U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
OFFICE OF THE SECRETARY
WASHINGTON. D.C.2O41ff-Oaoi 7
If]
* ."'! 'C
I S IQfiR [ •
MEMORANDUM FOR:
Regional Administrators
Regional Labor Relations Officers
'<
Labor Relations Directors
FROM:
Justin L.
SUBJECT:
Logsdon, Office of Labor Relations,
Transmittal
SL
of Revised Davis-Bacon Coverage Chart
and Appendices
The attached chart is designed as a convenient thumbnail reference
point for determining the Davis-Bacon consequences flowing from use of
CDBG/UDAG monies to finance various activities associated with a
development project.
Divided into four columns, the chart lists some common activities
connected with a construction project, states whether prevailing wage,
rate requirements apply if that activity is federally-financed, then
whether related non-federally financed construction is Davis-Bacon-
covered, and finally the authority for the conclusions reached.
The
"authority" column refers to eight attached appendices,
including the
General Counsel, and excerpts from HUD Handbook 1344.1,
REV-1.
1987 Justice Department opinion on Davis-Bacon applicability to CDBG/UDAG
projects, certain opinions issued by this Office and the Office of
Although the chart should be a helpful guide to providing quick and
reliable answers to common Davis-Bacon applicability questions, it is not
intended as an infallible instrument for the resolution of all prevailing
wage coverage issues that may arise.
Each case must be examined on its
own merits, including the precise terms of grant documents and contracts,
evidence regarding the actual use of the federal funds, and all other
relevant circumstances.
The chart itself cannot be relied on as binding
in making applicability decisions.
Only the official authority cited—as
well
as other relevant authority—can serve that purpose.
In addition,
if CDBG/UDAG monies are to be used to finance
nonconstruction activities,
it
is
imperative that grant agreements,
development and construction contracts, and other legal instruments
unambiguously dedicate the use of the HUD funds to those specific
purposes.
The Office of General Counsel has ruled that,
Davis-Bacon requirements are applicable under Section
110 where [CDBG/UDAG] funds are made available to a
beneficiary for a project that includes construction
work, notwithstanding the assertion of any
unilateral, after-the-fact allocation to non-■
■
construction items, unless the terms of the
instrument making the ... funds available restrict
the use of the funds to non-construction aspects of
the project or other documentary evidence indicates
that the ... funds were not or could not have been
used to finance the construction.
(Memorandum entitled, "Applicability of Davis-Bacon wage rates to CO8G-
assisted projects financed by Jacksonville Local Development Company,
Inc."
June 11, 1984, page 4)
I hope this chart will be helpful
responsibilities.
in carrying out your
As always, do not hesitate to call upon this Office if
we can be of assistance on a specific case.
o the Secretary
Relations
Attachments
Office
u.s
of
Labor
Relations
Department of Housing and Urban Development
Washington,
I).
C.
REVISED
DAVIS-BACON COVERAGE CHART
CDBG/UDAG FINAHCEO ACTIVITIES
October
Financed
Activity
Real Property Acquisition
(land, pre-existing build
ings
and
other
Demolition
(no
15,
1988
Related Non-Federal
Construction Covered?
Activity
Covered?
8/6/87
No
N/R*
pp.
(App.
HUD
N/R
No
(to be followed
construction)
Yes
No,
if demolition
I?parate
contract
(state,
county,
of
to
its
contractor
land
Yes,
done
by
under
grantee
city, etc.) or
before
transfer
developer.
if demolition contracted
Tor".by
same
entity
(developer,
contractor, etc.) doing private
construction and will be carried
out while contracting entity
controls
site.
opinion
14
OGC
(App.
n);
opinion,
p
n)
Handbook
Rev-1,
on-site contemplated)
Demolition
by on-site
DOJ
9-11,
11/19/87
improvements
construction
Authority
§ 7-5
1344. 1,
(App.
S3)
App. #3 in conjunction
with 4/30/85 OGC opinion
(by analogy to on-site
improvements)
(App.
H)
Page
Related Non-Federal
Construction Covered?
Acti vity
F i n a need
Off-site
(street
Covered?
Activity
Yes
Improvements
work,
and"utility
storm
sewer
construction,
etc. )
No,
if
off-site
Authority
improvements
are separately owned and the
off-site work andon-sjte
construction is provided for
in
separate
8/19/88
pp.
1-2
Yes
storm
drainage, utility or sewer
work, paving/walks/striping,
site
lighting,
landscaping,
No,
FFe
construction
if on-site
done under
improvements
separate con
tract by grantee (state, county,
city, etc.) or its contractor
before transfer of land to
App.
developer.
etc.)
Yes,
if
improvements
deTigned
and
intended
are
to
serve
building on the site; will be
contracted for by same entity
having building constructed;
and will be carried out while
contracting entity controls the
si te.
Cleaning During
Construction
Cleaning After
Construction
to
Occupancy
Prepare
for
Yes
Yes
No,
if 'performed under
"separate
contract.
OLR
opinion,
(App.
#5);
9/19/38
0 L R -Op_i n.i on . (A P_P_-. _ K. §J
contracts.
On-site Improvements
{excavation/grading,
2
App.
#7
App.
#7
Page
Acti vity
Financed
Covered?
Activity
Materials
Purchase
Equipment,
Machinery,
and
Equipment, Machinery,
Fixtures Installation
(as opposed to, or in
and
N/R
Yes,
unless
have
an
N/R
Ho,
to,
purchase)
if
Yes, if
more than
Incidental
amount of
construc
materials
independent
purchased
separate
Fixtures Purchase (as
opposed to installation)
addition
Related Non-Federal
Construction Covered?
Authori ty
App.
$2,
pp.
4-5
App. #1,
App. #2,
PP. 2-3
pp.
pp.
13-14;
2-3; App.
use
under
contract.
Yes, if more than
i nci dental amount
construction work
involved in the
installation. 1/
3
an
of
App. #1. pp. 13-14;
App. #2, pp. 2-3; App.
pp. 2-3 ; 10/15/87 OLR
opinion (App. #8)
tion work
1 nvolved
i n the
1ns ta Uation.1/
Legal/Account! ng
N/R
1/
if
obtained
separate
Services
Architectural/
Engineering Services
No,
N/R1
No,
if
contract.
obtained
separate
under
under
contract.
App. #1,
pp. 5-6
p
App.
#1.
pp.
App.
§2,
p.
14;
App.
9-10,
#2
14;
5
Construction work involving installation is incidental If U is 13% or less of the total
App. #8.
cost of the COBG/UDAG-financed equipment; 1f It is more, a 4-part test applies.
#5,
05,
Page
Financed
Activity
Construction
Tenant
Management
Allowances
Nonconstruction
(furniture,
licenses,
ActivityCovered?
for
Expenses
N/R*
N/R
Related Non-Federal
Construction Covered?
No,
i f
provided
Under, separate
for
"
App.
Authority
#2,
pp.
5-6
contract
No, i f provided for
u~n"der separate contract
business
etc.)
- Hot relevant because no construction activity is involved.
App. #1, P.
App.
82,
p.
14»
6
4
REVISEO
DAVIS-BACOH COVERAGE CHART
C08G/UDAG FINANCED ACTIVITIES
October 15, 1988
List
Appendices
1.
Department of Justice legal
2.
HUO Office of General Counsel
legal
3.
HUD
7-5.
4.
HUD Office of General
5.
HUD Office of Labor Relations opinion,
dated August
6.
HUD Office of Labor Relations opinion,
dated September
7.
HUD
8.
HUD Office of Labor Relations opinion,
Handbook
Handbook
1344.1,
1344.1,
Rev-1,
opinion,
of
§
Counsel
Rev-1,
§
legal
dated August 6,
1987.
opinion,
dated November 19,
opinion,
dated April
19,
30,
1985.
1988.
19,
1938.
7-4.
dated October
15,
1937
1987.