Earlier today, MDOT communicated their direction and plans for implementing the repeal of the State of Michigan prevailing wages on projects they process through bid letting to MITA. Although the Michigan legislature passed legislation on June 6th repealing Michigan’s long-standing prevailing wage law, MDOT indicated that the formal implementation date for the new law was determined to be June 12th.
Per MDOT, as of June 12th, they had “state funded” projects that fell into one or three groups. Those groups and their disposition, as it relates to the repeal of the state prevailing wage, are:
Group 1: Projects awarded and under contract.
For projects in this group the contractual procedures in place requiring state prevailing wage will remain and continue throughout the term of the contract.
Group 2: Projects with bids taken, but contracts not yet awarded.
MDOT has made the determination that they will not reject all bids taken and rebid the projects in this group, nor will they request any price adjustments or concessions from the bidders.
MDOT has created an “amendment” to the originally advertised bid documents titled “Post Letting Changes to Contract” which eliminates all state prevailing wage requirements. MDOT has sent revised contracts, which include the “Post Letting Changes to Contract”, to the low bidders in this group with an explanation of the change.
Group 3: Projects advertised, but bids not yet taken.
Addenda removing the state prevailing wage requirements are being created and issued for projects in the June 29th and July 13th bid lettings.
Moving Forward…
As we now move forward with MDOT’s implementation of this new law, you should understand that this repeal of Michigan’s state prevailing wage has no impact on federally funded projects that have Davis-Bacon prevailing wage requirements. If you currently have a federally funded project, or if you are bidding on a project that is federally funded, the Davis-Bacon prevailing wage requirements and compliance protocols remain unchanged.
On state funded construction projects let by other public owners, where the advertisement still includes a state prevailing wage requirement, we recommend that bidders contact those public owners pre-bid to question the inclusion of a state prevailing wage requirement, and to get that owners direction on how you should react to the state prevailing wage requirement when bidding the project.
MITA has reached out to the Department of Licensing and Regulatory Affairs (LARA), Wage & Hour Division, to get their formal guidance on the implementation of the repeal of the state prevailing wage. However, they have indicated they are still working internally and with the Attorney General on those guidance documents.
We will keep all members informed as we learn and understand more about how the repeal of Michigan’s prevailing wage law will be implemented. If formal guidance documents are provided by LARA or any other state agency, we will pass those documents along, as well.
If you have any questions, please Glenn Bukoski, VP of Engineering Services, at glennbukoski@thinkmita.org, or Rachelle VanDeventer, VP of Industry Relations, at rachellevandeventer@thinkmita.org. You can call them in the MITA office as well at 517-347-8336.
