Article 36: Davis-Bacon Act
(Category: eligibility-regulations)
Article Summary
The Davis-Bacon Act is a federal labor law requiring contractors to pay construction workers the local “prevailing wage,” including fringe benefits, as determined by the U.S. Department of Labor. As a general statutory rule, the provisions of the Davis-Bacon Act do not apply to standard State, Local, Tribal, or Territorial contracts for work funded under the Stafford Act's Public Assistance program.
However, there are two major exceptions where prevailing wages must be enforced:
- Direct Federal Agency Letting: The Davis-Bacon Act applies to contracts that are formally let and managed directly by other Federal agencies executing disaster work, such as the U.S. Army Corps of Engineers (USACE) under a Mission Assignment.
- Pre-Existing Local Practice: If a local or state government subrecipient maintains a standard, uniform policy of incorporating U.S. Department of Labor prevailing wage rates into all of its public works contracts as part of its normal, non-disaster business practice, then those elevated labor rates remain fully eligible for FEMA Public Assistance reimbursement.
Five Key Takeaways for CTA FEMA Compliance
- Determine Project-Specific Davis-Bacon Applicability: Review contract origins carefully; standard local public assistance construction contracts are exempt from Davis-Bacon rules unless direct federal agencies or specific state laws mandate them.
- Enforce Labor Scales on USACE-Managed Contracts: Ensure full compliance with all federal prevailing wage tracking and payroll reporting if your infrastructure repairs are handled directly via a USACE contract.
- Validate Reimbursement via Pre-Existing Labor Policies: If your agency pays prevailing wages, provide copies of your pre-disaster procurement regulations to prove this is your uniform practice across all funding sources.
- Confirm Labor Market Rates for Local Cost Reasonableness: Even when Davis-Bacon is not legally triggered, verify that all contracted labor rates align with local market averages to satisfy general FEMA cost reasonableness standards.
- Maintain Compliant Certified Payroll Documentation: If prevailing wages are utilized under local policy, mandate that contractors submit weekly certified payroll sheets to streamline federal closeout audits.
