Review To Determine Whether Davis-Bacon Act Has an Inflationary Impact and Increases Costs on METRO Construction

HRD-81-10: Published: Oct 2, 1980. Publicly Released: Oct 31, 1980.

Additional Materials:


Office of Public Affairs
(202) 512-4800

Preliminary findings are presented of a review of the effect of the use of wage rates issued by the Department of Labor under the Davis-Bacon Act on the construction of the Washington Regional Rapid Rail Transit System (METRO). GAO conducted a wage rate survey in Montgomery County, Maryland, but did not survey areas of northern Virginia because Labor was conducting a wage survey there at the time. The Act requires that minimum wage rates, to be paid to employees on construction contracts of over $2,000, be stated for the various classes of laborers and mechanics. The minimum wage rates must be based on wages determined by the Secretary of Labor to be prevailing for the corresponding classes of laborers and mechanics employed on projects similar to the contract work in the locality in which the contract work is to be performed.

Most of the wage rates prevailing on private construction in Montgomery County for the 13 crafts surveyed are substantially lower than those required by Labor. Overall, the higher wage rates established by Labor resulted in significantly higher wage costs for the METRO construction contracts. Setting prevailing wages for METRO construction, as required by the Davis-Bacon Act, may increase the construction cost by about 6.8 percent, or about $149 million. GAO recognized that the wage rate difference found in Montgomery County may not be the same for all types of labor in all jurisdictions where METRO is being constructed, and that the proportion of labor provided by a particular craft classification may vary. However, it believes that the wage rates within the different Washington metropolitan area transit zones should be reasonably close to those in Montgomery County, and that its cost estimates are a useful indicator of the potential magnitude of the increased construction costs resulting from the Davis-Bacon wage determinations.

Feb 8, 2018

Feb 6, 2018

Dec 21, 2017

Dec 7, 2017

Nov 20, 2017

Oct 26, 2017

Oct 23, 2017

Jun 22, 2017

May 30, 2017

May 18, 2017

Looking for more? Browse all our products here