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Meaning of Davis-Bacon Act’s “Public Work” clarified


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sean

By Sean McLean

Public work
The DBA requires prevailing wages to be paid to various classes of laborers and mechanics under every contract in excess of $2,000, to which the Federal Government or the District is a party, for the construction of a “public work.”  For this purpose, DOL regulations define “public work” as government construction projects carried on to serve the interest of the public.  Pursuant to such regulations, the DOL found that the Project satisfied this definition due to the District’s involvement in planning and oversight, and the collateral public benefits expected to flow from the development, such as employment opportunities for District residents, a set of affordable housing units, new sidewalks, pedestrian friendly areas, and increased lease and tax revenue for the District.  

The District, on the other hand, acknowledged that it had greater involvement in the Project than in a typical condominium or hotel construction project.  However, it claimed that this increased involvement was due to the mixed-use nature of the project and the fact that the District owns the land.  When viewed in conjunction with the plain language of the DBA, the District argued that the term “public work” could not be construed to apply to the Project which was neither built nor used by the government or the public.

Court’s determination
In analyzing the dispute, the court noted that there are two signature elements of a public works project: (i) public dollars going into the project, and (ii) a public facility coming out of the project.  The Project at issue in this dispute has neither element. The court found it is privately financed by for-profit entities and will result in the creation of condominiums, apartments, office space, retail space, and a hotel that will all be privately owned and operated.  The court found the fact that the project is expected to give rise to incidental public benefits, such as employment opportunities, increased tax revenue, and even a certain amount of open space, does not transform it into a public work.  To the contrary, these are the goals of every urban development project.  The fact that the District has imposed certain requirements does not alter the essence of the finished product.  Therefore, the court concluded the DBA does not apply to the Project.

 

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