Washington, D.C. – Congressman Paul A. Gosar, D.D.S. (AZ-09) issued the following statement after introducing H.R. 8518, the Responsibility in Federal Contracting Act, legislation that would require the calculation of wages for public works projects be based on actual statistics calculated by the Bureau of Labor Statistics (BLS):

“For far too long, wages for public works projects have been determined by a flawed formula that sacrifices accuracy and billions of federal tax dollars.  For example, the surveys produced by the Department of Labor’s Wage and Hour Division (WHD) are inaccurate and unscientific.  The sample size is not sufficient to get an accurate recording. A 2011 Government Accountability Office (GAO) report found that 75% of wage rates established by WHD used surveys that tallied the wages of less than 29 workers. Furthermore, the prevailing wages set by WHD often rely on wage data from workers experiencing varying standards of living–thereby skewing the data.

The Bureau of Labor Statistics has proven time and time again that they are the only department capable of accurately determining these wages. Their surveys are much easier to fill out, and the agency follows up with non-respondents–resulting in a response rate of 80% for their own wage surveys, which is much higher than those of WHD. Requiring the BLS to calculate these wages could save hundreds of billions every year on infrastructure projects for the federal government. We owe it to the American taxpayer to spend federal dollars in a more efficient manner, allowing for more jobs and worthwhile projects in the process.

The Responsibility in Federal Contracting Act will cut waste, create jobs and save millions for the American taxpayer,” concluded Congressman Gosar.

Mark Mix, President of the National Right to Committee added “The DOL chooses to calculate prevailing wages with biased, self-selected surveys instead of using the scientific BLS data it has available for one simple reason: to make it easier for union bosses to manipulate the results to their advantage – and therefore to the disadvantage of a majority of construction workers who are not members of a union. This bill eliminates one of the many ways that politically connected union officials disproportionately benefit from government spending.”

Background:

The Davis-Bacon Act (DBA) of 1931 requires government contractors of federal construction projects to pay a “prevailing” wage to employees. The Department of Labor (DOL) calculates the prevailing wage through in-house surveys of employers by the Wage and Hour Division (WHD).

For contracts finalized on or after October 23, 2023, if 30% of employees report an identical wage, and that wage is earned by the greatest number of workers, that wage is the prevailing wage. If no wage can reach the 30% threshold, then the average wage of all respondents is deemed the prevailing wage.

The Responsibility in Federal Contracting Act, in line with recommendations from the Government Accountability Office and the DOL Inspector General, would require wage surveys be completed by the Bureau of Labor Statistics (BLS) using “proper random statistical sampling techniques,” a process that the BLS already incorporates successfully into their monthly jobs reports and other employment-related data.

Supporting groups:

Heritage Action, National Right to Work Committee, Institute for the American Worker, Small Business & Entrepreneurship Council