joel hoffman

Looking forward to your upcoming article, Vern. The 1980 GAO memo to OFPP is very informative and mirrors much of my arguments. Even then, GAO was indicating that there was no need for “protection” for organized labor for small, relatively insignificant projects below the then $10,000 simplified acquisition limit, let alone a $2,000 threshold. Such contracts were reserved for small business firms. Those firms generally aren’t unionized and are burdened by administrative costs and manpower resources to comply with D-B. The GAO said that the D-B protections were designed for workers on large project [not minuscule projects that would likely be performed by non-union employees anyway]. Sorry for rambling. I’m done now.

As an example, the Davis-Bacon threshold was higher ($5000) 93 years ago than it is now. They lowered it 89 years ago to $2000. That’s longer than anyone here has lived. Trivial? That’s an understatement. A dollar then was worth over 20 times what it is today. Today a dollar can buy about 4.4 cents of what a dollar could buy back then. My dad earned $1 a day plus meals and a cot in his Army run CCC Camp in 1933. $2000 was equivalent to 2000 man days of work. 🤪

Carl, when you have to use multiple trades to perform a tiny amount of work…which is reserved for small business firms anyway, it’s not practical for Unionized contractors. So there is no need to “protect” or promote union labor on such small jobs. But it probably will be the same for Longer time. Common sense isn’t evident here.

Nine hours ago, @ji20874 posted: “Joel,Are you trying to make a case for a change? Fine with me if you are, but I don’t think Wifcon.com is where you need to make your case.” ———————————————— ji, have you followed this thread? Yes, I responded to the subject of the thread. I simply mentioned that the $2000 Davis-Bacon threshold appears to be immortal. It’s been the threshold since 1935. The original 1931 threshold was $5000 but was lowered, as part of efforts to end the Great Depression, to $2000. You can read the history of the Davis-Bacon Act at Wikipedia.com Then, I was challenged to explain why it’s “bad for the system and the country” and why it’s burdensome. The conversation eventually got around to the likelihood of the DB threshold being increased. It appears that it won’t likely be raised. A dollar in 1935 is worth $22.69 in 2024. I wouldn’t advocate raising it that much. But a comparable amount of construction work within the current threshold is about 4.4% of what you could get in 1935. And labor productivity was much lower then, resulting in larger labor crews and total labor hours to construct a project. Means, methods, materials, tools and equipment have greatly increased labor productivity. If most of the 88-90% of the US construction industry workforce is willing to work as non-union craft labor, is there a need to retain a 1931 ($5000) or 1935 ($2,000) Depression Era threshold for application of primarily union based wage rates. Almost all, if not all states, have adopted minimum construction wage rates. In fact, when I was still active in construction contracting as late as 8 years ago, actual wages on our job sites often exceeded the DB minimum wage rates due to market competition for craft labor. This thread intended to discuss, in part, regulations and laws that, once Instituted, tend to live forever, regardless of whether or not they are still necessary. Unionized contractors likely won’t bother with minuscule contracts with very little labor hours but with the administrative expenses to comply and report, Union work craft rule restrictions, etc.

Carl, did your research show you that DOL has recently decided to revert to methods used to determine Prevailing wage rates that are essentially based upon organized labor bargained rates, even though they might not be “prevailing” for the locality This is the way it was done a relatively long time ago in the seventies and 80’s. I don’t remember when that was changed to reflect more actual prevailing rates. Now it seems to be back during this Administration. So wage rates applicable to a small minority of the workforce may now again be considered the prevailing rates… It was posted on WIFCON awhile back, complete with the DOL “spin”, justification.

The administrative effort on the part of non-Union contractors isn’t nil. 88-90% construction employees are non-Union, generally including those working for small business employers. Local Small Businesses would be the industry market for very small construction contracts (generally reserved for small business anyway) assuming the DB threshold would be raised to say$10k. Remember that the labor share of $2k-$10k minor construction/Maintnence/repair contract would generally be a small percentage of the total price, which also would likely include, materials, tools and equipment, supervision, overhead and profit.

Thanks, Vern. I’ll look for the article. Bye.🤠

@Vern Edwards Because Saturday, you asked me to go on (“provide specifics”). Did you forget? I thought I’d already made my point. You had appeared to believe that there was some value to the construction workforce in keeping the threshold at $2000. However, in response to your Saturday request, I provided some specific details for my reasoning against retaining the threshold. Yes, “I know” and am glad we agree that the DB threshold should be changed and that we agree Congress and the President won’t change it. None of them know anything about it. It’s purely political, in almost meaningless support for the 10-12% portion of the US construction industry labor force that is unionized. That’s why the $2000 DB threshold is practically or seemingly “semi-immortal”. Those unionized construction firms likely won’t bother seeking or taking on a $2000 or even larger small construction contract. Those can be relatively easily procured from local small business firms using simplified acquisition methods. Seemingly Immortal laws and regulations was a point in the original post quoting Elon Musk and in wifwaf’s summation, both of which you challenged. it’s interesting that even some of the largest US construction firms have separate Union and non-union companies (e.g., Bechtel). It’s called “Double-Breasted Operations”. I’m done too, thanks.

@Vern Edwards Ok. See next post.

Vern, the specifics are that a $2000 construction job probably wouldn’t take more than a day or so at the most. The labor is only a small fraction of the total cost, including materials, any equipment and materials plus the overhead and markup. The administrative costs for a contractor to comply with the D-B wage rate requirements for a minuscule job involving a few man hours would likely be burdensome, especially for a small business, non- union contractor. I doubt that many if any Union contractor would bother with a small job. Many union contracts include show up pay requirements, such as at least four hours, even for a one to three hour workday. There are also strict limitations on what Union employees are allowed to do, leading to the need for additional crew members and/or separate trades for routine work that one or two persons can accomplish. Add the additional paperwork burden to that. Only between 10-12% of the nationwide construction workforce is unionized. Many of those work on large projects. Apparently you believe that the 88-90% non-union workforce are being taken advantage by their employers and it would serve the nation well to pay everyone union wages and benefits. If a non-union employee performs more than one trade on a small job, do they have to keep track of the different trade times? Probably just get paid the highest rate.

What good does applying Davis-Bacon, essentially requiring Union labor rates to simple tasks, that may take a couple of hours to perform, provide the country, labor or the system? The “system” has recently reverted to determining, in practice, “prevailing wage rates” based on local Union rates, even where union labor is a small fraction of the labor force. DOL stopped doing that probably 20-25 years ago. Now it’s back. Bureaucratic inconvenience?????? Come on Vern. Unnecessary, wasteful complexity for minuscule tasks that doesn’t effect any real difference in a workers pay. Most small construction tasks are performed by small businesses, who likely aren’t unionized in most parts of the country. Union contractors probably won’t even bother contracting for such small jobs. $2000 total cost is minuscule in scale. Why over complicate it. I could talk for days about dealing with the Tri-City, Washington unionized labor force at Umatilla, Oregon that built the Chemical Weapons Demil Plant. (Example: three electricians carrying a 20’ , 3/4” piece of electrical conduit that probably weighs 5 pounds or less across the site from a storage trailer… the prime had electrical labor overruns of 165% on a huge FFP contract that affected the other trade productivity.)

So, “there ya Ah!” 🤠

I said about the same thing. You don’t have to include a FAR clause to consider past performance in a no cost agreement.

A $2,000 dollar construction effort now days could involve an hour or two worth of labor to install something. Does that mean obtaining a wage decision and payrolls, etc, etc? The threshold isnt based solely on the cost of labor…

That’s what I’ve been trying to determine. It appears that if there has been a delay you may be entitled to a compensable time extension for additional efforts, depending upon the specific additional services provided beyond the agreed completion date. You should be able to submit a Request For Equitable Adjustment for the costs and maybe for overhead and profit. Don’t have all the facts and your contract language.