CDBG Grantee Responsibilities Prior to Awarding a Construction Contract

Engineering and/or Architectural Design and Specifications Preparation

Contracts for Professional Services (Ex. architects, engineers, surveyors, landscape architects, and industrial hygienists). Although exempt from the Procurement Code, 24-101-105, competition for such Services must be conducted through the use of a Request for Statements of Qualification (RFQ) per CRS §24-30-1403. RFQs are published on BIDS and Advertised in at least one daily newspaper of general circulation. Price cannot be used as a consideration in the Award (see Chapter III.4(H), Statements of Qualification/Request for Qualifications (RFQ)); For further information go to QBS Colorado Coalition or contact your Program manager for the state Procurement Guide. Professional contracts for services on federally funded projects must comply with Section 3: Local Employment, Training and Contracting, See Exhibit VIII-A, Sample Contract for Professional Services.

Note: “Design-Build” contracts are not generally used in the CDBG Program. Contact your Program manager if you are interested in seeing if this method will work for your project.

Complete the Water Works & Wastewater Projects Review Process

The Water Quality Control Division within the Department of Health must review and approve all plans and specifications for new water works and wastewater projects or for improvements or modifications to existing water and wastewater works prior to construction. Information must be submitted to this Division a minimum of forty-five (45) days prior to letting bids for construction. See Exhibit VIII-B.

Determine Davis-Bacon Applicability

All contracts for construction, alteration, rehabilitation, some demolition or repair funded in whole or part with CDBG funds are subject to DavisBacon prevailing wage rate provisions. If the grantee believes that its project or a part thereof is exempt, the grantee should contact the Program manager prior to completion of a written statement detailing the reasons for exemption, see Exhibit VIII-C. The statement should be maintained in the grantee's labor standards file and a copy sent to the state office. If the grantee has questions about the applicability of federal labor standards provisions, contact the Program manager.

If the project is subject to Davis Bacon please download a copy of Davis-Bacon and Labor Standards. See Exhibit VIII-C.1 for a Davis Bacon Checklist.

Determine Davis-Bacon Prevailing Wage Rates 

If the project is not exempt from DavisBacon provisions, the grantee should take the following actions:

Select the proper wage rate. Generally, construction projects are classified as Building, Highway, Residential, or Heavy.

• Building – generally, this is used when the construction of sheltered enclosures with walk-in access for the purpose of housing persons, machinery, equipment, or supplies. It includes all construction of such structures, the installation of utilities and the installation of equipment, both above and below grade.
• Highway – these projects include the construction, alteration or repair of roads, streets, highways, runways, taxiways, alleys, trails, paths, parking areas, and other similar projects not incidental to building or heavy construction.
• Residential – projects involving the construction, alteration, or repair of single family houses or apartment buildings of no more than four stories in height. This includes all incidental items such as site work, parking areas, utilities, streets and sidewalks.
• Heavy – heavy construction is not a standardized classification. Because of this catch-all nature, projects within the heavy classification may sometimes be distinguished on the basis of their particular characteristics. For example, water and sewage treatment plants (other than buildings), flood control projects, sewage collection and disposal lines, would be classified under heavy.

Obtain a wage determination from the state, (DLG / OEDIT contact CDBG Program Coordinator, DOH contact Asset Manager in writing (e-mail), to request a wage determination. See Exhibit VIII-D.

• Send the completed form to your DLG / OEDIT CDBG Program Coordinator or DOH Asset Manager at least 10 days prior to the bid date. Maintain the written confirmation of Wage Determination from the State in your file.
• If additional classifications are required, either because of changes in the project or because the work classification you need doesn’t appear on the wage decision, you will need the grantee to complete a HUD form 4320A, "Report of Additional 
  Classification and Rate", see Exhibit VIII-E – be sure to read the instructions. This report should be sent to your DLG / OEDIT CDBG Program Manager, or DOH Asset Manager to forward to the Department of Labor.
  • Wage Determination “Lock-In” Rules:
    • Competitive bidding: Modifications published less than 10 days before bid opening may be disregarded if found there is not sufficient time to notify bidders, and a report is made to contract file. The grantee is not required to update the bid package only if there is insufficient time to notify all bidders and the grantee certifies that it was unable to notify the bidders of the modification. An attempt to notify bidders of the wage modification must be made.
    • Lock-in occurs at time of bid opening provided contract is awarded within 90 days
    • Must update wage determination if contract award is more than 90 days after bid opening
    • Once a Davis-Bacon wage rate has been “locked,” it stays in effect for the duration of the project.

The governing regulations for laws on labor standards provide for specific language to be included in all solicitations for bids and contracts for projects receiving federal financial assistance. A Sample Contract is available in Exhibit VIII-J.

Visit the Office of Labor Relations on the HUD home page at: for more information.

Bid Preparation & Processing

Before inviting bids on any contract, the grantee should take the following steps to ensure that the bid package contains all the relevant information that bidders will need to respond adequately. When completed a copy of the bid package should be sent to your program manager.

• The architect/engineer should provide the grantee with a set of drawings and specifications for the construction project including an accurate and clear description of the technical requirements of the project and, if applicable, a certification that the design takes into account requirements of the Architectural Barriers Act related to accessibility by handicapped persons. The Architect's Certification, Exhibit VIII-F, must be consigned by a city official and included in the contract file. Finally, the plans and drawings must be stamped by an architect/engineer registered or licensed by the State of Colorado.
• Acquire any property, easements, or rightsofway that might be required for construction of the project, Exhibit VIII-G. Please consult with your Program manager if this project involves Acquisition.
• Obtain information from local public utilities regarding underground installations. The grantee should request a map of the project site which will be included in the bid package. The request should contain a cutoff date for response (generally 30 days) after which the grantee would not be held liable for damages to underground facilities.
• Determine the cost and pricing format. Contracts may be either lump sum or unit priced. "Cost plus" contracts may not be used. The grantee should consider, at this point, whether or not it wishes to include "deductible alternatives" in the pricing format for the contract.

Bid Package Preparation

Solicitation of bids and the awarding of contracts for construction, alteration or rehabilitation of public works projects, public facilities, and large housing projects are governed by a set of laws requiring that:

• Contractors pay mechanics and laborers at a rate equal or greater to that paid to workers on similar activities in the area. These Davis-Bacon "prevailing wage rates" are determined by the U.S. Department of Labor.
• Workers are paid at regularly scheduled intervals (at least once a week) and only deductions allowable by law or authorized by the employee are taken out of the worker's gross pay.
• Workers receive overtime compensation at a rate of at least one and onehalf (1.5) times their regularly hourly wage for any work performed in excess of forty (40) hours per week.
• Workers are assured of safe and healthy working conditions.

The bid package must include all applicable portions of EXHIBITS VIII-B through VIII-O, and at the very least includes the following items:

• Invitation for Bids, Exhibit VIII-H
• Instructions to Bidder, process by which the bids will be evaluated, and the method of contract award, Exhibit VIII-I.
• Contract Documents, Exhibit VIII-J.
• Bid Proposal FormLump Sum, or Unit Price, Exhibit VIII-K/ Exhibit VIII-L
• Bid Bond Form, Exhibit VIII-M.
• Information on Performance and Payment Bond Requirements, Exhibit VIII-N.
• Contractor and Subcontractor Certifications, Exhibit VIII-O, O.1, O.2, O.3 (if applicable) and O.4
• The wage rate determination received from DOLA and Federal Labor Standards Provisions (FLSP), Exhibit VIII-I.2, must be included in any solicitation for bids.

Once the complete bid package has been assembled, it is recommended, but not required that the bid package be reviewed and approved by your attorney.

Bid Advertisement

An advertisement of the bid should be drafted based on the information in the "Invitation for Bid", Exhibit VIII-H. The advertisement should be:

• published in a general circulation newspaper – (posting should be in the legal notices section or follow local standard procedure)
• in addition you can also email, fax etc. bid announcements to any contractors choose
• if holding a pre-bid meeting, you should allow a reasonable amount of time for contractors to be made aware of the project (5 working days for instance) before the date of the pre-bid.
• allow at least 15 days for response by bidders. (The response period may be extended in instances where the project is complex and requires additional time for preparation of bids.)

Any amendments to the bid package must be mailed to each bidder, and every bidder must be given an appropriate period of time to respond to the amendments.

Bid Logging

Upon receipt by the grantee, each bid should be logged by time and date of receipt and offer the bids should remain sealed and safely stored until the bid opening. A copy of the log should be kept in the contract file.

Bid Opening

The Bid Opening should be conducted in a businesslike manner with each bid being read aloud. In addition, the names of the bidders and their bid amounts should be shared (via email, fax etc.) to all contractors submitting a bid. The apparent low bidder will be determined at this time, but the contract is not awarded at the bid opening.

In the event that all bids exceed the amount of funds available for the construction project, the grantee has three options:

• seek additional financing resources such as general revenues or bond proceeds;
• use "deductible alternatives," identified in the bid package; or,
• modify the bid package and repeat the entire bid process as outlined above. Under no circumstances can the grantee negotiate with the low bidder to bring the offer in line with the project budget.

Where the grantee chooses the "deductible alternatives" approach, each bid should be reevaluated based on the modified scope of goods and services to be provided. The grantee must, however, be careful not to significantly alter the program benefits when using this approach, as the grant was awarded based on the level of program benefits identified in the CDBG application.

Review Low Bidder & Bidder Eligibility (Debarment check)

Following the bid opening the low bid should be reviewed to ensure that the bid submission was technically and legally responsive to the solicitation for bids, that the contractors and all subcontractors are qualified and have the capacity to carry out the project as scheduled, that the prime contractor does not appear on the active exclusion list of the System for Award Management (SAM). See below.

Prior to executing any construction contract/s, the grantee is required to verify that any or all of its proposed contractors and subcontractors are not debarred, suspended or ineligible to participate in a federally funded project. Should any contractor/subcontractor fall into one of the three categories, it is not eligible to participate in the CDBG funded project. Complete Exhibit VIII-P Contractor's Eligibility Verification Letter (debarment check), and submit it to your DLG / OEDIT CDBG Program Manager or DOH Asset Manager.

If the low bidder proves to be unsatisfactory for any reason, and the grantee chooses to use the next lowest bidder, a statement of justification should be sent to the low bidder and a copy should be retained in the contract file.