I Have Been Awarded A Contract, Now What?

Once you receive notification that you have been awarded a contract, there are several things that will happen: Contract, Notice to Proceed, and Documentation for the Contract File:

• You will receive a draft contract by email. This contract will include any HUD provisions that are required to be part of the contract as well as the scope of work and part or all of your proposal. You will need to review the contract to determine if you have any questions or need clarification on any items. If you agree to the terms of the contract, you will return two signed copies of the contract to BHA. You will receive a fully executed original by mail.
• You will receive a Notice to Proceed. You may receive this at the same time that you receive the contract to print and sign. If the project will not begin immediately, the Notice to Proceed will be issued at a later date. BHA is not responsible for any work performed or materials ordered prior to the full execution of the Notice to Proceed.
• You will need to provide copies of business licenses, your W-9, and any other forms requested by BHA for your contract file.
• You will need to request a certificate of insurance with endorsements from your insurance agent. The certificate must comply with the requirements of the contract. The easiest way to ensure that this occurs is to provide the insurance provisions of the contract directly to your insurance agent.
• You will be contacted by the BHA project manager to begin work on the project.

In most cases, BHA will not sign the contractor’s contract form. The contractor must agree to the contract provided by BHA once any mutually agreeable revisions have been made.

As a public agency performing public works projects, the Bremerton Housing Authority is required to comply with various labor standard regulations. In Washington State, the Department of Labor & Industries (L&I) regulates documentation required for public works contracts.

When a public works contract is signed with the Bremerton Housing Authority, the contractor is required to submit an Intent to Pay Prevailing Wages (Intent) and an Affidavit of Wages Paid (Affidavit) for that project. It is BHA’s responsibility to include this requirement in the contract document. It is the contractor’s responsibility to file the paperwork.

• The Intent to Pay Prevailing Wages is filed at the beginning of the project. Typically, BHA’s projects require HUD or Davis Bacon wage rates, so the paperwork requires special wording and must be filed in hard copy. The Contractor will work with BHA to ensure that the intent includes the correct information and is filed correctly. Once L&I approves the Intent, the contractor will inform BHA that the approved intent is available online.
• The Affidavit of Wages Paid is filed at the end of the project. This is filed online by the Contractor. Once L&I approves the Affidavit, the contractor will inform BHA that the approved affidavit is available online.
• The Contractor must ensure that all subcontractors file intents and affidavits for their work on the project.
• There is no minimum contract amount. Intents and Affidavits must be filed on every project.

Many of BHA’s projects require that an amount between 5-10% of the total contract amount is withheld as retainage. This amount is meant to cover any prevailing wage, tax, or other issues that may arise during the course of the contract. To release retention, BHA must submit a Notice of Completion to the Employment Security Department, the Department of Revenue, and the Department of Labor & Industries to request approval to release. Once those agencies certify that they have no claims on the retainage, BHA is able to release payment of that amount to the contractor. BHA is unable to submit the Notice of Completion until all contractor and subcontractor intents and affidavits have been submitted to and approved by L&I. Once the notice of completion is submitted, it can take 6 to 8 weeks for all of the agencies to provide approval for release of retainage – if there are no unresolved issues with the contractor or any of the subcontractors. The intents should be filed as soon as the contract is signed and affidavits as soon as the job is complete to ensure that there are no delays in filing the notice of completion.

More information on Intents and Affidavits may be found at L&I’s website by clicking here.

Certified Payroll is required for all work performed for BHA. Some contracts require that the certified payroll reports are submitted to BHA on a weekly basis, and others require that they are generated and kept by the Contractor. The requirement varies based on the funding of the work and is indicated in the contract document signed by BHA and the Contractor.

Contractors are required to retain and/or submit certified payroll to illustrate and document that they have complied with the prevailing wage requirements of the project. Certified payroll reports may be reviewed by BHA, HUD, or the Department of Labor & Industries at any time during the project or as part of the closeout. If it is determined through review of the reports that a mistake was made in the payment to an employee, BHA will work with the contractor to ensure that the mistake is corrected and the employee compensated appropriately.

More information on certified payroll in general may be found by clicking here.

More information on certified payroll required by an Owner/Operator may be found by clicking here.

Additional Resources related to certified payroll and federal and state prevailing wage requirements may be found by clicking here.

The Bremerton Housing Authority is required to withhold retainage on all construction contracts totaling $35,000 or more. If retainage is applicable, the percentage to be withheld will be specified in each individual contract.

Retainage is generally 5 or 10% of the total contract amount. This amount is withheld from payment to ensure that BHA and the state agencies have recourse if the contractor or subcontractor fail to meet an obligation. The state agencies have the right to request payment for any amounts owed up to and including the full amount of retainage withheld. Once the state agencies notify BHA in writing that the contractor and subcontractors have met all obligations, BHA is able to release retainage. Before releasing retainage, BHA will review the project to ensure that there are no unresolved issues with the project. If there are, BHA has the option to use the withheld amount to rectify those issues. If there are no issues, or BHA chooses not to use retainage to rectify what issues there are, retainage will be released to the Contractor who is then responsible for paying retainage out to its subcontractors.

It is the contractor’s responsibility to ensure that all Intents to Pay Prevailing Wages and Affidavits of Wages Paid are filed with the Department of Labor & Industries. The Contractor and all subcontractors must file these forms. Delay in filing these forms will result in a delay of releasing retainage.

Once a project is accepted as final, BHA will complete a Notice of Completion form to be forwarded to the Department of Labor & Industries, the Employment Security Department, and the Department of Revenue. This form cannot be filed with any of the agencies until the intents and affidavits for the contractor and all subcontractors have been filed and approved. Once the form is filed with the three state agencies, BHA must wait to receive approval letters from each agency to release the retainage. Retainage will not be released until all three letters are received. If there are no issues, this process can take from six to eight weeks.

If there are any issues that need to be resolved for any of the three agencies, the release of retainage will not occur until the issues are resolved and the approval to release retainage has been received from all three agencies. Examples of issues that may be encountered is a tax audit conducted by the Department of Revenue or an issue with payment to employees found by L&I. The state agencies have the right to request payment from the retainage withheld by BHA to rectify issues that are found that the contractor or subcontractor refuses to rectify. BHA is required to comply with that request.

The Bremerton Housing Authority pays on a net 30 basis and only for work performed. There are some exceptions made if the contractor must make a large purchase of materials or equipment at the beginning of the job. Other exceptions can be made if authorized by the contracting officer in writing.

Per RCW 35.82.210, the Bremerton Housing Authority is exempt from taxes including sales tax as outlined below:

• Sales Tax on Labor: Sales or use tax is not to be applied to labor or services in the performance of work for BHA.
• Sales Tax on Material: All materials purchased by the Contractor in the performance of work for BHA are subject to Washington State Use Tax (unless retail sales tax has been paid on the materials).
• Applicable Sales Tax is to be included in the bid and final pricing. Sales tax is not to be a separate line item in the bid or on the invoice.
• BHA will provide the Contractor with the Buyer’s Retail Sales Tax Exemption Certificate for documentation.