U.S. DEPARTMENT OF LABOR DBA/DBRA/CWHSSA 

DAVIS-BACON RESOURCE BOOK 2010 WITHHOLDING 

WITHHOLDING 

AND 

DISBURSEMENT 

OF WITHHELD FUNDS FOR 

DB/DBRA COVERED WORKERS

 
U.S. DEPARTMENT OF LABOR DBA/DBRA/CWHSSA 

DAVIS-BACON RESOURCE BOOK 2010 WITHHOLDING 

WITHHOLDING OF FUNDS 

DUE PROCESS 

PRIORITY OF WITHHELD FUNDS

DISPOSITION OF WITHHELD FUNDS

WITHHOLDING REQUEST LETTER (DB/DBRA) 

VERIFICATION OF WITHHOLDING LETTER 
U.S. DEPARTMENT OF LABOR DBA/DBRA/CWHSSA 

DAVIS-BACON RESOURCE BOOK 2010 WITHHOLDING 

1

WITHHOLDING OF FUNDS 

◊ The labor standards clauses require the proper classification and payment of wages to: 

 ◊◊ Laborers and mechanics on construction projects subject to the DavisBacon and related Acts (DBRA), 

◊ To protect the rights of covered workers, these Acts and related Department of Labor 

(DOL) regulations provide for remedies when compliance with the prevailing wage 

requirements is in question. An important element is the withholding of contract funds 

sufficient to satisfy alleged wage underpayments pending resolution of a wage dispute. 

The contracting agency may withhold funds on its own initiative or at the direction of 

DOL. 

 ◊◊ The relevant statutory and regulatory provisions are 40 U.S.C. 3142(c)(3), 

29 § 5.5(a)(2) and 5.5(b)(3). 

◊ The withholding of contract funds is a very effective enforcement tool in 

DB/DBRA/CWHSSA cases. 

 ◊◊ It assures the availability of monies for the payment of the back wages if a 

contractor refuses to make restitution when back wages are found due to 

covered workers. 

 ◊◊ When federal agencies, states and local communities have benefited from 

the work performed by the contractor's employees, the employees are 

required by law to be paid the applicable prevailing wage and overtime 

compensation. 

 ◊◊ The prime contractor is responsible for compliance on the contract, will be 

liable for payment of the back wages not paid by a subcontractor, and may 

decide to withhold payments from the subcontractor until the back wage 

issues are resolved. 

◊ Assuring that the proper wages are received by covered workers on government 

contracts lies with representatives of the contracting agency and/or DOL. 

 ◊◊ A contracting officer should withhold funds when he/she believes that a 

back wage violation exists. 

 ◊◊ In addition, contracting officers shall withhold funds upon written request 

from DOL. Contracting officers should respond immediately confirming 

that the funds have been withheld. 
U.S. DEPARTMENT OF LABOR DBA/DBRA/CWHSSA 

DAVIS-BACON RESOURCE BOOK 2010 WITHHOLDING 

2

 ◊◊ Additionally, if the request has been made by DOL, it is important for the 

agency to preserve the withheld funds until notified in writing by DOL 

regarding final disposition of the withheld funds. 

◊ Davis-Bacon and CWHSSA contract clauses

 ◊◊ The contract clause language set forth at 29 C.F.R. § 5.5(a)(2) states: 

 Withholding - The federal agency or the loan or grant recipient shall 

upon its own action or upon written request of an authorized representative 

of DOL 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 the 

full amount of wages required by the contract. 

[and, further:] 

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, 

... all or part of the wages required by the contract, the (Agency) may, after 

written notices 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. 

 ◊◊ 29 C.F.R. § 5.5(b)(3) is a similar provision concerning the withholding of 

contract funds in relation to overtime pay obligations and liquidated 

damages determined to be due because of CWHSSA violations. 

 ◊◊ The comparable FAR contract clause language “Withholding of Funds” is 

at 48 C.F.R. § 52.222-7 and “Contract Work Hours and Safety Standards 

Act – Overtime Compensation” is at § 52.222-4. (The FAR guidance for 

applying the DBA/DBRA contract clauses is at 48 C.F.R. § 22.403-1, 

22.404-12, and 22.305.) 

◊◊◊ FAR guidance regarding the “Withholding from or suspension of 

contract payments” at 48 C.F.R. § 22.406-9(a) states: 

(a) Withholding from contract payments. If the contracting officer 

believes a violation exists (see 22.406-8), or upon request of the 

Department of Labor, the contracting officer shall withhold from 

payments due the contractor an amount equal to the estimated wage 

underpayment as well as any estimated liquidated damages due the 

United States under the Contract Work Hours and Safety Standards 

Act. (See 22.302.) .... 
U.S. DEPARTMENT OF LABOR DBA/DBRA/CWHSSA 

DAVIS-BACON RESOURCE BOOK 2010 WITHHOLDING 

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◊◊◊ Continuing, the FAR guidance, at 48 C.F.R. § 22.406-9(a)(2), states: 

(2) If subsequent investigation confirms violations, the contracting 

officer shall adjust the withholding as necessary. If the withholding 

was requested by the Department of Labor, the contracting officer 

shall not reduce or release the withholding without written approval 

of the Department of Labor. 

◊◊◊ At 48 C.F.R. § 22.406-9(a)(3) the FAR further states that the withheld 

funds are to be used to satisfy validated wage underpayments (unless 

the contractor makes restitution) and assessed liquidated damages. 

(See also 48 C.F.R. § 22.406-9(c), “Disposition of contract payments 

withheld or suspended” and 48 C.F.R. § 406.10 “Disposition of 

disputes concerning contract labor standards enforcement”.) 

◊◊◊ Cross-withholding provisions under the Davis-Bacon and related Acts 

give DOL and contracting agencies some recourse in collecting back 

wages in situations where the contract on which the violations 

occurred has been paid off by the contracting agency. Where funds 

remaining on the contract under which the violations occurred are 

insufficient to cover the back wages due, the contracting agency can 

withhold funds from other contracts subject to DBA/DBRA/CWHSSA 

or any other federal contract held by the same prime contractor. (See 

29 C.F.R. § 5.5(a)(2) and 29 C.F.R. § 5.5(b)(3). For FAR guidance 

see 48 C.F.R. § 22.406-9(a)(1).) 
U.S. DEPARTMENT OF LABOR DBA/DBRA/CWHSSA 

DAVIS-BACON RESOURCE BOOK 2010 WITHHOLDING 

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DUE PROCESS 

◊ To ensure that contractors and subcontractors receive “due process” prior to the 

withholding of funds at the direction of the WHD ), the following steps are included in 

WHD enforcement procedures. 

◊◊ Where a contractor refuses to pay back wages under SCA or DBRA and funds are 

available for withholding, WHD will generally send a “due process” letter to the 

prime contractor. This letter will include: 

 ◊◊◊ A statement that the final conference was conducted at which time the 

contractor was provided an opportunity to discuss the alleged 

violations; or if a final conference was not held, provide the reason(s) 

why; 

 ◊◊◊ A brief description of the alleged violations; 

 ◊◊◊ An affirmation that the contractor received a Summary of Unpaid 

Wages; 

 ◊◊◊ A statement that the matter is being forwarded for a decision to a 

designated WHD deciding official, who will decide whether 

withholding action will be taken regarding the back wage findings; 

 ◊◊◊ A statement that the contractor has fifteen (15) days to provide the 

deciding official with written views on whether the violations 

occurred; 

 ◊◊◊ A statement that any determination regarding the withholding of 

contract funds will not result in the distribution of the funds to the 

underpaid workers until such time as the administrative remedies 

available to the contractor have been completed. 

◊◊ If the deciding official determines that withholding action is warranted, a copy of 

the WHD withholding request to the contracting agency and a letter indicating the 

deciding official’s decision on withholding will be sent to the prime contractor. 

◊ In certain cases, such as missed payrolls, likely bankruptcy filings, or imminent 

contract close out, it may be necessary to request withholding before the measures 

described above can be provided. In those cases, the procedures outlined above should 

be followed after the withholding action; and based on the contractor’s submission, the 

WHD deciding official may decide to revoke an earlier withholding request. 
U.S. DEPARTMENT OF LABOR DBA/DBRA/CWHSSA 

DAVIS-BACON RESOURCE BOOK 2010 WITHHOLDING 

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PRIORITY OF WITHHELD FUNDS

◊ DOL's position is that accrued funds withheld for payment of wages may not be used 

or set aside for other purposes until such time as the prevailing wage issues are 

resolved. To give contracting agency reprocurement claims priority, for example, 

would essentially make the employees unfairly pay for the breach of contract between 

their employer and a federal agency or grant recipient. 

◊ It is the Department’s position that wages due underpaid employees have priority over 

any competing claims against a contractor, regardless of when the claims were raised. 

(See 29 C.F.R. § 4.187(b).) DOL believes that to hold otherwise would be inequitable 

and contrary to public policy since the affected employees have already performed the 

work subject to a contractual obligation to fulfill the labor standards requirements. 

◊ Employees' wage claims for underpayment have priority over: 

 (1) An Internal Revenue Service levy for unpaid taxes; 

 (2) Reprocurement costs of the contracting agency after a contractor's default or 

termination for cause; 

 (3) Any assignee of the contractor ... including assignments made under the 

Assignment of Claims Act; 

 (4) Any claim by a trustee in bankruptcy. 
U.S. DEPARTMENT OF LABOR DBA/DBRA/CWHSSA 

DAVIS-BACON RESOURCE BOOK 2010 WITHHOLDING 

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DISPOSITION OF WITHHELD FUNDS

◊ WHD Regional Offices (RO’s) are responsible for directing the processing of back 

wage disbursements. Following the issuance of administrative law judge decisions, 

including decisions approving settlement agreements, Administrative Review Board 

decisions, or if a contractor does not request a hearing pursuant to 29 C.F.R. § 5.11(b), 

the WHD RO requests the contracting agency to transfer the withheld funds. 

◊ Direct Davis-Bacon contracts

 ◊◊ In the case of direct federal DBA contracts, since the DBA requires the 

Comptroller General to disburse back wages, the WHD RO will request the 

agency to transfer the withheld funds to the General Accountability Office. 

The GAO administers a Davis-Bacon fund account to pay claims relating to 

the DBA. 

 ◊◊ The following procedure is to be used for the disposition of withheld funds. 

◊◊◊ When transferring funds electronically, the Agency Location Code 

(ALC) is: 0 5 0 0 0 0 0 1. 

◊◊◊ All checks for disbursement under the DBA should be accompanied 

by a completed Form 1093 and should be made payable to the U.S. 

General Accountability Office. 

 On October 1, 2007, GAO implemented a cross-servicing 

arrangement with the U.S. Department of Transportation (DOT) 

Enterprise Service Center to perform certain accounting transactions 

affecting cash deposits, accounts payable and accounts receivables, 

including the Davis-Bacon Fund. Checks should be mailed to: 

Enterprise Service Center 

 Attn: Linda Zorhorst 

FAA/MMAZ, General Accounting 

6500 S. MacArthur Boulevard, Room 181 

Oklahoma City, Oklahoma 73169 

So that the GPO Office of the General Counsel can readily identify and/or 

properly establish a case file, the name of the contractor (the actual 

contractor found in violation) and the contract number should be shown on 

the bottom of the check. The contract number is the number for which the 

contract was written and the work was performed rather than the contract 

number for which funds may be withheld via a cross-withholding action. 

 ◊◊ In situations where the contracting agency has conducted the Davis-Bacon 

Act investigation, FAR 48 C.F.R. § 22.406.9(c) provides guidance 
U.S. DEPARTMENT OF LABOR DBA/DBRA/CWHSSA 

DAVIS-BACON RESOURCE BOOK 2010 WITHHOLDING 

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regarding additional information that is to be reported to the General 

Accountability Office. The contracting agency should send a copy of the 

Standard Form 1093, along with any investigative reports required by the 

Department of Labor to: 

U.S. General Accountability Office 

Davis-Bacon Group-OGC 

 Attn: LaBrenda Dean 

441 "G" Street, NW, Room 2L13 

Washington D.C. 20548 

◊ Contracts subject to Davis-Bacon related Acts or CWHSSA

 ◊◊ Under the Davis-Bacon “related Acts” (i.e., federal assistance by grants, 

loans, or loan guarantees rather than a federal DBA contract), the 

disbursement process is handled by DOL. (This is also true under the 

Service Contract Act.) 

When funds are forwarded to DOL for disbursement, so that the receiving 

DOL office can readily identify and make the appropriate disbursements to 

the affected employees, please include th ame of the contractor, and the 

contract number(s) for the contract(s) on which the work was 

performed (rather than the contract number from which the funds may 

have been withheld via a cross-withholding e n action) on the check or in a 

letter transmitting the check. All enclosed information is forwarded to the 

disbursing office by the bank. 

 ◊◊ In the cases where federally assisted contracts subject to the provisions of 

Davis-Bacon related Acts have been forwarded to WHD for appropriate 

legal action, the RO will notify the contracting agency of the final 

disposition of the investigation. The withheld monies are disbursed by two 

methods: 

 ◊◊◊ Incoming wire deposits will be processed by the Federal Reserve 

Bank of New York City (TREAS NYC) and must include the 

following information: 

Bank Name: TREAS NYC 

ABA Routing Number: 021030004 

Agency Location Code: 16010002 

Disbursement Office ID: (03, 04, 05, 06, or 09) 

 ◊◊◊ Paper check deposits to: 

WHD Central Processing 

P.O. Box 77752 

Washington, D.C. 20013 
U.S. DEPARTMENT OF LABOR DBA/DBRA/CWHSSA 

DAVIS-BACON RESOURCE BOOK 2010 WITHHOLDING 

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 (Effective October 1, 2007, DOL lockbox deposit processing was 

replaced by U.S. Treasury “Paper Check Conversion Over the 

Counter” (PCC OTC).) 

◊ Sample letters for withholding request and verification

 ◊◊ Below are a sample withholding request letter used by WHD and a sample 

verification of withholding letter that may be used by agencies to provide 

WHD confirmation that the funds have been withheld. 
U.S. DEPARTMENT OF LABOR DBA/DBRA/CWHSSA 

DAVIS-BACON RESOURCE BOOK 2010 WITHHOLDING 

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WITHHOLDING REQUEST LETTER (DBRA)

Ms. Contracting Officer 

U.S. Federal Agency 

Anywhere, USA 00000 

Dear Ms. Contracting Officer: 

Re: Name of prime contractor 

 Contract number and location 

 Our file number: 98-000-00000 

Our Wage and Hour District Office has conducted an investigation of the above-referenced 

contractor under the Davis-Bacon and related Acts (DBRA) and the Contract Work Hours 

and Safety Standards Act (CWHSSA). 

The investigation has disclosed monetary violations resulting from failure to pay the required 

prevailing wage rates. DBRA back wages due have been computed in the amount of $ . 

The contractor has not agreed to pay the back wages found due. Therefore, in order to 

protect the interests of the Federal government and the affected employees, and in 

accordance with Department of Labor Regulations, 29 C.F.R. § 5.5(a)(2), and as provided for 

in the Federal Acquisition Regulations at 48 C.F.R. § 52.222-4(c) and 52.222-7, it is 

requested that the aforementioned sum be withheld from contract payments due the prime 

contractor. 

<1-Optional> If there are insufficient funds to withhold on this contract, cross-withholding of 

funds from any current Federal contract with the same prime contractor or from any 

federally-assisted contract with the same prime contractor which is subject to either DavisBacon prevailing wage requirements or Contract Work Hours and Safety Standards Act 

requirements, respectively, is authorized by the FAR (48 C.F.R. § 52.222-7 and/or 52.222-

4(c), respectively). 

<2-Optional> We request that you advise us immediately if you have any information that 

the prime contractor has filed bankruptcy proceedings. 

Should we succeed in securing direct payments to the employees or should there be any 

change in the amount noted, we will advise you immediately. Thank you for your continuing 

cooperation in this matter. If you have any questions, please contact the Wage and Hour 

Regional Wage Specialist at the above address. 
U.S. DEPARTMENT OF LABOR DBA/DBRA/CWHSSA 

DAVIS-BACON RESOURCE BOOK 2010 WITHHOLDING 

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-2- 

Please notify us in writing of your actions on this request no later than (date) . A 

withholding verification form is enclosed for your convenience. 

Sincerely, 

Regional Administrator 

 Wage and Hour Division 

Enclosure 

cc: Name of Prime Contractor
U.S. DEPARTMENT OF LABOR DBA/DBRA/CWHSSA 

DAVIS-BACON RESOURCE BOOK 2010 WITHHOLDING 

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 VERIFICATION OF WITHHOLDING LETTER

Case Name: 

File Number: 

 VERIFICATION OF WITHHOLDING 

This is to verify that $ has been withheld from funds due (name of contractor) to 

cover wage underpayments under Contract Number as of (enter date) per 

section 5.5(a)(2) of Regulations, 29 C.F.R. § Part 5. 

 _________________________________

 Contracting Officer 

 _________________________________

 Agency 

 _________________________________

 Telephone Number