Win a federal construction contract and you'll meet the Davis-Bacon Act immediately: work over $2,000 requires paying prevailing wages — minimum rates set by county and trade, attached to your solicitation as a wage determination. Certified payroll is mandatory. Misclassify or underpay and you'll meet the Department of Labor next.
What prevailing wage really costs
The wage determination isn't a suggestion. In the Bronx, an electrician's base plus fringe runs about $75 an hour. If you're an electrical contractor paying $75 an hour for labor, what do you charge your customer? Well over $100 — 150, 200. Labor rates scale; that's the game. The contractors who survive Davis-Bacon work don't fight the wage — they engineer around it.
The pre-assembly strategy
The winning move is to move work off the job site. Davis-Bacon applies to work performed at the site of the work. So professionals do exactly what our instructors did across decades:
- Pre-assemble everything possible off-site with non-union or lower-cost labor: panels, racks, assemblies, sections built in a shop, shipped ready to install.
- Minimize on-site hours. On site, use union or prevailing-rate crews for the shortest window possible — and use the ratios: a journeyman with apprentices at reduced rates, where the union agreement allows (two apprentices for one journeyman at 65 and 75, or one apprentice at 50).
- Plan the schedule like a military operation. On an island project, instructors ran crews four ten-hour days, Monday through Thursday — then the next crew worked Friday through Monday — keeping the job running seven days a week while travel costs were cut in half by rotating crews through the same flights.
Same scope, same wage law, radically different labor cost. That's how one instructor averaged over 30% margin across more than a billion dollars of federal work — in an industry where single digits are normal.
The compliance side
- Read the wage determination before you price. It's attached to the solicitation and it's non-negotiable.
- File certified payroll weekly. Miss a filing and payments can stop.
- Classifications matter. Paying a carpenter's rate for electrician's work is the classic violation — the wage determination lists rates by trade, and the work performed defines the classification.
- Subs are your liability. Prime contractors are responsible for their subs' compliance. Put it in the subcontract.
Budget for it honestly
Beginners price Davis-Bacon work like their normal labor plus a little. That's how they lose their shirt on the first job. Price from the wage determination, add the burden, then apply the market-pricing logic — because your competitors are doing the same math, and the market price of compliant labor is what it is.