U.S. DEPARTMENT OF LABOR
0FFICE OF THE SECRETARY
WASHINGTON
April 6, 1971
MEMORANDUM #93
TO: All Government Contracting Agencies of the Federal
Government and the District of Columbia
SUBJECT: REVOCATION OF THE PROCLAMATION OF FEBRUARY 23, 1971
SUSPENDING PROVISIONS FOR PAYMENT OF WAGES ON CON-
STRUCTION PROJECTS PURSUANT TO WAGE DETERMINATIONS
OF THE SECRETARY OF LABOR UNDER THE DAVIS-BACON ACT;
AND ESTABLISHMENT OF A WAGE AND PRICE STABILIZATION
MECHANISM FOR THE CONSTRUCTION INDUSTRY
The purpose of this memorandum is to provide you with initial information
on the ,subject action taken by the President on March 29, 1971. Further
information will be provided as it becomes available.
REVOCATION-0F DAVIS-BACON SUSPENSION
By proclamation of the President on March 29, 1971, Proclamation 4031 of
February 23 1971 is revoked--
“as to all construction contracts for which solicitations
for bids or proposals are issued after the date of this
Proclamation, whether direct federal construction or fed-
Rally ,assisted construction subject to the previous
Proclamation No. 4031."
WAGE AND PRICE STABILIZATION IN CONSTRUCTION: EXECUTIVE ORDER
By Executive Order 11588, on March 29, 1971, the President established
a wage and price stabilization mechanism for the construction industry.
Among other things, the Order (1) establishes a tripartite Industry
Stabilization Committee composed of 12 members appointed by the Secretary
of Labor (4 each from labor unions, contractors' associations, and the
public sector) to review wage and salary increases in collective bar-
gaining agreements; (2) provides that associations of contractors and
national and international unions shall jointly establish craft dispute




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boards composed of labor and management representatives to determine
whether wages and salaries are acceptable in accordance with criteria
contained in the Order; and (3) establishes an interagency committee
composed of agency representatives designated by the Secretary of HUD
to develop criteria for the determination of the acceptable prices in
construction contracts, as well as criteria for acceptable compensation.
The wage and price stabilization mechanism is established-pursuant to
the authority vested in the President by the Economic Stabilization
Act, as amended.
REINSTATEPENT OF DAVIS-BACON PROVISIONS
Under Proclamation 4040 of March 29, 1971, revoking the Davis-Bacon
suspension imposed by Proclamation 4031 of February 23, 1971, federal
wage payment requirements dependent on wage determinations of the
Secretary of Labor are once again made applicable to -
(1) Solicitations (issued after March 29, 1971) for bids of proposals
on federal or federally assisted construction of a character subject
to the previous suspension; and
(2) All contracts for such construction entered into pursuant to such 
bids.
(3) Subcontracts, of whatever tier, under such contracts.
By its terms, Proclamation 4040 does not specifically requires changes
in pending procurement actions or contract procedures with respect thereto
which were initiated prior to the revocation of the suspension. It is
recognized that some contracts may have actually been let during the
period of suspension. The Proclamation is prospective in its application,
however, and in no way does it prevent any resolicitation otherwise
authorized of bids or proposals after such date, in which event the
Davis-Bacon requirements will become applicable to the procurement if it
is of a character to which they would otherwise apply, and the contract
entered into as a result of the solicitation will not be affected by
the previous suspension.
Contracts entered into without Davis-Bacon provisions during the period
between February 23, and March 29, 1971, inclusive, remain free of such
provisions and the same is true of subcontracts thereunder, irrespective
of the date they are entered into or the period in which their
performance occurs.




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Where bids or proposals for contract work were solicited subject to
Davis-Bacon provisions prior to Proclamation 4031 suspending such
provisions with respect to "contracts entered into" on or after
February 23, 1971, and no further action has been taken and no con-
tract entered into pursuant to such solicitation between February 23
and March 29, 1971, inclusive, it would appear that no contract or
solicitation therefor became subject to the suspension proc1mnation
before the revocation by Proclamation 4040 and that the additional
effort and expense of issuing a resolicitation after March 29, 1971
would not be required as a result solely of the two proclamations.
So long as the wage determination on the basis of which the solicita-
tion was made remains in effect, a contract subject to its provisions
may be entered into as it would have been if there had been no suspen-
sion during the intervening period.
The reinstatement of Davis-Bacon provisions under Proclamation 4040
should accordingly avoid, or at least minimize, most of the problems
resulting from interrupting the procurement process once it has begun,
which were faced by contracting officers under Proclamation 4031.
WAGE DETERMINATIONS AND REQUIREMENTS
Regulations of the Department of Labor (29 CFR Parts 1, 53 see also
36 F.R. 304-308) governing requests for wage determinations, use of
wage determinations, contract clauses, and their enforcement have been
reinstated (36 F.R. 6427). Area and general wage determinations out-
standing on the date of the suspension have had their expiration dates
extended until such time as new determinations to replace them can be
made, and such determinations may be used (36 F.R. 6467). Requests for
project wage determinations will be received and handled pursuant to
the previously established procedures. Contracting agencies are reminded
of the requirements of 29 CFR 5.3(a)(3) to submit pertinent wage infor-
mation and are urged to provide recommendations as to wages which are
prevailing for each classification of laborer and mechanic to be employed
on the proposed contract. It is further requested, ix> assist in reducing
delays in responding to requests, that requests for wage determinations
be submitted with a self-addressed envelope that may be used to transmit
the wage determination to the office or person responsible for its use.
Every effort will be made to respond to requests for wage determinations
expeditiously and, wherever possible, the effective date of existing wage
determinations will be extended on an individual basis in accordance with
the provisions of 29 CFR 5.4(a) in order to avoid delays in responding to
the large number of requests anticipated during the next month.




STABILIZATION ACTIONS UNDER THE EXECUTIVE ORDER
Appropriate regulations will be issued in the near future dealing with the
operations of the Industry Stabilization Committee, Craft Disputes Boards,
and the Department of Labor under Executive Order 11588.
Section 5(c) of the Order provides for making public the determinations
of the Committee and the Boards with respect to the acceptability of wage
and salary increases by craft and area. It is contemplated that notices
of certifications by the Secretary of Labor of increases determined to be
unacceptable will be published in the Federal Register in order to assure
the broadest possible publication.
Section 5(b) of the Order directs the heads of all federal departments
and agencies, in order "to assure that unacceptable wage rates" are not
utilized in Federal or Federally assisted construction, to review--
1. Plans for construction and assistance for construction
in localities where wage or salary increases have been"
certified by the Secretary of Labor as unacceptable; and
2. Current and prospective Federal and federally assisted
construction in the areas affected by such certification
to determine whether such plans can be approved or continued and such
contracts awarded or continued.
These reviews of plans and of current and prospective contracts are
necessary under the Order in every instance when wage and salary increases
have been certified by the Secretary of Labor as unacceptable. Suggested
guidelines for carrying out the directive in section 5(b) will be developed.
Section 5(a),of the Order requires that a wage or salary increase "in
excess of that found to be acceptable" shall, in making wage determinations,
not be taken into consideration--
(1) By the Secretary of Labor in making such determinations
in accordance with the Davis-Bacon Act;
(2) By the States in making similar determinations under
State statutes.




Federal agencies providing federal funding or assistance to contracts in
the States to which such State statutes may apply should advise the State
agencies with whom they deal of the requirement in paragraph (2), above,
keep the Secretary of Labor informed concerning the application of this
requirement by the States, and assume responsibility for enforcement
actions available under the statutes which they administer, in accordance
with the provisions of Reorganization Plan No. 16 of 1990 and regulations
of the Secretary of Labor.
As indicated above, further information will be sent to you on these
subjects as it becomes available. In the meantime, questions as to
application of the Proclamation and Davis-Bacon requirements may be
addressed to the Workplace Standards Administration, and questions as
to the application of the Executive Order may be addressed to this
Office.
L. H. Silberman
Under Secretary of Labor