Human Capital:

Information on the Davis-Bacon Act

HEHS-97-30R: Published: Oct 30, 1996. Publicly Released: Oct 30, 1996.

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Pursuant to a congressional request, GAO reviewed: (1) whether wage determinations promulgated by the Department of Labor under the Davis-Bacon Act were lower than local area prevailing wages; (2) the possibility of fraud in the payment of wages under the Davis-Bacon Act; and (3) the total dollar amount spent on construction covered by the Davis-Bacon Act and on all construction during fiscal year (FY) 1995. GAO noted that: (1) it has issued 26 products on issues related to the act's prevailing wage requirement; (2) an October 1980 study comparing those wage rates issued by Labor under the Davis-Bacon Act applying to the construction of the Washington Regional Rapid Rail Transit System (METRO) with local area wage rates showed that the rates specified by Labor were higher or identical to, rather than lower than, the area prevailing wage rates on private construction for 13 key craft occupations; (3) since April 1979, GAO has not reviewed alleged situations of wages being fraudulently or otherwise improperly paid to workers on federal construction projects, but other federal agencies are involved in the investigation of such allegations; (4) the Congressional Budget Office estimated that about $41 billion, or 14 percent, of the $295.4 billion spent nationally in the construction industry during fiscal year 1995 was covered by the act; and (5) Labor has acknowledged the need to take steps to improve the accuracy of submitted wage data and has already taken some action by requiring additional verification of wage data submitted by third parties and employers.

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