Davis-Bacon Act Coverage and the State Revolving Fund Program Under the Clean Water Act

Davis-Bacon Act Coverage and the
State Revolving Fund Program
Under the Clean Water Act
Updated March 26, 2008
William G. Whittaker
Specialist in Labor Economics
Domestic Social Policy Division

Davis-Bacon Act Coverage and the State
Revolving Fund Program Under the Clean Water Act
The Davis-Bacon Act (DBA) requires, among other things, that not less than the
locally prevailing wage be paid to workers employed, under contract, on federal
construction work “to which the United States or the District of Columbia is a party.”
Congress has added DBA prevailing wage provisions to more than 50 separate
program statutes.
In 1961, a DBA prevailing wage requirement was added to the Federal Water
Pollution Control Act (P.L. 87-88), now known as the Clean Water Act (CWA),
which assists in construction of municipal wastewater treatment works. In 1987,
Congress moved from a program of federal grants for municipal pollution abatement
facilities to a state revolving loan fund (SRF) arrangement in which states would be
expected to contribute an amount equal to at least 20% of SRF capitalization funding.
The SRFs were expected to remain as a continuing and stable source of funds for
construction of treatment facilities. And, Congress specified that certain
administrative and policy requirements (including Davis-Bacon) were to be annexed
from the core statute and would apply to treatment works “constructed in whole or
in part before fiscal year 1995” with SRF assistance. By October 1994, under the

1987 amendments, it was expected that federal appropriations for SRFs would end.

After 1987, Congress variously reconsidered the CWA and the SRF program but
made no further authorizations. It did, however, contrary to expectation when the
1987 legislation was adopted, continue to appropriate funds for SRF pollution
abatement projects. Thus, a conflict arose. Did the administrative and policy
requirements associated with federal funding (inter alia, the prevailing wage
requirement) continue to apply? If so (or if not), upon what legal foundation? In
1995, the Environmental Protection Agency (EPA) ruled that prevailing wage rates
(Davis-Bacon) would no longer be required on SRF projects. The Building and
Construction Trades Department (BCTD), AFL-CIO, protested.
What happened after 1994 is not entirely clear: that is, whether prevailing rates
were actually paid. In the spring of 2000, EPA reversed its position and came to
conclude that Davis-Bacon did indeed apply. Following notice in the Federal
Register (and review of submissions from interested parties), EPA entered into a
“settlement agreement” with the BCTD. It would enforce DBA rates on CWA
projects effective July 1, 2001. But then EPA moved the effective date back, to late
summer — and, then, to October. Thereafter, it seems, EPA was silent.
During recent years, Congress has increasingly considered funding mechanisms
other than direct appropriations for public construction: e.g., joint federal and state
revolving funds, loan guarantees, tax credits, etc. This report is a case study of the
application of DBA requirements to one such mechanism, the CWA/SRFs. The
question of DBA application to the SRFs continues in the 110th Congress.

In troduction ......................................................1
Background ......................................................2
Linking Davis-Bacon to the Clean Water Act............................2
The 1961 Amendments and Their Aftermath........................3
Emergence of the State Revolving Fund Concept.....................4
Restructuring the CWA Program..............................5
Questions of Interpretation and Intent..........................7
Charting a New Federal Role, 1987-1995...............................9
The End Draws Near?.........................................10
Interim Assessment.......................................10
New Legislative Proposals..................................11
The Committee Reports....................................12
Stalemate ...............................................13
Consideration in the House, 1995................................13
Moving On: 1995 and Beyond......................................15
The Davis-Bacon/CWA Issue Begins to Form......................16
A Gradual Change of Policy at EPA..............................18
Tentative Compromise Is Reached...........................18
A Call for Public Comment.................................20
A New EPA Policy Enunciated..................................23
Another Reversal at EPA?......................................24
Some Considerations of Policy......................................25
Review of the Davis-Bacon Statute...............................25
Davis-Bacon and the Clean Water Act............................25
Federal Funding and Administrative Requirements?.............25
The Concept: “to which the United States ... is a party”...........26
The Complexities of Regulatory Enforcement..................27
Davis-Bacon Act and the CWA/SRFs in the 110th Congress...............28
Preliminaries and an Early Hearing...............................28
A New Bill Introduced (H.R. 720)................................29
Subcommittee and Committee Action.........................29
Report from the Subcommittee: H.Rept. 110-30.................29
The Bill Considered in the House............................31
Consideration of H.R. 720 by the Senate...........................32

Davis-Bacon Act Coverage and
the State Revolving Fund Program
Under the Clean Water Act
In 1987, Congress amended the Clean Water Act (CWA) to provide for
establishment of a program of state revolving loan funds (SRFs) through which to
finance local water pollution abatement projects (P.L. 100-4). The SRFs were to be
jointly funded by the federal government and the states with loans to be made (and
repaid) in cyclical fashion. The legislation included a provision mandating that
construction work performed with SRF assistance would be covered by the prevailing
wage requirements of the Davis-Bacon Act (DBA): a 1931 statute requiring payment
of not less than the locally prevailing wage on certain federal (and, later, federally
assisted) construction work.1
By the mid-1990s, this system was expected to have changed. Once the SRFs
were in place, federal funding for these waste water treatment facilities would pass
through the SRFs on a revolving basis. It was assumed that by the mid-1990s, the
transition would be complete and that no further federal appropriations would be
needed. However, a federal presence would continue through the SRFs as funds were
recycled through loans and repayment.
In practice, matters evolved somewhat differently. Although no additional
authorizing legislation was adopted after 1987, Clean Water Act appropriations,
contrary to stated expectations, continued. Given continuing federal funding, some
have argued, federal requirements governing administration of the program
(including labor standards) should remain in place. Others have sought to set aside
the various federal requirements, including the CWA Davis-Bacon provision.
Debate over Davis-Bacon coverage under the CWA/SRF program is ongoing,
and has been the subject of several policy shifts on the part of the Environmental
Protection Agency (EPA). First. In 1995, EPA ruled that Davis-Bacon no longer
applied to CWA/SRF projects. Second. In the spring of 2000, EPA reversed itself
and, entering into a settlement agreement with the Building and Construction Trades
Department, AFL-CIO, affirmed that the act would be applied to such projects
effective July 1, 2001. Third. EPA then set back the effective date for Davis-Bacon
coverage to the fall of 2001, perhaps reversing itself once more. Thereafter, EPA
seems to have remained silent on the issue.

1 The Davis-Bacon Act has been codified at 40 U.S.C. 276a to 276a-7; it has now been
recodified at 40 U.S.C. 3141-3148.

This report deals neither with environmental/water quality issues nor with the
Davis-Bacon Act, per se, but, rather, with the intersection of two statutes and the
regulatory complexities that have resulted. It suggests the evolution of the Davis-
Bacon provision of the Clean Water Act and traces the conflict (1994-2008) as to
whether DBA wage standards should/do still apply to CWA/SRF projects. Finally,
it poses questions of policy: How did the dispute develop, how has it been resolved
(if, indeed, it has been), and how might similar conflicts be avoided? With more than
50 program statutes now covered by Davis-Bacon prevailing wage provisions (and
with Congress exploring a variety of innovative funding mechanisms for public
works), how this issue is ultimately resolved could have wider implications.
In 1948, Congress enacted the Federal Water Pollution Control Act setting in
motion a continuing initiative for restoring the health of America’s water resources.
The act, which would evolve into the Clean Water Act, started modestly, mandating
a series of studies and limited projects. Gradually, on an ad hoc basis, the pollution
abatement program became more ambitious with federal aid to states and local
governments. In 1972, the various initiatives and requirements were drawn together
in a more coherent manner. Other amendments followed. In 1987, the most recent2
amendments, Congress made changes both with respect to policy and funding.
The Davis-Bacon Act (1931) had a two-fold thrust: to promote stability within
the construction industry and to protect construction workers from a downward spiral
in wages and working conditions. In 1935, Congress broadly restructured the Davis-
Bacon Act, reducing the coverage threshold from $5,000 to $2,000 and extending the
scope of the act to “construction, alteration, and/or repair, including painting and
decorating, of public buildings or public works” to which “the United States or the3
District of Columbia is a party.” Gradually (and with increasing frequency after the
mid-1950s), Davis-Bacon provisions were added to statutes in which the work was4
made possible through federal grants, loans, and other financial arrangements.
Linking Davis-Bacon to the Clean Water Act
Conflict developed early on between federal and state responsibilities. In 1956,
Congress adopted legislation (P.L. 84-660) to provide for grants of “up to $50
million a year” through a 10-year period to be used for “matching grants to states and
localities for construction of community sewage-treatment plants.” President
Eisenhower reluctantly signed the legislation but, later, urged that the grant program
be abolished. When Congress, instead, nearly doubled the size of the program, the

2 Concerning water quality issues, see CRS Report RL33800, Water Quality Issues in the

110th Congress: Oversight and Implementation, by Claudia Copeland.

3 P.L. 74-403.
4 For an historical sketch of the Davis-Bacon Act, see CRS Report 94-408, The Davis-Bacon
Act: Institutional Evolution and Public Policy, by William G. Whittaker.

President vetoed the legislation and his veto was sustained.5 Observing that “water
pollution is a uniquely local blight,” the President stated that “primary responsibility
for solving the problem lies not with the Federal Government but rather must be
assumed and exercised, as it has been, by State and local governments.”6
The 1961 Amendments and Their Aftermath
In early 1961, President Kennedy reversed the Eisenhower policy on water
pollution abatement and called for increased “Federal assistance “to municipalities
for construction of waste treatment facilities.”7 When new CWA legislation was
reported in the House in April 1961, it provided, inter alia, that “all laborers and
mechanics employed by contractors or subcontractors on projects” for which
construction grants were to be made were to be paid wages “as determined by the
Secretary of Labor, in accordance with the Act of March 3, 1931, as amended, known
as the Davis-Bacon Act....”8
The Davis-Bacon provision was explained to Members of the House.
Representative John Blatnik (D-MN), chair of the Subcommittee on Rivers and
Harbors, stated that this was not an unusual practice since similar provisions already
applied “to contracts for school, hospital, housing and airport projects constructed
with Federal-aid funds.”9 The municipal wastewater pollution abatement program,
it was explained, would be a partnership between the federal government and state
or local entities. Davis-Bacon coverage does not appear to have been contentious.
Representative James Wright (D-TX) observed: “If we were to oppose the payment
of prevailing standard wages, then would this not mean that we favored the payment
of substandard wages? Surely,” he added, “the Congress does not wish to take that
position.”10 Though other aspects of the legislation were subject to extended debate,
no one seemed seriously to dispute the requirement for DBA coverage.11
Senate consideration of the 1961 legislation appears to have been no more
controversial where Davis-Bacon coverage was concerned. The concept was

5 Congressional Quarterly Almanac, 1960. Washington, Congressional Quarterly Inc.,

1960, pp. 250-251. (Hereafter cited as CQ Almanac).

6 Veto of Bill To Amend the Federal Water Pollution Control Act. February 23, 1960.
Public Papers of the Presidents of the United States: Dwight D. Eisenhower, 1960-1961.
Washington, U.S. Govt. Print. Off., 1961. pp. 208-209.
7 President Kennedy’s Special Message on Natural Resources, February 23, 1961, reprinted
in CQ Almanac, 1961, p. 877.
8 U.S. Congress. House. Committee on Public Works. Federal Water Pollution Control
Act Amendments of 1961. Report to Accompany H.R. 6441. H.Rept. 87-306, 87th Cong.,st

1 Sess. Washington, U.S. Govt. Print. Off., l961. pp. 8, 15, and 37.

9 Congressional Record, May 3, 1961, p. 7144.
10 Ibid., p. 7161-7162.
11 Ibid., p. 7196.

endorsed by Labor Secretary Arthur Goldberg and by organized labor.12 Although
it was opposed by the Chamber of Commerce, the provision seemed uncontentious,
as debate shifted largely to technical and fiscal aspects of pollution control.13
With the House and Senate in agreement, Davis-Bacon was not an issue in the
conference report.14 Congress appeared to accept the premise that federal funding for
pollution abatement projects, even when made available through assistance to states
and local entities on a matching basis, should include, as a corollary, Davis-Bacon
coverage. (See P.L. 87-88.)
Through the next few years, Congress variously modified the Federal Water
Pollution Control Act (FWPCA). Though Davis-Bacon had high visibility during the
1960s, it does not appear to have been an issue in the context of pollution abatement
legislation. FWPCA amendments in 1965 retained the DBA requirement and added
“anti-kickback” provisions.15 During Senate hearings on the program in 1971, Davis-
Bacon was mentioned only in passing;16 and when, the following year, Congress
restructured the act with passage of P.L. 92-500, the Davis-Bacon and “anti-
kickback” provisions remained in place. Notwithstanding authorization of substantial
expenditures for construction of state and local wastewater treatment facilities under
the 1972 legislation,17 stable and adequate funding would continue to be an issue
through the next decade. Davis-Bacon, however, does not appear to have been a
serious issue for any of the parties at this juncture.
Emergence of the State Revolving Fund Concept
Through the 1980s and beyond, Congress would continue to wrestle with issues
of policy raised under the early statutes. In 1981, the federal contribution to assist
states and local governments with pollution abatement was reduced. Thus, the

12 Letter from Secretary Goldberg to Chairman Chavez, May 8, 1961, reprinted in U.S.
Congress. Senate. Committee on Public Works. Water Pollution Control. Hearings beforethst
a Subcommittee of the Committee on Public Works, 87 Cong., 1 Sess., May 8 and 9, 1961.
Washington, Govt. Print. Off., 1961. Pp. 67-68, 186. (Hereafter cited as Senate Public
Works, Water Pollution Control).
13 Ibid., p. 105.
14 U.S. Congress. House. Federal Water Pollution Control Act Amendments of 1961.
Conference Report to Accompany H.R. 6441. H.Rept. 87-675, 87th Congress, 1st Sess.
Washington, Govt. Print. Off., July 6, 1961. See also Congressional Record, July 13, 1961,
pp. 12471-12496, and July 14, 1961, pp. 12565-12567.
15 P.L. 89-234, Section 4(g). The Copeland Act requires employers to file payroll records
to show that the appropriate wages, without unauthorized deductions, have been paid.
16 U.S. Congress. Senate. Committee on Public Works, Subcommittee on Air and Water
Pollution. Water Pollution Control Legislation. Hearings on S. 75 (and other bills), 92ndst
Cong., 1 Sess., March 18, 19, 22, 23, and 24, 1971. p. 662.
17 See CQ Almanac, 1972. p. 708.

burden could be expected to fall more heavily on non-federal entities. Program and
policy, here, reflected sharply differing approaches to governance.18
Restructuring the CWA Program. During hearings in March 1985, Jack
Ravan, Assistant EPA Administrator in the Reagan Administration, called for a total
phasing-out of the federal construction grants program by the end of FY1989. Ravan
argued that “Federal funding has simply substituted for, not supplemented, State and
local financing.” Devolution, he suggested, would be a wiser course.19
In the context of a projected shift from federal to state (or non-federal) funding
of treatment facilities, creation of state revolving funds (SRFs) surfaced as one
option. However, questions arose concerning management of such a program: how20
much (or how little) local control ought to be allowed. Ravan suggested a gradual
phasing out of existing requirements. He opined that “the first use of the money out
of the revolving fund might very well carry with it the requirements” of the existing
program. (Italics added.) He continued, “I believe there also must come a day,
hopefully, as quickly as possible, when the States would be given absolute flexibility
for utilization of these funds ....”21 Robert Perry of the Water Pollution Control
Federation was more expansive. “Treat moneys that have been used and then paid
back to a fund as State revenues,” he urged. “Remove the requirement that they be22
treated as Federal funds ad infinitum.”
Different versions of the CWA amendments were passed by the House and
Senate during the summer of 1985, but in neither body did labor standards appear to23
be an issue. For nearly a year, the legislation laid dormant until, during the spring
of 1986, conferees met and began what became a protracted process of negotiation.
The thrust of the pending proposals (S. 1128, H.R. 8) seemed clear: that is, that at
some point in the near future, federal appropriations (and authorizations) would cease
and construction of treatment facilities would rest on the SRFs.

18 U.S. Congress. House. Committee on Public Works and Transportation, Subcommittee
on Water Resources. Possible Amendments to the Federal Water Pollution Control Act.thst
Hearings. 99 Cong., 1 Sess., April 25 and 30, 1985, p. 311.
19 U.S. Congress. Senate. Committee on Environment and Public Works, Subcommittee on
Environmental Pollution. Amending the Clean Water Act. Hearings on S. 53 and S. 652,thst
99 Cong., 1 Sess., March 26, 1985, p. 5. (Hereafter cited as Senate Environmental
Pollution Subcommittee, Amending the Clean Water Act).
20 U.S. Congress. House. Committee on Public Works and Transportation, Subcommittee
on Water Resources. Possible Amendments To the Federal Water Pollution Control Act.thst
Hearings. 99 Cong., 1 Sess., April 25 and 30, 1985, p. 312. (Hereafter cited as House
Water Resources Subcommittee, Possible Amendments to the Federal WPCA).
21 Senate Environmental Pollution Subcommittee, Amending the Clean Water Act, pp. 24-25.
22 House Water Resources Subcommittee, Possible Amendments to the Federal WPCA, p.


23 Congressional Record, June 12, 1985, p. 15301-15326; June 13, l985, p. 15616-15678;
July 22, 1985, p. l9846-l9865; and July 23, 1985, p. l9993-20112. See also: CQ Almanac,
l985, pp. 204-208; and CQ Almanac, l986, pp. 136-137.

The conference report, filed in October 1986, included (as part of the
legislation) a 10-paragraph section titled “SPECIFIC REQUIREMENTS” that laid
out the continuing administrative practices that would apply to “treatment works ...
which will be constructed in whole or in part before fiscal year 1995 with funds
directly made available by capitalization grants.” Among those requirements, it was
specified that Section 513 of the CWA (the Davis-Bacon provision) would continue
to be applied “in the same manner as [it had been applied to] treatment works
constructed with assistance under title II” — namely, the former direct federal grants
program.24 The House approved the report (408 yeas to 0 nays), as did the Senate
(yeas 96 to 0). There appears to have been no other discussion of the Davis-Bacon
prevailing wage language.25 However, despite strong support for the legislation, it
was subjected to a pocket veto (Congress having adjourned) by President Reagan —
for reasons other than Davis-Bacon.26
Early in the 100th Congress, consideration of the issue resumed with new
(essentially identical) legislation being introduced. Members spoke of a “transition
from Federal to State funding” and of “phasing out the Federal program ... without
abandoning the needs of States and municipalities.” It is not clear whether Members
viewed devolution as absolute.27 What requirements, if any, would remain in place?
In fact, the federal phase-out would not be total for the SRFs rested upon federal
“seed money.”28 Had there been no federal funding (no seed money), there would
have been no state revolving funds. But, there were ambiguities. Representative
Arlan Stangeland (R-MN), for example, observed:
Federal moneys made available for these funds would be subject to certain
restrictions on their use, as are moneys provided through the Construction Grant
Program. As these moneys are repaid into the fund, the restriction on how the
funds can be used would be eliminated, thereby allowing the States greater
flexibility and freedom....
Mr. Stangeland did not specify the “restrictions” he had in mind. Was this flexibility
with respect to the types of projects and the priorities to be assigned? Or, did it imply
that the states would be free to utilize the SRFs without restraint? It was clear that
the SRFs would serve federally specified purposes and in a federally specified
manner.29 Congress quickly approved the legislation.
In late January 1987, consistent in his opposition, President Reagan vetoed the
measure. While endorsing pollution abatement, he focused upon “the Federal deficit

24 Congressional Record, October 15, 1986, p. 31582. H.Rept. 99-1004, Conference Report
on S. 1128, Water Quality Act of l986, is reprinted here in full, pp. 31577-31630.
25 Congressional Record, October 15, 1986, pp. 31954-31975. See also Congressional
Record, October 15, 1986, pp. 31608-31609; and October 16, 1986, pp. 32390 and 32407.
26 CQ Almanac, 1986, pp. 136-137.
27 Congressional Record, January 8, l987, pp. 976, 985 and 990.
28 Ibid., pp. 991, 994, and 1005.
29 Ibid., p. 991, and January 14, 1987, p. 1269.

— and the pork-barrel and spending boondoggles that increase it.” Local sewage
treatment facilities, he affirmed, were “historically and properly ... the responsibility
of State and local governments.” He raised no objection to Davis-Bacon, per se.30
On February 3 and 4, 1987, the House and Senate voted to override the
President’s veto. H.R. 1 became P.L. 100-4.31 The old Title II direct federal grants
program would be phased-out and replaced with the Title VI SRF loan program.
Questions of Interpretation and Intent. In P.L. 100-4, Congress appeared
to assume (from debate and public documentation, did assume) that no federal
appropriations for SRFs would be made after 1994. However, even were that
assumption to have held true (in fact, it would not), the federal presence would not
have ended. The SRFs were a direct federal creation, largely capitalized by the
federal government.
Under P.L. 100-4, at least two elements need to be considered. First, there isth
the language of S. 1128 of the 99 Congress (the vetoed bill) and of the conference
report that accompanied it. Second, there is the actual language of the new statute
(P.L. 100-4). With respect to DBA coverage, they differ in critical aspects.
When reporting S. 1128 in the House in the 99th Congress, the conference report
explained that the 16 administrative requirements of Section 602(b)(6) — including
the Davis-Bacon requirement (Section 513 of the CWA) — were not to apply “to
funds contributed by the State” or to “monies repaid to the fund.”32 Senator George33
Mitchell (D-ME) explained the measure in the Senate in almost identical language.
But, that language was not incorporated within the proposed legislation — which, in
any event, did not become law.
P.L. 100-4 (like S. 1128 of the 99th Congress) states that “treatment works” to
be “constructed in whole or in part before fiscal year 1995 with funds directly made
available by capitalization grants under this title” must “meet the requirements” set
forth in Section 602(b)(6): the 16 “Specific Requirements” which included the
Section 513 Davis-Bacon provision. The statute did not say that Davis-Bacon
coverage would cease after 1995 (when authorization would have terminated) nor did
it specify that Section 513 (Davis-Bacon) and the other enumerated requirements
would not apply to recycled (repaid) funds. It carried the program up to FY1995 and
then was silent, making no reference to the first use concept where the Davis-Bacon
Act was concerned.

30 Public Papers of the President of the United States. Ronald Reagan, 1987. Washington,
Govt. Print. Off., 1989. Pp. 95-96.
31 Congressional Record, February 3, 1987, pp. 2505-2516; and February 4, 1987, pp. 2795-

282. See also CQ Almanac, 1987, pp. 291-296.

32 Congressional Record, October 15, 1986, pp. 31608.
33 Congressional Record, October 16, 1986, pp. 32390.

The issue of continuing DBA coverage for the SRF program appears to have
sparked concern neither during the closing days of the 99th Congress nor early in the

100th Congress. But, there may have been continuing ambiguities.

The legislation projected a direct federal role in the SRFs (continuing
appropriations) until FY1995. Thereafter, the program was still expected to continue
on a foundation of federal funding. Did Congress intend to drop the Davis-Bacon
requirement (with others) once the SRFs were in place — resting as they were on
federal funding? And was Congress willing to acquiesce in the payment of wages
lower than those prevailing in a locality after FY1994?34
There may also have been the matter of disaggregation of SFR funding. An
abatement project, commenced prior to 1995 with an SRF loan, would clearly be
DBA-covered. What if work were to continue beyond 1995 through supplemental
SRF loans? The entire project could be grandfathered-in and wholly subject to
Davis-Bacon; or, once 1994 had been reached, coverage could cease. Or coverage
might be associated with each contract or sub-contract, depending upon the date on
which a contract was entered into or on which the work commenced. Could a
worksite be fragmented, part covered and part exempt?
How were the various agencies to distinguish between covered and non-covered
funding? Construction grants under Title II had always required DBA coverage; but
with federal funds now going first to SRFs (capitalization grants) and then being
loaned out to local entities, would DBA still apply in the absence of a specific policy
from the Congress. And what about the first use doctrine?
Given the very high visibility of Davis-Bacon during this period, some may
wonder that the act was not a major subject of debate where the CWA was
concerned. Documents to this point (1987) are remarkable silent.35

34 The 100th Congress may, arguably, have seen no need to reaffirm prevailing wage
coverage, taking coverage for granted. Or, conversely, it might have added specific
language stating that, after 1994, the DBA would not apply to SRF-funded construction; but
it did not do so. The target date was, after all, nearly seven years off — and, surely, there
would be time to revisit the act. How much weight should be given the absence of language
overturning long-established public policy?
35 An issue at least since the later 1950s, a major controversy erupted with the 1979 GAO
report, The Davis-Bacon Act Should Be Repealed. (U.S. Government Accounting Office,
HDR-79-18. Washington, U.S. Govt. Print. Off., April 27, 1979.) The report led to hearings
by three separate committees of Congress. Projected administrative reform (and litigation)
then continued, in some degree, into the Clinton Administration.

Charting a New Federal Role, 1987-1995
Through the late 1980s, Members of Congress continued to speak in terms of
a terminating program and shifting responsibility. P.L. 100-4 “brings the [Title II
federal grant] program to an end,” observed Senator Daniel Moynihan (D-NY). The
program “... will end in 1994. The end. After that there is a revolving loan fund to
sustain the program.”36 But, federal financial involvement didn’t end.
By 1991, the beginnings of a policy shift were evident. Senators Max Baucus
(D-MT) and John Chafee (R-RI) introduced legislation (S. 1081) that became, in
effect, a vehicle for oversight. Senator Chafee asserted that the “States have actually
lost ground as the construction grants program is [being] phased out,” and affirmed
that “the States are starved for resources to carry out the act.” Among other things,
the Baucus/Chafee proposal would have set back the target date for termination of
the federal role in the SRFs from 1995 to 1998 and, it appears, would have extended
through that period applicability of the existing specific requirements under Section

602(b)(6) — including Davis-Bacon coverage (Section 513).37

Hearings commenced on the Baucus/Chafee legislation in the spring of 1991.
But, by that point, a number of things had changed. Concern with wetlands and
combined sewer overflows (CSOs) and non-point source pollution had become the
key issues, especially the former. The Reagan Administration had given way to the
Bush Administration and EPA Administrator William Reilly now acknowledged a
municipal pollution abatement need “into the indefinite future.” He stated that the
costs of abatement were rising and that the states and municipalities “are very often38
not in a position to meet the many federal requirements we are imposing.” These
problems may have overshadowed concern about prevailing wage standards except,
perhaps, from the standpoint of keeping costs down.
Though specific proposals were avoided for the moment, it became increasingly
clear that the federal government would not be able to make a clean break from
federal funding and to independent and self-sustaining SRFs. Interest groups,
associated with pollution abatement, began to call for more federal funding. Such
calls for federal dollars were accompanied with appeals for enhanced flexibility:
fewer strings, less federal control. States, it was argued, “should be allowed to
maintain the flexibility to establish priorities ... and to deploy available funds for the
most pressing problem on a timely basis.” Continued capitalization by the federal39
government “through FY1994 and beyond,” it was asserted, “is essential.” Appeals
for “increased Federal funding” were coupled with pleas for relief from the

36 Congressional Record, July 12, 1988, pp. 17658.
37 Congressional Record, May 15, 1991, pp. 11034 and 11032. See Section 28 of S. 1081.
38 U.S. Congress. Senate. Committee on Environment and Public Works. Subcommittee
on Environmental Protection. Water Pollution Prevention and Control Act of 1991.ndst
Hearings, 102 Cong., 1 Sess., May 21, June 13, July 9, 17, and 18, 1991. Pp. 31 and 62.
39 Ibid., pp. 267, 275, and 336. Italics added.

“administrative burdens and regulatory roadblocks” of the l987 legislation, including
the Section 602(b)(6) specific requirements.40
In early 1992, Senator Chafee reminded his colleagues that “[u]nder current law,
there is to be no Federal role, no additional Federal dollars, after 1994.” “That date
is now in sight,” he pointed out, and “... it is time to reconsider that decision. I have
come to the floor of the Senate today to urge that Federal support for the State
revolving loan funds be continued at current levels for the foreseeable future.”41
(Italics added.)
The nature of a continuing federal presence was now at issue. The
Baucus/Chafee bill would not have terminated the federal role in construction of
treatment plants. Rather, it would have created a series of new categorical grant
programs to be placed under the SRF umbrella. But this, it seems, was opposed by
certain state authorities hostile to the idea of “a proliferation of new Federal
categorical grants.” Instead, they wanted “the flexibility already available to them”
in the SRFs “to effectively address their highest priorities as they see them.”42
Since the Bush Administration had not yet announced a firm policy with respect
to SRF funding, EPA Administrator Reilly was not then able to address the issue
definitively. The Baucus/Chafee bill was not marked-up. Reauthorization to provide
for sustained and comprehensive CWA/SRF funding did not move forward.43
The End Draws Near?
Until FY1995, the SRF structure would remain in place. What would or what
ought to happen thereafter remained in question. Meanwhile, Congress continued
to review a variety of CWA-related proposals.
Interim Assessment. In March 1991 and in January 1992, GAO released
assessments of the initial operation of the CWA/SRF program, stating that the wage
requirement was the “most controversial” of the old Title II (now Title VI)
administrative requirements. But, it also found opinion mixed: some arguing that
DBA “could increase project costs significantly” while others suggested that, “except
for small or disadvantaged communities, the increased costs associated with the Title44
II ... requirements may not be as substantial” as critics aver. In short, its findings
seem to have been ambiguous with little hard evidence upon which to rest.

40 Ibid., pp. 917-918.
41 Congressional Record, February 7, 1992, pp. 2129-2130.
42 Ibid.
43 CQ Almanac, 1991, pp. 212-213.
44 U.S. General Accounting Office. Water Pollution: States’ Progress in Developing State
Revolving Loan Fund Programs. GAO/RCED-91-87. Washington, U.S. Govt. Print. Off.,
March 1991. Pp. 3 and 8; and U.S. General Accounting Office. Water Pollution: State
Revolving Funds Insufficient to Meet Wastewater Treatment Needs. GAO/RCED-92-35.
Washington, U.S. Govt. Print. Off., January 1992. Pp. 12, 15, and 20.

In October 1991, EPA had presented its own evaluation. Like GAO, it noted
that some found the specific requirements onerous: that the “most frequently
mentioned” of these was the Davis-Bacon provision. The states, it said, “would
prefer ... to be exempted entirely” from the strings Congress had imposed, arguing
that they “reduce the program’s attractiveness to communities” to whom SRF loans
would be made. The EPA study paralleled the March GAO report, suggesting that
payment of the locally prevailing wage could increase the cost of public construction.
But, EPA also pointed out that the DBA requirement “varies considerably based on
local socioeconomic and market conditions and State prevailing wage rate laws.”45
In each of these reports, DBA was merely touched upon. Assessments of the
prevailing wage statute were more reportorial than analytical, and rendered as the
views of persons interviewed. No new evidence or impact analysis was presented.
New Legislative Proposals. With the 1987 authorization set to expire in
October 1994, reauthorization of the CWA/SRF program assumed a “high priority.”46
On June 15, 1993, Senators Chafee and Baucus introduced S. 1114, which proposed
to extend the SRF program, to increase federal funding, and to permit the states47
greater flexibility. The DBA requirement would have remained in effect.
Hearings before the Senate Clean Water Subcommittee commenced the
following day, continuing intermittently through three months. A general consensus
became apparent concerning the SRF program. Senator Bob Graham (D-Fla.), chair
of the subcommittee, explained: “The justification for this change in policy
[extending the program through 2000] seems to be grounded in the continued need
for federal support.”48
Witnesses offered mixed responses. In an exchange with Senator Chafee,
Ronald Marino of the investment firm of Smith Barney raised the issue of first use
and recycled funding, suggesting that “when the loan is recycled and repaid,”49
mandates such as Davis-Bacon might be eliminated. Several witnesses appeared
to reflect GAO assertions: namely, that small communities might benefit through

45 U.S. Environmental Protection Agency. State Revolving Fund (SRF): Final Report To
Congress. Washington, Govt. Print. Off., October 1991. pp. 1-7 and 11-12. See also:
Fraundorf, Martha Norby, John P. Farrell, and Robert Mason, Effect of the Davis-Bacon Act
on Construction Costs in Non-Metropolitan Areas of the United States. Corvallis:
Department of Economics, Oregon State University, January 1982. 41 p.
46 Congressional Record, June 15, 1993, p. 12754.
47 In introductory remarks, neither Senators Chafee nor Baucus made reference to Davis-
Bacon. See Congressional Record, June 15, 1993, pp. 12726-12757.
48 U.S. Congress. Senate. Committee on Environment and Public Works, Subcommittee on
Clean Water, Fisheries, and Wildlife. Reauthorization of the Clean Water Act. Hearings,rdst

103 Cong., 1 Sess., June 16, 23; July 1, 14, 27; August 4, 5; and September 15, 1993. p.


49 Ibid., p. 348. Marino, here, was presenting options.

exemption from specific requirements “including the Davis-Bacon Act.” Generally,
through the 1700 pages of testimony, labor standards were not at issue.50
The Committee Reports. In May 1994, Senator Baucus introduced a clean
bill (S. 2093) which was soon reported from the Committee on Environment and
Public Works.
In S. 2093, transfer from federal to state responsibility for full financing of
municipal pollution abatement was deferred. The committee noted that early policy
had “contemplated a transition to full State and local financing by fiscal year 1995,
when the capitalization grants were to end and the funds were to be sustained by
repayments of loans made from the fund.” However, confronted with a 20-year
agenda of treatment projects (estimated to cost $130 billion), past assumptions
seemed no longer appropriate. The new bill would authorize “continued funding for
the successful SRF program through the year 2000.” The committee’s position was
made clear. Were the legislation to be adopted, the federal role in the SRF program
would not end; rather, it would be extended at least until 2000 — and possibly into
the indefinite future.51
But, what about the various administrative requirements of the 1987 legislation?
Existing law would be modified “to increase State flexibility in managing loan
funds;” but, for the most part, these changes would affect utilization and financial52
management of the SRFs. During mark-up, Senator Robert Smith (R-NH)
proposed repeal of the existing Davis-Bacon requirement under the CWA. The
Smith amendment was defeated by a vote of 6-11. Thereupon, Senator Harris
Wofford (D-PA) offered an amendment confirming that the Davis-Bacon Act would
apply “to all State loans” under the SRF. The Wofford amendment was approved by
a vote of 11 to 6. The committee voted to report the bill by a vote of 14 to 3.53
With respect to Davis-Bacon and its applicability under the SRFs, the bill as
reported was clear. The relevant part of the new Section 513 was to have read:
The Administrator shall take such action as may be necessary to ensure that each
laborer or mechanic employed by a contractor or subcontractor of a project that
is financed in whole or in part by a grant, loan, loan guarantee, refinancing, or
any other form of financial assistance provided under this Act (including
assistance provided by a State from a water pollution revolving loan fund

50 Ibid., pp. 332, 344, 348-349, 360, 407, 412, and 415-417. One witness suggested that
dispensing with the administrative regulations (presumably, including the DBA), would
allow communities to get “more bang for the bucks.” The inference was clear: paying
lower wages would stretch tax dollars a bit further. The stated purpose of the Davis-Bacon
Act, however, was to maintain at least the locally prevailing wage structure.
51 U.S. Congress. Senate. Committee on Environment and Public Works. Water Pollution
Prevention and Control Act of 1994. Report to accompany S. 2093. S.Rept. 103-257, 103rdnd
Cong., 2 Sess. Washington, U.S. Govt. Print. Off., May 10, 1994. p. 11.
52 Ibid., pp. 13-20.
53 Ibid., pp. 164-165. Senators Smith, Dirk Kempthorne (R-ID), and Lauch Faircloth (R-NC)
voted in opposition.

established by a State pursuant to Title VI) shall be paid wages at rates that are
not less than the prevailing rates for projects of a similar character in the locality
of the project that is financed under this Act, as determined by the Secretary of
Labor in accordance with the Act of March 3, 1931 (commonly known as the
“Davis-Bacon Act”) (40 U.S.C. 276a et seq.). (Italics added.)
No exception was made for small, financially strapped, jurisdictions. The concept
of first use (with repaid funds exempt from federal wage requirements) was not
raised as an issue — but was implicitly rejected. Clearly, the committee’s majority
intended that CWA projects funded through SRFs should be Davis-Bacon covered.54
Stalemate. Numerous contentious issues were associated with the proposedrd
environmental legislation during the 103 Congress, but wetlands preservation may
well have been the most difficult to resolve. With time running out, reauthorizationth
legislation stalled both in the House and Senate. Through the remainder of the 20
century an into the 21th century, no further reauthorization for the Clean Water Act55
would be adopted.
The SRFs and mandated water quality objectives remained in place. Congress
continued to appropriate funds for CWA projects and for SRFs. Construction of
abatement facilities continued, the absence of reauthorization notwithstanding.
Under the circumstances, it may have seemed reasonable that normal administrative
requirements of the CWA would similarly remain in place; but, not all agreed with
that conclusion.
Consideration in the House, 1995
In 1995, party control shifted in the House. Bud Shuster (R-PA) became chair
of the Committee on Transportation and Infrastructure; Sherwood Boehlert (R-NY),
chair of the Subcommittee on Water Resources and Environment. Quickly, extended
hearings (February 9 to March 11, 1995) commenced on CWA reauthorization and
new legislation was introduced (H.R. 961) by Shuster in mid-February 1995.
The DBA requirement was, here, more openly in dispute. Paul Marchetti
(Council of Infrastructure Financing Authorities, CIFA) urged “some elimination of
the costly Title II requirements that have been held over from the construction grant

54 Ibid., p. 453. During the spring of 1994, the Senate had under consideration amendments
to the Safe Drinking Water Act (S. 2019, 103rd Congress) which included a provision for
Davis-Bacon coverage of loans from state revolving funds. When confronted with floor
amendments to strike DBA coverage from that program, the Senate three times rejected that
option, leaving DBA coverage in the legislation. See Congressional Record, May 17, 1994,
pp. S5806-S5811; May 18, 1994, pp. S5897-S5899, S5900-S5901, and S5909-S5910; and
U.S. Congress. Senate. Committee on Environment and Public Works. Safe Drinkingrd
Water Act Amendments of 1994. Report to accompany S. 2019. S.Rept. 103-250, 103nd
Cong., 2 Sess., Washington, U.S. Govt. Print. Off., April 14, 1994. pp. 11 and 71-72.rd
Although approved by the Senate, S. 2019 died at the close of the 103 Congress.
55 CQ Almanac, 1994, pp. 241-243.

programs ... that increase the cost of projects....”56 He argued that requirements, “like
Davis-Bacon ... significantly increase the construction costs in many areas.” In short,
CIFA pressed for support of federal funding but elimination of federally-imposed
administrative requirements.57
Scott McElwee of the Associated Builders and Contractors (ABC) expressed
similar concerns. “We believe,” he stated, “that with full funding and repeal of the
Davis-Bacon Act, our water infrastructure needs will begin to diminish and our
Nation’s water quality will dramatically improve.”58 Questioned by Representative
Stephen Horn (R-Calif.), William Rogers of the Associated General Contractors
(AGC) affirmed general support for repeal of Davis-Bacon. The discussion,
however, was brief and focused on DBA generally — not on the Davis-Bacon/CWA
connection.59 Further, Kermit Prime, speaking for the National Society of
Professional Engineers (NSPE), urged Congress to eliminate Section 602(b)(6) of the
CWA: the administrative requirements. “We are particularly interested,” he
concluded, “in repealing the applicability of the Davis-Bacon Act to SRF-financed
projects, also required under Section 602(b)(6).”60
Section 602 of H.R. 961 would have deleted the phrase “before fiscal year
1995” and would have removed “administrative requirements previously imposed on
Title II grant recipients and currently extended to applicants who receive SRF
capitalization grant loans.”61 Specifically, H.R. 961 amended the statute by striking

56 U.S. Congress. House. Committee on Transportation and Infrastructure. Subcommittee
on Water Resources and Environment. Reauthorization of the Federal Water Pollutionthnd
Control Act. Hearings. 104 Cong., 2 Sess. [sic.], February 9, 16, 21, and 25, 1995,
March 7, 9, and 11, 1995. Pp. 62. (Hereafter cited House Transportation and Infrastructure
Subcommittee, Reauthorization of Federal Water Pollution Control Act).
57 Ibid., p. 152. Marchetti provided no documentation for his claim nor did he attempt to
disaggregate impacts: i.e., to separate any Davis-Bacon costs from those associated with
other administrative requirements.
58 House Transportation and Infrastructure Subcommittee. Reauthorization of Federal
Water Pollution Control Act, p. 256. In a statement for the record, p. 316, McElwee
The Davis-Bacon Act unnecessarily raises the cost of federal construction by an
average of 5-15% with cost in rural areas being inflated by as much as 25-38%.
... even worse, these figures do not take into account the burden that Davis-Bacon
requirements impose on states and localities.” (Italics added.)
McElwee seems to mean total project costs, not just labor costs. No source was offered for
this assertion nor were supporting data provided.
59 House Transportation and Infrastructure Subcommittee. Reauthorization of Federal
Water Pollution Control Act, pp. 259-261.
60 Ibid., pp. 267, and 343-344. Prime also endorsed legislation (H.R. 500 of the 104th
Congress) that would have repealed the Davis-Bacon and Copeland Acts.
61 U.S. Congress. House. Committee on Transportation and Infrastructure. Clean Water
Amendments of 1995. Report on H.R. 961. H.Rept. 104-112, 104th Cong., 1st Sess.

from CWA Section 602(b)(6) “‘201(b)’ and all that follows through ‘218’ and
inserting ‘21l.’” Thus, the reference to Section 513 (Davis-Bacon) was retained but
without the limitation of “before fiscal year 1995.”62 Davis-Bacon does not appear
to have been mentioned, specifically, in the committee’s report.
As reported and on the floor, the legislation proved contentious, but concern was
with environmental issues — not with Davis-Bacon. On May 16, 1995, H.R. 961
was passed by the House: yeas 240, nays 185 — 9 not voting.63 It died in the Senate
at the close of the 104th Congress.
Moving On: 1995 and Beyond
After 1994, there appears to have been some ambiguity with respect to CWA’s
Davis-Bacon provision. Each side sought to have their interpretation prevail.
Davis-Bacon is not self-enforcing. If an agency determines not to apply the
statute, someone must take exception, move through the appeals process — and,
potentially, through the courts. It’s not a simple procedure, nor is it quick. Few
individuals would be in a position to take such action — nor might they be inclined
to do so where wages and conditions of employment are reasonably good.
Organized labor (the Building and Construction Trades Department, AFL-CIO
— the BCTD) will normally support a prevailing wage requirement. Conversely,
some employers (often open shop firms) may be hostile to Davis-Bacon and seek to
avoid its applicability or enforcement. Federal agencies, contracting for various types
of construction (and operating on tight budgets), may find themselves the natural
allies of the contractor/employer as they seek to reduce wages (labor costs). Even
within an Administration, there may be different perspectives among agencies on a
prevailing wage requirement.
In the case of DBA and SRF projects, various factors come into play. Congress
might have spoken with greater clarity if stalemate had not occurred with non-DBA
issues blocking further authorizing legislative. But stalemate did occur: Congress
made no immediate CWA authorizations beyond 1994. Similarly, changes within

61 (...continued)
Washington, U.S. Govt. Print. Off., May 3, 1995. Pp. 164.
62 The implications of the changes proposed in H.R. 961 may not be entirely clear. In a
letter to EPA Administrator Carol Browner, August 3, 2000, Representative Shuster would
recall: “... H.R. 961 — which I was the lead sponsor of and which passed the House in 1995
— included specific provisions which had the effect of reapplying Davis-Bacon to the Clean
Water SRF.” He added: “No one — including the Administration — commented that EPA
already had sufficient legal authority to effectuate this policy change thereby making these
provisions unnecessary.” It is possible others thought there was no need for comment if the
amended statute merely extended the Davis-Bacon requirement, as it stood, while deleting
certain other administrative requirements — and deleting a consideration of time (“before
fiscal year 1995”) that was no longer relevant.
63 Congressional Record, May 16, 1995, p. 13094.

the Congress and at the White House may have brought a shift of philosophies. This
could (and, likely, would) result in new policies both at DOL and in EPA.
The Davis-Bacon/CWA Issue Begins to Form
In a memorandum of August 8, 1995, Michael Cook of EPA called the attention
of his staff to confusion about applicability to the SRFs of the “equivalency
requirements” (including the DBA provision).64 Noting the language of the statute
and making no allowance for the altered circumstance, Cook stated:
Section 602(b)(6) of the Clean Water Act requires section 212 publicly-owned
treatment works projects to comply with these statutory requirements if they are
constructed in whole or in part before October 1, 1994, with funds “directly
made available by” capitalization grants. Consequently, projects that began
construction on or after that date do not have to comply with the requirements.
(Underscoring in the original.)
Cook explained various complexities. For example, with “a binding commitment for
the project” made prior to October 1, 1994, or an ongoing project being
“incrementally funded,” the “equivalency requirements” could be expected to apply.
But, where a commitment or initiation of construction “occurred on or after October
1, 1994, the equivalency requirements do not attach to the project.” This would be
true “even though the project was funded with funds ‘directly made available by’
capitalization grants (equivalency funds).”65 There would be no DBA coverage.
The Cook memorandum did not resolve all confusion about DBA applicability.
From public documents, it is not clear how widely it was circulated nor how it was
treated by CWA/SRF managers. What advice was given to potential contractors in
this respect? Did DBA provisions continue to be written into CWA/SRF contracts?
If not, was there objection from the workers or from the several unions involved?
In January 1997, EPA’s Region III (Philadelphia) sought advice from DOL in
Philadelphia concerning DBA coverage for CWA projects. On the assumption that
Davis-Bacon no longer applied, EPA’s regional office was ready to remind the states
within its jurisdiction that coverage had ceased and that DOL would no longer
enforce compliance. It sent DOL a copy of its proposed policy statement, asking:
“Please let us know if we are misstating the Department of Labor’s role in this
particular situation.” The EPA draft commenced: “It has come to our attention that
some states are continuing to apply the Davis-Bacon Act” to CWA/SRF projects.
And, later, the draft advised: “... since the DBA is a federal statute, it is inappropriate

64 The Section 602(b)(6) requirements, including the Davis-Bacon provision, are variously
referred to in the literature as the “specific requirements” or the “equivalency requirements.”
65 Memorandum from Michael B. Cook, Director, Office of Wastewater Management, U.S.
Environmental Protection Agency, to Water Management Division Directors, August 8,


to use the threat of federal enforcement in cases where compliance is not federally
mandated in the first place.”66
The exchange between EPA and DOL sparked renewed interest in Davis-Bacon
and CWA/SRF projects. Word of EPA’s position filtered back to Washington and
in April 1997 Robert Georgine, president of the Building and Construction Trades
Department, AFL-CIO, laid the matter before John Fraser, Acting Administrator,
Wage and Hour Division, DOL. Georgine reviewed the history of the labor standards
provisions of the CWA, pointing to two separate sections of that statute: Section 513
which, he stated, applies Davis-Bacon wage standards, generally, to CWA-funded
projects and, Section 602(b)(6), the segment of the 1987 CWA amendments that
requires Davis-Bacon coverage through FY1994 under the SRF program.
... even if Congress intended to repeal application of the Davis-Bacon
requirements in the Clean Water Act to construction of treatment works began
[sic.] after the beginning of fiscal year 1995, Section 602(b)(6) simply failed to
give effect to that intention. Congress left in place and did not qualify the scope
of the applicability of Section 513 to all construction of treatment works for
which grants are made under the Act. When construing legislation of this type,
the plain statutory language should control and that [sic.] EPA cannot perform
linguistic gymnastics in order to upset the plain language of the Clean Water Act67
as it exists today.
A copy of Georgine’s letter was dispatched to EPA Administrator Carol Browner as
well as to the member unions of the BCTD.
DOL referred the Georgine letter to EPA for review. In October 1998, EPA’s
Michael Cook responded with a six-page analysis. He began with the assertion that
“Title VI limits application of the CWA Davis-Bacon Act provision to SRF-funded
projects ‘constructed in whole or in part before fiscal year 1995.’” He stated:
Contracts to which the United States is not a party, but which are awarded under
a Federal assistance program, must also comply with Davis-Bacon Act
requirements if the statute authorizing the assistance so requires. (Italics added.)
Cook stated further: “Federal grant-making agencies recognize that the Davis-Bacon
Act applies to federally assisted construction projects only if it is required by the
legislation authorizing the assistance.”
He again pointed to the time limitation: to “projects ‘constructed in whole or
in part before fiscal year 1995.” (Italics in the original.) Having taken that initial
stand, Cook then reviewed each of the arguments made (or implied) in the Georgine
letter and concluded that the interim period of Davis-Bacon coverage had “ended by

66 Denise Harris, Assistant Counsel, EPA Region 3, to Susan Jordan, Staff Attorney, U.S.
Department of Labor, January 28, 1997 (with enclosure). The Region III (EPA) directive,
quoted here, was simple draft language but, presumably, represented the perspective of the
regional office at that juncture.
67 Robert A. Georgine to John R. Fraser, Administrator, Wage and Hour Division, U.S.
Department of Labor, April 30, 1997.

fiscal year 1995.” He added: “For these reasons, we are confident that the position
reflected in the EPA memorandum [Cook’s own earlier memorandum] is the proper
one, and we urge the Department [of Labor] to respond to the [Building and
Construction Trades] Council accordingly.”68
A Gradual Change of Policy at EPA
From the perspective of EPA, the matter was closed: Davis-Bacon should not
apply (did not apply, as EPA interpreted the 1987 statute) to CWA/SRF projects
begun after October 1994. But, the issue was not entirely resolved.
Tentative Compromise Is Reached. During the late 1990s, the BCTD
variously conferred both with DOL and with EPA seeking a ruling that would affirm
DBA coverage for CWA/SRF projects. By early 2000, there seems to have been
some shift of policy on the part of the latter agency.
On May 22, 2000, EPA wrote to BCTD Counsel Terry Yellig (with copies to
various EPA, DOL and AFL-CIO officials) noting an “interest in settling the Labor
Department proceeding between EPA and the Building Trades.” EPA stated:
Under the proposed settlement agreement we have drafted, the Agency would
again require states to ensure that treatment works projects receiving CWSRF
assistance directly made available by capitalization grants comply with the Clean
Water Act’s Davis-Bacon provisions for as long as grants are awarded to the
states under this program. In exchange for the Agency’s agreement, the Building
Trades would withdraw its pending Labor Department challenge and refrain from
challenging the Agency on this issue in the future.
Once BCTD had agreed to the settlement, EPA would commence the administrative
process to give it effect. Depending upon the results of “consultations with state and
local officials” and public comment through Federal Register notice, EPA reserved
the right to “withdraw from or withhold agreeing to the proposed settlement.”
Assuming the settlement were to proceed, then EPA would direct that a provision be
added to grant agreements “entered into with the states on or after January 1, 2001”
requiring them to “comply with section 513” of the CWA with respect to projects
“receiving CWSRF assistance directly made available by capitalization grants.”69
EPA published the notice in the Federal Register (June 22, 2000), outlining the
projected agreement and calling for comment. It was explained that EPA would
“prospectively apply the Davis-Bacon Act’s prevailing wage rate requirements in the

68 Michael B. Cook, Director, Office of Wastewater Management, EPA, to Ethel P. Miller,
Office of Enforcement Policy, Government Contracts Team, DOL, October 29, 1998. While
Title VI affirms that DBA does apply prior to FY1995, it does not state that it will not apply
to subsequent work. Arguably, it awaits further action by Congress.
69 Geoff Cooper, Finance & Operations Law Office, U.S. EPA, to Yellig, May 22, 2000.
Where an interested party believes that the DBA has been mis-applied, a formal appeals
procedure exists within the Department of Labor: a process that has, on occasion, led to
judicial redress.

Clean Water State Revolving Fund ... in the same manner as they applied before
October 1, 1994.” The notice reviewed the dispute and concluded:
EPA has closely considered the relationship of CWA section 513 and CWA
section 602(b)(6) .... While the Agency’s position to date rests on a reasonable
legal interpretation, EPA is now persuaded of the appropriateness of the view
that CWA section 513 imposes a continuing, independent obligation on the
Agency to ensure that Davis-Bacon Act requirements apply to any grants made
under the CWA for treatment works, including capitalization grants made under
title VI of the CWA. The language of CWA section 602(b)(6) does not relieve
the Agency of this obligation. Furthermore, as a matter of policy, the Agency
has determined that prevailing wage rate requirements applicable to federally-
assisted construction projects should continue to apply to federally-assisted
treatment works construction in the CWSRF program.
In the “Proposed Settlement Agreement,” per se, it was added that, while the
requirements of Section 513 (DBA) would hereafter apply to SRF projects, “no other70
requirements identified in section 602(b)(6) of the CWA, will apply ....”
The proposed settlement raised a number of questions. How did the parties
distinguish between the initial Section 513 requirement, standing on its own, and
Section 602(b)(6) into which Section 513 had been incorporated? If Section 513
continued to have independent applicability, then why was it necessary to include it
within Section 602(b)(6) at all? What was the intent, as used in the agreement, of
such phrasing as capitalization grants and directly made available — which, given
the history of the statute, could become a focus of litigation even were the settlement
affirmed? Why had EPA acquiesced to enforcement of the Davis-Bacon
requirements while specifically rejecting enforcement of the other provisions of
Section 602(b)(6)? And, were EPA’s actions, here, in compliance with the
Administrative Procedure Act?
More broadly, a provision allowed EPA to opt out of the agreement should
testimony and comment warrant. In that event, the BCTD’s “sole remedy will be to
reinstitute its request for ruling before the DOL.” EPA also stated: “In exchange for
EPA’s commitment, Building Trades would agree not to pursue any further action
on this matter before DOL or any other Federal administrative agency, or in
Cook’s conclusions and the settlement seem at odds. Cook had held that DBA
did not apply to SRF programs after October 1, 1994 — neither through Section 513
nor Section 602(b)(6).71 But EPA, having “closely considered the relationship” of

70 Federal Register, June 22, 2000, p. 38828-38830.
71 Cook’s argument is lengthy, but he observes in part: “...the application of section 513 is
limited. It applies the Davis-Bacon Act only to treatment works receiving grants from the
Agency. Section 602(b)(6) merely extends this otherwise limited application to certain
SRF-funded projects for a certain period of time. EPA’s construction of the clear direction
in section 602(b)(6) did nothing to disturb the application of section 513. It continues to
apply to ‘treatment works for which grants are made under (the CWA)’ but not to grants for

the two sections, had now come to conclude that DBA does apply and, further, that
“[t]he language of CWA section 602(b)(6) does not relieve the Agency of this
obligation.” What was the true meaning of the law — and what was the intent of the
Congress? Was Cook right — or were the authors of the settlement right?
Finally, EPA’s Federal Register explanation noted: “... as a matter of policy,
the Agency has determined that prevailing wage rate requirements applicable to
federally-assisted construction projects should continue to apply to federally-assisted
treatment works construction in the CWSRF program.” (Italics added.) One may
query: Did the proposed settlement rest on law or upon policy as enunciated by the
spokesman for an administrative agency?
A Call for Public Comment. During the summer of 2000, EPA took public
comment on its proposed notice of settlement. Two statements supported the
settlement; 23 opposed it. Testimony fell into three general categories: the BCTD,
contractor associations, and state agencies responsible for dealing with the CWA.
Several Members of Congress presented their views. A few statements focused on
legal issues. Others argued for or against the Davis-Bacon Act per se — which,72
though interesting, added little insight with respect to the actual settlement.
Views from Members of Congress. Representative Shuster raised legal
concerns. He questioned “whether an Executive Branch agency can make the
decision to reapply a statutory requirement that expired after September 30, 1994.”
The act, “as currently written,” he suggested, “does not allow EPA to take such
action.” New legislation, he stated, would be needed to reinstate the DBA. He said
that EPA had “failed to provide ... a credible legal analysis of the Agency’s purported
authority to implement this proposal.”73
William Goodling, Education and the Workforce chair (with 10 other
Republican committee members), called upon EPA to “reverse its plan to apply the
Davis-Bacon Act to clean water infrastructure projects funded” through the SRFs.
They stated that the proposed settlement “violates the clear intent of Congress.” The
Members suggested that, procedure aside, applying DBA to such work would be bad
public policy that “needlessly adds to the cost of clean water projects, thus harming
taxpayers, consumers and communities in need of affordable clean water solutions.”74

71 (...continued)
capitalizing State funds.” See Cook to Miller, October 29, 1998, cited above.
72 Reaction was not so one-sided as the numbers might suggest. The BCTD presented a
single statement on behalf of “the fifteen national and international labor organizations”
affiliated with it. The Association of State and Interstate Water Pollution Control
Administrators presented testimony in its own behalf — but a number of individual state
agencies presented testimony independently.
73 Honorable Bud Shuster to Carol Browner, Administrator, U.S. EPA, August 3, 2000.
74 Honorable William Goodling, et al., to Carol Browner, July 31, 2000.

Industry and Local Government Comment. Industry and state agencies
assumed that the DBA requirement had expired — (which both EPA and the BCTD75
would now dispute). Their subsequent comments were based on that premise.
The Associated General Contractors (AGC) urged EPA “to withdraw” the
settlement. William Isokait, for AGC, argued that the settlement “is a policy
judgment beyond the authority of the agency” for which “EPA offers no
explanation.” Desire for a settlement, he chided, “does not grant it the authority to
originate prevailing wage policy or to administer its programs in ways that contradict
the laws that establish and fund those programs.” He termed the EPA proposal
“inappropriate, improper and inconsistent.” As a technical matter, Isokait stated that
Section 602(b)(6) had contained 16 administrative requirements inherited from the
Title II program. Although the other 15 requirements had been allowed to expire in

1994, EPA had selected one (dealing with DBA) to retain. “Why this obligation does76

not exist with respect to these [other] conditions is not explained.”
Charles Maresca, Jr., for the Associated Builders and Contractors (ABC), also
accused EPA of acting “beyond its statutory authority” in “attempting to legislate via
executive fiat.” The “plain language of Section 513,” he stated, “... authorizes the
application of Davis-Bacon to projects funded by grants under the Act. It does not
authorize Davis-Bacon application to projects funded by revolving funds to which
EPA has made a grant.” In any case, it would have been nullified by “the sunset
provision” of Section 602(b)(6). Like several others, he charged that EPA had
proposed “no legal argument to support its new position,” adding: “The agency
merely announces that it ‘is now persuaded of the appropriateness’ of imposing
Davis-Bacon, and that ‘as a matter of policy’ the application of Davis-Bacon
requirements to treatment works begun after FY1994 should resume.” The
Administration, he concluded, “is overstepping its bounds.”77
The Association of State and Interstate Water Pollution Control Administrators
expressed dismay that the settlement had been “developed without input from this
Association” or the various state agencies.78 That view was echoed by a number of79
witnesses for the states. Some questioned why EPA would act at all. “It has been

75 The Heavy Highway Contractors Association supported the EPA/AFL-CIO settlement and
the “independent obligation” under Section 513 “to apply DBA to SRF funded wastewater
projects.” James Piazza, Jr., Legislative Liaison, Heavy Highway Contractors Association,
to Geoff Cooper, Office of General Counsel, U.S. EPA, August 4, 2000.
76 William Isokait, Counsel, Labor & Employment Law, AGC, to Cooper, August 4, 2000.
77 Charles Maresca, Jr., Director, Legal and Regulatory Affairs, ABC, to Cooper, August 7,

2000. Albert Miller, President, National Society of Professional Engineers, August 15,

2000, to Cooper, mused: “... NSPE can only conclude that the decision is not a matter of
policy but politics, this being an election year.”
78 Robbi Savage, Association of State and Interstate Water Pollution Control Administrators,
to Cooper, August 8, 2000.
79 Mike Linder, Director, State of Nebraska Department of Environmental Quality, to
Cooper, undated; Russell Harding, Director, State of Michigan Department of

known to Congress since the deadline passed that the Davis-Bacon Act was not being
applied” and Congress had taken “no action ... to reinstate” the requirement.80
Besides, several commenters argued, there would be little purpose in imposing DBA
requirements since local “construction tradespeople are receiving wages that often
exceed those published as Davis-Bacon Prevailing Rates.”81
Several submissions focused upon a procedural issue. Were federal funds being
made (1) to fund construction of treatment works or (2) to provide capital for the
SRFs — which would then make loans for specific projects? The importance of the
distinction (direct and indirect funding), however, was not spelled out with total
clarity in the submissions. Nor was it developed clearly in the legislative history —
or, for that matter, in the comments of EPA associated with the agreement.82
Were the settlement to be approved, several commenters urged, the effective
date should be set back to allow time “to notify future loan recipients ... and to re-
train personnel for implementation.”83
Perspectives of the BCTD, AFL-CIO. As a potential party to the
settlement, the BCTD was presumably privy to the reasoning upon which the
compromise was based. Thus, its testimony, transmitted to EPA by BCTD President
Edward Sullivan, could be regarded as an inside assessment.
The BCTD stated its understanding that “EPA would prospectively apply Davis-
Bacon prevailing wage requirements to construction of treatment works projects
assisted by State Water Pollution Control Revolving Funds with funds made directly
available by capitalization grants under Title VI of the Clean Water Act ....”84 The
BCTD explained: “.... in order to receive a capitalization grant” for its SRF, the
states had been required to “enter into a capitalization grant agreement with the EPA
that imposes an assortment of conditions” — one of which was the Section 602(b)(6)

79 (...continued)
Environmental Quality, to Cooper, July 14, 2000; and Daniel Law, Executive Director,
Colorado Water Resources & Power Development Authority, to Cooper, July 21, 2000.
80 Chris Matthews, Chris Matthews Construction, Inc., to Cooper, July 20, 2000.
81 S. W. Daignault, P.E., City Manager, City of Cape Coral, Florida, to Cooper, August 4,
2000. Chris Matthews, op. cit., observed in the same spirit: “Since most of the wage
determinations used [for Davis-Bacon purposes] are several years old, and the construction
skilled labor market has been tightening, ma[n]y of the wage determinations prescribe wages
which are lower than those current to the market.”
82 Don Ostler, Director Division of Water Quality, Utah Department of Environmental
Quality, to Cooper, July 12, 2000; and J. Dale Givens, Secretary State of Louisiana
Department of Environmental Quality, to Cooper, July 31, 2000.
83 Douglas Benevento, Director, Environmental Programs, Colorado Department of Public
Health and Environment, to Cooper, July 18, 2000.
84 Edward C. Sullivan, President, Building and Construction Trades Department, AFL-CIO,
to Cooper, August 4, 2000, transmitting the BCTD statement. Cite is to p. 1 of the BCTD
statement. The phrases, “assisted by,” “made directly available by,” and “capitalization
grants under Title VI,” may benefit from amplification.

DBA requirement. Included in Section 602(b)(6), by reference, Section 513 provided
that “all laborers and mechanics employed by contractors or subcontractors on
treatment works for which grants are made under this Act shall be paid wages”
at least equal to DBA rates.85
The effect and standing of Section 513 (originally applicable to Title II) and of
Section 602(b)(6) of the new Title VI remained in dispute, raising the question as to
whether the federal funding in question came from EPA or from the CWA/SRFs.
Section 513, the BCTD stated, “applies to ‘all laborers and mechanics employed by
contractors or subcontractors on treatment works for which grants are made under
this Act,’ not ‘all laborers and mechanics employed by contractors or subcontractors
on treatment work by which grants are made by EPA under this Act.’ That is,” it
concluded, “the plain language of Section 513 is not as limited as EPA claimed.”86
The BCTD then turned to congressional intent: “... there is no question that in 1987,
Congress intended to discontinue providing capitalization grants” to the SRFs after
FY1994. However, “... federal funding of capitalization grants to the States has
continued unabated since FY1995....”87
Why would EPA, having taken a very public stand that the DBA did not apply
to SRF work, suddenly reverse itself? If the BCTD interpretation of the law is
correct, the statement speculated, “there is a potentially substantial amount of back
pay liability arising from failure to pay prevailing wages and benefits” on CWA
projects. “EPA has wisely decided” that, although its prior position “‘rests on a
reasonable legal interpretation,’” it “‘is now persuaded of the appropriateness of the
view that CWA section 513 imposes a continuing, independent obligation on [EPA]
to insure that Davis-Bacon Act requirements apply to any grants made under the
[Clean Water Act] for treatment works, including capitalization grants under title VI
of the CWA.’”88
A New EPA Policy Enunciated
EPA’s “final settlement agreement” with the BCTD appeared in the Federal
Register of January 25, 2001.89 First. EPA explained that, under the settlement, it
would “prospectively apply the Davis-Bacon Act’s prevailing wage rate requirements
in the Clean Water State Revolving Fund ... program established in title VI ... in the
same manner as they applied before October 1, 1994.” Second. “In exchange for
EPA’s commitment, Building Trades has agreed not to pursue any further action on
this matter before DOL or any other Federal administrative agency, or in litigation.”
Third. The settlement would become effective on July 1, 2001 (delayed from the

85 Ibid., p. 7. Bolding in the original.
86 Ibid., p. 9. Bolding in the original.
87 Ibid., p. 10.
88 Ibid., p. 10-11.
89 The settlement agreement was signed by Gary S. Guzy, General Counsel, EPA, on January

11, 2001, and by Edward C. Sullivan of the BCTD on January 17, 2001.

original target date of January 1, 2001 to accommodate the states). Thereafter,
Davis-Bacon requirements were to be in effect.
The Federal Register notice reviewed the controversy, summarized the
submissions, and explained the position of the agency. Among other things:
... the legal basis for reimposing the Davis-Bacon Act requirement is sound and,
as a matter of policy, it is proper for prevailing wage rates to apply to
construction projects that are, for all intents and purposes, federally-assisted.
(Italics added.)
Reimposing the Davis-Bacon Act requirements may increase construction costs
for many CWSRF recipients, but the levels of those cost increases vary widely
and are often insignificant.
Although EPA is interested in streamlining administrative requirements and
reducing implementation costs, state prevailing wage rate laws cannot substitute
for the requirements of CWA section 513.
The settlement, however, still contained the provision that were EPA, after the
signing and publication of the settlement, to fail to meet its obligations under the
settlement’s terms, the “sole remedy” of the Building and Construction Trades
Department would be “to reinstitute its request for ruling before the DOL.”90
Another Reversal at EPA?
Interest groups had aligned on each side of the EPA/BCTD settlement. If the
trade union movement could applaud the decision as simply consistent with statute
(and with sound policy), industry would dissent. The Associated Builders and
Contractors (ABC) protested that the settlement “essentially repeals a statutorily
mandated sunset date of October 1, 1994” and charged that it was “a violation of the
Clean Water Act.”91 Nevertheless, both sides agreed to work for reauthorization of
the CWA: in the case of the ABC, without Davis-Bacon coverage. For Associated
General Contractors, “expansion of federal drinking water and wastewater revolving
funds” was a top legislative priority for the 107th Congress.92 For EPA, “wastewater
infrastructure” was reportedly a top budget concern.93

90 Federal Register, January 25, 2001, p. 7761-7763. The settlement does not contain a
definition section. Both the settlement and EPA explanation of it contain phrasing that may
need more careful legal analysis than given to it here. Given the long history of litigation
with respect to the Davis-Bacon Act, one might be excused for questioning the meaning of
even the most simple and direct language and the intent of its authors.
91 Statement, Davis-Bacon and the EPA, website of the Associated Builders and Contractors
[http://www.abc.org], October 26, 2001.
92 Associated General Contractors. News & Views, October 19, 2001, p. 2. See also: The
Growing Water Crisis in America. Constructor, August 2001, pp. 42-46.
93 Engineering New Record, May 21, 2001. p. 13.

As noted above, the final settlement had been modified in one area: moving the
effective date back to July 1, 2001, in order to accommodate the needs of the states.
At that point, it was agreed, EPA would begin mandating Davis-Bacon coverage on
all SRF-assisted projects.94 But, EPA subsequently moved the effective date back to
September 1, 2001. Then, “[w]ith no elaboration,” EPA moved it back again, this
time to October 1, 2001.95 Thereafter, there was silence.
Some Considerations of Policy
Conceived prior to the Depression, the Davis-Bacon Act (1931) was passed at
the urging of the Hoover Administration. The intent was to bring stability to the
construction industry and, at the same time, to prevent construction wages from
spiraling downward as part of the Depression-era decline. After the act was refined
and expanded in 1935, subsequent amendment has been largely technical — though
the Davis-Bacon principle has been extended to more than 50 program statutes.
Review of the Davis-Bacon Statute
Almost from the beginning, there was debate about the statute that quickly
became symbolic. Organized labor supported the act (as did many in industry.) For
others from industry and elsewhere, the Davis-Bacon became a target, with support
for (or opposition to) the act viewed as a political litmus test. Arguments, pro and
con, have, through the years, been pursued with vigor. The act (with the related
program provisions) has been litigated extensively, with individual words, phrases,
and concepts becoming grist for the contending parties on each side.
Congressional debate over Davis-Bacon has been intermittent at least since the

1950s, but it was more or less ongoing through the 1970s, 1980s, and into the 1990s.

Not infrequently, DBA has surfaced as a subject of consideration several times
during a single session of the Congress, and given what some perceive as the
ambiguity of the statute and the difficulty of its implementation, one may reasonably
expect that it will continue as part of the agenda of the Congress and the courts.
Davis-Bacon and the Clean Water Act
Davis-Bacon prevailing wage coverage was added to what would become the
Clean Water Act in 1961. When Congress created the CWA/SRF loan program in

1987, DBA (with other administrative requirements) was made part of that program.

What happened after 1994 when SRF authorizations expired remains in question.
Federal Funding and Administrative Requirements? In 1987, Congress
decided to end new authorization for SRFs after FY1994. Almost immediately,
however, there was recognition that further federal funding for SRFs would be
needed “for the foreseeable future.” Several proposals to that effect were considered.

94 Bureau of National Affairs, Daily Labor Report, January 25, 2001, p. A4.
95 Bureau of National Affairs, Daily Labor Report, September 14, 2001, p. A14.

Possibly, because of more contentious issues (wetlands, for example), they were not
enacted. But absent further authorizations, Congress continued to fund the SRF
program through the appropriations process. The program is ongoing.
So long as the SRF program received federal funding (with authorizations
through FY1994), Congress provided that DBA coverage continue. Given a literal
interpretation of the 1987 authorization (that is, that DBA and other administrative
requirements would apply only to treatment works “constructed in whole or in part
before 1995”), one could argue that any project constructed after that time would not
be DBA-covered.
However, one might also argue that Congress intended to continue the initial
SRF program through the appropriations process. And since appropriations
continued to be made, it might also be argued that the various administrative
provisions (including Davis-Bacon), in place in 1994, would continue until such time
as Congress intervened. From this perspective, there would have been no change in
the long-standing policy of DBA coverage of CWA and CWA/SRF projects — and
no need for a new statement of intent by the Congress.
The Concept: “to which the United States ... is a party”. Speaking
generally, Davis-Bacon coverage has taken two forms. The act itself requires an
agreement to pay not less than the locally prevailing wage rate be included in every
construction contract “in excess of $2,000, to which the United States or the District
of Columbia is a party....” (Italics added.) In the case of the Clean Water Act, a
DBA prevailing wage requirement has been added to the statute with Section 513 (of
the core act) and with Section 602(b)(6) with respect to the SRF program.
Determination of what constitutes a locally prevailing wage is left to the Secretary
of Labor, while the EPA Administrator is directed to insure that all laborers and
mechanics employed on covered work are “paid wages at rates not less than those”
found by the Secretary to be prevailing.
In a narrow legal sense, the concept of “is a party” may be interpreted as
requiring that the United States, through its authorized agent, be an actual signatory
to a construction contract. More broadly, in the case of federally assisted programs,
some may argue that the recipient of federal funds (a loan, grant, tax incentive), by
virtue of the receipt of such assistance, becomes the de facto agent of the federal
government and, thereby takes on a variety of federally imposed responsibilities.
The CWA/SRF is, by and large, a federal program, even where the federal
government is not, immediately, a signatory to a specific contract under its egis.
SRFs were established at the initiative of the federal government, and have been
funded largely by the federal government. If there are administrative (or social)
requirements inherent in federal funding (fiduciary practice, non-discrimination, etc.),
some might argue that they should continue in place while the program continues or96
until specifically stricken from the statute. Here, the SRFs were designed to be

96 For example, the states, presumably, having accepted federal grants to capitalize the SRFs,
are not free to convert these funds to an unrelated purpose of their own choice — e.g.,

ongoing. One might argue that the concept of being “a party” to an ongoing program
(with the responsibilities that may entail) does not end simply because no new federal
funding is forthcoming and while the program continues to operate by virtue of the
old funding.97
The program (even without new authorizations) is ongoing, and it might be
argued that the federal government continues to be “a party” to it. That would seem,
on the surface, to be implicit in the EPA agreement to enforce the DBA requirements
“prospectively” and “in the same manner as they applied before October 1, 1994.”98
Such assumptions, of course, lay at the heart of the continuing dispute.
Establishment of SRFs, in effect, creates an intermediary between the source of
the funding (largely federal) and the loan recipient. To what extent is the continuing
federal presence modified by the mechanism through which funding is made
available for local abatement projects? Does the existence of the SRFs render the
federal government other than “a party” to the construction?99 The issue is legal,
philosophical — and disputable.
The Complexities of Regulatory Enforcement. Both Davis-Bacon and
the CWA/SRF initiative have enjoyed high visibility. Conflict about prevailing wage
treatment of SRF-funded projects has been an issue through more than a decade, and
suggests various policy dilemmas:

96 (...continued)
highway construction, public welfare, or support for the arts. These restraints upon how the
funds might be used flow, arguably, from the original character of the funding mechanism.
97 Here, one might consider the concept of first use. Some have argued that federal funds,
loaned out and then repaid, lose their federal character and take on the character of the
administrator of the program. In this manner, it is argued, the federal government ceases to
be “a party” to programs it has initiated and funded, and which would not exist in the
absence of a federal role or presence.
98 In its January 2001 “settlement agreement,” EPA stated: “[t]he legal basis for reimposing
the Davis-Bacon Act requirements is sound and, as a matter of policy, it is proper for
prevailing wage rates to apply to construction projects that are, for all intents and purposes,
federally-assisted.” (Italics added.) Federal Register, January 25, 2001, p. 7762.
99 Legislation introduced by Senator Mark Hatfield (R-OR) and Representative Curt Weldon
(R-PA) in the 104th Congress (S. 1183 and H.R. 2472) attempted to address these issues.
This legislation (not adopted) would have added language to the DBA specifying:
“(3) FEDERALLY ASSISTED. — The requirements of this Act ... shall
apply to any project for the construction, rehabilitation, reconstruction, alteration
or repair, including painting and decorating, of buildings or works that are
financed in whole or in part by loans, grants, revolving funds, or other assistance
from the United States pursuant to a statute that —
“(A) is enacted after the effective date of this Act unless exempt
or otherwise limited by Federal law; or
“(B) contains a provision requiring the payment of prevailing
wages as determined by the Secretary of Labor pursuant to this Act.”

!Was EPA correct, beginning in 1995, in asserting that the Davis-
Bacon requirements did not apply to SRF projects? Or was it correct
in its new position, in 2000-2001, that Davis-Bacon did apply? If
the EPA were correct (in either stance), upon what legal foundation
does its judgment rest?
!What was the role of the Department of Labor through this period?
Assuming that it had required application of DBA standards prior
to 1994, did it stop doing so in 1995? If so, on what ground?
!Since the CWA/SRF initiative has (and will) involve multiple
billions of dollars, it is a major undertaking. Are there now in place
procedural restraints through which to handle conflicts of this sort?
Davis-Bacon Act and the CWA/SRFs
in the 110th Congress
Through more than a decade, authorization for funding of the CWA/SRFs has
been a matter of contention with the authorizing committees of both the House and
the Senate. Each time a bill has been brought up for consideration, various other
factors were raised — among them, coverage under the Davis-Bacon Act — and
ultimately, the several bills died.100
In the 110th Congress, there has once again been consideration of clean water
bills. Almost immediately after the Congress convened, the process commenced in
the House. As with prior Congresses, the issue of Davis-Bacon remained an essential
ingredient in the proceedings.101
Preliminaries and an Early Hearing
On January 19, 2007, the House Subcommittee on Water Resources conducted
an oversight hearing on investment in clean water infrastructures.
J. Kevin Ward, speaking for the Council of Infrastructure Financing Authorities
(CIFA), did not refer to the Davis-Bacon Act in his prepared testimony but he did
urge that “more operating flexibility” be allowed for the states (a concept sometimes
associated with an anti-Davis-Bacon stance). Ward continued:
“Certainly States must be fully accountable for their use of federal dollars but an
excessive overlay of mandates and set asides and operational requirements will
only serve to stifle innovation and interfere with the ability of States to best
respond to local needs. The success of this program derives from the flexibility
of the SRF model....”

100 For general background on the recent period, see CRS Report RL33800, Water Quality
Issues in the 110 Congress: Oversight and Implementation, by Claudia Copeland.
101 Bureau of National Affairs, Daily Labor Report, January 10, 2007, p. A8.

With a view to prospective legislation of the 110th Congress, Ward affirmed that
there are “a number of specific program changes that we would want to see included
in CWSRF reauthorization....”102
Jim Stutler, representing the National Utility Contractors Association (NUCA),
noted that there “are several policy issues that will no doubt be debated during the
legislative process” but urged the committee “to focus on the big picture.” Stutler
continued: “...the impasse over prevailing wage requirements under the Davis-Bacon
Act has stymied this legislation for too long.” He continued: “...NUCA represents
both union and non-union contractors” and “Davis-Bacon is not an issue of
contention for our members.”103
A New Bill Introduced (H.R. 720)
On January 30, Representative James Oberstar (D-MN) introduced H.R. 720,
the “Water Quality Financing Act of 2007.”104 The bill was referred to the
Subcommittee on Water Resources and Environment, marked-up and promptly
forwarded to the full Committee on Transportation and Infrastructure.
Subcommittee and Committee Action. In the subcommittee (January 31,

2007), Davis-Bacon again became an issue. Representative Richard Baker (R-LA),

in an amendment proposed by Representative Thelma Drake (R-VA), urged that the
Davis-Bacon language be stricken. On a voice vote, the Baker/Drake amendment105
was rejected and the Davis-Bacon provision was retained.
On February 7, the House Committee on Transportation and Infrastructure took
up the sewage and wastewater measure. In each case (in the subcommittee and in the
committee), there had been controversy, but it had been overcome. The bill was
approved in the full committee by a vote of 55 yeas to 13 nays. With the Davis-106
Bacon provision intact, the bill was ordered reported.
Report from the Subcommittee: H.Rept. 110-30. As reported, two
provisions deal with Davis-Bacon. Section 513, which had applied the act broadly
to treatment construction, was retained. It required that “all laborers and mechanics
employed by contractors or subcontractors on treatment works for which grants are
made under this Act shall be paid wages at rates not less than those prevailing for the
same type of work on similar construction in the immediate locality.”

102 Testimony of J. Kevin Ward, on behalf of the Council of Infrastructure Financing
Authorities, before the House Subcommittee on Water Resources and the Environment,
January 19, 2007, pp. 2 and 7.
103 Testimony of Jim Stutler, President, National Utility Contractors Association, before the
Subcommittee on Water Resources and Environment, January 19, 2007, p. 5.
104 Congressional Record, January 30, 2007, p. E220.
105 Terry Kivlan, Subpanel, OKs $20 Billion Waste Water Construction, see
http:nationaljournal.com/members/markups/2007/01/mr_20070131_3,htm, February 28,

2007. See also Bureau of National Affairs, Daily Labor Report, February 2, 2007, p. A3.

106 Bureau of National Affairs, Daily Labor Report, February 9, 2007, p. A2.

That authority (Section 513) had long been in place. However, a new provision
was added: Section 602(b)(17). The committee report explained:
“New Section 602(b)(17) requires the application of the Davis-Bacon
requirements for the construction of treatment works carried out in whole or in
part with assistance made available from state revolving loan funds under Title
VI, funds from section 205(m) of the Act, or both. This amendment authorizes
the application of the prevailing wage requirements to construction projects
carried out with any financial assistance from the state revolving fund, whether
the source of assistance originates from Federal capitalization grant funds, state
matching funds, repayments to the fund, interest payments, or other sources of
income to the state revolving fund, and whether the character of the assistance
is through loans, loan guarantees, or other types of assistance authorized by
section 603(d).”
The report continued. “By establishing the Davis-Bacon prevailing wage requirement
for the construction of treatment works, the Committee continues its long-standing
practice of ensuring the application of Davis-Bacon where Federal funds are provided
for construction....” It added: “For the Clean Water SRFs, the most significant source
of revenue in the state revolving funds is the Federal capitalization grant. As
Congress has done in 63 separate instances for Federally-funded construction, the
Davis-Bacon Act should apply to the reauthorization of the Clean Water SRFs.”
The committee went on to discuss the varied rationale for support of the Davis-
Bacon Act: to “attract more experienced and better trained workers,” workers who
“are often more productive than workers with less training and experience,” that
Davis-Bacon work results often “in the completion of construction projects ahead of
schedule,” “reducing the overall cost of the project,” and “offsetting any increased
costs due to higher hourly wage rates.”107
Conversely, Representative John Mica (R-FL), together with several others,
suggested a strong opposition. Mr. Mica stated that the bill “represents an important
step forward for clean water” but “it also takes a significant step backwards by
mandating and expanding upon the past application of Davis-Bacon Act prevailing
wage requirements in the SRF program.” Davis-Bacon, he stated, would add “to the
cost of public construction” and have a disproportionate impact on “small, rural, and
disadvantaged communities, which can least afford to pay the higher cost of
projects.” He stated that the act was “discriminatory” in that “[f]ew small and
minority-owned firms can afford to pay the higher wages that the Davis-Bacon Act
requires. As a result,” he observed, “they are rarely awarded Davis-Bacon contracts,
and many of them stop applying for those contracts.” He concluded: “There is no108

precedent here for applying the Davis-Bacon Act to state funds....”
107 U.S. Congress. House. Committee on Transportation and Infrastructure. H.Rept. 110-30,
Water Quality Financing Act of 2007: Report to Accompany H.R. 720, “Section 302,
Capitalization Grant Agreements, (b) Additional Requirements,” last paragraph; p. 24 of
written version.
108 H.Rept. 110-30, “Minority Views” section at end of report, paragraph 5; pp. 56-57 of
written version.

The Bill Considered in the House. On March 9, the “Water Quality
Financing Act of 2007” was called up for debate in the House. Davis-Bacon was a
significant part of the discussion that followed.
In discussing the rule, Representative Pete Sessions (R-TX) brought up Davis-
Bacon coverage, stating: “... the Democrat leadership is bringing legislation to the
House floor that benefits big labor bosses at someone else’s expense.” Sessions
continued: “...in order to help big labor bosses pad their dwindling ranks, they would
apply these same provisions [Davis-Bacon regulations] to all non-Federal funds, such
as loan repayments, State bond revenues, interest and State-matching funds.”
Sessions objected to “this Depression Era wage subsidy law” and “its associated
inflation” which means that local budgets cannot build “schools, hospitals, prisons,
roads and other vital projects.” He continued:
“If you support fiscal responsibility, small business, States’ rights, rural
communities, women- and minority-owned businesses, and the environment, you
will join with me in opposing this rule.
“If, however, instead, you support environmental harm, market distortion,
wasteful Federal spending, and stacking the deck in favor of labor bosses, I109
wholeheartedly encourage you to vote for this legislation.”
Representative Kathy Castor (D-FL) responded that some were “...unable to
criticize the heart of this legislation” (that is, authorization for “an important part of
the Clean Water Act”). Thus, she suggested that the Member from Texas “instead
reverts to attacking a portion of this legislation that is vital to workers across
America, the Davis-Bacon Provisions.” Castor noted that “it has become all too
familiar from the other side of the aisle to attack workers across America.” She then
affirmed that
“[i]t is our policy, in fact, it is Congress’s long-standing continuing tradition of
applying prevailing wage requirements to federally funded construction projects.
Studies have shown that by attracting more experienced, better-trained workers,
that wage requirements lead to higher productivity and they reduce overall costs,
which offset any higher wages.”
Castor argued that Davis-Bacon “protects communities by ensuring that wage
determination” is based “solely on the local workforce costs” — the locally
prevailing wage rate. Further, she argued, with Davis-Bacon in place, oftentimes
“projects come in under budget and on time.”110
Throughout floor consideration of H.R. 720, Davis-Bacon was of continuing
interest with Members, some taking strong positions either for or against the
statute.111 As discussion moved on to amendments, Representatives Baker and Steve
King (R-IA) proposed an amendment. King explained: “... really all this amendment
does is it just stops the expansion of the Davis-Bacon, and it says we are not going

109 Congressional Record, March 9, 2007, p. H2346.
110 Congressional Record, March 9, 2007, pp. H2346-H2347.
111 Congressional Record, March 9, 2007, pp. H2345-H2368.

to move this Davis-Bacon into a revolving fund.” Baker added with respect to Davis-
Bacon: “It will make the compliance of the rules for rural and lower income
communities much more difficult to achieve. Compliance with the Davis-Bacon
provisions,” he stated, “is a difficult and cumbersome task.”112 Speaking against the
Baker/King amendment was the chairman of the Committee on Transportation and
Infrastructure, Mr. Oberstar, who noted the difference between a union wage and a
prevailing wage. “This Davis-Bacon provision is [a] prevailing [wage], not [a] union
wage.” Oberstar added: “It is the prevailing local wage.”113
On a roll-call vote, the Baker/King amendment was defeated: 140 ayes to 280
noes.114 Thus, the Davis-Bacon Act would apply to the SRFs under the House-passed
version of the Water Quality Financing Act of 2007 — whether on a first use basis
or, repeatedly, throughout the program. Following discussion of other issues, the bill
was adopted and was dispatched to the Senate.
Consideration of H.R. 720 by the Senate
In the Senate, on March 12, 2007, H.R. 720 was read and referred to the
Committee on Environment and Public Works. The bill remains in committee, no
further action having been reported.

112 Congressional Record, March 9, 2007, p. H2369.
113 Congressional Record, March 9, 2007, p. H2370.
114 Congressional Record, March 9, 2007, pp. H2373-H2374.