Application of the Davis-Bacon Act

to Urban Development Projects

that Receive Partial Federal Funding

Section 110 of the Housing and Community Development Act of 1974 requires that those 

engaged in construction work that is financed with federal funds (whether in whole or in part) 

receive wages at rates prevailing in the locality as determined by the Secretary of Labor under 

the Davis-Bacon Act. However, if the construction work is not financed with federal funds, 

the Davis-Bacon Act wage rates need not be paid, even if other aspects of the construction 

project, such as land, fixtures, o r services, receive federal funds pursuant to the Act.

This question arose pursuant to a dispute between the Secretary of Labor and the Secretary of 

Housing and Urban Development in the course of exercising their respective authorities under 

the Act. The Office of Legal Counsel has jurisdiction to resolve the dispute pursuant to 

Executive Order No. 12146.

August 6, 1987

M e m o r a n d u m O p i n i o n f o r t h e S e c r e t a r y ,

D e p a r t m e n t o f H o u s i n g a n d U r b a n D e v e l o p m e n t

This memorandum responds to your request for the opinion of the Attorney 

General on the proper interpretation of § 110 of the Housing and Community 

Development Act of 1974 (Act), 42 U.S.C. § 5310. The Attorney General has 

referred this matter to the Office of Legal Counsel for resolution.

I. Background

Title I of the Act authorizes the Secretary of Housing and Urban Development (HUD) to provide Community Development Block Grants (CDBG) and 

Urban Development Action Grants (UDAG) to States and localities for “the 

development of viable urban communities, by providing decent housing and a 

suitable living environment and expanding economic opportunities, principally 

for persons of low and moderate income.” 42 U.S.C. § 5301(c). Section 110 of 

the Act requires that “[a]ll laborers and mechanics employed by contractors or 

subcontractors in the performance of construction work financed in whole or in 

part with assistance received under this chapter shall be paid wages at rates . . . 

determined by the Secretary of Labor in accordance with the Davis-Bacon 

Act.” 42 U.S.C. §5310.

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In 1985, the Department of Labor took the view that § 110 requires payment 

of Davis-Bacon wages not only when UDAG and CDBG funds are used 

directly to pay for the activities commonly thought of as “construction” of a 

building, but also when those funds are used for other activities that are 

integrally and proximately related to that construction, even if no federal funds 

are expended directly for the construction work. The Department of Labor 

provided three examples of the application of this standard:

For example, if UDAG or CDBG funds were used to acquire the 

land upon which construction was later to take place, that construction should be done with Davis-Bacon wages, even if all 

UDAG or CDBG dollars had been expended before the commencement of the direct construction activity. .. . Other such 

costs could include, for example, engineering and architectural 

fees, materials, and equipment or machinery to be installed as 

part of the building.

Letter to Robert A. Georgine, President, Building & Construction Trades 

Department, AFL-CIO from Susan R. Meisinger, Deputy Under Secretary for 

Employment, Department of Labor at 2 (July 31, 1985) (Labor Opinion).

HUD disputes this interpretation on the grounds that, in HUD’s view, it 

would initiate a drastic departure from the consistent application of DavisBacon requirements under the Act. Accordingly, HUD requested that Labor 

reconsider the position taken in its July 31, 1985 letter. On July 21, 1987, the 

Secretary of Labor responded by withdrawing the “integrally and proximately 

related” test and stating that “the question must be whether the construction 

work is federally financed,” and that “the mere use of federal funds to finance 

the purchase of land . . . does not trigger Davis-Bacon coverage under the 

statute.” Letter to the Honorable Samuel R. Pierce, Jr., Secretary, Department 

of Housing and Urban Development, from the Honorable William E. Brock, 

Secretary, Department of Labor (July 21, 1987).

The Secretary of Labor’s letter, however, reserved the question of “the 

application of Davis-Bacon requirements to projects on which UDAG/CDBG 

funds are used to purchase equipment installed as part of the project,” and, 

apparently, the question of the application of Davis-Bacon requirements to 

non-federally funded construction work when federal funds are used to pay for 

“engineering and architectural fees.” Id. After reviewing the Secretary of 

Labor’s letter, the Secretary of HUD noted that the letter “does not resolve 

other issues . .. raised [in the Labor Opinion]. In particular, whether UDAG/ 

CDBG financing of architectural and engineering fees and purchase of equipment would require prevailing wages on related private construction work is 

unanswered .... As your letter fails to resolve all the issues springing from the 

[Labor Opinion], I must continue to seek a comprehensive decision from the 

Attorney General.” Letter to the Honorable William E. Brock, Secretary, 

Department of Labor, from the Honorable Samuel R. Pierce, Jr., Secretary, 

Department of Housing and Urban Development (July 28, 1987).

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II. Discussion

Before turning to the substantive issues presented by your request, we 

address a threshold jurisdictional matter: whether the Attorney General, and 

hence this Office, has authority to render an opinion on the proper interpretation of the Housing and Community Development Act at the request of the 

Secretary of HUD. The Department of Labor has suggested that Reorganization Plan No. 14 of 1950,15 Fed. Reg. 3176 (reprinted in 5 U.S.C. app. at 1050 

(1982) and in 64 Stat. 1267 (1950)), precludes the Attorney General from 

rendering such an opinion. In its view, the Secretary of Labor has the exclusive 

authority to issue a ruling concerning the proper interpretation of the DavisBacon provisions of the Housing and Community Development Act. This 

view, however, misconstrues the Reorganization Plan as well as the authority 

and functions of the Attorney General and the Secretary of Housing and Urban 

Development.

Section 110 of the Act provides:

All laborers and mechanics employed by contractors or subcontractors in the performance of construction work financed in 

whole or in part with assistance received under this chapter shall 

be paid wages at rates not less than those prevailing on similar 

construction in the locality as determined by the Secretary of 

Labor in accordance with the Davis-Bacon Act, as amended (40 

U.S.C. §§ 276a, 276a-5).. . The Secretary of Labor shall have, 

with respect to such labor standards, the authority and functions 

set forth in Reorganization Plan Numbered 14 of 1950 (15 F.R.

3176; 64 Stat. 1267) and section 276c of title 40.

42 U.S.C. § 5310. The Reorganization Plan, in turn, provides:

In order to assure coordination of administration and consistency of enforcement of the labor standards provisions of each 

of the following Acts by the Federal agencies responsible for the 

administration thereof, the Secretary of Labor shall prescribe 

appropriate standards, regulations, and procedures, which shall 

be observed by these agencies ....

Reorganization Plan No. 14 of 1950, 15 Fed. Reg. 3176 (reprinted in 5 U.S.C. 

app. at 1050 (1982) and in 64 Stat. 1267 (1950)).

Labor argues that its interpretation of § 110 constitutes an appropriate standard, regulation, or procedure to enforce the labor standard provisions of the 

Act. But even assuming the validity of this argument, the Reorganization Plan 

speaks only to the respective functions of HUD and Labor in administering the 

Housing and Community Development Act. The Reorganization Plan does not 

preclude either the head of a department from seeking, or the Attorney General

A. Jurisdiction

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from rendering, an opinion on a question of law arising in the administration of 

his department.

By law, “[t]he head of an executive department may require the opinion of 

the Attorney General on questions of law arising in the administration of his 

department.” 28 U.S.C. § 512. The only limitation on the right of the head of an 

executive department to obtain an opinion of the Attorney General is that the 

question presented must be one that actually arises in the administration of his 

department. See 31 Op. Att’y Gen. 234 (1918); 31 Op. Att’y Gen. 127 (1917); 

20 Op. Att’y Gen. 178 (1891). Thus, the initial inquiry is whether the question 

presented by the Secretary of HUD — whether the acquisition of land, fixtures, 

or architectural and engineering services with federal assistance requires a 

finding that “integrally and proximately related” construction work paid for 

entirely with non-federal funds must be deemed financed in whole or in part 

with federal assistance — is one “arising in the administration of his department” within the meaning of 28 U.S.C. § 512.

We think that it clearly is. The Secretary of HUD is charged with the 

administration of the Act. The interpretation given to § 110 determines the 

nature and contents of the contracts the Secretary must enter into with state and 

local recipients of UDAG and CDBG funds. As the Secretary stated in his letter 

of May 13, 1987, to the Attorney General:

The need for a resolution of this dispute is even more urgent 

now than when I wrote you last October: the construction season 

has begun; our Urban Development Action Grant (UDAG) submissions are due in May and July; and the majority of our 

Community Development Block Grant (CDBG) submissions 

will be coming in the next two months.

Letter to the Honorable Edwin Meese III, Attorney General, from the Honorable Samuel R. Pierce, Jr., Secretary, Department of Housing and Urban 

Development (May 13, 1987). The Reorganization Plan confirms this conclusion. The Plan itself recognizes that although federal agencies must observe 

“appropriate standards, regulations, and procedures” prescribed by the Secretary of Labor, these agencies remain responsible for the administration of the 

underlying Acts. As the Message of the President accompanying the Reorganization Plan states: “The actual performance of enforcement activities . . . will 

remain the duty of the respective agencies awarding the contracts or providing 

the Federal assistance.” 5 U.S.C. app. at 1050-51 (1982).

Our conclusion that the Secretary is entitled by law to the opinion of the 

Attorney General is consistent with the analysis and conclusion of Attorney 

General Levi in a situation virtually identical to this one. See 43 Op. Att’y Gen. 

No. 8 (Jan. 11, 1977). There, the Secretary of Commerce sought the opinion of 

the Attorney General concerning the meaning of the phrase “contractors or 

subcontractors” as used in § 109 of the Local Public Works Capital Development and Investment Act of 1976. That section, in language virtually identical 

to that of § 110, provides:

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All laborers and mechanics employed by contractors or subcontractors on projects assisted by the Secretary under this Act shall 

be paid wages at rates not less than those prevailing on similar 

construction in the locality as determined by the Secretary of 

Labor in accordance with the Davis-Bacon Act, as amended (40 

U.S.C. §§ 276a-276a-5).. . . The Secretary of Labor shall have, 

with respect to the labor standards specified in this provision, 

the authority and functions set forth in Reorganization Plan 

Numbered 14 of 1950 (15 F.R. 3176; 64 Stat. 1267; 5 U.S.C.

§§ 133z-15), and section 2 of the Act of June 13, 1964, as 

amended (40 U.S.C. § 276c).

The Secretary of Labor took the position that the phrase included state and 

local governments who performed construction work with their own work 

force. The Secretary of Commerce disagreed, contending that the terms “contractors or subcontractors” could refer only to those who contracted with 

laborers and mechanics to perform the work. The Attorney General rejected the 

Labor Department’s claim that he was without authority to render the requested 

opinion, finding that “the Secretary of Commerce’s administrative responsibility for implementation of the Local Public Works Act at least requires him to 

satisfy himself concerning any doubts he may have regarding the lawfulness of 

the Secretary of Labor’s determination, and permits him to seek my advice for 

that purpose.” 43 Op. Att’y Gen. No. 8, at 3. The opinion continued:

This conclusion will be seen as particularly appropriate when it 

is recognized that, as will be discussed below, the present controversy does not involve a uniform interpretation which the 

Secretary of Labor seeks to apply to the Davis-Bacon Act and all 

related acts, but rather a special rule applicable to the Local 

Public Works Act. To the extent the outcome hinges upon the 

peculiar text or peculiar circumstances of that law, the policy 

considerations supporting an assertion of exclusive cognizance 

in the Secretary of Labor become less persuasive, and the issue 

becomes more appropriate for — if not resolution by the Secretary of Commerce — at least examination by the Attorney 

General at the Secretary’s instance.

Id. at 3—4. This passage applies with equal force to the present request.

Executive Order No. 12146, concerning the resolution of interagency legal 

disputes, does not alter this conclusion. Executive Order No. 12146 provides in 

pertinent part:

1—401. Whenever two or more executive agencies are unable to 

resolve a legal dispute between them, including the question of 

which has jurisdiction to administer a particular program or to 

regulate a particular activity, each agency is encouraged to 

submit the dispute to the Attorney General.

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1-402. Whenever two or more Executive agencies whose heads 

serve at the pleasure of the President are unable to resolve such a 

legal dispute, the agencies shall submit the dispute to the Attorney General prior to proceeding in any court, except where there 

is specific statutory vesting of responsibility for a resolution 

elsewhere.

Section 1-401 authorizes and encourages executive agencies to submit their 

legal disputes to the Attorney General. This provision applies not only to the 

executive departments, but also to all other agencies in the Executive Branch. 

Executive Order No. 12146 thus expands the authority of the Attorney General 

to render legal opinions beyond his statutory obligation to render opinions at 

the request of the heads of executive departments on questions of law arising in 

the administration of their departments. See 28 U.S.C. § 512.1

In addition, when the heads of the agencies serve at the pleasure of the 

President, § 1-402 requires the agencies to submit legal disputes they are 

unable to resolve to the Attorney General “except where there is specific 

statutory vesting of responsibility for a resolution elsewhere.” Labor contends 

that the exception precludes resolution of the current dispute by the Attorney 

General. Even assuming, however, that Reorganization Plan No. 14 of 1950 — 

directing the Secretary of Labor to prescribe appropriate labor-related standards, regulations, and procedures — constitutes “specific statutory vesting of 

responsibility for a resolution” of the present dispute within the Secretary of 

Labor, the reorganization legislation’ in no sense affects the authority of the 

head of an executive department to seek, or the Attorney General to render, an 

opinion under 28 U.S.C. § 512 on questions of law that arise in the administration of his department. Rather, under the above assumption, Reorganization 

Plan No. 14 of 1950 at most would mean that § 1-402 of Executive Order No. 

12146 does not require the Secretaries of HUD and Labor to submit this legal 

dispute to the Attorney General.

Thus, Executive Order No. 12146 is not fully apposite to the present request. 

Neither Reorganization Plan No. 14 of 1950 nor Executive Order No. 12146 

purport in any way to preclude the head of an executive department from 

requesting the opinion of the Attorney General on questions of law arising in 

the administration of his department. Since 1789, it has been the duty of the 

Attorney General “to give his advice and opinion upon questions of law .. .

1 Under 28 U.S.C. § 512, Attorneys General have felt constrained to decline requests for legal opinions 

from executive agencies not within one of the executive departments. See, e.g., 37 Op. A tt’y Gen. 488, 490 

(1934) (declining to give an opinion at the request o f the Reconstruction Finance Corporation on the ground 

that “the Attorney General is authorized to render opinions only upon the request o f the President or the head 

o f an executive departm ent”); 20 Op. A tt’y Gen. 312, 313 (1892) (stating that the “Civil Service Commission 

is not included within any of the great Departments of Government” and that “[ujntil the Commission shall 

request the President, to whom they are directly responsible, to present the question of law arising in the 

discharge of their duties to the Attorney General, he is not called upon to give, and should not under the law 

give, his opinion”). W ith the promulgation of Executive Order No. 12146, the President has authorized all 

executive agencies to request the opinion of the Attorney General whenever a legal dispute arises between 

such agencies.

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when requested by the heads of any of the departments, touching any matters 

that may concern their departments.” Judiciary Act of 1789, ch. 20, § 35,1 Stat. 

73, 93. Accordingly, by law, the heads of executive departments may require 

the opinion of the Attorney General, regardless o f whether a dispute exists on

the question within the Executive Branch. See 28 U.S.C. § 512. All that is 

required is that the question presented be one arising in the administration of 

the department whose head requests the opinion. Thus, even if HUD had never 

disagreed with Labor’s interpretation of § 110 the Secretary of HUD would be 

entitled to request and receive the opinion of the Attorney General on that 

question. It goes without saying, therefore, that the Secretary of Labor’s 

withdrawal of the Labor Department’s prior interpretation of § 110 in no way 

relieves the Attorney General of his statutory authority — indeed, his responsibility — to provide the Secretary of HUD with his opinion.2 The presence or 

absence of a contrary or consistent Labor Department interpretation is simply 

irrelevant to the Secretary’s statutory right “to require the opinion of the 

Attorney General.” 28 U.S.C. § 512. Because the Secretary of HUD has not 

withdrawn his request, the Attorney General’s legal obligation is to render an 

opinion on the question presented.

Finally, the Attorney General’s authority to give his opinion at the request of 

the Secretary is also confirmed by 28 U.S.C. § 516 and 5 U.S.C. § 3106. The 

former reserves generally to the Attorney General the conduct of all litigation 

in which the United States, an agency, or officer thereof is a party. The latter 

generally prohibits the head of an Executive department from employing an 

attorney for the conduct of litigation in which the United States, an agency, or 

an employee thereof is a party, requiring instead that the matter be referred to 

the Department of Justice. Both provisions admit of exceptions only when 

“otherwise authorized by law.” Although Congress has established “a solicitor 

for the Department of Labor,” 29 U.S.C. § 555, the solicitor has no general 

litigating authority; his authority is narrowly drawn, see 29 U.S.C. § 663 

(representation of the Secretary of Labor in occupational safety and health 

litigation); 29 U.S.C. § 1852(b) (litigation for the protection of migrant and 

seasonal workers); 30 U.S.C. § 822 (representation of the Secretary of Labor in 

mine safety and health litigation), and nevertheless “subject to the direction 

and control of the Attorney General.” Id. The Attorney General’s authority to 

conduct litigation on behalf of the United States necessarily includes the 

exclusive and ultimate authority to determine the position of the United States 

on the proper interpretation of statutes before the courts. Thus, because this 

question of the proper interpretation of § 110 is the subject of pending litigation 

to which the Secretary of HUD is a party, see Dairy Development Ltd. v. 

Pierce, Civ. Action No. 86-1353-R (W.D. Okla.), the Attorney General has 

both the authority and the obligation to decide the question presented by the 

Secretary of HUD.

2 See 2 Op. A tt’y Gen. 31 1 (1830), in which Attorney General Berrien observed “that it is made my duty to 

give my opinion on all questions referred to me by the heads o f departments ‘touching any matters that may 

concern their departm ents.’” Id. at 31 1.

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B. Substantive Issues

Section 110 of the Act provides:

All laborers and mechanics employed by contractors or subcontractors in the performance of construction work financed in 

whole or in part with assistance received under this chapter shall 

be paid wages at rates not less than those prevailing on similar 

construction in the locality as determined by the Secretary of 

Labor in accordance with the Davis-Bacon Act, as amended (40 

U.S.C. § 276a, 276a-5): Provided, That this section shall apply 

to the rehabilitation of residential property only if such property 

is designed for residential use for eight or more families. The 

Secretary of Labor shall have, with respect to such labor standards, the authority and functions set forth in Reorganization 

Plan Numbered 14 of 1950 (15 F.R. 3176; 64 Stat. 1267) and 

section 276c of title 40.

42 U.S.C. § 5310.

We adhere to the well-established principle that “[statutory construction 

must begin with the language employed by Congress and the assumption that 

the ordinary meaning of that language accurately expresses the legislative 

purpose.” Park ‘n Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189, 194 

(1985); see American Tobacco Co. v. Patterson, 456 U.S. 63,68 (1982); 2A N. 

Singer, Sutherland’s Statutory Construction § 46.04 (4th ed. 1984). The operative language of § 110 is “construction work financed in whole or in part with 

assistance received under this chapter.” 42 U.S.C. § 5310. The narrow question 

is whether the use of CDBG or UDAG funds to pay for the land, fixtures, or 

services — but not for the construction work — associated with a particular 

project means that the construction work is “financed in whole or in part with” 

such funds within the meaning of the Act. We think the language used in § 110 

indicates that it is not.

Construction work that is part of a project receiving federal funds to pay for 

non-construction activities of the project is, of course, benefited indirectly by 

such funds because the federal funds reduce the total amount of nonfederal 

funds needed to finance the project. Nevertheless, the construction work itself 

is not financed with the federal funds that are used to pay for the project’s other 

activities. The ordinary meaning of the verb, “finance,” is “to raise or provide 

funds or capital for” or “to furnish with necessary funds.” W ebster’s Ninth New

Collegiate Dictionary 463 (1986). Because the funds used to finance the 

construction work are nonfederal, the only way to conclude that the statute 

applies is, in effect, to substitute “construction project” for “construction 

work.” Such a construction, however, conflicts with both the statutory language and its history.

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The language of § 110, requiring the payment of Davis-Bacon wages when 

“construction work” is financed with federal funds,3 contrasts sharply with the 

broader, project-oriented approach of several other federal statutes. For example, the labor standards section of the Public Works and Economic Development Act of 1965 provides that “[a]ll laborers and mechanics employed by 

contractors or subcontractors on projects assisted by the Secretary under this 

chapter shall be paid [Davis-Bacon] wages.” 42 U.S.C. § 3222 (emphasis 

added). Similarly, a 1974 amendment to the United States Housing Act of 1937 

states that “[a]ll laborers and mechanics employed by contractors or subcontractors in housing or development activities assisted under this section shall be 

paid [Davis-Bacon] wages.” 42 U.S.C. § 1440(g) (emphasis added).

The latter provision is particularly significant because it was enacted as part 

of the Housing and Community Development Act of 1974, see Pub. L. No. 93- 

383, § 802(g), 88 Stat. 633,724, the same Act that contains the provision under 

consideration here. See id. § 110, 88 Stat. at 649. Sections 110 and 802(g) of 

the Act are identical in all material respects except that the former is triggered 

by federal funding of “construction work” and the latter by federal assistance to 

“housing or development activities.” By its terms, § 802(g) requires more 

expansive Davis-Bacon coverage than § 110. Thus, the argument that § 110 

requires the payment of Davis-Bacon wages whenever any activity associated 

with a particular project (such as the acquisition of land, fixtures, or architectural and engineering services) is financed with federal funds, even though the 

project’s construction work is not, negates the distinction between the effect of 

the two provisions, in contravention of the clear and unambiguous language of 

the Act.

The conclusion that § 110 requires payment of Davis-Bacon wages only 

when construction work is financed with federal funds is also suggested by the 

history of the Act. The version of the Act considered initially by the Senate 

would have required the payment of prevailing wages to “[a]ll laborers and 

mechanics employed by contractors and subcontractors in the performance of 

work on any construction project financed in whole or in part with funds

received under this chapter.” S. 3066, 93d Cong., 2d Sess. 314 (1974) (emphasis added). A “construction project” necessarily encompasses all activities 

needed in order to undertake and complete the project, most notably, the 

purchase of land, equipment, and raw materials, as well as actual construction. 

Thus, under the Senate bill, federal funding of any activity associated with a 

construction project would constitute partial federal financing of the project 

and trigger the requirement that prevailing wages be paid to all laborers and 

mechanics employed by contractors and subcontractors in the performance of 

work on the project. The report accompanying the Senate bill acknowledges 

the breadth of the Senate proposal, stating that the Senate bill would require the 

payment of prevailing wages “with respect to all multifamily housing projects

3 Accord 49 U.S.C. app. § 1609(a) (requiring the paym ent of Davis-Bacon wages to “laborers and mechanics em ployed by contractors or subcontractors in the performance o f construction work financed with the 

assistance o f loans or grants under this chapter”) (em phasis added).

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.. . , health facilities, and land development projects.” S. Rep. No. 693, 93d 

Cong., 2d Sess. 36 (1974).

The House bill, by contrast, would have required payment of prevailing 

wages to laborers and mechanics employed by contractors and subcontractors 

only “in the performance of construction work financed in whole or in p art

with assistance received under this chapter.” H.R. 15361, 93d Cong., 2d Sess. 

110 (1974) (emphasis added). As discussed, construction work is merely one 

element of a construction project. The specific inquiry under the House provision, then, is whether federal funds are used to finance construction work. 

Whether federal funds are used to finance any other activity associated with the 

construction project is immaterial. The House Report reiterates the specific 

focus of the House provision, stating that the House bill would require the 

payment of prevailing wages to workers employed on “construction funded 

under this title.” H.R. Rep. No. 1114, 93d Cong., 2d Sess. 55 (1974). Thus, 

whereas the Senate bill would have required payment of prevailing wages 

whenever federal funds were used to finance any part of a construction project 

(including construction work), the House bill would have required the payment 

of such wages only when the activity financed with federal funds was construction work.

With minor changes not relevant here, the Conference Committee adopted 

the labor standards provision of the House bill. As the Conference Report 

states, “[t]he conference report contains the House provision with a technical 

amendment.” H.R. Conf. Rep. No. 1279, 93d Cong., 2d Sess. 133 (1974). As 

finally enacted, § 110 applied only to “construction work financed in whole or 

in part with grants received under this title.”

We recognize that neither the Conference Report nor the floor debates 

contain an explanation of the conference decision to adopt the “construction 

work” language of the House bill instead of the “project” approach of the 

Senate bill.4 This lack of legislative discussion hardly yields a conclusion that

4 The Conference Report explains:

The Senate bill applied the prevailing wage requirements of the Davis-Bacon Act to residential 

construction involving 12 or more units and to rehabilitation involving 8 or more units The 

House amendment applied such requirements only to the construction of 8 or more units without 

reference to rehabilitation. The conference report contains the House provision with a technical 

amendment making it clear that the requirement applies only to rehabilitation, since construction 

of residential structures is not a permissible use of community development funds.

H.R. Conf. Rep. No. 1279, 93d Cong., 2d Sess. 133 (1974). Contrary to Labor’s suggestion, this discussion 

does not necessarily reveal the exclusive reason for C ongress’ adoption o f the House provision. The selection 

of the House provision was consistent with Congress* desire to carry forward the Davis-Bacon coverage o f 

the Housing Act o f 1949. Under the 1949 Act, Davis- Bacon wage requirements applied only to the 

“undertakings and activities of a local public agency in an urban renewal area.” 42 U.S.C. § 1460 (1976). 

Thus, all privately undertaken construction and activity, even though part o f a project receiving federal 

assistance, was exem pt from Davis-Bacon requirements. Section 105 of the 1974 Act, delineating the 

activities eligible for CDBG funding, specifically includes “payment of the cost o f completing a project 

funded under title I o f the Housing Act of 1949 " 42 U.S.C. § 5305(a)(10). By choosing the labor standards 

provision of the House bill. Congress ensured that the use of CDBG funds to complete outstanding projects 

would not result in expanding Davis-Bacon coverage to the privately funded construction work associated 

with such projects because such work is not financed in whole or in part with federal funds. The Senate bill,

Continued

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Congress intended Davis-Bacon coverage to be less restrictive than the choice 

of the House provision would suggest. Such an anomalous conclusion would 

ignore the best evidence of congressional intent — the language adopted. That 

language is clear, and evinces an unambiguous intent to require less DavisBacon coverage than the Senate bill.5

Because there have been numerous, inconsistent interpretations of § 110 to 

various activities in the past, we pause to consider several applications of § 110 

in light of our interpretation of the Act. For example, HUD has previously 

agreed with Labor that the use of CDBG or UDAG funds to purchase equipment may require the payment of prevailing wages with respect to the installation of the equipment when such installation involves “more than an incidental 

amount” of construction work. See Letter to John S. Selig, Esq., Mitchell, 

Williams, Selig, Jackson & Turner, from Justin L. Logsdon, Assistant to the 

Secretary for Labor Relations, Department of Housing and Urban Development (Dec. 1, 1986) (advising that Davis-Bacon requirements do not apply to 

the installation of federally funded equipment where the cost of installation is 

only 1.5 percent of the cost of the equipment). Assuming that installation of 

equipment constitutes or requires “construction work,”6 we believe that § 110 

does not require the payment of prevailing wages with respect to installation 

where federal funds are provided exclusively for the purchase of equipment 

and not for its installation. Thus, to the extent that Labor and HUD have 

adopted a contrary interpretation of § 110, they have misconstrued the Act.

4 (. . . continued)

by contrast, would have required the paym ent of prevailing wages for construction work exempt under the 

1949 Act. This is so because construction work is part of a construction project, and the Senate bill would 

have required the payment o f Davis-Bacon wages whenever “any construction project is financed in whole or 

in part with [federal] funds.”

M oreover, we wish to stress that Congress need not express an intent that clear language means what it 

says. Indeed, legislative history tending to contradict the plain meaning o f a statute is often discounted. Here, 

where we have no expression in the legislative history o f a congressional intent contradicting the plain 

language o f § 110, the statutory language necessarily controls.

5 This conclusion is consistent with the subsequent amendments to the Act authorizing the Urban Development Action G rant program See 42 U.S.C. § 5318 The UDAG program authorizes grants to cities and urban 

areas experiencing severe economic distress to help stim ulate economic development activity. Id. § 5318(a). 

Under the program , the Secretary (1) m ust determine that there is a strong probability that without the grant, 

the nonfederal investm ent in the project would not be m ade, id. § 5318(j), and (2) “assure that the amount of 

the grant is the least necessary to m ake the project feasible.” Id. § 5318(k). Thus, the UDAG program is 

designed to encourage and leverage nonfederal investment in depressed urban areas. In fact, the average 

UDAG project has involved six nonfederal dollars for every dollar o f UDAG funds. Significantly, Congress 

did not change the “construction work” focus of Section 110 in adding the UDAG program to the Act. This 

means that if UDAG funds are used exclusively to finance the non-construction work activities of a particular 

project (as they often are), Davis-Bacon wages need not be paid. A conclusion that Section 110 required the 

paym ent o f prevailing w ages under these circumstances would substantially impair the intended effect o f the 

program. Because the program is designed to minimize the amount o f federal funds necessary to cause a 

project to go forward, a requirement that Davis-Bacon w ages be paid with respect to the entire project could 

significantly increase (conceivably in excess of the total federal investment) the amount of nonfederal funds 

needed for the project. Given the language o f Section 110 and the general, although admittedly not wholly 

consistent, practice o f HUD to require the payment of Davis-Bacon wages only when federal funds are used 

to finance construction work, it is reasonable to conclude that Congress added the UDAG program with this 

understanding in mind. A construction of Section 110 expanding its traditional scope, therefore, could 

significantly underm ine the program in terms of its cost and effect.

6 If in a given case installation does not entail construction work, then § 110 is inapplicable in any event.

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Similarly, we agree with Labor’s position that “UDAG or CDBG financing 

of certain ‘soft costs’ would not, in and of itself, trigger Davis-Bacon coverage 

for building construction when there was no direct UDAG or CDBG financing 

of the actual construction.” Labor Opinion at 2. Labor gave as examples of 

such “soft costs” legal services and tenant allowances for purchasing furniture 

or obtaining business licenses. See id. In short, we do not believe that § 110 

requires payment of Davis-Bacon wages when federal funds are used to pay for 

any activity other than construction work. So long as no part of the cost of 

construction work is paid for with UDAG or CDBG funds, § 110 does not apply.

Conclusion

Given the language of § 110 and Congress’ contemporaneous rejection of 

alternative language that expressly would have required the payment of DavisBacon wages for all work associated with any “construction project,” not just 

“construction work,” we conclude that the Act requires the payment of prevailing wages only when federal funds are used to pay for construction work. The 

mere use of federal funds to acquire the land upon which that work is to take 

place does not constitute federal financing of the construction work.

Similarly, the use of federal funds either to purchase materials, equipment, 

machinery, or other fixtures installed during the construction work or to pay for 

the architectural and engineering services rendered prior to that work, does not 

trigger Davis-Bacon coverage when no federal funds are used to pay for the 

construction work itself.

C h a r l e s J. C o o p e r

Assistant Attorney General

Office o f Legal Counsel

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