Government Construction Contract Compliance Checklist 2025

Government construction contracts come with extensive compliance requirements that contractors must meet before, during, and after project completion. Non-compliance can result in contract termination, financial penalties, debarment, and even criminal charges. This comprehensive checklist covers every major compliance area to help you maintain good standing.

Why Compliance Matters

According to GAO data, over $2.4 billion in contract funds are recovered annually due to compliance violations. Maintaining strict compliance protects your business and opens doors to more opportunities.

Compliance Categories Overview

Pre-Qualification

Registrations, certifications, and eligibility requirements

Financial/Insurance

Bonding, insurance, and financial capacity requirements

Labor/Safety

Wage rates, workforce, and safety program requirements

Pre-Bid Compliance Requirements

Before you can even submit a bid on most government contracts, you must have certain registrations and certifications in place. Missing these requirements results in automatic bid rejection.

Federal Contract Requirements

SAM.gov Registration (Required)

System for Award Management registration is mandatory for all federal contracts.

• Must be active and current (renew annually)
• Includes CAGE code assignment
• Verify NAICS codes match solicitation
• Update within 30 days of any information changes

DUNS/UEI Number

Unique Entity Identifier required for federal contractor identification.

• Obtain before SAM registration
• UEI replaced DUNS as of April 2022
• Assigned automatically through SAM.gov

E-Verify Enrollment

Required for federal contracts over $150,000.

• Verify employment eligibility of new hires
• FAR clause 52.222-54 compliance
• Must be enrolled before contract award

VETS-4212 Reporting

Annual veteran employment reporting for contracts $150,000+.

• Report by September 30 annually
• File at dol.gov/vets
• Required even if you have zero veterans employed

State & Local Requirements

Licensing Requirements

State Contractor License: Valid and in good standing
Trade-Specific Licenses: Electrical, plumbing, HVAC as applicable
Business License: Local jurisdiction registration
DIR Registration: Required in California for public works

Portal Registrations

State Procurement Portal: Register in each state you bid
Agency-Specific Systems: PlanetBids, Bonfire, etc.
Prequalification: Some agencies require annual prequalification
Vendor Diversity Portals: DBE certification registration

Bonding & Insurance Requirements

Government contracts require specific bonding and insurance coverage. Requirements vary by project size and jurisdiction, but federal projects follow the Miller Act standards.

Required Bonds

Bond Type	Purpose	Federal Threshold	Typical Amount
Bid Bond	Guarantees contractor will enter contract if awarded	$150,000+	5-20% of bid
Performance Bond	Guarantees completion of work per contract	$150,000+	100% of contract
Payment Bond	Guarantees payment to subs and suppliers	$150,000+	100% of contract
Maintenance Bond	Covers warranty period defects	Varies	10-25% of contract

Insurance Coverage Requirements

General Liability Insurance

• Minimum: $1M per occurrence / $2M aggregate (typical)
• Some projects require $5M or higher
• Must name agency as additional insured
• Waiver of subrogation often required

Workers Compensation

• Statutory limits required
• Employers liability: typically $1M each accident
• EMR (Experience Modification Rate) often evaluated
• Coverage must extend to all job classifications

Auto Liability

• Combined single limit: typically $1M minimum
• Covers owned, hired, and non-owned vehicles
• Higher limits for heavy equipment operations

Professional Liability/E&O

• Required for design-build contracts
• Typical minimum: $1M-$2M
• Must cover professional services component

Prevailing Wage Compliance

Most government construction projects require payment of prevailing wages. Federal projects follow Davis-Bacon Act requirements, while state projects follow state-specific prevailing wage laws.

Davis-Bacon Act Requirements

Wage Determination

• Obtain correct wage determination for project location and type
• Post wage determination at job site
• Check for modifications during project duration
• Use sam.gov/wage-determinations for current rates

Certified Payroll Requirements

• Submit weekly certified payroll reports (WH-347 form)
• Include all workers on federal project
• Show hours worked, classifications, pay rates
• Retain records for 3 years after project completion

Worker Classification

• Classify workers according to actual work performed
• Pay applicable rate for each classification
• For multiple classifications, use highest rate OR track hours per classification
• Apprentices must be in registered program

Fringe Benefits

• Pay fringe benefits as cash or approved benefit plans
• Document method used for each classification
• Cannot use credit for benefits below requirement

Prevailing Wage Violation Penalties

• Back wages owed to workers plus interest
• Liquidated damages up to $31 per violation per day
• Contract termination and withholding of payments
• Debarment from federal contracts (up to 3 years)
• Criminal prosecution for willful violations

Safety & OSHA Requirements

Government contracts require comprehensive safety programs. Federal contractors must comply with OSHA standards, and many agencies have additional safety requirements.

Safety Program Requirements

Written Safety Program

• Site-specific safety plan
• Hazard communication program
• Emergency action plan
• Fall protection plan (heights over 6 feet)
• Excavation and trenching procedures
• PPE requirements and enforcement

Documentation Required

• OSHA 300 log (recordable injuries)
• Safety meeting minutes (weekly/daily)
• Training certifications for workers
• Equipment inspection logs
• Incident investigation reports
• Competent person designations

EMR and Safety Record Requirements

Experience Modification Rate (EMR)

Many agencies require EMR below certain thresholds:

• Federal: Generally no cap, but evaluated during responsibility determination
• State/Local: Often require EMR below 1.0 or 1.25
• Some owners require EMR below 0.85 for prequalification

OSHA Citation History

• Willful or repeat violations can affect responsibility determination
• Serious citations may require explanation in prequalification
• Open citations must be disclosed on some bid forms

DBE/MBE/WBE Requirements

Many government contracts include goals for participation by Disadvantaged Business Enterprises (DBE), Minority Business Enterprises (MBE), Women Business Enterprises (WBE), and other small business categories.

DBE Compliance Requirements

Good Faith Efforts

If you cannot meet DBE goals, document good faith efforts:

• Solicit DBE firms through outreach (ads, direct contact, associations)
• Provide DBE firms with plans/specs for bidding
• Break up work into economically feasible units
• Document all contacts and responses
• Attend pre-bid meetings and outreach events

Counting DBE Participation

• Only count work actually performed by DBE firm
• For supplies: count 60% (or 100% if DBE manufacturer)
• DBE firm must be certified for the work being counted
• Cannot count participation from non-certified affiliates

Required Documentation

• Submit DBE participation commitment with bid
• Provide Letters of Intent from DBE subcontractors
• Monthly DBE utilization reports during project
• Final DBE utilization report at project completion

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Documentation & Reporting

Government contracts require extensive documentation throughout the project lifecycle. Missing or incomplete documentation can delay payments and create compliance issues.

Required Project Documentation

Daily Reports

• Weather conditions
• Work performed by each trade
• Worker count and hours
• Equipment on site
• Visitors and inspections
• Delays or issues encountered

Submittals & Approvals

• Shop drawings with approval stamps
• Material certifications and test reports
• Product data and MSDS/SDS sheets
• Inspection approvals and certificates

Change Order Documentation

• Written authorization before proceeding
• Detailed cost breakdowns
• Time impact analysis if applicable
• Supporting documentation (T&M tickets, quotes)

Closeout Documentation

• As-built drawings
• Operation and maintenance manuals
• Warranty documentation
• Final lien waivers from all subs
• Certificate of Substantial Completion

Record Retention Requirements

Document Type	Federal Retention	Notes
Contract Documents	6 years	From final payment
Payroll Records	3 years	From completion
Safety Records	5 years	OSHA 300 logs
DBE Documentation	3 years	After project completion

Common Violations to Avoid

Understanding common compliance pitfalls helps you avoid costly mistakes. Here are the most frequent violations and how to prevent them.

Top 10 Compliance Violations

Prevailing Wage Underpayment

Using wrong classification or failing to pay fringe benefits

Late/Missing Certified Payrolls

Weekly submissions required - missing reports halt payments

DBE Goal Non-Compliance

Failing to meet goals without documented good faith efforts

Insurance Certificate Lapses

Expired coverage can result in work stoppage

SAM.gov Registration Expiration

Annual renewal required - payments blocked if expired

Buy American Act Violations

Using foreign materials without proper waiver

Unauthorized Subcontracting

Subcontracting without written approval from contracting officer

OSHA Documentation Gaps

Missing safety plans, training records, or inspection logs

E-Verify Non-Compliance

Failure to verify new hires within required timeframe

False Claims Act Exposure

Certifying compliance when requirements not actually met

Frequently Asked Questions

What happens if I miss a certified payroll submission?

Late certified payrolls can delay your progress payments. Most agencies will withhold payment until all payroll reports are current. Repeated violations can result in contract termination. Set up automated reminders to submit payroll reports every Friday.

How often do I need to renew my SAM.gov registration?

SAM.gov registration must be renewed annually. Set a calendar reminder for 60 days before expiration. An expired registration can block contract awards and payments. Log in quarterly to ensure your information is current.

What if I cannot meet the DBE goal on a contract?

If you cannot meet the DBE goal, you must demonstrate good faith efforts (GFE). Document all outreach attempts, responses received, and reasons DBE firms could not participate. Submit GFE documentation with your bid. The agency will evaluate whether your efforts were sufficient.

Do prevailing wages apply to my office staff?

Prevailing wages apply to mechanics and laborers working on the project site. Office staff, project managers working primarily from the office, and executives are generally exempt. However, if office staff visit the site and perform covered work, those hours must be paid at prevailing rates.

What EMR do I need for government contracts?

Requirements vary by agency. Federal contracts evaluate EMR during responsibility determination but typically have no hard cap. Many state and local agencies require EMR below 1.0 or 1.25. Some prequalification programs require 0.85 or lower. Check individual solicitation requirements.

How long must I keep project records?

Federal contract records must be retained for 6 years after final payment. Payroll records require 3 years, and OSHA records require 5 years. When in doubt, keep records longer. Digital storage makes long-term retention inexpensive.

Conclusion

Government construction contract compliance requires attention to detail across multiple regulatory areas. By implementing systematic compliance processes and maintaining thorough documentation, you protect your business from violations while building a track record that qualifies you for larger, more profitable opportunities.

Use this checklist as a starting point, but always verify specific requirements for each contract. Requirements vary by agency, project type, and funding source. When in doubt, ask the contracting officer for clarification before proceeding.

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