The Chamber

The Davis-Bacon Act is a Depression-era law that requires the payment of the local prevailing wage - the wage paid to a majority of workers or the average wage in a given classification in given area - on all federally-funded construction projects.  The Davis-Bacon wage rate is supposed to be based on the information gathered via voluntary wage surveys.  In reality, due to inefficiencies and inaccuracies with this archaic program, the rates are often the local union rates and not the prevailing market wage rates.

As a federally-supervised law, Davis-Bacon also requires significant paperwork and reporting.  Many smaller businesses avoid bidding for projects that include Davis Bacon requirements because of the added paperwork and reporting requirements.  Davis-Bacon is an inaccurate, cumbersome system that adds more red tape and bureaucracy to federal contracts and prevents taxpayers from getting the best bargain on federal construction projects by eliminating true competition from the contracting process.

The Republican Study Committee has made repealing Davis-Bacon the first focus of a newly created Repeal Taskforce that will “work to eliminate U.S. federal laws that inhibit, restrict, or are otherwise harmful to the American public.  The taskforce will focus on laws that are unconstitutional, anti-free-enterprise, or otherwise counter to economic, national security, or social conservatism.”  The taskforce will be lead by Rep. Connie Mack (R-Fla.). 

On April 6, 2011 the General Accounting Office (GAO) released a new report titled, “Davis-Bacon Act: Methodological Changes Needed to Improve Wage Survey.”  The report concluded Department of Labor's (DOL) current wage survey method results in especially high or low prevailing wages for construction workers.  GAO attributed the findings to several factors: a low number of contractors who respond to surveys; the long periods of time between wage surveys; and methodology for analyzing the surveys' results.  The report revealed that 63% of prevailing wage determinations are based on collectively bargained rates despite the fact less than 14% of construction employees are union members.  Perhaps most alarming was the finding that over 25% of the wage rates were based on six or fewer workers.  The GAO recommended the DOL:

• Amend the requirement that the department issue wage rates by civil subdivision to allow more flexibility; in some cases wage determination could not be made for a county because of insufficient survey responses;
• Obtain expert advice on the survey design and methodology; and
• Improve the transparency of its wage determinations.

Status of Legislation:  Several bills have been introduced that would repeal the Davis-Bacon Act.  Representative Steve King (R-Iowa) has been a strong supporter of repeal and has introduced the Davis-Bacon Repeal Act (H.R. 745) and has also sponsored repeal amendments. 

IEC Position:  IEC supports efforts to repeal this outdated, inefficient law.  IEC supports updating the federal prevailing wage so that accurate wage rates are obtained and the uncertainty and inefficiency is removed from the process.

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