DISCUSSION 

DRAFTOffice of Inspector General—Office of Audit 

WAGE AND HOUR 

DIVISION 

 

This audit was performed by Foxx & Company, under contract to the U.S. 

Department of Labor, Office of Inspector General, and by acceptance, it 

becomes a report of the Office of Inspector General. 

 

Assistant Inspector General for Audit 

U.S. Department of Labor 

RECOVERY ACT: ENFORCEMENT OF DAVISBACON ACT PREVAILING WAGE RATE 

DETERMINATIONS 

Date Issued: March 31, 2011

Report Number: 18-11-009-04-420
U.S. Department of Labor 

Office of Inspector General 

Office of Audit 

BRIEFLY... 

Highlights of Report Number: 18-11-009-04-420, to the 

Acting Administrator, Wage and Hour Division 

WHY READ THE REPORT 

President Obama signed the American Recovery and 

Reinvestment Act (Recovery Act) into law on 

February 17, 2009. The Recovery Act appropriated 

$787 billion dollars to preserve and create jobs, 

promote the nation’s economic recovery, and assist 

those most impacted by the recession. The Recovery 

Act funded construction, renovation of federal buildings, 

and a range of infrastructure projects, such as roads, 

bridges, public transit, water systems, and housing. 

The Act covered projects funded directly, by or in part, 

through several federal agencies. 

 

The Department of Labor (DOL) received $80 million for 

various Recovery Act-related oversight activities. 

Funds designated for these purposes could be 

obligated through September 30, 2010. The DOL Wage 

and Hour Division (WHD) obligated $11.5 million to 

carry out Recovery Act work for Davis-Bacon Act (DBA) 

wage determinations and enforcement. WHD used the 

funds to conduct activities in three areas: outreach, 

prevailing wage enforcement, and prevailing wage 

determinations. This report presents the results of how 

efficiently and effectively WHD used the Recovery Act 

funds to conduct its oversight of DBA requirements for 

Recovery Act-funded construction projects. 

WHY OIG CONDUCTED THE AUDIT 

This audit was conducted to answer the following 

questions: 

1. Did WHD provide adequate compliance 

assistance and outreach to ensure Recovery 

Act contractors and subcontractors complied 

with DBA? 

2. Did WHD conduct timely prevailing wage 

complaint and directed investigations in 

accordance with applicable policies and 

regulations? 

3. Did WHD issue timely and reliable prevailing 

wage determinations in response to the 

Recovery Act in accordance with applicable 

policies and regulations? 

READ THE FULL REPORT 

To view the report, including the scope, methodology, 

and full agency response, go to: 

http:www.oig.dol.gov/public/reports/oa/2011/18-11-009-

04-420.pdf. 

March 2011 

Recovery Act: Enforcement of Davis-Bacon Act 

Prevailing Wage Rate Determinations 

WHAT OIG FOUND 

WHD provided adequate assistance and outreach to 

contractors and other interested parties to ensure that 

they were aware of DBA requirements for Recovery 

Act-funded projects. In addition, WHD enhanced its 

enforcement program to conduct more investigations of 

DBA violations. The investigations were more effective 

in identifying violations and were completed in a more 

timely manner than non-Recovery Act investigations. 

WHD also conducted wage determination surveys for 

Department of Energy’s weatherization program, which 

came under the DBA requirements because of 

Recovery Act funding. The wage determination surveys 

were timely and reliable. 

WHAT OIG RECOMMENDED 

Because WHD provided adequate outreach, 

implemented an improved prevailing wage 

investigations process, and issued timely prevailing 

wage determinations, this report does not include 

recommendations to DOL. 

The auditors met with WHD personnel to discuss the 

results of the audit and subsequently provided the 

Agency with a draft report for review and possible 

comment. After reviewing the draft report, WHD 

management notified the OIG through an email that 

they agreed with the report and did not plan to send a 

formal response to the report. 
Prepared by Foxx & Company 

For the U. S. Department of Labor – Office of Inspector General 

PAGE INTENTIONALLY LEFT BLANK 

 RA: Davis-Bacon Act Enforcement 

Report No. 18-11-009-04-420 
Prepared by Foxx & Company 

For the U. S. Department of Labor – Office of Inspector General 

Table of Contents 

Independent Auditor’s Report...................................................................................... 1

Results ........................................................................................................................... 3

Objective 1 — Did WHD provide adequate compliance assistance and outreach to 

ensure Recovery Act contractors and subcontractors complied 

with the DBA?....................................................................................... 3

Wage and Hour Division outreach efforts were extensive and effective ............... 3

Objective 2 — Did WHD conduct timely prevailing wage complaint and directed 

investigations in accordance with applicable policies and 

regulations?.......................................................................................... 4

WHD used Recovery Act funds to shift the overall focus of DBA 

investigations, and their initiatives have resulted in lasting improvements 

to the investigation program ................................................................................. 4

Objective 3 — Did WHD issue timely and reliable prevailing wage determinations 

in response to the Recovery Act in acccordance with applicable 

policies and regulations?.................................................................... 6

WHD conducted timely surveys and established reliable prevailing wage 

determinations required by the Recovery Act for weatherization projects ............ 6 

Appendices

Appendix A Background ..................................................................................... 11

Appendix B Objectives, Scope, Methodology, and Criteria ................................ 13

Appendix C Acronyms and Abbreviations .......................................................... 15

 RA: Davis-Bacon Act Enforcement 

Report No. 18-11-009-04-420 
Prepared by Foxx & Company 

 For the U. S. Department of Labor – Office of Inspector General 

 RA: Davis-Bacon Act Enforcement 

Report No. 18-11-009-04-420 

PAGE INTENTIONALLY LEFT BLANK 
Prepared by Foxx & Company 

For the U. S. Department of Labor – Office of Inspector General 

 RA: Davis-Bacon Act Enforcement 

1 Report No. 18-11-009-04-420 

Independent Auditor’s Report 

March 31, 2011 

Nancy Leppink 

Acting Administrator, Wage and Hour Division 

U.S. Department of Labor 

200 Constitution Avenue, NW 

Washington, D.C. 20210 

President Obama signed the American Recovery and Reinvestment Act (Recovery Act) 

into law on February 17, 2009.1

 The Recovery Act appropriated $787 billion dollars to 

preserve and create jobs, promote the nation’s economic recovery, and assist those 

most impacted by the recession. The Recovery Act funded construction, renovation of 

federal buildings, and a range of infrastructure projects, such as roads, bridges, public 

transit, water systems, and housing. The Act covered projects funded directly, by or in 

part, through several federal agencies. 

The Davis-Bacon Act (DBA) requires contractors pay their laborers and mechanics no 

less than the prevailing wages for corresponding work on similar projects in the area. 

The Recovery Act requires that all projects receiving funds must comply with the DBA 

prevailing wage rates. As a result, an additional 40 federally assisted construction 

programs spread across 12 federal agencies were to comply with the DBA.2 DOL’s 

Wage and Hour Division (WHD) obligated $11.5 million for Recovery Act related wage 

determinations and DBA enforcement. WHD expended funds in fiscal years 2009 and 

2010, to conduct activities in three areas: outreach, prevailing wage enforcement, and 

wage determinations. Additional background on the Recovery Act and WHD’s 

responsibilities is included in Appendix A. 

 

Our audit objectives were to determine whether WHD (1) provided adequate 

compliance assistance/outreach to ensure Recovery Act contractors and subcontractors 

complied with DBA; (2) conducted timely prevailing wage complaint and directed 

investigations in accordance with applicable policies and regulations; and (3) issued 

timely and reliable prevailing wage determinations in response to the Recovery Act in 

accordance with applicable policies and regulations. We reviewed documents and 

 

1 American Recovery and Reinvestment Act of 2009, (P.L.111-5), February 17, 2009 2 U.S. Government Accountability Office (GAO) Report; Recovery Act: Officials Views Vary on Impacts of 

Davis-Bacon Act Prevailing Wage Provision, GAO-10-421, (Washington D.C: February 24, 2010), Page 7 
Prepared by Foxx & Company 

For the U. S. Department of Labor – Office of Inspector General 

interviewed WHD officials in Washington, D.C., and at the WHD regional and district 

offices in Dallas, TX; Chicago, IL; and Philadelphia, PA. 

We conducted this performance audit in accordance with generally accepted 

government auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions based on our 

audit objectives. Our objectives, scope, methodology and criteria are further discussed 

in Appendix B. 

RESULTS IN BRIEF 

WHD used Recovery Act funds to achieve positive results. WHD provided adequate 

assistance and outreach to contractors, subcontractors, and other interested parties 

such as labor unions: federal, state, and local agencies; community action 

organizations; and employees. WHD conducted conferences, seminars, stakeholder 

meetings and various other activities to ensure that all parties involved in the Recovery 

Act-funded projects were aware of DBA requirements. WHD also issued guidance and 

advisory letters and enhanced its website to disseminate information on Recovery Act 

requirements. 

We determined that WHD used Recovery Act funds in accordance with policies and 

regulations and implemented an improved process for conducting directed and 

complaint investigations that could have a lasting impact on future DBA investigations. 

Directed investigations were initiated by WHD based on risk assessment of contractor 

non-compliance with DBA provisions. 

WHD placed a higher priority on DBA prevailing wage rate compliant investigations 

under the Recovery Act. In fiscal year 2010, the Recovery Act complaint investigations 

took an average of 157 days to complete compared to 342 days for DBA investigations 

not funded by the Recovery Act. 

WHD issued timely prevailing wage determinations for workers covered under 

Department of Energy’s (DOE) Weatherization program. Prevailing wage rates already 

existed for all other types of work for programs funded by the Recovery Act. Prevailing 

wage rates were needed for Weatherization workers because contractor employees 

doing home weatherization were low-skilled workers and the existing residential wage 

rates were for skilled workers. In June 2009, Energy and DOL agreed that new wage 

rate surveys were needed. WHD conducted the weatherization surveys in all states 

during July and August, and published the new rates in September 2009. 

We determined WHD provided adequate outreach, implemented an improved prevailing 

wage investigations process, and issued timely prevailing wage determinations; 

therefore, the report does not include recommendations to DOL. 

 RA: Davis-Bacon Act Enforcement 

2 Report No. 18-11-009-04-420 
Prepared by Foxx & Company 

For the U. S. Department of Labor – Office of Inspector General 

Before issuing a draft report, the auditors met with WHD personnel to discuss the 

results of the audit. Subsequently, the OIG issued a draft report to the Agency for 

review and possible comment. After reviewing the draft report, WHD management 

informed the OIG through an email that they agreed with the report and did not plan to 

comment on the report contents. 

RESULTS 

Objective 1 — Did WHD provide adequate compliance assistance and outreach to 

ensure Recovery Act contractors and subcontractors complied 

with the DBA? 

Wage and Hour Division outreach efforts were extensive and effective. 

The Recovery Act provided additional funding that allowed WHD to significantly expand 

its compliance assistance and outreach efforts. WHD provided adequate compliance 

assistance and outreach to contractors, subcontractors, and other interested parties 

such as labor unions; federal, state, and local agencies; community action agencies, 

associations, and employees. WHD conducted conferences, seminars, stakeholder 

meetings and various other activities to ensure that all parties involved in 

Recovery Act-funded projects were aware of DBA requirements. WHD also issued 

guidance, advisory letters and enhanced its website to disseminate information on 

Recovery Act requirements. 

WHD hosted two prevailing wage conferences in Washington, D.C., and seven in the 

WHD regions from July 2009 to November 2010. The conferences were advertised to 

provide information to the federal, state, and local contracting communities on DBA 

requirements under the Recovery Act, and guidance on complying with the DBA. 

According to WHD officials, many of the affected contractors and agencies were not 

familiar with these requirements. More than 1,900 persons attended. At the end of each 

of the seven regional prevailing wage conferences, WHD officials asked participants to 

prepare an evaluation on the effectiveness of the outreach efforts. WHD received 714 

evaluation forms. Our review of the evaluations from the seven regional conferences 

demonstrated that the conferences were comprehensive, effective, and targeted to the 

intended audience. 

 

In addition, WHD held 376 smaller outreach events between July 2009 and September 

2010 that included presentations, seminars, speeches, stakeholder meetings, and face-toface consultations with individuals and groups concerned about the DBA requirements 

under the Recovery Act. More than 15,700 people attended these events. Of the 376 

events, 300 were requested by employers, unions or government agencies. The other 

events were initiated by WHD. 

 RA: Davis-Bacon Act Enforcement 

3 Report No. 18-11-009-04-420 
Prepared by Foxx & Company 

For the U. S. Department of Labor – Office of Inspector General 

 RA: Davis-Bacon Act Enforcement 

4 Report No. 18-11-009-04-420 

WHD issued guidance (May 2009 for Recovery Act Division A programs and May 2010 for 

Recovery Act Division B programs)3

 to all contract agencies of the Federal government and 

the District of Columbia that explained how the DBA applied to all Federally-assisted 

construction and weatherization work funded by the Recovery Act. WHD also issued 

project-specific advisory letters to the Departments of Energy, Interior, and other 

stakeholders. In addition, WHD created a WHD web page that provided comprehensive 

assistance materials and up-to-date information on how DBA applied to Recovery 

Act-funded projects. 

WHD officials said that the Recovery Act-related outreach efforts contributed to making 

more people aware of the DBA requirements on contracts not affected by the Recovery 

Act. For example, WHD data showed a large increase in the DBA complaint 

investigations filed in fiscal year 2010 (1,428), compared to fiscal year 2009 (756) and 

fiscal year 2008 (356). 

Objective 2 — Did WHD conduct timely prevailing wage complaint and directed 

investigations in accordance with applicable policies and 

regulations? 

WHD used Recovery Act funds to perform Davis-Bacon Act investigations in 

accordance with policies and regulations, and their initiatives have resulted in 

lasting improvements to the investigation program. 

WHD used its Recovery Act funds to perform DBA investigations in accordance with 

regulations and WHD’s Recovery Act Plan. In doing so, WHD implemented an improved 

process for conducting DBA investigations by focusing on WHD directed investigations and 

setting a higher priority on complaint investigations in response to allegations of noncompliance with DBA requirements received by WHD. These initiatives, along with a 

cadre of better equipped and trained investigators, resulted in an enhanced 

enforcement program. As a result, WHD has increased its capability to conduct DBA 

investigations in the future. 

Directed Investigations:

WHD initiated an aggressive program to target and investigate Recovery Act funded 

projects to assess DBA prevailing wage compliance. As part of a concentrated focus, 

WHD targeted projects with a high dollar volume and multiple contractors and 

subcontractors on-site. These directed investigations were initiated by WHD based on 

its assessment of the risk that contractors working on a construction project may not be 

complying with DBA requirements. 

 

3

 Division A of the Recovery Act consists primarily of discretionary spending. Examples of discretionary 

projects and activities include federal construction projects and certain research activities. Division B 

consists of mainly mandatory spending and revenue provisions, including tax, unemployment, health, and 

state fiscal relief. 
Prepared by Foxx & Company 

For the U. S. Department of Labor – Office of Inspector General 

Each of WHD’s five Regional Offices was responsible for completing at least 10 project 

investigations. WHD selected 51 project investigations from a broad spectrum of 

federal agencies in fiscal year 2010. In this project-based approach, WHD investigated 

all contractors and subcontractors performing work on the project. If DBA violations 

were detected, investigators were expected to consider opening additional 

investigations of that contractor at other job sites. 

According to WHD officials, DBA investigations are more complex than other DOL 

investigations and are generally performed by investigators with DBA investigation training 

and experience. Consequently, WHD restructured its investigation efforts by promoting 

and training 33 senior investigators to take on the new role as a Senior Investigative 

Advisor (SIA). The SIAs, along with WHD regional and headquarters officials, selected 

the DBA projects to be investigated. The SIAs managed the investigations and trained 

other experienced investigators to work on the projects. 

The directed DBA prevailing wage investigations under the Recovery Act had positive 

results. In fiscal year 2010, WHD completed 450 directed investigations and 204 had 

violations. These investigations were completed more timely than regular DBA 

investigations. The DBA investigations funded by the Recovery Act took an average 

109 days to complete, compared to 274 days for DBA investigations not funded by the 

Recovery Act. 

Complaint Investigations:

WHD also placed a higher priority on DBA prevailing wage rate complaint investigations 

under the Recovery Act. In fiscal year 2010, WHD set a goal that district offices initiate 

90 percent of the investigations within 30 days of receipt the complaint. WHD data 

shows that 67 percent of the complaint cases were assigned to investigators in 30 days. 

Although the 90 percent goal was not achieved, WHD officials said the goal was set to 

encourage district investigators to focus on Recovery Act complaint investigations. This 

tied into the DOL Secretary’s policy to change the nature of referrals by having WHD be 

the lead on complaint investigations rather than referring the investigations to the 

federal agencies that actually provided funds for the projects. 

During fiscal years 2009 and 2010, WHD received 157 complaints citing DBA prevailing 

wage violations under the Recovery Act. In fiscal year 2010, WHD completed 45 of the 

complaint investigations and 33 had violations. The investigations took an average of 

157 days to complete compared to 342 days for DBA investigations not funded 

by the Recovery Act. 

Investigative Results:

According to WHD officials, WHD’s directed and complaint investigations have led to 

more awareness of the DBA requirements and provided financial benefits to workers. 

The following are examples provided by WHD officials. 

 RA: Davis-Bacon Act Enforcement 

5 Report No. 18-11-009-04-420 
Prepared by Foxx & Company 

For the U. S. Department of Labor – Office of Inspector General 

• WHD investigated two Recovery Act covered contracts that led to truck drivers 

receiving $20,800 in back wages. According to WHD officials, the affected state 

agency where the violations took place is taking steps to ensure that workers 

receive the correct DBA wages on all covered contracts. The truck drivers and 

contractors stated to WHD officials that they were more satisfied because they 

had a better understanding of the DBA requirements. 

• As a result of an investigation of a Housing Authority project, 66 persons working 

for 12 different contractors received more than $415,000 in back wages. 

Contractors paid the workers less than the required prevailing wage rates, 

misclassified the workers, and did not pay the workers for all of their hours 

worked on the project. Of the 14 firms investigated on this project, 12 contractors 

underpaid their workers. 

• On a Recovery Act-funded construction project at a waste water treatment plant, 

eight workers of a cement contractor were not paid for a month’s wages. The 

cement contractor issued weekly paychecks to the employees for their work on 

this Recovery Act project; however, many of the checks were returned unpaid. 

Following a WHD investigation, the prime contractor agreed that it was financially 

liable for subcontractor liabilities, and issued a check in the amount of $26,048 to 

the workers for unpaid wages and fringe benefits. 

WHD officials said that Recovery Act funding significantly increased the DBA prevailing 

wage rates enforcement program. According to WHD officials, current investigation 

efforts have been very effective based on the number of cases completed in 2010. 

Also, according to WHD officials there are now better trained and experienced 

investigators to meet future DBA responsibilities. All the documentation reviewed 

confirmed WHD’s assertion. 

Objective 3 — Did WHD issue timely and reliable prevailing wage determinations 

in response to the Recovery Act in accordance with applicable 

policies and regulations? 

WHD conducted timely and thorough new prevailing wage determinations 

required by the Recovery Act.

WHD issued timely prevailing wage determinations for workers covered under DOE’s 

weatherization program. Prevailing wage determinations already existed for all other 

types of work for programs funded by the Recovery Act. Prevailing wage rates were 

needed for weatherization workers because contractor employees doing home 

weatherization were low-skilled workers and the existing residential wage rates that 

applied to skilled workers did not apply to these workers. 

WHD also used Recovery Act funds to update old DBA highway surveys in 10 states. 

However, these surveys had not been published when our fieldwork was completed. As 

 RA: Davis-Bacon Act Enforcement 

6 Report No. 18-11-009-04-420 
Prepared by Foxx & Company 

For the U. S. Department of Labor – Office of Inspector General 

 RA: Davis-Bacon Act Enforcement 

7 Report No. 18-11-009-04-420 

a result, we could not express an opinion on the reliability of the rates established based 

on the survey results. 

Weatherization:

The Department of Energy’s weatherization program received $5 billion as a result of 

the Recovery Act; a substantial increase over funding received in prior years. After 

passage of the Recovery Act, DOE and DOL held extensive discussions concerning 

existing DBA prevailing wage rates for residential work. In June 2009, DOE decided 

that separate rates were needed for the low-skilled weatherization workers. 

Subsequent to this decision in June 2009, DOL published guidance to weatherization 

program grantees and agreed to data collection requirements needed for the prevailing 

wage surveys. 

The WHD’s weatherization surveys leading to new prevailing wage rates were 

conducted from headquarters. Under this Recovery Act-funded effort, WHD initiated 

and completed the prevailing wage rate surveys during July and August 2009 and 

published the weatherization rates for more than 3,000 counties by September 3, 2009. 

While waiting for the new wage surveys to be completed, DOE and DOL asked 

agencies to use existing residential rates so that weatherization work would not be 

delayed. Some states opted to wait until WHD issued weatherization rates before 

spending funds to weatherize homes.4 

WHD started receiving inquires from DOE and community action agencies concerning 

the new published weatherization rates in September 2009. Some community action 

agencies stated that they had submitted survey data with errors. The Community Action 

Agencies stated that they were confused and not familiar with DBA requirements, which 

resulted in the agencies providing incorrect data. Based on these discussions and the 

extent of possible errors in the reported data, WHD decided to re-verify all the submitted 

survey data to ensure the data was accurate and reliable. WHD then published revised 

prevailing wage rates for weatherization in December 2009. 

We reviewed the quality control procedures and requested some of the underlying 

source data for the weatherization rates. We met with the WHD officials responsible for 

conducting the surveys and discussed the scope, methodology, and timeliness details 

of the surveys. We received a detailed chronology of the survey efforts and reviewed 

the information to evaluate the survey efforts. We concluded that the overall survey 

effort was timely. The procedures used by WHD to conduct the prevailing wage survey 

for the weatherization wage rates were adequate, under the circumstances, considering 

the short time it took to complete the surveys and finalize rates. To evaluate the use of 

the survey results, we obtained and reviewed survey information from WHD for three 

states. We compared the survey information with the rates that were established. 

 

4

 GAO, Recovery Act: Project Selection and Starts Are Influenced by Certain Federal Requirements and Other 

Factors, GAO-10-383 (Washington D.C.: February 10, 2010) Page 16 
Prepared by Foxx & Company 

For the U. S. Department of Labor – Office of Inspector General 

Based on these reviews, we concluded that the rates established for weatherization 

were reliable. 

Highway Surveys:

Recovery Act funding was also used to update 10 DBA highway surveys, some of which 

had not been updated for about 18 years. According to WHD officials, WHD would not 

have given these surveys a high priority without Recovery Act funds being available. 

The surveys were conducted by WHD headquarters personnel. However, the regions 

assisted by contacting individual states to request certified payroll data. Once received, 

WHD had to analyze each of the payrolls and calculate prevailing rates for publication. 

The large volume of data to be analyzed resulted in the new rates not being published 

when our fieldwork was completed. According to WHD officials, the updated prevailing 

wage rates for the 10 states will be published by the summer of 2011. As a result, we 

did not review the surveys. 

Because WHD provided adequate outreach, implemented an improved prevailing wage 

investigations process, and issued timely prevailing wage determinations, this report 

does not include recommendations to DOL. 

We appreciate the cooperation and courtesies that Wage and Hour Division personnel 

extended to Foxx & Company during this audit. 

Martin W. O’Neill 

Partner 

 RA: Davis-Bacon Act Enforcement 

8 Report No. 18-11-009-04-420 
Prepared by Foxx & Company 

For the U. S. Department of Labor – Office of Inspector General 

Appendices 

 RA: Davis-Bacon Act Enforcement 

9 Report No. 18-11-009-04-420 
Prepared by Foxx & Company 

For the U. S. Department of Labor – Office of Inspector General 

 RA: Davis-Bacon Act Enforcement 

10 Report No. 18-11-009-04-420 

PAGE INTENTIONALLY LEFT BLANK
Prepared by Foxx & Company 

For the U. S. Department of Labor – Office of Inspector General 

 RA: Davis-Bacon Act Enforcement 

11 Report No. 18-11-009-04-420 

Appendix A

Background 

President Obama signed the American Recovery and Reinvestment Act (Recovery Act) 

into law on February 17, 2009. The Recovery Act provided $787 billion to preserve and 

create jobs, promote the nations’ economic recovery, and to assist those most impacted 

by the recession. The Act covers projects funded directly, by or in part, through the 

Federal government. These funds were used for construction and renovation projects 

such as of federal buildings, and a range of infrastructure projects, such as roads, 

bridges, public transit, water systems, and housing. 

WHD sets prevailing wage rates for various job categories in a local area based on 

periodic surveys it conducts of contractors, unions, advocacy groups, and other 

interested parties. The DBA requires that contractors and subcontractors working on 

federally funded contracts in excess of $2,000 to pay their laborers and mechanics at 

least the prevailing wages, including fringe benefits, for the area in which the work will 

be performed. 

Prior to the Recovery Act, many federal programs that included construction projects 

were already subject to the DBA prevailing wage rates. The new DBA related Recovery 

Act (section 1606) extended the requirement for DBA prevailing wage rate coverage to 

40 additional federally-assisted construction programs spread across 12 federal 

agencies.5

 One of the programs was the DOE weatherization program that received 

$5 billion under the Recovery Program. The weatherization program has been in place 

since 1976,6 but at a much lower funding level. Also, the weatherization program had 

not been required to comply with DBA requirements previously. Except for the DOE’s 

weatherization program, all the other 39 added programs were able to use existing DBA 

prevailing wage rates for related job occupations. 

The DOL received $80 million for various Recovery Act-related oversight activities. 

Funds designated for these purposes can be obligated through September 30, 2010. 

The DOL Wage and Hour Division obligated $11.5 million to carry out Recovery Act 

work for the Davis-Bacon Act. As of February 25, 2011, WHD data showed that it 

expended $10.3 million to conduct activities in three areas: outreach, prevailing wage 

enforcement, and prevailing wage determinations. 

 

5 GAO; Recovery Act: Officials Views Vary on Impacts of Davis-Bacon Act Prevailing Wage Provision, 

GAO-10-421, (Washington D.C: February 24, 2010), Page 7 6 Ibid, Page 10 of GAO report cited in footnote 5.
Prepared by Foxx & Company 

For the U. S. Department of Labor – Office of Inspector General 

PAGE INTENTIONALLY LEFT BLANK

 RA: Davis-Bacon Act Enforcement 

12 Report No. 18-11-009-04-420 
Prepared by Foxx & Company 

For the U. S. Department of Labor – Office of Inspector General 

Appendix B 

Objectives, Scope, Methodology, and Criteria 

Objective 

Our audit objectives were to determine whether WHD (1) provided adequate 

compliance assistance and outreach to ensure Recovery Act contractors and 

subcontractors complied with DBA; (2) conducted timely prevailing wage complaint and 

directed investigations in accordance with applicable policies and regulations; and (3) 

issued timely and reliable prevailing wage determinations in response to the Recovery 

Act in accordance with applicable policies and regulations. 

Scope and Methodology 

We audited the WHD oversight responsibilities for DBA prevailing wages under the 

Recovery Act. The scope of the audit included WHD’s outreach efforts, prevailing wage 

enforcement, and prevailing wages rates determinations funded by the Recovery Act. 

The audit fieldwork started on January 5, 2011, and ended on February 25, 2011. The 

message conference with DOL/OIG officials was held on February 28, 2011. 

The audit team examined policies and procedures, federal laws and regulations, and 

published reports related to DBA requirements and WHD responsibilities. We also 

reviewed WHD planning documents and other documentation that helped explain the 

extent of and results of oversight efforts. To obtain more detail on the DBA process 

and further determine the impact of the Recovery Act on WHD activities, we conducted 

interviews with WHD officials in Washington, D.C., and regional and district officials in 

Chicago, IL; Dallas, Texas; and Philadelphia, PA. We obtained and reviewed 

documentation, as appropriate, from WHD to ensure that information received during 

the interviews concerning WHD’s oversight effort was supported and reliable. 

We conducted this performance audit in accordance with generally accepted 

government auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions based on our 

audit objectives. 

Criteria 

We used the following criteria to accomplish our audit: 

• American Recovery and Reinvestment Act of 2009, dated February 17, 2009 

• WHD Recovery Act Plan 

• Department of Labor Risk Management Plan 

• Wage and Hour Division FY 2010 Transitional Performance Plan 

 RA: Davis-Bacon Act Enforcement 

13 Report No. 18-11-009-04-420 
Prepared by Foxx & Company 

For the U. S. Department of Labor – Office of Inspector General 

 RA: Davis-Bacon Act Enforcement 

14 Report No. 18-11-009-04-420 

• Wage and Hour Division FY 2011 Operating Plan 

• Wage Determination Resources Book 

• Wage and Hour Division Field Operations Handbook 

• Office of Management and Budget (OMB) Memorandums: 

o M-09-10: Initial Implementing Guidance for the American Recovery and

Reinvestment Act of 2009, dated February 18, 2009 

o M-09-15: Updated Implementing Guidance for the American Recovery and

Reinvestment Act of 2009, dated April 3, 2009 

o M-09-21: Implementing Guidance for the Reports on Use of Funds 

Pursuant to the American Recovery and Reinvestment Act of 2009, dated 

June 22, 2009 

• DOL/WHD May 2009 and May 2010 guidance letter 

• DOL Web Site 
Prepared by Foxx & Company 

For the U. S. Department of Labor – Office of Inspector General 

Appendix C 

Acronyms and Abbreviations 

Recovery Act American Recovery and Reinvestment Act of 2009 

DBA Davis-Bacon Act 

DOL Department of Labor 

DOE Department of Energy 

FY Fiscal Year 

GAO Government Accountability Office 

OIG Office of Inspector General 

WHD Wage and Hour Division

 RA: Davis-Bacon Act Enforcement 

15 Report No. 18-11-009-04-420 
Prepared by Foxx & Company 

For the U. S. Department of Labor – Office of Inspector General 

PAGE INTENTIONALLY LEFT BLANK 

 RA: Davis-Bacon Act Enforcement 

16 Report No. 18-11-009-04-420 
TO REPORT FRAUD, WASTE, OR ABUSE, PLEASE CONTACT: 

Online: http://www.oig.dol.gov/hotlineform.htm 

Email: hotline@oig.dol.gov 

Telephone: 1-800-347-3756 

 202-693-6999 

Fax: 202-693-7020 

Address: Office of Inspector General 

U.S. Department of Labor 

200 Constitution Avenue, N.W. 

 Room S-5506 

Washington, D.C. 20210