The Davis-Bacon Act: Suspension
Released: 2006-02-08T00:00:00

The Davis-Bacon Act

The Davis-Bacon Act of 1931, as amended, requires, inter alia , that construction contractsentered into by the federal government specify minimum wages to be paid to the various classes oflaborers employed under those contracts. (2) Minimum wages are defined as those determined by the Secretaryof Labor (a) to be prevailing (b) in the locality of the project (c) for similar crafts and skills (d) oncomparable construction work. The concept of wage was expanded in 1964 to include a fringebenefit component. The act has a coverage threshold of $2,000 and above.

In addition to direct federal construction contracts, the Davis-Bacon prevailing wage"principle" has been written into a series of federal program statutes. The act is supplemented bythe 1934 Copeland "anti-kickback" Act (which requires weekly reporting of wages actually paid andan affirmation from employers that any deductions from wages due to employees have been proper),and by federal overtime pay and health and safety standards statues. Further, some states haveenacted "little Davis-Bacon" Acts within their respective jurisdictions.

The issues surrounding the act have changed little through the years. Does the act protectworkers, help stabilize the construction industry, and serve the federal contracting community? Oris it anti-competitive, preventing flexible workforce utilization? Has it been administeredeffectively, and if not, can it be administered in an equitable fashion? Is there sufficient objectiveinformation concerning the act to allow for fair assessment of the statute and its impact?

The Davis-Bacon Act is a federal statute . It does not have any direct impact uponnon-federal construction or wage rates. In so far as it ensures that persons employed on federalcontract work receive not less than the prevailing wage, the act could have a ripple effect uponnon-federal construction and/or other work. (3)

Is the Davis-Bacon wage a union wage? And, does the act mandate that union wages be paidon federal contract construction projects? It may be a union wage -- where the union rate isdetermined to be the locally prevailing wage . But it need not be the union rate. It depends upon therate that the Department of Labor (DOL) finds to be prevailing in an area. If the union rate prevails,then the union rate becomes the Davis-Bacon wage. If another rate (a non-union wage) prevails, thenthat rate becomes the Davis-Bacon rate. A great deal depends upon the processes and proceduresof the Department of Labor which administers the act.

Does the Davis-Bacon Act inflate the cost of federal contracts? Theoretically, it should not. The Department of Labor reviews the conditions under which public (federal) construction occurs,determines the "locally" prevailing wage, and then applies that wage to federal projects. But theDavis-Bacon rate need not be the actual rate paid, since the market may require a higher rate in orderto recruit employees. Thus, the Davis-Bacon wage may be a floor and not necessarily the wage paid.

What is meant by locality ? Traditionally, the department observes the wage rates paid onseveral classes of construction (i.e., residential, public buildings, highways, and heavy construction)for each jurisdiction (normally a county unit) across the United States. It is usually upon that unitthat locality is based.

Perhaps the most frequently asked question concerning the Davis-Bacon Act is the following: How much money could we save (the taxpayer and the government contractor) if the Davis-BaconAct were repealed or modified to narrow its scope? Many have claimed to have an answer, but thereis little empirical evidence available. The short answer would seem to be that no one really knows. Does the Davis-Bacon Act, in fact, save money for the federal construction consumer? It may -- butthat question is similarly open.

After nearly three-quarters of a century, why is the literature on Davis-Bacon of such dubiousvalue? First, given the number of projects covered by the act (and their diversity), it is nearlyimpossible for an independent scholar to review the act's administration and to assess its impact. Second, there is the availability of basic documentation. How much information has actually beenpreserved? Third, assuming that the data are available, securing such documentation (and access toadministrative personnel) may be problematic.

If one assumes that documentation exists, that the analyst is granted access to it, that all ofthe parties are cooperative, and that the means, financial and other, are available for such anundertaking, the analyst is left with a fourth complication. He or she is comparing something thatdid happen with something that in fact, for whatever reasons, did not happen. In the absence of aDavis-Bacon requirement, would the contract have gone to the same contractor? If so (or if not),would it have been managed in the same way? Did the act have any impact upon the wages actuallypaid or upon workforce utilization? Without Davis-Bacon, would different workers have beenemployed -- and would they have been paid different rates?

These same questions confront a public agency in its efforts to investigate Davis-Bacon'simpact. For a public agency, the task is no less massive than it would have been for a privatescholar. And, in the public sector, there may be other constraints. Simply put, how much fundingand staff time could (or should) be devoted to an investigation of the Davis-Bacon impact onconstruction that is already in place? What political or policy concerns may come into play?

One might like to be able to say, forthrightly, that a change in the statute could have apositive or a negative impact. However, the state of current exploratory research would probablybe insufficient to justify just an assertion. (4)

Davis-Bacon Suspended

Historically, it is not entirely clear why it was necessary for the Franklin RooseveltAdministration to have suspended the act. Only very limited documentation concerning thesuspension appears to be available. For the more recent Administrations (those of Richard Nixonand George W. H. Bush), it is also difficult to define precisely their rationales -- though the BushAdministration acted in response to particular events. The case of George W. Bush, of course, is stillunfolding. The materials, here, are presented as something of an historical sketch .

Franklin D. Roosevelt

As noted above, the original version of the Davis-Bacon Act (March 3, 1931), as in effectduring the Roosevelt Administration, included the provision that "in case of national emergency thePresident is authorized to suspend the provisions of this act."

By the early summer of 1934, with the enactment of various New Deal statutes, there wassome confusion as to which laws took priority where the wages of construction workers wereconcerned. In this instance, there appears to have been a conflict between the provisions of theDavis-Bacon Act and the National Industrial Recovery Act (NIRA) -- the latter, a very broad generalstatute designed to restructure the economy and which was subsequently found to be unconstitutional(1937). (5)

Acting upon the advice of the Secretary of Labor and the Administrator of Public Works,Roosevelt declared, simply: "I find that a national emergency exists," and, under date of June 5,1934, suspended the provisions of the Davis-Bacon Act for an indefinite period. He did not define"national emergency" in his proclamation of suspension beyond noting that concurrent operation ofthe two laws (Davis-Bacon and the NIRA) caused "administrative confusion and delay which couldbe avoided by suspension of the provisions of the Davis-Bacon Act." (6)

The impact of the suspension of 1934 seems not to have been immediately felt. Chester M.Wright, a former American Federation of Labor staffer and, at that time, a Washington journalist,observed: "The suspension order did not become publicly known for a week or ten days. Even thenit was necessary to go to the State Department for a copy." When the President's action did becomepublic, building trades unions protested, charging that the suspension was the "beginning of anational wage-cut campaign." (7)

On June 30, 1934, as quietly as it had been suspended (just 25 days earlier), the act wasrestored to full force, the President simply remarking of the suspension proclamation that "it appearsthat a revocation of the said proclamation would be in the public interest." (8) As in the case of the firstproclamation, the latter seems to have been little noticed, the first press account appearing on July4, 1934. Wright viewed the second proclamation as tantamount to an acknowledgment that thePresident had been "badly advised." (9) No other formal suspension of the act appears to have occurreduntil 1971.

Richard M. Nixon

During February 15-25, 1971, the AFL-CIO Executive Council (and associated groups) metat Bal Harbour, Florida. The Davis-Bacon Act was considered, indirectly and directly, in twocontexts. First, there was a demand that general revenue sharing legislation, then pending beforeCongress (and which the AFL-CIO opposed), provide, inter alia, for labor standards comparable tothose in the Davis-Bacon Act. Second, the 40th anniversary of the enactment of the Davis-Bacon Actwas at hand.

Setting the Stage. In a resolution dealing withrevenue sharing, the Council affirmed, "There is widespread agreement on the responsibility of thefederal government to provide financial aid to the state and local governments, particularly, in thistime of rapid social and economic change." However, the Council rejected the Administration'sapproach, urging in its place a diversified program of its own. The AFL-CIO resolution noted of thethen-current system for distribution of federal funds to local jurisdictions that it provided for bothlabor standards and civil rights standards -- and has "served the nation well." Then, turningspecifically to the Nixon Administration proposals, encompassed in the Baker-Betts bills, (10) the Council explained:

Under the 'general revenue sharing' proposal, the federalgovernment would dispense about $5 billion a year to the states on a no-strings basis -- withformulas that would require a pass-through to the local governments. (...) ... without specific andenforceable federal performance standards there is no assurance that federal civil rights guaranteesand fair labor practices will be applied to projects supported by no-strings federal grants. (11)

Although the AFL-CIO Council made no specific reference to Davis-Bacon, it was clear that it hadthat statute, among others, in mind.

In a separate statement, the Council took note that 1971 was the 40th anniversary of enactmentof the Davis-Bacon Act. "This principle of prevailing wages is essential," the Council stated, "toassure that work for the federal government is not based upon exploitation of workers. Without suchrequirement, bidding on federal contracts by unscrupulous employers could result in a competitiveundermining of fair wage and labor standards." And, the Council concluded: "The Davis-Bacon Actis as important today as it was 40 years ago. Its basic principle, as well as effective enforcement,must be maintained. The AFL-CIO will not settle for less." (12)

Davis-Bacon Suspended. With the dawning ofthe 1970s, President Nixon had become concerned about the wage-price structure of the constructionindustry. On January 18, 1971, he met with the tripartite Construction Industry CollectiveBargaining Commission at the White House to express his concerns. (13)

"The purpose of the meeting," Labor Secretary James Hodgson said, "was for the Presidentto urge action on the part of these leaders to do something about curbing the wage-price spiral inconstruction." Various options were discussed, including suspension of the Davis-Bacon Act (aproposal reportedly offered by Federal Reserve Chairman Arthur Burns). In closing, the Presidentset a 30-day deadline during which the industry (labor, management and representatives of the public-- with Under Secretary of Labor Lawrence Silberman and Commission Executive Secretary JohnT. Dunlop) should resolve the issues troubling the President. On February 8, the Building andConstruction Trades Department, AFL-CIO, met at Bal Harbour (just prior to the winter meeting ofthe AFL-CIO Executive Council) with the presidential deadline drawing near. (14)

At a February 17 presidential press conference (while the AFL-CIO Executive Council wasin session at Bal Harbour), the issue surfaced again. President Nixon was asked what action hewould take to hold down wages and prices in construction. He responded that Secretary Hodgsonwas then meeting with industry leaders and that he would await the Secretary's report. But, hepromised, "there will be action." And he noted: "The construction industry is a sick industry. It isa sick industry not because of the quality of construction in the United States -- it is the highestquality construction in the world -- but because it has had too rich a diet." He noted that constructionwage increases, then averaging 16% (while unemployment in construction was double the nationalaverage), were too high for the good of the general economy -- but he made no mention ofDavis-Bacon, per se . However, he did note that $14 billion of the federal budget, the next fiscalyear, would be devoted to construction. "Now, with this kind of financial interest in construction,"he suggested, "it is essential that the federal government use its power to the extent that it can tobring about more reasonable settlements within that industry" and to promote "... wage and pricestability." (15)

The AFL-CIO Executive Council meeting was marked by rumors and speculation. SecretaryHodgson moved between Washington and Bal Harbour while trade union representatives met withDunlop. (16) Discussionbetween Hodgson and AFL-CIO President George Meany on February 4 had been less thandefinitive but Meany expressed his hope that the parties "will come up with something." (17) Following conferenceswith the President, OMB Director George Shultz and others in Washington, Hodgson returned toFlorida for additional talks with Meany on February 19-20, 1971. Saturday evening (February 20),the Secretary and his staff returned to Washington.

In a statement on February 23, 1971, President Nixon announced a decision. "I am todaysuspending the provisions of the Davis-Bacon Act which requires contractors working on federalconstruction projects to pay certain prescribed wage rates to their workers," he declared.

In my judgment, the operation of this law at a time whenconstruction wages and prices are skyrocketing only gives federal endorsement and encouragementto severe inflationary pressures.

The action I have taken today is based on theprinciple that government programs which contribute to excessive wage and price increases mustbe modified or rescinded in periods of inflation. This was the principle I applied to industry in thecase of recent excessive increases in steel and oil prices. This is the principle I am applying toorganized labor in the construction emergency.

The period, in President Nixon's view, was marked by very high wages in construction. Were theDavis-Bacon Act to apply, those excessively high wages would have to be paid by federalconstruction contractors. He noted that the act had been adopted in 1931 during a period marked byvery different circumstances. In 1971, the act meant something else entirely. He affirmed: "Ibelieve ... that this preferential arrangement does not serve the interests of either the constructionindustry or the American public at a time when wages are under severe upward pressures." Nixoncontinued:

The proclamation [4031] I am issuing today alsosuspends the wage determination provision of more than 50 other federal laws relating to federallyinvolved construction which incorporate the Davis-Bacon Act. I am calling upon states and othergovernmental bodies with similar statutes to take similar action . (Italicsadded.)

Suspension of Davis-Bacon may have been less an attack upon the act, per se, than an effortto twist the arms of labor and management and to encourage, from the President's perspective, amore responsible wage/price policy. He closed his statement of suspension not with an objectionto Davis-Bacon but, rather, with a word of advice -- presumably both to industry and to labor:

I have suspended the Davis-Bacon Act because ofemergency conditions in the construction industry. The purposes of the Davis-Bacon Act can onceagain be realized when construction contractors and labor unions work out solutions to the problemswhich have created the emergency.

In the final analysis, those who are directlyinvolved in the construction industry must assume the leadership in finding answers to thesecomplex problems.

Then, Mr. Nixon added, "Construction contractors and labor leaders will have the full cooperationof this Administration as they strive to carry out this crucial responsibility." (18)

The Davis-Bacon Act Reinstated. SecretaryHodgson explained the action of the President in suspending the Davis-Bacon Act -- the suspensionoccurring several hours after the adjournment of the AFL-CIO Council meeting in Florida. TheSecretary noted with respect to plans for wage and price control,

In Miami, I met with a courteous reception and sensedgreat concern on the part of the labor people. But they could not offer assurances on a voluntaryplan, and all I could report to the President was that they would discuss further a governmentimposed plan. In this situation, the President really had only two options: to impose wage controlsor to take some steps that involved less government interjection into the bargaining process. Hechose the latter, and the course he took was to suspend relevant provisions of the Davis-BaconAct.

Hodgson continued:

You may wonder how effective this action will be. Webelieve that it will be quite effective. It has long been [thought] that these provisions of the act[,]that prescribe that wages in federal construction must be based on those prevailing in the area[,] haveoften operated to support labor costs at an artificially high level and to give an upward thrust to thoserates, not only in contract construction but throughout theindustry.

Then, the Secretary concluded on an optimistic note, following the lead of President Nixon: "Webelieve suspension should help produce more reasonable settlements throughout the industry andrestore a better balance to the bargaining process." (19) (Italics added.)

Organized labor was less enthusiastic. George Meany branded the suspension as "punitiveagainst workers without real effect on halting inflation" and added that it presents "an open invitationto unscrupulous employers to exploit workers by competitive undermining of fair wage and laborstandards." Iron Workers President John H. Lyons suggested that the suspension really constituteda windfall for open shop contractors since the non-union firms could bid competitively upon thebasis of union wage scales and then, in the absence of Davis-Bacon sanctions, pay whatever wagesthey might wish. (20) Meanwhile, Labor Reporter John Herling observed that the President's action "has certainly broughtcheer to the U.S. Chamber of Commerce. For decades," he pointed out, the Chamber "has battledto remove Davis-Bacon and the related Walsh-Healey Act from the Statute Books." (21)

Of greater importance, however, both in the context of general revenue sharing and thedispute over Davis-Bacon, was the interrelationship between state and federal laws dealing with theprevailing wage issue. Some states had taken action to provide prevailing wage protection in publicconstruction several decades before enactment of the Davis-Bacon Act -- and many states still havesuch statutes. (22) By theearly 1970s, only about nine states had failed to enact "little Davis-Bacon" Acts. (23)

In suspending the Davis-Bacon Act provisions, President Nixon had called upon the "statesand other governmental bodies with similar statutes to take similar action." (24) Normally, in the absenceof federal legislation, applicable state statutes would come into play -- even, seemingly, on projectsfunded jointly by federal and state funds or with local revenues. In the wake of the Nixon suspensionof Davis-Bacon, New York State Commission of Labor, Louis Levine, affirmed: " On apublicly-funded construction project, financially assisted by the federal government, the state lawrequiring prevailing wages remains in effect as mandated by the state legislature ." (Emphasis inthe original.) Levine added: "Therefore, I want to assure the construction industry -- labor andmanagement -- that wherever federally-aided state projects are involved the wage structure willcontinue to be based on the state prevailing wage rate law." (25)

Opinion in Ohio seems, generally, to have paralleled that from New York state. During aspeech at the National Press Club, Ohio's Governor John Gilligan termed the suspension"misdirected, ineffective, carelessly drafted without any full consideration of what is really meant." Gilligan continued:

Let me suggest some of the realities thatunderlie that. We have a 'little Davis-Bacon' act in Ohio on our law books. We guarantee thepayment of prevailing area wages in the construction industry. We had the question ariseimmediately after Mr. Nixon's statement that under emergency powers -- still not defined so far asI know -- he suspended that federal law.

We have the proposition presented to us. Wehad a dozen road contracts coming up -- some of them joint federal-state road contracts with federalfunding in them, amounting to several millions of dollars. What were we to do? Had Mr. Nixon setaside our state law as well? Or was it to suspend it? And then what? And then throw the contractsopen to bidding by any contractor who came down the pike, who would hire labor at any price? What then would be the floor? $1.60 an hour, the federal minimum -- or what wouldapply?

The whole construction industry would havebeen thrown into total chaos if that had been done. We informed the prospective bidders by telegramthat they would be expected to comply with that section of the state law. All of them came and bid. All of the bids were awarded. They came in under the estimates of our engineering department. They were awarded to union contractors who had union contracts in full force and effect. And weare not going to suspend the provisions of that law in the state of Ohio. (26)

Meanwhile, Peter G. Nash, U.S. Solicitor of the Department of Labor, announced that "thePresident's action in suspending the Davis-Bacon Act renders inapplicable any state 'littleDavis-Bacon law' in all federally assisted construction where one of the federal requirements wasthat the federal Davis-Bacon Act would apply," affirming a federal preemptive power over the states. "Thus a new form of federal-state conflict is under way," suggested reporter Herling. "At a timewhen revenue-sharing has become the guideline for the Nixon Administration, new restrictions maybe implanted on state and local decision-making." (27)

At the urging of the Administration, leaders of the building and construction trades and ofindustry, with public and government representatives, met under the guidance of John Dunlop in anattempt to achieve some solution to the problems in the construction industry. The suspension ofthe Davis-Bacon Act, some suggested, had not been entirely successful. Indeed, it may havesucceeded primarily in augmenting the irritation of trade union leaders toward the Administration. But it allowed Assistant Secretary of Labor Arthur Fletcher (a former city councilman from Pasco,Washington) an opportunity to predict, before a conference of the Associated Builders andContractors -- generally an anti-Davis-Bacon industry group -- that "the era of union domination ofthe employment pattern in the construction industry is over." Further, Fletcher reportedly denouncedthe act as both inflationary and discriminatory. (28)

Suspending the Davis-Bacon Act was more complicated than it may have appeared at first. "The fact is," Herling reported, "that the Davis-Bacon suspension had not been operative in themonth since it was ordered.... But in that time," he added, "the Administration was made tocomprehend the legal quagmire into which it might sink as a result of the suspension." Whilebuilding trades attorneys began to explore the options open to labor, the tangled web ofinterapplicability of federal and state statutes (the 'little Davis-Bacon' laws) began to emerge. (29)

On March 29, 1971, President Nixon issued another Executive Order, "establishing acooperative mechanism for the stabilization of wages and prices in the construction industry." Themechanism was the tripartite Construction Industry Stabilization Committee (30) -- later to become a partof the Cost of Living Council -- again presided over by John Dunlop. Mr. Nixon pointed out that"contractors and labor leaders have indicated their willingness to cooperate with the Government infair measures to achieve greater wage and price stability." Then: "I am therefore today reinstatingthe Davis-Bacon Act, which I suspended on February 23, 1971, and I am substituting a system ofconstraints to which I expect all parties will subscribe." (31) Reaction to restoration was mixed. Generally, attention seemsto have shifted to the broader question of wage and price restraints/controls.

Some Implications of the Nixon Suspension. TheNixon suspension of the Davis-Bacon Act, together with its subsequent reinstatement, had severalimplications. But, perhaps, these may not have been entirely expected.

In 1931, Davis-Bacon had been enacted as an emergency measure at the urging of the HerbertHoover Administration. It was subsequently amended in 1935 and thereafter (with some minortinkering) remained a generally accepted (although not universally accepted) part of the federal laborscene. Then, suddenly, the very existence of the statute was called into question. Labor, of course,reacted, but so did critics of Davis-Bacon. At least until the mid-1990s, repeal of Davis-Bacon hadbecome a cause cÃ©lÃ¨bre for each side of the dispute. (32)

Given the interconnectedness of state and federal statutes, suspension of Davis-Bacon wasmore complicated than it might have appeared. President Nixon, though he called upon the statesto act similarly, could not enforce such a commitment from the states -- nor did the President seemto imply that he had that authority. ("I am calling upon states and other governmental bodies withsimilar statutes to take similar action.") (33) The pronouncement of Solicitor Nash, cited above, would seemto have dubious value either as an interpretation of law -- or, perhaps, as policy.

In retrospect, it appears the Nixon suspension of the act was never intended to be of longduration. It was, it would seem, to have been an exercise in arm-twisting, aiming to make the severalparties (but, in effect, organized labor) take seriously the Administration's wage/price control policy. If so, it did not appear to have served this purpose well, but rather it tended to create confusionwithin the industry. Bidding would move forward. Projects were underway. What impact would(or could) the suspension of the act have in that environment -- in what, it turned out, was asuspension of just over 30 days.

Finally, neither the Nixon Administration nor the Roosevelt Administration before it hadformally defined what constituted a national emergency.

George H. W. Bush

President Bush faced challenges leading up to the 1992 election. Criticism from his ownparty included Representative Newt Gingrich (R-GA) reportedly calling the current situation"unacceptable" and urging that "[t]he president must define for his team which vision and systemhe needs to govern effectively and win decisively." (34)

Suspension of the Davis-Bacon Act appears to have been under consideration by the BushAdministration at least through the early months of 1992. Senior officials suggested that a numberof items were on the presidential agenda including "suspending the Davis-Bacon Act." (35) The Washington Times ,editorially, confirmed the notion on March 15. (36) And, again on March 19, the Washington Times reported thatthe President would likely "rely on proposals prepared by Richard Darman," OMB director, one ofwhich would be to "lift the Davis-Bacon Act." (37) On March 20, the Washington Post reported that among otheritems that the President was contemplating would be "limiting the Davis-Bacon wage law." (38) But nothing occurred justthen.

The President Acts on Davis-Bacon. The issueof Davis-Bacon continued to appear through the next several months. On April 21, 1992, WhiteHouse Deputy Press Secretary Judy Smith confirmed that suspension of Davis-Bacon was still underconsideration but that there was "no closure on it" yet. (39) A day later, the Daily Labor Report stated that the President"will not seek to suspend the Davis-Bacon Act by declaring an economic emergency, believing thatit would establish a precedent he does not want to set." (40) But then, on June 5, it was reported that the White House was"again giving 'serious consideration' to ordering a nationwide suspension" of the act and, accordingto "one White House source," the decision to suspend the act is now "more likely than not." (41)

Critics of Davis-Bacon continued to press the President to take action. As the summerpassed, however, the Davis-Bacon issue seemed to disappear from public view. It is also possiblethat no identifiable emergency had as yet occurred. Behind the scenes, the issue seems still to havebeen under consideration, for on October 7, 1992, OMB circulated a memorandum to agency headsseeking comment on a proposed suspension of the act. The Daily Labor Report stated,"Consideration of the suspension appeared to be on a fast track as comments were requested by noonof the same day." (42) On October 9, 1992, Congress adjourned.

During late August, Hurricane Andrew struck Florida and Louisiana. On September 12,1992, Hurricane Iniki struck Hawaii. Taking note of the destruction caused by the two storms,President Bush, on October 14, 1992, declared the two areas "a 'national emergency' within themeaning of Section 6 of the Davis-Bacon Act." He stated in a Presidential Proclamation (No. 6491):

... I do hereby suspend, until otherwise provided, theprovisions of any Executive order, proclamation, rule, regulation, or other directive providing forthe payment of wages, which provisions are dependent upon determinations by the Secretary ofLabor under the Davis-Bacon Act;.... (43)

The Proclamation went on to discuss the relative merits of the suspension in terms of the generalreconstruction in the three areas to which it applied: Florida, Louisiana, and Hawaii. (44)

Suspension of Davis-Bacon Draws Fire, Praise. The action by President Bush raised a number of questions. First, what constitutes a nationalemergency for Davis-Bacon purposes? The answer may not have been beyond dispute. Second, ifthe concept of national emergency under Davis-Bacon can be made to include such disasters ashurricanes (and, perhaps, earthquakes, floods, riots, etc.), did the act then empower the President toenter into a selective suspension of the act? Third, is the presidential suspension authority limitedto the Davis-Bacon Act, per se , or could it be extended to the various program statutes into whichthe Davis-Bacon "principle" has been incorporated? Fourth, in areas where there are state and localprevailing wage requirements, how might these be affected, if at all, by a presidential suspension ofDavis-Bacon? Fifth, what was the impact likely to be upon the entire contracting process in theseveral affected areas?

Some questioned the President's authority "to selectively suspend" the act. "It is clear thatCongress delegated to the President authority to suspend application of the Davis-Bacon Act in anational emergency," stated Robert Georgine, president of the AFL-CIO Building and ConstructionTrades Department. "But it is equally clear that Congress did not authorize the president to pick andchoose where application of the act would be suspended." (45) Others "questioned thewisdom of sending low-wage, low-skilled workers to the hurricane-damaged areas where skilled andexperienced building tradesmen are needed." (46) Again, Georgine called it "a callous election-year move" and"nothing more than a baldly calculated political ploy designed to curry favor with those who opposefederal labor standards." (47)

Within a two-week period, the President signed a second order -- Executive Order No. 12818-- which dealt, in part, with the concept of project labor agreements . Taken together, the two wereof critical importance, some within the trade union movement asserted. (48)

Candice Johnson, writing in the AFL-CIO News, opined that "President Bush, in a desperateattempt to win business support in electoral-rich Florida and Louisiana, has suspended Davis-Baconsafeguards for hurricane relief efforts." (49) Frank Swoboda, columnist for the Washington Post, was moredirect -- discussing the two putatively anti-union directives. Swoboda cited Steven Westra, presidentof the Associated Builders and Contractors (ABC). Westra called Bush's action "courageous" andsaid "the president 'deserves our votes and our full support.'" With this, Swoboda said, the ABC, "atrade group representing 16,000 nonunion contractors, immediately announced its support for Bushin the November 3 elections." (50)

The Coalition to Reform the Davis-Bacon Act (which included the ABC) wrote to expressits thanks to the President. "We appreciate that your action will enable federal assistance to gofarther in rebuilding hurricane devastated communities and create thousands of new jobs...." TheCoalition spoke of "giving residents a chance to assist in rebuilding their own communities" and of"expanded opportunities for contractors to hire local workers." (51) The National UtilityContractor headlined: "President Bush Grants Davis-Bacon Reprieve for Hurricane Stricken Areas." The President's action, it suggested, "could create as many as 11,000 new construction jobs in thethree states." (52) AndDonald Lambro, reporter for Human Events , seemed to have felt that a suspension was appropriate. Then, looking toward the future, he suggested: "By suspending it everywhere, [the newly electedPresident] Clinton could help combat high youth unemployment, give federal taxpayers more fortheir tax dollars and help open up economic opportunities for inner-city minorities." (53)

President Clinton and Restoration of Davis-Bacon

On February 1, 1993, President William Clinton issued Executive Order No. 12836, revokingExecutive Order No. 12818, and restoring the use of project labor agreements in public (federal)construction. It provided, inter alia, that the "heads of executive agencies shall promptly revoke anyorders, rules, or regulations" impeding such project labor agreements. (54) The Wall Street Journalreported that Mr. Clinton has "pleased his political supporters in organized labor" by revoking theprohibition on project labor agreements. But it continued: "The so-called project-agreement orderwas issued in the heat of the presidential campaign by George W. Bush last October 23 after theAssociated Builders and Contractors, a trade group for 16,000 nonunion construction companies hadthreatened not to endorse his bid for re-election." (55)

On March 6, Clinton issued Proclamation No. 6534, providing that the Bush suspension bewithdrawn and that the Davis-Bacon Act be fully restored. (56) "Within 15 days,according to Clinton's proclamation, Davis-Bacon's requirements will be back in force in the affectedareas for all direct federal construction and for federally-assisted construction." (57)

Suspension Under George W. Bush

On August 29, 2005, Florida and the Gulf Coast were hit by Hurricane Katrina. The resultwas one of the greatest natural disasters in the history of the United States. Gradually, the impactof the hurricane was assessed. Diverse public and private funding was made available to the areasaffected, while thousands of people were displaced from their homes, often to other states.

Reaction from President Bush

"Year after year," observed Representative George Miller, ranking Democrat on the HouseCommittee on Education and the Workforce, "Republicans have tried to erase this law [theDavis-Bacon Act] ... But they do not have the votes in Congress to do it." (58) The hurricane, however,may have made a difference, for the Washington Post headlined, in an issue of September 10, 2005, "In the Floods, Parties' Agendas Surface." (59)

There had been large pockets of poverty in the New Orleans area. When the announcementwas made to vacate the city as the storm approached, the poor apparently had few resources uponwhich to rely. Further, a lack of transportation may have been critical and, perhaps as important, thelack of a destination. After the storm passed, many poor remained amid the ruins of a once thrivingcity, still without resources, but now without homes or jobs.

It was reported that on Wednesday, September 7, when Budget Director Joshua Boltenbriefed House Republicans on the President's supplemental spending request, "conservativelawmakers urged him to lift the wage rules" tied to Davis-Bacon. (60) That same day,Representatives Tom Feeney, Jeff Flake, and Marilyn Musgrave organized a letter to the President,urging him to use his presidential power to waive Davis-Bacon requirements.

Temporary suspension of Davis-Bacon will help avoidcostly delays that impede clean-up and reconstruction efforts along the Gulf Coast. Time is of theessence and any action that can be taken to expedite this process need [sic] to be,' statedFeeney.

Feeney went on to state general arguments against Davis-Bacon and concluded that the act oftenresults in "driving up costs" of construction. (61)

In the letter to the President, signed by 35 Members of the House, the concept of a "nationalemergency" was affirmed. It was also stated that compliance with the wage processes of theDavis-Bacon Act could delay reconstruction ("... often a delay of two weeks....") and that the act's"regulations effectively discriminate against contractor employment of non-union and lower-skilledworkers" and "can even raise total construction costs by up to 38%." The letter reviewed the pasthistory of Davis-Bacon suspensions and closed, "Faced with the massive rebuilding challengesahead, we respectfully urge you to make a presidential proclamation to suspend Davis-Bacon untilour country is once again whole." (62)

On September 8, 2005, President Bush suspended the Davis-Bacon Act as it relates tospecific segments of the country (i.e., to portions of Florida, Alabama, Mississippi, andLouisiana). (63) Hespecified both the act and "the provisions of all other acts providing for the payment of wages, whichprovisions are dependent upon determinations by the Secretary of Labor" under the Davis-Baconrules. The suspension would continue "until otherwise provided." (64)

Reaction to the Promulgation

Representative Charlie Norwood praised the President for his "quick action to strip awayunnecessary bureaucracy that may hamper our ability to recover...." Davis-Bacon rules "are onerousand drive up the cost of any project to which they are applied...." The nation, he stated, "can't affordthat kind of inefficiency, red tape, and inflated costs when we have an entire region to rebuild,largely at taxpayer expense." (65) The Daily Labor Report , quoting the President, suggested thatsuspension "will result in greater assistance to these devastated communities and will permit theemployment of thousands of additional individuals...." (66) Or, as Representative Feeney stated: "Lots of people inLouisiana are willing to go to work tomorrow, and the market will set the wage...." (67)

Organized labor opined that the President's order "would allow contractors to paysubstandard wages to construction workers in the affected areas." John Sweeney, AFL-CIOpresident, explained: "Employers are all to eager to exploit workers. This is no time to make thateasier." Sweeney stated: "Taking advantage of a national tragedy to get rid of a protection forworkers that corporate backers of the White House have long wanted to remove is nothing less thanprofiteering." Edward Sullivan, president of the Building and Constructions Trades Department,likened the effect to "legalized looting." (68) The New York Times editorialized, "By any standard of humandecency, condemning many already poor and now bereft people to sub-par wages -- thusperpetuating their poverty -- is unacceptable." (69)

Legislation Introduced

Somewhat anticipating the President's action, Representative Flake introduced the "Cleanupand Reconstruction Enhancement Act (CARE Act)" on September 7, 2005. The Flake bill( H.R. 3684 ) would, whenever a "major disaster" has been proclaimed under the StaffordAct, automatically suspend the Davis-Bacon Act for one year in the area of concern. A companionbill ( S. 1817 ) was subsequently introduced by Senator Jim DeMint (R-SC).

In the wake of the President's action, several bills were introduced that would have had theeffect of overturning the President's Davis-Bacon proclamation: H.R. 3763 (GeorgeMiller), H.R. 3834 (Pallone), and S. 1739 (Kennedy). (70) Senator Barbara Boxerintroduced a two-pronged bill ( S. 1763 ), first, to give employment preference toworkers who have been displaced by Hurricane Katrina; and second, to restore the impact of theDavis-Bacon Act in the areas in which it had been suspended.

In addition to legislation dealing specifically with the Davis-Bacon Act, two bills seemed tochallenge Administration policy in that regard. Representative Miller introduced H.Res. 467 : a bill "[r]equesting that the President transmit to the House of Representatives information inthis possession relating to contracts for services or construction related to Hurricane Katrina recoverythat relate to wages and benefits to be paid to workers." The bill was referred to the Committee onEducation and the Workforce -- where, ultimately, it was rejected by a vote of 25 to 20. (71) A separate measure, butof similar content ( H.Res. 488 ), had been introduced by Representative SteveLaTourette (R-OH) and had been forwarded to the Committee on Transportation and Infrastructurechaired by Representative Don Young (R-AK). (72) Finally, H.J.Res. 69 was introduced byRepresentative Miller, the impact of which would have been termination of the national emergencydeclared by the President and reinstatement of the Davis-Bacon Act.

Davis-Bacon Reinstated

Gradually, conditions in the Gulf region became clearer and, in that context, a movement wasdiscerned for re-institution of the Davis-Bacon Act. In late September, some 37 Republicans "signedon to a letter" to President Bush urging that his proclamation be rescinded. In a more varied appeal,LaTourette stated: "When you suspend Davis-Bacon, you also suspend the Copeland Anti-Kickbackprohibitions" of the act "so you have no more certified payrolls." For those who are "... worriedabout profiteering and other things, reinstating Davis-Bacon is a good idea." (73)

In late October, about 20 Republicans reportedly attended a meeting with White House Chiefof Staff Andrew Card at the office of Speaker Dennis Hastert. Card was described as "more thanreceptive" to suggestions from those supportive of Davis-Bacon and acknowledged that "they weren'tsaving any money" through the suspension. (74) On October 25, according to one report, Card calledRepresentative LaTourette to invite him to a meeting at the White House the following day -- October 26. During the White House meeting, Card was quoted as having said, according toLaTourette, that "there appeared to be no savings garnered from suspending the Davis-BaconAct." (75)

On October 26, 2005, word began to surface that a change of policy was in the works, and,by late afternoon, it seemed to have been confirmed. The Bush Administration, the Daily LaborReport stated, would reinstate on November 8th -- just two months after its suspension -- the"Davis-Bacon Act prevailing wage requirements for reconstruction projects in the hurricane-batteredGulf Coast region." The article continued, quoting Labor Secretary Elaine Chao, that "[u]pon reviewof current conditions in the declared areas, the administration will reinstate Davis-Bacon...." (76) Under the circumstances,the suspension-related bills became moot.