Overcoming 8 Prevailing Wage Obstacles: A Tech Guide for Government Agencies

B2Gnow

Government agencies face significant challenges in managing prevailing wage labor compliance, certified payroll reports, and adhering to Davis-Bacon requirements. Strict regulations, frequent law changes, and the need for accurate reporting require constant oversight. Fortunately, comprehensive technology solutions can significantly alleviate these burdens by streamlining compliance, mitigating risk, enhancing accuracy, and ensuring timely reporting.

Let’s explore the most common concerns for government agencies—and how leveraging technology can help alleviate them.
  1. Navigating the Complexity of Prevailing Wage Regulations
    Prevailing wage laws can vary significantly across states, counties, or even municipalities. For government agencies overseeing projects in multiple regions, keeping up with local regulations and ensuring compliance can be overwhelming. These laws also change frequently, adding another layer of complexity.

    A comprehensive prevailing wage software platform, such as eComply, can simplify this process by automating compliance with varying local, state, and federal wage laws. By providing up-to-date information and handling regulatory updates automatically, agencies can effectively manage compliance across multiple jurisdictions.
  2. Ensuring Accurate Certified Payroll Reports
    Certified payroll reports require precise tracking of workers’ wages, hours, job classifications, and other essential data. The inability to check and verify every submitted certified payroll report can lead to underpaid workers, continued reliance on bad contractors, and ultimately, poor project execution.

    A comprehensive labor compliance software can automate the collection, verification, and submission of certified payroll reports, ensuring every area of non-compliance is highlighted for agency review.
  3. Aggregating and Reporting Payroll Data Accurately
    Certified payroll reports are often required on a weekly or bi-weekly basis. Government agencies must collect data from contractors and subcontractors, track hours worked, and ensure that all information is consistent and accurate, often from numerous sources.

    The real challenge for agencies lies in aggregating and reporting this data effectively. With technology, agencies can automate the collection of payroll data, centralize it, and generate accurate and comprehensive reports with up-to-date information. This reduces the risk of errors and ensures that reports are generated in a timely manner, enabling agencies to stay compliant and informed without manually sorting through large datasets.
  4. Managing Subcontractor Compliance
    On large projects, subcontractor compliance is a major concern for government agencies. In addition to managing the prime contractor, there could be hundreds of subcontractors also attached to a project. Agencies must ensure that all subcontractors are also in compliance with prevailing wage laws and that their certified payroll records are submitted correctly.

    A centralized software platform can integrate subcontractor payroll data into the agency’s system. This ensures that all parties are compliant, helping agencies manage subcontractor reports more effectively and efficiently.
  5. Dealing with Wage Theft Allegations
    Wage theft claims can arise when workers believe they haven’t been paid according to prevailing wage laws. Government agencies must address these allegations promptly to avoid legal issues and public backlash.

    With technology, agencies can access detailed payroll records to investigate and resolve disputes quickly. A transparent system provides a comprehensive record of wages and hours worked, as well as a detailed record of all communications, thereby helping agencies protect themselves against wage theft claims and ensuring proper payment.
  6. Facing Audits and Investigations
    Government audits can occur at any time, and agencies face the potential consequences of non-compliance, including fines, delays, or the loss of funding. Auditors carefully examine payroll records for misclassified workers, incorrect wages, or missing documents.

    A fully integrated, transparent record-keeping system simplifies audits by maintaining a secure, centralized history of payroll reports, wage determinations, and related correspondence. Automated, audit-ready reports and features, such as timestamps and version histories, enable agencies to respond quickly and confidently, minimizing risk and improving audit efficiency.
  7. Ensuring Proper Worker Classifications
    Misclassifying workers is a key compliance issue. Incorrect classifications can result in underpayment, fines, and legal disputes. As job duties evolve during a project, ensuring proper worker classifications is crucial.

    With technology solutions that track job roles and worker changes, agencies can ensure workers are classified correctly throughout the project, reducing the risk of misclassification and ensuring compliance with prevailing wage laws.
  8. Modernizing Systems and Ensuring Integration Across Compliance Programs
    Many government agencies still rely on manual or disconnected systems to manage various aspects of compliance, such as certified payrolls, workforce tracking, and supplier diversity efforts. This fragmented approach can lead to data inconsistencies, reporting delays, and increased risk of non-compliance.

    Upgrading to a modern, scalable labor compliance platform helps agencies reduce human error, centralize documentation, and maintain compliance more efficiently. The ideal solution should integrate seamlessly across programs and systems, enabling shared access, contract syncing, and unified reporting. For example, the eComply platform can connect prevailing wage tracking with the B2Gnow Supplier Diversity system, providing agencies with a single, streamlined interface to manage all compliance efforts and improve project oversight.

Conclusion
Government agencies face significant challenges when managing prevailing wage labor compliance, certified payroll requirements, and adhering to Davis-Bacon regulations. With complex regulations, tight deadlines, oversight of contractors and subcontractors, and the potential for audits or wage theft claims, it’s no wonder agencies are seeking solutions to simplify the process.

By leveraging technology, agencies can streamline compliance tracking, enhance reporting accuracy, and reduce administrative burdens while staying abreast of regulatory changes and mitigating risk.

Supplier Diversity in Procurement

B2Gnow

Supplier diversity in procurement is a critical initiative for many government agencies and organizations striving to provide fair contracting opportunities, improve community relations, strengthen local businesses, and drive a more resilient and inclusive community. At its core, supplier diversity involves the inclusion of businesses owned by historically underrepresented groups—such as minorities, women, veterans, and individuals with disabilities—in an organization’s procurement process. For government agencies, this practice often aligns with public policy objectives while also strengthening local economies, encouraging innovation, and widening the pool of vendors. This blog will outline the importance of supplier diversity in public procurement and the vast range of benefits for both diverse businesses and agencies.

What Is Supplier Diversity In Procurement?

Supplier diversity in procurement is an intentional strategy and commitment from government agencies and other organizations that focuses on proactively engaging and doing business with historically underrepresented or underserved groups – such as minority-owned, women-owned, veteran-owned, disabled-owned, and LGBTQ+-owned businesses—in their procurement processes. 

Why Is Supplier Diversity Important For Businesses?

Supplier diversity in procurement is important for businesses because it is intended to provide equitable contracting opportunities for small and diverse businesses to compete for government contracts, contributing to small and diverse business growth and a more resilient and inclusive economy. Public agencies and contractors often rely on software like B2Gnow supplier diversity software to manage prevailing wage labor compliance requirements alongside their diversity and inclusion goals, providing them with a more efficient and comprehensive compliance management solution for public infrastructure projects.

How Do Organizations Implement Supplier Diversity Programs?

Public agencies, contractors and other organizations implement supplier diversity programs through strategy and planning, gaining stakeholder buy-in, establishing goals and policies, formulating a plan for tracking and reporting, conducting outreach and engagement to small and diverse vendors, as well as leveraging technology to streamline processes and optimize efficiency.  Solutions like B2Gnow supplier diversity software offer an all-in-one platform to manage vendor certifications, track small and diverse vendor utilization, manage prevailing wage labor compliance, and generate reports for program compliance and results. 

What Challenges Do Organizations Face When Adopting Supplier Diversity Protocols?

Public agencies and organizations may face challenges when adopting protocols for supplier diversity in procurement, such as finding and growing their diverse supplier pool, limited resources and staff, and complex tracking and reporting requirements. Due to these common challenges, many public agencies, contractors, and organizations rely on tools like B2Gnow supplier diversity software to eliminate challenges and build an impactful, lasting supplier diversity program:

B2Gnow business diversity software’s cloud-based platform offers users access to the largest database of certified suppliers – this certification data is native and real-time in the B2Gnow system. Additionally, customers often benefit from B2Gnow’s powerful vendor outreach and engagement capabilities – allowing customers to search, sort, and group vendors by a variety of parameters such as certification type, certification agency, race, gender, NAICs, and much more.  

From a tracking, reporting and compliance perspective, agencies and organizations rely on B2Gnow to ensure supplier diversity compliance with federal and state regulations, ordinances, laws, executive mandates, and corporate resolutions. From 49 CFR Part 23 & 26 to public utility commissions, prevailing wage labor compliance, state, county, and city compliance regulations, tracking, and reporting, the system can even apply multiple programs against a single project. 

Moreover, B2Gnow provides customers with unmatched efficiency, saving up to 60%-80% of time spent on administrative tasks, freeing up time for endeavors that make a bigger difference in the communities served.

What Benefits Can Organizations Expect From Investing In Supplier Diversity?

Agencies and organizations that invest in supplier diversity in procurement can expect several benefits.  Here are a few key advantages to implementing and investing in a supplier diversity strategy at a public agency or organization:
  • Access to additional funds: In many instances, public agencies with robust supplier diversity programs may qualify for additional funding benefits due to strong diversity and inclusion initiatives
  • Positive economic impact: Engaging and providing an opportunity for small and diverse businesses to compete for government contracts contributes to fostering community impact and local job growth
  • Wider pool of vendors: Organizations with a growing pool of small and diverse vendors often see increased competition, greater innovation, improved service, reduced risk, and a positive impact on their supply chain
  • Enhanced compliance, reputation and trust: Organizations that prioritize and invest in supplier diversity in procurement often have diverse business utilization goals to meet, and these programs help to fulfill their targets. When organizations achieve and meet their compliance goals and targets, the result is often a positive reputation for supporting diversity and inclusion, making the organization more attractive to small and diverse suppliers, stakeholders, and others in the community

How Do Diverse Suppliers Benefit From Supplier Diversity Programs?

Supplier diversity programs provide a number of benefits for small and diverse firms.  For example, supplier diversity programs provide small and diverse firms with an opportunity to compete for government contracts. Additionally, when small and diverse are provided with an increased opportunity to compete and win government contracts, the result is increased growth and revenue for the firm.  The ripple effect is that these same businesses then contribute to job creation and economic growth in underrepresented communities, further driving positive impact. Furthermore, agencies and organizations that run supplier diversity programs often host supplier workshops and networking events, designed to foster connections between small and diverse suppliers with large contractors and public agencies, many times resulting in valuable industry contacts and potential partnerships. Overall, supplier diversity programs benefit small and diverse suppliers tremendously and empower them with resources, tools, connections, etc. to compete more effectively, succeed in new markets, and play a vital role in the public sector supply chain while also strengthening local economics and establishing greater economic inclusivity. 

How Can A Company Measure The Success Of Its Supplier Diversity Program?

An organization can measure the success of its supplier diversity program by leveraging tools like B2Gnow Supplier Diversity Software. From states to state DOTs, cities, counties, transits, airports, education, general contractors, healthcare, and more – organizations benefit from one solution to manage vendor certifications, handle prevailing wage labor compliance, expand their vendor pool, track and measure small and diverse vendor utilization, and access over 400 system reports, PowerBI access and data libraries, export options and API/web services, allowing organizations to easily visualize business diversity and report on the impact of their program. From supplier utilization to compliance metrics, organizations that leverage B2Gnow glean valuable insights that drive strategic decision-making and provide complete visibility into activities and the success of the program.

Conclusion

Prioritizing supplier diversity in procurement involves more than just measuring compliance – it involves developing and carrying out strategies to help build a dynamic and equitable economy.  As organizations continue to refine their supplier diversity protocols, they create a more inclusive marketplace while driving meaningful progress toward their mission. For over 25 years, B2Gnow Supplier Diversity Software has brought a wealth of knowledge to help organizations start, pivot, and grow supplier diversity programs and achieve compliance goals. From states to state DOTs, cities, counties, transits, airports, education, general contractors, healthcare, and more – organizations benefit from one solution to manage vendor certifications, track small and diverse vendor utilization, manage prevailing wage labor compliance, and generate reports for program compliance and results. Organizations save up to 60%-80% of time spent on administrative tasks, freeing up time for endeavors that make a bigger difference in the communities they serve. Learn more and request a demo: www.b2gnow.com/demo

Level-up Visibility and Compliance: An Overview of Supplier Tiers – From Tier 1 to Tier X 

B2Gnow

In the public sector, various tiers in the supply chain play a vital role in delivering large and complex projects for government agencies.  Tier 1, often called prime contractors, have a considerable responsibility, managing large-scale deliverables and ensuring compliance with complex regulatory requirements. Supporting Tier 1 (prime contractors), are Tier 2, Tier 3, and beyond suppliers and subcontractors. Each supplier provides specialized goods, services, or components that collectively contribute to the success of the project.  In this article, we will cover the various tiers in the public sector supply chain, including the importance of effective management, tracking and reporting of these tiers – from Tier 1 to Tier X – while meeting the unique demands of public sector projects.  

What Are the Different Tiers in the Public Sector Supply Chain?

In the public works supply chain, different tiers refer to the various levels of contractors, suppliers and manufacturers involved in producing and delivering products. The supply chain consists of three main tiers:

Tier 1 Suppliers: These are the primary suppliers who provide direct components or services to the manufacturer. They have a cooperative relationship with the manufacturer and engage in collaborative planning and development.

Tier 2 Suppliers: These suppliers provide materials or components to Tier 1 suppliers. They do not usually interact directly with the manufacturer but play an important role in supplying the necessary parts that Tier 1 suppliers assemble or integrate into their products.

Tier 3 Suppliers: These are the suppliers of Tier 2 suppliers, providing raw materials or basic components. They operate at a more distant level in the supply chain and deal with more clients, supplying multiple Tier 2 suppliers.

Understanding these tiers is essential for managing relationships, ensuring quality, and optimizing the flow of materials and information throughout the supply chain.

Additionally, it is important for public agencies to understand the crucial role that small and diverse businesses play in government supply chains. They can participate in supply chain tier 1, 2, 3 and beyond and often fulfill supplier diversity goals set forth by government agencies. These goals help ensure that underrepresented groups have equal access to contract opportunities. Larger prime contractors required to meet these diversity requirements will include certified diverse and small vendors, broadening competitive opportunities in public works procurement. 

How Do Tier 1 Suppliers Differ From Tier 2 Suppliers in Public Works Projects?

Tier 1 suppliers, or Prime Contractors, in construction, are the primary providers of products or services or often-times large scale infrastructure, directly to the government agency. They maintain a direct relationship with the agency, fulfilling contract requirements. Tier 1 suppliers engage in collaborative planning, development, design and innovation, working with agencies to meet specific requirements and standards.

Tier 2 vendors, often called subcontractors, supply products or services to Tier 1 suppliers or vendors rather than directly to the contracting agency. They provide services or goods used by Tier 1 suppliers to create the final products or fulfill requirements on a construction contract. While Tier 2 suppliers are important in the supply chain, their relationship with the agency is indirect.

Tracking spending with supply chain tier 1, 2, 3 vendors and beyond and be challenging. Supplier diversity management software like B2Gnow can ensure that all spend with small and diverse firms is accounted for. A good supplier diversity software provides unmatched spend and MWSDVBE utilization tracking features to gain insights into every dollar’s allocation. It empowers agencies to produce diversity spend reports for all types of expenditures, including non-contract (credit card transactions, purchase orders, etc), tier 2 (prime reporting) and tier X (tracking through all levels of subcontractors on a project).

Why Is It Important to Manage Tier 3 Suppliers and Beyond in Public Works Projects?

Managing Tier 3 suppliers is important because these suppliers provide the raw materials and components Tier 2 suppliers rely on to create their products. If Tier 3 suppliers encounter issues like quality control problems, delays, or supply disruptions, it can cascade through the supply chain, affecting overall production timelines and product quality.

Additionally, tracking spending for tier 3 suppliers and beyond can be difficult. When it comes to public works contracts and supply chain tiers, every dollar spent with small and diverse suppliers should be counted towards diversity goals. Without a real-time, up-to-date system, agencies are challenged with getting accurate data on supplier certification status, as many databases are outdated and incomplete. This can result in inaccurate tracking of diversity spend. 

Supplier diversity management software, like B2Gnow, can help. The B2Gnow diversity spend solution features more real-time certified vendor data than any other. Agencies can rest assured that spend reporting is accurate. With comprehensive reporting tools and data verification capabilities, public agencies can now reliably track and analyze diversity spending through supply chain tiers ten levels deep.

What Are the Challenges Associated With Managing Multiple Supply Chain Tiers in Government Procurement?

Managing multiple supply chain tiers in public works contracts poses challenges in many ways, including tracking spend with small and diverse certified vendors. Because many certified databases are incomplete or outdated, accurate certification data is challenging to attain. Additionally, matching expenditure data with certified suppliers is problematic as more supply chain tiers are involved. And, incompatible systems create more work and errors in data entry. Many government supplier diversity programs rely on B2Gnow to track supplier spend from POs, credit cards, and Tier-2 all the way through multiple tiers of contractors (up to 10).

How Can Organizations Improve Collaboration Between Tier 1, Tier 2, and Tier 3 Suppliers in Public Works Contracting?

To improve collaboration between supply chain tier 1, 2, 3, and beyond, agencies should establish clear communication channels through regular meetings and shared platforms. Implementing collaborative planning and forecasting processes helps anticipate needs and reduce costs, creating a sense of shared responsibility.

By investing in technology solutions, like B2Gnow supplier diversity management software, agencies and primes can digitize required documents and data, automatically validate certification status, match tier 1, tier 2, and tier 3 vendors, and beyond, to approved commodity codes, and calculate actual vendor participation versus contract goals while capturing lower-tier utilization up to ten supply chain tiers deep. Prime and subcontractor payments are collected, and direct subcontractor payment confirmation on active contracts is facilitated monthly or quarterly to minimize the risk of certified vendor participation falling below contract goals.

Conclusion

In the public sector supply chain, Tier 1, Tier 2, Tier 3, and beyond play critical roles in planning and executing large-scale infrastructure projects for government agencies. Tools like B2Gnow supplier diversity software enhance this supplier ecosystem by enabling government agencies and prime contractors to manage, track, measure, and engage small and diverse suppliers at each tier— from Tier 1, Tier 2, Tier 3, and beyond.

Effective spend tracking and reporting at all levels are essential for public works compliance, ensuring transparency in supplier diversity, meeting regulatory requirements, and fostering inclusive economic growth through equitable opportunities for small and diverse businesses. Learn more and request a demo: https://b2gnow.com/request-a-demo/

Understanding these tiers is essential for managing relationships, ensuring quality, and optimizing the flow of materials and information throughout the supply chain.

 Gain full visibility and track expenditures in one system – our diversity spend solutions ensure nothing falls through the cracks. Discover unmatched spend and MWSDVBE utilization tracking features to gain precise insights into every dollar’s allocation. Give your team the power to produce diversity spend reports for all types of expenditures, including non-contract (credit card transactions, purchase orders, etc), tier 2 (prime reporting) and tier X (tracking through all levels of subcontractors on a project).