Prevailing Wage Work Is Coming
Date Posted: October 19, 2023
Posted In: Discussion, News, Workforce,
From Construction Business Owner: In November 2021, President Joe Biden signed into law the Infrastructure Investment and Jobs Act (IIJA) which designates $550 billion for rebuilding roads and bridges, improving public transit, expanding passenger rail, upgrading ports and airports, broadband infrastructure investments, fixing water systems, modernizing the power sector and improving climate resilience. Many of these projects fall under the Davis-Bacon Act — meaning they are prevailing wage jobs.
Much of that money, however, remains unspent. For instance, the Environmental Protection Agency (EPA) is due to receive $60 billion, but as of Feb. 28, 2023, the EPA had spent less than 2% of the funds to be expended. Known as “implementation lag,” construction projects have many phases before a shovel hits the dirt. While the preconstruction phase is critical, it is also a lengthy process in which the project owner, the design team and the general contractor work together to define, design and prepare the project for execution. Preconstruction includes site selection, feasibility studies, risk assessment, budget, schedule development and various approvals from competing regulatory bodies. Essentially, preconstruction aims to ensure everyone is on the same page with the vision for the completed project before it starts.
Today much of the preconstruction efforts are ending, final bids are being released, and a transition to the implementation phase of the projects is beginning. That proverbial shovel is about to hit the ground — and hit the ground with force nationally. In 2023, $185 billion is expected to be spent at the state level, creating enormous opportunity for contractors who bid on and construct government-funded projects.
Simultaneously, commercial construction is slowing dramatically. In Manhattan alone, more than 100 million square feet of unoccupied office space exists. In cities across the country, including high-growth areas like Austin, Texas, office construction is coming to a screeching halt as companies adjust to hybrid work-from-home policies and do not require a fraction of the space necessary prior to the pandemic.