Appendix C

Davis-Bacon Act (as amended)

40 U.S. CODE, § 276

a. Rate of wages for laborers and mechanics

(a) The advertised specifications for every contract in excess of $2,000, to which the United States or the District of Columbia is a party, for construction, alteration, and/or repair, including painting and decorating, of public buildings or public works of the United States or the District of Columbia within the geographical limits of the States of the Union, or the District of Columbia, and which requires or involves the employment of mechanics and/or laborers shall contain a provision stating the minimum wages to be paid various classes of laborers and mechanics which shall be based upon the wages that will be determined by the Secretary of Labor to be prevailing for the corresponding classes of laborers and mechanics employed on projects of a character similar to the contract work in the city, town, village, or other civil subdivision of the State, in which the work is to be performed, or in the District of Columbia if the work is to be performed there; and every contract based upon these specifications shall contain a stipulation that the contractor or his subcontractor shall pay all mechanics and laborers employed directly upon the site of the work, unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account, the full amounts accrued at time of payment, computed at wage rates not less than those stated in the advertised specifications, regardless of any contractual relationship which may be alleged to exist between the contractor or subcontractor and such laborers and mechanics, and that the scale of wages to be paid shall be posted by the contractor in a prominent and easily accessible place at the site of the work; and the further stipulation that there may be withheld from the contractor so much of accrued payments as may be considered necessary by the contracting officer to pay to laborers and mechanics employed by the contractor or any subcontractor on the work the difference between the rates of wages required by the contract to be paid laborers and mechanics on the work and the rates of wages received by such laborers and mechanics and not refunded to the contractor, subcontractors, or their agents.

(b) As used in sections 276a to 276a-5 of this title the term "wages", "scale of wages", "wage rates", "minimum wages", and "prevailing wages" shall include(1) the basic hourly rate of pay; and

(2) the amount of

(A) the rate of contribution irrevocably made by a contractor or subcontractor to a trustee or to a third person pursuant to a fund, plan, or program; and

(B) the rate of costs to the contractor or subcontractor which may be reasonably anticipated in providing benefits to laborers and mechanics pursuant to an enforceable commitment to carry out a financially responsible plan or program which was communicated in writing to the laborers and mechanics affected,

for medical or hospital care, pensions on retirement or death, compensation for injuries or illness resulting from occupational activity, or insurance to provide any of the foregoing, for unemployment benefits, life insurance, disability and sickness insurance, or accident insurance, for vacation and holiday pay, for defraying costs of apprenticeship or other similar programs, or for other bona fide fringe benefits, but only where the contractor or subcontractor is not required by other Federal, State, or local law to provide any of such benefits:

Provided, That the obligation of a contractor or subcontractor to make payment in accordance with the prevailing wage determinations of the Secretary of Labor, insofar as sections 276a to 276a-5 of this title and other Acts incorporating sections 276a to 276a-5 of this title by reference are concerned may be discharged by the making of payments in cash, by the making of contributions of a type referred to in paragraph (2) (A), or by the assumption of an enforceable commitment to bear the costs of a plan or program of a type referred to in paragraph (2) (B), or any combination thereof, where the aggregate of any such payments, contributions, and costs is not less than the rate of pay described in paragraph (1) plus the amount referred to in paragraph (2).

In determining the overtime pay to which the laborer or mechanic is entitled under any Federal law, his regular or basic hourly rate of pay (or other alternative rate upon which premium rate of overtime compensation is computed) shall be deemed to be the rate computed under paragraph (1), except that where the amount of payments, contributions, or costs incurred with respect to him exceeds the prevailing wage applicable to him under sections 276a to 276a-5 of this title, such regular or basic hourly rate of pay (or such other alternative rate) shall be arrived at by deducting from the amount of payments, contributions, or costs actually incurred with respect to him, the amount of contributions or costs of the types described in paragraph (2) actually incurred with respect to him, or the amount determined under paragraph (2) but not actually paid, whichever amount is the greater.

a-1. Termination of work on failure to pay agreed wages; completion of work by Government

Every contract within the scope of sections 276a to 276a-5 of this title shall contain the further provision that in the event it is found by the contracting officer

that any laborer or mechanic employed by the contractor or any subcontractor directly on the site of the work covered by the contract has been or is being paid a rate of wages less than the rate of wages required by the contract to be paid as aforesaid, the Government may, by written notice to the contractor, terminate his right to proceed with the work or such part of the work as to which there has been a failure to pay said required wages and to prosecute the work to completion by contract or otherwise, and the contractor and his sureties shall be liable to the Government for any excess costs occasioned the Government thereby.

a-2. Payment of wages by Comptroller General from withheld payments; listing contractors violating contracts

(a) The Comptroller General of the United States is authorized and directed to pay directly to laborers and mechanics from any accrued payments withheld under the terms of the contract any wages found to be due laborers and mechanics pursuant to sections 276a to 276a-5 of this title; and the Comptroller General of the United States is further authorized and is directed to distribute a list to all departments of the Government giving the names of persons or firms whom he has found to have disregarded their obligations to employees and subcontractors. No contract shall be awarded to the persons or firms appearing on this list or to any firm, corporation, partnership, or association in which such persons or firms have an interest until three years have elapsed from the date of publication of the list containing the names of such persons or firms.

(b) If the accrued payments withheld under the terms of the contract, as aforesaid, are insufficient to reimburse all the laborers and mechanics, with respect to whom there has been a failure to pay the wages required pursuant to sections 276a to 276a-5 of this title, such laborers and mechanics shall have the right of action and/or of intervention against the contractor and his sureties conferred by law upon persons furnishing labor or materials, and in such proceedings it shall be no defense that such laborers and mechanics accepted or agreed to accept less than the required rate of wages or voluntarily made refunds.

a-3. Effect on other Federal laws

Sections 276a to 276a-5 of this title shall not be construed to supersede or impair any authority otherwise granted by Federal law to provide for the establishment of specific wage rates.

a-4. Effective date of sections 276a to 276a-5

Sections 276a to 276a-5 of this title shall take effect thirty days after August 30, 1935, but shall not affect any contract then existing or any contract that may thereafter be entered into pursuant to invitations for bids that are outstanding on August 30, 1935.

a-5. Suspension of sections 276a to 276a-5 during emergency

In the event of a national emergency the President is authorized to suspend the provisions of sections 276a to 276a-5 of this title.

a-6. Appropriation

a-7. Application of sections 276a to 276a-5 to contracts entered into without regard to section 5 of Title 41

The fact that any contract authorized by any Act is entered into without regard to section 5 of Title 41, or upon a cost-plus-a-fixed-fee basis or otherwise without advertising for proposals, shall not be construed to render inapplicable the provisions of sections 276a to 276a-5 of this title, if such Act would otherwise be applicable to such contract.

[From the Congressional Record, May 30, 1972]

FAT LABOR CONTRACTS; NO JOBS FOR LABOR

Mr. FANNIN. Mr. President, union leaders who have demanded exorbitant wage increases and restrictive work rules have caused inflation and have forced virtually entire industries to flee overseas.

Some of these union leaders have started to realize that it is no good to have fat labor contracts but no jobs for their members.

No industry operates in a vacuum. For every action in our economy, there is a reaction. When labor costs go up, prices increase, Americans pay more for their goods, and American products are no longer competitive in certain markets. The Wall Street Journal on April 14 published an excellent editorial stating that although there are indications that union leaders are starting to realize the problem, the majority of them still fail to understand fully their responsibilities.

Mr. President, I ask unanimous consent that the editorial be printed at this point in the RECORD.

There being no objection, the editorial was ordered to be printed in the RECORD, as follows:

THE UNIONS AGAINST THEIR MEMBERS

No one expects the AFL-CIO to sound like the National Association of Manufacturers, but it would be nice if the federation more often could see where union members' best interests really lie.

In a recent "Memo from COPE," published by the AFL-CIO's Committee on Political Education, the first article tells of the troubles of workers who lose jobs when their employers move manufacturing operations overseas or find that they cannot compete with imports. There certainly has been much painful dislocation, but COPE doesn't seem to see either the cause or the cure.

Reading this "Memo," as well as most of the other pronouncements by labor organizations and their leaders, you might think that the troubles result solely from a diabolical plot by corporations and their lackeys in federal government. American businessmen, says COPE, are "sailing off to foreign nations with their technology, sometimes their equipment, often their management personnel, and lots of American jobs"—with the help of favorable federal tax and tariff rules. In a roundabout way the labor group does appear to recognize that many businessmen start producing goods overseas because they can no longer produce them here and remain competitive in either foreign or domestic markets. Labor's "solution" is the Burke-Hartke bill, which would wall off much of the U.S. market as the exclusive province of U.S. companies.

COPE has the chutzpah to call this a tax-trade-consumer bill, although its inevitable result would be higher prices for many of the goods consumers buy. But the measure would indeed make a lot of Yankee businessmen go home; many, in fact, would go right out of business.

Anyone who thinks other nations would sit still for Burke-Hartke protec tionism is a congenital optimist. Retaliation would be swift and extensive, and many U.S. firms would lose whatever foreign market they still have.

A lot of American firms have gone overseas partly because of present foreign trade restrictions; a factory in France, for instance, may be essential to making any sales in the Common Market. U.S. plants abroad are responsible for a sizable share of America's exports, since they often use U.S.-made components-and help to promote some products that the companies make only in America.

Many of the American companies operating overseas could no longer do so if Burke Hartke's tax-tariff penalties are ever inflicted. As such companies shut up shop U.S. exports would drop, along with the jobs they provide.

Real solutions to the trade problems will require recognition that U.S. businessmen aren't the prime movers in this situation; they have been pulled and hauled by forces largely beyond their control.

One of the primary causes is the fixed-exchange-rate system that kept the dollar overvalued and thus made U.S. exports expensive and U.S. imports relatively cheap. Last December's exchange-rate realignment was a help, but rates could get out of line again.

They could easily do so if the U.S. government doesn't do a better job of controlling its finances and instead permits inflation to revive. The inflation, of course, has helped to push up the union wage demands that have done so much to price American goods out of markets both at home and abroad.