U.S. DEPARTMENT OF LABOR EMPLOYMENT STANDARDS ADMINISTRATION Wage and Hour Division WASHINGTON, D.C. 20210 MAR 17 1978 ALL AGENCY MEMORANDUM NO. 130 TO: ALL GOVERNMENT CONTRACTING AGENCIES AND THE DISTRICT OF COLUMBIA FROM: XAVIER M. VELA ADMINISTRATOR SUBJECT: Application Of The Standard Of Comparison "Projects Of A Character Similar" Under The Davis-Bacon And Related Acts The purpose of this memorandum is to set forth present policies of the Wage and Hour Division with regard to the determination of "projects of a character similar to the contract work" for wage determination purposes. The guidelines contained in the memorandum are to be used 187 the contracting agencies in selecting the proper schedule(s) of wage rates from the Federal Register and in instructing contractors regarding the application of multiple schedules. This memorandum supersedes All Agency Memorandum No. 68 (July 19, 1966). The Davis-Bacon and related Acts require the Secretary of Labor to determine the prevailing wage rates for corresponding classes of laborers and mechanics on projects in the area which are of a "character similar" to the proposed contract work to which the determination will be applied. The Department's Wage Appeals Board in a decision specifically relating to high-rise apartment buildings (WAB Case No. stated:76-11, dated January 27, 1977) stated: The test of whether a project is of a character similar to another project refers to the nature of the project itself in a construction sense, not to whether union or nonunion wages are paid or whether union or nonunion workers are employed. Since the 1935 amendments to the Davis-Bacon Act, the statutory focus has always been on the character of the project itself rather than on who was employed on the project or how much he or she was being paid. Page 2 Again, in a decision relating to a water treatment plant project (WAB Case No. 77-20, dated September 30, 1977), the Board stated: "When it is clear from the nature of the project itself in a construction sense that it is to be categorized as either building, heavy, or highway construction it is not necessary to resort to an area practice survey to determine the appropriate categorization of the project." Generally construction projects are classified as either Building, Heavy, Highway or Residential. 1/ Below are descriptions of these classifications with an illustrative listing of the kinds of projects that are generally included within the classification. Contracting agencies should utilize these descriptions and illustrations in carrying out their responsibilities, to insure a uniform and consistent administration of the Davis-Bacon and related prevailing wage statutes. The advertised and contract specifications should identify as specifically as possible the segments of work to which the schedules will apply. Note, however, that the descriptions and illustrations are guides. Contracting agencies should seek a determination from the Department of Labor on close questions or when the appropriate classification is in dispute. In making this determination where a project does not readily fall within any category, the Department of Labor may consider wages being paid on analogous projects as an indication of the proper category. As stated by the Wage Appeals Board in WAB Case No. 77-23, dated December 30, 1977: "Wages, however, are only one indication. It is also necessary to look at other characteristics of the project, including the construction techniques, the material and equipment being used on the project, the type of skills called for on the project work and other similar factors which would indicate the proper category of construction." BUILDING CONSTRUCTION Building construction generally is the construction of sheltered enclosures with walk-in access for the purpose of housing persons, machinery, equipment, or supplies. It includes all construction of such structures, the installation of utilities and the installation of equipment, both above and below grade I/ Generally, for wage determination purposes, a project consists of all construction necessary to complete a facility regardless of the number of contracts involved so long as all contracts awarded are closely related in purpose, time and place. For example, demolition or site work preparatory to building construction is considered a part of the building project for wage determination purposes. Where a project, such as a water and sewage treatment plant, includes construction items that in themselves would be otherwise classified, a multiple classification may be justified if such construction items are a substantial part of the project. Further, however, a separate classification would not apply if such construction items are merely incidental to the total project to which they are closely related in function. For example, water or sewer line work which is a part of a building project would not generally be separately classified. Where construction is "incidental" in function, 20 percent of project cost is used as a rough guide for determining when construction is also "incidental" in amount to the overall project. Page 3 level, as well as incidental grading, utilities and paying. Additionally, such structures need not be "habitable" to be building construction. The installation of heavy machinery and/or equipment does not generally change the project's character as a building. Examples Alterations and additions to buildings Apartment buildings (5 stories and above) Arenas (enclosed) Auditoriums Automobile parking garages Banks and financial buildings Barracks Churches City halls Civic centers Commercial buildings Court houses Detention facilities Dormitories Farm buildings Fire stations Hospitals Hotels Industrial buildings Institutional buildings Libraries Mausoleums Motels Museums Nursing and convalescent facilities Office buildings Out-patient clinics Passenger and freight terminal buildings Police stations Post offices Power plants Prefabricated buildings Remodeling buildings Renovating buildings Repairing buildings Restaurants Schools Service stations Shopping centers Stores Subway stations Theaters Warehouses Water and sewage treatment plants (buildings only) Page 4 RESIDENTIAL CONSTRUCTION Residential projects for Davis-Bacon purposes are those involving the construction, alteration, or repair of single family houses or apartment buildings of no more than four(4) stories in height. This includes all incidental items such as site work, parking areas, utilities, streets and sidewalks. Examples Town or row houses Apartment buildings (4 stories or less) Single family houses Mobile home developments Multi-family houses Married student housing HEAVY CONSTRUCTION Heavy projects are those projects that are not properly classified as either "building", "highway", or "residential". Unlike these classifications, heavy construction is not a homogeneous classification. Because of this catch-all nature, projects within the heavy classification may sometimes be distinguished on the basis of their particular project characteristics, and separate schedules issued. For example, separate schedules may be issued for dredging projects, water and sewer line projects, dams, major bridges, and flood control projects. Examples Antenna towers Bridges (major bridges designed for commercial navigation) 2/ Breakwaters Caissons (other than building or highway) Canals Channels Channel cut-offs Chemical complexes or facilities (other than buildings) Cofferdams Coke ovens Dams Demolition (not incidental to construction) Dikes Docks Drainage projects 2/ Major bridges contain elements of both heavy and highway construction. See WAB Case No. 772 (October 21, 1977) Page 5 Dredging projects Electrification projects (outdoor) Flood control projects Industrial incinerators (other than building) Irrigation projects Jetties Kilns Land drainage (not incidental to other construction) Land leveling (not incidental to other construction) Land reclamation Levees Locks, waterways Oil refineries (other than buildings) Pipe lines Ponds Pumping stations (prefabricated drop-in units - not buildings) Railroad construction Reservoirs Revetments Sewage collection and disposal lines Sewers (sanitary, storm, etc) Shoreline maintenance Ski tows Storage tanks Swimming pools (outdoor) Subways (other than buildings) Tipples Tunnels Unsheltered piers and wharves Viaducts (other than highway) Water mains Water-way construction Water supply lines (not incidental to building) Water and sewage treatment plants (other than buildings) Wells HIGHWAY CONSTRUCTION Highway projects include the construction, alteration or repair of roads, streets, highways, runways, taxiways, alleys, trails, paths, parking areas, and other similar projects not incidental to building or heavy construction. Examples Alleys Base courses Bituminous treatments Bridle paths Concrete pavement Curbs Excavation and embankment (for road construction) Page 6 Fencing (highway) Grade crossing elimination (overpasses or underpasses) Guard rails on highway Highway signs Highway bridges (overpasses; underpasses; grade separation) Medians Parking lots Parkways Resurfacing streets and highways Roadbeds Roadways Runways Shoulders Stabilizing courses Storm sewers incidental to road construction Street Paving Surface courses Taxiways Trails In applying these guidelines contracting agencies are reminded that they have the authority only in the first instance to designate the appropriate wage schedule(s) from the Federal Resister, and to determine the application of multiple schedules issued by the Wage and Hour Division in project wage determinations. Any questions regarding the application of the guidelines set forth in this memorandum to a particular project or any disputes regarding the application of the wage schedules are to be referred to the Wage and Hour Division for resolution, and the instructions of the Wage and Hour Division are to be observed in all instances. Furthermore, where multiple schedules are issued by the Wage and Hour Division, they must be utilized in the contract specifications unless the agency requests and receives a change in the wage determination from the Wage and Hour Division. To ensure that appropriate schedules are issued, contracting agencies are advised to provide the Wage and Hour Division in their requests for wage determinations with a sufficiently specific description of the project to be able to determine its character.