The application of Davis-Bacon to Federal-aid highway contracts is prescribed by 23 U.S.C. 113.The Davis-Bacon Act requires that each contract over $2,000, for the construction, alteration, or repair of public buildings or public works, to which the United States or the District of Columbia is a party, contain a clause setting forth the minimum wages to be paid to various classes of laborers and mechanics employed under the contract. Under the provisions of the Act, contractors and their subcontractors are required to pay workers employed directly upon the site of the project no less than the local prevailing wage rates, as determined by the Secretary of Labor, paid on projects of a similar character. Congress enacted Davis-Bacon to protect communities and workers from substandard earnings and to prevent the economic disruption caused by competition arising from non-local contractors coming into an area and obtaining Federal construction contracts by underbidding local wage levels.[433]
The impact of the Davis-Bacon Act varies from State to State. Many States have prevailing wage laws of their own, which often mirror or even exceed the Federal requirement. In such States, the impact of the Federal law could be limited. However, in States that have no prevailing wage law, or where such a State law does not apply, the application of the Federal law could have significant cost implications for the project. In addition, whenever the Davis-Bacon Act applies, it is accompanied by significant record keeping and auditing requirements.[434] Opponents of the law contend that Davis-Bacon can increase project costs between 5 and 38 percent above what the project would have cost if it was competitively bid.[435] However, proponents of the law argue that studies indicate that Davis-Bacon is needed with respect to costs.[436]
The Administration is proposing no changes to the Davis Bacon Act.