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Helmut Schmidt, Published February 03 2014

MSUM reimbursed ND contractors for prevailing wage errors

MOORHEAD – Minnesota State University Moorhead reimbursed West Fargo’s FM Contracting Inc. for nearly $69,000 after the company was told by a state agency it had not paid some workers in line with the state’s prevailing wage levels.

Jan Mahoney, MSUM’s vice president for finance and administration, said MSUM paid the difference in wages sought by the Department of Labor and Industry for 19 workers because of an architect’s error on bid documents sent out for the renovation of Dahl Hall.

“FM Contracting did everything OK,” Mahoney said Monday. “It was an oversight on the part of our architects.”

“Technically, what happened was the bid documents with the prevailing wage rates were at the printer, and while they were at the printer, the wages were updated on the Department of Labor and Industry website,” she said.

“It was an oversight. We didn’t go back and check. The architect didn’t go back and check before those documents were released,” Mahoney said.

Such payments are “very rare,” Mahoney said, and the $68,795.53 paid to FM Contracting was the biggest reimbursement MSUM has made.

Two other contractors on the Dahl Hall project also were reimbursed for prevailing wage payments ordered by the state agency. MSUM paid $212.25 to Overhead Door of Fargo and $67.19 to Northland Glass of Fargo, Mahoney said.

Tough on small firms

Mark Bement, owner and president of FM Contracting, said Minnesota’s prevailing wage laws can be tough on small contracting firms. The wages are often tied to the pay scales of tradesmen in the Twin Cities, rather than wages that are fair in outstate areas with lower costs of living, he said.

Bement said he sends in his wage information, but many small contractors don’t have the time or resources to do so. That means wage data from large Minneapolis/St. Paul firms predominates in setting the prevailing wage rates.

“That’s a huge problem out there,” he said.

The Minnesota State Colleges and Universities system is working with the Department of Labor and Industry to improve communication on wage rate changes, Mahoney said.

In the meantime, wage rates for MSUM projects are double-checked as a matter of course, she said.

“That won’t happen again. We learn from our mistakes,” she said.

Since bids for the Dahl Hall work came in under budget, money was there to pay the extra wages required by DLI and the project did not go over budget, Mahoney said.

Readers can reach Forum reporter Helmut Schmidt at (701) 241-5583