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HVAC work on non-building


Regor

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Just looking for how others are handling. There is a storage facility that apparently was bought as equipment and was not a construction. Haven't seen it but it must be pretty decent size. A/C went out. There are 3 each 5 -ton systems with separate air handlers and condensing units. Same type of units in your average home. However, since the engineers don't have it on their real property books, they won't touch it. Gov't estimate comes is aroung $30K with price of 3 units abot $15K and the rest labor. Labor requires fiitting to existing ductwork, electrical disconnects, approximately 75' of refrigerant lines. Because the HVAC units are not going in real property, are you buying this as a commodity with incidental installation even if it require trademan such as plumbers, electrician and HVAC techs to do the install?

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Guest Vern Edwards

What is the storage facility? Is it a prefabricated warehouse? Is it bolted to a concrete foundation slab?

If so, why do you think it's not real property?

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Guest Vern Edwards
Because the HVAC units are not going in real property, are you buying this as a commodity with incidental installation even if it require trademan such as plumbers, electrician and HVAC techs to do the install?

If the storage facility is not attached to a foundation, just resting on the ground, then I agree that it's not real estate.

I don't know what you mean by "HVAC" in this context. I don't know enough about your requirement and the market to make any suggestions. Do some market research. One thing -- don't refer to such heating and cooling equipment as a "commodity". They're differentiated products. Corn, raw production materials, crude oil, and coffee are commodities.

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Reading between the lines of your question I think you are asking if Davis Bacon applies and I would say Yes.

Reference FAR 22.4 which provides that “repair” to a public building and public works Davis Bacon is applicable. Just because the crazy policies of your agency does not have it on the property records I am betting DOL might consider it to be a “public work”. To carry it further a union local, should the prevailing rate be based on the locals rates and policies of that union where the work is being completed, would consider the repair covered by that performed by the local.

As another reference for you to research per Vern’s comment look up the definition of “public work”.

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If the storage facility is not attached to a foundation, just resting on the ground, then I agree that it's not real estate.

I don't know what you mean by "HVAC" in this context. I don't know enough about your requirement and the market to make any suggestions. Do some market research. One thing -- don't refer to such heating and cooling equipment as a "commodity". They're differentiated products. Corn, raw production materials, crude oil, and coffee are commodities.

Split A/C system where there is a blower (air handler) and a condensing unit, much like in a residential home. The work requires 75' of freon lines, 240V electric, and connection to ductwork.

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Reading between the lines of your question I think you are asking if Davis Bacon applies and I would say Yes.

Reference FAR 22.4 which provides that “repair” to a public building and public works Davis Bacon is applicable. Just because the crazy policies of your agency does not have it on the property records I am betting DOL might consider it to be a “public work”. To carry it further a union local, should the prevailing rate be based on the locals rates and policies of that union where the work is being completed, would consider the repair covered by that performed by the local.

As another reference for you to research per Vern’s comment look up the definition of “public work”.

Why would Daviss Bacon apply if it is not considered construction?

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Regor, what Org. or Department do you work for? Army relocatable buildings that are categorized as personal property would use the using organizations operating funding (See DA Pamphlet 420-11, paragraph 2-8 (g) for repairs. See also ACSIM powerpoint presentation at http://www.lce.com/pdfs/14-Relocatable-Buildings-White-166.pdf , which says that operations, repairs and maintenace to the actual buildings are the user's responsibility, not the Director of Public Works' . It also indicates that the DPW or USACE can supervise this under a reimbursable arrangement. I would imagine that DoD, Air Force and Navy regulations are similar. For that matter, real property vs. personal property laws might be fairly consistently applied across the government.

As for labor, according to my copy of a Corps of Engineers Labor Relations Regulation at ER 1180-1-8, labor on supply contracts that require significant trade labor with typical construction type operations might be subject to the Davis-Bacon Act labor requirements and questions should be addressed to the Dept. of Labor.

My advice is to contact someone in your legal office for some help on researching this.

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Guest Vern Edwards

If you call residential A/C manufacturer/installers, like Trane, and tell them you're going to apply Davis-Bacon to them, I suspect that they will think you're crazy.

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If you call residential A/C manufacturer/installers, like Trane, and tell them you're going to apply Davis-Bacon to them, I suspect that they will think you're crazy.

According to the OP, it looks like the installation costs are about 50% of the estimate. If you called an manufacturer such as Trane Corp, I would also consider you crazy. Local HVAC supplier/installation contractors that are used to dealing with federal contracts (military installation?) would be the ones that would normally perform this kind of work. Looks like a simplified acquisition method would be appropriate?

As for DBA, I suspect that the local labor rates will probably meet or exceed the DBA rates. If one wants to know, they can determine the DBA rates and check with some local contractors to see if they meet or exceed those rates. Generally, the payroll records administrative requirements are the biggest pain in the butt. I didn't make the rules or laws on applicability of federal labor law requirements to federal contracting. I don't know what DOL would say anyway.

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Just looking for how others are handling. There is a storage facility that apparently was bought as equipment and was not a construction. Haven't seen it but it must be pretty decent size. A/C went out. There are 3 each 5 -ton systems with separate air handlers and condensing units. Same type of units in your average home. However, since the engineers don't have it on their real property books, they won't touch it. Gov't estimate comes is aroung $30K with price of 3 units abot $15K and the rest labor. Labor requires fiitting to existing ductwork, electrical disconnects, approximately 75' of refrigerant lines. Because the HVAC units are not going in real property, are you buying this as a commodity with incidental installation even if it require trademan such as plumbers, electrician and HVAC techs to do the install?

Regor, roughly how old are these units that all 3 went out of service? Has anyone called a local repair contractor to fix or evaluate whether repairs would feasible?

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Regor – Why D-B? Because if you would have taken time to read my post and the reference I provided it says Davis Bacon applies to “repair”. And for the heck of it is it one more reference for the widely held opinion I expressed in my first post.

“The Service Contract Act Desktop Guide” dated December 2006, most current edition I believe for the Air Force. Found here - https://dap.dau.mil/aphome/das/Lists/Guidebooks%20and%20Handbooks/All.aspx?ggroup=All

I quote “ Repair vs. Maintenance - SCA also covers routine, regularly recurring maintenance of public works, buildings and building systems (electrical, plumbing, HVAC, fire suppression, etc.). But, repair of these systems is subject to Davis-Bacon Act (DBA) labor standards. “

Joel and Vern – Where are your references to suggest putting in D-B is crazy (Vern?) or that you have to go to some or any length to “suspect” (Joel)? Or in other words where are your references that repair of HVAC it is NOT D-B covered work!

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Guest Vern Edwards

Carl:

The OP didn't say anything about repair in his opening post. You were the first person to use that word in this thread. In fact, the OP has never used that word except when quoting you. The OP asked about the purchase and installation of equipment.

I didn't suggest that DB was crazy. I said that if the OP went to a certain type of equipment manufacturer and said he was going to apply DB the contractor would think he is crazy. Am I wrong?

Anyway, I wonder if the purchase and installation of air conditioning equipment might be a supply contract, instead of a construction contract. Is that a nutso thought?

As for Joel, I don't know why he thinks hiring Trane to install its equipment would be crazy. I did it. It worked fine for me. They advertise sales and installation.

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Carl, I don't know if a relocatable building is a public work or public building. In DOD, It is personal property not real property. That is why (for the DOD) the facility engineer is not responsible for maintenance or repairs. GAO found many problems with how these buildings were being purchased back in 2006-2008 time frame and it was obvious that the services weren't keeping very good track of the inventory. These seemed to be in "limbo" at the time.

I did say that repair work on relocatable buildings, which are personal property, by trade labor (exceeding the DBA threshold) might be subject to the DBA if done under a supply contract but to contact DOL for their opinion. I suggested that the OP have a lawyer research the whole thing.

I didn't mean to imply that applying DBA would be crazy. I indicated that if you called the Trane Corporation (the manufacturer) and told them that you were going to apply the DBA to them for three residential sized A/C units, EDIT: I would think you were crazy for bothering them.

EDIT: Trane doesn't install their products (at least in this State). Trane sells its products to various wholesale distributors, who then sell the equipment "in the box" to authorized Trane dealers/installers. The distributors might sell to other mechanical contractors or might not. Due to various factors, the dealers don't like it when the distributors sell to other licensed mechanical contractors plus there are warranty and protection of workmanship reputation considerations. The authorized dealers are licensed contractors who install the units. In this area and as far as one of my friends who works for an authorized dealer knows, Trane Distributors and dealers are usually independently owned companies. According to my friend, Trane doesn't get involved as a direct installation contractor due to State contractor licensing regulations, bonding, insurance, labor markets and all the other state specific contractor requirements. My friend said that it might be possible that Trane would get involved at the Distributor level in some markets just to maintain market share.

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Trane A/C and Heating Systems is but one example of a manufacturer; this is not an endorsement of Trane. The point is that authorized dealers who are licensed mechanical contractors sell and install them if you have to replace a residential type system, as was described here. You won't contract with a manufacturer like Trane, especially for a small job.

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Guest Vern Edwards

When the AC goes out and you put in new, I define that as purchase and installation or replacement. I do not define that as repair, and it doesn't seem right to define it as construction.

I'm not arguing with you, Carl. I'm simply suggesting that purchasing AC units and installing them into a manufactured storage unit might be classified as a supply contract, but I'm not insisting on it. It may be that DOL has issued guidance on this or made an administrative decision of some kind, but I don't have the time or inclination to research it.

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Vern - So what is your definition when A/C goes out and you are putting in new?

Joel - Do you think DOL cares about what agency policy says about whether something is on pr off property records?

No, they care about whether or not construction is part of the contract. This is a repair using construction type trade labor, not a service - but it is being made to personal property, not to real property, so I don't know if it is considered a public building or public works or what. If it were a public building or public work the installation work would be construction (repair) in my estimation and the non-equipment share is estimated at 50% of total price. Further, the typical firm that would likely supply the equipment and perform the installation work would be an authorized A/C dealer who is usually a State licensed contractor or an independant mechanical contractor.

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I think Vern is correct that this might be classified as a supply contract.

Here are some reasons why the contract classification and work classifications are confusing here. Even if it is a supply contract. I think that a firm that does business as a dealer/installer/construction company would likely be the Contractor and will supply and install the new equipment. A manufacturer generally won't contract to supply and install three residential A/C Systems and be responsible for warranties, workmanship, etc. Its authorized dealers provide and perform all of those functions that we would contract for. The question to me would be "Is this a public building or public work or is it not for purposes of application of the DBA?"

1. What constitutes "construction" as a type of acquisition (e.g., a constructon contract or construction as an activity within a broader scope of work) from the definition of "construction" in FAR 2.101 (emphasis added):

“ 'Construction' means construction, alteration, or repair (including dredging, excavating, and painting) of buildings, structures, or other real property. For purposes of this definition, the terms “buildings, structures, or other real property” include, but are not limited to, improvements of all types, such as bridges, dams, plants, highways, parkways, streets, subways, tunnels, sewers, mains, power lines, cemeteries, pumping stations, railways, airport facilities, terminals, docks, piers, wharves, ways, lighthouses, buoys, jetties, breakwaters, levees, canals, and channels..."

2. BUT - a relocatable building is classified as personal property under (at least) DoD and the individual services' regulations. For Army, see AR 420-1, Chapter 6, Section IV. Note that exterior utilities, permanent foundations and other supporting work for the relocatable may be classified as real property. We don't know if this is a DoD storage facility. But I bet that there is some consistency within many of the federal government agencies.

3. Now, continue reading the definition of construction in FAR 2.101. It excludes repairs to personal property from the definition of "construction" contracting:

Construction does not include the manufacture, production, furnishing, construction, alteration, repair, processing, or assembling of vessels, aircraft, or other kinds of personal property (except that for use in Subpart 22.5, see definition at 22.502).

4. The DoD and the Services classify replacement of a failed air conditioning system in a building that is real property as "repair" as distinct from "construction" for reasons other than contracting under FAR. Due to various statutory, regulatory, and administrative restrictions on types and sources of funding, "a clear distinction must be made between maintenance, repair, and construction work". As stated above, both repairs and construction related to real property would normally be classified as construction for purposes of contracting under FAR. For Army, see the classification and discussion of "repairs" to facilities under Army Pamphlet 420-11, "Project Definition and Work Classification" at http://www.apd.army.mil/jw2/xmldemo/p420_11/head.asp

"1-6. Definitions

a. Repair. Repair means "to restore a real property facility, system or component to such a condition that it may effectively used for its designated functional purpose."

(1) When repairing a facility, the components of the facility may be repaired by replacement, and the replacement can be up to current standards or codes. For example, heating, ventilation, and air conditioning (HVAC) equipment can be repaired by replacement, can be state-of-the-art, and provide for more capacity than the original unit due to increased demand/standards. Interior rearrangements (except for load-bearing walls) and restoration of an existing facility to allow for effective use of existing space or to meet current building code requirements (for example, accessibility, health, safety, or environmental) may be included as repair.

(2) Correction of deficiencies in failed or failing components of existing facilities or systems to meet current Army standards and codes where such work, for reasons of economy, should be done concurrently with restoration of failed or failing components. When the facility is in an overall failing condition corrective work may involve increases in quantities or capacities and inclusion of systems or components not previously present in the facility. "

5. So, I think that replacing failed A/C systems in personal property could (should?) be performed under a supply contract, bearing in mind that there will be significant associated installation work performed by trades persons that resembles construction or repairs of air conditioning systems for real property buildings.

7. So -unless somebody can define what a "public building" or "Public Work" is, I think that one ought to check with the DOL to see if the DBA applies to the installation effort. I haven't been able to find the definitions yet. Can someone point me to the definition? Thanks.

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Joel - Do you think DOL cares about what agency policy says about whether something is on pr off property records?

Carl, please clarify the point of your question. Were you asking me if DOL cares whether DOD considers a trailer , a series of trailers attached to each other or a portable storage module to be real property or personal property? Or were you asking if they care what USACE policy says about application of DBA to supply contracts when trade labor that would exceed the DBA threshold is involved during installation? The USACE policy that I referred to simply says to contact DOL through channels. DOL is located not far from USACE Headquarters in DC. They talk to each other. The Office of Counsel is the proponent for the Labor Relations Reg that I cited. There is an attorney who is labor relations specialist at USACE HQ. DOD is the overall proponent for "agency policy" about whether something is on or off property records. Each service then implements the policy in its regulations and guidance. I have read the three Services' policy on relocatables in the past when we were acquiring such modules on a large scale and they were similar. The DBA applies to construction of or repairs to public buildings and to public works. I can't find a statutory or regulatory definition of public buildings or public works due to my limited research abilities and don't have ready access to a USACE attorney. I don't know whether relocatables in general or this specific warehouse trailer or trailers would be considered to be public works/public buildings for purposes of the DBA or not. The significant use of such construction is a recent trend that is in a gray area. Plus the growing use of permanent, modular factory built construction presents other challenges. In addition, DOD and Congress are not big fans of having such large numbers of these Spartan looking, modern day equivalents to WWII temporary buildings around, which aren't accountable real property. Who ya gonna call here? "Labor Busters"!
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joel,

"Building or work" is defined at FAR 2.101:

“Building or work” means construction activity as distinguished from manufacturing, furnishing of materials, or servicing and maintenance work. The terms include, without limitation, buildings, structures, and improvements of all types, such as bridges, dams, plants, highways, parkways, streets, subways, tunnels, sewers, mains, power lines, pumping stations, heavy generators, railways, airports, terminals, docks, piers, wharves, ways, lighthouses, buoys, jetties, breakwaters, levees, canals, dredging, shoring, rehabilitation and reactivation of plants, scaffolding, drilling, blasting, excavating, clearing, and landscaping. The manufacture or furnishing of materials, articles, supplies, or equipment (whether or not a Federal or State agency acquires title to such materials, articles, supplies, or equipment during the course of the manufacture or furnishing, or owns the materials from which they are manufactured or furnished) is not “building” or “work” within the meaning of this definition unless conducted in connection with and at the site of such building or work as is described in the foregoing sentence, or under the United States Housing Act of 1937 and the Housing Act of 1949 in the construction or development of the project.
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So, does the DBA apply to the installation work (50%) of a replacement air conditioning system in a trailer or large movable fabric type storage structure that is classified as personal property?

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I am not arguing just concerned in the lack of any references, I thought we should be better than that!

And finally for the good of the order because I do read the comments and then chase the thoughts down as best I can…..

From DOL’s Rev. 660 FIELD OPERATIONS HANDBOOK – 10/25/2010 Chapter 15…..

15d13 Supply and installation contracts.

(a) Installation work performed in conjunction with supply or service (e.g., base support) contracts is covered by the DBRA where it involves more than an incidental amount of construction activity (i.e., the contract contains specific requirements for substantial amounts of construction, reconstruction, alteration, or repair work, and such work is physically or functionally separate from and can be performed on a segregated basis from the other nonconstruction work called for by the contract (see 29 CFR § 4.116©(2)). For example, D-B coverage has been extended to installing a security system or an intrusion detection system, installing permanent shelving which is attached to a structure, installing air-conditioning ducts, excavating outside cable trenches and laying cable, installing heavy generators, mounting radar antenna, and installing instrumentation grounding systems, where a substantial amount of construction work is involved.

(B) Whether installation work involves more than an incidental amount of construction activity depends upon the specific circumstances of each particular case and no fixed rules can be established which would address every fact situation. Factors requiring consideration include the nature of the prime contract work, the type of work performed by the employees installing the equipment on the project site (i.e., the techniques, materials, and equipment used and the skills called for in its performance), the extent to which structural modifications to buildings are needed to accommodate the equipment (such as widening entrances, relocating walls, or installing wiring), and the cost of the installation work, either in terms of absolute amount or in relation to the cost of the equipment and the total project cost.

© DBRA does not apply to construction work which is incidental to the furnishing of supplies or equipment, if the construction work is so merged with nonconstruction work or so fragmented in terms of the locations or time spans of its performance that the construction work is not capable of being segregated as a separate contractual requirement.

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Carl, I read thT too. However that same desk guide also states that one of the four requirements for DBA is that the work be done on a public building or public work. Is a trailer or a Sprung type storage structure a public building or public work? It is definitely personal property under the regulations and probably under the statutes and was likely originally bought under a supply contract, not that the latter controls.

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