When public agencies have funding for infrastructure and/or capital projects, they contract with a Prime Contractor who will then contract with subcontractors to fill all of the roles required to take the project from inception to completion. Contractor Compliance is the process of monitoring those contractors to ensure they meet any and all supplier diversity program goals of the contracting agency and that they are following the rules and regulations set by the government for those projects. That includes the pay rate of workers, the hours worked by each worker, mentorship programs, and more.

Many contractors typically use subcontractors they are familiar with. However, on public projects, contractors may have requirements to include subcontractors who are certified as a small, woman, minority, veteran, or other owned business. Database mangement comes into this process, as there are Certification Databases that hold the information on subcontractor certifications and certification types. Prime Contractors can search these databases by certification type, work codes, locations, business size, and more to find the subcontractors who would fit their project’s needs. The larger the database, the larger the pool of certified subcontractors to choose from.

The federal, state, or local agency overseeing the funding provided for each project sets contractor regulations or goals. To ensure compliance, organizations use Compliance Software to monitor and track contractors and contracts digitally. 

Contractor Compliance can vary depending on the size of the contract and what type of project the contract is for. Manually tracking subcontractors, workers, hours, and pay rates can become time-consuming, cumbersome, and prone to calculation and typing errors. Often, Compliance Officers will visit job sites to speak with workers and confirm with them, in person, what their hours and pay rates are. The Compliance Officers then compare their onsite information to the Prime Contractor’s reported information. If there are discrepancies, it can become an issue that needs to be addressed. Reporting all of this back to the agency is also time-consuming.

There are many tools and technologies that can assist with Contractor Compliance and Contractor Database Management. Labor Compliance Management Software, like B2Gnow’s eComply, takes the contract value, project location, and project scope and automatically inputs the correct pay rate per worker, any mentorship or on-the-job training required, and calculates as a worker’s hours are input. The B2Gnow Contractor Compliance Software can flag any discrepancies that arise so contractors can correct them immediately. As the project progresses, reports can be easily run for auditing purposes. Additionally, B2Gnow FairSource helps Prime contractors find more certified vendors, ensure contract compliance, document Good Faith Efforts, and win more business.

When researching a contractor database management system, look for a vendor with deep experience in labor compliance and subcontractor compliance software. The solution should be a modern, cloud-native, SaaS solution with automation technologies that remove the human touch and ensure accuracy. Another feature to look for is a vendor who manages the pay wages in the system for you and updates them as the Department of Labor (DOL) updates them. The solution should be configurable to your organization’s projects and the regulations you need to meet. It should identify possible subcontractors, help to connect and engage with vendors, document Good Faith Efforts, and enable the creation and sharing of utilization plans, empowering Primes to easily maximize and track all types of diverse and small business utilization.

When the U.S. Department of Labor or the U.S. Department of Transportation makes changes to the rules, it can catch organizations off guard. If the organization doesn’t update its processes to accommodate these changes, they can find themselves out of compliance. Contract Compliance Software vendors should continuously monitor regulation agencies and keep the software up to date. Software vendors should also communicate with their clients regularly about any regulatory changes and the impact they will have on the system. 

Documentation is an important part of Contractor Compliance. When an organization reports to the oversight agency, it needs to have all of the documentation related to a project pulled together to be able to run audit reports upon request. A leading Contractor Compliance Software will assist with documenting any communications between the organization and contractors is important, as well as demonstrating good faith efforts and any effort to correct discrepancies. 

There are amazing technologies, such as B2Gnow Supplier Diversity Software, that can be leveraged to improve contractor compliance. One of the newest features is generative AI. Generative AI can learn and create content as it is exposed to more and more information. AI can automatically pull data from other databases, reducing manual data entry. It can alert users if action is required and generate email content. If a contractor fails to enter hours and wages into the system properly, the system can alert the contractor so they can course correct and keep them on track. All of this reduces the time a staff user spends on these processes and catches errors human beings might not catch.