oversight

Davis-Bacon Act: Labor's Actions Have Potential to Improve Wage Determinations

Published by the Government Accountability Office on 1999-05-28.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                 United States General Accounting Office

GAO              Report to Congressional Committees




May 1999
                 DAVIS-BACON ACT
                 Labor’s Actions Have
                 Potential to Improve
                 Wage Determinations




GAO/HEHS-99-97
      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Health, Education, and
      Human Services Division

      B-282463

      May 28, 1999

      The Honorable Arlen Specter
      Chairman
      The Honorable Tom Harkin
      Ranking Minority Member
      Subcommittee on Labor, Health and Human
        Services, and Education
      Committee on Appropriations
      United States Senate

      The Honorable John Edward Porter
      Chairman
      The Honorable David R. Obey
      Ranking Minority Member
      Subcommittee on Labor, Health and Human
        Services, Education and Related Agencies
      Committee on Appropriations
      House of Representatives

      The Davis-Bacon Act requires employers to pay locally prevailing wage
      rates, including fringe benefits, to laborers and mechanics on the more
      than $40 billion of federal construction projects each year.1 The
      Department of Labor’s Wage and Hour Division (WHD), responsible for
      administering this act, determines these wage rates through surveys that
      collect data on wages and fringe benefits paid to workers in similar job
      classifications on comparable construction projects in the same
      geographic area. In the past, we and others have raised concerns that wage
      determinations issued by Labor may not accurately reflect wages paid in
      the local area. Inaccurate wage determinations could lead to the payment
      of wages that are either lower than what workers should receive, or higher
      than the actual prevailing wages, which would inflate federal construction
      costs at taxpayers’ expense.2 Accuracy problems can be caused, for
      example, by low participation rates in the surveys or the use of survey
      wage data that are, on average, 7 years old.

      For fiscal year 1997, the House Appropriations Committee Conference
      report directed Labor to test and implement ways to improve the overall

      1
       This 1996 estimate includes only construction projects for which federal agencies provide direct
      contracts. It does not include projects that receive federal assistance through grants, loans, loan
      guarantees, or insurance.
      2
      See Davis-Bacon Act: Process Changes Could Raise Confidence That Wage Rates Are Based on
      Accurate Data (GAO/HEHS-96-130, May 31, 1996).



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                       wage determination process by either using alternative wage data sources
                       or, if that was not feasible or cost-effective, improving the capacity of the
                       existing survey process to promote participation and data reliability. The
                       report also directed us to determine whether Labor’s changes would
                       improve the timeliness and accuracy of wage determinations. 3 As agreed
                       with the congressional appropriations committees, we determined

                   •   the status of Labor’s efforts to improve the Davis-Bacon wage
                       determination process, and
                   •   whether the changes Labor is making are likely to address the timeliness
                       and accuracy of wage determinations.4

                       To determine the status of Labor’s efforts and whether they are likely to
                       address the accuracy and timeliness of Davis-Bacon wage determinations,
                       we interviewed Labor officials at WHD and the Bureau of Labor Statistics
                       (BLS), obtained and reviewed relevant documents, and evaluated ongoing
                       and planned efforts for their potential impact on wage determinations. We
                       conducted this review between February and April 1999 in accordance
                       with generally accepted government auditing standards.


                       In response to the conference report directive, Labor is currently testing a
Results in Brief       number of efforts that are aimed at improving the process for determining
                       prevailing wage rates. The alternatives being tested fall under two tracks:

                   •   redesigning WHD’s existing survey process, including revising survey forms
                       to obtain data more efficiently and using technology to more quickly and
                       accurately analyze the survey data obtained; and
                   •   using data from surveys conducted by BLS to determine prevailing wage
                       rates.

                       The earliest efforts began in 1996 and most efforts under both tracks are
                       scheduled for completion by fiscal year 2000. Given these time frames and
                       the need to analyze the results, Labor officials said they will decide in
                       fiscal year 2001 which track (or specific efforts) best promotes a wage
                       determination process that will result in accurate, timely wage
                       determinations.


                       3
                        U.S. Congress, House of Representatives, Making Appropriations for the Department of Defense for
                       Fiscal Year 1997, H. Rept. 104-863, 104th Cong., 2nd sess.
                       4
                        The conference report also directed us to ascertain whether Labor’s changes would improve the
                       reliability of wage determinations. We believe that accurate wage rates would be reliable and, for ease
                       of presentation, are using the term accuracy to represent reliability as well.



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             Efforts under either track, if successfully implemented, have the potential
             to improve the timeliness and accuracy of wage determinations. For
             example, redesigning the survey form and making it more accessible and
             understandable to survey participants could increase survey participation
             and improve the timeliness of data submitted, potentially leading to more
             accurate and timely wage determinations. However, Labor officials
             identified several key issues that they will need to address for efforts
             under either track to achieve the intended results. These issues include
             concerns about (1) WHD’s ability to deal with potentially significant
             increases in the volume of survey data collected under a revised process
             and (2) limitations of BLS data as a tool in setting prevailing wage rates.
             Labor officials also acknowledged that they need to develop a clear plan to
             make an informed decision about which track, or combination of efforts
             under both tracks, to implement. Labor has established general
             performance measures that officials say will guide Labor’s efforts.
             Additionally, it has started to collect limited baseline data to assess
             progress made under both tracks but such data may be of limited use.
             Labor has also recognized that other factors, such as cost, will need to be
             considered when officials decide which efforts would most improve the
             accuracy and timeliness of wage determinations, but officials have not yet
             specified how these other factors will be analyzed.


             The Davis-Bacon Act, enacted in 1931, and related legislation require
Background   employers on federally funded construction projects valued at more than
             $2,000, or on federally assisted projects, to pay their workers, at a
             minimum, wages that the Secretary of Labor has determined to be
             “prevailing” for corresponding classes of workers on similar projects in
             the same locality. To carry out this mission, Labor administers surveys to
             construction contractors and third parties, such as representatives of
             unions and contractor associations, and asks them to provide wage and
             fringe benefit data on a form called the WD-10. Labor sets wages for four
             types of construction—building, residential, heavy, and highway—that it
             finds reflect current categories in the construction industry as well as the
             act’s requirement that wages for Davis-Bacon workers be commensurate
             with workers on “similar” projects. Labor’s survey coverage ranges from
             a county to an entire state, reflecting its implementation of the act’s
             requirement that prevailing wages represent those paid in the same
             locality. For example, surveys are typically conducted on a countywide
             basis for all construction types except highway, which are often
             conducted on a statewide basis. Labor generally issues general area wage
             rates for specific job classifications or occupations, such as electricians,



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carpenters, and drywallers to meet the act’s requirement that it set wages
for “corresponding classes” of workers.5 Labor has implemented
procedures to verify wage data submitted on the surveys to address
problems related to data accuracy. In 1999, we reviewed these procedures
and recommended specific changes to increase their impact on the
accuracy of the wage determinations while reducing the time and cost to
collect this information.6 See appendix I for a more detailed description of
the wage determination process.

BLS, the Labor component responsible for collecting, analyzing, and
disseminating labor statistics, is providing data to WHD from its existing
survey programs to allow WHD to evaluate whether those data can be used
to set prevailing wages under the Davis-Bacon Act. BLS seeks to produce
nationally representative employment and economic statistics that are
timely and accurate. To do so, BLS has established key priorities, such as
drawing representative samples, ensuring high response rates, and
guaranteeing the confidentiality of survey respondents. In fiscal year 1997,
BLS began collecting wage data through its Occupational Employment
Statistics (OES) survey, which had until then collected only employment
data. This mail survey, which comprises a sample of 1.2 million
establishments, covers approximately 400,000 establishments each year
and thus takes three yearly cycles to obtain data from the entire sample.
BLS is also in the process of combining several surveys that produced local
and national employment, wage, fringe benefit, and employment cost data
into a single survey: the National Compensation Survey (NCS). By
April 2001, BLS expects to survey over 30,000 establishments in 154
metropolitan and nonmetropolitan areas that represent all such areas in
the United States. Initial data collection will involve BLS staff conducting
on-site interviews and reviewing various payroll documents. According to
BLS officials, although this sample will be sufficient to produce national
estimates, BLS will be able to publish detailed data for only about half of
the areas surveyed.




5
 Labor determines an area’s prevailing wage rate on the basis of the 50-percent rule, which states that
the prevailing wage will be the wage paid to the majority of workers employed in a specific job
classification. If the same rate is not paid to a majority of those workers in the classification, the
prevailing wage will be the average of the wages paid, weighted by the total number of workers
employed in the classification. In addition to these general area wage determinations, Labor also
issues determinations on a case-by-case basis for individual projects through means other than
surveys.
6
 See Davis-Bacon Act: Labor Now Verifies Wage Data, but Verification Process Needs Improvement
(GAO/HEHS-99-21, Jan. 11, 1999).


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                         In response to the conference report directive, Labor is currently testing a
Labor Has Initiated,     number of efforts under two tracks that it believes will improve the wage
but Not Completed,       determination process. It expects that wage determinations would more
Efforts to Improve the   accurately reflect prevailing wages if the wage survey process was
                         improved through efforts that would, for example, increase survey
Wage Determination       participation and the timeliness of data collection and analysis. The
Process                  earliest of these efforts began in 1996, with most scheduled for completion
                         in fiscal year 2000. Labor will evaluate the results of these efforts and
                         decide in fiscal year 2001 which track, or combination of efforts under
                         both tracks, to implement.

                         Labor informed the House Education and Workforce Committee in 1997
                         that it had selected these two tracks to test simultaneously: one track
                         focuses on ways to redesign the current process WHD uses to collect and
                         analyze survey data to set prevailing wage rates, while the other explores
                         the use of BLS survey data as the basis for setting prevailing wages.7 Table
                         1 highlights selected major efforts under the redesign track; table 2
                         describes the efforts under the BLS track. Efforts under the redesign track
                         seek to (1) improve survey data collection by, for example, redesigning the
                         WD-10 survey form, making the form more accessible through a specially
                         designated Internet web site, and using alternative methods to identify
                         contractors and distribute surveys; and (2) enhance data analysis through
                         such means as verifying wage data and developing technology to help
                         identify inaccuracies in the data. WHD has tested or plans to test some of
                         these efforts in two comprehensive surveys covering entire states and all
                         four types of construction, which WHD traditionally has not done. For
                         example, in the first survey, conducted in Oregon in 1998, WHD used state
                         unemployment insurance (UI) data to identify additional construction
                         establishments to survey. In the second survey, scheduled to begin in
                         Colorado in June 1999, WHD plans to test technology, such as the use of
                         imaging and scanning software, to facilitate data entry and analysis.




                         7
                          In 1996, Labor selected these two tracks, after soliciting input from external customers and interested
                         parties, because it believed they were the most promising for improving the wage determination
                         process.



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Table 1: Selected Major Efforts to
Redesign WHD’s Current Survey        Description                              Status
Process                              Survey data collection
                                       Comprehensive surveys
                                     Conduct statewide surveys for all four   A pilot survey was conducted in Oregon in 1998
                                     types of construction to move from a     and a second is expected to be initiated in
                                     countywide to a statewide system that    Colorado in June 1999.
                                     includes all construction types
                                                                              Results from Oregon are expected in September
                                                                              1999 and from Colorado in 2000.
                                       Redesigned WD-10 form
                                     Add barcode to track survey          Barcodes were tested in the Oregon survey.
                                     submissions and change form to make
                                     survey completion easier and clarify WHD revised some questions and made format
                                     data                                 changes.

                                                                              The bar code and revised questions and format
                                                                              were incorporated in a redesigned form, which
                                                                              should be submitted to the Office of
                                                                              Management and Budget (OMB) for clearance
                                                                              in June 1999. WHD plans to use this form for all
                                                                              surveys beginning in August 1999.
                                     Collect wage data by “labor hours”       Collection of wage data by labor hours was
                                     rather than “peak week”a                 completed in fiscal year 1999 in a regular
                                                                              Hawaii survey.

                                                                              WHD is currently considering an advanced
                                                                              notice of proposed rulemaking to solicit public
                                                                              comment on the use of labor hours in lieu of
                                                                              peak week, and other methodological changes.
                                       Internet web site
                                     Design a web site that provides          In 1998, WHD initiated a web site that provides
                                     information about and access to the      access to the current WD-10 form, which
                                     WD-10 and allows participants to         includes a bar code. Participants can download
                                     submit data electronically to WHD        but not electronically submit the form.

                                                                              WHD is developing an interactive WD-10 based
                                                                              on the revised form for the web site that
                                                                              participants will be able to complete on-line and
                                                                              submit electronically.

                                                                              WHD plans to submit the interactive form to
                                                                              OMB for clearance in September 1999 and put it
                                                                              on the web site in fiscal year 2000.
                                       Additional sources to identify survey universe
                                     Use UI or other databases to           The use of a UI database was tested in the
                                     supplement existing sources of data to Oregon survey; it will not be tested in the
                                     identify contractors to survey         Colorado survey.b
                                                                                                                    (continued)




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Description                                    Status
    Automated printing and mailing of surveys
Use the Census Bureau’s automated              Census’ facilities were used to distribute survey
facilities to print and mail surveys           forms in the Oregon survey and will be used in
                                               the Colorado survey. WHD plans to use this
                                               process for all surveys beginning in August
                                               1999.
Data analysis and verification
    Telephone and on-site verification
Review wage data submissions by                As of 1996, WHD had implemented telephone
telephone or on-site for accuracy              verification for a sample of wage data
                                               submissions from contractors and third parties.

                                               In 1997 WHD implemented on-site reviews for a
                                               sample of wage data submissions from
                                               contractors and third parties.

                                               In response to previous GAO recommendations,
                                               WHD plans to increase the number of telephone
                                               reviews and decrease the number of on-site
                                               reviews.
    Technology
Use imaging and scanning software to WHD has developed this technology and
facilitate data entry and analysis   expects to complete testing in June 1999.
Use “knowledge management”c            WHD is currently testing software packages and
software to help WHD analysts and      expects to select one by the end of fiscal year
survey respondents check the           1999.
completeness and adequacy of survey
data, identify inaccuracies, and allow
WHD analysts to analyze data in a
standardized way across regions
Develop a Computer-Assisted                    WHD is currently evaluating telephone systems
Telephone Inquiry (CATI) system to             in its regional offices to determine how to
help WHD analysts follow up with               accommodate a CATI.
survey respondents to collect clarifying
information                                    WHD expects to determine the preliminary
                                               design in fiscal year 1999 and develop the
                                               system in fiscal year 2000.

a
 The “peak week” refers to the work week in which the contractor employed the largest number
of workers in a particular job classification for work on a specific construction project. While peak
week counts the number of workers within a job classification for only one week, regardless of the
number of hours worked and the wages paid them, labor hours counts the number of total hours
worked within a specific job classification for the entire duration of the project.
b
 Colorado will not allow WHD to use its UI database because BLS is conducting a survey there at
the same time and the state does not want to burden employers with excessive paperwork and
discourage participation.
c
 Knowledge management software allows users to examine, verify, and manage information in a
database. For example, the software will allow wage analysts to identify inconsistent or missing
information on submitted wage data forms.




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Efforts under the BLS track have focused on using existing BLS surveys to
obtain data on wage rates, fringe benefits, and the union affiliation of
construction employees.8 According to WHD and BLS officials, BLS was
selected as a possible alternative data source for a number of reasons,
including BLS’ more comprehensive approach and expertise in collecting
wage data compared with other potential sources, and its history of
providing statistical information to others. Also, BLS already provides wage
and fringe benefit data to WHD for the determination of prevailing wage
rates under the Service Contract Act (SCA), which requires that individuals
working in service occupations (such as janitors, security guards, or data
processors) under contract to a federal employer be paid prevailing wages.
SCA, however, has a more flexible concept of locality than Davis-Bacon,
and many of these service contracts are nationwide in scope. As a result,
under SCA, WHD uses a single national rate for several types of fringe
benefits to determine prevailing wage rates, unlike Davis-Bacon, for which
it must use fringe benefits paid in a given locality.

BLS has undertaken three distinct efforts to collect or tabulate data on
wage rates, fringe benefits, and union affiliation of construction employees
for WHD. In regard to wage data, BLS is using its existing survey procedures
and sampling frame to produce data for construction industries in local
areas to allow WHD to evaluate the data’s usefulness in setting wage rate
determinations. To collect data on fringe benefits and union affiliation, BLS
conducted pilot surveys using existing survey procedures and sampling
frames to test whether NCS and OES could obtain the necessary
information. WHD and BLS officials agreed that no significant changes would
be made to OES or NCS during this initial period, as these surveys had been
recently revised (for example, adding the wage variable to the OES) or
developed (for example, the NCS), and BLS did not know how additional
changes to the surveys would affect their viability.




8
 If a particular wage determination is based on a union’s collective bargaining agreement and Labor
has no indication that the situation has changed, updated wage determinations may be based on
updated collective bargaining agreements.



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Table 2: Description of Efforts to
Collect Data Through BLS Surveys     Effort             Description                   Status
                                     OES wage           Determine whether the         In fiscal year 1997, BLS conducted the first
                                     data               existing OES sampling         cycle of the 3-year survey, but the sample
                                                        frame and methodology         of construction establishments was too
                                                        could provide sufficient      small to provide locality-based wage
                                                        wage data                     estimates.

                                                                                      In fiscal year 1998, BLS conducted the
                                                                                      second cycle and provided results to WHD
                                                                                      in April 1999.

                                                                                      BLS is currently conducting the final cycle
                                                                                      and expects data for the full sample to be
                                                                                      available by 2000.
                                     NCS fringe         Conduct studies in four       BLS completed the first two studies
                                     benefit data       locations to collect fringe   (Jacksonville, Fla., and Tucson, Ariz.) in
                                                        benefit data in areas not     1998.
                                                        currently surveyed by NCS
                                                                                      BLS completed data collection for the third
                                                                                      location (Salt Lake City, Utah) and expects
                                                                                      to release results in June 1999.

                                                                                      In April 1999, BLS began data collection in
                                                                                      the final location (Toledo, Ohio) and
                                                                                      expects to release results at the end of
                                                                                      fiscal year 1999.
                                     OES union          Test whether OES can          BLS conducted an initial test in four states
                                     affiliation data   obtain information on union   in 1998 to determine if employers had
                                                        affiliation                   union affiliation information and were
                                                                                      willing to provide it. BLS provided this
                                                                                      information to WHD in 1998.

                                                                                      On the basis of positive test results, BLS is
                                                                                      conducting a follow-up study in nine
                                                                                      additional states and expects to have
                                                                                      results in fiscal year 2000.

                                     As shown in tables 1 and 2, the first of these efforts—telephone
                                     verification of contractor and third-party wage data submissions—began
                                     in 1996, and some of the efforts have been completed or implemented,
                                     such as on-site verification, the use of automated printing and mailing
                                     operations, and the use of state UI data to identify construction
                                     establishments. However, most efforts are still being tested or are ongoing
                                     and not scheduled to be completed before fiscal year 2000. For example,
                                     results from the Oregon survey, which tested several of these efforts, will
                                     not be available until September 1999. Additionally, WHD does not expect
                                     to select a knowledge management software package before the end of
                                     fiscal year 1999. The development of one effort—CATI—to facilitate the




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                       clarification of data by follow-up telephone calls will not begin until fiscal
                       year 2000. Moreover, even though BLS has provided some data to WHD from
                       the initial OES union affiliation test and two of the NCS fringe benefit
                       studies, all of the results will not be final until 2000.

                       Although the conference report did not set a deadline for Labor to
                       complete these efforts, Labor officials said they will decide which
                       track—or combination of efforts under both tracks—to select in fiscal
                       year 2001. Officials said this schedule is necessary given the time frames of
                       individual efforts and the need to evaluate and analyze all of the results
                       when the efforts are completed. For example, according to officials,
                       because final results representing the full OES sample will not be available
                       until 2000, an assessment of the OES data’s usefulness cannot be done until
                       the entire 3-year cycle of data collection is completed. Officials will not be
                       able to determine until then whether the wage data collected by the survey
                       will meet BLS standards for issuance and be sufficient to meet WHD’s needs
                       in determining wage rates. However, officials said that although they
                       would discontinue efforts at any time that did not appear to be working, in
                       the absence of a clear “stop light,” they believed they needed to see these
                       efforts through, evaluate them, and make an informed decision.

                       Since fiscal year 1997, Labor has allocated over $11 million for these
                       improvement efforts. It spent $7.4 million in fiscal years 1997 and 1998 and
                       allocated $3.75 million in fiscal year 1999. In its fiscal year 2000 budget,
                       Labor plans to obligate another $3.75 million to continue funding these
                       activities. To date, WHD has primarily used these funds to (1) procure the
                       services of private sector contractors to redesign the wage survey process
                       and conduct on-site verification; (2) purchase computer hardware and
                       software and telecommunications equipment; and (3) reimburse BLS
                       (about $3.7 million) for its survey activities, including the salaries and
                       expenses of about 11 full-time-equivalent staff at BLS to conduct the NCS
                       surveys. These funding amounts do not include salaries for WHD staff
                       working on improvement activities.


                       On the basis of our review of Labor’s efforts and our past work on the
Labor’s Efforts Have   Davis-Bacon Act, we believe that a number of Labor’s efforts under both
Potential to Improve   tracks, if successfully implemented, have the potential to improve the
Accuracy and           accuracy and timeliness of wage determinations. To achieve more
                       accurate and timely wage determinations under either track, Labor
Timeliness of Wage     officials said the process must promote greater survey participation,
Determinations         improve the accuracy of data submissions and Labor’s ability to verify



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                                         them, and increase the efficiency of data collection and analysis. Labor
                                         must ensure that the data are collected, analyzed, and published in a
                                         timely manner so that when wage rates are issued, they still reflect current
                                         local conditions. As summarized in table 3, a number of WHD’s efforts seek
                                         to improve the accuracy of the incoming wage data, such as making wage
                                         survey forms easier to complete, and to promote greater participation,
                                         such as using BLS’ OES survey with its large sample of construction
                                         establishments. However, Labor officials said they will need to address a
                                         number of unresolved issues in both tracks that could limit the potential of
                                         these efforts to achieve the desired results. Furthermore, they said they
                                         would need to do a number of things to ensure the track or efforts they
                                         select are the best options for improving the accuracy and timeliness of
                                         wage determinations.


Table 3: Potential Impact of WHD’s Efforts on Improving the Accuracy and Timeliness of Wage Determinations
                             Potential improvement to wage
                                      determination
Effort                  Accuracy           Timeliness         Area of process improvement
Comprehensive surveys   X                  X                  Collecting data on a statewide basis for all four construction types
                                                              would allow WHD to collect and use data for all construction types
                                                              and counties at once, rather than soliciting and discarding data
                                                              that did not meet the identified construction type and county
                                                              requirements specified in a survey, resulting in increased data and
                                                              more efficient data collection.

                                                              Respondents would complete only one survey for all construction
                                                              types and counties rather than having to complete surveys for four
                                                              different construction types by individual county. This could
                                                              improve respondents’ awareness of the survey and the universe of
                                                              survey participants, and reduce respondents’ burden, thereby
                                                              yielding greater levels of participation.

                                                              The greater volume of data resulting from larger, more frequent
                                                              surveys could improve the accuracy of wage determinations and
                                                              provide WHD with more flexibility to ensure sufficient usable data
                                                              to issue wage determinations.
Redesigned WD-10 form X                    X                  Making the form more accessible (for example, through revised
                                                              questions, Internet access) and understandable to participants
                                                              could encourage more participants to complete the survey,
                                                              resulting in greater participation, and reduce errors in data
                                                              submissions.

                                                              Collecting data by labor hours instead of peak week could
                                                              facilitate completing the survey, which could increase
                                                              participation, decrease errors, and reduce review time for WHD
                                                              analysts.
                                                                                                                      (continued)




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                               Potential improvement to wage
                                        determination
Effort                     Accuracy            Timeliness        Area of process improvement
Additional sources to      X                                     Using UI or other data sources could identify additional
identify survey universe                                         construction establishments to survey, leading to greater levels of
                                                                 participation.

                                                                 Greater participation could increase the volume and
                                                                 representativeness of data submitted, thereby increasing the
                                                                 accuracy of wage determinations.
Telephone and on-site      X                                     Verification could identify and correct errors and help educate
verification                                                     survey participants on how to complete forms properly.
Technology                 X                   X                 Imaging and scanning technology could expedite the transfer of
                                                                 survey data into an automated WHD database, which would
                                                                 expand survey coverage and facilitate data analysis and
                                                                 verification.

                                                                 Knowledge management software could help WHD staff analyze
                                                                 and verify data correctly and more efficiently, reducing the
                                                                 analysts’ work load and review time.
BLS’ OES wage data         X                   X                 The use of OES with its large sample of construction
                                                                 establishments could identify a greater number of employers. BLS’
                                                                 requirements for high response rates could lead to significant rates
                                                                 of participation.

                                                                 When OES completes its 3-year cycle and is fully operational, it will
                                                                 provide wage data annually that could improve the timeliness of
                                                                 wage determinations.

                                              To achieve these potential results, Labor officials said that they need to
                                              address a number of unresolved issues:

                                          •   Efforts to redesign the current wage determination process or conduct
                                              statewide surveys for all four construction types could significantly
                                              increase the volume of data received by WHD analysts. WHD estimates these
                                              changes would result in a tenfold increase in the number of WD-10s wage
                                              analysts would have to process before they begin data analysis. Although
                                              WHD plans to use technology to facilitate data handling and analysis, such a
                                              significant increase in the volume of data could affect the timeliness of
                                              wage determinations and raise questions about the adequacy of WHD
                                              resources and technology to deal with this work load.
                                          •   The use of alternative databases such as UI to identify additional
                                              construction establishments may not result in sufficient data that would
                                              adequately represent the current universe of construction establishments.
                                              The use of Oregon’s UI database provided names of additional construction
                                              establishments to survey; however, according to BLS officials, UI databases
                                              may not accurately represent all construction establishments because of




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    the high rate at which they are created and disbanded. As a result, WHD
    officials said they will need to evaluate the advantages and disadvantages
    of alternative data sources to ensure that survey participation accurately
    reflects the current universe. This would also be the case for any states,
    such as Colorado, that do not allow WHD to use their UI databases.
•   Using BLS’ OES data as the basis for wage determinations presents WHD with
    a number of operational issues about setting wage rates. For example, WHD
    officials said they need to evaluate whether the level of data provided
    through OES by occupation or construction type would be sufficient to
    comply with wage determination rate requirements. Also, because OES
    provides no information on fringe benefits, WHD officials said they would
    have to link OES wage data with other data sources that include fringe
    benefit data to set wage rates that comprise all relevant wage data and
    accurately reflect local conditions. WHD officials believe that the only
    adequate source of fringe benefit data is NCS; but because NCS data are
    available only at the national level or for limited geographic areas, their
    usefulness may be limited.

    Labor officials also said that they need to develop clear plans about how to
    ensure that the track or efforts they choose are the best options to
    improve the timeliness and accuracy of wage determinations. Accordingly,
    they have established general performance measures that the officials said
    will be used to gauge Labor’s process improvements and guide the final
    decision about which track to select. The measures seek to ensure that, by
    fiscal year 2002, Labor will be able to

•   survey each area of the country for all four types of construction at least
    every 3 years, and
•   issue 90 percent of all wage determinations within 60 days of Labor‘s
    national WHD office receiving wage survey data from regional offices.9

    Regarding the first measure, WHD officials believe that conducting surveys
    and issuing the resulting wage determinations every 3 years will lead to
    wage determinations that validly represent locally prevailing wage rates.
    Regarding the second measure, WHD officials reported that WHD currently
    issues almost all wage determinations within 60 days of receiving the
    information from regional offices and they would seek to maintain this
    level of timeliness at least 90 percent of the time despite the potentially
    significant increase in data volume resulting from more frequent, larger
    surveys.

    9
     Under the current process, the national office receives the survey data after the regional office has
    collected and analyzed the survey data and calculated recommended wage rate determinations.



    Page 13                                                            GAO/HEHS-99-97 Davis-Bacon Act
B-282463




According to WHD officials, the first measure represents an improvement in
timeliness in the wage determination process given that wage
determinations are based on survey data that are, on average, 7 years old.
Officials recognized, however, that they would have to consider other
indicators to ensure that more frequent, larger surveys result in more
accurate data and greater survey participation, especially if efforts under
both tracks enable them to conduct surveys every 3 years. Nevertheless,
they believe it is too soon to define these other indicators before the
results of the individual efforts are available. The second measure
provides some indication of timeliness but does not reflect improved
accuracy or participation. In addition, WHD officials said they are not sure
how this measure would help assess efforts under the BLS track, since
under this scenario, BLS—not WHD’s regional offices—would be providing
the wage data to WHD’s national office.

To develop baseline data that will be used to assess the progress
individual efforts achieve, WHD has also recently started to model the
process; this involves tracking segments of the current WHD wage
determination process to identify and address bottlenecks. For example,
WHD is collecting data from its Oregon and Colorado surveys to estimate
the time it takes WHD wage analysts to conduct various survey activities
and the percentage of employers submitting usable wage data. However,
these data may not be appropriate baseline data because they include a
mix of traditional and new practices, and represent data from only two
surveys. Also, given that WHD has little useful information on the time
needed to issue a wage determination, the accuracy of wage
determinations, or survey participation rates, it is not clear how this
information will allow WHD to assess the extent to which the tracks
improve the process.

Finally, Labor has begun to identify other key factors, such as cost, that
will need to be addressed as part of its decision-making process, but it has
not yet set priorities or assigned weights to these factors. These factors
are important if both tracks demonstrate some improvements in timeliness
and accuracy, which they likely will, or if WHD must consider certain
trade-offs—for example, if one track achieves greater levels of accuracy,
but is significantly more expensive or resource-intensive. However, Labor
believes it is premature to do so until it has seen the results of all of the
individual efforts.




Page 14                                         GAO/HEHS-99-97 Davis-Bacon Act
                  B-282463




                  We provided a draft of this report to the Department of Labor for its
Agency Comments   review and comment. In its comments, Labor stated that our report
                  provided an excellent summary of its recent efforts to improve the
                  accuracy and timeliness of Davis-Bacon wage determinations. Labor also
                  reiterated that it must first establish whether both approaches it is
                  undertaking, or some combination of the two, will be feasible to meet the
                  needs of the Davis-Bacon wage determination program before it can
                  assess the relative merits of each. Labor also noted that it had initiated
                  improvements to the Davis-Bacon wage determination process before the
                  congressional conference report directive. We acknowledge that Labor
                  initiated prior efforts to improve the process; however, the scope of this
                  report focuses only on the status of Labor’s efforts to respond to the
                  congressional directive. Labor officials also provided technical comments
                  and corrections, which we incorporated as appropriate. Labor’s comments
                  are included in their entirety in appendix II.


                  We are sending copies of this report to the Honorable Alexis M. Herman,
                  Secretary of Labor; the Honorable Bernard E. Anderson, Assistant
                  Secretary for Employment Standards; the Honorable Katherine G.
                  Abraham, Commissioner of the Bureau of Labor Statistics; appropriate
                  congressional committees; and other interested parties.

                  Please call me or Larry Horinko, Assistant Director, at (202) 512-7014 if
                  you or your staffs have any questions about this report. Other major
                  contributors to this report were Lori Rectanus, Ronni Schwartz, and
                  Robert C. Crystal.




                  Marnie S. Shaul
                  Associate Director
                  Education, Workforce, and
                    Income Security Issues




                  Page 15                                         GAO/HEHS-99-97 Davis-Bacon Act
Contents



Letter                                                                                           1


Appendix I                                                                                      18
Labor’s Wage
Determination
Process Under the
Davis-Bacon Act
Appendix II                                                                                     26
Comments From the
Department of Labor
Related GAO Products                                                                            28


Tables                 Table 1: Selected Major Efforts to Redesign WHD’s Current                 6
                         Survey Process
                       Table 2: Description of Efforts to Collect Data Through BLS               9
                         Surveys
                       Table 3: Potential Impact of WHD’s Efforts on Improving the              11
                         Accuracy and Timeliness of Wage Determinations




                       Abbreviations

                       BLS       Bureau of Labor Statistics
                       CATI      Computer-Assisted Telephone Inquiry
                       CBA       collective bargaining agreement
                       CRA       Construction Resources Analysis
                       NCS       National Compensation Survey
                       OES       Occupational Employment Statistics
                       OMB       Office of Management and Budget
                       RSPR      Regional Survey Planning Report
                       SCA       Service Contract Act
                       UI        unemployment insurance
                       WHD       Wage and Hour Division


                       Page 16                                       GAO/HEHS-99-97 Davis-Bacon Act
Page 17   GAO/HEHS-99-97 Davis-Bacon Act
Appendix I

Labor’s Wage Determination Process Under
the Davis-Bacon Act

                            The Davis-Bacon Act requires that workers employed on federal
                            construction contracts valued in excess of $2,000 be paid, at a minimum,
                            wages and fringe benefits that the Secretary of Labor determines to be
                            prevailing for corresponding classes of workers employed on projects that
                            are similar in character to the contract work in the geographic area where
                            the construction takes place.

                            To determine the prevailing wages and fringe benefits in various areas
                            throughout the United States, Labor’s Wage and Hour Division (WHD)
                            periodically surveys wages and fringe benefits paid to workers in four
                            basic types of construction (building, residential, highway, and heavy10).
                            Labor has designated the county as the basic geographic unit for data
                            collection, although Labor also conducts some surveys setting prevailing
                            wage rates for groups of counties. Wage rates are issued for a series of job
                            classifications in the four basic types of construction, so each wage
                            determination requires the calculation of prevailing wages for many
                            different trades, such as electrician, plumber, and carpenter. For example,
                            one heavy construction survey in Louisiana identified wage rates for 89
                            different construction trade occupations. Because there are over 3,000
                            counties, WHD would need to conduct more than 12,000 surveys each year
                            if every county in the United States was to be surveyed. In fiscal year 1997,
                            Labor issued 1,860 individual rates in wage determinations based on 43
                            area wage surveys. Labor’s wage determination process consists of four
                            basic stages:

                        •   planning and scheduling surveys of employers’ wages and fringe benefits
                            in similar job classifications on comparable construction projects;
                        •   conducting surveys of employers and third parties, such as representatives
                            of unions or industry associations, on construction projects;
                        •   clarifying and analyzing respondents’ data; and
                        •   issuing the wage determinations.11


                            Labor annually identifies the geographic areas that it plans to survey.
Stage 1: Planning and       Because it has limited resources, a key task of Labor’s staff is to identify
Scheduling Survey           those counties and types of construction most in need of a new survey. In
Activity
                            10
                             Heavy construction is a catch-all grouping that includes projects not properly classified under the
                            other three types of construction; for example, dredging and sewer projects.
                            11
                             A wage determination is the listing of wage and fringe benefit rates for each job classification of
                            workers that the WHD administrator has determined to be prevailing in a given area for a type of
                            construction. Each wage determination involves establishing prevailing wage rates for many
                            occupations.



                            Page 18                                                            GAO/HEHS-99-97 Davis-Bacon Act
    Appendix I
    Labor’s Wage Determination Process Under
    the Davis-Bacon Act




    selecting areas for inclusion in planned surveys, the regional offices
    establish priorities based on criteria that include

•   the need for a new survey according to the volume of federal construction
    in the area;
•   the age of the most recent survey; and
•   requests or complaints from interested parties, such as state and county
    agencies, unions, and contractors’ associations.

    If a type of construction in a particular county is covered by a wage
    determination based on collective bargaining agreements (CBA) and Labor
    has no indication that the situation has changed such that a wage
    determination should now reflect nonunion rates, an updated wage
    determination may be based on updated CBAs. The unions submit their
    updated CBAs directly to the national office. Planning begins in the third
    quarter of each fiscal year when the national office provides regional
    offices with the Regional Survey Planning Report (RSPR). The RSPR provides
    data obtained under contract with the F.W. Dodge Division of McGraw-Hill
    Information Systems that show the number and value of active
    construction projects by region, state, county, and type of construction,
    and the percentage of total construction that is federally financed.12 Labor
    uses the F.W. Dodge data because F.W. Dodge has the only continuous
    nationwide database on construction projects. Labor supplements these
    data with additional information provided to the national office by federal
    agencies regarding their planned construction projects. The RSPR also
    includes the date of the most recent survey for each county and whether
    the existing wage determinations for each county are union, nonunion, or
    a combination of both.

    Using this information, the regional offices, in consultation with the
    national office, designate the counties and type of construction to be
    included in the upcoming regional surveys. Although Labor usually
    designates the county as the geographic unit for data collection, in some
    cases more than one county is included in a specific data-gathering effort.

    The regional offices determine the resources required to conduct each of
    the priority surveys. When all available resources have been allocated, the
    regional offices transmit to the national office for review their schedules
    of the surveys they plan to do: the types of construction, geographic area,
    and time frames of when they plan to survey each defined area.

    12
     The F.W. Dodge data consider a project to be active from the time on-site work begins (ground
    breaking) until it is released to and accepted by the owner.



    Page 19                                                        GAO/HEHS-99-97 Davis-Bacon Act
    Appendix I
    Labor’s Wage Determination Process Under
    the Davis-Bacon Act




    When Labor’s national office has approved all regional offices’ preliminary
    survey schedules, it assembles them in a national survey schedule that it
    transmits to interested parties, such as major national contractor and
    labor organizations, for their review and comment. The national office
    transmits any comments or suggestions received from interested parties to
    its affected regional offices. Organizations proposing modifications of the
    schedule are asked to support their perceived need for alternative survey
    locations by providing sufficient evidence of the wages paid to workers in
    the type of construction in question in the area where they want a survey
    conducted.

    The target date for establishing the final fiscal year survey schedule is
    September 15. Once the national office has established the final schedule,
    each regional office starts to obtain the information needed to generate
    lists of survey participants for each of the surveys it plans to conduct.
    Each regional office then contacts Construction Resources Analysis (CRA)
    at the University of Tennessee. CRA applies a model to the F.W. Dodge data
    to identify all construction projects in the start-up phase13 (within the
    parameters specified in the regional office’s request) and produces a file of
    projects that were active during a given time period. The time period may
    be 3 months or longer, depending on whether the number of projects
    active during the period is adequate for a particular survey. The
    information CRA solicits from F.W. Dodge is provided directly to the
    regional offices and includes data on construction projects such as the
    location, type of construction, and cost; the name and address of the
    contractor or other key firm14 associated with the project; and if available,
    the subcontractors.15

    When the regional offices receive this information, Labor analysts screen
    the data to make sure the projects meet four basic criteria for each survey.
    The project must

•   be of the correct construction type,
•   be in the correct geographic area,
•   fall within the survey time frame, and
•   have a value of at least $2,000.

    13
     F.W. Dodge defines the start-up phase as one in which the construction will commence within 60
    days.
    14
      Other examples of key firms would be the owner or architect of the project.
    15
     A subcontractor is an employer that has a contractual agreement with the project’s prime employer.
    On a typical construction project, most employees working on the job will be employees of
    subcontractors.



    Page 20                                                          GAO/HEHS-99-97 Davis-Bacon Act
                      Appendix I
                      Labor’s Wage Determination Process Under
                      the Davis-Bacon Act




                      In addition to obtaining files of active projects, Labor’s regional analysts
                      are encouraged to research files of unsolicited information that may
                      contain payment evidence submitted in the past that is within the scope of
                      a current survey.



                      When the regional offices are ready to conduct the new surveys, they send
Stage 2: Conducting   a WD-10 wage reporting form to each contractor (or employer) identified
Surveys of            by the F.W. Dodge reports as being in charge of one of the projects to be
Participants          surveyed, together with a transmittal letter that requests information on
                      the projects listed on the enclosed WD-10, a list of subcontractors that
                      may have worked on each project, and information on any additional
                      projects the contractor may have. Every WD-10 that goes out for a
                      particular project has on it a unique project code, the location of the
                      project, and a description of the project. Data requested on the WD-10
                      include a description of the project and its location, in order to assure the
                      regional office that each project for which it receives data is the same as
                      the one it intended to have in the survey. The WD-10 also requests the
                      contractor’s name and address; the value of the project; the starting and
                      completion date; the wage rate, including fringe benefits, paid to each
                      worker; and the number of workers employed in each classification during
                      the week of peak activity for that classification. The week of peak or
                      highest activity for each job classification is the week when the most
                      workers were employed in that particular classification. The survey
                      respondent is also asked to indicate which of four categories of
                      construction the project belongs in.

                      In addition, about 2 weeks before a survey is scheduled to begin, regional
                      offices send transmittal letters to congressional representatives and a list
                      of third parties, such as national and local unions and industry
                      associations, to encourage participation. Labor encourages the submission
                      of wage information from third parties, including unions and contractors’
                      associations that are not the direct employers of the workers in question,
                      in an effort to collect as much data as possible.16 Third parties may obtain
                      wage data for their own purposes, such as for union officials that need
                      wage information to correctly assess workers’ contributions toward fringe
                      benefits. Third-party data generally serve as a check on data submitted by
                      contractors if both submit data on the same project. Regional offices also


                      16
                       Labor officials said that third-party data submissions generally account for about one-third of all
                      wage survey submissions. The percentage of survey respondents that are third parties can be
                      substantial for surveys of metropolitan areas.



                      Page 21                                                           GAO/HEHS-99-97 Davis-Bacon Act
                          Appendix I
                          Labor’s Wage Determination Process Under
                          the Davis-Bacon Act




                          organize local meetings with members of interested organizations to
                          explain the purpose of the surveys and how to fill out the WD-10.

                          Because the F.W. Dodge reports do not identify all the subcontractors,
                          both the WD-10 and the transmittal letter ask for a list of subcontractors
                          on each project. Subcontractors generally employ the largest portion of
                          on-site workers, so their identification is considered critical to the success
                          of the wage survey. Analysts send WD-10s and transmittal letters to
                          subcontractors as subcontractor lists are received. Transmittal letters also
                          state that survey respondents will receive an acknowledgment of data
                          submitted and that the respondent should contact the regional office if one
                          is not received. Providing an acknowledgement is intended to reduce the
                          number of complaints that data furnished were not considered in the
                          survey. Labor analysts send contractors who do not respond to the survey
                          a second WD-10 and a follow-up letter. If they still do not respond, analysts
                          attempt to contact them by telephone to encourage them to participate.


                          As Labor’s wage analysts receive the completed WD-10s in the regional
Stage 3: Clarifying and   offices, they review and analyze the data. Labor’s training manual guides
Analyzing                 the analyst through each block of the WD-10, pointing out problems to
Respondents’ Data         look for in data received for each one. Analysts are instructed to write the
                          information they received by telephone directly on the WD-10 in a
                          contrasting color of ink, indicating the source and the date received. They
                          are instructed to draw one line through the old information so it is still
                          legible.

                          Labor’s wage analysts review the WD-10 to identify missing information,
                          ambiguities, and inconsistencies that they then attempt to clarify or verify
                          by telephone. For example, an analyst may call a contractor for a
                          description of the work done on a project in order to confirm that a
                          particular project has been classified according to the correct construction
                          type. An analyst may also call a contractor to ask about the specific type of
                          work that was performed by an employee in a classification that is
                          reported in generic terms, such as a mechanic. In that situation, the
                          analyst would specify on the WD-10 whether the employee is a plumber
                          mechanic or some other type of mechanic to make sure that the wages
                          reported are appropriately matched to the occupations that are paid those
                          rates.

                          Similarly, because of variations in area practice, analysts may routinely
                          call to find out what type of work the employees in certain classifications



                          Page 22                                          GAO/HEHS-99-97 Davis-Bacon Act
                    Appendix I
                    Labor’s Wage Determination Process Under
                    the Davis-Bacon Act




                    are doing. This is necessary because in some areas of the country, some
                    contractors have established particular duties within a traditional general
                    craft as a specialty craft (for example, drywall finishers as a specialty craft
                    under the general craft of painters). Specialty crafts are usually paid at
                    lower rates than general crafts.

                    Labor verifies wage data from a sample of wage data forms submitted by
                    contractors and third parties by both telephone and on-site review. For
                    telephone verification, Labor selects a 10-percent sample of wage data
                    submissions from third parties and a 2-percent sample of submissions
                    from contractors. They verify wage data by telephone and, where
                    appropriate, ask that supporting payroll documents be mailed to Labor.
                    For on-site verification, Labor selects at least a 10-percent sample of wage
                    data forms submitted by contractors and third parties. A private
                    accounting firm was hired to conduct on-site reviews. Auditors from the
                    firm conduct an on-site review of payroll records at the contractor’s work
                    site to verify wage survey data. For both telephone and on-site verification,
                    Labor’s procedures require that the data be verified only with the
                    contractors, not with the third parties. Any discrepancies between the
                    original WD-10 submitted and the payroll records or contractor’s
                    testimony are recorded by the wage analyst and auditor. WHD reviews the
                    discrepancies and makes changes, as necessary.


Data Are Recorded   When an analyst is satisfied that all issues with respect to the data on the
                    WD-10 for a particular project have been resolved, the data are recorded
                    and tabulated. The analyst enters them into a computer that generates a
                    Project Wage Summary, Form WD-22a, for reporting survey information
                    on a project-by-project basis. The WD-22a has a section for reporting the
                    name, location, and value of each project; the number of employees who
                    were in each classification; and their hourly wage and fringe benefits. It
                    also has a section for reporting the date of completion or percentage of the
                    project completed, whichever is applicable.

                    At least 2 weeks before the survey cutoff date, the response rate for the
                    survey is calculated to allow time to take follow-up action if the response
                    rate is determined to be inadequate. For example, WHD operational
                    procedures specify that if data gathered for building or residential surveys
                    provide less than a 25-percent usable response rate or less than one-half of




                    Page 23                                           GAO/HEHS-99-97 Davis-Bacon Act
                       Appendix I
                       Labor’s Wage Determination Process Under
                       the Davis-Bacon Act




                       the required key classes of workers,17 the analyst will need to obtain data
                       from comparable federally financed projects in the same locality.18

                       If an analyst has no data on occupations identified by Labor as key
                       classification of workers for the type of construction being surveyed,
                       Labor’s procedures require him or her to call all the subcontractors
                       included in the survey who do that type of work and from whom data are
                       missing, to try to get data. If the analyst still cannot obtain sufficient data
                       on at least one-half of the required key classes, consideration must be
                       given to expanding the scope of the survey geographically to have more
                       crafts represented. If the overall usable response rate for the survey is
                       25 percent or more, data on three workers from two contractors are
                       considered sufficient to establish a wage rate for a key occupation. After
                       the survey cutoff date, when all valid data have been recorded and
                       tabulated, the final survey response rate is generated by computer.
                       Typically, a WHD analyst takes 4 months to conduct a survey.

                       Once all the valid project data have been entered, the prevailing wage rate
                       for each classification of worker can be generated by computer. If a
                       majority of workers is paid at a single rate in a job classification, that rate
                       prevails for the classification. The wage rate needs to be the same, to the
                       penny, to constitute a single rate. Lacking such a majority, a weighted
                       average wage rate for that occupation is calculated.

                       The prevailing wage rate for each occupation is compiled in a
                       computer-generated comprehensive report for each survey, called the
                       Wage Compilation Report, Form WD-22. The WD-22 lists each occupation
                       and the wage rate recommended for that occupation by the regional office.
                       The form indicates whether the rate is based on a majority or a weighted
                       average, and provides the number of workers for which data were used to
                       compute each wage rate. The regional offices transmit survey results to
                       the national office, which reviews the results and recommends further
                       action if needed.


                       The national office issues final wage determinations after reviewing
Stage 4: Issuing the   recommended wage rates submitted by the regions. There is no review or
Wage Determinations    comment period provided to interested parties before they go into effect.
                       Access to wage determinations is provided both in printed reports

                       17
                        Labor defines key classes of workers as those determined necessary for each of the four types of
                       construction surveys.
                       18
                        Since 1985, a regulation has prohibited, to the extent practicable, the use of wages for federal
                       construction in determining prevailing wages.


                       Page 24                                                           GAO/HEHS-99-97 Davis-Bacon Act
                  Appendix I
                  Labor’s Wage Determination Process Under
                  the Davis-Bacon Act




                  available from the U.S. Superintendent of Documents and on an electronic
                  bulletin board. Notices of modifications to general wage determinations
                  are published in the Federal Register.


                  An interested party may seek review and reconsideration of Labor’s final
Labor’s Appeals   wage determinations. The national office and the regional offices accept
Process           protests and inquiries relating to wage determinations at any time after a
                  wage determination has been issued. The national office refers all the
                  complaints it receives to the relevant regional offices for resolution. Most
                  inquiries are received informally by telephone, although some are written
                  complaints. Regional office staff said that a majority of those with
                  concerns appear to have their problems resolved after examining the
                  information (collected on form WD-22a) for the survey at issue, because
                  they do not pursue the matter further. If an examination of the forms does
                  not satisfy the complainant’s concerns, the complainant is required to
                  provide information to support the claim that a wage determination needs
                  to be revised. The national office modifies published wage determinations
                  in cases where regional offices, on the basis of evidence provided,
                  recommend that it do so, such as when it has been shown that a wage
                  determination was the result of an error by the regional office. Some of
                  those who seek to have wage rates revised are told that a new survey will
                  be necessary to resolve the particular issue that they raised. For example,
                  if the wage rates of one segment of the construction industry are not
                  adequately reflected in survey results because of a low rate of
                  participation in the survey by that segment of the industry, a new survey
                  would be necessary to resolve this issue.

                  Those who are not satisfied with the decision of the regional office may
                  write to the national office to request a ruling by Labor’s WHD
                  administrator. If the revision of a wage rate has been sought and denied by
                  a ruling of Labor’s WHD administrator, an interested party has 30 days to
                  appeal to the Administrative Review Board for review of the wage
                  determination. The board consists of three members appointed by the
                  Secretary of Labor. The Solicitor of Labor represents WHD in cases
                  involving wage determinations before the Administrative Review Board. A
                  petition to the board for review of a wage determination must be in writing
                  and accompanied by supporting data, views, or arguments. All decisions
                  by the Administrative Review Board are final.




                  Page 25                                         GAO/HEHS-99-97 Davis-Bacon Act
Appendix II

Comments From the Department of Labor




              Page 26         GAO/HEHS-99-97 Davis-Bacon Act
Appendix II
Comments From the Department of Labor




Page 27                                 GAO/HEHS-99-97 Davis-Bacon Act
Related GAO Products


              Davis-Bacon Act: Labor Now Verifies Wage Data, but Verification Process
              Needs Improvement (GAO/HEHS-99-21, Jan. 11, 1999).

              Davis-Bacon Act: Process Changes Could Address Vulnerability to Use of
              Inaccurate Data in Setting Prevailing Wage Rates (GAO/T-HEHS-96-166,
              June 20, 1996).

              Davis-Bacon Job Targeting (GAO/HEHS-96-151R, June 3, 1996).

              Davis-Bacon Act: Process Changes Could Raise Confidence That Wage
              Rates Are Based on Accurate Data (GAO/HEHS-96-130, May 31, 1996).

              Davis-Bacon Act (GAO/HEHS-94-95R, Feb. 7, 1994).

              The Davis-Bacon Act Should Be Repealed (GAO/HRD-79-18, Apr. 17, 1979).




(205392)      Page 28                                            GAO/HEHS-99-97 Davis-Bacon Act
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