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#1 Bailers

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Posted 03 November 2010 - 11:57 AM

I'm hoping someone here can help me. I'm working on a requirement for an IDIQ that will allow us to perform environmental dredging. We will be taking dirt out, but usually replacing it with something else. So I'm confused here if this should be considered Construction or Service. We are not altering property in the typical sense that we will make an improvement to the site, unless you consider removing toxic soil and replacing it with clean soil an improvement. There will be dredging on many sites but there is also a good deal of other work that my agency typically would consider a service.

I'm hoping that I'm just having a moment that is blocking my ability to come up with the answer. Any help would be appreciated. I'm not concerned with DBA/SCA, but this will matter for clauses and how we define small business requirements under the limitation on subcontracting provisions.

#2 Cajuncharlie

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Posted 03 November 2010 - 12:20 PM

Construction. Just my $0.02 worth.

#3 leo1102

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Posted 03 November 2010 - 01:21 PM

I'm hoping someone here can help me. I'm working on a requirement for an IDIQ that will allow us to perform environmental dredging. We will be taking dirt out, but usually replacing it with something else. So I'm confused here if this should be considered Construction or Service. We are not altering property in the typical sense that we will make an improvement to the site, unless you consider removing toxic soil and replacing it with clean soil an improvement. There will be dredging on many sites but there is also a good deal of other work that my agency typically would consider a service.

I'm hoping that I'm just having a moment that is blocking my ability to come up with the answer. Any help would be appreciated. I'm not concerned with DBA/SCA, but this will matter for clauses and how we define small business requirements under the limitation on subcontracting provisions.



Construction - you are improving "real" property by removing toxic soil and replacing it with clean soil. The definition of Construction in FAR 2.1 includes dredging.

#4 Jacques

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Posted 03 November 2010 - 01:21 PM

Is the principal purpose of the contract environmental restoration? If so, I'd look at NAICS Sector 56, Remediation Services (services). See here. If the contract is solely for excavating soil, even in support of remediation (under a different effort), NAICS 562910 points you to 238910 (construction).

You seem to be asking for purposes of clauses, so you may want to take a look at FAR 36.101©, which provides:

A contract for both construction and supplies or services shall include --(1) Clauses applicable to the predominant part of the work (see Subpart 22.4), or (2) If the contract is divided into parts, the clauses applicable to each portion.



#5 Bailers

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Posted 03 November 2010 - 02:22 PM

Is the principal purpose of the contract environmental restoration? If so, I'd look at NAICS Sector 56, Remediation Services (services). See here. If the contract is solely for excavating soil, even in support of remediation (under a different effort), NAICS 562910 points you to 238910 (construction).

You seem to be asking for purposes of clauses, so you may want to take a look at FAR 36.101?, which provides:



Thanks, I am using 562910 as my NAICS code, because the purpose isn't only excavating soil. It will likely be the biggest component, but it isn't the only thing we may be doing under the contract. I think my best bet is to use Part 36 clauses, with Service clauses as appropriate. Since the majority of money will be in the construction portion, I think I'll be safer calling it a construction contract.

#6 joel hoffman

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Posted 03 November 2010 - 02:25 PM

Is the principal purpose of the contract environmental restoration? If so, I'd look at NAICS Sector 56, Remediation Services (services). See here. If the contract is solely for excavating soil, even in support of remediation (under a different effort), NAICS 562910 points you to 238910 (construction).

You seem to be asking for purposes of clauses, so you may want to take a look at FAR 36.101?, which provides:



I believe that the dredging effort and soil replacement is construction (alteration or improvement of real property). You use the appropriate DBA wage and clauses for that work.

If you are going to operate a remediation site to treat the soil, then that is a service.

#7 Vern Edwards

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Posted 03 November 2010 - 03:23 PM

So many opinions. So little backup.

See Department of Labor, Wage and Hour Division, Field Operations Handbook (FOH) (Rev. 582, 6/29/90), http://www.dol.gov/whd/FOH/index.htm, Ch. 15, Davis-Bacon and Related Acts and Contract Work Hours and Safety Standards Act, Subchapter 15e, Interpretations - Application of DBRA to Types of Employees, Section 15e08, Dredge Workers:

Government contracts for dredging involve the construction, alteration, or repair of ?public works of the United States?. Workers on a dredge engaged in dredging operations are generally laborers or mechanics subject to the DBRA However, employees engaged as seaman on a dredge or a tugboat are not laborers or mechanics. (see FOH 15e22.)

Found through Google in less than 10 minutes. You should check field bulletins and opinion letters for updates.

You described the work as "environmental dredging." Any chance it's really excavation and restoration? If so, DBA applies. See Ruling Letter DBRA2003-1.

Don't look to NAICS for interpretations of labor law applicability.

#8 Vbus

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Posted 03 November 2010 - 04:18 PM

As a follow-on to Bailers question, how do you classify an acquisition that will include work that is both construction and services? If Bailer's IDIQ contemplated the award of task orders for dredging work and environmental site assessment work, would you classify it as construction or services based on the higher percentage or would you need to follow regulations that governed both the acquisition of construction and services?

I happened to come across this example on FBO:
https://www.fbo.gov/...p...mode=list&=

The Government's objective is to obtain services, including all labor, material, transportation, equipment, and supervision required to provide environmental services entailing a wide range of projects; such as, but not limited to: AST/UST removal and/or replacement; remediation and testing; asbestos, lead and mold abatement; facility decontamination and demolition; soil and groundwater sampling and remediation; site characterization and assessment; hazardous and environmental waste documentation, handling, treatment, and disposal; landfill maintenance and repair; unexploded ordinance removal and disposal; long term monitoring and operation and maintenance of remediation facilities; along with wetland and dredging operations.



#9 joel hoffman

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Posted 04 November 2010 - 07:16 AM

So many opinions. So little backup.

See Department of Labor, Wage and Hour Division, Field Operations Handbook (FOH) (Rev. 582, 6/29/90), http://www.dol.gov/whd/FOH/index.htm, Ch. 15, Davis-Bacon and Related Acts and Contract Work Hours and Safety Standards Act, Subchapter 15e, Interpretations - Application of DBRA to Types of Employees, Section 15e08, Dredge Workers:


Found through Google in less than 10 minutes. You should check field bulletins and opinion letters for updates.

You described the work as "environmental dredging." Any chance it's really excavation and restoration? If so, DBA applies. See Ruling Letter DBRA2004-1, June 3, 2004.

Don't look to NAICS for interpretations of labor law applicability.



Then why not ask the Department of Labor for the correct classification? I have recommended that before here, with people pooh poohing that idea. You can either research the DOL references or ask them.

#10 Guest_carl r culham_*

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Posted 04 November 2010 - 07:53 AM

Vbus - Joel's advice is the best- Ask DOL. The agency should do due diligence to include the appropriate clauses and wage determinations - SCA, D-B or both - with the diligence effort including Vern's advice to do your own research using appropriate references. Remember something very important - the liability of compliance will still be with the contractor so even a contractor seeing a project like you referenced might be well advised to seek DOL advice if the contractor does not agree with the wage clauses put in a solicitaiton.

If you explore the FAR and DOL's website regarding SCA and/or D-B application you might find your answer to a specific situation (see some references below which are not intended to be all inclusive) but if still in a quandary call the DOL.

FAR - (Do not forget to check out your agency's own supplements to the FAR too such as the DFARS)

22.402

22.404-12

DOL's own CFR - This reference discusses services in construction contracts -
http://ecfr.gpoacces...-....16&idno=29

#11 Jacques

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Posted 04 November 2010 - 08:03 AM

Vern writes, "Don't look to NAICS for interpretations of labor law applicability." I agree. But the thread become about labor law after my post. Bailer's Post #1 states, "I'm not concerned about DBA/SCA, but this [whether the effort is categories as construction or services] will matter for clauses and how we define small business requirements..." My advice addressed two things: synopsis (implicitly) and FAR 36.101©.

#12 Vern Edwards

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Posted 04 November 2010 - 08:28 AM

I'm not sure that I understand. Would you write a service contract, with service contract clauses, and then apply the Davis Bacon Act? Or would you write a construction contract, with construction contract clauses, and then apply the Service Contract Act? The decision to classify any contract as one or the other will, of necessity, have to take into consideration the application of labor laws.

As for consulting with DOL: while its hard to argue against such advice--good luck. It's easy to tell people to consult with this agency or that, but it's harder to actually do it and get both a quick and reliable response. Most of the time these kinds of issues have been addressed before and there are rulings, policy, or guidance available online. Informal consultation with DOL might produce an answer, but you might not be able to rely on it because the person giving the answer did not have all of the facts. Formal consultation will probably take too much time. (And consider how difficult it seems to be for some people to provide good and coherent background information at Wifcon when asking a question. A question was posted yesterday in another that is absolutely unintelligible. That didn't keep someone from responding. Who knows how good the response was?)

Learn where the online sources of information are and learn how to use them. Then do your research.

#13 joel hoffman

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Posted 04 November 2010 - 08:44 AM

I'm not sure that I understand. Would you write a service contract, with service contract clauses, and then apply the Davis Bacon Act? Or would you write a construction contract, with construction contract clauses, and then apply the Service Contract Act? The decision to classify any contract as one or the other will, of necessity, have to take into consideration the application of labor laws.



From the original description of the question, it appears that this will be an ID/IQ contract. The contract will include dredging at numerous hazardous material sites and replacement of the material with clean material. It also appears that the contract will include various services. I'm speculating that the services might include testing, exploration of sites and boundary determination, as well as services to remediate the soil. Or perhaps the contractor(s) will just store it somewhere for someone else to remediate. "There will be dredging on many sites but there is also a good deal of other work that my agency typically would consider a service."

The questioner apparently wants to know which clauses to use and "how [they] define small business requirements under the limitation on subcontracting provisions." Bailers, will you please confirm, deny or further elaborate on what type of work this ID/IQ contract will be for and if task order will be inclusive of dredging as well as remediation type services?

#14 Bailers

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Posted 04 November 2010 - 09:18 AM

From the original description of the question, it appears that this will be an ID/IQ contract. The contract will include dredging at numerous hazardous material sites and replacement of the material with clean material. It also appears that the contract will include various services. I'm speculating that the services might include testing, exploration of sites and boundary determination, as well as services to remediate the soil. Or perhaps the contractor(s) will just store it somewhere for someone else to remediate. "There will be dredging on many sites but there is also a good deal of other work that my agency typically would consider a service."

The questioner apparently wants to know which clauses to use and "how [they] define small business requirements under the limitation on subcontracting provisions." Bailers, will you please confirm, deny or further elaborate on what type of work this ID/IQ contract will be for and if task order will be inclusive of dredging as well as remediation type services?


Joel, you have it correct. It is for remediation of hazardous material that is the water or shorelines. Dredging will likely be a big component, but I say likely because we may also do excavation "in the dry". In addition to the remediation, there is some testing, disposal of hazardous material, and restoration work. The restoration work may be complicated native plant restoration, it may mean droping stones along a bank. That's my problem, I don't know at this point.

I said I'm not worried about DBA/SCA because my plan is to have the contractors propose their IDIQ rates based on SCA for Hazmat removal. Since this contract will cover 8 states and all the Great Lakes (including Canada potentially), it would be impossible to include all the DBA rates. DBA will be pulled and applicable at the task order level when we ask for the fixed price proposals. So for my contract, what I am thinking of doing is calling this a service, but including most or all of the Part 36 construction clauses as well. But doing this raised a couple of questions.

Do I tell the Ktrs (small business set aside) that they will be responsible for 15% of the work or 50%? Do I need to determine at each task order level how much will be construction that would make things like OFCCP notification necessary? Can I just paint a broad stroke and say everything will follow the construction requirements even if they may not be necessary? I don't want to do extra work, but sometimes it is easier to send out too much information that not enough.

Thanks everyone that has chimed in so far, it has been a helpful read. And please let me know if I am leaving anything out from my description.

#15 Vern Edwards

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Posted 04 November 2010 - 09:19 AM

I believe that the dredging effort and soil replacement is construction (alteration or improvement of real property). You use the appropriate DBA wage and clauses for that work.

If you are going to operate a remediation site to treat the soil, then that is a service.


Joel:

I would be interested in knowing the basis for your opinion about site remediation. See DOL Wage and Hour Division Opinion Letter DBRA 2003-1, in which the Administrator formally ruled that site remediation is construction to which the DBA applies. The DOE had claimed it was a service subject to the SCA. Among other things, the opinion says:

The WHD has consistently applied the DBA provisions to CERCLA-type projects where contractors have performed certain types of excavation work in which the remedial clean up calls for substantial earth moving and removal of soils followed by restoration of the landscape, even where such activities are performed without any other construction activities done on buildings or other structures at the cleanup site.

It's possible that the WHD has changed its mind, but they still show DBRA 2003-1 as current. Are you aware of any change in policy? If not, why do you say that remediation is a service? Do you mean something different by your use of the word "remediation"?

#16 Bailers

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Posted 04 November 2010 - 10:04 AM

Joel:

I would be interested in knowing the basis for your opinion about site remediation. See DOL Wage and Hour Division Opinion Letter DBRA 2003-1, in which the Administrator formally ruled that site remediation is construction to which the DBA applies. The DOE had claimed it was a service subject to the SCA. Among other things, the opinion says:


It's possible that the WHD has changed its mind, but they still show DBRA 2003-1 as current. Are you aware of any change in policy? If not, why do you say that remediation is a service? Do you mean something different by your use of the word "remediation"?


Vern,
I think you are correct about remediation being DBA. But sometimes we aren't actually moving dirt, remediation can be in-situ or other forms of remediation. That said, when we do CERCLA projects we apply DBA at the site level for excavation, and use SCA for the remainder of the work that isn't DBA. If we knock down a structure without the intent to replace it, my understanding is that the work is SCA. But when we dig in the dirt under or around that structure, it is DBA. And when we get rid of the dirt, if it is loaded directly onto a truck the disposal is SCA.

In my case here, I can't say for certain what type of remediation will be done for each task order. Am I safe in calling this a service contract, but including Miller Act requirements in the clauses, then saying that the Miller Act may be applicable on a per-task order basis? It might make it easier on everyone to propose on the IDIQ as a service, then just apply DBA and Miller Act clauses at a site where they actually are applicable?

One of the big concerns businesses had in their questions to me is how much of the contract they will be responsible for self-peforming. Since dredging is a big cost item, saying at a contract level we will expect greater than 50% to be self-performed, but on task orders where dredging is required we will drop that to 15%. It will make it more difficult for us to administer and review, but should be easier for the contractors since they would know that they only have to worry about SCA unless/until we tell them otherwise.

#17 joel hoffman

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Posted 04 November 2010 - 10:57 AM

Joel:

I would be interested in knowing the basis for your opinion about site remediation. See DOL Wage and Hour Division Opinion Letter DBRA 2003-1, in which the Administrator formally ruled that site remediation is construction to which the DBA applies. The DOE had claimed it was a service subject to the SCA. Among other things, the opinion says:


It's possible that the WHD has changed its mind, but they still show DBRA 2003-1 as current. Are you aware of any change in policy? If not, why do you say that remediation is a service? Do you mean something different by your use of the word "remediation"?


Vern, I was talking about a long term efforts like operating wells that pump hazardous water out of the ground, then run the water through a treatment plant and re-inject it into the ground. I've seen those operations on several military sites, which last for years after the construction of the plants and wells. I believe that those task orders were for services. I should have been more precise.

I did read DBRA 2003-1. It seems to discuss activities which I would consider to be construction, such as excavation hauling to a site, permanently encapsulating the soil and restoring the excavated site. The soil wasn't actually remediated from what I read. The operation did include some testing services. I dont know if construction testing services are covered under DBA. My GOOGLE search techniques didn't produce wage rates for testors . The Department of Labor, Wage and Hour Division, Field Operations Handbook (FOH) (Rev. 582, 6/29/90), http://www.dol.gov/whd/FOH/index.htm, Ch. 15, Davis-Bacon and Related Acts and Contract Work Hours and Safety Standards Act, did discuss certain operations and how they might be service or construction related, like surveying (but most of the surveyors arent DBA covered) and core drilling.

I have seen Military Installations in Germany where contaminated soil is excavated and transported to a treatment site consisting of dikes over an impervious acreage, underlined with fabric. It is then somehow treated to decontaminate it in the earth cells over a period of a year or more but I'm not familiar with the specific process used. It might be mixed with chemicals, which leach out with the hazardous materials and are collected and transported to a chemical plant for disposal. The treatment plants were actually operated under a separate contract from the contracts which excavated and trucked in the soil. The DBA and SCA did not apply to our contracts in Germany.

I have also seen soil superheated in a fixed or transportable incinerator to cleanse it at an incinerator site, then trucked back and replaced in the ground. That was done under a construction contract. But many states no longer allow it and the the federal air quality requirements are so strict as to make it financially unfeasible.

#18 Vern Edwards

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Posted 04 November 2010 - 11:20 AM

I should have been more precise.

I agree.

#19 joel hoffman

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Posted 04 November 2010 - 11:22 AM

I agree.


By the way, so should you. In the example you gave, the soil wasn't "remediated". It was moved and covered. It is still contaminated from what I read.

#20 Vern Edwards

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Posted 04 November 2010 - 11:36 AM

I presume that by "example you gave" you mean the work described in the WHD decision. If so, then here is the title of the statement of work for that job, as cited in that decision: "Scope of Work for Environmental Restoration Contaminated Soils Remedial Action."

Here is how the SOW described one of the tasks: "Excavating contaminated soil to a maximum of 10 feet or at the depth at which contaminant concentrations are below the final remediation goal (FRG), whichever is less for the various WAGS containing contaminated soils[.]"

Here's another task: "Collect confirmation samples to verify that the remedial action meets the FRG[.]"

If the agency conducting the procurement thought it was buying remediation, who are you to question it? In addition to being more precise, you should read more carefully.




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