Federal LEED projects demand Davis-Bacon wages - but is the Act ready for LEED builders?
One of our favorite blogs in the construction law world just happens to be Chris Cheatham’s Green Building Law Update. The blog undoubtedly focuses on green building, providing a wonderful balance of reporting on construction standards, legal developments and legislative change. Chris is a wonderful writer; one who challenges people in the sustainable building world to think about developing their industry. We highly recommend subscribing to his blog by clicking here.
Last week, Chris embarked on a new topic: discussing developments in the construction world that will have an impact on construction projects. His topic last week was the Davis-Bacon Act (DBA). While by no means a “development” in itself, Chris discussed the application of the DBA to ARRA (Amercian Recovery and Reinvestment Act) projects which have sprung up across the country. Lets briefly discuss.
Davis-Bacon Application
The federal Davis-Bacon Act applies minimum prevailing wage classifications for all federally-funded or assisted construction projects. The U.S. Department of Labor creates wage classifications by the type of project for a specific type of worker. Similarly, state governments, such as Washington, have applied “little” DBAs requiring prevailing wages on state funded works.
The worker classifications are crafted with broad job scopes, in order to be over-inclusive. These classifications have drawn the ire of many private construction firms, who complain of over payment for non specialized labor (i.e. paying a wire runner as a journeyman electrician). So, as many favor the DBA’s heavy wages – it can be crippling to an unprepared private firm’s profit margin.
To prepare, a construction professional must sit and absorb the federal wage classifications that apply on their project – before bidding. Wage classifications are prepared by state and by project.
For instance, if you are bidding a contract in Washington state – check out the Washington state classifications. If you were building a non-residential structure, such as a government building, in King County, you would click here.
If you had to bid ironworkers to lay your structural steel, you would need to bid them per hour at $36.62, plus $17.40 in fringe benefits (insurance, fringe, or even cash). There are no real boundaries here – if are involved in this work, you are getting paid as an ironworker. If you do not plan for this broad application, penalties under the Wage & Hour Act or Contract Work Hours and Safety Standards Act. Penalties are stiff, providing for up to two times the amount of the unpaid or underpaid wages, plus interest.
Green Implications
The intriguing part of Chris’ article is that we are talking about the DBA’s application to ARRA. Many ARRA projects are being classified as “green” with goals of meeting US Green Building Council LEED standards.
So, are contemporary DBA classifications ready for green building projects? The short answer is no.
A cursory review of the DBA classifications for LEED-heavy states such as Washington and California do not show that there is a wage classification for qualified LEED accredited professionals or green building raters. Despite advanced training and education, along with certification, these workers might be limited to lower level pay under “laborer” or their specialized area (i.e. roofer, plumber, electrician). More likely, these workers are likely to set their own pay level, since the market likely sets it above the minimum classifications.
What about specialized trade workers? Do LEED qualified electrical, mechanical, and plumbing workers require heavier wages? It appears not. But considering the federal government’s interest in pushing green construction, it would appear to be adequate incentive to offer higher wages (thus more profitable projects) to LEED builders.
We hope that Chris’ uncanny involvement in the green building industry lends to this discussion. Check back to BuildersCounsel.com to learn more about the DBA and green building.
Generally speaking, it is not a requirement of the LEED rating system that tradespeople be LEED AP’s. In fact, it is not even “required” by the LEED rating sytem although you do get 1 point for it under the Innovation in Design category -
“At least principal participant of the project team shall be a LEED Accredited Professional”
The cost of the LEED AP or the Green Globe rater would go into the project overhead as any QA/QC person would and would be a non-issue for Davis-Bacon requirements.
Since when does it take a LEED AP Journeyman Electrician to construct a LEED Certified building? I have managed the construction of a $60MM federal building that was LEED Certified Silver, and I’m currently managing a $120MM federal building that should be LEED Certified Gold when complete. Both projects obviously fall under the DBA. Never has the issue been raised about modifiying the prevailing wages due to the LEED Certification goal for the project. I’ve never seen a LEED AP perform construction on a project, and therefore they would not need a DB classification. The LEED Certification requirements are in the design. Any special LEED Certification requirements during construction (eg construction waste recycling, building air flush-out) are directed by project management – again, no change in DB classification. Am I missing something?
Thanks to both Bill and MJ for sending us some comments. Also, thanks Chris @ http://www.greenbuildinglawupdate.com for taking on the question and providing an answer.
I think everyone is right. LEED APs are not required. They are generally rolled into the overhead on a job, as a separate contractor. Further, the DOL will not classify workers based upon skill level – LEED qualifications are a skill/training.
But, thinking forward there might be more to this discussion. I will discuss further in my article today.