WHD strives to update its list of consolidated wage  determinations annually, issuing 410 consolidated wage determinations  covering almost 300 standard occupations in 205 geographic locations. When making a wage determination, WHD analysts consult several  sources of information, such as its SCA directory of occupations and data  collected through two BLS national wage surveys, for wage data on  occupations. Relying on these tools and their own expertise, analysts  calculate prevailing wages and fringe benefit amounts for specific  geographic locations. Stakeholders contend that the wage determination  process is not transparent and that the resulting wages do not always  reflect local wage conditions. As a result, analysts spend considerable time  responding to inquiries about the methodology used to determine wages. As a result, the directory does not include  a broad range of emerging occupations that are covered under SCA. In fact, WHD does not include a description of the  methodology used to derive the wage rates in its wage determinations,  such as the wage data source used or the procedures analysts’ follow. DOL Enforces SCA by Conducting Investigations, Ensuring Contractor Payments, and Providing Compliance Assistance, but WHD Could Make Better Use of Violation Data

WHD enforces SCA by conducting contractor investigations, ensuring  contractor payments to employees, and providing compliance assistance  to stakeholders. WHD investigates complaints from service contract  employees, contractors, federal agencies, unions, and others who allege  that contractors have failed to pay either the wages or fringe benefits, or  both, specified in service contracts. WHD collects violation data, but it  does not fully use these data to plan compliance assistance, target specific  service industries or geographic locations for SCA investigation, or set  strategic enforcement goals. Without  further analysis of prior SCA violation data, WHD cannot ensure that it is  using the most effective mix of compliance assistance, complaint-driven  investigations, and directed investigations. Appendix I: Objectives, Scope, and Methodology

For this report, we described how the Department of Labor (DOL)   (1) establishes locally prevailing wages and fringe benefits and   (2) enforces the Service Contract Act (SCA). In addition, we interviewed representatives from  several service industry unions and key trade associations;   analyzed data obtained from DOL, including data on WHD investigations  from DOL’s Wage Hour Investigator Support and Reporting Database  (WHISARD) database; national, regional and district office training and  outreach efforts; file data on debarments; and data from the Federal  Procurement Data System (FPDS), including information on the number  and total dollar amount of SCA contract actions for fiscal years 2000  through 2003; and interviewed state officials and representatives from private-sector groups  who also produce wage and benefit rates in an effort to better understand  the relative merits of DOL’s wage determination process. Related GAO Products

Department of Labor, Wage and Hour Division, Employment Standards  Administration: Service Contract Act; Labor Standards for Federal  Service Contracts.
Why GAO Did This Study

Recipients of federal government contracts for services are subject to wage, hour, benefits, and safety and health standards under the McNamara-O'Hara Service Contract Act (SCA) of 1965, as amended, which specifies wage rates and other labor standards for employees of contractors. SCA requires the Department of Labor (DOL) to set locally prevailing wage rates and other labor standards for employees of contractors furnishing services to the federal government. DOL's Employment Standards Administration's Wage and Hour Division (WHD) administers the SCA and each year determines prevailing wage and fringe benefit rates for over 300 standard service occupations in 205 metropolitan areas. SCA also authorizes DOL to enforce contractor compliance with SCA provisions. This report describes how DOL (1) establishes locally prevailing wages and fringe benefits and (2) enforces SCA.

What GAO Found

When making a wage determination, WHD analysts consult several sources of information, such as its SCA directory of occupations and data collected through two Bureau of Labor Statistics national wage surveys, for wage data on occupations. Relying on these tools and their own expertise, analysts calculate prevailing wages and fringe benefit amounts for specific geographic locations. The wage determination process produces a wealth of nationwide wage data for service occupations that WHD makes available online and strives to update annually. However, stakeholders (e.g., unions, contractors, employees, and others) contend that the wage determination process is not transparent and that the resulting wages do not necessarily reflect local wage conditions. For example, WHD does not include a description of the methodology used to derive the wage rates in its wage determinations, such as wage data sources used or the procedures analysts follow. As a result, analysts spend considerable time responding to inquiries about the methodology used to determine wages. WHD enforces SCA by conducting investigations, ensuring contractor payments, and providing compliance assistance to stakeholders. WHD investigates complaints from service contract employees, federal agencies, unions, and others who allege that contractors have failed to pay either the wages or fringe benefits, or both, specified in SCA contracts. WHD collects violation data, but it does not fully use these data to plan compliance assistance, target specific service industries or geographic locations for SCA investigation, or set strategic enforcement goals. As a result, WHD may be overlooking some SCA violators and industries that need further enforcement. A review of prior SCA violation data could provide WHD assurance that it is using the most effective mix of available compliance assistance and investigative efforts.