Public Works: Frequently Asked Questions
1. What is considered a public works project?
A public works project includes the erection, construction, alteration, demolition, installation, repair or improvement of any structure, building, road, or any other improvement of any kind paid for in whole or in part out of public funds.
2. When is a public works project required to pay prevailing wages?
California law requires the payment of prevailing wages on any public works project (funded with public money and/or conducted by a public agency or on public property), when the total project cost, including materials, equipment and labor is valued at $1,000 or greater.
3. When does a fair project need to be formally bid?
A fair project must be formally bid anytime the total project is valued at $25,000 or greater, any public funds are being used, and if the project is not considered maintenance as defined in FAQ #8 below. Formal bidding includes soliciting bids in writing and opening the project to all qualified licensed contractors.
4. What if the total project is less than $25,000?
Projects with a total cost of between $10,000 and $25,000 that will be using any public funding should be informally bid, with a minimum of three bids being obtained. The bids can be obtained by direct solicitation of contractors without a formal bidding process.
If the total project is less than $10,000, the project can be sole sourced to a qualified licensed contractor. (Note: Actual values may be lower depending on a specific fair’s policy.)
5. What is bid splitting?
Bid splitting, which is prohibited by law, is when a project is broken up (split) into smaller pieces to avoid having to go out to bid. When you look at a project and determine that the value of the work is $25,000 or more, then all of the work must be put out to formal, competitive bid. You may choose to bid a project of $25,000 or more in pieces, but each piece must be formally bid.
6. Do contractors have to be licensed and registered?
The contractor and all sub-contractors must have both a contractor’s license and be registered with the Department of Industrial Relations (DIR) in accordance with SB 854.
7. How do we determine what a project is worth?
The cost of a project can be determined using various methods. One way is to base it on similar projects the fair has conducted in the past. To do this, determine what you want, i.e. 10 RV spaces with hook-ups; compile a list of what items are required, i.e. site work, plumbing, electrical, paving, etc.; and determine what each item requires. Finally, attach a cost to each, from which a total cost can be calculated. You can also use current industry-recognized cost resources, such as Current Construction Costs from Saylor Publication, Inc. This publication was compiled using analyses from a large number of projects, interviews with material suppliers and subcontractors, and costs worked out with general contractors. In either case, the project cost needs to include all labor, materials, supplies, or any equipment costs.
8. What is considered maintenance work not subject to competitive bidding?
Maintenance is defined in the “California Public Contract Code” as normal reoccurring work (versus repair or improvement). Here are a few examples:
- We are replacing a water line and consider it to be maintenance.
A water line that already exists and that is replaced with a water line in the same location and of the same size, would be maintenance. If the line is moved, added to or size increased, it would be considered an improvement, and competitive bidding would likely be required.
- We have painting as a scheduled item every year, so we consider it maintenance. Moderate amounts of painting can be considered as maintenance and is permitted. Painting projects must be formally bid; however, if the value of materials, labor and equipment is greater than $25,000, or if the value exceeds the fair’s bidding threshold.
- We are planning to replace a roof that is leaking. Is that maintenance?
Repairs to a roof in order to fix leaks are maintenance. However, the replacement of a roof is a public works project subject to competitive bidding requirements.
9. Can fair staff do the majority of the work on a project?
First, is it “maintenance” or “public works” capital improvement? If maintenance work only, fair staff can be used without calculating the cost of labor. However, if the work is considered public works, then DAA fairs wishing to use their own employees must follow the “Day Labor” law in the California Public Contract Code. (For public works projects on fairgrounds to be performed by CFFA Day Labor, see FAQ #13 below.)
10. A local organization or non-profit wants to do a project on the fairgrounds, i.e. a 4-H club wants to put in new pens in the livestock barn, covering all costs, with no cost to the fair.
This is allowed and there are no bidding or prevailing wage requirements as long as there is absolutely no use of public funds, i.e. no fair labor, equipment, materials, or utilities are used. However, if a nonprofit wants to construct a building on public property and will be using water, electrical, equipment, etc., that is paid for with public funds, then it is considered a public works project.
11. Can a fair use volunteers on a project?
Yes, but it is important to remember that the definition of “volunteers” is found in the “California Labor Code.” They must be actual volunteers and not employees that want to give some extra time, or who are being paid by someone else to be there. Anyone paid on a fair project is no longer a volunteer and must be paid the proper prevailing wage rate.
12. Can a fair accept donations related to the project?
Yes. Donations can be of equipment, materials or supplies. The value of the donations are part of the value of the work and must be considered when looking at the project. For example, if someone offers to donate the use of their backhoe, you must figure out the value of that use and not just say that it was free so the operator doesn’t have to be paid prevailing wages. Remember that the value of work to determine bidding is different than the threshold for the payment of prevailing wages (see FAQ #2 above).
13. When can CFFA use day labor on fairgrounds projects?
CFFA may carry out projects on California fairgrounds using day labor. In no event can the total cost of the project when using day labor exceed $50,000 at a DAA fairgrounds. The use of day labor must be looked at on a project-to-project basis.
14. A utility company wants to bury the lines on the fairgrounds. It is going to be done entirely by them. Do we have to be sure it is bid?
No. This is not a fair project and the fair is not paying for the work. However, as the project is on public property, it will require plan review and inspection by either CFFA or the California Department of General Services (DGS).
For more information or if you have additional questions, please contact California Fairs Financing Authority, Bryan Eubanks, construction manager, (916) 263-6121, email@example.com.