Question 1: In Scenario 1 does the Davis/Bacon wage rate need to be updated for the Option work?
Question 2: If the answer is yes, does the new wage rate apply to the whole contract thereby requiring renegotiation of the contract price?
Question 3: Can you have two wage rates on a contract where by you are paying workers different rates when working in the same area. i.e. HVAC contractor installing a main trunk while constructing the shell and at the same time adding distribution ducts under the fit-out work?
Question 4: Research related to this issue seems to indicate that the Davis/Bacon wage rate is not updated. The requirement to update appears to be limited to circumstances where a Multiyear contract, as defined in FAR part 17 is involved and the option is exercised for a new performance period. i.e. a new option year.
In response to your questions concerning Davis-Bacon wage determinations, I offer the following
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1) Davis-Bacon Act is not applicable to FAR part 36.6 Architect-Engineering Service contracts. Therefore, even if the A&E contracts contained options, Davis-Bacon wage determinations are not an issue.
2) Davis-Bacon Act is applicable to all construction contracts valued over $2000 IAW FAR 22.403-1.
3) There are two types of wage determination: general and project. The same basic rules apply to both as far as options and wage determinations are concerned.
4) IAW FAR 22.404-1(a) and (b): "...General wage determinations contain no expiration date and remain valid until modified, superseded, or canceled by the Department of Labor. Once incorporated into the contract, a general wage
determination remains effective for the life of the contract, unless the contracting officer exercises an option to extend the term of the contract..."
5) the topic is further discussed in FAR 22.404-12(a) which states, " Each time the contracting officer exercises an option to extend the term of a contract for construction, or a contract that includes substantial and
segregable construction work, the contracting officer must modify the contract to incorporate the most current wage determination."
From the information you provided, the contracting officer is NOT extending the term of the contract such as under an Indefinite Delivery, Indefinite Quantity (IDIQ) construction contract that allows the issuance of task orders. Extending the term indicates on option for an additional specific period of time, 01 Oct 20XX through 30 Sept 20XX. While your period of performance will be extended for additional work that was within the original scope of the contract, the term of the contract is not extended by the exercise of the option. I cannot determine from the information submitted, if the second requirement " substantial and segregable construction work" would necessitate the incorporation of a new wage determination. This is a decision the contracting officer will have to make in consultation with the contract attorney after reviewing the applicable directives to include any Agency FAR Supplements. Either decision should be document in a contracting officer determination and finding and included in the contract file.
There should probably not be two Davis-Bacon wage determinations on the same contract unless the requirement of FAR 22.404-12(a) in item #5 above have been met. There are instances where an option is exercised under an IDIQ contract and a new wage determination is issued concurrent with exercising the option. In this instance, task order issued prior to the exercise of the option would contain one wage determination and task orders issued after the option would contain a second determination and both task orders could be active during the same time frame.
Your question #4 does not contain a question. Your question #2 is not completely clear but I believe I have provided enough information that the answer to the question was probably covered. If not, let me know.