Contractor: Davis-Bacon nets taxpayers four buildings for the price of five

Source: Associated Builders & Contractors (ABC), Washington, D.C.

Testifying on Capitol Hill at a hearing, “Examining the Department of Labor’s Implementation of the Davis-Bacon Act,” ABC representative Thomas Mistick observed, “At a time of shrinking public construction budgets, the Act’s fundamentally flawed system is arbitrarily limiting the amount of construction that can be built by needlessly increasing project costs. Jobs have been lost, businesses have closed and taxpayers are getting four buildings for the price of five because of this broken process.”

A principal of Church Restoration Group, based outside Pittsburgh, Mistick told members of the House Committee on Education and the Workforce Subcommittee on Workforce Protections, how the Act, as administered by the  Department of Labor (DOL), “hinders economic growth, increases the federal deficit, and imposes an enormous paperwork burden on contractors and the federal government.”

ABC characterizes the Act as an 80-year-old wage subsidy law that mandates ‘prevailing’ wages for employees of contractors and subcontractors performing work on federally funded construction projects. “The clear answer to the problems created by this fatally flawed and unfixable system is to repeal Davis-Bacon and let the market set acceptable wage rates through open and competitive bidding,” Mistick affirmed.

His testimony at the mid-April hearing followed the recent release of a Government Accountability Office report citing how Labor’s Davis-Bacon survey process suffers from a lack of transparency in how published wage rates are set and contains data errors regarding the number of employees and hourly and fringe benefit rates.

“The main reason Davis-Bacon causes so many problems is that the Department of Labor has failed to achieve the act’s stated objective of determining true ‘prevailing’ wages and instead has repeatedly issued wage determinations that are vastly inflated above the true market rates seen on private sector construction projects,” Mistick explained.