The Associated General Contractors of America (AGC) filed suit yesterday in federal court to block the Biden Administration’s unlawful effort to expand the reach of a decades-old law that governs wage rates on federally funded construction projects. Association officials noted that the administration lacks the legal authority to expand the law to cover manufacturing facilities miles away from projects, or to retroactively impose the measure on already-executed contracts, among other concerns.
“As an industry that largely pays above existing Davis-Bacon rates, our concerns are with the administration’s unconstitutional exercise of legislative power and not with the wage rate themselves,” said Stephen E. Sandherr, the chief executive officer of the Associated General Contractors of America. “But we are challenging the fact president’s unlawful efforts to expand a construction wage law to cover a wide range of manufacturing and shipping operations.”
The association filed its lawsuit in the U.S. District Court for the Northern District of Texas in response to the U.S. Department of Labor’s final rule proposing significant changes to the Davis-Bacon Act, which was first enacted in 1931. The measure sets construction wage rates for federally funded or assisted public works projects. Among other things, the administration is attempting to expand the construction wage law to cover workers in manufacturing facilities that produce building and infrastructure components, and to cover delivery truck drivers and to retroactively impose the measure on already executed contracts that don’t specifically require Davis-Bacon wage rates.
In its legal filing, the association noted that the Davis-Bacon Act is specifically limited only to “mechanics and laborers employed directly upon the site of the work.” Further, in an amended version of the Act passed in 1935, Congress clarified that the Davis-Bacon law does not apply to materials suppliers. The administration’s attempt to apply the law to materials suppliers operated by contractors or subcontractors represents an illegal attempt by the executive branch to exercise legislative power, the suit notes. Similarly, the rule impermissibly seeks to expand coverage to delivery truck drivers—who are not mechanics or laborers—when they spend an undefined, “not de minimis” amount of time on the jobsite.
The association also challenged the Biden administration rule for asserting that Davis-Bacon rules can be retroactively imposed on qualifying contracts that omitted inclusion of the Davis-Bacon requirements. They noted the Davis Bacon Act expressly requires that public contracts contain the Davis-Bacon stipulations for them to be applied. The lawsuit notes that the administration lacks the legal authority, or legal precedent, to retroactively impose Davis-Bacon stipulations on executed contracts that omitted them when signed.
The association is seeking to have the court order the administration to roll back its efforts to expand Davis-Bacon requirements to categories of work that were excluded in the initial legislation. Likewise, the association is urging the court to block the administration from retroactively imposing Davis Bacon requirements on executed contracts that did not include the provisions. However, the association is not challenging the Biden Administration’s efforts to revert to an earlier process for determining the prevailing wage rates for federally funded construction projects.
Click here for a copy of the association’s petition to the court.
Meanwhile, Associated Builders and Contractors (ABC) and its Southeast Texas chapter yesterday announced the filing of a complaint in the U.S. District Court for the Eastern District of Texas, challenging the U.S. Department of Labor’s controversial final rule, Updating the Davis-Bacon and Related Acts Regulations, which applies to federal and federally assisted construction projects funded by taxpayers.
“Far from ‘updating’ the DOL’s enforcement of the Davis-Bacon Act, the final rule returns to failed policies of the 1970s and unlawfully expands coverage of prevailing wage requirements onto new projects and industries and increases its regulatory burden on small construction contractors working on federally funded contracts,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “The DOL’s final rule forces ABC to take legal action to address its numerous illegal provisions and protect its members, the free market and taxpayers from the devastating impacts of this regulation.
“Instead of instituting commonsense reforms to Davis-Bacon regulations to ensure accurate prevailing wage determinations while providing much-needed clarity to the regulated community, the rule makes it much more likely that the DOL will adopt union wage scales as the prevailing wage at a greater frequency than in current practice,” said Brubeck. “The DBA already adopts union wage scales at improbable rates, considering just 11.7% of the construction industry is unionized. The erroneous, arbitrary and capricious changes to the implementation of the Davis-Bacon Act must be challenged to preserve fair and open competition on government construction projects, regardless of labor affiliation.
“The onerous new requirements, reduced competition and artificial inflation of construction costs imposed by this rule will only exacerbate economic headwinds and undermine taxpayer investments in infrastructure,” said Brubeck.
In October, Mario Burgos, chief strategy officer, Prairie Band LLC, Albuquerque, New Mexico, testified to Congress on behalf of ABC, urging lawmakers to rein in the Biden administration’s flawed wage determination process and unclear DBA regulations. Burgos detailed his efforts to comply with a byzantine process to determine prevailing wages on federal construction projects and said the DOL’s recent rulemaking updating Davis-Bacon will only make compliance challenges worse, driving small contractors out of public works projects or even out of business.
In August, ABC pushed back on the DOL’s final rule, calling it “yet another Biden administration handout to organized labor on the backs of taxpayers, small businesses and the free market.”
In May 2022, following a survey of its membership, ABC submitted nearly 70 pages of comments on the DOL’s proposed rule—and its more than 50 significant changes—urging the DOL to withdraw the proposal.
Learn more at abc.org/davisbacon.
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