In 2003-04 the US Department of Labor (USDOL) conducted wage surveys in Michigan for the purposes of updating the Davis-Bacon Act wage decisions for the Residential, Building and Heavy construction types. When the USDOL published the Michigan Heavy Wage Determinations (HWD) (also referred to as the “Underground Rates”) in early 2011 that were based on those survey results, some stark and significant content differences were noted from the previously published HWD.
One of the significant differences noted in the new HWD is that USDOL decided not to include sub-classifications for the various trades. For example, in the previously published HWD you would have found for the classification “Operator: Power Equipment”, sub-classifications that included, “Underground Construction” and “Gas Distribution Work”, and for the “Laborer” classification you would have found sub-classifications that included “Open Cut” and “Distribution Work.” In the HWD published since early 2011 you will find only the classification “Operator: Power Equipment” and the classification “Laborer” with no further sub-classification breakdown.
The most significant difference noted in the new HWD however, is the fact that USDOL, for yet unexplained reasons, decided to predominately incorporate only AGC (Building) negotiated wage rates for the trade classifications where a collectively bargained wage prevailed in the survey.
So what do these differences mean for the contracting community, particularly those who are signatory to the MITA negotiated collective bargaining agreements?
Unfortunately, it means that until these issues are corrected, bidders (prime and subcontractors) on federally funded projects that incorporate a HWD, must be exceptionally diligent in their pre-bid review and understanding of the wages that will be required to be paid on those projects. Although a contractor may be signatory to the MITA Underground or Distribution agreement, they will be required to pay the higher AGC rates on those federally funded projects.
Owner entities that put out projects for bid that may are federally funded and incorporate this HWD include, but are not limited to, MDOT, counties, and other local units of government, MDEQ, MDNR, Drain Commissions, and airport authorities.
MITA continues to be very aggressive in engaging the USDOL Regional Office in Chicago and the USDOL headquarters in Washington to get these HWD issues corrected. Based on our experience and efforts needed last summer to successfully resolve the federal “Buy America” issues, we are anticipating that travel to Washington for face-to-face meetings with USDOL leadership may be necessary to successfully resolve these HWD issues.
Until MITA notifies the industry that these HWD issues are corrected, it is recommended that contractors be extra diligent in their understanding of the HWD that may be incorporated in any project being bid. Regardless of your signatory status to any collective bargaining agreement, the prevailing wage listed in the project proposal will always be the minimum wage that must be paid.
If you have any questions about these HWD differences and issues, do not hesitate to contact Glenn Bukoski at glennbukoski@mi-ita.com or Doug Needham at douglasneedham@mi-ita.com or call them at the MITA office at 517-347-8336.
