As a HUD-funded Michigan Public Body corporate, DHC mandates that all contractors meet federal requirements to ensure workers, public housing residents and certain minority, women or disadvantaged business enterprises benefit from the use of federal funds. These requirements are outlined in the Davis Bacon Act, and DCHs Assistance to Small and Other Businesses and Section 3 policies.
Davis Bacon Act
The Davis Bacon Act (DBA) requires the payment of appropriate customary wage rates for all Federal construction projects in excess of $2,000. The Department of Labor (DOL) determines the customary wage. A copy of the wage decision is included in each bid package. The goal of the Davis-Bacon Act is to protect the statutory rights of construction workers by ensuring they are being paid appropriately for HUD or HUD "Related Acts" construction projects.
Failure to comply with Davis-Bacon regulation could lead to a breach of contract and debarment from further participation in HUD programs.
Davis-Bacon Reporting Requirements for Contractors/ Subcontractors:
- Weekly certified payrolls (WH-347) must be submitted following the first week of work on the contract/purchase order and every week thereafter.
- Payrolls are to be numbered sequentially starting with the first week of work. The first payroll must include the contractors Federal Employment Identification Number (FEIN) on the top of the first page.
- Certified payrolls need to be filled out completely including correct withholding and work classifications.
- Certified payrolls will not be accepted unless they have an original signature (blue ink is recommended).
- Contractors need to indicate how fringe benefits are paid.
- Contractors should indicate on the payrolls, and provide documentation of anyone participating in an apprentice program. Section 3 workers should also be indicated.
- Contractors should clearly indicate "Final" on the last weekly payroll so that DHC staff will know when this is the last payroll for this contract/purchase order.
All Contractors should keep a copy of their certified payrolls for their records.
For a copy of the "Contractors Guide to Davis-Bacon" visit the U.S. Department of Housing Urban Development Webpage at: http://www.hud.gov/olr/olrwrcp.html .
Current Wage Determination’s at: http://www.access.gpo.gov/davisbacon/mi.html
Assistance to Small and Other Businesses
A. Required Efforts
Consistent with Presidential Executive Orders 11625, 12138, and 12432, Section 3 of the HUD Act of 1968, all efforts shall be made to ensure that small and minority-owned businesses, women’s business enterprises, and other individuals or firms located in or owned in substantial part by persons residing in the area of the DHC’s project are used when possible. Such efforts shall include, but shall not be limited to:
- Including such firms, when qualified, on solicitation mailing lists
- Encouraging their participation through direct solicitation of bids or proposals whenever they are potential sources;
- Dividing total requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation by such firms;
- Establishing delivery schedules, where the requirement permits, which encourage participation by such firms;
- Using the services and assistance of the Small Business Administration, and the Minority Business Development Agency of the Department of Commerce;
- Including in contracts a clause requiring contractors, to the greatest extent feasible, to provide opportunities for training and employment for lower income residents of the project area and to award subcontracts for work in connection with the project to business concerns which provide opportunities to low-income residents, as described in 24 CFR Part 135 (“Section 3 Businesses”);
- Requiring prime contractors, when subcontracting is anticipated, to take the positive steps listed above.
Goals shall be established periodically for participation by small businesses, minority-owned businesses, women-owned business enterprises, labor surplus area businesses, and Section 3 business concerns in the DHC prime contracts and subcontracting opportunities.
ALTERNATIVE PROCUREMENT PROGRAM – Section 3
The Executive Director shall be authorized to establish an Alternative Procurement Program pursuant to 24 CFR 963 as a method to solicit and contract with eligible and qualified resident owned businesses for public housing supplies, services, or construction. The solicitation is limited to resident owned businesses.
A resident owned business is a business concern of which 51% is owned and controlled by one or more public housing residents. The management and daily business operations shall be controlled by one or more residents. All securities which constitute ownership or control of a corporation for purposes of establishing the business shall be held directly by then public housing resident(s). No securities held in trust by any guardian for a minor shall be considered as held by the public housing resident(s) in determining the ownership or control of a corporation. The term includes sole proprietorships.
B. Conditions for Use
Contracts awarded may not exceed $1,000,000 (million) individually or in aggregate. If the resident owned business is not a sole proprietorship, the resident owned business must:
- Be a Legally Formed Business - The business must certify that it was formed in accordance with Michigan State Law.
- Be a Resident Owned Business - The business must certify that it is a resident owned business.
- Have the Responsibility to Complete the Contract - The business shall submit evidence to demonstrate that the business has the ability to perform successfully under the terms and conditions of the proposed contract.
- Certify on Previous Alternative Procurement Contract Awards - The business shall certify on the number of contracts awarded and the dollar amounts of contracts awarded under the Alternative Procurement Program.
If the resident owned business is a sole proprietorship, DHC shall not award an employment type contract.
Under the alternative procurement process, DHC shall:
- Prepare an independent cost estimate for the procurement;
- Select the appropriate methods of procurement (small purchase, sealed bidding, competitive proposals, noncompetitive proposals);
- Solicit a bid, proposal or offer from one or more resident owned businesses;
- Ensure that the resident owned responses include a certification regarding previous contracts:
- Performs a cost or price analysis to determine price reasonableness;
- Awards to the bidder/offeror/respondent whose bid/offer/proposal is most advantageous to DHC consistent with the evaluation factors stated in the solicitation;
- Ensure the selected resident owned business is capable of performing satisfactorily; and
- Ensure the procurement files are documented.