Senator Jeff Flake (R-Ariz.) will soon introduce the “Opportunity in Federal Construction Act,” legislation that requires federal construction projects to use a more accurate wage determination process.
Because of the Davis-Bacon Act, the federal government is forced to pay contractors working on federally funded construction projects flawed and unrealistic prevailing market wages. This legislation fixes this oversight and ensures taxpayer dollars are more wisely spent. As such, Senators should have no hesitation supporting this important legislation.
Under the Davis-Bacon Act, any federal construction project must pay their workers the prevailing wage of a locality as defined by the Wage and Hourly Division. Unfortunately, this measurement is severely flawed and drives up the cost of projects at taxpayer expense.
On average, Davis Bacon wages are 22 percent above market rates resulting in construction costs that are 10 percent higher than comparable projects. Half of the wage rates that are determined by surveys are more than ten years old, and some even date back to the 1980s. Worse still, the Department of Labor Inspector General found a nearly 100 percent error rate in the accuracy of wage calculation.
Clearly, there is need for reform. Senator Flake’s legislation addresses this issue by shifting the determination process to the Bureau of Labor and Statistics which has the capability to more accurately determine appropriate pay and already calculates wages for more than two million federal employees. To ensure wage determination is being implemented and reformed properly, the legislation also calls for a GAO report one year after implementation.
Ultimately, a more accurate wage determination process will save taxpayers billions in dollars and generate as many as 30,000 more construction jobs. This legislation is commonsense and should be supported by all Senators.