Dual GAO Studies Find Negative Impact of Davis-Bacon Prevailing Wage Requirements on Recovery Act Projects

The American Recovery and Reinvestment Act of 2009 (ARRA) expanded federal Davis-Bacon requirements to 40 additional federal programs, according to a Feb. 2010 study conducted by the Government Accountability Office (GAO). Although the impacts of these requirements vary among agencies (primarily because many are not directly involved in construction activities), several--including the U.S. Department of Energy (DOE)* –report that Davis-Bacon has had a negative impact on ARRA-related program administration and goals. 

Earlier this year, a similar GAO study found that Davis-Bacon provisions were the primary factor for excessive administrative burden of, and the ultimate failure to meet multi-agency goals pertaining to, the Weatherization Assistance Program. Four federal agencies reported that Davis-Bacon directly delayed their ability to spend funds. In addition, the U.S. Department of Labor (DOL) was required to determine prevailing wages for weatherization work in every county in the United States. By the end of, 2009, only 9,100 of the planned 593,000 homes in the program had been weatherized.

*A separate, internal study by DOE's inspector general cited Davis-Bacon provisions as the prime factor for holding up the launch of its weatherization program, which did not begin work until October 2009–eight months after President Obama signed ARRA into law.