This document discusses how a company called Associated Benefits Consultants can help non-union employers who bid on prevailing wage government projects reduce their labor costs and increase profits. It notes that while contractors can pay fringe benefits as cash wages, this is the most expensive option due to payroll taxes and burdens. ABC instead proposes paying fringe benefits into bona fide plans to avoid these costs, potentially saving a plumbing contractor over $100,000 per year in the example provided. Contact information is given for those interested in learning how this approach could benefit their company.

1. Partnering with Associated Benefits
Consultants to…
“…increase your WIN’s & PROFIT
in Government Bids.”

2. The important qualifying questions?
● Are you a Non-Union Employer?
● Are you bidding on or currently engaged in
prevailing wage projects? Do you see your
business expanding into this market?
● How do you currently handle the fringe portion
of the wage determination?
● Would you like to decrease your labor costs and
WIN more business or increase your PROFIT?

3. Government Markets
● Construction & Maintenance Contractors
Bidding Work Subject to Prevailing Wage Laws
● Federal & State Davis Bacon Act
● Federal Service Contract Act
● American Recovery & Reinvestment Act
(“ARRA”)
● Required or Available Fringe Benefit Allocation
● Non-Union or Split Shop

4. Solving Industry-Specific
Business Problems

5. Sample Bidders List
(aka, the value of 1%)
Fairchild Hall Rehabilitation Project Jan 8, 2011
1 Scotts Industrial Electric, 3178 Bincrete Lane (999) 298-7481 $674,595.00
2 Heatherville Electric, 360 Industrial Drive (999) 743-1220 $675,900.00
3 Johnson Electric, 1145 Bellbrook Ave (999) 372-8205 $681,000.00
4 Chappelle Electric ,1985 Founders (999) 222-2290 $732,442.00
5 Caret Electric Company, 3925 Pansini Lane (999) 669-3399 $735,000.00
6 Kastle Electric, 4501 Libby Blvd (999) 254-2681 $740,300.00
7 BBW Electrical Contractors, 3400 Kettering Blvd (999) 293-6138 $745,897.00
8 Debra/Kuempel ,1948 W.Phyllis Lane (999) 531-5455 $770,000.00
9 Schamberger Electric, 6901 Americana Pkwy (999) 863-1844 $788,500.00

6. Increased Compliance Enforcement
● Federal stimulus package included millions for
increased enforcement
● DOL Wage & Hour Division hiring 300 new
investigators through 2011
● 400 investigations in 2009; 1,400 in 2010
● “Sweeps” and targeting of subcontractors
● W&H goal of debarring at least 90 companies in
2011 compared to 10 to 20 in past years

7. Sample Wage Determination
BASE + FRINGE
WAGE BENEFIT
$30 $10
TOTAL HOURLY WAGE
$40

8. Employer Decides How to
Satisfy the Wage Obligation
● Contractors typically pay the “base” amount in cash
and then choose how to pay the “fringe” portion;
➔ For vacation and holidays,
➔ Into an approved apprenticeship program,
➔ Furnish “bona fide” fringe benefits, or
➔ As cash, and have it treated as wages

9. The Problem when Performing
Government Work….
● Many contractors pay some or all of the
mandatory fringe benefit package as wages
because it is the easiest way to satisfy DOL
compliance. It is also the most costly method…

10. Why?
All cash wages subject to payroll burden:
➔ FICA 7.65%
➔ FUTA & SUTA* 2.00%
➔ General Liability* 2% - 15%
➔ Workers’ Comp* 10% - 40%
The actual payroll burden can be 11%-60%
This increases your labor costs!!!
*varies by company & state

11. How it works…
Plumber, Ohio
Pay Fringe in Paycheck Pay Fringe to “Bona Fide” Plan
Base Wage $34.52 Base Wage $34.52
Fringe $10.33
Total Wage $34.52
Total Wage $44.85
Payroll Burden $ 8.63
Payroll Burden $11.21 (25%)
(25%)
“Bona Fide” Plan $10.33
Bid Cost $56.06
Bid Cost $53.48
$2.58/hr
savings per
person

12. Plumbing Contractor…
“the WIN & PROFIT!”
● About 75% of this contractor’s work is government
➔ 2080 annual hours x 75% = 1560 hours
● There are 25 hourly employees
● The hourly savings by removing the fringe from payroll is
$2.58
● The annual savings:
➔ 1560 hours x 25 EEs x $2.58 hour = $100,620
Many pay for health premium or retirement
contributions “on top”!

13. Want to know how your firm can
“win & profit?” Please contact me:
Bob McCollins
Associated Benefits Consultants
bmccollins@associated-ins.com
614-264-9694