Key job classifications are those determined necessary for one or more of the  four construction types. Recent Efforts to Improve Data Collection and Processing Have Not Yet Addressed Key Issues with Survey Quality

		Labor’s Changes to Survey Data Collection and Processing May Not Achieve Expected Results

Labor has taken several steps over the last few years to address issues  with its Davis-Bacon wage surveys, including completing a number of  open surveys and changing how it collects and processes some survey  data in its efforts to improve timeliness and accuracy. We found some surveys  initiated under the new process are behind schedule and some published  wage rates are based on outdated data. Labor cannot determine whether its Davis-Bacon survey results are  representative of prevailing wage rates because it does not currently  calculate response rates or conduct a nonresponse analysis. This standard can be met  using data from a single county, multiple counties within a state, or  statewide. Utility of County Focus

Although its regulations state the county will normally be the civil  subdivision for which a prevailing wage is determined, Labor is often  unable to issue wage rates for job classifications at the county level because  it does not collect enough data to meet its current sufficiency standard of  wage information on at least three workers from two employers. In our  review of the four surveys, we found one-quarter of the final wage rates for  key job classifications were based on wages reported for six or fewer  workers (see fig. Little Incentive to Participate and Lack of Transparency Remain Key Issues for Stakeholders

		Many Stakeholders Reported Contractors Lack Incentive to Participate in Davis-Bacon Surveys

In our interviews with stakeholders about additional issues with Labor’s  wage determination process, they provided several reasons why contractors  have little or no incentive to participate in the Davis-Bacon wage survey. Second, 16 stakeholders  said contractors either may not understand the purpose of the survey or do  not see the point in responding because they believe the prevailing wages  issued by Labor are inaccurate. Stakeholders Reported Survey Form Was Generally Easy to Understand, but Most Forms Reviewed Had Errors

While 19 of the 27 contractors and interested parties we interviewed said  the wage survey form, which Labor officials said was last updated in 2004,  is generally easy to understand, some identified challenges in completing  specific sections. Labor’s regulatory goal to issue wage rates at the county level may also  limit its ability to improve survey representativeness and timeliness. To improve the transparency of wage determinations while maintaining  the confidentiality of specific survey respondents, we recommend that the  Secretary of Labor direct the Wage and Hour Division to publicly provide  additional information on the data used to calculate its Davis-Bacon wage  rates, such as the number and wages of workers included in each wage  rate calculation, and to clearly communicate the meaning of various dates  and codes used in wage determinations in the same place the prevailing  wage rates are posted. Appendix I: Objectives, Scope, and Methodology

Our review examined (1) the extent to which the Department of Labor  (Labor) has addressed concerns regarding the quality of the Davis-Bacon  wage determination process and (2) the additional issues identified by  stakeholders regarding the wage determination process. To address these  objectives, we  reviewed key documents, including past GAO and Department of Labor  Office of Inspector General (OIG) reviews of the program, agency  documents on recent changes to the wage survey process, and relevant  federal laws and regulations;  interviewed agency officials and representatives from organizations with  whom the agency contracts some aspects of the survey process;    analyzed (1) data from Labor’s Automated Survey Data System (ASDS),  Wage Determination Generation System (WDGS), and the Davis-Bacon  survey schedule Web site (http://www.dol.gov/whd/programs/  dbra/schedule.htm); (2) reports produced by Labor’s contracted  accounting firm for on-site verification of submitted payroll records; and  (3) Labor’s conformance logs for fiscal years 2007 through 2009;    conducted site visits to three of Labor’s five regional offices that conduct  Davis-Bacon wage surveys, as well as to the Construction Industry  Research and Policy Center (CIRPC), which is contracted to assist Labor  with the wage survey process;  interviewed approximately 30 stakeholders, including representatives  from academia, contractor associations, and unions, as well as individual  contractors and performed a content analysis of their comments; and    attended a Labor prevailing wage conference. GAO did not verify whether all procedures were  followed in all cases.
Why GAO Did This Study

Procedures for determining Davis-Bacon prevailing wage rates, which must be paid to workers on certain federally funded construction projects, and their vulnerability to the use of inaccurate data have long been an issue for Congress, employers, and workers. In this report, GAO examined (1) the extent to which the Department of Labor (Labor) has addressed concerns regarding the quality of the Davis-Bacon wage determination process, and (2) additional issues identified by stakeholders regarding the wage determination process. GAO interviewed Labor officials, representatives from contractor associations and unions, contractors, and researchers; conducted site visits to three Labor regional offices; and analyzed data from Labor's wage survey database.

What GAO Found

Recent efforts to improve the Davis-Bacon wage survey have not addressed key issues with timeliness, representativeness, and the utility of using the county as the basis for the wage calculation. Labor has made some data collection and processing changes; however, we found some surveys initiated under the new processes were behind Labor's processing schedule. Labor did not consult survey design experts, and some criticisms of the survey and wage determination process have not been addressed, including the representativeness and sufficiency of the data collected. For example, Labor cannot determine whether its wage determinations accurately reflect prevailing wages because it does not currently calculate response rates or analyze survey nonrespondents. And, while Labor is required by law to issue wage rates by the "civil subdivision of the state," the goal to issue them at the county level is often not met because of insufficient survey response. In the published results for the four surveys in our review, Labor issued about 11 percent of wage rates for key job classifications (types of workers needed for one or more of Labor's construction types) using data from a single county. The rest were issued at the multi-county or state level. Over one-quarter of the wage rates were based on six or fewer workers. Little incentive to participate in Labor's Davis-Bacon wage surveys and a lack of transparency in the survey process remain key issues for stakeholders. Stakeholders said contractors may not participate because they lack resources, may not understand the purpose of the survey, or may not see the point in responding because they believe the prevailing wages issued by Labor are inaccurate. While most stakeholders said the survey form was generally easy to understand, some identified challenges with completing specific sections. Our review of reports by Labor's contracted auditor for four published surveys found most survey forms verified against payroll data had errors in areas such as number of employees and hourly and fringe benefit rates. Both contractor association and union officials said addressing a lack of transparency in how the published wage rates are set could result in a better understanding of the process and greater participation in the survey. GAO suggests Congress consider amending its requirement that Labor issue wage rates by civil subdivision to allow more flexibility. To improve the quality and timeliness of the Davis-Bacon wage surveys, GAO recommends Labor obtain objective expert advice on its survey design and methodology. GAO also recommends Labor take steps to improve the transparency of its wage determinations. Labor agreed with the second recommendation, but said obtaining expert survey advice may be premature given ongoing changes. We believe obtaining expert advice is critical for improving the quality of wage determinations.