Davis-Bacon Act Should Be Repealed

Gao ID: 109628 June 14, 1979

The Davis-Bacon Act requires that each contract for the construction, alteration, or repair of public buildings in excess of $2,000, to which the United States is a party, must state the minimum wages to be paid to various classes of laborers and mechanics. After assessing the implementation of the act, GAO concluded that it would be advisable for Congress to repeal the Davis-Bacon Act because: (1) significant economic changes make the Act unnecessary; (2) the Department of Labor has not developed an effective program to issue and maintain current and accurate wage determinations; and (3) the act has an inflationary effect on the economy as a whole. The review showed that procedures used by Labor to issue wage rate determinations provided no assurance that the rates actually prevail for workers on similar private construction projects in the locality. Although GAO believed that wage surveys should be the primary method used by Labor to collect wage data, this procedure was not followed. Unnecessary costs were incurred by Labor in administering the act, costs were incurred by contractors who must submit weekly statements of employee wages to federal agencies, and construction costs were increased whenever Labor required wage rates higher than those prevailing in the locality. The Davis-Bacon wage requirements discourage nonunion contractors from bidding on federal construction work, with the result that there are fewer job opportunities for minority and young workers who are more likely to work in the nonunionized sector of the construction industry. For these reasons, GAO recommends that Congress repeal the Davis-Bacon Act and the 77 related statutes.

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