How to Read a Davis-Bacon Wage Determination

On a federally funded or federally assisted construction job, the labor rates you bid are not entirely your own call. The Davis-Bacon Act sets a floor: every laborer and mechanic on the site must be paid at least the base rate plus the fringe benefits listed for their classification in the wage determination (WD) that is part of the contract. Misread a fringe, price the wrong schedule or miss a classification, and the difference is owed to the workers out of your margin. This guide walks through a wage determination from the header to the footnotes, then turns one line into an hourly rate you can bid.

One caution: this explains how the document reads, and it is not legal advice. The solicitation, its amendments, the contract and the contracting agency decide what applies to a given job.

Where wage determinations are published

Davis-Bacon wage determinations are published on SAM.gov, in its wage determinations section. That section also holds Service Contract Act determinations for service work, so make sure you are in the Davis-Bacon (construction) set. You can search by state, county and construction type, and download the full text.

The act covers federal contracts over $2,000 for the construction, alteration or repair of public buildings and public works, and related acts carry the same requirements into many federally assisted programs. Many states also have their own prevailing wage laws and schedules. When a job falls under both, the bid documents should say how the two interact.

The most important point: the determination that governs your bid is the one in the bid documents, as changed by any amendments. Use SAM.gov to check for newer modifications, not to pick a different schedule than the one the agency attached.

General and project determinations

There are two kinds of wage determination:

• General wage determinations are issued for one or more construction types in a county or group of counties. They are published on SAM.gov, used on many projects in that area, and updated through numbered modifications.
• Project wage determinations are issued by the Department of Labor for a single project at the agency's request, typically when no general determination fits. One reaches you through the bid documents, and it has a limited life if the contract is not awarded in time.

The header: WD number, modification and construction type

The top of a general determination identifies it. Expect to see:

• General Decision Number. A two-letter state code, a year and a four-digit sequence number, in the form ST20260001, where ST stands for the state.
• Superseded General Decision Number. The determination this one replaced, if any.
• State, Construction Type and Counties. Where and what kind of work it covers.
• A description of the work covered, often with exclusions, for example a building schedule that does not cover single-family homes.
• A modification table. Modification Number 0 is the first publication. Each later modification gets the next number and its own publication date.

Write the WD number, modification number and publication date into your estimate notes, so everyone knows which rates the bid was built on.

Construction types

The Department of Labor uses four construction types. In plain terms:

The contracting agency decides which schedule applies. A project with significant work of more than one type can carry more than one schedule, for example a building schedule for the structure and a heavy or highway schedule for substantial site work. Rates for the same craft can differ between types, so price each scope at the schedule that covers it.

The classification lines

The body of the determination is a series of blocks. Each block starts with a rate identifier and a date, then lists classifications with two columns of dollars: Rates (the base hourly wage) and Fringes (the hourly fringe benefits amount).

A made-up line for illustration:

Read every line for more than the two numbers:

• The classification name and its scope. Laborers and power equipment operators are often split into groups, with a list of tasks or machines under each group. Make sure the group matches the work you are pricing.
• How the fringe is written. Most fringes are a dollar amount per hour. Some include a percentage of the base rate, and some carry footnote letters that point to paid holidays or vacation defined at the end of the determination.
• Lines with little or no fringe. These exist. The determination is a floor, not a forecast of what the crew you need will cost.

Rate identifiers: union, survey and union average

Every block sits under an identifier that says how its rates were set. The explanation at the end of each determination defines the identifiers it uses, and it is worth reading once. At a high level:

• Union identifiers begin with a short abbreviation for the craft union, followed by a local or district council number and a date. They mean the union rate prevailed for that classification in the wage survey. The date is the effective date of the most recent negotiated rate, and these lines tend to change through modifications as agreements step up.
• SU (survey) identifiers mean no single rate prevailed. The published rate is a weighted average of all rates reported in the survey for that classification, which can include union and non-union rates. The identifier carries the state and the survey year. Survey rates can stay unchanged for years, until the Department of Labor updates them.
• UAVG (union average) identifiers mean no single rate prevailed, but the data reported was all union. The published rate is a weighted average of the union rates, and it is updated periodically as the underlying agreements change.

For a bidder: union-identified lines move with collective bargaining agreements, so check for a newer modification before bid day. A low survey rate is still only the legal minimum.

Which modification applies to your bid

The Department of Labor's regulations set out when a modification becomes part of a contract, often called the lock-in rules. In general terms:

• Sealed bid contracts. A modification published 10 days or more before bid opening generally applies, and the agency is expected to issue it to bidders by amendment. One published less than 10 days before bid opening generally still applies, unless the agency finds there is not reasonable time left to notify bidders. Once bids are opened, a later modification generally does not apply if the contract is awarded within 90 days of bid opening. If the award slips past that, later modifications may come in.
• Negotiated contracts. Generally, the determination in effect on the date of award applies.
• Changes after award. Options, extensions and changes that add substantial new work can bring in a current determination.
• Assisted programs can have their own rules about which date locks the rates.

Treat these as the general shape, not as the answer for your job. Before bid day, check SAM.gov for any modification newer than the one in your bid documents. If you find one that has not been issued by amendment, ask the contracting officer in writing which modification to price. Their answer is the one that binds.

Missing classifications and conformance requests

Sometimes the work needs a craft that is not on the determination. You cannot simply pick a rate. The usual route is a conformance request: after award, the contractor proposes the classification and a rate, and the request goes through the contracting officer to the Department of Labor's Wage and Hour Division, commonly on Standard Form 1444.

The Department of Labor generally looks at three things:

1. The work is not already performed by a classification on the determination.
2. The classification is used in the area by the construction industry.
3. The proposed wage, including any fringe, bears a reasonable relationship to the rates on the determination.

An approved conformed rate generally applies from the first day work was performed in that classification. So price the missing craft at the rate you expect to be approved, anchored to the closest related classification, and note the assumption. The work performed decides the classification, not the job title on your payroll.

Turning a classification line into a bid labor rate

The determination gives you the minimum package. Your bid rate builds on it:

1. Find the right line: the right schedule, the right modification and the right group.
2. Take the base rate. This is the minimum hourly cash wage.
3. Add the fringe. You can meet it by contributing to bona fide benefit plans, by paying it in cash, or by a mix. Contributions to your own plans can be credited toward the fringe. Payroll taxes and workers' compensation required by law cannot.
4. Add your burden: the employer payroll taxes and insurance that follow wages. Fringe paid in cash is wages, so it carries payroll taxes; plan contributions generally do not.
5. Allow for overtime. On contracts covered by the Contract Work Hours and Safety Standards Act (generally those over $100,000), hours over 40 in a workweek are paid at no less than one and a half times the base rate. The fringe is not multiplied.

Worked example. Using the made-up Electrician line above, with an example burden of 18.0% on wages (payroll taxes and insurance only, since the fringe already covers the benefits):

If the same fringe is paid in cash instead, the taxable wage is $42.50 + $18.75 = $61.25, the burden is $61.25 × 18.0% = $11.03, and the rate is $61.25 + $11.03 = $72.28. That is $3.38 more per hour for the same package. An overtime hour in this example costs at least $42.50 × 1.5 = $63.75 plus the $18.75 fringe, or $82.50 before burden.

Our guide to burdened vs direct labor rates works out a burden percentage from scratch, and how to build a bid summary shows where labor sits in the bid total.

In IntelCost's Wage Calculator, you choose Prevailing Wage Federal (Davis-Bacon) for the project, upload the wage determination text file you downloaded from SAM.gov, and base and fringe are filled for each craft it matches. You review every rate, can replace any of them with your own, and the set is saved with the project.

A checklist before bid day

• Each scope is priced at the schedule for its construction type, and every schedule in the bid documents is accounted for.
• The modification number in your estimate matches the bid documents, and SAM.gov shows nothing newer that is unaddressed.
• Every craft you plan to use has a line, a group that fits the work, or a priced conformance assumption.
• Fringe is priced the way your company actually pays it: to plans, in cash, or both.
• Burden is added on the wages that carry it, and overtime is priced where the schedule needs it.
• Any question about which rates apply has a written answer from the contracting officer.