AGC Takes the Stand on Davis-Bacon Final Rule

On June 10, AGC of America, and several of its members, took to the witness stand in federal court to halt three unfair provisions in the new Davis-Bacon final rule impacting its coverage to truck drivers, contractors with material supply operations, and where an owner fails to include the requirement in the bidding documents/contract. Doug Walterscheid (J. Lee Milligan Inc., AGC of Texas member), John Ramage (71 Construction, AGC of Wyoming member), Doug Tabeling (Carroll Daniel Construction, Georgia AGC member), and Jimmy Christianson (AGC of America) testified in the U. S. District Court for The Northern District of Texas in Lubbock on behalf of the association’s legal challenge to the U.S. DOL’s unlawful expansion of Davis-Bacon coverage to construction contractors. The court hearing was on AGC of America’s motion for preliminary injunction that, if granted, would halt the U.S. Department of Labor’s enforcement of the three aforementioned provisions.

These members articulated in court how the Davis-Bacon final rule:

1. Creates a bait-and-switch situation when an owner fails to include Davis-Bacon requirements in bidding documents or the contract. Some owners, like schools, are using federal covid funds and don’t realize Davis-Bacon applies. Now, because of the Davis-Bacon final rule, when owners forget to include Davis-Bacon requirements in contracts, it still applies. Contractors are required to retroactively cover workers’ wage differentials and submit certified payrolls, even after project completion. 
2. Creates significant administrative burdens and an unlevel playing field for truck driver coverage. The final rule expanded Davis-Bacon requirements to truck drivers who spend more than an undefined “de minimis” amount of time on the jobsite. The administrative difficulty of tracking truck drivers’ time on site has led many contractors to automatically apply Davis-Bacon requirements to truck drivers on applicable projects. However, not all contractors are necessarily undertaking this safe compliance approach, creating an unlevel playing field in a low bid environment.
3. Creates a competitive disadvantage for contractors with material supply operations. The final rule expanded Davis-Bacon requirements to contractors that use their own material supply operations on Davis-Bacon covered projects but exempts from Davis-Bacon requirements companies that only provide material supplies. As a result, contractors are both disincentivized and penalized for using their own material supply operations on their Davis-Bacon covered projects whereas contractors without material supply operations have a competitive advantage in using bona fide material suppliers because those suppliers do not have to follow and pay for Davis-Bacon requirements on the projects.