Davis-Bacon Act Expansion
On March 31, 2022, the US Department of Labor announced it is seeking to “re-interpret” the Davis-Bacon Act (DBA) to include, among other things, the construction of modular buildings. Some offsite manufacturing or fabrication of building materials could also be affected by the proposed revisions to the “site of the work” requirement. Under these proposals, the definition of “site of the work” would be changed to apply to offsite construction of “significant portions” of a building or work. Currently, these are usually excluded from coverage unless the work is performed at facilities established by the contractor specifically for the performance of a contract or project.
The proposed changes to the Davis-Bacon Act would have two main effects on the modular construction industry:
- The first concern is that the 26 states who have adopted “Little Davis Bacon” Acts (i.e., state-level laws that mirror the Davis-Bacon Acts requirements) will also adopt the federal government’s re-interpretation, thus limiting the financial viability of offsite and modular construction for public projects in those states.
- The second concern is that instead of utilizing U.S.-based modular companies, federal (and eventually state) developers and contractors will simply utilize foreign companies that do not have to abide by the Davis-Bacon Act. Should the proposed changes take effect, U.S.-based modular construction—which, due to its speed and lower labor costs, is currently being used by state and local governments to combat the critical need for affordable housing and infrastructure—will be financially impractical.
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Contact Your Representative
Please consider taking action by contacting your members of Congress and ask for their support to tell the Department of Labor the oppose this proposed rule change.
Links are provided below to identify your members of congress and their contact information.
You are welcome to use the sample letters below and add your own comments, or simply send your own communication outlining how this expanded rule would impact your business.
Sample Letter to the U.S. Senate
The Advocacy Team at Squire Patton Boggs has been Reaching Out to Congressional Offices to Educate Legislators on the Significant Impact of the Proposed Davis-Bacon Act Rule.
The advocacy team at Squire Patton Boggs has been reaching out to Congressional offices to educate legislators on the significant impact of the U.S. Department of Labor’s (DOL) proposed Davis-Bacon Act (DBA) rule. Most recently, they met with congressional staff from the office of Senator Jon Thune (R-South Dakota) on the DOL’s expansion of the law to “secondary worksites” which clearly targets the modular industry.
US House of Representatives & Senate Submit Letters Opposing Davis-Bacon Expansion
Members of the US House of Representative's Committee on Education and Labor, led by ranking members Reps. Virginia Miller and Fred Keller, and the Senate's Committee on Health, Education, Labor and Pensions, led by ranking member Sen. Richard Burr, have submitted letters to the US Dept. of Labor opposing its proposed expansion of the Davis-Bacon Act.
MBI Submits Public Comments to Dept. of Labor in Opposition of Davis-Bacon Act Expansion
The Modular Building Institute has submitted public comments Re: RIN 1235-AA40, Notice of Proposed Rulemaking on Updating the Davis-Bacon and Related Acts Regulations. These comments, supported by additional comment submissions from MBI members, explain MBI’s opposition to the proposed changes.
Learn More about the Davis-Bacon Act
What is the Davis-Bacon Act and How Does it Affect Modular Construction?
Enacted in 1931 during the Great Depression, the Davis–Bacon Act has long had implications far beyond its original, very targeted intent. Now, however, new proposals threaten to further increase its scope to include offsite and modular construction.
What the Expansion of the Davis-Bacon Act Would Mean for the Modular Construction Industry
MBI executive director Tom Hardiman discusses the potential expansion of the Davis-Bacon Act—which would impose prevailing wages on offsite and modular manufacturers working on federal construction projects—and its many implications for the modular industry at-large.
Small Business Administration Advocates Against DBA Expansion
See the full comments from the Small Business Administration against the expansion of the Davis-Bacon Act.
Frequently Asked Questions
The U.S. Department of Labor’s (“DOL”) 400+ page revision of its regulations implementing the ninety-year-old Davis–Bacon Act of 1931 could prove disastrous for the modular construction industry. The proposed rule expressly targets the modular industry by expanding DBA coverage to permanent offsite modular factories and eliminating the regulatory exemption that has been in place for decades. The public comment period on the proposed rule expired on May 17, 2022 and the DOL is in the next stage of drafting a final rule.
Here at MBI, we’ve fielded numerous questions about the DOL’s proposed expansion of DBA coverage and its impact on the industry.