How to Complete FHWA Form 1273: Sections, Wages, and Compliance

FHWA Form 1273 is the set of required contract provisions that must be physically written into every federal-aid highway construction contract and every subcontract beneath it. The current version was revised October 23, 2023, and is available as a PDF from the Federal Highway Administration at fhwa.dot.gov/programadmin/contracts/1273/1273.pdf. It is not a form you fill out. It is a twelve-section document you reproduce, word for word, inside your signed agreements, and its clauses then govern how you pay workers, hire, train, keep records, and run the job site.

Which Contracts Have to Include It

Under 23 CFR 633.102, the form applies to all federal-aid highway construction contracts except Appalachian construction contracts, which operate under a separate set of provisions.1eCFR. 23 CFR 633.102 – Applicability If any part of the project is funded under Title 23 of the United States Code, the whole contract carries the obligation. Partial federal funding does not reduce it.

The form does not apply to professional service contracts. The FHWA’s own applicability table marks it as required for highway and non-highway construction but lists “No” for service contracts.2Federal Highway Administration. Contract Provisions for Federal-aid Construction and Service Contracts Required by FHWA or Other Agencies A pure engineering, design, or consulting contract with no construction component is outside its scope. Design-build contracts that include construction work are inside it.

Physical Incorporation, Not Reference

The regulation is unusually specific on this: FHWA Form 1273 must be physically incorporated into the text of every federal-aid highway construction contract. It cannot be incorporated by reference.3eCFR. 23 CFR 633.102 – Applicability A clause saying the contractor shall comply with FHWA Form 1273 is not enough. A hyperlink to the FHWA site is not enough. The full text has to appear in the signed agreement.

The prime contractor is responsible for putting the form into every subcontract and for ensuring it appears in every lower-tier subcontract beneath those. The prime is also responsible for compliance by all subcontractors and lower-tier firms.3eCFR. 23 CFR 633.102 – Applicability This is where compliance most often breaks down in practice. A prime sends out subcontracts that reference the form instead of reproducing it, and the project’s federal eligibility is exposed.

What the Twelve Sections Cover

The form is organized into twelve sections. Each addresses a distinct area of federal policy that will govern the work.

  • Section I – General. Defines the scope of the provisions and their application to all work on the contract.
  • Section II – Nondiscrimination. Contains the Equal Employment Opportunity requirements, including designation of an EEO Officer and active recruitment of minorities and women.
  • Section III – Nonsegregated Facilities. Prohibits maintaining segregated facilities for employees.
  • Section IV – Davis-Bacon and Related Act Provisions. Requires payment of prevailing wages, weekly certified payrolls, and compliance with the Copeland Anti-Kickback Act.
  • Section V – Contract Work Hours and Safety Standards Act. Sets overtime rules and liquidated damages for violations.
  • Section VI – Subletting or Assigning the Contract. Requires the prime to perform at least 30 percent of the work with its own organization.
  • Section VII – Safety: Accident Prevention. Mandates compliance with OSHA construction standards at 29 CFR Part 1926.
  • Section VIII – False Statements Concerning Highway Projects. Warns that fraudulent claims carry criminal penalties under 18 U.S.C. 1020.
  • Section IX – Clean Air Act and Federal Water Pollution Control Act. Requires compliance with those environmental statutes on the project.
  • Section X – Debarment, Suspension, Ineligibility, and Voluntary Exclusion. Requires certification that the contractor is not currently debarred or suspended.
  • Section XI – Use of Contract Funds for Lobbying. Prohibits using federal contract funds for lobbying.
  • Section XII – Use of United States-Flag Vessels. Applies to projects involving ocean transportation of materials.

Prevailing Wages and Certified Payroll

Section IV is the heaviest ongoing burden. It applies the Davis-Bacon Act’s prevailing wage rules to every worker performing construction on the project. The Department of Labor sets prevailing wage rates by labor classification and geographic area, and contractors must pay at least those rates for every hour worked.4U.S. Department of Labor. Davis-Bacon and Related Acts The wage determination that applies to a given project is published on SAM.gov and lists the minimum hourly rate and fringe benefit amount for each covered trade in the locality.5SAM.gov. Wage Determinations

The Copeland Anti-Kickback Act, also enforced through Section IV, makes it unlawful to induce any worker on a federally funded construction project to give up any portion of the compensation owed to them.6Acquisition.GOV. 48 CFR 22.403-2 – Copeland Act That reaches indirect schemes as well: forced kickbacks, inflated equipment charges, or unauthorized deductions.

Underpayment creates back-pay liability for the full difference. The Comptroller General also maintains a list of contractors who have disregarded their wage obligations, and firms on that list are barred from any federal contract for three years from the date of publication.7Office of the Law Revision Counsel. 40 USC 3144 – Authority of Comptroller General

Every contractor and subcontractor performing covered work must submit certified payroll weekly for each week Davis-Bacon work is performed, and the prime is responsible for making sure all subcontractor payrolls come in as well.8eCFR. 29 CFR 5.5 – Contract Provisions and Related Matters Each certified payroll has to show:

  • Worker name and an individually identifying number, typically the last four digits of the Social Security number. Full SSNs must not appear on the weekly transmittal.
  • The correct labor classification for the work actually performed, matching the wage determination.
  • Daily and weekly hours worked on the covered contract.
  • Hourly wage rates, including fringe benefit contributions.
  • All deductions and the net wages actually paid.

Payrolls can be submitted on Optional Form WH-347 or in any other format that includes the required information. Most state departments of transportation now require electronic submission through dedicated portals. Records must remain accessible to the contractor, the contracting agency, and the Department of Labor for at least three years after all work on the prime contract is completed.8eCFR. 29 CFR 5.5 – Contract Provisions and Related Matters

Nondiscrimination and EEO Steps

Section II prohibits employment discrimination based on race, color, religion, sex, or national origin and requires affirmative steps to ensure equal opportunity across hiring, promotion, and all other personnel actions.9eCFR. 23 CFR Part 230 Subpart A – Equal Employment Opportunity on Federal and Federal-Aid Construction Contracts The form spells out specific steps.

The contractor must designate an EEO Officer with real authority to run the program. That officer conducts meetings with supervisory staff at least every six months to review EEO policy, indoctrinates new supervisors within 30 days of hire, and instructs recruitment personnel on how to locate and hire minorities and women. EEO notices and posters must be placed where employees and applicants can see them. Job advertisements must include “An Equal Opportunity Employer” and be placed in publications with broad circulation among minorities and women in the project area.

For workforce reporting, federal-aid highway contractors do not use the private-sector EEO-1. They complete FHWA Form PR-1391 for every July in which work is performed, reporting employment data from the last payroll period of that month, with a separate PR-1391 for each covered contract or subcontract.10GovInfo. 23 CFR 230.121

The 30 Percent Self-Performance Rule

Section VI limits how much of the contract a prime can hand off. The prime must perform at least 30 percent of the total original contract price with its own organization, meaning its own employees and its own or rented equipment. Work performed by subcontractors, agents, or assignees does not count toward that 30 percent. The contract itself may set a higher percentage.

“Own organization” can include leased employees from a staffing firm, but only if the prime maintains day-to-day supervision, remains responsible for work quality, retains the power to accept or exclude individual workers, and stays ultimately responsible for prevailing wage payments and payroll submissions. The prime must also furnish a competent superintendent, employed by the firm, with full authority over construction operations on the project.

Specialty items, meaning work requiring highly specialized knowledge or equipment not ordinarily available to firms bidding on the contract as a whole, may be subcontracted and deducted from the contract price before calculating the 30 percent. The contracting agency designates which items qualify.

Safety, Overtime, and False Statements

Section VII requires compliance with all federal, state, and local safety laws, with specific reference to OSHA’s construction standards at 29 CFR Part 1926. Contractors must provide safeguards, safety devices, and protective equipment to protect workers and the public, and no employee may be permitted to work in surroundings that are unsanitary, hazardous, or dangerous under those OSHA standards. The Secretary of Labor, or an authorized representative, has the right to enter any project site at any time to inspect for compliance, under 40 U.S.C. 3704.

Section V handles overtime. Hours over 40 in a workweek must be paid at no less than one and one-half times the basic rate of pay. Violations trigger liquidated damages assessed per affected worker for each calendar day the overtime rules were broken, and the Department of Labor adjusts the per-day rate annually for inflation under the Federal Civil Penalties Inflation Adjustment Act.

Section VIII puts contractors on notice that false statements or fraudulent claims connected to a federal highway project carry criminal penalties under 18 U.S.C. 1020. Because certified payrolls are submitted under penalty of perjury, wage-related fraud can bring both civil back-pay liability and criminal prosecution.

Keeping the Project in Compliance

The biggest compliance failures are mundane. A subcontract that references the form instead of reproducing it. A missed weekly payroll. A worker booked under the wrong trade classification. Any of these can produce an audit finding that holds up payments, and state transportation agencies routinely withhold a percentage of contract payments until labor compliance issues are resolved.

Three tasks carry most of the ongoing weight. Verify that every subcontract at every tier contains the full current text of FHWA Form 1273 before work begins. Submit certified payrolls weekly through the state DOT’s electronic system for every contractor and subcontractor working that week. Keep all required records, meaning payrolls, EEO documentation, PR-1391 reports, and training records, for at least three years after project completion. Federal auditors can and do request them years after the last truck leaves the site.