MBI Members Provide Testimony to White House Regarding Concerns about Davis-Bacon Act Expansion

On a recent call with the White House’s Office of Information and Regulatory Affairs (OIRA), several MBI members provided testimony about the potential impact expanding the Davis-Bacon Act (DBA) would have on their companies and the industry.

Under the Department of Labor’s Wage and Hour Division, the Administration is proposing to expand the ninety-year old construction law to  cover “secondary sites of work” which would include modular prefabrication plants for the first time ever.

In addition, the Department of Labor’s estimated cost of compliance with the proposed DBA expansion was stated as a paltry $78!

MBI members provided testimony in several key areas, including:

• Cost of compliance. Testimony was offered showing that it would actually require some manufacturers to hire an additional HR/payroll person to monitor and track all the various wages in the factory, ensure the accuracy, and submit the required certified payrolls at a cost closer to $75,000!
• Cost of projects. Two members (a developer and a GC) offered testimony that the cost of projects would increase by 25-30%, which is counter-productive to President Biden’s affordable housing initiatives.
• Voided contracts. Multiple members mentioned that their current GSA contracts would immediately need to be voided based on expected increases in cost, again adding to the compliance costs.
• Lost revenue. Several members stated that they would not be able to bid federal work if the proposed rule become final, costing their small businesses a significant portion of revenue.
• Inability to comply. Lastly, a key point made was that, despite the project and compliance cost, some modular companies simply cannot comply with the rule as written. MBI member testimony detailed how the worker risk, roles, and responsibilities are different in a factory versus on site.