Construction Issue: The Importance of the Davis-Bacon Act

Davis-Bacon Act is a 1931 federal law that ensures that workers are paid the Prevailing Wage and fringe benefits for corresponding work on similar projects in the area.

It levels the playing field when it comes to bidding on these projects, as the law takes wage compensation rates out of the competitive bidding process on federally funded construction projects. With uniform labor costs, contractors compete for public projects based on skill, productivity and management abilities – not the lowest price.

In short, Davis-Bacon protects against:

• Unethical contractors undercutting the local workforce.
• Shoddy construction.
• Construction site accidents due to an unskilled and untrained workforce.
• Cost overruns and delays.

Mandating livable wages and benefits

All contractors who bid on public construction projects with Davis-Bacon requirements must pay their employees the Prevailing Wage and also ensure a certain level of fringe benefits such as health insurance and retirement benefits.  

The Prevailing Wages and benefits are determined based on wages paid to various classes of construction workers employed on specific types of construction projects in an area, which are determined by a survey conducted by the U.S. Department of Labor. 

Thanks to this bill, the tradesmen and tradeswomen who work on projects governed under Davis-Bacon have enabled members of the building trades to live a middle-class life. This allows them to earn a family-supporting wage, receive respectable health insurance and earn good retirement benefits for the hours they put in on these projects.

Work performed by a highly skilled and highly trained workforce

Projects awarded to the lowest bidder that are not under the scope of Responsible Contracting policies and Davis-Bacon are susceptible to poor-quality work.

Davis-Bacon helps assure projects are built to the highest standards by skilled, safe, well-trained construction.  

By taking compensation out of the bidding process, it allows project owners to look at the big picture and make sure federal tax dollars are spent wisely.

Instead of awarding projects to fly-by-night contractors who undercut all other bidders by misclassifying their workers and not paying them a livable wage, project owners who abide by Davis-Bacon know the work performed will be of high quality.

Additionally, such contractors often use construction workers who have little or no training and pose a significant risk of injury on the jobsite.

Davis-Bacon helps protect taxpayers because projects bid out under a Davis-Bacon requirement produce a higher quality of construction work, competitive bids based on sound management and the use of a highly skilled and highly trained workforce. 

The use of a highly skilled and highly trained workforce also means the project will likely finish on time and on budget thanks to their training. Not only will the quality of work be performed in an efficient manner, but it will also be performed under industry-leading OSHA standards. This keeps everyone on the jobsite safe and ensures little to no downtime due to injury or worse.