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Ranking Member Cassidy Blasts Biden’s Inflationary Davis-Bacon Rule Harming Small Businesses

WASHINGTON – Today, U.S. Senator Bill Cassidy, M.D. (R-LA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, released the following statement in response to the Department of Labor’s (DOL) final rule pertaining to the Davis-Bacon and Related Acts (DBRA) that would undermine private contractors and further inflate the cost of federal construction projects to the detriment of American taxpayers. It would also make it harder for smaller construction firms, many of which are minority-owned, to bid on federal projects due to heightened regulatory costs.

The Davis-Bacon and Related Acts (DBRA) requires any worker on a federal or federally subsidized construction contract over $2,000 to be paid at least the local “prevailing wage” rather than actual market wages. The Biden administration’s regulations would allow the prevailing wage to be set up to a rate only paid to 30 percent of an area’s tradesmen. It would also revoke a decades-old rule that separates wage calculations based on urban and rural regions, which would disproportionally inflate the cost of projects in rural areas. According to multiple reports by the Government Accountability Office (GAO) and the DOL Office of Inspector General, DOL’s Wage and Hour Division currently relies on poor survey methodology to set prevailing wage rates and changes are needed to improve the DBRA. However, instead of adopting needed reforms to the program, the final rule moves in the opposite direction at the behest of the Biden administration’s union stakeholders.  

“This new rule would defy 40 years of precedent and disregard the nonpartisan GAO’s warning that this action would drastically inflate the price of construction,” said Dr. Cassidy. “This is the last thing our country needs as families continue to live with the painful effects of the Biden administration’s inflation agenda.”

Specifically, the new rule would:

  • Institute the 30 percent rule, despite the admonition of multiple GAO reports identifying the rule as a key culprit in inflating construction costs.
  • Revoke a Reagan-era rule separating metropolitan and rural wage data, ensuring any future wage calculation will over-count inflated urban wages as prevailing in smaller rural areas.
  • Undermine the procedural due process rights of contractors and increase administrative costs by expanding DOL’s debarment powers.
  • Impose DBRA obligations through “operation of law” regardless of contract language, deterring many small and minority-owned construction firms without administrative resources from bidding on contracts.
  • Expand the term “site of work” to include material supply drivers and off-site construction. This contradicts the plain language of DBRA and legally binding D.C. Circuit precedent.

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