Prevailing wage rules required by the federal stimulus program may drive up costs and cause some projects to miss their goals, according to a new study by the U.S. Government Accountability Office.
The study, ordered by Senate Minority Leader Mitch McConnell (R-Ky) and released on March 25, contends that 40 federal programs with construction funding authorized under the 2009 American Recovery and Reinvestment Act are now subject to the wage rules under the federal Davis-Bacon Act. Seven programs are brand-new, and 33 were not previously covered by the law. They account for $102 billion of the $309 billion appropriated for construction-related work, says GAO. In addition to setting prevailing wages, Davis-Bacon requires contractors to pay workers weekly and to submit certified payroll records.