Glossary
Davis-Bacon Act
The Davis-Bacon Act requires that laborers and mechanics on federal construction contracts be paid no less than the locally prevailing wages and fringe benefits determined by the U.S. Secretary of Labor. The statute, 40 U.S.C. 3142(a), applies to every contract in excess of $2,000 to which the federal government or the District of Columbia is a party for construction, alteration or repair of public buildings or public works.
The $2,000 figure has not changed since the act's early history, so in practice essentially all covered construction is subject to it.
The short version
- The threshold is $2,000, which means coverage is effectively universal for construction once the act applies.
- The Davis-Bacon Related Acts are the mechanism that carries the requirement into state and local projects funded with federal assistance.
- Wage determinations are published by trade and county and are incorporated into the contract by reference.
- Coverage attaches to the funding, not to the identity of the owner. A city can be the contracting party and Davis-Bacon rates still apply.
Why it matters to a bidder
Most contractors first encounter Davis-Bacon not on a federal job but on a local one paid for with a federal grant, which is exactly the situation where it gets missed at bid time. Guard against that:
- Read the funding disclosure in the solicitation. If a federal program is named, look for the wage determination and the labor standards provisions.
- Check the determination's date and modification number. An addendum often incorporates an updated determination, and using the superseded one underprices labor.
- Flow the clauses down. Subcontracts must contain the labor standards provisions, and the prime is liable for sub violations.
- Plan for weekly certified payroll for every tier, including owner-operators.
A real example
A city rehabilitates a community center using Community Development Block Grant funds. The construction contract is with the city, not the federal government, and the general contractor prices it as ordinary private-market work. The bid package includes a Department of Labor wage determination because a Davis-Bacon Related Act attaches to the grant. The contractor's carpenter rate is roughly $9 an hour below the determination. The shortfall is discovered at the first certified payroll review, and the contractor absorbs it for the life of the job.
How this reaches state and local work
Davis-Bacon itself covers contracts to which the federal government is a party. The reach into state and local procurement comes through the Davis-Bacon Related Acts: dozens of separate statutes that attach prevailing wage requirements to construction assisted by particular federal programs, including many transportation, housing, water infrastructure and community development programs.
Two consequences for bidders. First, the presence of federal money, not the identity of the owner, is the trigger. Second, Davis-Bacon can stack with a state prevailing wage law on the same project; where both apply, the higher rate for each classification generally governs. Federal grant conditions may also bring domestic content requirements and Uniform Guidance procurement rules to the same contract.
Common questions
Is the $2,000 threshold per contract or per worker?
Per contract. Above $2,000 in contract value, the requirement applies to all covered laborers and mechanics on the job.
Does Davis-Bacon apply to service contracts?
No. Service contracts fall under a different federal statute governing service employee wages. Davis-Bacon covers construction, alteration and repair.
Who is a laborer or mechanic?
Workers performing manual or physical labor on the site. Bona fide executive, administrative and professional employees and most material suppliers are excluded.
What if the wage determination is missing from the bid package?
Ask in writing during the question period. Getting it added by addendum protects both your price and every other bidder's.