CDBG Entitlement FAQ

We have a public sewer project where we are paying only for site work. Construction and equipment for the project are not part of our contract. Is it necessary to require Payment and Performance Bonds and Prevailing Wage of the contractor that is building the sewer plant? We are requiring this of the contractor that is doing the site work.

Date Published: May 2015

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Davis-Bacon wage rates apply when CDBG funds pay in whole or in part for any direct cost of construction and the construction meets one of the following thresholds:

  • Residential: Property has 8 or more units
  • Non Residential: Any construction work valued at more than $2,000

Since CDBG funds are being used to finance part of the construction of the project, in this case site work, Davis-Bacon wage rates apply to the entire construction project. You should follow your bonding policies and requirements for both contracts. Grantees that do not have bonding polices and requirements should follow the requirements at 24 CFR 85.36(h)(1).

Note that site acquisition, since it is not a construction activity, is not covered by Davis-Bacon.

Tags: CDBG Entitlement Program Davis-Bacon