The Davis-Bacon Act: Issues and Legislation During the 108th Congress

Order Code RL31063

CRS Report for Congress

Received through the CRS Web

The Davis-Bacon Act: Issues and Legislation

During the 108th Congress

Updated March 19, 2004

William G. Whittaker

Specialist in Labor Economics

Domestic Social Policy Division

Congressional Research Service ˜ The Library of Congress

The Davis-Bacon Act: Issues and Legislation

During the 108th Congress

Summary

The Davis-Bacon Act (1931, as amended) requires, among other things, that not

less than the locally prevailing wage be paid to workers employed in federal contract

construction. Through recent decades, the Act has become a continuing source of

contention. Some ask: What is the impact of the Act? Should it be modified?

Strengthened? Repealed? Is it being administered effectively? These and other

questions continue to be raised.

Adopted in 1931 at the urging of the Hoover Administration, the Act was

regarded as an emergency measure intended to help stabilize the construction

industry and to encourage employment at fair wages (i.e., not less than those

prevailing in the locality of the covered work). The statute was amended in 1935 and

its scope broadened. Subsequently, Davis-Bacon provisions have been incorporated

within more than 50 federal program statutes.

The original Davis-Bacon Act (even with the 1935 amendments) was a

relatively simple statute which, it was assumed, the Secretary of Labor would have

little difficulty administering. However, the nature of the statute, changes within the

construction industry, and extension of the Act to a wide range of program statutes

seem to have added complications. By the 1950s, some had begun to urge major

amendment or repeal of the Act. Through the rulemaking process, the Department

of Labor has modified application of the statute — but controversies continue.

Serious oversight of the statute was undertaken during the early 1960s; then,

recommenced in the late 1970s. Among the issues raised have been the following:

revision of the database upon which prevailing wage rates are based; expansion of

the conditions under which “helpers” (generally, unskilled or semi-skilled workers)

can be employed on Davis-Bacon projects; revision of the operational concept of

“site of the work” for Davis-Bacon purposes; and updating of the “prevailing wage”

determination process and of the coverage threshold.

Oversight, however, has not resulted in conclusive resolution of the issues

surrounding the Davis-Bacon Act. Debate continues with respect to application of

the Act to specific program statutes. Should all (or most) federal and/or federallyassisted contract construction be covered by a prevailing wage requirement? Should

the Act apply in cases where indirect federal funding mechanisms are used (i.e., tax

credits, revolving loan funds, etc.)? What is (or has been) the economic impact of

the prevailing wage requirement?

This report does not trace every occasion in which the Davis-Bacon prevailing

wage requirement became an issue during recent Congresses. Such cases are

numerous. Rather, it provides a series of case studies by way of example. (Among

Davis-Bacon related bills of the 108th Congress, see H.R. 2283 and H.R. 895.)

Contents

Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Introducing the Davis-Bacon Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

The Structure and Context of Davis-Bacon . . . . . . . . . . . . . . . . . . . . . . . . . . 2

The Purposes of the Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

A Continuing Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

The Debate Over Davis-Bacon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Perspectives of Davis-Bacon Critics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Perspectives of Davis-Bacon Supporters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

What Do We Really Know About the Impact of the Davis-Bacon Act? . . . . . . . . 8

Some Areas of Continuing Concern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

The “Helper” Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Setting Out the Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Efforts to Revise the “Helper” Requirement . . . . . . . . . . . . . . . . . . . . 10

Initiatives of the 108th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

The “Site of the Work” Coverage Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Questions of Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

A New Rule Is Issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

School Construction and Davis-Bacon . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Davis-Bacon and the District of Columbia Schools . . . . . . . . . . . . . . 16

Davis-Bacon and School Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

New Initiatives in the 108th Congress? . . . . . . . . . . . . . . . . . . . . . . . . 18

The Clean Water Act and Prevailing Wage . . . . . . . . . . . . . . . . . . . . . . . . . 18

An Altered Requirement? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Consideration During the 107th Congress . . . . . . . . . . . . . . . . . . . . . . 19

Consideration in the 108th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Raising the Davis-Bacon Threshold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

The “CALFED” Water Resources Legislation . . . . . . . . . . . . . . . . . . . . . . 23

Through the 107th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

In the 108th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Modernization of America’s Railroads . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Through the 107th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

In the 108th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Other Davis-Bacon Legislative Issues of the 108th Congress . . . . . . . . . . . . . . . 26

Child Care Construction and Renovation Act . . . . . . . . . . . . . . . . . . . . . . . 26

The Davis-Bacon Act: Issues and

Legislation During the 108th Congress

Most Recent Developments

The Davis-Bacon Act of 1931 (as amended) requires that not less than the

locally prevailing wage be paid to workers employed under federal construction

contracts.1 It also affects manpower utilization on such projects: for example, the

employment of helpers or unskilled/semi-skilled general utility workers. With

respect to the implementation of the Act, Congress has assigned wide administrative

responsibility to the Secretary of Labor. Congressional concern with Davis-Bacon

— oversight and legislative proposals — has been more or less continuous at least

since the 1950s.

In the 108th Congress, only one bill, H.R. 2283 (Blackburn), deals singularly

with the Davis-Bacon Act: a proposal to establish a separate worker classification

of helper for Davis-Bacon prevailing wage rate determination purposes. No action

has yet been taken on the Blackburn proposal.

Through the years, Davis-Bacon provisions have been written into more than

50 program statutes. Application of the Act to these (and to new legislative

programs) has continued to spark congressional interest. Some have urged that the

prevailing wage requirement be set aside in the name of economy: to stretch

construction dollars by permitting paying of less than locally prevailing rates. During

recent years, the prevailing wage issue has variously been considered in the context

of legislative proposals in which there was a Davis-Bacon component — but in

which Davis-Bacon was not the core (substantive) concern.

Introducing the Davis-Bacon Act

In 1931, at the urging of the Hoover Administration, Congress enacted

prevailing wage legislation for federal contract construction — legislation

cosponsored by Representative Robert Bacon (R-N.Y.) and Senator James Davis (RPa.), i.e., the Davis-Bacon Act.2 The Act was significantly amended in 1935 and its

1

40 U.S.C. 3141-3148. Davis-Bacon provides a wage floor. To recruit and retain a skilled

workforce, contractors may be forced, by the market, to pay wages in excess of those found,

under Davis-Bacon, to be prevailing in the locality of the construction work.

2

Robert Bacon had engaged in banking in New York prior to his election to the House of

(continued...)

CRS-2

scope broadened. In 1964, the definition of prevailing wage was expanded to include

a fringe benefit component. Otherwise, the Act remains essentially in its 1935 form.3

Although there have been intermittent efforts to repeal the Davis-Bacon Act and the

related Copeland “anti-kickback” Act (1934),4 such initiatives have been consistently

rejected by Congress — which has, through the years, added Davis-Bacon

requirements to numerous individual program statutes.

The Structure and Context of Davis-Bacon

The Davis-Bacon Act requires that federal (and some federally assisted)

construction contracts specify the minimum wage rates to be paid to the various

categories of laborers working under those contracts. Minimum wages are defined

as those rates of pay found by the Secretary of Labor (a) to be prevailing (b) in the

locality of the project (c) for similar crafts and skills (d) on comparable construction

work. The concept of locality is usually (but not necessarily always) a county or

metropolitan area. Normally, construction work is divided into four categories:

residential, non-residential buildings, highway, and heavy construction.

The Act does not require that collectively bargained (union) wages be paid

unless such wages happen to be prevailing in the locality where the work takes place.

Further, the prevailing rate for Davis-Bacon purposes represents a floor, not

necessarily the rate that a construction firm will have to pay in order to recruit and

retain qualified workers.5

Typically, the Department of Labor (DOL) conducts two types of wage rate

determinations: general area determinations and, where necessary, specific project

determinations. DOL sometimes collects data through a direct survey process. More

often, it works from data provided by contractors, trade unions and other interested

parties. It may use both methods, jointly.

The Act requires that the “advertised specifications for every [construction]

contract in excess of $2,000, to which the United States or the District of Columbia

is a party,” must specify the wage that the Secretary of Labor determines to be

prevailing in the locality for the “various classes of laborers and mechanics”

employed on the covered work. Speaking generally, DOL does not recognize

2

(...continued)

Representatives in 1922. James Davis had served as Secretary of Labor in the cabinets of

Presidents Harding, Coolidge and Hoover prior to his election to the Senate in 1930.

3

For a quick historical overview of the Act, see CRS Report 94-408, The Davis-Bacon Act:

Institutional Evolution and Public Policy, by William G. Whittaker.

4

Some employers, it was alleged, had paid the prevailing wage to their workers but then

demanded rebates or kickbacks. To end this practice, Congress passed the Copeland “antikickback” Act in 1934 (P.L. 73-324). Though not a part of the Davis-Bacon Act, it operates

in tandem with that statute and, in policy terms, is usually a part of the Davis-Bacon debate.

5

There does not appear to be any systematic analysis of the gap, if any, between the floor

provided by the Davis-Bacon Act and the wages actually paid to construction workers on

covered projects.

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unskilled or semi-skilled “helpers” as a class of workers for wage rate determination

purposes. Rather, it evaluates workers by craft. Thus, employers are discouraged

from employing helpers on Davis-Bacon projects, turning to more skilled

craftspersons instead. DOL does, however, recognize apprentices and encourages the

employment on Davis-Bacon projects of persons enrolled in bona fide apprenticeship

programs.6

Supplemented by other statutes, work under Davis-Bacon is covered by

workhours and health and safety standards legislation — though the latter are not part

of the Davis-Bacon Act, per se. The related 1934 Copeland “anti-kickback” Act

requires weekly reporting of wages actually paid, with an affirmation from employers

that any deductions from wages due to employees were proper.

Davis-Bacon applies to direct federal construction, alteration, or repair of public

buildings and public works, including painting and decorating, where the contract is

in excess of $2,000. Further, Davis-Bacon provisions have been written into over 50

federal program statutes. Some states have enacted “little Davis-Bacon” acts. These

state statutes, however, normally differ from each other and from the federal DavisBacon Act.7

In general, labor standards for federal contract procurement are governed by

three statutes. The Davis-Bacon Act applies only to federal contract construction.

The Walsh-Healey Public Contracts Act (1936) deals with labor standards with

respect to goods produced under contract for the federal government. The

McNamara-O’Hara Act (1965), popularly known as the Service Contract Act, deals

with labor standards under federal service contracts. It addition, there is the more

general Contract Work Hours and Safety Standards Act (1969) — the latter an

amalgam of earlier federal workhours and safety enactments. (These statutes do not

apply to fully private sector work.) Although the federal contract labor standards

statutes supplement each other (i.e., for construction, goods, and services), they have

different wage floors, different triggering mechanisms and other requirements, and

are applied differently with respect to the various types of federal contract work.8

6

With the Fitzgerald Act in 1937 (29 U.S.C. 50 ff.), the federal government assumed an

oversight role with respect to apprentice training. Workers enrolled in programs recognized

by the Department of Labor (or in cooperating state programs) receive specified training

which, when complete, results in a credential certifying the competence of the graduate

(journeyman). The credential is portable (i.e., recognized throughout the country). Such

programs are usually funded jointly by the employer and the apprentice (through a

temporarily reduced wage) and, often, by a contribution from the trade union in the craft.

The reduced wage option, which increases normally with the systematic improvement in the

skills of the apprentice, tends to encourage employment of apprentices on Davis-Bacon

projects. Some open shop firms, however, prefer to train workers independently.

7

See CRS Report RS20940, The “Little Davis-Bacon” Acts and State Prevailing Wage

Standards, by William G. Whittaker.

8

For a more extended (but critical) account of these statutes and their administration, see

Armand J. Thieblot, Jr., Prevailing Wage Legislation: The Davis-Bacon Act, State “Little

Davis-Bacon” Acts, the Walsh-Healey Act, and the Service Contract Act (Philadelphia,

(continued...)

CRS-4

The Purposes of the Act

In the 1920s, the federal government undertook a major program of public

works. As the nation moved into a depression after 1929, this program had important

implications for the areas where the work was to be performed. However, given the

depth of the economic catastrophe and the scope of unemployment, any opportunity

for work — almost without regard to wage rates or conditions under which the work

was to be performed — was attractive both to workers and to struggling firms.

Federal construction contracts were normally awarded to the lowest responsible

bidder — a process that appears to have limited the options of the various federal

agencies when selecting a contractor. Treatment of workers and payment of fair

wages were not taken into account. The result, some argued, was the sacrifice of

product quality (and labor standards) for short-term economy. Certain itinerant

contractors, employing workers imported from low-wage parts of the country, were

able (or believed to be able) to underbid local contractors for federal construction

work. In this way, it was alleged, fly-by-night operators would win contracts, based

upon the payment of sub-standard wages (to workers desperate for employment but

sometimes lacking mature skills), and then produce an inferior quality of

construction. In that manner, the positive rehabilitative economic impact of public

building and public works projects for the various localities was reduced — to the

disadvantage both of local contractors and local workers alike.9

In drafting the Davis-Bacon Act, Congress was not searching for the cheapest

available labor for federal construction work. Rather, it prescribed payment of not

less than the locally prevailing wage in order, in part, to protect fair local contractors

and workers, residing in and employed in local markets, from contractors and lowwage crews from outside of the area of construction work. Thus, the original DavisBacon Act was as much a protection for fair contractors as for workers.10 However,

supporters have contended there is no essential conflict between the purposes of the

statute and securing a bargain for the public agency consumer (the taxpayer).

8

(...continued)

University of Pennsylvania Press, 1986). See also CRS Report RL32086, Federal Contract

Labor Standards Statutes: An Overview, by William G. Whittaker.

9

During the late 1920s and early 1930s, the contracting community appears to have been

very much concerned about establishment of quality controls, ethical standards, and fair

competition. See, for example G.F. Schlesinger, “Responsibility as a Pre-Requisite,” The

Constructor, Aug. 1928, pp. 24-25, 55-61; “‘Irresponsible Contractor’ Defined,” The

Constructor, Aug. 1928, pp. 35-36, 51; A. E. Horst, “Accomplishments in Cooperation:

Elimination of Irresponsibility Marks Progress of the Industry,” The Constructor, Nov.

1929. pp. 28-30, 56; “When Low Bids Are Too Expensive,” The Constructor, Feb. 1930,

pp. 40-41, and 58; and E. A. St. John, “Cooperation Eliminating Irresponsibility,” The

Constructor, Apr. 1930, pp. 35-36.

10

The prevailing wage requirement did not preclude award of contracts to outside

contractors. It simply assured that local labor standards would not be undercut.

CRS-5

The prevailing wage statute preceded the Fair Labor Standards Act (1938) with

its minimum wage provisions and was, thus, a somewhat new concept in federal

labor standards law.11 Davis-Bacon was viewed as a device that might help to assure

quality of construction, to stabilize the local economy and industry, and to make the

federal government, indirectly through its power as a consumer, a model for private

sector employers with respect to labor standards.12

A Continuing Process

In 1931, the Davis-Bacon legislation was regarded as an emergency measure.

It sparked little controversy at the time of its enactment and, from a review of the

hearings and debates of that period, it seems clear that Congress anticipated none of

the administrative problems that would ensue. Few of the terms or concepts

embodied within the statute were defined. No provision was made for

predetermination of the prevailing wage rate: only after a bid was submitted and a

contract awarded would a contractor learn what his wage obligations might be. How

disputes were to be adjusted was not specified: it was assumed that the Secretary of

Labor would have little difficulty enforcing the Act. But, complications were soon

to arise.

Almost immediately, restructuring of the Act commenced as Congress and the

Administration each began a process of reassessment. In early 1932, in an effort to

preempt action by the Congress, President Hoover moved to strengthen

administration of the statute through Executive Order No. 5778.13 Although

Congress proceeded with general oversight of the Act and, ultimately, adopted

reform legislation, that initiative was vetoed by President Hoover.14 The Copeland

“anti-kickback” Act (1934) helped assure that the appropriate rates would be paid

without improper deductions. Then, in 1935, Congress approved basic changes to

the statute. The 1935 amendments: (a) reduced the coverage threshold from $5,000

to $2,000; (b) extended coverage from only public buildings as in the original

enactment to “construction, alteration, and/or repair, including painting and

decorating, of public buildings or public works”; and (c) required that the locally

prevailing (Davis-Bacon) wage rates be predetermined — that is, prior to solicitation

of bids — and that they be written into bid solicitations.15

11

Late in the 19th century, the states had begun to enact prevailing wage laws with respect

to public construction. See David B. Johnson, “Prevailing Wage Legislation in the State,”

Monthly Labor Review, Aug. 1961, pp. 839-845.

12

Some have questioned whether, given the Fair Labor Standards Act after 1938, there was

a continuing need for Davis-Bacon prevailing wage protection.

13

Proclamations and Executive Orders: Herbert Hoover, March 4, 1929 to March 4, 1933

(Washington, GPO, 1974), vol. II, pp. 1066-1067.

14

These reform initiatives are discussed in U.S. Congress. Senate, Relationship Between

Employees and Contractors on Public Works, Report Pursuant to S.Res. 228, H.Rept. 74332, Part 2, 74th Cong., 1st sess., (Washington: GPO), May 13, 1935, pp. 7-9.

15

Reduction of the coverage threshold appears to have been motivated by at least two

considerations. First. Contracts for painting and decorating were often too small to come

(continued...)

CRS-6

The Debate Over Davis-Bacon

By the 1950s, Congress had begun to add Davis-Bacon provisions to various

program statutes in which federal funding made the work possible. But, such

extensions of coverage (which would involve new and different types of contract

work — and a new body of contractors) seem to have sparked increased uneasiness

with the Act. Despite numerous efforts by Davis-Bacon critics, however, proposals

to weaken the prevailing wage legislation were uniformly rejected by Congress.

Through the years, arguments for and against Davis-Bacon have become largely

fixed; so have counter arguments of defenders and critics. The logic and many of the

assumptions these arguments contain have been questioned at length. In the evolving

debate, few contentions about the Act have gone (or are likely to go) unchallenged.

On both sides, there are truths that advocates tend to accept without question.

Current policy debate has focused upon change: to amend the Act, whether to

strengthen it or to diminish its impact — or to repeal the statute outright. Outlined

below are some of the arguments advanced by critics and by defenders of

Davis-Bacon expressed in summary as each side in the ongoing debate might state

them. Some of these arguments, pro and con, may not appear on the surface to be

consistent; but, then, not all critics or defenders of the Act can be expected to make

precisely the same assumptions. Further, hardly a phrase of either set of arguments

has passed without refutation (and counter-refutation).16

Perspectives of Davis-Bacon Critics

Some critics of Davis-Bacon argue that the Act is inflationary (unnecessarily

increasing public construction costs), that it is difficult to administer (that it has

frequently been inequitably administered), and that it hampers competition —

especially with respect to small and minority-owned businesses that may be

unfamiliar with federal contracting procedures and lack the staff to deal with the

requirements such procedures impose. They contend that the Act impedes efficient

manpower utilization, limiting the use of “helpers” or general utility workers. Some

argue, were Davis-Bacon restrictions absent, that contractors would be able to

restructure the work to be performed, dividing tasks into less complex assignments,

in order to make practical the employment of workers who may be less skilled — and

who are also less expensive to employ. The result, they argue, would be increased

efficiency. And, they suggest, this would likely open more employment opportunities

15

(...continued)

under the $5,000 figure. Second. It appears that some contractors artfully divided work into

small parcels in order to avoid Davis-Bacon coverage. Reducing the threshold to $2,000

was viewed as a means through which to extend coverage.

16

Among trade unionists, the Davis-Bacon Act affects primarily persons involved in the

building and construction trades where the statute seems to have general support. Critics

of the Act, however, are a more diverse group. In some measure, industry is split. In policy

terms, the division of opinion seems to be more often philosophical, reflecting basic

attitudes toward labor-management relations rather than a division along partisan political

lines. The distinctions are not always neatly drawn.

CRS-7

to minorities and women, allowing them to gain work experience and on-the-job

training, while reducing the costs of public construction.

Besides, critics note, the Davis-Bacon Act (1931, 1935) was enacted before

there were federal minimum wage standards. With the general minimum wage floor

established under the Fair Labor Standards Act (1938), they suggest, the Davis-Bacon

Act is no longer needed: that is, that a “super minimum wage” for federal

construction work is both unnecessary and inequitable. They assert that labor costs

for federal construction could be reduced (with savings for the taxpayer) if actual

local market wages were paid rather than administratively determined locally

prevailing wages which, some argue, may often be union rates.17 In addition, they

urge simplification of the Copeland Act’s reporting requirements, arguing that a

simple declaration of compliance would have equal effect: that compliance with

existing law is onerous, bureaucratic, and that reports are rarely even examined.

Perspectives of Davis-Bacon Supporters

Supporters of Davis-Bacon often contend that the Act prevents cutthroat

competition from fly-by-night firms that undercut local wages and working

conditions and compete unfairly with local contractors: that the Act helps stabilize

the local construction industry, an advantage to workers and employers alike. The

Act, they suggest, may tend to assure the consuming agency of higher quality work

since employers, required to pay at least the locally prevailing wage, are likely to hire

more competent and productive workers — resulting in better workmanship, less

waste, reduced need for supervision, and fewer mistakes requiring corrective action.18

This may lead to fewer cost overruns and more timely completion of public

construction — and, in the long-term, lower rehabilitation and repair needs down the

line. Thus, some argue, the Davis-Bacon Act could actually save the taxpayer money

on public construction.

Supporters of the Act also argue that Davis-Bacon deters contractors from

fragmenting construction tasks in order to utilize low-wage (and low-skill) “helpers”

or pick-up crews. Some argue that without Davis-Bacon (and in the absence of a

collective bargaining agreement), contractors would probably be unlikely to provide

training beyond the necessary and narrow requirements of the job — and would not

likely enter into a formal program such as those monitored by DOL’s Bureau of

Apprenticeship and Training. Reducing or eliminating apprenticeship programs in

the construction industry might work to the disadvantage of minority and women

workers who are entering the building trades in growing numbers. In addition, some

assert that if “helpers” are substituted for skilled craft workers, it would likely be

minorities (and, to a lesser extent, women) who would be laid off or forced into

lower-wage jobs.

17

Again, one needs to recall that the Davis-Bacon prevailing rate is a floor, not necessarily

the rate that employers will actually have to pay. DOL suggests that union rates are used

only where they are found to be prevailing in a locality.

18

Conversely, some argue that, in the fully private sector, there is a significant amount of

quality construction work that is performed without Davis-Bacon protection.

CRS-8

What Do We Really Know About the Impact

of the Davis-Bacon Act?

Perhaps the most frequently asked question concerning the Davis-Bacon Act is:

How much money could be saved if Davis-Bacon were repealed or modified to

narrow its scope? The short (and honest) answer is probably: no one really knows.

Conversely, does Davis-Bacon save money for the federal government in its

purchases of construction — for example, employment of more highly skilled

workers on Davis-Bacon projects? Here again, a response may also be uncertain.

Davis-Bacon literature is extensive and diverse, much of it in the form of public

materials (i.e., agency reports and analyses). Journalists have taken a continuing

interest in the Act, resulting in a substantial popular literature. Serious academic

studies may be fewer. It is extremely difficult for an independent scholar to review

the administration of the Act to assess its impact. First. There is the scope of the

task: vast numbers of projects scattered throughout the United States, administered

by different agencies and involving hundreds of contractors and subcontractors,

working under dissimilar circumstances and in diverse labor markets. Second. There

is the problem of the availability of documentation. Since the contractors involved

are of the private sector, how much information has been preserved? Third. Access

presents a problem. Assuming that the data and documents have been preserved and

could be made available, securing such documentation (and access to administrative

personnel) may be problematic — both from the private sector (contractors, workers

and unions) and from the various public agencies.

If one assumes that documentation exists, access is allowed, that all of the

parties are cooperative, and that the means, financial and other, are available for such

an undertaking, there remains a fourth complication. The analyst would be

comparing something that did happen with something that in fact, for whatever

reasons, did not happen. Payroll records, labor-management relationships,

availability of skilled workers, quality of supervision, internal agency memoranda,

etc., all relate to an actual project and not to what might have happened under other

circumstances.

In the absence of a Davis-Bacon requirement, would the contract have gone to

the same contractor? If so (or if not), would the contract have been managed in the

same way? Did the Act have any impact upon the wages actually paid or upon

workforce utilization? Without Davis-Bacon, would different workers have been

employed? The work of a governmental researcher may be further complicated by

political or public policy considerations.19

For all of these reasons, there appear to be significant gaps in our knowledge of

the Act and of its administration despite oversight by Congress, extensive study by

public and private agencies, and the work of individual scholars. Further, few studies

19

See also CRS Report 94-908, Davis-Bacon: The Act and the Literature, by William G.

Whittaker.

CRS-9

of the Act, whether public or private, have escaped criticism on grounds of flawed

methodology or inadequate sample size. Thus, precise estimates of impacts ought

to be viewed with considerable caution.20

Some Areas of Continuing Concern

The Davis-Bacon Act has been a focus both of legislative and administrative

consideration — and of litigation. DOL has instituted its own reform initiatives —

most notably during the Reagan Administration — but these have often proven

contentious and have resulted in prolonged litigation. Among areas of continuing

concern and controversy are those discussed below.

The “Helper” Issue

The Davis-Bacon Act makes no mention of “helpers,” nor does it refer to

“trainees,” “apprentices,” or other skill groups. Rather, it refers to “various classes

of laborers and mechanics” and then leaves up to the Secretary of Labor the

determination of just what those “various classes” might be and how they might be

distinguished one from the other. But, just what is a “helper” — and how might he

or she be differentiated from a “laborer” or skilled construction worker? Equally

contentious has been whether the use of helpers is a common or prevailing practice

in the locality of a proposed federal construction project.21

Setting Out the Issue. Under Davis-Bacon, before bids are solicited, the

minimum locally prevailing wage rate is determined for each category of worker that

might be used on the project. Where a “helper” category is not recognized in the

locality of the projected construction, craft or laborer rates have to be paid,

potentially (but not necessarily) increasing the labor cost of such construction. On

the other hand, recognition of a helper category where it is not common or prevailing

area practice could defeat the purposes of the Act (i.e., allowing contractors to

fragment tasks so that low-skilled, low-wage helpers could be employed instead of

laborers and craft workers) resulting in a downward wage spiral. Further, some

20

A distinction needs to be made between labor costs and project costs. Higher labor costs

could result in lower project costs if more efficient and more skilled workers are employed.

But, as a practical matter, to what extent are actual project costs governed by the

requirements of the Davis-Bacon Act? Might they reflect the manner of federal agency

oversight and monitoring of the progress of the work? Is federal construction work

supervised as closely as that of the private sector? What might be the impact of other

federal requirements: style of construction/architecture, especially for ceremonial buildings?

Is cost impacted by various “set asides” for sheltered contractors — small and minority

business, etc.? For an example of the problems private research involves, see Martha Norby

Fraundorf, with John P. Farrell, and Robert Mason, Effect of the Davis-Bacon Act on

Construction Costs in Non-metropolitan Areas of the United States (Corvallis: Oregon State

University), Jan. 1982.

21

For general background, see Herbert R. Northrup, “The “helper” Controversy in the

Construction Industry,” Journal of Labor Research, fall 1992, pp. 421-435.

CRS-10

argue, employment of helpers would undercut apprenticeship programs with a

generally deleterious impact upon skills transfer.

Several questions are immediately apparent: (a) Are helpers commonly

employed in the area of the projected construction? (b) Is a clear distinction made

between a “helper” and a “laborer” or other craft workers? (c) What is the technical

distinction between such groups of workers? Upon what is that distinction based?

(d) What might be the economic impact of the recognition and utilization of a distinct

category of “helpers” on Davis-Bacon covered projects. Such questions have

remained a part of the debate over the helper issue through more than two decades

and, with the dawn of the 21st century, they remain largely unresolved. The position

of DOL on the issue has varied over time.

Efforts to Revise the “Helper” Requirement. Through the years, helpers

have been employed on Davis-Bacon construction where their use was common in

the area of the projected work and where they were clearly distinguished from

“laborers” and from skilled craft workers. However, such use of helpers appears to

have been infrequent. During the late 1970s, the Carter Administration opened the

general issue of Davis-Bacon implementation for debate and public comment.

Seizing the opportunity, industry urged a closer adherence to area practice when

establishing worker classifications — “especially ‘helper’ classifications.”22 But,

before new Davis-Bacon regulations could be given effect, President Carter was

replaced in office by President Reagan: regulations proposed by the former

Administration were withdrawn and their substance reconsidered.

New Davis-Bacon regulations, proposed by the Reagan Administration in May

1982, redefined the concept of helper and, potentially, expanded their use: a change

applauded by industry and objected to by the building trades unions.23 Litigation

followed. In order to circumvent objections raised by the courts, DOL redrafted the

helper regulations. In January 1989, during the Bush Administration, the courts

acquiesced in the judgment of the Department and cleared the regulations for

implementation. At that juncture, Congress objected, refusing to appropriate funds

for implementation and enforcement of the regulation. This restraint continued into

the 1990s, disappearing during fiscal1996. Then, another impediment was raised:

DOL, under the Clinton Administration, declined to act.

In June 1996, the Associated Builders and Contractors brought suit to require

DOL to enforce its helper regulations. DOL responded quickly and, in late July,

Assistant Secretary Bernard Anderson affirmed that the helper regulation (approved,

but still suspended) was “simply ... non-administratable.” Anderson explained that

the distinction between helpers and other workers in terms of their role and duties

was insufficiently clear, and that DOL had no intention of implementing the

regulation in its current form.24 In a Federal Register notice of August 2, 1996, DOL

noted that during the 14 years that had passed since the regulation was first

22

The Constructor, Dec. 1980, p. 61.

23

Federal Register, May 28, 1982, p. 23644 ff.

24

Bureau of National Affairs, Daily Labor Report, July 29, 1996, pp. A9-A10.

CRS-11

published, “additional information has become available which warrants review of

the suspended rule.” Therefore, the regulation remained in abeyance while DOL

engaged “in substantive rulemaking” on the issue.25

Through the next five months, DOL reassessed the data and, in December 1996,

it announced that the helper regulation would remain suspended “until the

Department either (1) issues a final rule amending (and superseding) the suspended

helper regulations; or (2) determines that no further rulemaking is appropriate, and

issues a final rule reinstating the suspended regulations.”26 In July 1997, the U.S.

District Court for the District of Columbia ruled that the Department was within its

rights to issue an indefinite suspension of the helper regulation.27 Then, in April

1999, DOL issued a new proposed rule that would, essentially, reaffirm the status

quo prior to the Carter Administration initiatives of the late 1970s — two decades

earlier.28 Thus, the use of helpers would be limited to demonstrated common area

practice where they were clearly differentiated from “laborers” and other craft

workers. Under the proposed rule, their use could be expected to be infrequent.

Late in the 105th Congress, Representative Charlie Norwood (R-GA) introduced

legislation that would have created a special category of workers (i.e., “helpers”) for

Davis-Bacon purposes, but no action was taken on the proposal. Early in the 106th

Congress (in March 1999), the Congressman introduced new legislation that would

have established a separate helper classification under the Davis-Bacon Act. On July

21, 1999, the House Subcommittee on Oversight and Investigations, Committee on

Education and the Workforce, conducted a general hearing on the impact of DavisBacon helper rules for job opportunities in the construction industry. The

Subcommittee, however, took no further action: the Norwood bill was not reported.

The “helper” issue also arose during committee consideration of the Labor,

Health and Human Services, and Education Appropriations for FY2000. In that

instance, Representative Anne Northup (R-KY) raised objection to the helper

regulation that DOL had proposed in April 1999. At the Congresswoman’s request,

language was added during mark-up that would have denied funding “to implement,

administer, or enforce” the helper rule proposed by the Clinton Administration.

However, through the legislative process, the provision was dropped. What impact

inclusion would have had may not be entirely clear since, in essence, it would have

codified then existing practice.

As the 106th Congress was drawing to a close, DOL issued a new final

regulation governing the use of helpers. It was dated November 14, 2000, and was

set to take effect 60 days after its publication in the Federal Register — just hours

prior to the end of the Clinton Administration. The regulation provides that helpers

25

Federal Register, Aug. 2, 1996, p. 40367; and Bureau of National Affairs. Daily Labor

Report, Aug. 1, 1996, pp. A2-A3.

26

Federal Register, Dec. 30, 1996, p. 68646.

27

Bureau of National Affairs, Daily Labor Report, Aug.4, 1997, pp. A10-A11.

28

Federal Register, Apr. 9, 1999, pp. 17442-17458.

CRS-12

will be recognized as a “distinct classification ... only where” the following

conditions occur:

(i) The duties of the helper are clearly defined and distinct from those

of any other classification on the wage determination;

(ii) The use of such helpers is an established prevailing practice in the

area; and

(iii) The helper is not employed as a trainee in an informal training

program.

The work of a “helper” is not to be performed by any other classification of worker

“in the wage determination.”29

While this final regulation from the Clinton Administration has now gone into

effect, it may not be the end of the process. On the one hand, the Department could,

at its discretion, reevaluate the “helper” question and issue a new proposed rule. Or,

conversely, Congress could attempt to resolve the issue through new legislation.

On May 23, 2001, Representative Norwood introduced legislation that, had it

been passed, would have redefined the concept of “helper” and would have permitted

the use of “helpers” on Davis-Bacon projects. The bill was referred to the

Subcommittee on Workforce Protections where it remained at the close of the 107th

Congress.

Initiatives of the 108th Congress. In the 108th Congress, the issue was

raised again by Representative Marsha Blackburn (R-TN) with the introduction of

H.R. 2283. The Blackburn bill would (a) mandate recognition, for wage rate

determination purposes, of helpers as a separate workforce classification, and (b)

require that a helper “be paid the prevailing wage of helpers ... employed on projects

which are of a character similar to the project on which the helper is employed” in

the locality “in which the helper is employed.” The bill continues:

... the term “helper” means a semi-skilled worker (other than a skilled

journeyman mechanic) who —

(1) works under the direction of and assists a journeyman;

(2) under the journeyman’s direction and supervision, performs a

variety of duties to assist the journeyman, such as preparing, carrying,

and furnishing materials, tools, equipment, and supplies, maintaining

them in order, cleaning and preparing work areas, lifting, positioning,

and holding materials or tools, and other related semi-skilled tasks as

directed by the journeyman; and

(3) may use tools of the trade at and under the direcction and

supervision of the journeyman.

The Blackburn bill was referred to the Committee on Education and the Workforce

and to the Subcommittee on Workforce Protections.

29

Bureau of National Affairs, Daily Labor Review, Nov. 20, 2000, pp. E1 forward. For a

more detailed discussion of this issue, see also CRS Report 96-228, Davis-Bacon:

Employment of Helpers on Federal Contract Construction, by William G. Whittaker.

CRS-13

The “Site of the Work” Coverage Issue

The initial Davis-Bacon Act of 1931 was a relatively simple statute: one

paragraph, with a statement indicating the date that it would take effect. With

experience, the statute was substantially modified in 1935 and, inter alia, language

was added providing that the Act’s prevailing wage requirements should apply to

“the contractor or his subcontractor” and to “all mechanics and laborers employed

directly upon the site of the work.”30

Through the years, with implementation of the Act, questions have arisen with

respect to this seemingly simple provision. For example, what is the “site of the

work” and how is “directly” to be defined? By whom must the workers in question

be employed? These concepts have changed over time with altered technology and

industry practice. But, rather than being quietly resolved, the “site of the work” issue

would become a subject of administrative review and, ultimately, of litigation.31

Rulemaking in this area would continue until near the close of the Clinton

Administration late in 2000. Litigation would be extensive.

Questions of Interpretation. Interpretive variations are numerous. For

example, given the specific wording of the statute, if workers engaged in the

construction of a building (working on the structure itself) were covered by

Davis-Bacon, would workers in an adjoining space mixing mortar, etc., be similarly

covered? How far removed from the actual structure could such work take place and

still be regarded as “directly upon the site of the work?” Where some assembly of

components is undertaken in a holding area down the street a little way, would

workers engaged in such assembly be regarded as employed “directly upon the site

of the work” for Davis-Bacon coverage purposes? If prefabricated units to be used

at a construction site in Alaska were assembled at a site in Seattle (a thousand miles

away), would the Seattle workshop be considered part of the site of the work?

As one begins to apply the statute, questions multiply. For example, using the

case above: Is the site in Seattle owned by the firm operating in Alaska? Are the

employees, engaged in the work in Seattle, direct employees of the Alaska firm? Is

the Seattle site dedicated solely to the Alaska project? Or, is the work in Seattle

being performed by a manufacturing plant that makes and sells components to any

construction firm engaging in work, public or private? Are the components, thus,

purchased in the open market? Or, are they developed and fabricated under a specific

federal contract? When do the fabricated goods change ownership — from the

manufacturer to the construction firm? Are they installed by workers employed by

the construction firm or by employees of the manufacturer? And, if the latter, would

30

31

P.L. 74-403. The provision remains a part of the statute.

See, for example, Building and Construction Trades Department, AFL-CIO v. United

States Department of Labor Wage Appeals Board, 932 F. 2d 985 (D.C. Cir. 1991) (Midway);

Ball, Ball and Brosamer v. Reich, 24 F. 3d 1447 (D.C. Cir. 1994); L. P. Cavett Company v.

U.S. Department of Labor, 101 F. 3rd 1111 (6th Cir. 1996).

CRS-14

these non-construction workers (installers) be Davis-Bacon covered?32 Was the

support facility created solely to serve the federal project (did it have prior existence)

and will it, likely, close when the federal project is completed?

If a contractor, engaged in work covered by Davis-Bacon, has concrete hauled

to the construction site (the permanent location of the structure, in this instance), how

are the drivers hauling the concrete to be treated? Does it matter by whom the

drivers are employed? Or, how long they are directly involved on the construction

site (however defined) as opposed to actual hours spent driving? If the construction

contractor sets up a separate firm to haul material, would this device insulate the

drivers from Davis-Bacon coverage?

Such questions may seem tedious, but they have been, through decades, the

subject of rulings from the Comptroller General and a focus of litigation and/or of

appeals through the hierarchy of DOL. Among federal contracting agencies, there

has not always been agreement on these matters. They have also been a focus of

attention for those who wish to extend Davis-Bacon coverage broadly — and for

those who favor a narrower application of the Act. DOL has sought to deal with

these issues through the regulatory process (and continues to do so) but with mixed

results. Even precise judicial rulings have been insufficient to prevent partisans from

finding nuances of meaning, either in the statute or in the regulations, from which

further litigation might blossom.33

A New Rule Is Issued. On September 21, 2000, DOL published in the

Federal Register a proposed rule redefining the concept of “site of the work” and

calling for public comment through October 23, 2000. Under the proposed

regulation, “site of the work” would be defined to include, in addition to the common

32

Several options could come into play. The components in this hypothetical case could be

off-the-shelf purchases in which federal labor standards requirements may not be an issue.

They could be contract purchases of goods, covered by the Walsh-Healey Public Contracts

Act rather than the Davis-Bacon Act. Or, if purchased from the manufacturer and installed

by employees of the manufacturer, the work could be regarded as an adjunct to the purchase

of the goods (possibly Walsh-Healey covered) or part of a service contract covered under

the McNamara-O’Hara Service Contract Act. The particular circumstances, likely different

in each case, would seem to be determinative. These issues were the subject of extensive

hearings during the early 1960s with respect to missile site development. See U.S.

Congress, House Committee on Education and Labor, Special Subcommittee on Labor,

Administration of the Davis-Bacon Act, hearings, 87th Cong., 2nd sess., Part 1, June 6, 1962ff

(Washington: GPO, l962); and, U.S. Congress, Senate Committee on Government

Operations, Permanent Subcommittee on Investigations, Work Stoppage at Missile Bases,

hearings, 87th Cong., 1st sess., Parts 1 and 2, Apr. 25, 1961ff (Washington: GPO, 1961).

More generally, see CRS Report RL32086, Federal Contract Labor Standards Statutes: An

Overview, by William G. Whittaker.

33

Concerning recent litigation, see the following, all authored by William A. Isokait:

“Davis-Bacon Developments after Midway Excavators,” The Constructor, July 1991, pp.

100-102; “What Midway Excavators Means for Federal Construction Contractors,” The

Constructor, Aug. 1992, pp. 27-29; and “Anatomy of a Victory: Reason Restored, Courts

Rule Davis-Bacon Act Language Means What It Says,” The Constructor, Aug. 1994, pp. 2022.

CRS-15

concept of a construction site, “... any other site where a significant portion of the

building or work is constructed, provided that such site is established specifically for

the performance of the contract or project.” This would include, further, “job

headquarters, tool yards, batch plants, borrow pits, etc.,” where they are “dedicated

exclusively, or nearly so” to the performance of the contract and are “adjacent or

virtually adjacent to” the site of work. It would not include “permanent home offices,

branch plant establishments, fabrication plants, tool yards, etc.,” the existence of

which is not dependent upon the federal or federally-assisted project. Pre-established

facilities (those extant prior to opening of project bids) are not to be regarded as part

of the site of the work.34

The proposed rule was opposed by certain construction industry groups but

supported by the building trades unions.35 On December 20, 2000, DOL published

the final rule in the Federal Register. Unchanged (in this respect) from the proposed

rule, it took effect on January 19, 2001.36 But, like the “helper” case, the issue of the

“site of the work” could be addressed further through departmental rulemaking,

through legislation — neither, a simple task — or through further litigation.

School Construction and Davis-Bacon

Since 1931, the Davis-Bacon Act has applied to contracts for public

construction “to which the United States or the District of Columbia is a party.”

School construction has involved the federal government less directly than with

respect to other types of construction, with primary funding coming from local school

districts and, in some instances, from the states. Federal funding may be involved

where schools are located at federal installations, where there is impact aid from the

federal government, where certain types of tax credits help fund educational

programs requiring construction — and with respect to the schools of the District of

Columbia. On such projects, however infrequent, contractors engaged in school

construction where there is federal funding are assured a level playing field in so far

as labor standards are concerned — and the construction workers, employed for such

projects, are afforded at least a locally prevailing wage and related standards.

That arrangement, however, has had its critics. Assuming that the Davis-Bacon

requirement increases the cost of public construction (an assumption that continues

as a subject of dispute), some have urged that the Act be waived in order to reduce

costs and stretch appropriated funding. That savings would result, were the DavisBacon requirement eliminated, may not be entirely clear. And, if there were savings

resulting from elimination of the prevailing wage requirement, it may not be obvious

that they would be passed along by the contractor to the government and, ultimately,

to the taxpayer.37

34

Bureau of National Affairs, Daily Labor Report, Sept. 21, 2000, pp. A8-A9; and Federal

Register, Sept. 21, 2000, pp. 57269-57276.

35

Bureau of National Affairs, Daily Labor Report, Oct. 26, 2000, pp. C1 forward.

36

Federal Register, Dec. 20, 2000, pp. 80268-80278.

37

The debate, both pro and con, seems to rest more on logic than on hard data. See Armand

(continued...)

CRS-16

Davis-Bacon and the District of Columbia Schools. In the 105th

Congress, during consideration of the District of Columbia Appropriations bill

(FY1998), it was suggested that the Davis-Bacon requirement be set aside with

respect to school construction: to allow construction employers, as an economy

measure, to pay wages lower than those prevailing in the area to workers engaged in

the construction, renovation, and repair of the District’s schools. A provision to that

effect was included in the bill as reported.

Discussion of the provision was relatively brief and developed along well

established lines. Representative Anne Northup (R-KY) pointed to the District’s

need “to stretch their construction money.” Representative Frank Riggs (R-CA)

argued that, by waiving Davis-Bacon, “the District could gain more construction for

the dollar and be able to allocate more resources to better meet students’ needs.” It

was a “simple choice,” suggested Representative Tom Delay (R-TX). “We can vote

to support schools and public education or we can vote to support corruption and

Washington union bosses.” Conversely, Representative Frank LoBiondo (R-N.J.)

reasoned: “It is not as simple as some claim, that there would be a major cost saving

by eliminating this requirement.” He stated: “... in general you truly do get what you

pay for.” Representative Jack Quinn (R-NY) affirmed: “... Davis-Bacon simply

ensures that wages and working conditions at a given locality are observed on

federally funded construction programs.”

As debate proceeded, Representative Martin Sabo (D-MN), disagreeing both

with the substance of the Davis-Bacon waiver provision and with its legislative

appropriateness, proposed that the language setting aside the prevailing wage

requirement be deleted.38 On a vote of 234 yeas to 188 nays, the Sabo amendment

was approved. Davis-Bacon coverage for District of Columbia school construction

was retained.39

Davis-Bacon and School Finance. In the 106th Congress, it was proposed

to assist the public schools by allowing interest from bonds designated for school

construction to be paid by the federal government through tax credits for the

bondholder. In effect, the federal government would pay the interest cost for states

and local governments on bonds for construction of classrooms and related facilities.

Would this subsidy, some questioned, establish the federal government as “a party”

37

(...continued)

J. Thieblot, Jr., Prevailing Wage Laws and School Construction Costs, (Washington, Merit

Shop Foundation, undated), 16 p.; and Steven G. Allen, and David Reich, Prevailing Wage

Laws Are Not Inflationary: A Case Study of Public School Construction Costs (Washington,

Center to Protect Workers’ Rights, Dec. 1980), 24 p. See also Peter Philips, Square Foot

Construction Costs for Newly Constructed State and Local Schools, Offices and Warehouses

in Nine Southwestern and Intermountain States, 1992-1994. Paper prepared for the

Legislative Education Study Committee of the New Mexico State Legislature, Sept. 6, 1996.

43 p.

38

Congressional Record, Oct. 9, 1997, p. H8780.

39

Ibid., pp. H8780-H8783.

CRS-17

to school construction, alteration, etc.? And, if so, would it trigger applicability of

the Davis-Bacon Act?40

Debate ensued. The Building and Construction Trades Department, AFL-CIO,

saw Davis-Bacon coverage as “a high priority” and asserted a need “to establish [a]

precedent” for cases involving such “indirect financing.” Conversely, the Associated

Builders and Contractors (ABC), a predominantly open shop trade association, urged

the House leadership “not even [to] consider moving a school construction bill with

Davis-Bacon attached.”41 The issues were broader than just education policy.

Ultimately, none of the proposals was approved; the status of Davis-Bacon coverage

for school construction was not altered during the 106th Congress.42

Early in the 107th Congress, Representative Randy “Duke”Cunningham (R-CA)

introduced legislation to exempt from Davis-Bacon and Copeland Act coverage “any

contract which is entered into to construct or repair facilities of an educational agency

or library.”43 Conversely, Representative Major Owens (D-NY) proposed a system

of grants to states “to enable local educational agencies to finance the costs

associated with the construction, repair, and modernization technology of school

facilities within their jurisdictions” — with Davis-Bacon coverage included as part

of the program.44 Similarly, legislation was introduced by Representatives Nancy

Johnson (R-CT) and Charles Rangel (D-NY) to provide funding for school

construction and modernization through a system of tax credits — to which Davis-

40

The General Educational Provisions Act (20 U.S.C.1232(b)) provides that “[a]ll laborers

and mechanics employed by contractors or subcontractors on all construction and minor

remodeling projects assisted under any applicable program shall be paid wages at rates not

less than those prevailing on similar construction and minor remodeling in the locality” as

provided under the Davis-Bacon Act. The term “applicable program” is defined (20 U.S.C.

1221(c)(1)) as “any program for which the Secretary or the Department has administrative

responsibility as provided by law or by delegation of authority pursuant to law.” Even

language so broadly worded may not place Davis-Bacon coverage in all instances beyond

the possibility of challenge. On the one hand, it could be argued that the a tax credit

approach went beyond the normal concept of a federally funded project. But, conversely,

one might argue that the arrangement was merely a different approach to the same result:

building schools and related structures with federal assistance — and, thus, that the work

should be covered under Davis-Bacon.

41

Bureau of National Affairs, Daily Labor Report, May 26, 1999, pp. A2-A3.

42

At large concerning school construction issues, see CRS Report RS20171, School

Facilities Infrastructure: Background and Legislative Proposals, by Susan Boren. Much

of the recent debate concerning Davis-Bacon and schools has revolved around tax credit

issues. In that area, see CRS Report RS20606, Qualified Zone Academy Bonds: A

Description of Tax Credit Bonds, by Steven R. Maguire; and CRS Report RS20699,

Funding School Renovation: Qualified Zone Academy Bonds vs. Traditional Tax-Exempt

Bonds, by Steven R. Maguire.

43

See H.R. 331 (107th Congress).

44

See H.R. 469 (107th Congress).

CRS-18

Bacon would also have been applicable.45 The several bills died at the close of the

107th Congress.46

New Initiatives in the 108th Congress? Early in the 108th Congress,

Representative Owens introduced new legislation “to provide Federal funds to enable

local educational agencies to finance the costs associated with the construction,

repair, and modernization for information technology of school facilities within their

jurisdictions.” Introduced on March 24, 2003, the bill (H.R. 599), which includes a

Davis-Bacon requirement, was referred to the Committee on Education and the

Workforce.

The Clean Water Act and Prevailing Wage

In 1961, Congress passed federal water quality legislation that would emerge as

what is now popularly known as the Clean Water Act (CWA). Included in the 1961

legislation was a provision applying Davis-Bacon prevailing wage requirements to

construction of sewage treatment facilities where there was a federal involvement

(i.e., direct federal assistance), notably through grants to the states.

An Altered Requirement? In 1987, Congress shifted its focus. Rather than

continuing with a program of direct federal funding (grants) of such construction, it

established a structure of state revolving loan funds (SRFs), about 80% federally

funded with 20% non-federal matching funds. Congress expected that, by FY1995,

the SRFs would provide a continuing source of financing for pollution abatement and

that the federal role (further appropriations) would end. In authorizing legislation

(1987), Congress mandated Davis-Bacon coverage for such work commenced prior

to FY1995.

Things did not work out as anticipated, however. First, the SRFs did not

provide an adequate source of funding for pollution abatement work. Second,

Congress continued to fund this work — though channeling much its support through

the SRFs. Third, because of a series of unrelated environmental controversies (for

example, a dispute concerning the environmental approach to wetlands), no new

authorizing legislation was adopted after 1987. However, Congress continued to

appropriate funds for the CWA and the SRF program continued.

Thus, a question arose. If the abatement program remained federal in terms of

funding and priorities (notwithstanding the absence of authorizing legislation),

should the statutorily mandated administrative requirements of that program —

including the prevailing wage requirement — remain in place? In 1995, the

Environmental Protection Agency (EPA) declared that Davis-Bacon would no longer

apply to SRF-related construction: that the requirement (but not the funding) had

45

46

See H.R. 1076 (107th Congress).

Although no action was taken on H.R. 469, per se, the concept was considered in

connection with other education-related legislation. Legislative proposals of the 107th

Congress, dealing with educational matters, were diverse — not all of them are considered

here. See CRS Report RS20171, School Facilities Infrastructure: Background and

Legislative Proposals, by Susan Boren.

CRS-19

terminated at the end of the period covered by the 1987 authorization (i.e., by

FY1995). Thereafter, agencies involved in such work would be permitted to pay

contract construction workers less than the locally prevailing wage (the market

permitting) and to avoid any other perceived disadvantages associated with DavisBacon coverage.

The Building and Construction Trades Department (AFL-CIO), or BCTD,

protested and, following extended negotiation, EPA changed its position. In May

2000, it proposed a “settlement agreement” under which Davis-Bacon would once

more apply to certain CWA/SRF construction and, in an announcement published in

the Federal Register of June 22, 2000, called for comment. Comment was sharply

divided: some industry groups and local governmental entities (users of construction

labor) urged that Davis-Bacon not apply — and, for the most part, argued that EPA

was moving beyond its statutory authority in attempting to reinstate that requirement.

The BCTD, conversely, held that Davis-Bacon did apply and, ultimately with the

concurrence of EPA, that the environmental agency was statutorily bound to enforce

the prevailing wage requirement. In the Federal Register of January 25, 2001, EPA

decided that Davis-Bacon did (and should) apply and would be applied effective on

July 1, 2001. Subsequently, EPA moved the effective date back to September 1,

2001 — and then to October 1, 2001. The situation then became somewhat

ambiguous.47

Consideration During the 107th Congress. Debate on the Davis-Bacon

provision of the Clean Water Act continued into the 107th Congress as the House and

Senate commenced consideration of new clean water legislation. In each instance,

the prevailing wage provision was a relatively minor — though contentious — part

of an otherwise comprehensive legislative package. The committees in the House

and Senate would proceed independently — though they would cover much of the

same ground.

Senate Action. On February 26 and 28, 2002, hearings were conducted in the

Senate by Subcommittees of the Committee on Environment and Public Works. Two

proposals were under consideration. S. 252 was presented by Senator George

Voinovich (R-OH) that, inter alia, would have deleted certain of the administrative

requirements of the 1987 CWA legislation but would have left the Davis-Bacon

requirement in place. S. 1961, introduced by Senators James Jeffords (I-VT) and

Bob Graham (D-FL), was silent on the Davis-Bacon issue.

As the Committee moved forward with the CWA legislation, the Davis-Bacon

issue became a focus of attention — and remained so during full Committee mark-up

in May 2002. An amendment, proposed by Senator Harry Reid (D-NV), resulted in

applying Davis-Bacon coverage to all CWA and Safe Drinking Water SRFs.48

47

For a more extended sketch of this issue, see CRS Report RL31491, Davis-Bacon Act

Coverage and the State Revolving Fund Program under the Clean Water Act, by William

G. Whittaker.

48

U.S. Congress, Senate Committee on Environment and Public Works, Water Investment

Act of 2002, report to accompany S. 1961, S.Rept. 107-228, 107th Cong., 2nd sess.

(continued...)

CRS-20

According to the National Journal, Senator Robert Smith (R-NH) argued that the

amendment might be self-defeating. “If Davis-Bacon is added to this bill,” Smith

predicted, “it’ll be dead as a mackerel ... dead, dead, dead!”49 The bill was reported

on July 29, 2002, with the Davis-Bacon requirement, but it died at the close of the

107th Congress.

House Action. In the House, a somewhat different bill (H.R. 3930) was

introduced by Representative John Duncan (R-TN). The Duncan bill, in eliminating

certain administrative requirements, also deleted Davis-Bacon coverage.

During markup by the Committee on Transportation and Infrastructure on

March 20, 2002, Representatives Sue Kelly (R-NY), Ellen Tauscher (D-CA) and

Peter DeFazio (D-OR) proposed an amendment restoring the Davis-Bacon

requirement and making it apply to SRFs — including recycled funds.50 The

amendment was approved and the bill, as amended, was ordered to be reported

(March 20, 2002).51

The result, it appears, was a stalemate. According to the Daily Labor Report,

House Majority Leader Richard Armey (R-TX) declared that he “will not allow a bill

to authorize appropriations for state water pollution control projects to come to the

House floor because of a Davis-Bacon Act amendment included in the measure.” At

the same time, House Transportation and Infrastructure Committee Chairman Don

Young (R-AK) was said to have “pledged that no legislation would be reported out

of his committee without Davis-Bacon coverage.”52 No further action had been taken

on H.R. 3930 by the close of the 107th Congress.

Consideration in the 108th Congress.53 With the opening of the 108th

Congress (January 7, 2003), Representative Kelly of New York introduced new

48

(...continued)

(Washington: GPO, 2002), p. 45. (Hereafter cited as Senate Committee on Environment and

Public Works, Water Investment Act of 2002.) The Daily Labor Report, May 20, 2002, p.

A10, stated that under the Reid amendment to S. 1961, the prevailing wage requirements

“would apply to second and subsequent rounds of funding” for projects under the

legislation.

49

David Hell, “Environment Panel Slogging Ahead on $35 Billion Water Quality Bill,”

National Journal, May 16, 2002.

50

CRS Issue Brief IB10069, Clean Water Act Issues in the 107th Congress, by Claudia

Copeland, p. 7. Representative Michael Rogers (R-MI) proposed an amendment to weaken

the Kelly-Tauscher-DeFazio amendment on the ground that the stronger language, according

to “‘a leadership office’” would “‘stop the bill.’” The National Journal stated: “Young

replied that he would be ‘surprised’ if the bill were stalled, and Rogers’ amendment was

defeated on another voice vote.” Michael Steel, “$20 Billion Loan Fund Approved for

Wastewater Projects,” National Journal News Service, Mar. 20, 2002.

51

H.R. 3930 was also referred to the Committee on Ways and Means and reported on Apr.

17, 2002.

52

Daily Labor Report, Apr. 18, 2002, p. A7.

53

See CRS IB10108, Clean Water Act Issues in the 108th Congress, by Claudia Copeland.

CRS-21

Clean Water Act legislation (H.R. 20) which, among its other provisions, affirmed

Davis-Bacon coverage for SRF projects. In April, an alternative proposal, the “Water

Quality Financing Act of 2003" (H.R. 1560) was introduced by Representative

Duncan of Tennessee — a bill that was silent on the prevailing wage issue. Hearings

were held on June 19 by the Subcommittee on Water Resources and Environment

and, on July 17, 2003, the Duncan bill was unanimously approved and sent on to the

full Committee on Transportation and Infrastructure.54

Representative Kelly, with the Committee’s ranking Democrat, Representative

Jerry Costello of Illinois, reportedly indicated that they would reintroduce the DavisBacon issue in full Committee — a putative action to which some employers

objected.55 Although it supported an expanded CWA program, the Associated

Builders and Contractors (ABC) stated its opposition to H.R. 20 “because it applies

federal Davis-Bacon Act provisions to both federal capitalization grants as well as

subsequent state repayment funds” which ABC termed both “a gross expansion of

the Davis-Bacon Act” and “an egregious infringement upon states’ rights.” Still, the

largely open shop (merit shop) contractor group endorsed H.R. 1560.56 What action

the full Committee may take remains uncertain.

Meanwhile, Senator Voinovich introduced S. 170 (January 15, 2003), the

“Clean Water Infrastructure Financing Act of 2003.” The bill was referred to the

Committee on Environment and Public Works. S. 170 would authorize $15 billion

over five years for the CWA State Revolving Fund. The Voinovich bill is silent on

the Davis-Bacon issue.57

Raising the Davis-Bacon Threshold

As noted above, the original threshold for Davis-Bacon coverage, in 1931, had

been set at $5,000. The result, in practice, was that smaller contracts (for painting

and decorating, notably) fell below the threshold amount and were, thus, DavisBacon exempt. Further, some contractors (and, presumably, with the concurrence of

agencies with which they dealt) allegedly structured their bids for public work in a

manner that allowed portions of the work to fall below the threshold.58 Thus, after

54

U.S. Congress, House Committee on Transportation and Infrastructure, “Water Quality

Financing Act of 2003 Unanimously Approved by House Subcommittee,” press release,

July 17, 2003.

55

See Juliana Gruenwald, “House Subcommittee Boosts Wastewater Treatment Loan

Program,” National Journal, July 17, 2003; and Kathryn A. Wolfe, “Subcommittee

Endorses Water Development Bills,” CQ.com, July 17, 2003.

56

See the Associated Builders and Contractors web site [http://www.abc.org/ga].

57

Congressional Record, Jan. 15, 2003, p. S855.

58

Procurement officers, in order to stretch agency funding, may tend to associate

themselves, perhaps informally, with contractor concerns for keeping labor costs as low as

feasible even where that may mean reducing the wages of workers. This raises several

questions, among which are: Would the payment of lower wage rates, although it may

reduce labor costs, result in lower project costs? (Reduced labor costs should not

(continued...)

CRS-22

extensive hearings, Congress amended the Act in 1935 to lower the threshold to

$2,000 — the current threshold level.

Through the years, there have been various proposals to raise the Davis-Bacon

threshold. Some appear to have been urged by forces, often hostile to the DavisBacon Act, as a discrete means through which to reduce coverage. Others have

argued that there was a need to adjust the threshold to offset the impact of inflation:

that a $2,000 figure, which may have been reasonable in 1935, was de minimis nearly

seven decades later. At the same time, some who support the concept of a prevailing

wage requirement may urge the widest possible coverage and, therefore, may oppose

any adjustment of the threshold.

If one assumes that the prevailing wage requirement is still appropriate but that

an increase in the threshold is needed, then several questions might be raised. What

is the result that a change of threshold level seeks to effect? To what level should the

threshold be raised?59 How have changes in construction methods and technology

— and factors associated with the economics of construction — affected manpower

utilization and compensation? Is a straight adjustment for constant dollars an

appropriate approach to establishment of a new Davis-Bacon threshold?

On June 7, 2001, Representative Cass Ballenger (R-NC) introduced the “DavisBacon Modernization Act” (H.R. 2094) which, had it been enacted, would have

raised the Davis-Bacon threshold from $2,000 to $100,000. The Act’s requirement

that not less than the locally prevailing wage be paid to workers engaged on federal

contract construction Mr. Ballenger viewed as an “enormous waste.” He argued that

the requirement “inflated” the cost of federally-assisted projects and hindered their

development.60 The bill was referred to the Committee on Education and the

Workforce and to the Subcommittee on Workforce Protections. No further action

was taken on H.R. 2094.

58

(...continued)

necessarily be equated with lower overall project costs.) Would any savings, realized

through reduced wages, actually be passed through to the agency/consumer? And, what is

the nature of the relationship between the federal procurement officer (who must monitor

a contract and assure that a project remains within budget) and a contractor? The answers

are not immediately clear.

59

As a collateral issue, some may question why prevailing wage protections are appropriate

for workers employed on large projects where they can be dispensed with when workers are

employed on small jobs. There would appear to be no obvious differential in the cost-ofliving for the workers involved. Can it be assumed that employers, engaged in work under

small contracts, would be more solicitous of the welfare of their employees than would

firms engaged for larger projects — and that labor standards protections are less necessary

when the contract amount is under $5,000 (or, were the threshold to be raised, under

$100,000 or $500,000 or $1,000,000)? What are the purposes that Congress has intended

to achieve by continuing to require a prevailing wage on federal construction?

60

Congressional Record, June 26, 2001, p. H3526.

CRS-23

The “CALFED” Water Resources Legislation

During the 107th Congress, committees both of the House and the Senate

considered legislation that would have authorized the Secretary of the Interior and

certain other agencies to pursue a program “to achieve increased water yield and

environmental benefits, as well as improved water system reliability, water quality,

water use efficiency, watershed management, water transfers, and levee protection.”61

The focus of the legislation was on “the region east of San Francisco Bay, where the

Sacramento and San Joaquin Rivers converge,” with certain related areas.62

Through the 107th Congress. Of various CALFED-related proposals63 that

were introduced, two were reported during the second session of the 107th Congress:

S. 1768, sponsored by Senators Diane Feinstein (D-CA) and Barbara Boxer (D-CA);

and H.R. 3208, sponsored by Representatives Ken Calvert (R-CA) and Calvin

Dooley (D-CA). The two bills proceeded along somewhat different tracks and

neither was passed by the 107th Congress.

As introduced, H.R. 3208 was silent on the prevailing wage issue. During

markup, Representative Nick Rahall (D-WV) offered an amendment that, inter alia,

would have included, specifically, a Davis-Bacon requirement. The Rahall

amendment failed on a roll call vote of 17 yeas to 20 nays. Later, Representative

George Miller (D-CA) offered an amendment, focused narrowly upon Davis-Bacon

coverage, which was approved by a roll call vote of 23 yeas to 18 nays.64 As

reported, H.R. 3208 provided:

Any contract under which laborers or mechanics may be employed, for a project

or activity funded in whole or in part under Title I or II (or under an amendment

made by such title), shall contain reasonable assurances that each contractor or

subcontractor involved shall pay laborers and mechanics employed by such

contractor or subcontractor wages equivalent to those applicable under the Act

of March 3, 1931 (... commonly known as the Davis-Bacon Act).65

61

U.S. Congress, House Committee on Resources, Western Water Security Enhancement

Act, 107th Cong., 2nd sess., H.Rept. 107-360, Part 1, (Washington: GPO, 2002), p. 19.

(Hereafter cited as House Committee on Resources, Western Water Security Enhancement

Act.)

62

U.S. Congress, Senate Committee on Energy and Natural Resources, CALFED Bay-Delta

Authorization Act, 107th Cong., 2nd sess., S.Rept. 107-171 (Washington: GPO, 2002), p. 7.

(Hereafter cited as Senate Committee on Energy and Natural Resources, CALFED BayDelta Authorization Act.) On this general issue, see CRS Issue Brief IB10019, Western

Water Resources Issues, by Betsy A. Cody.

63

“CALFED,” here, refers to the “Calfed Bay-Delta Program” which means “programs,

projects, complementary actions, and activities taken through coordinated planning,

implementation, and assessment activities of the State and Federal agencies....” The project

does not exclusively impact California. See S. 1768 of the 107th Congress.

64

65

House Committee on Resources, Western Water Security Enhancement Act, pp. 36-39.

The wording of the prevailing wage provision of H.R. 3208 is somewhat different from

Davis-Bacon provisions in other statutes.

CRS-24

In comments attached to the Committee’s report, Representatives Rahall and Miller

voiced strong support for the prevailing wage provision. “For over seven decades,

the Davis-Bacon Act has mandated that prevailing wages be paid when the federal

government funds construction projects,” they stated. “Over many years, the DavisBacon law has applied to traditional Bureau of Reclamation construction projects

including dams.” The Davis-Bacon amendment to H.R. 3208, they affirmed, offers

added assurance that CALFED projects will actually be covered and workers thereon

protected. The provision, they averred, would “... eliminate any potential confusion

or debate as to whether Davis-Bacon wages are mandated for projects or activities

authorized by titles I and II of this legislation.”66 The Committee’s report (H.Rept.

No. 107-360, Part I) was dated February 14, 2002. On March 14, 2002, both the

Committee on Transportation and the Committee on Education and the Workforce

(to which the bill had been referred, sequentially) were discharged from further

consideration of the measure and the bill was placed on the Union Calendar

(Calendar No. 217). No further action was taken.

The Senate bill (S. 1768) was silent on the Davis-Bacon issue, both as

introduced and as reported. The Senate report (S.Rept. 107-171) was dated June 24,

2002; and, on that date, the bill was placed on the Senate Legislative Calendar under

General Orders (Calendar No. 436). No further action was taken.

In the 108th Congress. During the first session of the 108th Congress, three

bills were introduced that deal with the CALFED issue: H.R. 2641 (George Miller),

H.R. 2828 (Calvert), and S. 1097 (Feinstein and Boxer). The Water and Power

Subcommittee, with Mr. Calvert as Chairman, conducted hearings on the legislation

on July 24, 2003. By a voice vote on September 25, 2003, the Subcommittee

approved H.R. 2828, forwarding the measure to the full Committee on Transportation

and Infrastructure. On October 30, 2003, hearings were conducted by the Senate

Subcommittee on Water and Power on S. 1097. No further action has been taken on

these proposals.67

Modernization of America’s Railroads

Upgrading of America’s rail transportation system has been a continuing

concern of the Congress. But, programs of rail expansion and/or rehabilitation have

involved measures to protect workers employed on such projects.

Through the 107th Congress. Early in the 107th Congress (on March 14,

2001), Representative Jack Quinn (R-NY) introduced H.R. 1020. The bill would

have directed the Secretary of Transportation, among other things, to “establish a

program of capital grants for the rehabilitation, preservation, or improvement of

66

House Committee on Resources, Western Water Security Enhancement Act, pp. 71-72.

Even with the Davis-Bacon provision added, however, “most Democrats on the panel

opposed the bill and warned that it would never reach the president’s desk without major

modifications.” See Molly M. Peterson, “Massive Western Water Bill Clears House

Committee,” National Journal News Service, Nov. 7, 2001.

67

See CRS Report RL31975, CALFED Bay-Delta Program: Overview of Institutional and

Water Use Issues, by Betsy A. Cody and Pervaze A. Sheikh.

CRS-25

railroad track.” Companion legislation, S. 1220, was introduced by Senator John

Breaux (D-LA) on July 23, 2001.

H.R. 1020 was referred to the Committee on Transportation and Infrastructure.

Following hearings, it was marked up and reported — and, on June 12, 2001, placed

on the Union Calendar. It would have required, inter alia, that “laborers and

mechanics employed by contractors and subcontractors in construction work financed

by a grant made under this section will be paid wages not less than those prevailing

on similar construction in the locality” (i.e., the Davis-Bacon requirement). And,

further, that: “The Secretary [of Transportation] shall make a grant under this section

only after being assured that required labor standards will be maintained on the

construction work.”68

S. 1220, which was referred to the Committee on Commerce, Science, and

Transportation, contains parallel language with respect to Davis-Bacon coverage.

Under date of August 1, 2002, S. 1220 was reported from Committee.69 Both bills

died at the close of the 107th Congress.

In the 108th Congress. On January 7, 2003, early in the 108th Congress,

Senator Ernest Hollings (D-SC) introduced S. 104, the “National Defense Rail Act.”

The bill directs that an assessment be made of security risks associated with rail

transportation and that prioritized recommendations for improvements be developed.

Further, it directs the Secretary of Transportation to develop high-speed rail facilities

and to make certain upgrades in existing rail infrastructure. The bill, Senator

Hollings explained, “is the same bill that the Commerce Committee reported” in the

107th Congress. “It is critical that the Senate take this bill up, and pass it, to ensure

that our railroads are secure and we have adequate investment in both Amtrak and

the development of high speed rail corridors....”70 A companion bill, H.R. 2726, was

introduced in the House by Representative on July 15, 2003, by Representative Julia

Carson (D-IN).

Each of the bills contained a Davis-Bacon requirement. No immediate action

was taken on either bill.

68

U.S. Congress, House Committee on Transportation and Infrastructure, Railroad Track

Modernization Act of 2001, report to accompany H.R. 1020, 107th Cong., 1st sess., H.Rept.

107-96 (Washington, GPO, June 12, 2001), pp. 2 and 11.

69

U.S. Congress, Senate Committee on Commerce, Science, and Transportation, Railroad

Track Modernization Act of 2002, report to accompany S. 1220, 107th Cong., 2nd sess.,

S.Rept. 107-238 (Washington, GPO, Aug. 1, 2002), pp. 7, 10-11. Concerning rail

transportation issues at large, see CRS Issue Brief IB10030, Federal Railroad Safety

Program and Reauthorization Issues, by Paul Rothberg and John Williamson.

70

Congressional Record, Jan. 7, 2003, p. S80.

CRS-26

Other Davis-Bacon Legislative Issues

of the 108th Congress

Program legislation that has a construction component often includes a DavisBacon prevailing wage provision — even though the legislation would not,

ordinarily, be regarded as a labor bill. One such proposal is discussed below.

Child Care Construction and Renovation Act

On February 25, 2003, Representative Carolyn McCarthy (D-NY) introduced

H.R. 895, the “Child Care Construction and Renovation Act.” The bill, which

authorizes various programs to assist in the development and/or renovation of child

care facilities, includes a provision applying the Davis-Bacon Act “to actions taken

under this Act.” The bill was referred to the Committee on Financial Services and

to the Subcommittee on Housing and Community Opportunity. No action has been

taken on the McCarthy proposal.