- Contract Award
Once the bid results are determined, and the institution has requested to enter into a contract, intent to award a contract shall be prepared by the entity that has contract administration duties. A contract will not be issued until a performance and payment bond is receive in accordance with Arkansas Code Annotated §18-44-501 et Seq. (Appendix 37), §22-9-401 et Seq., and other applicable documents are properly executed and received.
Contracts shall be awarded pursuant to Arkansas Code Annotated Code §22-9-201 et Seq. and Arkansas Code Annotated Code §19-4-1401 et Seq. (Appendix 38). No capital improvement contract shall be awarded to other than the lowest responsible bidder for hard bid projects, or to the contractor selected in accordance with Board Policy 730.2 for major capital projects in excess of five million ($5,000,000).
The institution reserves the right to rescind the award of any contract at any time before the execution of the contract by the parties and approval of the institution without any liability against the State of Arkansas.
In any contract, the following shall be included:
Failure to make any disclosure required by Governor’s Executive Order 98-04, or any violation of any rule, regulation, or policy adopted pursuant to that Order, shall be a material breach of terms of this contract. Any regulation or policy shall be subject to all legal remedies available to the institution.
- The Contractor shall prior to entering into any agreement with any subcontractor, for which the total considerations is greater than $20,000, require the subcontractor to complete a Contract and Grant Disclosure and Certification form (Appendix 39). The Contractor shall ensure that any agreement, current or future between the Contractor and a subcontractor for which the total consideration is greater than $20,000 shall contain the following:
Failure to make any disclosure required by Governor’s Executive Order 98-04, or any violation of any rule, regulation, or policy adopted pursuant to that Order, shall be a material breach of the term of the subcontract. The Party who fails to make the required disclosure or who violates the rule, regulation or policy shall be subject to all legal remedies available to the Contractor.
- The Contractor shall, within ten days of entering into any agreement with a subcontractor, transmit to the Owner a copy of the Contract and Grant Disclosure and Certification form completed and signed by the subcontractor and a statement containing the dollar amount of the subcontractor.
- The terms and conditions regarding the failure to disclose and conditions which constitutes material breach of contract and rights of termination and remedies under the Executive Order 98-04 are hereby incorporated within.
- Arkansas Prevailing Wage Rates
Please see section VI. Project Bidding for Hard Bid Capital Construction (G) of these capital construction policies and procedures for more guidance and information regarding Arkansas Prevailing Wage Rates.
- Davis-Bacon (Federally Assisted Projects)
The Davis-Bacon and Related Acts (DBRA) are administered by the U.S. Department of Labor Wage and Hour Division. These Acts apply to contractors and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair (including painting and decorating) of public buildings or public works (40 U.S.C. §275(a) http://www.dol.gov/whd/regs/statutes/dbra.pdf).
The information provided below is taken from http://www.dol.gov/compliance/guide/dbra.htm and is not a substitute for the U.S. Code, Federal Register, and Code of Federal Regulations as official sources of applicable law. You may find later versions of the compliance guide and information at www.dol.gov/compliance.
- Basic Provisions/Requirements
The Davis-Bacon Act requires that all contractors and subcontractors performing work on federal contracts (and contractors or subcontractors performing work on federally assisted contracts under the related Acts) in excess of $2,000 pay their laborers and mechanics not less than the prevailing wage rates and fringe benefits listed in the contract’s Davis-Bacon wage determination for corresponding classes of laborers and mechanics employed on similar projects in the area. Davis-Bacon labor standards clauses must be included in covered contracts.
Apprentices may be employed at less than predetermined rates if they are in an apprenticeship program registered with the Department of Labor or with a state apprenticeship agency recognized by the Department. Trainees may be employed at less than predetermined rates if they are in a training program certified by the Department.
Contractors and subcontractors on prime contracts in excess of $100,000 are required, pursuant to the Contract Work Hours and Safety Standards Act, to pay employees one and one-half times their basic rates of pay for all hours over 40 worked on covered contract work in a workweek. Covered contractors and subcontractors are also required to pay employees weekly and to submit weekly certified payroll records to the contracting agency.
- Employee Rights
The Davis-Bacon and Related Acts provide laborers and mechanics on covered federally financed or assisted construction contracts the right to receive at least the locally prevailing wage rate and fringe benefits, as determined by the Department of Labor, for the type of work performed. The Wage and Hour Division and respective federal contracting agencies accept complaints of alleged Davis-Bacon violations.
- Recordkeeping, Reporting, Notices, and Posters
- Notices and Posters
Every employer performing work covered by the labor standards of the DBRA must post the WH-1321 “Employee Rights Under the Davis-Bacon Act” poster at the site of the work in a prominent and accessible place where it may be easily seen by employees. There is no particular size requirement. The wage determination must be similarly posted.
Under the DBRA, covered contractors must maintain payroll and basic records for all laborers and mechanics during the course of the work and for a period of three years thereafter. Records to be maintained include:
- Name, address, and Social Security number of each employee
- Each employee’s work classifications
- Hourly rates of pay, including rates of contributions or costs anticipated for fringe benefits or their cash equivalents
- Daily and weekly numbers of hours worked
- Deductions made
- Actual wages paid
- If applicable, detailed information regarding various fringe benefit plans and programs, including records that show that the plan or program has been communicated in writing to the laborers and mechanics affected
- If applicable, detailed information regarding approved apprenticeship or trainee programs
- Some of the records required to be kept under the law are also required under the Fair Labor Standards Act. See Wage and Hour Division Fact sheet #21: Recordkeeping Requirements under the Fair Labor Standards Act (FLSA).
Each covered contractor and subcontractor must, on a weekly basis, provide the federal agency a copy of all payrolls providing the information listed above under “Recordkeeping” for the preceding weekly payroll period. Each payroll submitted must be accompanied by a “Statement of Compliance.” The contractor, subcontractor or the authorized officer or employee of the contractor or subcontractor who supervises the payment of wages must sign the weekly statement. Statements of Compliance are to be made on the form WH-347 “Payroll (For Contractors Optional Use)” or on any form with identical wording. This must be completed within seven days after the regular pay date for the pay period.
Contractors may also be asked to submit, via survey, wage data that may be used by the Wage and Hour Division to determine the locally prevailing wage rates that will apply to workers on Davis-Bacon and DBRA-covered projects. The submission of wage data is encouraged, but voluntary. Contractors and others may use the WD-10 Form, Report of Construction Contractor’s Wage Rates.
Contractors or subcontractors found to have disregarded their obligations to employees, or to have committed aggravated or willful violations while performing work on Davis-Bacon covered projects, may be subject to contract termination and debarment from future contracts for up to three years. In addition, contract payments may be withheld in sufficient amounts to satisfy liabilities for unpaid wages and liquidated damages that result from overtime violations of the Contract Work Hours and Safety Standards Act (CWHSSA).
Contractors and subcontractors may challenge determinations of violations and debarment before an Administrative Law Judge. Contractors and subcontractors may appeal decisions by Administrative Law Judge’s with the Department’s Administrative Review Board. Final Board determinations on violations may be appealed to and are enforceable through the federal courts.
Falsification of certified payroll records or the required kickback of wages may subject a contractor or subcontractor to civil or criminal prosecution, the penalty for which may be fines and/or imprisonment.
- Relation to State, Local, and Other Federal Laws
Since 1931, Congress has extended the Davis-Bacon prevailing wage requirements to some 60 related Acts which provide federal assistance for construction through loans, grants, loan guarantees, and insurance. These Acts include by reference the requirements for payment of the prevailing wages in accordance with the Davis-Bacon Act. Examples of the related Acts are the American Recovery and Reinvestment Act of 2009, the Federal-Aid Highway Acts, the Housing and Community Development Act of 1974, and the Federal Water Pollution Control Act.
The Copeland “Anti-Kickback” Act prohibits contractors from in any way inducing an employee to give up any part of the compensation to which he or she is entitled under his or her contract of employment, and requires contractors to submit a weekly statement of the wages paid to each employee performing DBRA covered work.
Contractors on projects subject to DBRA labor standards may also be subject to additional prevailing wage and overtime pay requirements under State and local laws. Also, overtime work pay requirements under CWHSSA and the Fair Labor Standards Act may apply.
- Compliance Assistance Available
The Department of Labor provides employers, workers, and others with clear and easy-to-access information and assistance on how to comply with the Davis-Bacon and Related Acts, such as the DBRA Forms page. Other compliance assistance related to the Act — including the Davis-Bacon and Related Acts (DBRA) Web Page and regulatory and interpretive materials — is available on the Compliance Assistance “By Law” Web page. Also, the Wage Determinations OnLine (WDOL) Web site provides a single location for federal contracting officers to obtain Davis-Bacon wage determinations for use in covered contracts. The WDOL Web site library provides a variety of links that relate to compliance with the prevailing wage laws that apply to federal and federally assisted contracts.
- Notice to Proceed
The attached Notice to Proceed form (Appendix 40) or similar form approved by the Office of the General Counsel shall be used.
- Contract Time
The period of time allocated for the substantial completion of work shall be stated as a calendar date or as calendar days and specified in the contract documents. The Owner/institution with input from the Design Professional shall decide on the amount of liquidated damages and the amount of such damages to be included in the project specifications.
- Contractor’s Insurance
The Contractor shall secure and maintain in force during this Contract such insurance as is specified within the Contract Documents, from an insurance company authorized to write the prescribed insurance in the jurisdiction where the Project is located as will protect the contractor, his subcontractors, and the Owner from claims for bodily injury, death, or property damage which may arise from operations under this Contract. The contractor shall not commence work under this Contract until he has obtained all the insurance required, has filed the Certificate of Insurance with the Owner, and the certificate has been approved by the Owner. All certificates shall identify the “Board of Trustees of the University of Arkansas” as the certificate holder.
While not a requirement, it is recommended that the Institution only accept policies issued by an insurer which has an A.M. Best claims paying ability rating of not less than “A- VII.” The University of Arkansas shall require the Contractor to provide the following insurance to cover Contractor’s liability and protect the University:
- Commercial General Liability:
The University shall be named as additional insured for ongoing and completed operations and the contractor shall provide copies of the Contractor’s additional insured endorsements. Commercial General Liability is recommended but not required on project under $5,000. Commercial General Liability shall be “Per Project Aggregate” as opposed to “Per Policy” or “Per LOC.”
- Worker’s Compensation and Employer’s Liability:
Insurance in statutory limits shall be secured and maintained as required by the laws of the State of Arkansas. This insurance shall cover all employees who have performed any of the obligations assumed by the Contractor under these Contractor documents including Employer’s Liability Insurance. This insurance shall protect the Contractor and its subcontractors providing work, labor or materials used in connection with this work against any and all claims resulting from injuries, sickness, disease, or death.
- Umbrella or Excess Liability:
The Contractor shall be required to furnish umbrella or excess coverage, and keep in effect during the term of the contract which provides excess limits over the primary coverage.
- Automobile Liability:
The Contractor shall obtain, at Contractor’s expense and keep in effect during the term of the contract, automobile liability insurance including “any auto” or all three of the following: “scheduled autos,” “hired autos” and “non-owned autos” coverage.
- Builder’s Risk Insurance:
The Contractor shall procure and maintain during the life of this Contract Builder’s Risk Insurance or Installation Floater Insurance, and any extended coverage which shall cover damage for capital improvement projects. Perils to be insured are fire, lighting, vandalism, malicious mischief, explosion, riot and civil commotion, smoke, sprinkler leakage, water damage, windstorm, hail and property theft on the insurable portion of the Project on a 100 percent completed value basis against damage to the equipment, structures, or material. The Owner and the contractor, as their interests may appear, shall be named as the insured. Exception: Contract documents which do not require coverage based on inapplicable coverage (such as demolition or abatement work). If the project is small, this requirement of Builder’s Risk coverage may be waived in the Supplemental Conditions section of the Contract documents. If the AIA Document A201-2007 Contract for Construction is used, paragraph 11.3.1 must be deleted as the standard language in the General Conditions section of this document requires the Owner to “purchase and maintain” Builder’s Risk Insurance. A provision requiring the General Contractor to procure Builder’s Risk coverage should be inserted in the Supplemental Conditions portion of the Contract.
Proof of Insurance:
The Contractor shall maintain the insurance coverage required by these policies and outlined in the Supplemental Conditions of the Contract throughout the term of the contract, and shall furnish the Owner with certificates showing the type, amount, class of operations covered, effective dates and dates of expirations of policies.
No insurer or producer shall issue or use a Certificate of Insurance or Evidence of Insurance form that contains language that conflicts with or purports to alter any policy of coverage, exclusion, provision or condition, including, in the case of Evidence of Insurance forms altering the Notice of Cancellation or providing Additional Insured status to the certificate holder except as stated in the insurance policy or an endorsement. Such misrepresentation is a violation of the Arkansas Insurance Code.
Certificates of Insurance may be viewed as a summarized reflection of an insurance policy and are only informational. The policy is the definitive source for its provisions, not the certificate. If any party in addition to the first named insured desires a copy of a cancellation notice in the event the policy is cancelled, that party should be expressly endorsed onto the policy as a cancellation notice recipient.
Each Certificate of Insurance/Evidence form includes, following the “Coverages” section, a field for “Description of Operations” and/or “Remarks”, and that section, or an ACORD 101 Additional Remarks Form, may be used to include more information about the policy, e.g. Number of Days of Written Notice.
- Payment Requests/Processing of Payments
Payment shall be processed within the time allowed and according to Arkansas Code Annotated §19-4-1411(Appendix 43).
The Contractor may submit periodically, but not more often than once each month, a Request for Payment for work completed. When unit prices are specified in the Contract Documents, the Request for Payment shall be based upon the quantities completed.
Unless otherwise provided in the Contract Documents, payments will be made on account of materials or equipment not incorporated in the Work but delivered and suitably stored at the site, if approved in advance by the Owner; payments may similarly be made for materials or equipment suitably stored at some other location, if agreed upon in writing. Payments for materials or equipment stored on or off the site shall be made after the Contractor submits bills of sale, or such other procedures deemed satisfactory by the Owner and Design Professional. Payment will establish Owner’s title to such materials, equipment or otherwise, and protect the Owner’s interest, including applicable insurance and transportation to the site for those materials and equipment stored off site.
The Contractor shall furnish the Design professional or Owner all reasonable facilities and job tickets required for obtaining the necessary information relative to the progress and execution of the Work, and the measurement of quantities. Each Request for Payment shall be computed from the work completed on all items listed in the approved schedule of values less ten percent (10%) of the first fifty percent (50%) of the adjusted Contract Sum and less previous payments to the Contractor on the Contract.
- Change Orders
- A Change Order is a written instrument, prepared by the Design Professional and approved by the Owner, stating their agreement upon the following, separately or in any combination thereof:
- Description and details of the work.
- Amount of the adjustment in the Contract Sum.
- Extent of the adjustment in the Contract Time.
- Terms and conditions of the Contract Documents.
- Change Order requests by the Contractor shall be submitted in a complete itemized breakdown, acceptable to the Owner and the Design Professional.
- Where unit prices are stated in the Contract, Contractor should submit an itemized breakdown, acceptable to the Owner and the Design Professional.
- The Contractor shall present an itemized accounting together with appropriate supporting data for the purposes of considering additions or deductions to the Contract Amount. Supporting data shall include but is not limited to the following:
- Costs of labor, including social security, old age and unemployment insurance, fringe benefits required by agreement or custom, and worker or workmen’s compensation insurance;
- Cost of materials, supplies and equipment, including cost of transportation, whether incorporated or consumed;
- Rental costs of machinery and equipment, exclusive of hand tools, whether rented from the Contractor or others;
- Costs of premiums for all bonds and insurance, permit fees, and sales, use of similar taxes related to the Work; and
- Additional costs of supervision and field office personnel directly attributable to the change.
The burden of proof of cost rests upon the Contractor. Contractor agrees that Owner or Owner’s Representative shall have the right, at reasonable times, to inspect and audit the books and record of the Contractor to verify the propriety and granting of such cost.
- Compute request for changes be they addition or deductions as follows:
- For work performed by the Contract:
|Net Cost of Materials||a|
|State Sales Tax||b|
|Net Placing Cost||c|
|W.C. Insurance Premium and FICA Tax||d|
|Overhead and Profit, 12% x(a+b+c+d)||e|
|Allowable Bond Premium||f|
- Credit for work deleted shall be computed as outlined in section 5.a., except the Contractor’s share of overhead and profit percentage is seven percent (7%).
- For added work performed by Subcontractors: Subcontractors shall computer their work as outlined in section 5.a. To the cost of that portion of the work (Change) that is performed by the Subcontractor, the Contractor shall add an Overhead and Profit Change of five percent (5%) plus the Allowable Bond Premium.
- For work deleted by a Subcontractor: Subcontractors shall compute their work as outlined in 5.a., except that the overhead and profit shall be seven percent (7%) and the Contractor’s overhead and profit shall be five percent (5%).
- Substantial Completion
A Certificate of Substantial Completion, establishing the Date of Substantial Completion shall state the responsibilities of the Owner and the Contractor for security, maintenance, heat, utilities, damage to work, insurance, and shall fix the time within which the Contractor shall complete the items listed therein. Warranties required by the Contract Documents shall commence on the Date of Substantial Completion, unless another timeframe is stated in the Certificate of Substantial Completion. After the Architect approves the Certificate of Substantial Completion, it should be forwarded to the UA System office for execution by the Vice President for Administration. The Certificate of Substantial Completion shall not become effective until approved by the Owner. An original AIA Certificate of Substantial Completion document (Appendix 45) or other similar form may be used as the Substantial Completion Certificate.
- Qualifications of Contractors
All contractors are subject to approval by the institution. The institution shall record violations of contracts, poor workmanship, and other serious breaches of responsibilities.
Where a contractor has exhibited unsuitability in the professionalism of a contract, the Institution Purchasing Official shall thoroughly investigate all aspects of his alleged unsuitability and make a determination to suspend the contractor for cause not to exceed one (1) year. The Contractor shall be notified in detail the results of the investigation and be afforded the opportunity to appeal his suspension. The decision shall be given to the Contractor in writing. Suspension of a contractor for cause shall be reported to the Contractor’s Licensing Board where applicable.
When it is necessary for the institution to suspend a contractor twice in any twenty-four (24) month period, the suspension shall be automatically referred to the Contractor’s Licensing Board with a recommendation that the Contractor be debarred from bidding on any state-funded capital improvement projects.
- Acceptance and Final Payment
Once the Design Professional receives written notice that the Work is ready for final inspection, the Design Professional and Owner will conduct such an inspection together. Once the Design Professional and Owner determine that the Work is acceptable, the Design Professional shall certify acceptance to the Owner. Final Payment shall be the Contract sum plus approved Change Order additions, less approved Change Order deductions, less previous payments made, and less liquidated damages, if any. The Contractor shall furnish evidence that he has fully paid all debts for labor, materials, and equipment incurred in connection with the Work. The Owner will accept the Work and release the Contractor once the Owner receives notice that the Design Professional has received all documentation from the Contractor; except as to the conditions of the Payment and Performance Bond, any legal rights of the Owner, required guarantees, and correction of faulty work after Final Payment. Once the Owner authorizes payment of the Contractor’s final Request for Payment, the Contractor must allow sufficient time for the Design Professional to assemble and check the necessary data between the time of completion of work and approval of the final Request for Payment.
Acceptance of final payment by the Contractor shall constitute waiver of all claims by the Contactor except those previously made in writing and identified by the Contractor as unsettled at the time of final Request for Payment. Any claims for interest on delinquent payments shall be made pursuant to Arkansas Code Annotated §22-9-205(Appendix 46).
*To ensure the most accurate and up-to-date information, please check for Arkansas Code changes by searching the code section on this free Arkansas Code Search:http://www.lexisnexis.com/hottopics/arcode/Default.asp