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I am having a debate with a colleague of mine. This is for a civilian agency. Requirement is for repair of a small marine vessel (to transport employees between an island work location and mainland port). My colleague swears up and down that the repair of a boat should be construed as construction. I pointed my colleague to FAR 2.0 definition of construction, which explicitly excludes building and repair of any vessel from construction. Am I missing something here? Is there some empirical detail that would make a difference? My FBO search for the applicable NAICS showed many ship repair requirements being solicited as commercial, which means they are not construction.

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The FAR definition of construction has the precise answer for you:

"?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. Construction does not include the manufacture, production, furnishing, construction, alteration, repair, processing, or assembling of vessels, aircraft, or other kinds of personal property."

I don't see how anything can impact that it's not unless you are building a huge dock with lots of buoys, jetties, and breakwaters for the boat :)

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I pointed that out to my colleague, who was evasive and could not give a straight answer as to why that meant my position, that vessel repair is not construction, was incorrect. I think my colleague is off her rocker, but I wanted to make sure I was not missing something. I don't think I am, but I have neither construction nor ship repair experience, so I did not want to be too presumptuous.

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  • 3 weeks later...

I'm a ship repair contract ACO and procurement CS for ship repair contracts with a civilian agency. My boss does new ship construction as well as major overhauls.

For the ship repairs, the bottom line is that ships are not considered real property, therefore we treat the deliverable as a refurbished supply. We issue firm-fixed-price supply contracts which include 52.222-20 WALSH-HEALEY PUBLIC CONTRACTS ACT (DEC 1996) as well as 52.222-4 CONTRACT WORK HOURS AND SAFETY STANDARDS ACT -- OVERTIME COMPENSATION (JUL 2005). We treat ship construction the same as ship repair. We do not use Part 36 clauses.

Here's a link to one of my current RFPs...

FedBizOpps

That being said, we had a very long and detailed conversation with a senior DoL investigator about this very subject. He basically stated that his opinion was that ship construction should probably use Davis-Bacon because of the nature of the work and because the trades within Davis-Bacon most closely fit the work that was actually taking place. This regardless of the type of contract. But this is the same guy that said that a supply with incidental installation should include DBA if the installation were to cost more than $2,000 which was news to me since that is in contradiction of FAR 22.402 b(2)(i).

[edited to correct SCA reference to DBA in last sentence]

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I'm a ship repair contract ACO and procurement CS for ship repair contracts with a civilian agency. My boss does new ship construction as well as major overhauls.

For the ship repairs, the bottom line is that ships are not considered real property, therefore we treat the deliverable as a refurbished supply. We issue firm-fixed-price supply contracts which include 52.222-20 WALSH-HEALEY PUBLIC CONTRACTS ACT (DEC 1996) as well as 52.222-4 CONTRACT WORK HOURS AND SAFETY STANDARDS ACT -- OVERTIME COMPENSATION (JUL 2005). We treat ship construction the same as ship repair. We do not use Part 36 clauses.

Here's a link to one of my current RFPs...

FedBizOpps

That being said, we had a very long and detailed conversation with a senior DoL investigator about this very subject. He basically stated that his opinion was that ship construction should probably use Davis-Bacon because of the nature of the work and because the trades within Davis-Bacon most closely fit the work that was actually taking place. This regardless of the type of contract. But this is the same guy that said that a supply with incidental installation should include SCA if the installation were to cost more than $2,500 which was news to me.

Don't be so quick, Sixth_WIFCON_Registration ("SWR") to overlook the applicability of the Davis-Bacon Act to other than real property. The DBA is applicable to public buildings or public works. Apparently, ships and vessels are considered public works. Unless, my DOL source below is OBE, The DBA seems to apply to certain types of ships or vessels.

Apparently, there is a difference between "Naval vessels" (US Navy and Coast Guard ships) vessels and "marine vessels" for civilian agencies (including those vessels used for Civil Works by the US Army Army Corps of Engineers). The Federal Acquisition Streamlining Act repealed the coverage of the Walsh-Healy Public Contracts Act to contracts for the construction, alteration, furnishing, or equipping of naval vessels for the Navy and Coast Guard. This would have made construction alteration or repair of those vessels subject to the DBA. Congress reinstated the applicability of the PCA to Naval vessels in the Fiscal Year 1996 DOD Authorization Act.

See the following USDOL discussion concerning Amendments to Federal Contract Labor Laws by the Federal Acquisition Streamlining Act of 1994 [9/5/1996] at: http://74.125.47.132/search?q=cache:RnMozF...lient=firefox-a

These regulatory changes were effective on September 4, 1996

?Section 3023 of FASA repealed 10 U.S.C. 7299 to eliminate the applicability of the PCA to contracts for the construction, alteration, furnishing, or equipping of naval vessels. While this amendment required no changes in the regulations, the Department (of Labor) advised contracting agencies and contractors that such contracts would, as a result, be subject to the Davis-Bacon Act, which applies to contracts in excess of $2,000 for the construction, alteration, and/or repair, including painting and decorating, of a public building or a public work, because marine vessels have historically been regarded as ``public works'' for purposes of the Davis-Bacon Act.?

?Marine vessels have historically been regarded as ``public works'' for purposes of the DBA.\3\ The DBA has accordingly been applied to contracts for the construction, alteration, or repair of Federally-owned or operated marine vessels (e.g., of the U.S. Army Corps of Engineers, National Oceanic and Atmospheric Administration, and Maritime Administration). Pursuant to 10 U.S.C. 7299, however, contracts in excess of $10,000 calling for construction, alteration, furnishing or equipping of naval vessels (U.S. Navy or U.S. Coast Guard) were heretofore subject to PCA. This statute had the effect of removing Navy and Coast Guard vessels from DBA coverage. The repeal of 10 U.S.C. 7299, however, caused the provisions of DBA to become applicable to Navy and Coast Guard vessels as with all other Federally-owned or operated marine vessels. Although this may have been an unintended consequence of the passage of FASA, the question of DBA coverage is clear. Thus, contracts involving U.S. Navy or U.S. Coast Guard vessels, as for all other U.S. Government marine vessels historically, would also be subject to DBA by statutory language in the absence of 10 U.S.C. 7299. In any case, however, this issue has become moot by the enactment of section 815 of the Fiscal Year 1996 DOD Authorization Act (Pub. L. 104-106; February 10, 1996), which includes a provision reinstating former 10 U.S.C. 7299. As a result, each contract for the construction, alteration, furnishing or equipping of a naval vessel is once again subject to the PCA, unless the President determines that this requirement is not in the interest of national defense.?

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Don't be so quick, Sixth_WIFCON_Registration ("SWR") to overlook the applicability of the Davis-Bacon Act to other than real property. The DBA is applicable to public buildings or public works. Apparently, ships and vessels are considered public works. Unless, my DOL source below is OBE, The DBA seems to apply to certain types of ships or vessels.

Apparently, there is a difference between "Naval vessels" (US Navy and Coast Guard ships) vessels and "marine vessels" for civilian agencies (including those vessels used for Civil Works by the US Army Army Corps of Engineers). The Federal Acquisition Streamlining Act repealed the coverage of the Walsh-Healy Public Contracts Act to contracts for the construction, alteration, furnishing, or equipping of naval vessels for the Navy and Coast Guard. This would have made construction alteration or repair of those vessels subject to the DBA. Congress reinstated the applicability of the PCA to Naval vessels in the Fiscal Year 1996 DOD Authorization Act.

See the following USDOL discussion concerning Amendments to Federal Contract Labor Laws by the Federal Acquisition Streamlining Act of 1994 [9/5/1996] at: http://74.125.47.132/search?q=cache:RnMozF...lient=firefox-a

These regulatory changes were effective on September 4, 1996

?Section 3023 of FASA repealed 10 U.S.C. 7299 to eliminate the applicability of the PCA to contracts for the construction, alteration, furnishing, or equipping of naval vessels. While this amendment required no changes in the regulations, the Department (of Labor) advised contracting agencies and contractors that such contracts would, as a result, be subject to the Davis-Bacon Act, which applies to contracts in excess of $2,000 for the construction, alteration, and/or repair, including painting and decorating, of a public building or a public work, because marine vessels have historically been regarded as ``public works'' for purposes of the Davis-Bacon Act.?

?Marine vessels have historically been regarded as ``public works'' for purposes of the DBA.\3\ The DBA has accordingly been applied to contracts for the construction, alteration, or repair of Federally-owned or operated marine vessels (e.g., of the U.S. Army Corps of Engineers, National Oceanic and Atmospheric Administration, and Maritime Administration). Pursuant to 10 U.S.C. 7299, however, contracts in excess of $10,000 calling for construction, alteration, furnishing or equipping of naval vessels (U.S. Navy or U.S. Coast Guard) were heretofore subject to PCA. This statute had the effect of removing Navy and Coast Guard vessels from DBA coverage. The repeal of 10 U.S.C. 7299, however, caused the provisions of DBA to become applicable to Navy and Coast Guard vessels as with all other Federally-owned or operated marine vessels. Although this may have been an unintended consequence of the passage of FASA, the question of DBA coverage is clear. Thus, contracts involving U.S. Navy or U.S. Coast Guard vessels, as for all other U.S. Government marine vessels historically, would also be subject to DBA by statutory language in the absence of 10 U.S.C. 7299. In any case, however, this issue has become moot by the enactment of section 815 of the Fiscal Year 1996 DOD Authorization Act (Pub. L. 104-106; February 10, 1996), which includes a provision reinstating former 10 U.S.C. 7299. As a result, each contract for the construction, alteration, furnishing or equipping of a naval vessel is once again subject to the PCA, unless the President determines that this requirement is not in the interest of national defense.?

Joel,

Thanks for presenting this information as I had not seen it previously. It's a very Title 10 centric discussion and seems contradictory as to how it affects a Title 41 agency.

On the surface, I would say that FASA repealed the Title 10 agency authorization to use PCA, not the Title 41 agency authorization to use PCA. Therefore, Title 41 agencies would be unaffected by this aspect of FASA just as they would be unaffected by Section 815 of the FY 1996 DoD Authorization Act.

Without getting too argumentative about it, I question the accuracy of the discussion where it states that DBA is historically used for non-defense purpose marine vessels. I have found no evidence of that within my agency.

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Sixth_WIFCON_Registration,

I think that you should be using Davis-Bacon for the repair of other than naval vessels. This is from Department of Labor (DOL) Wage & Hour Division's Field Operations Handbook (Chapter 15, 15d08):

Shipbuilding, alteration, repair, and maintenance.

The building, alteration, and repair of ships under Government contract is work performed upon ?public works? within the meaning of the Davis-Bacon Act. Wage determinations for shipbuilding under the D-B are issued only if the location of contract performance is known when bids are solicited. However, a Government contract which calls for the construction, alteration, furnishing, or equipping of a ?naval vessel" (U.S. Navy and U.S. Coast Guard vessels) is subject to [the Walsh-Healey Public Contracts Act] PCA. A contract which calls for maintenance and/or cleaning, rather than alteration or repair, of a ship or naval vessel is a service contract within the meaning of the SCA.

joel,

It's interesting that you brought up 10 USC 7299. Notice that it does not use the word "repair":

Each contract for the construction, alteration, furnishing, or equipping of a naval vessel is subject to the Walsh-Healey Act (41 U.S.C. 35 et seq.) unless the President determines that this requirement is not in the interest of national defense.

In G. Marine Diesel Corp., 68 Comp. Gen. 411, B-234196 (May 1, 1989), the GAO rejected the Coast Guard's argument that 10 USC 7299 (an earlier version, but pretty much the same) applied to ship repair:

First, 10 U.S.C. Sec. 7299 does not refer to ship repair and the Coast Guard does not explain why a ship repair contract should be considered to fall under 10 U.S.C. Sec. 7299. Further, the purpose of that legislation was to make clear the view of Congress that contracts for the construction or alteration of vessels are subject to the Walsh Healey Act. See 42 Comp.Gen. 467, at 477, supra. The legislation does not relate to whether ship repair contracts are to be considered service or supply contracts.

They also rejected the argument, still used by NAVSEA, that a ship repair contract is a supply contract:

It is most significant, in our view, that the Coast Guard makes no argument that the classification of such a repair contract as one for supplies is logical. We do not understand how it can be argued that as between the two categories-- supplies or services-- a contract for the repair of a vessel is classified as one for the vessel itself rather than for the repair services to be performed on that vessel. Since we think the solicitation was properly one for services, the protester's failure to complete the Small Business certification does not affect the responsiveness of the bid.
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Don,

Thanks for the reply. I'm certain that you don't remember, but we met several years ago at DAU in San Diego (I'm formerly Canned Sunshine, et al). I very much respect your opinion and Joel's opinion.

That being said, you've inadvertently provided me with the answer that I can hang my hat on:

"Wage determinations for shipbuilding under the D-B are issued only if the location of contract performance is known when bids are solicited"

The ship repair or even a construction location are unknown at the time of solicitation because the repair / construction location is "the successful bidder's / offeror's repair facility".

-Will Havens

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  • 1 year later...
They also rejected the argument, still used by NAVSEA, that a ship repair contract is a supply contract:

DON, within Navy, outside of NAVSEA, there has been a recent policy change that converted ship repair from a service contract to a supply contract. Have you seen anything modifying your view that ship repair is a service vice a supply?

In your view what are the statutory or regulatory implications of using a supply versus a service contract to repair ships?

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DON, within Navy, outside of NAVSEA, there has been a recent policy change that converted ship repair from a service contract to a supply contract. Have you seen anything modifying your view that ship repair is a service vice a supply?

In your view what are the statutory or regulatory implications of using a supply versus a service contract to repair ships?

Is there a written policy change? No, I haven't seen anything to modify my view.

The most significant implication of calling ship repair a supply is the avoidance of the Davis-Bacon Act. If the cost of compliance with the Davis-Bacon Act were not an issue, the Navy would not be calling ship repair a supply.

There may be other regulatory and statutory hurdles that the Navy is trying to avoid and, as illogical as it may be, it may make the best business sense to call ship repair a supply. The application of laws and regulations does not always yield a logical conclusion. It reminds me of a Supreme Court decision holding that a tomato is a vegetable.

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Is there a written policy change? No, I haven't seen anything to modify my view.

The most significant implication of calling ship repair a supply is the avoidance of the Davis-Bacon Act. If the cost of compliance with the Davis-Bacon Act were not an issue, the Navy would not be calling ship repair a supply.

There may be other regulatory and statutory hurdles that the Navy is trying to avoid and, as illogical as it may be, it may make the best business sense to call ship repair a supply. The application of laws and regulations does not always yield a logical conclusion. It reminds me of a Supreme Court decision holding that a tomato is a vegetable.

The policy affects overseas Navy contracting offices doing ship repair where the DBA does not apply. I am trying to get a copy of the policy memo to determine the basis for the decision to move from service to supply.

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