Associated Builders and Contractors Inc.

ABC: Davis-Bacon Act Inflates Cost of Federal Construction

In testimony today before the U.S. House of Representatives Committee on Education and the Workforce Subcommittee on Workforce Protections, Associated Builders and Contractors (ABC) General Counsel and shareholder with Littler Mendelson, P.C., Maurice Baskin said the Department of Labor’s (DOL) administration of the Davis-Bacon Act has, “hindered economic growth, increased the federal deficit and imposed an enormous paperwork burden on both contractors and the federal government.”

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The Davis-Bacon Act is an 80-year-old wage subsidy law administered by the DOL that mandates “prevailing” wages for employees of contractors and subcontractors performing work on federally financed construction projects. In his testimony, Baskin focused on DOL’s dysfunctional wage survey process.

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“The department continues to use antiquated and outmoded wage and survey methods that guarantee inflated and erroneous wage determinations all over the country, inflating the cost of federal construction to taxpayers,” Baskin said.

“First, the department continues to rely on wage surveys containing unacceptably low response rates instead of using sound statistical samples already made available through other government data collections,” Baskin said. “The department also has, in recent years, violated its own rules by importing wage rates from labor markets hundreds of miles apart. The resulting wage determinations bear little relation to actual local wages in the areas surveyed.

“ABC and others have repeatedly called on DOL to explore using alternative data to determine wage rates – such as data collected through the Bureau of Labor Statistics Occupational Employment Statistics program,” Baskin said. “DOL has refused to make this correction to the wage survey process and has not provided any rational explanation.”

Baskin also talked about DOL’s failure to provide contractors with enough information to accurately determine work assignments for individual job classifications and the huge paperwork burden placed on contractors when submitting weekly certified payroll reports.

More information is available in Baskin’s written testimony and on the subcommittee’s website.

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