Prevailing Wage Requirements and the Emergency Suspension of the Davis-Bacon Act

Order Code RL33276

CRS Report for Congress

Received through the CRS Web

Prevailing Wage Requirements and the

Emergency Suspension of the Davis-Bacon Act

February 16, 2006

-name redacted- and -name redactedLegislative Attorneys

American Law Division

Congressional Research Service ˜ The Library of Congress

Prevailing Wage Requirements and the Emergency

Suspension of the Davis-Bacon Act

Summary

On September 8, 2005, President Bush issued a Proclamation suspending the

application of the Davis-Bacon Act to all contracts to be performed in specified

jurisdictions in Alabama, Florida, Louisiana, and Mississippi included in the

Hurricane Katrina disaster area. The Proclamation permitted the payment of less

than the locally prevailing wage on contracts entered into after September 8, 2005 for

the construction or repair of public buildings and public works in the affected area.

Although concern over the validity and effect of the Proclamation arose soon after

its issuance, that concern seemed to disappear once the President revoked the

Proclamation on November 3, 2005. This report provides background on the DavisBacon Act and discusses the President’s September 8, 2005 Proclamation and its

revocation on November 3, 2005.

Contents

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Effect of Proclamation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Prevailing Wage Requirements and the

Emergency Suspension of the Davis-Bacon

Act

On September 8, 2005, President Bush issued a Proclamation suspending the

application of the Davis-Bacon Act to contracts to be performed in the counties

included in the Hurricane Katrina disaster area.1 The Davis-Bacon Act, which dates

back to 1931,2 requires every construction contract in excess of two thousand dollars

to which the federal government (or the District of Columbia) is a party to pay all

laborers and mechanics not less than the locally prevailing wage. Construction

includes the alteration or repair (including dredging, excavation, and painting) of

buildings, structures, or other real property.3 Moreover, the term “construction” has

been found to include many types of activities that will be included in the recovery

from Hurricane Katrina such as contracts for improvements to bridges, dams,

highways, streets, subways, tunnels, sewers, power lines, cemeteries, pumping

stations, railways, airports, docks, piers, lighthouses, jetties, breakwaters, levees,

canals, and channels.

Background

The Davis-Bacon Act reflects Congress’s interest in giving the government “the

power to require its contractors to pay their employees the prevailing wage scales in

the vicinity of the building projects.”4 A prevailing wage is the rate of wages,

including fringe benefits, paid to a majority of workers in a geographic area for the

same type of work on similar projects.5 The Department of Labor is responsible for

1

Proclamation 7924, 70 Fed. Reg. 54,227 (Sept. 8, 2005), available at

[http://www.whitehouse.gov/news/releases/2005/09/20050908-5.html]. The Proclamation

also applies to the operation of the so-called “related acts” to the extent they reference the

Davis-Bacon Act. Related acts provide financial assistance for construction projects and

require the payment of prevailing wages for workers on those projects.

2

Ch. 411, 46 Stat. 1494 (March 3, 1931). Codified at 40 U.S.C. §§ 3141 thru 3148.

3

40 U.S.C. § 3142(a).

4

S. Rep. No. 71-1445, at 1-2 (1931). For additional information on the Davis-Bacon Act,

see CRS Report 94-408, The Davis-Bacon Act: Institutional Evolution and Public Policy,

and CRS Report RL33149, Davis-Bacon Suspension and Its Legislative Aftermath, both by

(name redacted). The Davis-Bacon Ac

t establishes a wage floor for covered

construction. In practice, conditions may require contractors to pay a higher rate of wages.

5

40 U.S.C. § 3142(b).

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issuing wage determinations that identify what the prevailing wage is for particular

occupations in a particular type of project in a particular jurisdiction.6

Under section 6 of the act, the President may suspend the requirements of the

act during a “national emergency.”7 Over its long history, the act has been suspended

several times for various types of national emergencies such as economic emergency

and natural disaster.8 Suspension of the act does not require that less than the

prevailing wage be paid on the covered contracts, but it does remove the bar to the

payment of such wages.

In addition to the Davis-Bacon Act itself, Congress has added prevailing wage

provisions to approximately thirty-eight statutes that provide financial assistance for

construction projects through grants, loans, and other funding mechanisms.9 These

6

Id. The Department of Labor regulations governing wage determinations may be found

at 29 C.F.R. parts 1 and 4. Amendments to these regulations, effective August 26, 2005,

provide for online request of wage determinations. 70 F.R. 50,888 (August 26, 2005).

Examples of prevailing wage de terminations can be found at

[http://www.gpo.gov/davisbacon/allstates.html].

7

40 U.S.C. § 3147.

8

See Proclamation No. 4031, 36 Fed. Reg. 3,457 (February 25, 1971) (suspending the act

because of an economic emergency in the construction industry); Proclamation No. 6491,

57 Fed. Reg. 47,553 (October, 14, 1992) (suspending the act for contracts in the recovery

areas of Florida, Louisiana, and Hawaii in the wake of Hurricanes Andrew and Iniki in

1992). See also Proclamation No. 2487, 6 Fed. Reg. 2,617 (May 29, 1941) (declaring an

unlimited national emergency, which was in effect until terminated by Joint Resolution (ch.

327, § 3, 61 Stat. 451) in 1947). Although Proclamation No. 2487 itself did not specify the

Davis-Bacon Act as being suspended, the Joint Resolution terminating national emergencies

proclaimed by the President did list the Davis-Bacon Act.

9

See National Housing Act, 12 U.S.C. § 1715c; Housing Act of 1959, 12 U.S.C. §

1701q(c)(3); National Foundation on the Arts and the Humanities Act, 20 U.S.C. § 956(j);

General Education Provisions Act, 20 U.S.C. § 1232b; Education of the Deaf Act, 20 U.S.C.

§§ 4305(b)(4), 4332(b)(5); Federal-Aid Highway Act, 23 U.S.C. § 113(a); Indian SelfDetermination and Education Assistance Act, 25 U.S.C. § 450e; Indian Health Care

Improvement Act, 25 U.S.C. § 1633(b); Federal Water Pollution Control Act, 33 U.S.C. §

1372; Postal Reorganization Act, 39 U.S.C. § 410(b)(4)(C); National Visitors Center

Facilities Act of 1968, 40 U.S.C. § 808; Appalachian Regional Development Act of 1965,

40 U.S.C.App. § 402; Hospital Survey and Construction Act, 42 U.S.C. § 291e(a)(5); Safe

Drinking Water Act, 42 U.S.C. § 300j-9(e); Public Health Service Act, 42 U.S.C. §§ 300s1(b)(1)(I), 300t-12(b)(1)(D); U.S. Housing Act of 1937, 42 U.S.C. § 1437j; Demonstration

Cities and Metropolitan Development Act of 1966, 12 U.S.C. § 1715c, 42 U.S.C. §§ 3310,

1437j; Housing Act of 1964, 42 U.S.C. § 1486(f); Defense Housing and Community

Facilities and Services Act of 1951, 42 U.S.C. § 1592i; Headstart, Economic Opportunity,

and Community Partnership Act of 1974, 42 U.S.C. § 2992a; Atomic Energy Act, 42 U.S.C.

§ 2297g-3; Housing and Urban Development Act of 1965, 42 U.S.C. § 3107; Public Works

and Economic Development Act of 1965, 42 U.S.C. § 3222; Domestic Volunteer Service

Act of 1973, 42 U.S.C. § 5046; Robert T. Stafford Disaster Relief and Emergency

Assistance Act, 42 U.S.C. § 5196(j)(8); Housing and Community Development Act of 1974,

42 U.S.C. §§ 1440(g), 5310; Federal Nonnuclear Energy Research and Development Act,

42 U.S.C. § 5919(x)(2); National Energy Conservation Policy Act, 42 U.S.C. § 6371j;

(continued...)

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so-called “related acts” involve construction in areas such as transportation, housing,

air and water pollution reduction, and health. The Robert T. Stafford Disaster Relief

and Emergency Assistance Act, the federal statute that authorizes the Federal

Emergency Management Agency (“FEMA”) to provide funds for the repair and

reconstruction of facilities following a major disaster and for construction related to

emergency preparedness, includes a prevailing wage provision.10

Section 611(j)(8) of the Stafford Act references the Davis-Bacon Act to require

the payment of locally prevailing wages to laborers and mechanics employed on

construction projects related to emergency preparedness.11 Section 611(j)(8) does not

apply to repair or reconstruction projects involving state or local public facilities,

private nonprofit facilities, and owner-occupied private residences following a major

disaster.12 These projects are funded by other sections of the Stafford Act, which are

not affected by the prevailing wage requirements of section 611(j)(8). In 2002, one

proposal for the establishment of a homeland security agency included a provision

that would have arguably required the payment of prevailing wages for workers on

these kinds of projects.13 However, the prevailing wage language in this proposal

was not included in the final version of the homeland security measure.

9

(...continued)

Public Works Employment Act of 1976, 42 U.S.C. §§ 6708, 6728; Energy Conservation and

Production Act, 42 U.S.C. § 6881(h); Solid Waste Disposal Act, 42 U.S.C. § 6979; Clean

Air Act, 42 U.S.C. § 7614; Head Start Act, 42 U.S.C. § 9839(g)(3); Urban Mass

Transportation Act, 49 U.S.C. § 5333(a); Rail Passenger Service Act, 49 U.S.C. § 24312;

Airport and Airway Improvement Act, 49 U.S.C. § 47112(b); Model Secondary School for

the Deaf Act, Pub. L. No. 89-694, § 4, 80 Stat. 694; Delaware River Basin Compact, Pub.

L. No. 87-328, § 15.1, 75 Stat. 714.

10

42 U.S.C. § 5121 et seq.

11

42 U.S.C. § 5196(j)(8). See 42 U.S.C. § 5195a(3) (The term “emergency preparedness”

means “all those activities and measures designed or undertaken to prepare for or minimize

the effects of a hazard upon the civilian population, to deal with the immediate emergency

conditions which would be created by the hazard, and to effectuate emergency repairs to,

or the emergency restoration of, vital utilities and facilities destroyed or damaged by the

hazard.” Measures to be undertaken in preparation for anticipated hazards include the

construction of shelters, shelter areas, and control centers.).

12

See 42 U.S.C. §§ 5172(a)(1) (The President may make contributions (1) to a State or local

government for the repair, restoration, reconstruction, or replacement of a public facility

which is damaged or destroyed by a major disaster and for associated expenses incurred by

such government; and (2) to a person who owns or operates a private nonprofit facility

damaged or destroyed by a major disaster for the repair, restoration, reconstruction, or

replacement of such facility and for associated expenses incurred by such person.);

5174(c)(2)(A)(i) (The President may provide financial assistance for the repair of owneroccupied private residences, utilities, and residential infrastructure damaged by a major

disaster to a safe and sanitary living or functioning condition).

13

S. 2452, 107th Cong. § 194 (2002) (Lieberman substitute).

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Effect of Proclamation

Shortly after the issuance of the President’s September 8, 2005 Proclamation,

questions concerning the validity and effect of the Proclamation were raised. Some

argued that the National Emergencies Act (“NEA”) requires the President to declare

a national emergency before he may suspend the prevailing wage requirements of the

Davis-Bacon Act.14 Enacted in 1976, the NEA identifies a procedure for declarations

of national emergency by the President, prescribes accountability and reporting

requirements for the President, and provides for the termination of national

emergencies.15 The NEA was enacted, in part, “to provide for [the] orderly

implementation and termination of future national emergencies.”16 Because the

Proclamation was seemingly issued without regard to the NEA, critics maintained

that it could be invalid.17

Section 201 of the NEA provides for the declaration of national emergency by

the President and discusses the effect of such a declaration on other laws. Section

201(a) states:

With respect to Acts of Congress authorizing the exercise, during the period of

a national emergency, of any special or extraordinary power, the President is

authorized to declare such national emergency. Such proclamation shall

immediately be transmitted to the Congress and published in the Federal

Register.18

In the Senate report accompanying the NEA, the Senate Committee on Government

Operations indicated that section 201(a) was not intended to grant additional

authority to the President: “The President can only exercise those powers delegated

to him in other statutes . . . The purpose of this statute is to prescribe the procedures

to be followed in the event that the President proclaims a national emergency, as

authorized by some other statute.”19

14

See Rep. Miller: In Rush to Cut Wages, President Forgets to First Declare National

Emergency, US Federal News, Sept. 16, 2005, 2005 WLNR 14735421 (“‘President Bush

was in such a hurry to cut workers’ wages that he did it even before declaring a national

emergency. This may mean that the President’s wage proclamation was done illegally.’”).

15

50 U.S.C. § 1601 et seq. For additional information about the National Emergencies Act,

see CRS Report 98-505, National Emergency Powers, by (name redacted).

16

S. Rep. No. 94-1168, at 1(1976), reprinted in 1976 U.S.C.C.A.N. 2288.

17

See note 14.

18

50 U.S.C. § 1621(a). See S. Rep. No. 93-549, at 314 (1973) (identifying section 6 of the

Davis-Bacon Act as authorizing the exercise of special or extraordinary power during a

period of a national emergency).

19

S. Rep. No. 94-1168, supra note 16 at 4. The House Committee on the Judiciary, which

also reviewed the National Emergencies Act, reached a similar conclusion. See H.R. Rep.

No. 94-238, at 5 (“This language of section 201(a) is not intended to grant any additional

authority to the President. Rather it indicates the general nature of the circumstances in

which a declaration might be issued. The proclamation would be immediately transmitted

(continued...)

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Section 201(b) of the NEA further provides, in relevant part:

Any provisions of law conferring powers and authorities to be exercised during

a national emergency shall be effective and remain in effect (1) only when the

President (in accordance with subsection (a) of this section), specifically declares

a national emergency, and (2) only in accordance with this chapter.20

The Senate Committee on Government Operations maintained that section 201(b)

establishes that the statutes granting powers to the President during a national

emergency shall have effect “only during times the President has declared a national

emergency and then only if he has acted in accordance with the provisions of the

act.”21 The Committee also observed that the stipulation in section 201(b) “has

particular reference to the provisions of section 301 which require that the President

specify the laws he or other officers will utilize.”22

Both the language of section 201(b) and the legislative history of the NEA

appear to support the position that a declaration of national emergency must be issued

in accordance with the NEA to be effective. Section 201(a) of the NEA requires a

declaration to be transmitted immediately to the Congress and published in the

Federal Register. Section 301 requires the President to “specify the provisions of law

under which he proposes that he, or other officers will act.”23 Section 301 also states

that such specification may be made either in the declaration of national emergency

or in subsequent executive orders.24

Although the President’s September 8, 2005 Proclamation did not mention the

NEA and was not identified as a “declaration,” it seems possible to have argued that

the Proclamation did comply with the NEA’s requirements.25 The Proclamation

stated that “conditions caused by Hurricane Katrina constitute a ‘national emergency’

19

(...continued)

to the Congress and published in the Federal Register.”).

20

50 U.S.C. § 1621(b).

21

S. Rep. No. 94-1168, supra note 16 at 5.

22

Id. The House Committee on the Judiciary again reached a similar conclusion. See H.R.

Rep. No. 94-238, at 5-6 (“Subsection (b) limits the effectiveness of provisions of law to be

exercised during a national emergency to periods when a President’s declaration of national

emergency is in effect and then only in accordance with the balance of the provisions of the

bill. This latter provision has particular reference to the provisions of section 301 which

requires that the President specify the provisions of law he will utilize or under which other

officers of the Government will act.”).

23

50 U.S.C. § 1631.

24

Id.

25

Compare Proclamation 7924, supra note 1, with Proclamation 7463, 66 Fed. Reg. 48,199

(Sept. 14, 2001) (titled “Declaration of National Emergency by Reason of Certain Terrorist

Attacks”).

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. . .”26 The Proclamation was transmitted immediately to Congress and published in

the Federal Register.27 Finally, the Proclamation identified 40 U.S.C. § 3147 as the

provision of law under which the President proposed to act.28 Thus, while the

Proclamation did not follow identically the language or structure of other declarations

of national emergency under the NEA, it appeared to satisfy generally the act’s

substantive and procedural requirements.29

If the Proclamation was found to comply with the NEA’s requirements, it seems

likely that the statute’s other provisions would have become applicable. For

example, section 202(b) of the NEA requires that each house of Congress meet to

consider a vote on a joint resolution to terminate the emergency no later than six

months after the emergency is declared, and within each six-month period thereafter

during the course of the emergency.30 In addition, section 202(d) provides for the

termination of a national emergency

on the anniversary of the declaration of that emergency if, within the ninety-day

period prior to each anniversary date, the President does not publish in the

Federal Register and transmit to the Congress a notice stating that such

emergency is to continue in effect after such anniversary.31

Thus, although section 6 of the Davis-Bacon Act does not identify a time period or

expiration date for suspensions brought under that section, the NEA would have

likely prompted the automatic termination of the suspension if the President did not

provide for the extension of the national emergency.

Questions about the termination of the suspension and the relationship between

the Proclamation and the NEA, however, seemed to disappear following the issuance

of a second Proclamation on November 3, 2005.32 This second Proclamation revoked

the September 8, 2005 Proclamation and reimposed the prevailing wage requirements

of the Davis-Bacon Act and the related acts. Although the September 8, 2005

Proclamation did not reference the NEA, the statute was identified in the November

26

Proclamation 7924, supra note 1.

27

See H.R. Doc. 109-55 (2005); 151 Cong. Rec. S9831 (daily ed. Sept. 8, 2005) (Report on

the Suspension of Subchapter IV of Chapter 31 of Title 40, United States Code, Within a

Limited Geographic Area in Response to the National Emergency Caused by Hurricane

Katrina); 70 Fed. Reg. 54,227 (Sept. 8, 2005).

28

See Proclamation No. 7924, supra note 1.

29

See, e.g., Proclamation No. 7463, supra note 25 (“. . . I hereby declare that the national

emergency has existed since September 11, 2001, and, pursuant to the National Emergencies

Act . . . I intend to utilize the following statutes: sections 123, 123a, 527, 2201(c), 12006,

and 12302 of title 10, United States Code, and sections 331, 359, and 367 of title 14, United

States Code.”). The National Emergencies Act does not appear to require a proclamation

to specifically reference the NEA in its text.

30

50 U.S.C. § 1622(b).

31

50 U.S.C. § 1622(d).

32

Proclamation 7959, 70 Fed. Reg. 67,899 (Nov. 3, 2005), available at

[http://www.whitehouse.gov/news/releases/2005/11/20051103-9.html].

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3, 2005 Proclamation as a source for the President’s authority.33 By revoking the

suspension so soon after the September 8, 2005 Proclamation, the second

proclamation left unresolved the question of whether the September 8, 2005

Proclamation not only suspended the Davis-Bacon Act, but also served as a

declaration of national emergency under the NEA.

33

Id (“NOW, THEREFORE, I, GEORGE W. BUSH, President of the United States of

America, acting under the authority vested in me by the Constitution and the laws of the

United States, including section 202 of the National Emergencies Act, 50 U.S.C. 1622, do

by this Proclamation revoke . . . Proclamation 7924 as to all contracts for which bids are

opened or negotiations concluded on or after November 8, 2005.”).

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