CIVIL CONTRACTOR PREVAILING WAGE CASH FLOW.
Prevailing wage civil work creates three specific cash flow problems that don't exist on private work: fringe benefits paid weekly before monthly billing collects them, certified payroll administration overhead that belongs in the bid rate and usually isn't there, and wage classification risk that produces back pay liability if errors turn up at audit.
None of the three are accounting problems. They're pricing and timing problems that turn up in the bank account. The fringe money goes out with Friday's payroll and comes back 45 days after the monthly billing, the office hours spent on certified payroll never made it into the overhead rate, and a classification nobody checked at the start becomes back pay two years later. A civil contractor bidding public and private work at the same overhead rate is underpricing one of them every single time.
WHAT IT MEANS.
Prevailing wage cash flow is the timing problem created when a civil contractor pays fringe benefits and certified payroll costs weekly on public work that only bills once a month.
SPM doesn't process payroll and that's outside our scope. The cash mechanics around prevailing wage work aren't outside our scope, and they're where the money goes. All three fixes are changes to the cash forecast, the overhead rate, and a checklist at project start.
THREE PROBLEMS PRIVATE WORK DOES NOT HAVE.
Fringe benefits are paid weekly and billing is monthly
Davis-Bacon and state prevailing wage laws require payment of fringe benefits either in cash on top of the base wage or through a bona fide benefit plan. When fringes are paid in cash, which is the simplest option for many civil contractors, they go out weekly with payroll while the project doesn't bill until the monthly cutoff, so the fringe cost is deployed seven to 14 days before the billing event covers it. On a 20-person prevailing wage crew with an $18/hour average fringe rate, that's $14,400 per week in fringe cost running ahead of billing, or $28,800 to $43,200 out ahead of the first collection. A cash forecast that carries that timing turns a recurring surprise into a known week.
Certified payroll administration is real overhead that belongs in the bid
Prevailing wage projects require weekly certified payroll reports documenting wages paid, hours worked, and benefit payments for each employee on the project. For a small civil contractor without dedicated payroll staff, putting those reports together takes 4 to 6 hours per week per project. On a $4M civil contractor running three simultaneous prevailing wage projects, that's 12 to 18 hours per week of administrative time that's not in the estimate, and at $35/hour for office staff time that's $420 to $630 per week in overhead cost most civil contractors are absorbing informally.
The wrong wage classification produces back pay liability
Davis-Bacon wage determinations are specific to the county, the project type, and the work classification. A civil contractor who classified a laborer as a general laborer when the work was grade-setter or pipe-layer work, both of which carry higher prevailing wage rates, has a back pay liability that can surface during a DOL audit or at project close. The cash impact is double, because it's the back pay itself plus the administrative cost of the correction. The fix is a wage classification review at project start, before the first certified payroll is submitted.
WHAT IT LOOKS LIKE IN DOLLARS.
On a 20-person prevailing wage crew with an $18/hour average fringe rate, $14,400 per week in fringe cost runs ahead of billing, which is $28,800 to $43,200 deployed before the first collection. On a $4M civil contractor running three simultaneous prevailing wage projects, certified payroll administration runs 12 to 18 hours per week, and at $35/hour for office staff time that's $420 to $630 per week in overhead nobody bid. Neither number looks large on its own. Both are permanent, and both are missing from the rate.
THREE ADJUSTMENTS TO THE MECHANICS.
Weekly fringe cost deployed against a monthly billing event is a predictable difference, and it belongs in the 13-week cash forecast as its own line item. Modeling it converts a recurring surprise into a planned LOC draw. Same money, no scramble.
Staff time spent on certified payroll documentation is real overhead. Quantify it as hours per project per week times the staff burden rate, then include it in the overhead rate calculation. Prevailing wage projects carry a higher real overhead rate than private work for this reason alone.
Before the first certified payroll is filed, verify that every classification on the project matches the wage determination for the specific county and work type. A 2-hour review at project start costs significantly less than the back pay liability of a misclassification discovered 6 months into the project. It also gives you a document to point at if anyone asks later.
A civil contractor running both prevailing wage and private work should calculate separate overhead rates for each. At minimum, understand that the blended rate understates the cost of prevailing wage work and overstates the cost of private work. Bidding both at the same overhead rate means the prevailing wage work is consistently underpriced.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing, no payroll, and no add-ons.
Pricing
| Last 12 months revenue | Monthly fee |
|---|---|
| Up to $1M | $1,900 to $2,900 |
| $1M to $3.5M | $2,600 to $3,900 |
| $3.5M to $6.5M | $3,800 to $5,700 |
| $6.5M to $9.5M | $5,100 to $7,100 |
| $9.5M to $12.5M | $6,100 to $8,500 |
| $12.5M to $15.5M | $7,400 to $11,000 |
| $15.5M to $18.5M | $9,400 to $13,500 |
| $18.5M+ | Quoted individually |
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions rather than a report.
Your bookkeeper keeps doing the books.
You stop touching the books.
Everything in Core, and we run the bookkeeping and the controllership as well. Nobody in your office is answering coding questions or chasing a reconciliation at month end.
We do the books. No payroll.
Every job shows its margin while it's still running.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the job costing.
FREQUENTLY ASKED.
