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NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2022
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speech of
HON. CHRISTOPHER H. SMITH
of new jersey
in the house of representatives
Wednesday, September 22, 2021
Mr. SMITH of New Jersey. Mr. Speaker, my amendment directs the Army Corps of Engineers to provide uniform guidance and to strengthen enforcement of laws that are already on the books to ensure that federal construction projects, particularly on our military bases, are completed with the highest quality workmanship.
The Government Accountability Office (GAO)--the federal government's
``watchdog'' agency--recently completed an investigative report, mandated by an amendment I authored as part of the 2020 National Defense Authorization Act (NDAA), that found inconsistencies with implementation of the Corps mechanisms for compliance with important worker protection laws. Today's amendment addresses those problems and instructs the Corps' to fully comply with relevant federal laws and regulations for: building quality facilities--labs, hangars, housing, and workspaces--for our military men and women; providing an honest wage for construction workers; and providing the best investment for the taxpayer.
For years, we have witnessed unscrupulous contractors win construction bids for critical federal work, only to have those important projects mismanaged, understaffed, delayed, left unfinished, and in some cases, rebid--then properly redone by high-skilled tradesmen and women who should have gotten the job in the first place.
There is wide-spread concern that irresponsible contractors and subcontractors hire unqualified or underqualified workers and put them in high-skill jobs for which they lack the needed training and expertise--a practice known as misclassification.
There are two different types of misclassification: craft misclassification and independent contractor misclassification. Craft misclassification occurs when dishonest contractors misclassify high-
skilled workers as general laborers or lower wage classifications in order to avoid paying the higher prevailing wage rate applicable to the high-skilled work actually performed. Independent contractor misclassification occurs when contractors misclassify employees as independent contractors to avoid paying prevailing wages thereby reducing labor costs and avoiding state and federal taxes.
These practices deny workers of their rights to critical benefits and protections, including prevailing wages, worker's compensation and unemployment insurance, and communities suffer because misclassification results in lower tax revenues for federal, state, and local governments.
Additionally, the end product is often compromised by shoddy workmanship which can lead to do-overs and substantial cost overruns.
Congress has passed laws to prevent such problems and punish the offenders. The Davis-Bacon Act is critical in this effort as it requires contractors working on certain federally funded construction projects to pay their workers a prevailing wage to ensure that our federal projects are completed by skilled workers who have been properly trained, classified and paid according to their expertise and locality. The Act stands as a check and balance designed to protect employees from low-wage, low-bidding contractors who look to do the job on the cheap hurting the workers and the client, i.e. the federal taxpayer.
When it comes to domestic construction projects, the Army Corps of Engineers, procures more than most divisions of the Department of Defense. According to the GAO, in 2019, the Corps obligated over $11 billion for domestic construction contracts.
Each federal agency is primarily responsible for enforcing the Davis-
Bacon protections at its construction worksites. The Army Corps has a lot of construction projects and federal construction monies to properly oversee.
Unfortunately, federal construction projects in my district, including Army Corps projects at Joint Base McGuire-Dix-Lakehurst--have fallen short in oversight and compliance and have run into trouble with unqualified, subpar bidders who avoid hiring needed skilled workers. We have seen cases of sophisticated work--HVAC, plumbing and sheet metal--
needing to be ripped up and redone after the irresponsible bidders failed to properly do the work.
To examine this problem and find lasting solutions, in 2019, Congress enacted my amendment to the 2020 NDAA directing the GAO to study the contracting practices of the Corps with a focus on how the Corps monitors and enforces the Davis-Bacon Act.
The GAO conducted its audit from May 2020 to March 2021 examining Corps guidance, relevant documents about the Davis-Bacon Act, Department of Labor guidance and other relevant laws and regulations. They conducted ``semistructured interviews'' in four Army Corps district offices--Louisville, New Orleans, New York and Walla Walla--
based on the district's activities and representing ``various geographical areas in the U.S. and a mixture of volume and type of construction contracts (e.g. military and civil projects)''.
They interviewed Corps headquarters officials, DOL officials and four external groups including two labor unions and two trade associations.
The GAO said that ``monitoring, including payroll reviews and on-site inspections, are key to ensuring that the Corps enforces contractor's compliance with the Davis-Bacon Act''.
But the report also described implementation inconsistencies across the various districts that can easily lead to gaps in compliance with Davis-Bacon.
The GAO concluded that aspects of the reviews and on-site inspections
``may not be sufficient.'' They found that ``Corps documents lack information'' and said that ``In the absence of directions to consistently document on-the-ground conditions, like the number of employees on site'' district officials ``may not be fully using on-site inspection to ensure contractors' compliance with the Act.''
GAO's final recommendations to Army Corps were that Corps headquarters provide clarifying information on how to conduct payroll reviews and document on-site inspections to ensure the proper monitoring of the number of workers and work performed.
In essence, the GAO found that the Army Corps needs to do a better job in complying with and enforcing Davis-Bacon protections on Corps' projects.
My amendment instructs the Army Corps to provide each of its districts with the guidance it needs to enforce Davis-Bacon. It also directs the Corps to investigate worker complaints and third-party complaints within 30 days of filings and reaffirms transparency and disclosure requirements for certified payroll reports.
With better compliance and more transparency, we will see better workmanship, and a greater return for the taxpayer.
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SOURCE: Congressional Record Vol. 167, No. 165
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