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Subcontract Requirements

 

Jason Humphrey, Const/Maint. Engineer, 605.773.3571

 

If you are a prime contractor on a SDDOT highway project and you plan to sublet a portion of the work, the first step is to complete a Request to Sublet Work, Form DOT-202. This form must be signed by the prime contractor and sent to the address listed in the lower left-hand corner of the form PRIOR to such sublet work being performed. If a subcontractor plans to sublet a portion of their work, the Request to Sublet Work form must be signed by the PRIME CONTRACTOR then submitted to the DOT. The SDDOT Subletting of Contract Standard Specification, Section 8.1 stipulates the requirements for obtaining written consent to sublet work, limits the percent of work that may be sublet, defines what the Department will not consider as subcontracting and defines the project limits.

The form FHWA-1273 Required Contract Provisions dated May 1, 2012 and the SD-1273 South Dakota Special Provision for Required Contract Provisions dated July 18, 2012 must be physically incorporated (not referenced) in all contracts, subcontracts and lower-tier subcontracts (excluding purchase orders, rental agreements and other agreements for supplies or services related to a construction contract). A breach of any of the stipulations contained in these Required Contract Provisions may be sufficient grounds for withholding of progress payments, withholding of final payment, termination of the contract, suspension / debarment or any other action determined to be appropriate by the contracting agency and FHWA, as stipulated in Section I(3) of the FHWA-1273.

SDDOT Labor Compliance Information - The U.S. Department of Labor (U.S. DOL) Davis-Bacon Highway-Heavy Wage Decisions shall be attached to and made part of all contracts and subcontracts in accordance with FHWA-1273, Parts I and IV. The U.S. DOL's Davis-Bacon Wage Decisions apply to all Federal-aid construction contracts exceeding $2,000. The South Dakota Transportation Commission adopted that the U.S. DOL's Davis-Bacon Wage Decisions will also apply to South Dakota's non-Federal funded highway construction contracts where the award amount meets or exceeds $100,000. All laborers and mechanics employed or working upon the site of the work, will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor, in accordance with FHWA-1273 Section IV. Any Contractor or subcontractors performing work, under a South Dakota DOT highway construction contract funded with either $2,000 or more of federal funds or with $100,000 or more of state funds, shall furnish copies of complete weekly payroll reports together with the most recent SDDOT Statement of Compliance form to the contracting agency. Incomplete payroll reports and payroll reports that do not include the most recent SDDOT Statement of Compliance Form will not be accepted.

The SDDOT Prompt Payment Standard Specification, Section 9.13, stipulates that the contractor shall pay subcontractors or suppliers within 15 days of receiving payment for work that is submitted for progress payment by the Department. Retainage on subcontract work shall be released within15 days after the work is satisfactorily completed. The prompt payment and release of retainage applies to all tiers of subcontracts.

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