OSU PaCS 304-02: Oregon Bureau of Labor and Industries (BOLI): Prevailing Wage Rates Law and Payment Bonds

Purpose

1. To assure quality workmanship on public works projects; to discourage exploitation of workers; and to encourage competition for contracts at the management skills level.
2. To determine when a payment bond is required on Bureau of Labor and Industries/Prevailing Wage Rate projects.

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Applicability

All public works contracts over $50,000 (or with a cumulative project total of $50,000 in contracted services and purchased materials) are subject to the prevailing wage rate laws (ORSs 279C.800–279C.870).

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Background

Oregon's Prevailing Wage Rate (PWR) law was first enacted in 1959.  Oregon's Bureau of Labor and Industries (BOLI) is responsible for administering and enforcing PWR laws, establishing Prevailing Wage Rates for different geographical locations within the State, and for educating contractors, subcontractors and public agencies about its requirements.  Contractor employees as well as other contractors, subcontractors or other interested parties may file complaints with BOLI's Wage and Hour Division if they believe a violation of PWR law has occurred.

Prevailing Wage Rate (PWR) law requires contractors to obtain Payment Bonds when contracting for public improvement projects.  BOLI has determined that OSU has the authority to waive Payment Bonds on projects less that $25,000.  These projects include mixed goods and on-site services (systems furniture with installation services) where the on-site services portion is valued at less than $25,000.

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Policy

Prevailing Wage Rate Projects

Due to the complexity and variety of requirements of the Prevailing Wage Rate statutes, all BOLI/PWR project bids for any BOLI project must be processed by Procurement & Construction Contracting (PaCS) regardless of the dollar amount of a specific bid – even down to $1.00, and even if the cost of the service is under the delegated departmental purchase authority of $5,000.   Departments have $0 in delegated authority for BOLI projects.

The contracting agency is required to notify BOLI of public works contract awards in excess of $25,000.  Contracting agencies (including OSU) may be held jointly liable for any unpaid wages unless the agencies have complied with all BOLI requirements in the solicitation and contract documents.  In addition, contracting agencies can be assessed damages and fines in addition to any back wages owed to a contractor's employee(s).

Payment Bonds

OSU PaCS will not waive Payment Bonds for any projects for Public Improvements or for on-site services portions of mixed contracts with values of $10,000 or more.

For projects for Public Improvements or for on-site services portions of mixed contracts with values of less than $10,000, the determination of whether or not to waive the Payment Bond will be based on the following:

• OSU History with the contractor;
• The ratio of goods to on-site services and;
• The value of the contract or the on-site services portion

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Procedure

PWR Projects

Departments that have a small project (that does not involve professional design services and is not being managed by a Facilities Services Project Manager) must send the following information to PaCS:

1. A departmental requisition form; (please insert appropriate link to website),
2. All applicable project information such as sketches and/or a scope of work, and
3. The names of any contractors the department wants PaCS to invite to bid on the work.

PaCS will then issue the invitation to bid and work with the department to make the appropriate award(s) and complete the BOLI requirements.

If the project is larger, involves professional design services or is being managed by a Facilities Services project manager, Facilities Services will coordinate the invitations to bid with PaCS.

Payment Bonds

1. Departments shall submit their request for BOLI/PWR projects to PaCS.  PaCS will make the determination as to whether a Payment Bond is required.  Any mixed goods and on-site services bids or quotes must split out the goods portion of the bid from the services part of the bid to determine the amount of the total that is related to on-site services (installation, etc.)
2. PaCS will be the final authority on whether to waive any Payment Bond in these instances with consultation and a decision by the Associate Director of Business Services.
3. Any decision by PaCS to allow for a waiver of the Payment Bond must include a written acceptance of the risk by the Department Head after consultation by PaCS.

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