Davis Bacon Requirements
The Title XVII and ATVM programs require that each recipient of a Department of Energy loan guarantee, loan or credit subsidy assistance provide with reasonable assurance that all laborers and mechanics employed in the construction and performance of a project or facility, including those employed by contractors or subcontractors, will be paid wages at rates not less than those prevailing on similar work in the locality of the project, as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code (the Davis Bacon Act).
An applicant’s obligation to provide such reasonable assurance and maintain compliance with the Davis Bacon Act shall be effective as of the closing date of the Department loan or loan guarantee. The Department will not issue a loan guarantee or pay the credit subsidy cost for any project or facility if an applicant fails to comply with the Davis Bacon Act and provide such reasonable assurance. Failure to provide such reasonable assurances in respect of a project will adversely impact the availability of appropriated funds under the Recovery Act to cover the credit subsidy cost for such project. Each borrower will be required in the Loan Guarantee Agreement to make representations and warranties, covenant to, and satisfy conditions precedent to closing and to each disbursement that, in each case, relate to its compliance with the Davis Bacon Act and all applicable Davis Bacon Act regulations, including all requirements set forth in 29 CFR Part 5.
Section 1605 of the Recovery Act prohibits the use of funds appropriated or otherwise made available by the Recovery Act for any project or facility involving the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States. The law requires that this prohibition be applied in a manner consistent with United States obligations under international agreements, and it provides for waiver under given certain enumerated circumstances. Office of Management and Budget (OMB) has issued interim guidance on these requirements in the OMB Implementing Guidance. If Section 1605 of the Recovery Act is applicable to a project or facility, any Loan Guarantee Agreement with respect to such project or facility will require compliance with this provision. Applicants should visit the Program Web site for additional guidance regarding the application of Section 1605 of the Recovery Act.