Project Monitoring

Volume 5, Chapter 14

INTRODUCTION

The dictionary defines "monitoring" as (1) checking systematically or scrutinizing for the purpose of collecting specified categories of data, and (2) keeping watch over; supervising.

The above meanings apply to project monitoring of University construction projects. The extent of needed project monitoring is determined by the Facility. Except for the contract schedule, which is monitored by the University's Representative, project monitoring is mainly performed by the Project Manager.

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14.1 MONITORING THE CONTRACT SCHEDULE

References:

- Long Form, General Conditions.

- Long Form, Specifications.

Specifications, Section 01310, requires the contract schedule to be updated monthly by the contractor; therefore, the contract schedule becomes a tool to monitor the progress of the work. By looking at an approved updated contract schedule, the University's Representative can determine the approximate state of completion of each portion of the work.

Another important use of the contract schedule is for analyzing the validity of delay claims (see 13.5). General Conditions, Paragraph 8.4, provides for extension of contract time for delays in progress of the work. A current updated contract schedule allows the University's Representative to determine if a delay is in an activity that will actually delay the completion of the project.

The contract schedule is also used to compare the actual construction time to contract time, and the schedule is used for evaluating the percentage of completed work activities when the Facility processes the contractor's monthly Application for Payment (see 15.3).

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14.2 STATUTORY REQUIREMENTS

References:

California Labor Code, Sections 1771 through 1775, 1776, 1777, 1777.1, 1777.5, 1777.7, and 3077.
California Code of Regulations, Title 8, Chapter 8, Subchapter 4 - Sections 16423, 16433, 16450 and Subchapter 4.5 – Sections 16450-16455
- Long Form, General Conditions and Supplementary Conditions, Article 14.

The California Labor Code is applicable to certain University construction contracts. Two items in the code, "Prevailing Wage Rates" and "Apprentices," are set forth in General Conditions and the Supplementary Conditions, Article 14. Additional apprenticeship standards stated in Labor Code, Section 1773.3, require the University to follow certain administrative procedures. The major requirements of these documents are covered in the paragraphs that follow.

14.2.1 Prevailing Wage Rates

References:

- "University of California Guidelines for Payment of Prevailing Wage Rates on Construction and Maintenance Contracts," December 9, 1993. 

Guidelines for the Payment of Prevailing Wage Rates on Construction and Maintenance Contracts. The requirements for payment of prevailing wage rates on construction and maintenance contracts for public works projects are defined by Sections 1771 through 1775 of the California Labor Code. The University, in certain situations, must require the payment of prevailing wage rates on construction and maintenance contracts. The University also requires the payment of prevailing wage rates in some other situations where an exemption from the prevailing wage requirements could be claimed. These guidelines set forth when the University will require the payment of prevailing wage rates.

The following guidelines apply to all construction and maintenance contracts exceeding $1,000 located in the state, and involving the University:

  1. The University will require payment of prevailing wage rates by contractors and subcontractors on construction and maintenance contracts:
    1. Contracted for using University contract documents, or any other contract documents, and for which any portion of the funds are furnished by the state.
    2. Paid for with funds not furnished by the state and contracted for using University contract documents.
    3. Contracted for without using University contract documents; but the University owns the underlying land and the University is the manager of the project.
    4. The University will be a lessee using more than 50 percent of the assignable square feet of the project in which the construction will be performed regardless of the source of funds, land ownership, or contract documents used.
  2. The University will not require payment of prevailing wage rates by contractors and subcontractors on construction or maintenance contracts undertaken by developers on Facility land or on property of The Regents, including inclusion area land, where the project cannot, in the sole determination of the responsible University administrator, be constructed economically or practically if the payment of prevailing wages is required, and where either of the following conditions exist:
    1. The cost will be paid entirely by non-state funds furnished principally by students, faculty, staff, hospital patients, outside corporations, or donors or where the construction or maintenance contract is funded by loans which will be repaid by any of the above.
    2. The project is built for sale or lease to students, faculty, or staff without any funds being furnished by the state.
  3. Upon an appropriate showing of exceptional need, the University's Senior Vice President Business and Finance may authorize an exception to the prevailing wage requirements of these guidelines that permits a construction or maintenance project to proceed without the payment of prevailing wages.
  4. As used herein, a contract will be considered a construction contract only if its performance requires a license under California's Contractor's License Law.

Requirements When the University Must Pay or Agrees to Pay Prevailing Wage Rates. Wage rates are made a part of the contract by reference to a wage scale in the General Conditions. A copy of the current wage schedule is to be kept on file and available for inspection in the Facility's facilities management office.

The director of the California Department of Industrial Relations (DIR) is responsible for determining the general prevailing wage rate of per diem wages ("wage rates"). Each Facility must research the appropriate prevailing wage rates by contacting the DIR and/or referring to the DIR website.

Monitoring of Prevailing Wage Rates. The University is not required to monitor the contractor's payment of prevailing wage rates, except during projects funded in whole or in part by bonds issued by the State of California, as described below. The monitoring process is usually performed by labor unions or others. However, if the University requires the payment of prevailing wage rates, random checks must be made to determine if the contractor is meeting the contract requirements.

If a complaint is received regarding contractor noncompliance with prevailing wage rates, review the contractor's certified copy of the payroll records (see 14.2.2).

Projects Funded by State-issued Bonds.  The University is required to monitor and enforce compliance with prevailing wage laws on all projects funded in whole or in part with bonds issued by the State of California where the contract is awarded after January 1, 2012. The University will operate a systemwide Labor Compliance Program (LCP) for all affected projects at all locations.  Every Facility must have a designated Labor Compliance Officer who is knowledgeable about the LCP requirements.  Any Facility that would like assistance in performing the tasks required by the LCP can request such assistance from another Facility with more experience and/or a larger staff.  The University will be required to inform contractors and subcontractors of the labor compliance requirements at a pre-job conference, review certified payrolls at least monthly and audit where necessary, verify proper posting of job site notices and conduct job site interviews, among other activities.  The University’s approved Labor Compliance Program document is at the Office of the President website. The DIR website provides further information. Special language found within the University approved contract templates must be added to the Supplementary Conditions of any contract for a project where labor compliance monitoring is required. The University is required to withhold payments to contractors when an underpayment of wages is noted and when payroll records are late or incomplete.

The contractor forfeits to the University a penalty for each calendar day or portion thereof, for each worker that is paid less than the specified rates. The amount of this forfeiture is determined by the Labor Commissioner. The contractor also pays to each worker an amount equal to the difference between the specified rate and the amount that was paid to the worker.

14.2.2 Payroll Records

The contractor and all subcontractors must keep an accurate payroll record, showing each person's name, address, and Social Security number or classification; straight-time and overtime hours worked each day and week; and the actual hourly wages paid to each journeymen, apprentice, worker, or other employee employed in connection with the work. These payroll records must be certified and submitted electronically to the University using designated software at such times as directed. In addition:

  • A certified copy of an employee's payroll record must be made available for inspection or furnished to such employee or the employee's authorized representative on request.
  • A certified copy of all payroll records must be made available for inspection upon request by the University, the Division of Labor Standards Enforcement, and the Division of Apprenticeship Standards of the Department of Industrial Relations.
  • A certified copy of all payroll records must be made available upon request to the public for inspection, or copies thereof made, provided that the request by the public is made to either the University, the Division of Apprenticeship Standards, or the Division of Labor Standards Enforcement. The public cannot be given access to such records at the principal offices of the contractor or subcontractors. Any copy of records made available for inspection to the public must be marked or obliterated in such a manner as to prevent disclosure of an individual's name, address, and Social Security number. The name and address of the contractor or subcontractors awarded the contract or performing the work must not be marked or obliterated.

The contractor must file a certified copy of the payroll records with the entity that requested the records within 10 days after receipt of a written request. The contractor informs the University of the location of such project payroll records, including the street address, city, and county, and shall, within five working days, provide a notice of change of location and address of such records.

In the event of contractor noncompliance with the requirements of the General Conditions or with Labor Code, Section 1776, regarding the submission or inspection of payroll records, the contractor has 10 days in which to comply following receipt of written notice specifying what is required of the contractor. Should noncompliance still be evident after the 10-day period, the contractor forfeits a monetary penalty for each calendar day, or portion thereof, for each worker, until strict compliance is accomplished.

Violations With Intent To Defraud and Willful Violations. Labor Code, Section 1777.1, addresses violations with intent to defraud and willful violations. The Labor Commissioner determines such violations and will direct the University on what action to take. Section 1777.1 states:

  1. Whenever any contractor or subcontractor performing a public works project pursuant to this chapter is found by the Labor Commissioner to be in violation of this chapter with intent to defraud, except Section 1777.5, the contractor or subcontractor or any firm, corporation, partnership, or association in which the contractor or subcontractor has a substantial interest shall be ineligible to bid on or to receive any public works contract for a period of not less than one year or more than three years. The period of debarment shall run from the date the determination of the violation is made by the Labor Commissioner.
  2. Whenever any contractor or subcontractor performing a public works project pursuant to this chapter is found by the Labor Commissioner to be in willful violation of this chapter, except Section 1777.5, the contractor or subcontractor or any firm, corporation, partnership, or association in which the contractor or subcontractor has a substantial interest shall be ineligible to bid on or to receive any public works contract for a period up to three years for each second and subsequent violation occurring within three years of a separate and previous willful violation of this chapter. These periods of debarment shall run from the date the determination of the violation is made by the Labor Commissioner.
  3. Any determination by the Labor Commissioner shall be made after a full investigation by the Labor Commissioner and a fair and impartial hearing and reasonable notice.
  4. A willful violation occurs when the contractor or subcontractor knew or reasonably should have known of his or her obligations under the public works law and deliberately fails or refuses to comply with its provisions.
  5. The Labor Commissioner shall promulgate rules and regulations for the administration and enforcement of this section, the definition of terms, and appropriate penalties.
    - California Labor Code, Section 1777.1.

A list of contractors that have been debarred and are not eligible to bid on public works projects as a result of violations of Labor Code provisions governing prevailing wage and apprenticeship is available on the DIR website. The Facility can check this list to verify if a potential bidder is eligible.

14.2.3 Employment of Apprentices

Only apprentices as defined in Section 3077 of the California Labor Code who are in training under apprenticeship standards and written apprentice agreements under Chapter 4, Division 3, of the Labor Code are eligible to be employed by the contractor and subcontractors as apprentices. The employment and training of each apprentice must be in accordance with the provisions of the apprenticeship standards and apprentice agreements under which the apprentice is training.

Every apprentice must be paid the standard wage to apprentices under the regulations of the craft or trade in which the apprentice is employed, and be employed only at the work of the craft or trade to which the apprentice is indentured.

When the contractor or subcontractors employ workers in any apprenticeship craft or trade for the work, the contractor or subcontractors apply to the joint apprenticeship committee administrating the apprenticeship standards of the craft or trade, in the area of the site of the work, for a certificate approving the contractor or subcontractors under the apprenticeship standards for the employment and training of apprentices.

The committee issues a certificate fixing the number of apprentices or the ratio of apprentices to journeymen employed in the craft or trade for the work. The ratio cannot exceed that stipulated in the apprenticeship standards under which the joint apprenticeship committee operates, but in no case the ratio be less than one hour of apprentice labor for each five hours of journeymen labor, except as permitted by law.

The contractor or subcontractors, upon the issuance of the approval certificate in each such craft or trade, employs the number of apprentices in the ratio of apprentice labor hours to journeymen labor hours fixed in the certificate, or the contractor or subcontractors must present an exemption certificate issued by the Division of Apprenticeship Standards.

If the contractor or subcontractors employ journeymen or apprentices in any apprenticeship craft or trade in the area of the site of the work, and there exists a fund for allaying the cost of the apprenticeship program in that trade or craft, and other contractors in the area of the site of the work are contributing to that fund, the contractor must also contribute to the fund.

The contractor violates the construction contract if the contractor willfully fails to comply with General Conditions, Paragraph 14.5. Nothing contained in General Condition, Paragraph 14.5, prohibits or prevents the hiring by the contractor or subcontractors of journeymen-trainees who may receive on-the-job training to enable them to achieve journeymen status in any craft or trade under standards other than those set forth for apprentices.

Required Notification. Labor Code, Section 1773.3, "Notifications of Award of Public Works Contract and of Discrepancy in Apprentices Journeymen Ratio," states:

An awarding agency whose public works contract falls within the jurisdiction of Section 1777.5 shall, within five days of the award, send a copy of the award to the Division of Apprenticeship Standards. When specifically requested by a local joint apprenticeship committee, the Division shall notify the local joint apprenticeship committee regarding all such awards applicable to the joint apprenticeship committee making the request. Within five days of a finding of any discrepancy regarding the ratio of apprentices to journeymen, pursuant to the certified fixed number of apprentices to journeymen, the awarding agency shall notify the Division of Apprenticeship Standards.

    - California Labor Code, Section 1773.3.

On contracts to which Labor Code, Section 1777.5, applies (see 14.3.1), the University is required to file a notice with the director of the Division of Apprenticeship Standards within five days of contract award. The division supplies Form PWC 100 for filing this notice electronically or by mail.

Exemptions From Apprenticeship Standards. California Labor Code, Section 1777.5, lists the categories of contractors exempted from apprenticeship standards. Section 1777.5 states, "This section shall not apply to contracts of general contractors involving less than thirty thousand dollars ($30,000) or 20 working days or to contracts of specialty contractors not bidding for work through a general or prime contractor involving less than two thousand dollars ($2,000) or fewer than five working days."

Penalties For Noncompliance With Apprenticeship Standards. Labor Code, Section 1777.7, provides for the following penalties in instances of noncompliance with established apprenticeship standards:

A contractor who willfully fails to comply with certain provisions regarding the employment of apprentices is denied the right to bid on public works contracts for a period of one year.

The University, under specified circumstances, is required to withhold from contract progress payments (see 15.2) due or to become due, the sum of $5,000 until released on the order of the Administrator of Apprenticeship, or until completion of the contract.

Monitoring Contractor Compliance. The Facility monitors applicable contracts for contractor compliance with General Conditions, Paragraph 14.5. The Facility sets up administrative procedures to make certain the contractor is complying with the contract apprenticeship requirements.

The requirements of apprenticeship standards are explained at the pre-bid conference.

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14.3 HOSPITAL REQUIREMENTS

References:

    - Health and Safety Code, Part 7, Chapter 1, Health Facilities, commencing with Section 129675,
       known as the Alfred E. Alqist Hospital Seismic Safety Act of 1983 (Alquist Act).
    - SB 1953 (Chapter 740, 1994), chaptered into statute in Sections 130000 through 130070
       of the Alfred E. Alquist Hospital Facilities Seismic Safety Act
       (To access the above references, please go to the California Health & Safety Code)
    - Long Form, Specifications.

Hospital projects require special monitoring to meet Office of Statewide Health Planning and Development (OSHPD) requirements and to meet other hospital-related construction requirements set forth in the Specifications.

14.3.1 OSHPD Requirements

Hospital safety standards and inspection requirements are set forth in 12.2.4. Facilities management personnel must monitor the fulfillment of these requirements to make certain the project does not fall behind schedule because of Office of Statewide Health Planning and Development (OSHPD) reviews and approvals. All contacts with OSHPD shall be made by facilities management personnel; therefore, items required to be submitted by the inspector, design professional, or contractor, shall be processed with OSHPD by the Facility's facilities management office.

14.3.2 Special Additional Hospital Requirements

The Facility must monitor the contractor's compliance with special hospital requirements set forth in the Specifications such as:

    Infection control.

    Sign protection.

    Work hours.

    Protective covers.

    Daily cleanup.

    Barricades.

    Advance notices for shutdowns.

    Observation of construction by the University's Representative.

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Revised May 22, 2012 (Change No. FM 12-005-D)

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