WAP Compliance & Regulatory Framework

The WAP Compliance Landscape

WAP compliance is governed by multiple overlapping regulatory frameworks. Unlike programs governed primarily by a single set of regulations, weatherization agencies must navigate federal energy regulations, labor law requirements, technical installation standards, health and safety protocols, and general federal award requirements simultaneously. Understanding the hierarchy of these requirements — and how they interact — is essential for any weatherization director or compliance officer.

10 CFR Part 440: The Foundation

The Code of Federal Regulations, Title 10, Part 440 is the primary regulation governing WAP. It establishes the fundamental rules for program administration, including:

• Eligibility definitions: Income thresholds, dwelling types, and priority populations
• Allowable expenditures: What costs can be charged to WAP, including per-unit limits, administrative percentages, and training and technical assistance allocations
• State plan requirements: What states must include in their annual application to DOE
• Re-weatherization restrictions: The prohibition on re-weatherizing units served after September 30, 1994
• Energy audit requirements: The mandate for whole-house energy audits and the SIR cost-effectiveness standard

DOE Weatherization Program Notices (WPNs)

DOE issues Weatherization Program Notices to provide detailed guidance on specific aspects of WAP administration. WPNs supplement the regulations in 10 CFR 440 and carry the force of program requirements. Key WPNs that every weatherization manager should know include:

• WPN on Health and Safety: Defines the scope of allowable health and safety expenditures, the hazards that must be addressed before or during weatherization, and when a unit should be deferred rather than weatherized
• WPN on Average Cost per Unit: Establishes the current per-unit spending limit and defines what costs are included in the calculation versus excluded (T&TA, admin, and health and safety costs are excluded from the per-unit average)
• WPN on Davis-Bacon: Guidance on prevailing wage requirements, wage determination lookups, certified payroll procedures, and common compliance issues
• WPN on Vehicle and Equipment: Rules for purchasing, maintaining, and disposing of vehicles and equipment acquired with WAP funds

WPNs are updated periodically and new ones are issued as program requirements evolve. States are responsible for communicating applicable WPNs to their sub-grantees, but proactive agencies monitor DOE's WAP guidance page directly.

Standard Work Specifications (SWS)

The Standard Work Specifications are DOE's technical standards for weatherization installation work. SWS define how each weatherization measure must be installed to ensure quality, safety, and durability. They cover every aspect of the physical work:

• Air sealing specifications: Where to seal, what materials to use, required air leakage reduction targets, and blower door testing protocols
• Insulation specifications: R-value requirements by climate zone, installation methods, fire-blocking requirements, and moisture management
• HVAC specifications: Furnace and boiler repair/replacement criteria, duct sealing and insulation standards, combustion safety testing procedures
• Health and safety specifications: Lead paint handling, asbestos management, combustion appliance zone testing, carbon monoxide and smoke detector installation

SWS compliance is not optional. All weatherization work performed with WAP funds must meet or exceed the applicable SWS. Quality control inspections (discussed below) are the primary mechanism for verifying SWS compliance on completed jobs.

Davis-Bacon Prevailing Wage Requirements

The Davis-Bacon Act requires that all laborers and mechanics employed on WAP work be paid at least the prevailing wage rate for their job classification in the county where the work is performed. This is one of the most consequential and frequently violated compliance requirements in WAP.

Who Is Covered

Davis-Bacon applies to "laborers and mechanics" performing weatherization installation work. This includes:

• Sub-grantee employees who install weatherization measures
• Contractor and subcontractor crews performing weatherization installation
• HVAC technicians replacing furnaces or performing mechanical work

Energy auditors and quality control inspectors are generally not considered laborers or mechanics and are not subject to Davis-Bacon. Administrative and management staff are also excluded. However, the line can be blurry — an auditor who also performs installation work is covered for the hours spent on installation.

Key Davis-Bacon Compliance Requirements

• Wage determinations: Before starting work, identify the correct wage determination for each county in your service area. Wage rates are published by the Department of Labor and must be checked for each job location.
• Certified payrolls: Maintain weekly certified payroll records for all covered employees showing hours worked, job classification, wage rate paid, and fringe benefits. The project supervisor or officer must certify each payroll.
• Posting requirements: The applicable wage determination and the DOE "Employee Rights under Davis-Bacon" poster must be posted at each job site where work is being performed.
• Worker classification: Workers must be classified accurately according to the work they perform. Misclassifying a worker at a lower-paying classification to reduce costs is a violation.
• Fringe benefits: Prevailing wage includes both the basic hourly rate and fringe benefits. Fringe benefits can be paid in cash or through bona fide benefit plans.

Energy Audit Requirements

Every WAP job must begin with a whole-house energy audit. The audit is the technical foundation for all subsequent work and must be completed before any measures are installed.

Approved Audit Tools

DOE requires the use of approved energy audit tools:

• NEAT (National Energy Audit Tool): For site-built single-family and small multifamily homes. NEAT models the building shell, heating/cooling systems, and calculates SIR for each potential measure.
• MHEA (Manufactured Home Energy Audit): For manufactured housing and mobile homes. MHEA accounts for the unique construction characteristics of manufactured housing.
• DOE-approved equivalents: Some states have received DOE approval to use alternative audit tools that meet the same cost-effectiveness analysis standards as NEAT/MHEA.

The SIR Requirement

The Savings-to-Investment Ratio is the cornerstone of WAP's cost-effectiveness standard. For each potential energy conservation measure identified by the audit:

• Individual measure SIR: Each measure must have an SIR of 1.0 or greater — meaning projected lifetime energy savings equal or exceed the installation cost
• Cumulative SIR: The overall package of measures installed must also achieve a cumulative SIR of 1.0 or greater
• Exceptions: Health and safety measures and incidental repairs necessary to perform weatherization are not subject to SIR requirements, as their purpose is safety rather than energy savings

Health and Safety Protocols

Weatherization work frequently encounters health and safety hazards that must be addressed before, during, or as part of the weatherization process. The DOE health and safety WPN defines the scope of allowable health and safety activities and establishes when a unit must be deferred.

Common Health and Safety Hazards

Deferral vs. Remediation

When a health and safety hazard exceeds what can be addressed within WAP's health and safety budget, the unit must be deferred. Deferral means the unit is removed from the active production queue until the hazard can be resolved through other means. Common deferral triggers include extensive mold contamination, structural deficiencies, active vermiculite insulation containing asbestos, and serious electrical hazards. Agencies must document the deferral reason and, where possible, refer the household to other programs that may be able to address the underlying issue.

Quality Control Inspections

Quality control (QC) inspections are the primary mechanism for verifying that completed weatherization work meets SWS and that the energy audit was conducted properly. DOE requires that a minimum of 5% of completed units receive a post-work QC inspection, though many states set higher thresholds — 10% to 100%, depending on state policy and sub-grantee risk level.

• Inspector independence: The QC inspector must not be the person who performed the energy audit or the installation work on the unit being inspected. This separation ensures objectivity.
• Inspection scope: QC inspections verify audit accuracy, measure installation quality, health and safety protocol adherence, client file completeness, and SWS compliance.
• Failed inspections: When a QC inspection identifies deficiencies, the crew must return to the unit and correct the issues. The inspection failure rate is tracked and used as a performance metric during state and DOE monitoring.

Procurement Requirements

WAP is a federal award, and all procurement using WAP funds must comply with 2 CFR 200 procurement standards. This applies to materials purchases, contractor services, equipment, and vehicles. Key procurement requirements include:

• Competitive bidding: Purchases above the simplified acquisition threshold require competitive procurement. Even below the threshold, agencies must demonstrate they obtained reasonable prices.
• Conflict of interest: Written policies must prohibit employees or board members from participating in procurement decisions where they have a personal interest.
• Documentation: All procurement decisions must be documented, including the basis for contractor selection, cost analysis, and any sole-source justifications.

Vehicle and Equipment Management

WAP agencies typically maintain fleets of work vehicles and specialized equipment (blower doors, infrared cameras, insulation blowers, combustion analyzers). These assets, when purchased with WAP funds, are subject to federal property management rules:

• Inventory tracking: All equipment with a unit cost of $5,000 or more must be inventoried and tagged. Physical inventory must be conducted at least every two years.
• Use restrictions: Equipment purchased with WAP funds must be used primarily for WAP purposes. If used for other programs, a cost allocation must be applied.
• Disposition: When equipment is no longer needed or reaches the end of its useful life, disposition must follow federal property rules. Equipment with a fair market value over $5,000 may require DOE approval before disposal.

Monitoring by State and DOE

WAP agencies are subject to monitoring at two levels. States monitor their sub-grantees, and DOE monitors the states. Monitoring visits typically include:

• Client file review: Verifying eligibility documentation, energy audit accuracy, measure selection, SIR calculations, and final inspection reports
• Fiscal review: Examining expenditure documentation, Davis-Bacon payroll records, procurement files, and cost allocation methodology
• Unit inspections: On-site visits to recently completed homes to verify that installed measures meet SWS and that the work matches the client file documentation
• Production and inventory review: Checking production tracking records, vehicle and equipment inventories, and warehouse/materials management

Monitoring findings are categorized by severity, and agencies must respond with corrective action plans for all findings. Repeated or serious findings can result in reduced funding, increased monitoring frequency, or, in extreme cases, termination of the sub-grant. For guidance on Single Audit requirements that apply when your organization expends $750,000 or more in federal awards, see our dedicated guide.