On May 5, 2011, the Ohio House of Representatives passed H.B.
153, Ohio's main operating budget for fiscal years 2012 and
2013. The current bill contains some key provisions affecting the
public construction industry in the areas of prevailing wage law
and alternative delivery methods.
Prevailing Wage
Under the budget bill, for prevailing wage requirements to
apply, a project must be constructed by a public authority or
constructed for the benefit of a public authority to be considered
a "public improvement project," even if the project uses
or receives financing, grants, or similar support from a public
authority.
The budget bill also increases the prevailing wage thresholds for
both construction and reconstruction on public improvements to $3.5
million (with a biennial adjustment as under current law by the
Department of Commerce) for projects other than roads, sewers,
ditches and other related works. (Threshold levels for road
projects remain the same at $78,258 for new construction and
$23,447 for reconstruction and repair.) It prohibits school
districts and educational service centers from requiring prevailing
wages, and exempts from prevailing wage requirements public
improvement projects undertaken by, or under contract for, state
colleges and universities, various economic development programs
administered by the Department of Development, and the construction
or repair of a port authority facility.
The budget bill also eliminates the ability of an interested party,
such as a labor union, to file a lawsuit against a party that it
believes has violated the statute before the Department of Commerce
has made its determination.
Alternative Delivery Methods
The budget bill authorizes public authorities, other than the
Ohio Turnpike Commission, to use the following alternative methods
of construction delivery: construction manager-at-risk,
design-build, design-assist, or general contractor. It also
eliminates the requirement that the multiple-prime contracting
method be used, but does not prohibit its use. Construction
manager-at-risk and design-build are defined in the bill, and the
process that a public authority must employ to select them is
specifically prescribed.
The budget will now be considered by the Senate, where significant
changes can still be made. The goal is to have all legislative work
on the budget completed and to the governor by June 30, 2011.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.