INTRODUCTION Legislation requiring the payment of minimum wages to laborers and mechanics employed under federally awarded contracts for the construction of public buildings and public works first was adopted in the Davis-Bacon Act of 1931. This act, as amended in 1935, is set forth at 40 U.S.C. 276a. The principal purpose sought to be achieved was a protection of communities affected by such construction from the depressing influence of lower wages at which workmen might be hired elsewhere and brought onto the work, and this was accomplished through contract conditions requiring payment of minimum wages based on wages prevailing in the areas to be protected. The legislative proceedings indicate that determinations of prevailing wages were expected to be no more than factfinding tasks and that the Government would not formulate special rates but would be bound by those established in private industry. Subsequent extensions of minimum wage coverage to federally assisted contracts appear to have had a slightly broader objective and to have adopted the concept that contracts resulting from federally assisted construction, even though not awarded by the Government, similarly should support locally prevailing wage standards. The responsibility of ascertaining what wages prevail has been placed, in all cases, in the Secretary of Labor. For federally awarded construction contracts, the Davis-Bacon Act provides that minimum wages "shall be based upon the wages that will be determined by the Secretary of Labor to be prevailing on projects of a character similar to the contract work in the city, town, village, or other civil subdivision of the State *** or in the District of Columbia if the work is to be performed there." For assisted construction contracts in which there is a Federal interest growing out of grants, loans, or insurance, responsibility is placed in the Secretary of Labor, not by the Davis-Bacon Act, but by provisions of individual enabling acts which usually specify that the wages to be paid should not be less than those determined by the Secretary of Labor to be prevailing "in accordance with the Davis-Bacon Act." For housing construction projects for the armed services (Capehart housing) under the National Housing Act, 12 U.S.C. 1701, 1715c, Federal assistance, in the form of mortgage insurance, is conditional upon a certification as follows: "*** the laborers and mechanics employed in the construc- On April 5, 1962, the House Committee on Education and Labor favor- The Secretary of Labor's responsibility for determining prevailing wages under the National Housing Act, as well as under of Labor. various minimum wage programs, has been delegated to the Solicitor Applicable regulations and procedures are set out in part 1 of subtitle A, 29 CFR (exhibit A). Section 1.2(b) thereof, under the heading "Definitions," states that "the term 'area' in determining wage rates under the Davis-Bacon Act, as amended, and the labor standards provisions of the National Housing Act, as amended," among others, "shall mean the city, town, village, or other civil subdivision of the State in which the work is to be performed." This definition is nearly identical to that employed in the Davis-Bacon Act, except that it does not expressly give effect to the additional language "or in the District of Columbia if the work is to be performed there." The Capehart housing provisions (12 U.S.C. 1715c) refer only to "the locality in which the work was performed." It should be noted that jurisdiction over initial prevailing wage determination matters has been placed almost exclusively in the Secretary of Labor, and ordinarily the merits of such determinations are not reviewed by us. Also, the Supreme Court has indicated a view that such wage determinations are not subject to judicial review. United States versus Binghampton Construction Company, 347 U.S. 171, 177. It was reasoned that the Secretary does not exercise regulatory power over private business or employment, but acts simply as any other agent of the Government given authority to fix conditions for procurement. For this reason and in this sense, a bidder or contractor has no legal standing to question their terms. As pointed out in Perkins v. Lukens Steel Company, 310 U.S. 113, commenting upon similar wage determining authority in the Walsh-Healy Act, 41 U.S.C. 35, the Congress in the act "did no more than instruct its agents" and "Courts should not, where Congress has not done so, subject purchasing agencies of the Government to the delays necessarily incident to judicial scrutiny at the instance of potential sellers ***." On the other hand, our authority in the matter is inherent in general jurisdiction to audit accounts of disbursements of appropriated funds and to investigate and report to the Congress all matters relating to the receipt, disbursement, and application of public funds. See 31 U.S.C. 53. Pursuant there to we have held that the Secretary of Labor was not granted discretion under the Davis-Bacon Act to attach a condition to a wage classification or rate which had no relevancy to the prevailing wage requirements to which the terms of his authority are exclusively addressed. 36 Comp. Gen. 806. See also B-147847, April 11, 1962 (to Senator Carl T. Curtis), and 40 Comp. Gen. 565. While it is assumed that we would be estopped generally from questioning the legal effectiveness of contract conditions incorporating the Secretary's wage determinations, it does not appear that this legal limitation operates to preclude objection to any action outside the proper scope of the authority given to him, or to restrict our obligation to report to the Congress any instances in which we believe that the authority has been erroneously exercised. 88711 0-62-pt. 22 The following officials held the positions of Secretary, Under Secretary, and Solicitor of Labor during the period in which the activities discussed in this report were carried out. A description of the general procedures used in determining prevailing wage rates and the background of these wage rate decisions will be found beginning on page 12. |