of funds]{.underline}.

\(1\) In the event of failure or refusal of the contractor or any
subcontractor to comply with the labor standards provisions or upon
written request of DOL, the CO shall take such action as may be
necessary to cause the suspension of payment or advance of funds until
such time as the violations are discontinued, or until sufficient funds
are withheld to compensate employees for the wages to which they are
entitled and to cover any liquidated damages which may be due.

\(2\) If there is not sufficient funds due the contractor or
subcontractor to satisfy the claims for employee wages and to cover any
liquidated damages, the CO shall withhold or cause to be

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RD Instruction 1940-C

§1940.106(f)(2) (Con.)

withheld from the contractor monies payable on account of work performed
under any other Federal or Federally-assisted contract subject to
Davis-Bacon prevailing wage requirements, as may be necessary to meet
the contractor or subcontractor\'s obligations.

\(3\) After consultation with the State Director and DOL, funds withheld
for payment of employee wages will be:

\(i\) paid to the individual employees that have not been paid in
accordance with the terms of the contract in such amounts as to correct
the violation, when the contractor or subcontractor refuses to comply
with the contract, or

\(ii\) released to the contractor after the contractor or subcontractor
has made full restitution for all violations of the labor standards
provisions.

\(4\) Funds withheld for payment of liquidated damages associated with
Davis-Bacon and Related Act violations may be disbursed only after
authorization from the National Office.

§1940.107 [Semiannual reports]{.underline}.

\(a\) The CDM or RDM will complete Form RD 440-29, \"Semiannual Labor
Compliance Report,\" for projects requiring compliance with the
Davis-Bacon and Related Acts, and submit it to the State Director for
periods of October 1 through March 31, and April 1 through September 30.
This report should also include those active contracts issued under RD
Instruction 2024-A that are subject to the Davis-Bacon and Related Acts.
Form RD 440-29 must reach the State Director no later than April 20 and
October 20 of each calendar year.

\(b\) State Offices will consolidate all reports received from the
County and District Offices and forward three copies to the
Administrator no later than April 30 and October 31.

§1940.108 [Recordkeeping]{.underline}.

The Agency official responsible for the project will preserve all
payrolls and certifications for a period of 3 years from the date of
final payment on the contract. The records shall be made available to
the

Secretary of Labor when requested during the 3-year period.

§1940.109 - 1940.150 \[Reserved\]

Attachment: Exhibit A

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8

RD Instruction 1940-C

Exhibit A

Page 1

## LABOR STANDARDS PROVISIONS

The following clauses shall be made part of the contract documents for
projects subject to the Davis-Bacon and Related Acts:

(Section a) [Davis-Bacon Act (40 U.S.C. 276a - 276a-7)]{.underline}.

\(1\) [Minimum Wages]{.underline}.

\(i\) All laborers and mechanics employed or working upon the site of
the work (or under the United States Housing Act of 1937 or under the
Housing Act of 1949 in the construction or development of the project)
will be paid unconditionally and not less often than once a week, and
without subsequent deduction or rebate on any account (except such
payroll deductions as are permitted by regulations issued by the
Secretary of Labor under the Copeland Act (29 CFR\
Part 3)), the full amount of wages and bona fide fringe benefits (or
cash equivalents thereof) due at time of payment computed at rates not
less than those contained in the wage determination of the Secretary of
Labor which is attached hereto and made a part hereof, regardless of any
contractual relationship which may be alleged to exist between the
contractor and such laborers and mechanics. Contributions made or costs
reasonably anticipated for bona fide fringe benefits under section
1(b)(2) of the Davis-Bacon Act on behalf of laborers or mechanics are
considered wages paid to such laborers or mechanics, subject to the
provisions of paragraph (1)(iv) of this section, also, regular
contributions made or costs incurred for more than a weekly period (but
less often than quarterly) under plans, funds, or programs which cover
the particular weekly period, are deemed to be constructively made or
incurred during each weekly period. Such laborers and mechanics shall be
paid the appropriate wage rate and fringe benefits on the wage
determination for the classification of work actually performed, without
regard to skill, except as provided in paragraph (4) of this section.
Laborers or mechanics performing work in more than one classification
may be compensated at the rate specified for each classification for the
time actually worked therein: Provided, that the employer\'s payroll
records actually set forth the time spent in each classification in
which work is performed. The wage determination (including any
additional classification and wage rates conformed under paragraph
(1)(ii) of this section) and the Davis-Bacon poster (WH-1321) shall be
posted at all times by the contractor and its subcontractors at the site
of the work in a prominent and accessible place where it can be easily
seen by the workers.

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RD Instruction 1940-C

Exhibit A

Page 2

\(ii\) This paragraph has been suspended indefinitely (58 FR 58955, Nov.
5, 1993).

\(iii\) Whenever the minimum wage rate prescribed in the contract for a
class of laborers or mechanics includes a fringe benefit which is not
expressed as an hourly rate, the contractor shall either pay the benefit
as stated in the wage determination or shall pay another bona fide
fringe benefit or an hourly cash equivalent thereof.

\(iv\) If the contractor does not make payments to a trustee or other
third person, the contractor may consider as part of the wages of any
laborer or mechanic the amount of any costs reasonably anticipated in
providing bona fide fringe benefits under a plan or program, provided,
that the Secretary of Labor has found, upon the written request of the
contractor, that the applicable standards of the Davis-Bacon Act have
been met. The Secretary of Labor may require the contractor to set aside
in a separate account assets for the meeting of obligations under the
plan or program

\(v\) [Additional Classifications]{.underline}.

\(A\) The Contracting Officer shall require that any class of laborers
or mechanics which is not listed in the wage determination and which is
to be employed under the contract shall be classified in conformance
with the wage determination. The Contracting Officer shall approve an
additional classification and wage rate and fringe benefits therefor
only when the following criteria have been met:

(*1*) The work to be performed by the classification requested is not
performed by a classification in the wage determination; and

(*2*) The classification is utilized in the area by the construction
industry; and

(*3*) The proposed wage rate, including any bona fide fringe benefits,
bears a reasonable relationship to the wage rates contained in the wage
determination.

\(B\) If the contractor and the laborers and mechanics to be employed in
the classification (if known), or their representatives, and the
Contracting Officer agree on the classification and wage rate (including
the amount designated for fringe benefits where appropriate), a report
of the action taken shall be sent by the Contracting Officer to the
Administrator of the Wage and Hour Division, Employment

RD Instruction 1940-C

Exhibit A

Page 3

Standards Administration, U.S. Department of Labor, Washington, D.C.,
20210. The Administrator, or an authorized representative will approve,
modify, or disapprove every additional classification action within 30
days of receipt and so advise the Contracting Officer or will notify the
Contracting Officer within the 30-day period that additional time is
necessary.

\(C\) In the event the contractor, the laborers or mechanics to be
employed in the classification or their representatives, and the
Contracting Officer do not agree on the proposed classification and wage
rate (including the amount designated for fringe benefits, where
appropriate), the Contracting Officer shall refer the questions,
including the views of all interested parties and the recommendation of
the Contracting Officer, to the Administrator for determination. The
Administrator, or an authorized representative, will issue a
determination within 30 days of receipt and so advise the Contracting
Officer within the 30-day period that additional time is necessary.

\(D\) The wage rate (including fringe benefits where appropriate)
determined pursuant to subparagraphs (1)(v)(B) or (C) of this section,
shall be paid to all workers performing work in the classification under
this contract from the first day on which work is performed in the
classification.

\(2\) [Withholding]{.underline}. The Agency or Contracting Officer shall
upon its own action or upon written request of an authorized
representative of the Department of Labor withhold or cause to be
withheld from the contractor under this contract or any other Federal
contract with the same prime contractor, or any other federally-
assisted contract subject to Davis-Bacon prevailing wage requirements,
which is held by the same prime contractor, so much of the accrued
payments or advances as may be considered necessary to pay laborers and
mechanics, including apprentices, trainees, and helpers, employed by the
contractor or any subcontractor, the full amount of wages required by
the contract. In the event of failure to pay any laborer or mechanic,
including any apprentice, trainee, or helper, employed or working on the
site of the work (or under the United States Housing Act of 1937 or
under the Housing Act of 1949 in the construction or development of the
project), all or part of the wages required by the contract, the Agency
may, after written notice to the contractor, sponsor, applicant, or
owner, take such action as may be necessary to cause the suspension of
any further payment, advance, or guarantee of funds until such
violations have ceased.

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RD Instruction 1940-C

Exhibit A

Page 4

\(3\) [Payrolls and basic records]{.underline}.

\(i\) Payrolls and basic records relating thereto shall be maintained by
the contractor during the course of the work and preserved for a period
of three years thereafter for all laborers and mechanics working at the
site of the work (or under the United States Housing Act of 1937, or
under the Housing Act of 1949, in the construction or development of the
project). Such records shall contain the name, address, and social
security number of each such worker, his or her correct classification,
hourly rates of wages paid (including rates of contributions or costs
anticipated for bona fide fringe benefits or cash equivalents thereof
the types described in section 1(b)(2)(B) of the Davis-Bacon Act), daily
and weekly number of hours worked, deductions made and actual wages
paid. Whenever the Secretary of Labor has found under paragraph (1)(iv)
of this section that the wages of any laborer or mechanic include the
amount of any costs reasonably anticipated in providing benefits under a
plan or program described in section 1(b)(2)(B) of the Davis-Bacon Act,
the contractor shall maintain records which show that the commitment to
provide such benefits is enforceable, that the plan or program is
financially responsible, and that the plan or program has been
communicated in writing to the laborers or mechanics affected and
records which show the costs anticipated or the actual cost incurred in
providing such benefits. Contractors employing apprentices or trainees
under approved programs shall maintain written evidence of the
registration of apprenticeship programs and certification of trainee
programs, the registration of the apprentices and trainees, and the
ratios and wage rates prescribed in the applicable programs.

\(ii\) [Payrolls]{.underline}.

\(A\) The contractor shall submit weekly for each week in which any
contract work is performed a copy of all payrolls to the Agency if the
Agency is a party to the contract, but if the Agency is not such a
party, the contractor will submit the payrolls to the applicant,
sponsor, or owner, as the case may be, for transmission to the Agency.
The payrolls submitted shall set out accurately and completely all of
the information required to be maintained under paragraph (3)(i) of this
section. This information may be submitted in any form desired. Optional
Form WH-347 is available for this purpose and may be purchased from the
Superintendent of Documents (Federal Stock Number 029-005-00014-1), U.S.
Government Printing Office, Washington, D.C. 20402. The prime contractor
is responsible for the submission of copies of payrolls by all
subcontractors.

RD Instruction 1940-C

Exhibit A

Page 5

\(B\) Each payroll submitted shall be accompanied by a \"Statement of
Compliance,\" signed by the contractor or subcontractor or his or her
agent who pays or supervises the payment of the persons employed under
the contract and shall certify the following:

(*1*) That the payroll for the payroll period contains the information
required to be maintained under paragraph (3)(i) of this section and
that such information is correct and complete;

(*2*) That each laborer or mechanic (including each helper, apprentice,
and trainee) employed in the contract during the payroll period has been
paid the full weekly wages earned, without rebate, either directly or
indirectly, and that no deductions have been made either directly or
indirectly from the full wages earned, other than permissible deductions
as set forth in Regulations, 29 CFR Part 3;

(*3*) That each laborer or mechanic has been paid not less than the
applicable wage rates and fringe benefits or cash equivalents for the
classification of work performed, as specified in the applicable wage
determination incorporated into the contract.

\(C\) The weekly submission of a properly executed certification set
forth on the reverse side of Optional Form WH-347 shall satisfy the
requirement for submission of the \"Statement of Compliance\" required
by subparagraph (3)(ii)(B) of this section.

\(D\) The falsification of any of the above certifications may subject
the contractor or subcontractor to civil or criminal prosecution under
section 1001 of title 18 and section 231 of title 31 of the United
States Code.

\(iii\) The contractor or subcontractor shall make the records required
under paragraph (3)(i) of this section available for inspection,
copying, or transcription by authorized representatives of the Agency or
the Department of Labor, and shall permit such representatives to
interview employees during working hours on the

job. If the contractor or subcontractor fails to submit the required
records or to make them available, the Agency may, after written notice
to the contractor, sponsor, applicant, or owner, take

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RD Instruction 1940-C

Exhibit A

Page 6

such action as may be necessary to cause the suspension of any further
payment, advance, or guarantee of funds. Furthermore, failure to submit
the required records upon request or to make such records available may
be grounds for debarment action pursuant to 29 CFR 5.12.

\(4\) [Apprentices and Trainees]{.underline}.

\(i\) [Apprentices]{.underline}. Apprentices will be permitted to work
at less than the predetermined rate for the work they performed when
they are employed pursuant to and individually registered in a bona fide
apprenticeship program registered with the U.S. Department of Labor,
Employment and Training Administration, Bureau of Apprenticeship and
Training, or with a State Apprenticeship Agency recognized by the
Bureau, or if a person is employed in his or her 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 Bureau of Apprenticeship and Training or a State
Apprenticeship Agency (where appropriate) to be eligible for
probationary employment as an apprentice. The allowable ratio of
apprentices to journeymen on the job site in any craft classification
shall not be greater than the ratio permitted to the contractor as to
the entire work force under the registered program. Any worker listed on
a payroll at an apprentice wage rate, who is not registered or otherwise
employed as stated above, shall be paid not less than the applicable
wage rate on the wage determination for the classification of work
actually performed. In addition, any apprentice performing work on the
job site in excess of the ratio permitted under the registered program
shall be paid not less than the applicable wage rate on the wage
determination for the work actually performed. Where a contractor is
performing construction on a project in a locality other than that in
which its program is registered, the ratios and wage rates (expressed in
percentages of the journeyman\'s hourly rate) specified in the
contractor\'s or subcontractor\'s registered program shall be observed.
Every apprentice must be paid at not less than the rate specified in the
registered program for the apprentice\'s level of progress, expressed as
a percentage of the journeymen hourly rate specified in the applicable
wage determination. Apprentices shall be paid fringe benefits in
accordance with the provisions of the apprenticeship program. If the
apprenticeship program does not specify fringe benefits, apprentices
must be paid the full amount of fringe benefits listed on the wage
determination for the applicable classification. If the Administrator
determines that a different practice prevails for the applicable
apprentice classification,

RD Instruction 1940-C

Exhibit A

Page 7

fringes shall be paid in accordance with that determination. In the
event the Bureau of Apprenticeship and Training, or a State
Apprenticeship Agency recognized by the Bureau, withdraws approval of an
apprenticeship program, the contractor will no longer be permitted to
utilize apprentices at less than the applicable predetermined rate for
the work performed until an acceptable program is approved.

\(ii\) [Trainees]{.underline}. Except as provided in 29 CFR 5.16,
trainees will not be permitted to work at less than the predetermined
rate for the work performed unless they are employed pursuant to and
individually registered in a program which has received prior approval,
evidenced by formal certification by the U.S. Department of Labor,
Employment and Training Administration. The ratio of trainees to
journeymen on the job site shall not be greater than permitted under the
plan approved by the Employment and Training Administration. Every
trainee must be paid at not less than the rate specified in the approved
program for the trainee\'s level of progress, expressed as a percentage
of the journeyman hourly rate specified in the applicable wage
determination. Trainees shall be paid fringe benefits in accordance with
the provisions of the trainee program. If the trainee program does not
mention fringe benefits, trainees shall be paid the full amount of
fringe benefits listed on the wage determination unless the
Administrator of the Wage and Hour Division determines that there is an
apprenticeship program associated with the corresponding journeyman wage
rate on the wage determination which provides for less than full fringe
benefits for apprentices. Any employee listed on the payroll at a
trainee rate who is not registered and participating in a training plan
approved by the Employment and Training Administration shall be paid not
less than the applicable wage rate on the wage determination for the
classification of work actually performed. In addition, any trainee
performing work on the job site in excess of the ratio permitted under
the registered program shall be paid not less than the applicable wage
rate on the wage determination for the work actually performed. In the
event the Employment and Training Administration withdraws approval of a
training program, the contractor will no longer be permitted to utilize
trainees at less than the applicable predetermined rate for the work
performed until an acceptable program is approved.

\(iii\) [Equal employment opportunity]{.underline}. The utilization of
apprentices, trainees and journeymen under this part shall be in
conformity with the equal employment opportunity requirements of
Executive Order 11246, as amended, and 29 CFR part 30.

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RD Instruction 1940-C

Exhibit A

Page 8

\(5\) [Compliance with Copeland Act requirements]{.underline}. The
contractor shall comply with the requirements of 29 CFR part 3, which
are incorporated by reference in this contract.

\(6\) [Subcontracts]{.underline}. The contractor or subcontractor shall
insert in any subcontracts the clauses contained in paragraphs (1)
through (10) of this section and such other clauses as the Agency may by
appropriate instructions require, and also a clause requiring the
subcontractors to include these clauses in any lower tier subcontracts.
The prime contractor shall be responsible for the compliance by any
subcontractor or lower tier subcontractor with all the contract clauses
in this section.

\(7\) [Contract termination: debarment]{.underline}. A breach of the
contract clauses in this section may be grounds for termination of the
contract, and for debarment as a contractor and a subcontractor as
provided in 29 CFR 5.12.

\(8\) [Compliance with Davis-Bacon and Related Act
requirements]{.underline}. All rulings and interpretations of the
Davis-Bacon and Related Acts contained in 29 CFR parts 1, 3, and 5 are
herein incorporated by reference in this contract.

\(9\) [Disputes concerning labor standards]{.underline}. Disputes
arising out of the labor standards provisions of this contract shall not
be subject to the general disputes clause of this contract. Such
disputes shall be resolved in accordance with the procedures of the
Department of Labor set forth in 29 CFR Parts 5, 6, and 7. Disputes
within the meaning of this clause include disputes between the
contractor (or any of its subcontractors) and the Contracting Officer,
the U.S. Department of Labor, or the employees or their representatives.

\(10\) [Certification of Eligibility]{.underline}.

\(i\) By entering into this contract, the contractor certifies that
neither it (nor he or she) nor any person or firm who has an interest in
the contractor\'s firm is a person or firm ineligible to be awarded
Government contracts by virtue of section 3(a) of the Davis-Bacon Act or
29 CFR 5.12(a)(1).

\(ii\) No part of this contract shall be subcontracted to any person or
firm ineligible for award of a Government contract by virtue of section
3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1).

\(iii\) The penalty for making false statements is prescribed in the
U.S. Criminal Code 18 U.S.C. 1001.

RD Instruction 1940-C

Exhibit A

Page 9

(Section b) [Contract Work Hours and Safety Standards Act (40 U.S.C.
327-333)]{.underline}.

\(1\) [Overtime requirements]{.underline}. No contractor or
subcontractor contracting for any part of the contract work which may
require or involve the employment of laborers or mechanics shall require
or permit any such laborer or mechanic in any workweek in which he or
she is employed on such work to work in excess of forty hours in such
workweek unless such laborer or mechanic receives compensation at a rate
not less than one and one-half times the basic rate of pay for all hours
worked in excess of forty hours in such workweek.

\(2\) [Violation; liability for unpaid wages; liquidating
damages]{.underline}. In the event of any violation of the clause set
forth in paragraph (1) of this section, the contractor and any
subcontractor responsible therefor shall be liable for the unpaid wages.
In addition, such contractor and subcontractor shall be liable to the
United States (in the case of work done under contract for the District
of Columbia or a territory, to such District or to such territory), for
liquidated damages. Such liquidated damages shall be computed with
respect to each individual laborer or mechanic, including watchmen and
guards, employed in violation of the clause set forth in paragraph (1)
of this section, in the sum of \$10 for each calendar day on which such
individual was required or permitted to work in excess of the standard
workweek of forty hours without payment of the overtime wages required
by the clause set forth in paragraph (1) of this section.

\(3\) [Withholding of unpaid wages and liquidating damages]{.underline}.
The Agency or Contracting Officer shall upon its own action or upon
written request of an authorized representative of the Department of
Labor withhold or cause to be withheld, from any moneys payable on
account of work performed by the contractor or subcontractor under any
such contract or any other Federal contract with the same prime
contractor, or any other Federally-assisted contract subject to the
Contract Work Hours and Safety Standards Act, which is held by the same
prime contractor, such sums as may be determined to be necessary to
satisfy any liabilities of such contractor or subcontractor for unpaid
wages and liquidated damages as provided in the clause set forth in
paragraph (2) of this section.

\(4\) [Subcontracts]{.underline}. The contractor or subcontractor shall
insert in any subcontracts the clauses set forth in paragraphs (1)
through (4) of this section and also a clause requiring the
subcontractors to include these clauses in any lower tier subcontracts.
The prime contractor shall be responsible for compliance by any
subcontractor or lower tier subcontractor with the clauses set forth in
paragraphs (1) through (4) of this section.

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(10-30-96) PN 267