Davis-Bacon Act: Methodological Changes Needed to Improve Wage Survey

In 2014, the Department of Labor reported that its Division of Wage Determinations was merged with the Branch of Government Contracts Enforcement into the Office of Government Contracts, headed by a newly-created SES position. According to officials, this merger centralized all aspects of the government contracts program and streamlined changes to the wage determination methodology. Officials noted that this restructuring was part of a larger effort by the Wage and Hour Division (WHD) to reevaluate its survey processes. As part of that effort, officials said numerous meetings and discussions were held with BLS to explore use of the Occupational Employment Survey (OES) or alternative survey methodology. WHD officials indicated, however, that there are barriers to using the OES, including: the Davis Bacon Act and implementing regulations that require WHD to use the smallest civil subdivision, whereas OES data are primarily derived using statewide data; regulations requiring the use of a prevailing rate requirement at more than 50 percent as opposed to the OES' automatic calculation of an average rate; and the inclusion of data collected by BLS in its surveys that are not permitted to be included in prevailing wage calculations (for example, the OES includes data on "helpers"). In FY 2015, WHD officials reported that they conducted a review of the construction survey process. As part of this review, officials said they actively engaged with various construction stakeholders to identify ways to improve contractor participation in the survey. In addition, WHD officials indicated that in January 2015, they began conducting post-survey briefings to explain how participation affected survey results. Based on positive stakeholder response, officials reported in 2016 that they institutionalized the use of post-survey briefings and began conducting mid-survey briefings to increase survey participation. In April 2016, WHD published its first stakeholder fact sheet to clarify that survey data are not used to target contractors for investigation. In September 2016, WHD contracted with Eastern Research Group (ERG) to revise and streamline the survey process. ERG assumed responsibility for the survey in February 2017. As of May 2017, ERG indicated it was delivering weekly progress reports on the status of each survey and number of responses processed; revising the processing of survey responses to improve timeliness; revising the survey form to make it more user-friendly; rewriting standard operating procedures; and exploring possible approaches to improve response rates. The contract with ERG also indicates that it will conduct, develop, and test different survey strategies to maximize participation as well as conduct stratified sample surveys in counties designated by WHD to estimate the ratio of collective bargaining agreement construction activity to total construction. These efforts can help WHD enlist assistance to evaluate and provide advice on the survey. Conducting the survey evaluation and obtaining advice on how to improve the process can help the agency determine what additional steps are needed to further improve the determination of prevailing wages paid to workers on federally-funded construction projects.