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Bloomberg on Davis-Bacon

Challenges surrounding the administration of the Davis-Bacon Act have long plagued the Department of Labor. In August of 2009, Chairman Kline requested the Government Accountability Office (GAO) conduct a new examination of the implementation of the Davis-Bacon Act. As Bloomberg highlights in the following article, the GAO report found “inadequate and sometimes inaccurate data has been used to set wage rates for workers on federal construction jobs, possibly raising costs to U.S. taxpayers, according to congressional auditors.”

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Poor Data Used to Set Wages on U.S. Jobs Added Costs, GAO Says

By Holly Rosenkrantz

Inadequate and sometimes inaccurate data has been used to set wage rates for workers on federal construction jobs, possibly raising costs to U.S. taxpayers, according to congressional auditors.

Poor data collected by the U.S. Labor Department prevents accurate calculations of the prevailing pay rate required by law on the projects, the Government Accountability Office, Congress’s investigative arm, said in a report to be released today. The department “cannot have high confidence its results” are accurate, according to the report.

Labor Department officials in many cases base the wage rates on six or fewer workers, according to the watchdog agency. It also has failed to periodically update the information to assure the data represents current conditions, according to the report.

If “prevailing wage rates are too high, they potentially cost the federal government and taxpayers more for publicly funded construction projects,” according to the report.

The Davis-Bacon law, passed in 1931, requires workers on federal construction projects to be paid at rates prevailing for workers on similar jobs near the work site.

The 2009 U.S. stimulus law allocated about $300 billion for federal spending on building and infrastructure projects that would be subject to Davis-Bacon rates. About $220 billion was spent in 2009.

“These inaccurate wage determinations may drive up the cost of federal construction projects” and discourage competition, Representative Tim Walberg, a Michigan Republican, who leads a House subcommittee on worker protection.

Representative John Kline, a Minnesota Republican and a member of the workforce protections subcommittee, said lawmakers aren’t sure federally funded projects paid wages that were accurate or fair.

“We can no longer accept a system that spends taxpayer dollars without any real accountability, accuracy or transparency,” Kline said.

The GAO also cited a lack of transparency on how the Labor Department determines Davis-Bacon wage rates.

To read the report, please click here.

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