Thursday, July 31, 2014

Senate Bill to Rescind the Davis-Bacon Act

Every Government contractor is probably aware of the Davis-Bacon Act (DBA) and the Service Contracting Act (SCA). The Davis-Bacon Act (DBA) applies to contractors and subcontractors performing on federally funded contracts for the construction, alteration, or repair of public buildings or public works projects. DBA requires that contractors (and subcontractors) pay their laborers and mechanics employed under the contract no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area. The prevailing wage rates are determined by the Department of Labor and updated frequently. The Service Contracting Act (SCA) is very similar but applies to contractors and subcontractors providing "services" to the Government.

Earlier this month, Senator Mike Lee (Utah) introduced a bill that would repeal the Davis-Bacon Act (its called the Davis-Bacon Repeal Act). According to the Senator, the bill will
... drive down the inflated costs of federally funded construction projects on our nation's infrastructure and make it easier for federal contractors to train and employ workers of all skill levels. The ... Act would also save the American people billions of dollars in wasted taxpayer money and diminish the power of the cronyist alliance between big government and big labor unions.
Continuing on, Senator Lee's press release states:
The Davis-Bacon Act exemplifies how big government hurts the people it purports to help, gives unfair advantages to favored special interests, and squeezes the middle class. It crowds out low-skilled workers in the construction industry, preventing them from getting a fair shot at a job, and funnels taxpayer money to prop up big labor unions, which accrue windfall profits as Davis-Bacon removes the incentive for federal contractors to hire unskilled, non-unionized workers.
Forcing the American citizens to subsidize labor unions in this way artificially inflates the costs of construction projects to repair and improve our national infrastructure. This is unfair, and unsustainable, and costing taxpayers billions of dollars every year.
Davis-Bacon certainly increases costs to the Government. We've witnessed situations where workers have walked off a non-DBA (and non-union) job to take a DBA job in the same area where in one case, a worker told us he would be making three times what he was currently making. We suspect that this new bill has little chance of passing.

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