Davis-Bacon Act

The Davis-Bacon Act is a federal law, passed in 1931, that requires contractors and subcontractors on federal construction contracts over $2,000 to pay at least the locally prevailing wage and fringe benefits set by the US Department of Labor. Prevailing wage is the general idea; Davis-Bacon is the federal law.

What it covers

The act covers contracts for the construction, alteration or repair of federal public buildings and public works, including painting and decorating. A group of related acts applies the same wage rules to many projects that are paid for with federal money but run by a state, city or other body, such as some highway, housing and water projects. The contract tells you whether Davis-Bacon applies; when it does, the wage determination is part of the contract.

Wage determinations

The Department of Labor's Wage and Hour Division sets the rates, and they are published on SAM.gov as wage determinations. Each one covers an area, usually a county or group of counties, and a type of construction: building, residential, heavy or highway. For each craft it lists a base rate and a fringe benefit amount per hour.

Determinations are updated through modifications. Price from the determination in the bid documents, as changed by any amendments, and check SAM.gov for a newer modification before bid day. Whether a newer one applies depends on when it was published, as the guide to reading a wage determination explains; if one has not been issued by amendment, ask the contracting officer in writing which to price.

What the contractor owes

• Pay each worker at least the base rate plus fringe for the classification of work they do.
• Pay overtime at time and a half of the base rate where the Contract Work Hours and Safety Standards Act applies, as it does on most larger federal contracts. The fringe is not part of the overtime premium.
• Submit certified payroll every week. The Department of Labor offers an optional form, WH-347, for it.
• Post the wage determination where workers can see it.
• Flow the requirements down to every subcontractor. The prime is responsible for its subs.

This is a summary, not legal advice. The contract, the determination and the Department of Labor are the authorities.

Example

Say the determination lists Laborer at a base of $24.50 and a fringe of $14.20 per hour (example values), and you need a crew of four laborers for one 8-hour day:

1. Package rate: $24.50 + $14.20 = $38.70 per hour
2. Hours: 4 workers x 8 hours = 32 hours
3. Minimum wage cost: 32 x $38.70 = $1,238.40

Your labor burden, payroll taxes and insurance, goes on top of that. If your company already pays some of the fringe into a health or retirement plan, that part is credited and the rest is paid to other plans or as cash.

Bidding a Davis-Bacon job

Find the determination in the bid documents, match every crew member to a classification, and build your rates from base, fringe and burden. If a craft you need is not listed, an added classification is requested through the contracting officer after award, in what is called a conformance request. In the IntelCost Wage Calculator, you can upload the wage determination text file you download from SAM.gov, and it fills base and fringe for each craft it matches. The guide on how to read a Davis-Bacon wage determination walks through one line by line.