September 23, 2019

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D.C. Circuit Declines to Extend Davis-Bacon Act

Some Washingtonians stroll through CityCenterDC on shopping sprees at “upscale retail stores such as Hermès, Boss, and Louis Vuitton,” or meet for lunch at “high-end restaurants such as DBGB and Centrolina.”  Lawyers watch these scenes from our offices in the northwest corner of CityCenterDC, where they recently analyzed the D.C. Circuit’s opinion holding that we and our luxury-minded fellow tenants work in a mixed-use development that is not subject to the Davis-Bacon Act.  The court’s opinion was a stern rebuff to the Department of Labor, which had “advanced a novel reading of the Davis-Bacon Act that would significantly enlarge the number and kinds of construction projects covered by the Act.” 

The Davis-Bacon Act requires the payment of prevailing wages for employees on “every contract in excess of $2,000, to which the Federal Government or the District of Columbia is a party, for construction, alteration, or repair … of public buildings and public works….”  The Labor Department argued that its long-term lease of land to the developers provided enough of a nexus to constitute a “contract … for construction” to which the District was a party.  It argued further that the ancillary public benefits CityCenterDC is expected to generate made the project a “public work.”  The court disagreed.  Affirming the 2014 decision of the District Court, the D.C. Circuit held that CityCenterDC fell outside the Act’s coverage in two respects.

First, the D.C. government was not a party to the transaction.  Instead, it leased the underlying land to private developers, who then entered construction contracts with the laborers.  The District was neither a lessee nor lessor of the land, and its attenuated connection to those contracts did not make it a “party” to the contracts.

Second, CityCenterDC is not a “public work.”  The project did not receive public funding, and the D.C. government does not own or operate the finished development.  CityCenterDC met neither of those two elements of the public work test, so the conclusion in this case was relatively easy for the court to reach.

However, the court left open the question whether both elements must be present for a project to qualify as a “public work” under the Davis-Bacon Act.  The court held only “that a project must possess at least one (if not both) of” those elements to be a public work.  In other words, the opinion contemplates the possibility that a construction project might have some level of governmental involvement — either funding or ownership/operation — and still fall outside the Davis-Bacon regime.

Despite the lingering questions about the contours of the “public work” definition, the opinion provides helpful clarity about the Act’s coverage.  The CityCenterDC developers can come visit some great restaurants to raise a celebratory toast.

© 2019 Covington & Burling LLP

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About this Author

Jeff Bozman, Government contracts attorney, Covington Burling
Associate

Jeff Bozman draws on his past experience as a Marine Corps officer to advise companies who do business with the United States Government. Mr. Bozman’s practice includes procurement law and public policy, with an emphasis on national security issues. He has successfully represented clients in bid protests at both the GAO and the U.S. Court of Federal Claims.

Mr. Bozman helps companies secure approval from the Committee on Foreign Investment in the United States (“CFIUS”)...

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Scott Freling, Government Contracts Lawyer,  Covington Law Firm
Partner

Scott Freling divides his practice between working with civilian and defense contractors on traditional government contracts matters and representing buyers and sellers, including a number of private equity firms, in complex M&A deals involving a government contractor.

Mr. Freling represents contractors at all stages of the procurement process and in their dealings with federal, state, and local government customers. In addition, he counsels clients on compliance matters and risk mitigation strategies, including obtaining SAFETY Act liability protection for anti-terrorism technologies.

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Lindsey Burke Employment Law Attorney at Covington Burling Law Firm
Partner

Lindsay Burke co-chairs the firm’s employment practice group and regularly advises U.S., international, and multinational employers on employee management issues and international HR compliance. Her U.S. practice includes advice pertaining to harassment, discrimination, leave, whistleblower, wage and hour, trade secret, and non-competition issues arising under federal and state laws, and she frequently partners with white collar colleagues to conduct internal workplace culture assessments and audits in the wake of the #MeToo movement. Her international practice focuses...

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