Flawed System Lets Contractors Cheat Workers on Federal Building Jobs
A new report from The Center for Public Integrity, with an assist from the Foundation for Fair Contracting in Washington, D.C., illustrates how “low-road” contractors can, and often do, circumvent the federal Davis-Bacon Act.
Workers on a Government Services Administration (GSA) job in Washington, DC who spoke to the Center for Public Integrity said their employer didn’t tell them what they were owed under the law. They and 124 others filed a complaint with the Labor Department’s Wage and Hour Division in 2011.
Investigators found in the workers’ favor, saying they should have earned $25.47 per hour including benefits, as skilled laborers, a specific category of employee under Davis-Bacon. Instead, their supervisors paid them $15.84 an hour and classified their work as general labor. Six years after the complaint was filed, the investigation remains open on appeal. The workers still haven’t gotten their back pay.
The U.S. Department of Labor’s Wage and Hour Division must enforce at least 14 statutes across the nation’s 29 million businesses with a team of only 929 investigators. Federal agencies, which spent more than $470 billion on contracts during the 2016 fiscal year, are saddled with a flawed system to vet contractors and monitor their compliance with those laws. As a result, contractors’ violations rarely show up in government databases. Subcontractors get even less scrutiny.
Last year, the federal government spent more than $40 billion on contracts covered by Davis-Bacon. But a Center investigation found that about 70 percent of the businesses caught violating the law in 2016 don’t appear in federal databases designed to track companies’ contracting records.
Weak oversight allows subcontractors in particular to shortchange workers on government projects with little fear of being caught or barred from future contracts. Meanwhile, their overseers often maintain clean labor records and continue to win government business. This fiscal year, federal agencies have spent more than $425 million on contractors found to have violated Davis-Bacon in 2016, according to U.S. Treasury and Labor Department records analyzed by the Center. The top spenders: The U.S. Department of Defense and the GSA.