Does Virginia's prevailing wage law apply to public works construction projects at Virginia's public colleges and universities?

Subject

Unless otherwise exempted by specific statutes outside of the Virginia Public Procurement Act, the prevailing wage rate requirements for public works contracts found in the Procurement Act apply to institutions of higher education in Virginia.

Plain-English summary

In 2020, the Virginia General Assembly enacted a prevailing wage requirement for Virginia public works contracts, codified at Va. Code § 2.2-4321.3. Effective May 1, 2021, solicitations and contracts for public works under the Virginia Public Procurement Act must include provisions requiring payment of wages and benefits at the prevailing rate. Delegate Mark Sickles asked the Attorney General whether that rule applied to Virginia's public colleges and universities.

The AG said yes. The statutory definition of public bodies subject to the Procurement Act includes "any . . . institution . . . created by law to exercise some sovereign power or to perform some governmental duty." Reading "any . . . institution" with its plain meaning, that covers public colleges and universities. Reinforcing that, § 2.2-4321.3 starts with "[n]otwithstanding any other provision of this chapter," which means the prevailing wage rule applies even where another part of the Procurement Act might otherwise exempt a public body.

There is one important carve-out. Under the Restructured Higher Education Financial and Administrative Operations Act (§§ 23.1-1000 through 23.1-1028), certain qualifying institutions can negotiate a management agreement (subject to approval by the Governor and the General Assembly) or enter a memorandum of understanding for limited operational autonomy. If that management agreement or MOU exempts the institution from the Procurement Act, the prevailing wage rule does not apply by force of the Procurement Act itself. But the institution is not prohibited from voluntarily adopting prevailing wage requirements.

What this means for you

For public-works contractors bidding on Virginia public university projects

The opinion holds that public works contracts at Virginia public colleges and universities are subject to the § 2.2-4321.3 prevailing wage requirements, unless the institution has a management agreement or MOU exempting it from the Procurement Act. It holds that even an exempt institution is not barred from adopting prevailing wage requirements voluntarily.

For construction workers on Virginia public university projects

The opinion holds that public works at Virginia public colleges and universities falls within the Procurement Act's prevailing wage requirement, so projects at those institutions are covered unless the institution is exempt through a management agreement or MOU under the Restructured Higher Education Act.

For Virginia public colleges and universities

The opinion holds that, unless a management agreement or MOU under the Restructured Higher Education Act exempts the institution from the Procurement Act, the institution's solicitations and contracts for public works are subject to the § 2.2-4321.3 prevailing wage requirement. It holds that § 2.2-4321.3 applies "notwithstanding any other provision" of the Procurement Act, so it overrides other exemptions within the Act, and that an exempt institution may still adopt prevailing wage requirements on its own.

Common questions

What is Virginia's prevailing wage requirement?
Under Va. Code § 2.2-4321.3, effective May 1, 2021, contracts and solicitations for "public works" entered into under the Virginia Public Procurement Act must include provisions requiring the contractor and subcontractors to pay wages, salaries, and benefits at the prevailing rate for the relevant locality and trade.

Does it cover Virginia public colleges and universities?
Yes, unless an institution-specific management agreement or MOU under the Restructured Higher Education Act exempts it from the Virginia Public Procurement Act.

What counts as a "public works" contract?
The Procurement Act defines public works in § 2.2-4321.2. Generally, building, repairing, or doing construction on government property is public works. Architectural and engineering services and certain other specialized contracts have their own rules.

Which institutions might be exempt?
Institutions that have negotiated, with the Governor and the General Assembly's approval, a management agreement under § 23.1-1004, or operate under a § 23.1-1003 MOU, that exempts them from the Procurement Act. The opinion describes this mechanism in general terms and does not name specific institutions.

Can an exempt institution still pay prevailing wage if it wants to?
Yes. The exemption doesn't bar prevailing-wage adoption. It just means the Procurement Act doesn't force the institution to use it.

Does the opinion explain how the prevailing wage rate is calculated?
No. The opinion resolves only whether the prevailing wage requirement reaches higher-education institutions; it does not address how the rate is set or which agency administers the program.

Background and statutory framework

The Virginia Public Procurement Act lives at Va. Code §§ 2.2-4300 through 2.2-4377. The prevailing wage rate requirement for public works contracts was added in § 2.2-4321.3 as part of a broader package of labor-and-employment reforms in the 2020 General Assembly session. It took effect May 1, 2021.

The Restructured Higher Education Financial and Administrative Operations Act (§§ 23.1-1000 through 23.1-1028) lets qualifying institutions exercise limited financial and administrative autonomy, including in procurement, by entering either an MOU (§ 23.1-1003) for designated operational areas or a full management agreement (§ 23.1-1004) approved by the Governor and the General Assembly. Where such an arrangement specifically exempts the institution from the Procurement Act, the prevailing wage rule of § 2.2-4321.3 does not apply through the Procurement Act.

The AG's analytical move was clean: read "any . . . institution" in the public-body definition broadly enough to include higher-education institutions, observe that § 2.2-4321.3 overrides other Procurement Act exemptions ("[n]otwithstanding any other provision of this chapter"), and then carve out the narrow case of an institution exempted from the Procurement Act itself by external statute.

Citations

• Va. Code § 2.2-505 (AG advisory opinions)
• Va. Code §§ 2.2-4300 to -4377 (Virginia Public Procurement Act)
• Va. Code § 2.2-4301 (definition of "public body")
• Va. Code § 2.2-4321.2 (public works definitions)
• Va. Code § 2.2-4321.3 (prevailing wage rate for public works contracts)
• Va. Code §§ 23.1-1000 to -1028 (Restructured Higher Education Financial and Administrative Operations Act)
• Va. Code § 23.1-1003 (MOU)
• Va. Code § 23.1-1004; § 23.1-1005 (management agreement)
• Va. Code § 23.1-1007
• Davenport v. Little-Bowser, 269 Va. 546 (2005)
• 2006 Acts of Assembly Chapter 933
• 2009 Acts of Assembly Chapter 675

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2021/21-041-Sickles-issued.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

COMMONWEALTH of VIRGINIA

Office of the Attorney General

Mark R. Herring
Attorney General
202 North Ninth Street
Richmond, Virginia 23219
804-786-2071
Fax 804-786-1991
Virginia Relay Services
800-828-1120

May 24, 2021

The Honorable Mark D. Sickles
Member, House of Delegates
Post Office Box 10628
Franconia, Virginia 22310

Dear Delegate Sickles:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issue Presented

You ask whether the prevailing wage requirements of the Virginia Public Procurement Act apply to institutions of higher education in Virginia.

Applicable Law and Discussion

Effective May 1, 2021, solicitations, and contracts for "public works" made or entered into pursuant to the Virginia Public Procurement Act (the "Procurement Act") must include provisions requiring the payment of wages, salaries, benefits, and other remuneration to certain categories of workers at the prevailing wage rate. Public bodies subject to these prevailing wage rate requirements include "any legislative, executive or judicial body, agency, office, department, authority, post, commission, committee, institution, board or political subdivision created by law to exercise some sovereign power or to perform some governmental duty, and empowered by law to undertake the activities described in this chapter."

"A principal rule of statutory interpretation is that courts will give statutory language its plain meaning." The plain meaning of "any . . . institution" in the above quoted definition of "[s]tate agency" must be read broadly enough to include institutions of higher education in Virginia. The comprehensive nature of the list of public bodies included in that same definition further evinces the intent of the General Assembly that the prevailing wage rate requirements apply broadly to Commonwealth public bodies. Additionally, the General Assembly provided that these requirements apply "[n]otwithstanding any other provision of this chapter," referring to the entirety of the Procurement Act. This means that the prevailing wage rate requirements will apply to public bodies who are otherwise generally exempted by the provisions of the Procurement Act.

Note, however, that certain institutions of higher education in Virginia may be granted exemption from the provisions of the Procurement Act, including the prevailing wage rate requirements, by other, more specific statutes. Under the Restructured Higher Education Financial and Administrative Operations Act, institutions may receive authority to exercise limited financial and administrative autonomy in several areas that include procurement. Institutions that meet certain goals and requirements "may negotiate with the Governor to develop a management agreement with the Commonwealth." If the Governor approves the management agreement, he then "authorize[s] the appropriate Cabinet Secretary to enter into a management agreement with the governing board of such institution." The management agreement must then be approved by the General Assembly. Certain institutions and the appropriate Cabinet Secretary may also enter into a memorandum of understanding to exercise operational authority in designated areas, including procurement. An institution whose management agreement or memorandum of understanding exempts the institution from the Procurement Act is likewise exempt from the Act's prevailing wage requirements. Exempted institutions are not prohibited from adopting prevailing wage requirements, but would be governed by the terms of the applicable management agreement or memorandum of understanding in doing so.

Conclusion

Accordingly, it is my opinion that, unless otherwise exempted by specific statutes outside of the Procurement Act, the prevailing wage rate requirements for public works contracts found in the Procurement Act apply to institutions of higher education in Virginia.

With kindest regards, I am,
Very truly yours,

Mark R. Herring
Attorney General