Applicability of the Davis-Bacon Act to Workers Who Perform Testing, Adjusting and Balancing (“TAB”) Work on HVAC Systems (AAM No. 247)
“Determinations as to the applicability of Davis-Bacon requirements to TAB workers performing HVAC work under a particular contract are fact-specific.”
--All Agency Memorandum No. 247
It is another hot August day, and the mind invariably turns to the wonders of air conditioning.
Are workers who perform testing, adjusting and balancing (“TAB “) work on heating, ventilating, and air conditioning (“HVAC”) systems “laborers or mechanics” to whom Davis-Bacon Act (“DBA”) requirements may be applicable? Under what circumstances is TAB work on HVAC systems part of the construction, alteration, and/or repair on a DBA-covered project, and hence subject to DBA labor standards?
The US Department of Labor(“DOL”) issues guidance on for federal contractor wage laws by means of so-called All Agency Memorandums (“AAMs” ) which are sent to executive agency officials, and posted at sam.gov along with the DOL wage determinations. Over the years, the DBA and the related Acts (“DBRA”) have been a fertile field for AAMs. On July 23, 2024, DOL issued AAM no. 247 to provide long needed guidance to the HVAC industry on coverage of technicians who service HVAC systems under federal contracts. https://iae-wdol-sam-gov.s3.amazonaws.com/WDOL_MEMORANDUM/AAM247.pdf?X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Date=20250819T142947Z&X-Amz-SignedHeaders=host&X-Amz-Expires=10&X-Amz-Credential=AKIAY3LPYEEX52OJRSGS%2F20250819%2Fus-east-1%2Fs3%2Faws4_request&X-Amz-Signature=324cb44a742195c9852a173f6276310afef637db021d23588f5ffcb5106ec893 The recurring issue that DOL was addressing is when those technicians might be performing work covered by the DBA, rather than service work covered by the Service Contract Act (“SCA”). It matters because the two laws specify different prevailing wages and benefits.
As noted in AAM No. 247, HVAC systems regulate and move heated and cooled air throughout buildings (or other works such as vessels), and are a significant component of the buildings or works in which they are installed. DOL made clear its position that installation, alteration, or repair of an HVAC system as part of a DBA overed project will be subject to Act. However, DOL noted that The applicability of DBA labor standards to workers who perform TAB work on HVAC systems is more complex and case specific. Because TAB work on HVAC systems may vary by contract and project, the AAM contains general guidelines for determining when DBA requirements apply to such work.
The DBA covers “laborers and mechanics” which are defined as workers who perform manual or physical labor, typically as part of a construction trade. According to DOL, TAB work has traditionally been performed by workers in the “sheet metal” trade. Aspects of TAB work have also been performed by workers with job titles such as “TAB Technician” or “Air and Hydronic Balancing Technicians.” Because job titles can vary, consideration of the actual duties a TAB worker performs is important to determine if they are “laborers or mechanics.”
The AAM goes on to specify the kind of work performed when testing, adjusting and balancing HVAC systems. DOL concludes that that workers who perform TAB work on HVAC systems are generally laborers or mechanics. But DOL also thinks that TAB work performed on HVAC systems is distinct from work performed by “air balance engineers” and “inspectors.” AS set forth in DOL’s Field Operations Handbook(FOH) Sections 15e06 and 15e14, workers performing those types of work are not considered laborers or mechanics because those duties—unlike TAB work—are not manual or physical in nature. Those FOH provisions recognize that if a worker performs manual or physical duties in addition to inspector or air balance engineer work, then they would be considered laborers or mechanics for the time so spent.
The AAM goes on to note that:
In determining whether TAB work on HVAC systems under a federal or federally assisted contract is DBRA-covered, the contract’s scope of work must be considered.4F 5 This is because TAB tasks may be performed by laborers or mechanics both under federal or federally assisted contracts for construction, including contracts that call for substantial rehabilitation, replacement, or installation of HVAC systems, and under federal contracts for routine, scheduled maintenance or servicing of HVAC systems. In general, TAB work under the former contracts would be DBRA-covered, while the Service Contract Act (SCA) would instead cover the latter.
Now here is where the rubber meets the road. Dol opines that TAB HVAC work such as the physical adjustment of dampers, physical clearing of debris obstructing airflows to be tested and measured, removal of guards to facilitate routine maintenance, and diagnostic drilling, standing alone, generally would not establish that a contract for such work is a “contract for construction” subject to the DBA. While they are deemed to be physical activities and involve manual work, they nonetheless may be performed under non-construction contracts such as routine maintenance contracts, as well as on contracts for the construction, alteration, and/or repair of buildings or works.
DOL notes that the sequence in which work is performed can also affect the coverage of the labor standards laws. When manual or physical activities including TAB HVAC work are performed at the DBA-covered work site and precede the acceptance of the completed building or work, those activities are subject to DBA coverage. See Norsaire Systems, Inc., WAB Case No. 94-06, 1995 WL 90009 (Feb. 28, 1995) (holding that warranty repair work to air cooling systems installed during the construction of a building prior to the building’s acceptance was DBA-covered work). Accordingly, DOL concludes that TAB work performed during a contract for the repair of one or more HVAC systems would be DBA-covered.
Testing HVAC system functionality also may be deemed a necessary but preliminary component of a contemplated federal or federally-assisted repair or rehabilitation project, even when the testing work is in a separate contract. In that event, all construction is DBA covered if necessary to complete the building or work regardless of the number of contracts involved so long as all contracts awarded are closely related in purpose, time and place. See AAM 130 (Mar. 17, 1978). DOL states that “Where DBRA-covered HVAC system construction, alteration, and/or repair work is already contemplated, contracts for testing work to identify HVAC repairs, renovations, or replacements that may be needed for such projects will generally be considered directly related and integral to the project, and thus subject to the Davis-Bacon labor standards” . The factors which go into this determination “include, but are not limited to, the existence of engineering or architectural plans or surveys of the site(s); the allocation of, or an application for, Federal funds; contract negotiations or bid solicitations; the stated intent of the relevant government officials; and the disposition of the site(s) after testing. “
Nonetheless, TAB testing work may be still performed in situations in which construction activities are undertaken in segregable phases that are distinct in purpose, time, and place, or where construction is not yet contemplated and typically would not be DBA-covered. DOL gives the following examples:
[V]entilation verification contracts may call for the performance of TAB work only to evaluate and report the extent and details of repairs, equipment replacements and construction that may be recommended or needed in the future, and it remains uncertain whether any future construction will take place. In those circumstances, the contracts for TAB testing work may reasonably be considered separate and distinct as to their purpose and/or timing from future contracts for construction planned or entered into after TAB report recommendations have been reviewed, decisions have been made based on that information, and funding has been obtained for that construction work.
Another example of TAB work not subject to DBRA requirements involves contracts solely for inspection (i.e., testing) of HVAC installation or rehabilitation work. TAB workers employed on a contract only to provide independent, “third party” inspections (but not adjustments or repairs) following the installation, reconstruction or rehabilitation of an HVAC system to determine the system’s compliance with required standards and to advise the project owner regarding readiness of the system for acceptance, would not be performing work on a DBRA-covered contract for construction. As discussed above, such workers would generally be considered inspectors rather than laborers and mechanics. See FOH 15e14.
In short, this is complicated stuff. Change the facts ever so slightly and you get a different result. As DOL itself concludes, “Determinations as to the applicability of Davis-Bacon requirements to TAB workers performing HVAC work under a particular contract are fact-specific.” If you want to know whether your HVAC work is covered either by the DBA or the SCA, read your contract first. Then ask DOL if there are any ambiguities. And guess what, traditionally DOL has favored DBA-coverage, so the old adage is if you have to ask, assume the answer is yes -- the DBA likely will apply.