Davis-Bacon Act Repeal Efforts Renewed

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Republican members of Congress have renewed steps to repeal the Davis–Bacon Act, which sets the prevailing wage requirements for workers employed under federally funded or assisted contracts for the construction, alteration, or repair of public works. In January, Senator Jeff Flake (R-AZ) introduced the Transportation Investment Recalibration to Equality (TIRE) Act that would suspend the Davis–Bacon Act’s provision that workers on federal contracts be paid a prevailing wage for all federal highway construction projects. Additionally, Senator Mike Lee (R-UT) and Representative Steve King (R-IA) introduced companion bills in the Senate (S. 244) and House (H.R. 743) that seek to repeal all of the prevailing wage requirements of the Davis–Bacon Act.

The proposed legislation comes after President Donald Trump, in his first address to a joint session of Congress, implored Congress to pass a 10-year, $1 trillion infrastructure plan to fix the nation’s roads, rails, bridges, and ports. Trump’s plan would focus on projects with a national scope, including investments in the nation’s power grid, cybersecurity efforts, and energy development on public lands. Senator Flake asserts that the Department of Labor employs a flawed methodology to calculate prevailing wages and that suspension of the Act will allow taxpayer dollars to be spent more efficiently. The Department of Labor is also tasked with enforcing the Davis–Bacon Act, and under the current law, contractors that violate its provisions can be barred from obtaining future contracts.

President Trump has not yet publicly taken a position on the issue of repealing the Act. In fact, when the issue was raised during a January meeting with national labor union leaders, he stated that he knew of the Davis–Bacon proposal well and understood how it works, but he avoided taking a direct position on the matter. It is worth noting that President Trump has hired Geoffrey Burr, a former construction industry trade group lobbyist at Associated Builders and Contractors, to help with his transition team. Disclosure reports indicate that in 2015, Burr lobbied the House on a bill to repeal Davis–Bacon as well as an amendment to prohibit the use of funds to implement, administer, or enforce the prevailing wage requirements under the law. However, the President has not yet appointed Burr to any position within the Department of Labor. Ultimately, the Administration’s position on the issue may become clearer once the President’s latest nominee for the position of Secretary of Labor, Alexander Acosta, is confirmed.

Those supporting repeal believe the Davis–Bacon Act, federal Buy American requirements, and other mandates hinder job creation and increase project costs. Repealing the Act could mean a potential increase in profit margins for government contractors. Since President Trump’s infrastructure plan may emphasize private investment along with government funding, these types of legislative proposals will be of special interest to potential government contractors and investors.