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Determination of Wage Rates Under the Davis-Bacon and Service Contract Acts

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The Secretary of Labor is required to determine “prevailing” wage rates under the Davis-Bacon and Service Contract Acts with reference to an objective standard of predominance or currency in a given locality.  It is proper to define the prevailing rate in terms of the lowest rate only where the lowest rate is also that which occurs with the greatest frequency.  Where no single wage rate is predominant, it would ordinarily be permissible for the Secretary to use an average.

The minimum wage rate required by law to be included in all contracts subject to the Davis-Bacon and Service Contract Acts must be at least the prevailing rate as determined by the Secretary of Labor.

In the absence of a statutory definition of a term, one must look to the common understanding of the word, and to the legislative history and purpose of the statute generally.  In addition, a presumption of correctness may be accorded the longstanding administrative interpretation of a term.

Updated July 9, 2014