December 3, 2009
QUESTIONS RELATED TO PREVAILING WAGE LAW AND CONSTRUCTION CONTRACTS
By: John Moran, Principal Analyst
You asked several questions related to the state awarding construction contracts under the prevailing wage law. The Office of Legislative Research is not authorized to provide legal opinions and this report should not be considered one.
The prevailing wage law sets a wage standard on state and municipal construction projects that construction contractors must comply with and verify. The prevailing wage law applies to all new construction projects costing $400,000 or more and alteration and repair jobs costing $100,000 or more (CGS § 31-53 et seq.).
1. Can the state prohibit a contractor that is under investigation for prevailing wage violations from being awarded a new state public works contract?
When an investigation is ongoing, the results are not yet determined. It would be inappropriate to punish a contractor (by denying the ability to win a new contract) when it has not yet been given due process.
2. Do statutes authorize the state to deny a contractor a new contract award if the contractor has a history of poor performance?
Contractors must be pre-qualified by either the Department of Transportation or the Department of Administrative Services to be eligible for major state construction contracts (see OLR report 2007-R-0596).
State statutes establish criteria for disqualifying contractors from bidding on or participating in public works projects (CGS §§ 31-57c and 31-57d). The transportation commissioner or the public works commissioner may disqualify a contractor for up to two years for one or more causes set in statute. Most of the causes are for criminal convictions related to a public contract, but one addresses performance: “a history of failure to perform or of unsatisfactory performance of one or more public contracts, agreements, or transactions. . . (CGS § 31-57d(d)(5)).”
3. Do any statutes prevent a contractor who is debarred in another state from getting a contract in Connecticut?
No, but the contractor's debarment could be viewed as cause for disqualification under either of the statutory sections mentioned previously.
Also, state law prohibits giving contracts to a company that has been debarred under the federal prevailing wage law (Davis-Bacon Act, 40 USC 276a-2). It also bars contracts with violators of the federal Occupational Safety and Health Act if they (1) have been cited for three or more willful or serious violations during the three years prior to the bid or (2) have been convicted of one or more criminal convictions related to the injury or death of an employee in the three years prior to the bid.
4. What are the possible penalties for a contractor found in violation of the prevailing wage law?
The penalties range from restitution to employees and civil penalties to referral to the State's Attorney's Office for criminal prosecution. Failing to file the required certified payroll, or knowingly filing a false certified payroll, is a class D felony for which the employer may be fined up to $5,000, imprisoned up to five years, or both.
Department of Labor officials note that it requires most low-level violators to pay restitution to the employee for back pay or benefits and pay a fine ($300 per violation, per employee).
In more serious cases, typically where the violations are wanton or the unpaid wages and benefits amount to $50,000 or more, the department seeks debarment. A debarred contractor cannot obtain any state contracts for three years.