Do Davis-Bacon wages apply to small jobs?

The FAR applies the wage rate requirement to federal construction, alteration, or repair contracts in excess of $2,000.

When is a performance bond required?

For construction contracts exceeding $150,000, unless waived as the statute allows.

Can SBA help me get bonded?

SBA guarantees surety bonds issued by certain surety companies for eligible small businesses, up to $14 million for federal contracts.

Guide

How to price your first federal bid as a trade contractor

Updated October 14, 2026

Federal construction bids carry costs that private jobs often do not. Price in prevailing wages on contracts over $2,000, bonds on contracts over $150,000, and enough self-performed work to meet the subcontracting limit. On sealed bids, award goes to the responsible bidder whose conforming bid is most advantageous considering only price and price-related factors. [FAR 14.101, Elements of sealed bidding]

Know how the bid will be judged

In sealed bidding, bids are opened publicly and evaluated without discussions. Award goes to the responsible bidder whose bid conforms to the invitation and is most advantageous to the government, considering only price and price-related factors. [FAR 14.101, Elements of sealed bidding] Read the whole solicitation and price exactly what it asks for.

Include prevailing wages

Federal construction, alteration, or repair contracts over $2,000 must include a clause requiring that laborers and mechanics on site be paid no less than prevailing wage rates set by the Secretary of Labor. This was formerly known as the Davis-Bacon Act. [FAR 22.403-1, Construction Wage Rate Requirements] Use the wage determination attached to the solicitation for your labor rates.

Price your bonds

Construction contracts over $150,000 require performance and payment bonds. For contracts over $35,000 up to $150,000, the contracting officer picks two or more payment protections, such as a payment bond or an irrevocable letter of credit. [FAR 28.102-1, Bonds (Miller Act)] Bonds or other protection must be furnished before notice to proceed. [FAR 28.102-1, Bonds (Miller Act)] If you cannot get bonded on your own, SBA guarantees bid, payment, and performance bonds through certain sureties for federal contracts up to $14 million. SBA charges 0.6% of the contract price on performance and payment bond guarantees and nothing for bid bond guarantees. [SBA, Surety bonds]

Plan your self-performed work

On set-aside work, special trade contractors may not pay more than 75% of the amount paid by the government, excluding materials, to subcontractors that are not similarly situated. The limit is 85% for general construction. [FAR 52.219-14, Limitations on Subcontracting] Build your labor plan around that before you price the job.

Common questions

Do Davis-Bacon wages apply to small jobs?: The FAR applies the wage rate requirement to federal construction, alteration, or repair contracts in excess of $2,000. [FAR 22.403-1, Construction Wage Rate Requirements]
When is a performance bond required?: For construction contracts exceeding $150,000, unless waived as the statute allows. [FAR 28.102-1, Bonds (Miller Act)]
Can SBA help me get bonded?: SBA guarantees surety bonds issued by certain surety companies for eligible small businesses, up to $14 million for federal contracts. [SBA, Surety bonds]

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Sources

Checked against these sources on October 14, 2026. Rules change, so always read the current solicitation and regulation. This guide is general information, not legal advice.