On June 24, 2024, a Texas federal district court issued a significant ruling that partially and temporarily blocks enforcement of the expanded Davis-Bacon Act pending the outcome of ongoing litigation. This ruling impacts specific provisions, notably §5.2 and the entirety of §5.5(e) of the Department of Labor's Final Rule on "Updating the Davis-Bacon and Related Acts Regulations" (Final Rule).
The Final Rule, which was published on August 23, 2023, and took effect on October 23, 2023, introduced substantial changes to how the Davis-Bacon Act is applied, including:
- Operation-of-law Provisions: These provisions would incorporate the Davis-Bacon requirements into contracts even if they were omitted from the contract documents.
- Material Suppliers and Truck Drivers: The rule expanded the scope of the Act to include certain activities of material suppliers and truck drivers on the job site, which were previously exempt or not clearly covered.
The court's preliminary injunction reflects concerns that these provisions exceed the Department of Labor's authority under the Davis-Bacon Act and may impose significant administrative burdens on contractors.
Previously, the expansion of the Davis-Bacon rule in Summer 2023 was covered in this XBE newsletter. In response, XBE released features in October 2023 to help manage the new compliance requirements, particularly for prevailing wages for truck drivers.
We expect industry associations to provide additional guidance soon, which will be helpful to contractors as it relates to bidding strategies and compliance. We encourage XBE customers to leverage these resources and to stay informed about the ongoing legal developments.
For more details, you can download the full court decision here.