What are public works?
Public works encompasses construction and other detailed construction-related tasks, including reconstruction, major renovation or painting, among others, subject to the conditions that must be present for a work of improvement to fall within the statutory definition of public works (refer to ORS 279C.800).
Generally, a public works project must use a public agency’s funds, directly or indirectly, for a project that benefits the public.
When to consider public works and prevailing wage laws
Recognizing what constitutes a public works project is important because of the Prevailing Wage Rate (PWR) laws that establish wages for workers under public works contracts. The Bureau of Labor and Industries (BOLI) is responsible for administering and enforcing the prevailing wage law.
Prevailing wage laws exist to:
- Ensure that contractors compete on the ability to perform the work efficiently and competently while maintaining community-established compensation standards.
- Recognize the importance of local participation in publicly financed construction.
- Encourage training and education of workers to industry skills standards.
- Encourage employers to use funds allocated for employee fringe benefits for the actual purchase of those benefits.
BOLI determines prevailing wage rates, consisting of the hourly wage and fringe benefits, paid to the majority of workers employed on similar projects in the same trade or occupation and in the same geographic area.
Anyone employed on a public works project whose duties are manual or physical in nature must be paid the applicable prevailing wage rate if a project meets the definition of public works (refer to ORS279C.800(6)(a)).
PWR laws generally apply to projects with a total cost of $50,000 or more where the project is for construction, reconstruction, major renovation or painting, and the project directly or indirectly uses an agency’s funds. An agency may not divide a public works project into more than one project to avoiding compliance with PWR requirements.
Resource: Visit the BOLI website for additional guidance, prevailing wage publications, and the Prevailing Wage Rate Law Handbook. Their website also has a list of technical seminars and educational events.
A procuring agency must apply the following criteria to assess whether a project is a potential public works projects:
- Determine if the definition of public works applies (refer to ORS 279C.800(6)(a)).
- Determine if any exemptions from the law apply (refer to ORS 279C.810).
Examples of public works projects include:
- Roads, highways, buildings, structures and improvements where construction, reconstruction, major renovation or painting is carried on or contracted for by an agency to serve the public interest.
- Roads, highways, buildings, structures and improvements involving at least $750,000 of agency funds.
- Projects using private entity funds for constructing a privately-owned road, highway, building, structure or improvement of any type in which an agency will use or occupy 25 percent or more of the square footage of the completed project.
- Devices, structures or mechanisms (alone or in combination) that use solar radiation as a source for generating heat, cooling or electrical energy constructed or installed on land, premises, structures or buildings owned by a public body.
- Construction, reconstruction, painting or major renovation of a road, highway, building, structure or improvement of any type occurring on real property owned by a public university listed in statute (refer to ORS 352.002).
The definition of a public works project excludes certain types of projects, such as reconstruction or renovation of privately owned property leased by an agency.
Some public works contracts are exempted from prevailing wage rate rules and all statutory provisions and factors must be considered to determine if an exemption to rule applies. For example, projects with a total project cost of $50,000 or less are exempted, with the exception of projects on public property with a solar component.
In general, the PWR law does not apply to projects for which no public agency funds are directly or indirectly used. Thus, the source of a project’s funding plays a part in determining whether prevailing wage rate laws apply to the project. Refer to Prevailing Wage Rate Law Handbook for a description of directly and indirectly used funds.
How to process a public works procurement
Prior to each budget period, an agency must submit a list of every public improvement contract that it plans to fund in the upcoming budget period to the Commissioner of the Bureau of Labor and Industries.
The agency must identify each improvement by name and estimate the total on-site construction costs. The agency must also indicate whether it intends to perform the construction through a private contractor. If the project is estimated to cost more than $125,000 and the agency intends to perform the work using its own equipment and personnel, the agency must also confirm that its decision is the least cost.
Resource: Use the required Planned Public Improvement Summary form (WH-118) to notify BOLI of planned public improvement projects.
Determining whether a project is subject to PWR laws is not always straightforward. A procuring agency has a responsibility and duty regarding Prevailing Wage Law-related requirements and if it is unsure whether a planned project is a public works project subject to prevailing wage rate laws, the agency should engage BOLI early in the planning process. An agency can send an email to the Prevailing Wage Rate Unit and describe all relevant details of the project.
Alternatively, an agency can request a determination from the commissioner of BOLI. The request must include all documents, records, and other information necessary to enable the commissioner to make the determination. Additionally, the procuring agency must provide a copy of the request to any agency associated with the project. For more information on seeking a determination, refer to PWR Coverage Determinations under the PWR Law
on the BOLI website.
Conduct the procurement
Regardless of the procurement method selected, if a procuring agency is conducting a procurement that is a public works project it must include the following provisions in its solicitation and contract documents, as specified in law:
- A provision stating the applicable prevailing wage rates, including any appropriate amendment. A statement incorporating the rates by reference will satisfy this requirement, but the reference must be specific as to the title and date of the publication that applies, and the date of any amendment that applies.
- A provision that the contractor and every subcontractor must have a public works bond filed with the Construction Contractors Board before starting work on the project, unless exempt.
- Workers must be paid not less than the applicable state prevailing rate of wage.
- If the contractor fails to pay for labor and services, the agency can pay for them and withhold these amounts from payments to the contractor.
- Contractors must pay daily, weekly, weekend and holiday overtime as required in ORS 279C.540.
- Employers must give written notice to the workers of the number of hours per day and days per week they may be required to work.
- Contractors must make prompt payment for all medical services for which the contractor has agreed to pay, and for all amounts for which the contractor collects or deducts from the worker’s wages.
- Contractors must have a public works bond filed with the Construction Contractors Board before starting work on the project, unless exempt.
- Contractors must include a provision in every subcontract requiring the subcontractor to have a public works bond filed with the Construction Contractors Board before starting work on the project, unless exempt.
Additional provision for federal funds
Note: When a project uses federal funds, the procuring agency must include the following requirement in the solicitation documents and contract:
- Because the project involves federal funds, this solicitation and the resulting contract are subject to federal Davis-Bacon Act requirements in addition to BOLI requirements. The contractor must pay the higher of the BOLI wage rates and fringe benefits, as identified in the above BOLI wage rate booklet, or the federal wage rates and fringe benefits listed in the publication “General Wage Determinations Issued Under the Davis-Bacon and Related Acts” that is last published prior to the date that solicitation responses are due.
An agency must include all required specifications and contract provisions. If an agency fails to include the required items, the agency may be jointly and severally liable for any unpaid prevailing wages or have to pay the difference between lower and higher rate of wage plus liquidated damages.
Award a contract
A procuring agency must provide specific information in the form and format provided in the Prevailing Wage Rate Forms Directory.
- Submit a Notice of Public Works Form (WH-81) and copy of the disclosure of first-tier subcontractors within 30 days after awarding a public works contract.
- Submit the PWR fee and Public Works Fee Information Form (WH-39) within 30 days after awarding a contract or committing funds to the project (if the project is not carried on or contracted for by an agency, but still uses $750,000 or more in funds of an agency).
- Verify that the agency has not contracted with any of the contractors listed on BOLI’s current List of Contractors Ineligible to Receive Public Works Contracts.
An agency must notify BOLI within 30 days after awarding a public works contract and pay a fee set by BOLI to the Prevailing Wage Rate Unit. Both the WH-81 Form and the fee are associated with each public works contract, and not the project.
For a public works project where the awarded contract does not state a specific amount, the contract price for purposes of calculating the fee must be based on the amount the agency anticipates to be the guaranteed maximum amount of the project, with adjustments made when the contract is completed. Refer to BOLI's Public Agency Responsibilities for more information on fees.