Sources: Associated Builders & Contractors, Washington, D.C.; CP staff
Adding to an early-2017 bill targeting the 1931 Davis-Bacon Act, Senator Jeff Flake (R-AZ) has introduced The Opportunity in Federal Construction Act (S. 1200), which directs the U.S. Department of Labor (DOL) to use Bureau of Labor Statistics (BLS) data to calculate prevailing wages for federal and federally assisted construction projects. A BLS data method would replace the current practice of relying on the DOL Wage and Hour Division to calculate Davis-Bacon-bound job wage levels.
“If the Bureau of Labor and Statistics can be trusted to set fair wages for two million federal employees, it can be trusted to do the same for workers on federal infrastructure projects while also providing much-needed relief to taxpayers,” says Senator Flake. “The Opportunity in Federal Construction Act is a commonsense solution to a broken system that will ensure fair wages for workers, more opportunities for small businesses, and less waste for taxpayers.”
“The Davis-Bacon Act requires contractors engaging in certain federal construction projects pay workers on such projects not less than the locally prevailing wage for comparable work,” he explains. “Unfortunately for taxpayers, DOL has been unable to develop an effective process for determining market-rate wages, making the system vulnerable to bias and waste. A prevailing rate for thousands of workers in a given locale can be based on the reported wages of as few as six workers.”
“Under certain conditions, DOL will simply rely on inflated union rates to set a prevailing wage, making it all but impossible for smaller businesses who cannot match union pay rates to compete with unions when bidding on projects,” Senator Flake contends. “A Government Accountability Office (GAO) investigation found 63 percent of Davis-Bacon prevailing wage rates are union rates despite the fact that only 14 percent of the construction workforce belongs to a union. [It] also determined DOL cannot even verify whether its wage calculations accurately reflect local markets.”