Detailed Information on the
Prevailing Wage Determination Program Assessment

Initiating partnership discussions with interested parties to foster stakeholder participation in the DBA wage survey program.

Improving program management by establishing a new-hire and refresher training program for Wage Analysts, Wage Specialists, and Construction Industry Research and Policy Center staff.

Updating the Automated Survey Data System (ASDS) user guide and making it available to survey staff via the WHD intranet in order to improve efficiency in processing requests.

Modifying the wage survey or outreach strategies to boost survey response rates.

Has convened a work group to develop quantitative and (where appropriate) qualitative indicators and targets that are clear, ambitious, and reflected in managers' performance appraisals.

Will work closely with stakeholders to identify, recommend, and implement appropriate regulatory, administrative, or statutory reforms.

Plans to launch an external review of the program in 2004.

Measure: Number of wage determination data submission forms processed per 1,000 hours.

Explanation:The prevailing wage program implements the Davis-Bacon Act of 1931 (DBA), which requires contractors and subcontractors on federally-funded or federally-assisted construction contracts to pay laborers and mechanics no less than the locally prevailing wages and fringe benefits paid on projects of a similar character. WHD is responsible for determining the prevailing wages for four types of construction - building, heavy, highway, and residential. The long term goal (FY 2020) is to survey every area of the country for each type of construction at least once every three years. Wage rate surveys rely upon employer-submitted data forms (WD-10). Efficient processing of the forms is critical to ensuring that wage rates are updated in a timely fashion; this efficiency measure promotes timeliness to ensure compliance with the program's intent. The baseline of 1,491 forms processed per 1,000 hours was established in FY 2004.

Measure: Average age (in months) of Davis-Bacon wage rates

Explanation:The prevailing wage program implements the Davis-Bacon Act of 1931 (DBA), which requires contractors and subcontractors on federally-funded or federally-assisted construction contracts to pay laborers and mechanics no less than the locally prevailing wages and fringe benefits paid on projects of a similar character. WHD is responsible for determining the prevailing wages for four types of construction - building, heavy, highway, and residential. The long term goal (FY 2020) is to survey every area of the country for each type of construction at least once every three years. The FY 2007 baseline was 114 months.

Is the program purpose clear?

Explanation: The program implements the Davis-Bacon Act of 1931 (DBA), which requires employers on federal construction contracts over $2,000 to pay laborers and mechanics no less than wages and fringe benefits prevailing for the same job classifications in the geographic area where the contract is performed. The Secretary of Labor determines which rates prevail in each locality; covered contracts must include a Department of Labor-issued wage determination for each class of worker on the project. Since enactment, some 60 federal laws have extended DBA requirements to construction funded through federal loans, grants, loan guarantees, and insurance in transportation, housing, environmental protection, and other industries. DOL studies local wage conditions and analyzes data submitted voluntarily by contractors, others to calculate wage rates for thousands of job classes in four construction sectors (building, heavy, highway, residential) in 3,141 counties across the country. In 2001, $67 billion federal dollars were awarded for projects subject to DBA. DBA may govern as much as 25% of construction nation-wide.

Evidence: Davis-Bacon Act, as amended, 40 USC 3141 et seq. (P.L. 107-217, 2003; www.gpoaccess.gov/plaws/ index.html; enrolled bill pp.89-92), revising and recodifying 40 USC 276a et seq. (1931); Wage and Hour Division (WHD) implementing regulations appearing in 29 CFR Parts 1, 3, 5, and 7 (www.dol.gov/dol/allcfr/ESA/Title_29/Chapter_I.htm); DBA compliance information on WHD website (www.dol.gov/esa/programs/dbra/faqs.htm; www.dol.gov/esa/whd/contracts/dbra.htm); 29 CFR Part 1 Appx. A (list of 57 federal statutes requiring the payment of construction wages at rates predetermined by DOL; www.dol.gov/dol/allcfr/ ESA/Title_29/Part_5/29CFR5.1.htm); Congressional Budget Office (CBO), Budget Options (Feb. 2001); Daniel P. Kessler and Lawrence Katz, Prevailing Wage Laws and Construction Labor Markets, National Bureau of Economic Research Working Paper No.7454 (December 1999), citing CBO 1982 estimate that DBA covers 25% of all construction in the U.S.

Does the program address a specific and existing problem, interest, or need?

Explanation: The Congress has frequently considered, and continually affirmed, the continuing need for the Act. The DBA was enacted during the Great Depression to prevent destabilization of local wages by unscrupulous contractors who would import cheap labor to a town in order to underbid local companies for federal contracts. However, today's experts disagree on the role, effectiveness, and continuing need for the Act. To supporters, DBA serves to protect workers and communities by ensuring fair competition for federal construction work; regulating project quality; and encouraging apprenticeship and training. To critics, major socioeconomic changes since 1931 make the law unnecessary; the act imposes undue, unjustifiable regulatory and paperwork burdens on contractors; and serious weaknesses that have existed historically in DOL's program contribute to the act's considerable inflationary effect, demanding the program's overhaul or dismantlement.

Evidence: See, e.g., General Accounting Office (GAO) Report HRD-79-18 4/27/79, and GAO Testim. No.109238 5/29/79 (changed socioeconomic conditions since enactment; unsound principle behind wage determinations; untimeliness, inaccuracies, and impracticalities of administering wage determinations; and act's inflationary effect all warrant repeal); Owens statement on floor of House of Rep., 142 Cong. Rec. H 5996 et seq., 104th Congress, June 6, 1996 (act encourages private sector investment, and training and employment opportunities for minorities through apprenticeship programs; citing letters from individual employers and industry groups describing benefits of act); State of Ohio, Leg. Budget Office Policy Brief 1/7/2000 (outlining arguments for and against prevailing wage laws; www.lbo.state.oh.us/123ga/ publications/periodicals/policybriefs/v01_n11_prevwage.pdf). Countless bills have been introduced in Congress to either repeal, limit, expand, or reform the Act.

Is the program designed so that it is not redundant or duplicative of any Federal, state, local or private effort?

Explanation: Under DBA, the authority to calculate and administer prevailing wages for construction contracts funded entirely or in part with federal dollars rests solely with the Secretary of Labor. However, 32 States currently have similar ("little" Davis-Bacon) laws governing construction contracts funded with State funds.

Evidence: Davis-Bacon Act, as amended, 40 USC 3141 et seq. (P.L. 107-217, 2003; www.gpoaccess.gov/plaws/ index.html; enrolled bill pp.89-92), revising and recodifying 40 USC 276a et seq. (1931); WHD implementing regulations appearing in 29 CFR Parts 1, 3, 5, and 7 (www.dol.gov/dol/allcfr/ESA/ Title_29/Chapter_I.htm); and WHD table of dollar thresholds for 32 State prevailing wage laws (www.dol.gov/esa/programs/whd/state/dollar.htm).

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: Here, regulation is the most appropriate means through which to implement the Act. However, independent reviewers and some who work regularly with DBA in industry and government have, through the years, identified statutory provisions or program dynamics that they consider problematic and which continue to be debated today. For example: (1) Voluntary wage surveys. Neither DOL regulations nor the DBA authorization statute requires the submission of wage data by construction contractors or others. The voluntary nature of wage surveys may help to introduce reporting bias that undermines the accuracy of wage determinations. (2) Outdated threshold. The Act's jurisdictional threshold, set at $2,000 in 1935, has remained unchanged. Some say a static threshold not only is contrary to Congress' original intent to have the Act govern larger purchases, but also overburdens small business.

Evidence: GAO Testim. No.109238 5/29/79, pp.26-27 (citing problems in obtaining data through voluntary submission), and reports HEHS-94-95R 2/7/94, p.6 (reliance on voluntary cooperation of contractors leads to wage rates issued based on response rates as low as 25%), HEHS-96-166 6/96, p.10 (survey response rates could affect the validity of wage determinations), and HEHS-99-21, p.10 (reiterating that "reporting bias resulting from the voluntary nature of wage surveys may reduce the accuracy of wage determinations"); DOL Office of Insp. General (OIG) Rept. 04-97-013-04420 3/10/97 (voluntary nature of surveys is one factor threatening reliability of wage rates). Also see, for example, H.R.2094 (introd. 6/7/01 to raise threshold to $100,000), S.1183 (introd. 8/11/95 to raise threshold to $100,000), and proposal by former Vice President Gore's Nat'l Performance Review to tie the DBA jurisdictional threshold to a "simplified acquisition threshold" of $100,000 used government-wide (9/14/93; govinfo.library.unt.edu/ npr/library/nprrpt/annrpt/sysrpt93/reinven.html).

Is the program effectively targeted, so program resources reach intended beneficiaries and/or otherwise address the program's purpose directly?

Explanation: The program does not have a distributional component; its intent is not income redistribution. The purpose of the Act and of the program to implement it is to promote economic stability -- a public good. More specifically, the act was designed, in part, to prevent the disruption of local market conditions ' in particular, the depression of local wages -- that might be caused by the infusion of federal funding. In a competitive bidding process, where low bids were key to receiving federal contracts that would often employ many workers in a community, the experience was that the government's considerable purchasing power always had the potential to push down wages. DOL wage rates that significantly underestimate or overestimate a locality's true prevailing wage undermine this legislative intent.

Evidence: OIG Rept. 04-97-013-04420 3/10/97, Appdx. p.1 (www.oig.dol.gov; DBA's "intent was to prevent [federally] funded construction projects from undercutting local prevailing construction wages" and to "reduce local labor displacement resulting from the importation of low-wage workers from outside of the Government construction area"); Peter Phillips, et al., Losing Ground: Lessons from the Repeal of Nine "Little Davis-Bacon" Acts, p.3 (Prevailing wage laws "attempt to neutralize the effects of government purchases on wage determination in the private sector. [The objective of the DBA] is to prevent the federal government from affecting local wages and construction conditions; Davis-Bacon disallows the government from pushing down wages in competitive bidding."); Owens statement, 142 Cong. Rec. H 5996 et seq. ("Davis-Bacon does not set the wage rate; it reflects existing community standards"; 71% of wage determinations issued by DOL are non-union rates).

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The program has a broad outcome goal (tied to two performance indicators dealing with timeliness of wage rates) and a customer satisfaction goal. However, these goals lack numerical targets; the evolution of DBA goals and measures has not been linear (in recent years, goals have been eliminated, added, revised); and some goals have involved discrete, short-term outcomes, like the completion of a given process redesign, whose impact cannot be readily measured. Tying successes in any of these areas back to program outcomes becomes difficult. Additional, concrete steps must be taken to lay the groundwork for effective strategic planning. For example, the program needs active, measurable targets for both timeliness goals and other critical determinants of effectiveness such as data accuracy and survey participation rates. Even more fundamentally, WHD must pull together and critically edit the many DBA measures and indicators it has been using into a clear, organized framework that accurately reflects current conditions, and outlines and supports effective, consistent, long-term program measurement.

Evidence: Draft WHD 2003 Performance Plan; WHD 2002 Performance Plan, 2001 Performance Report; and DOL Strategic Plan for FYs 1999-2004. Outcome goal: "Insure timely, accurate and accessible wage determinations." Long-term performance indicators: (1) Each area of the country will be surveyed for all four types of construction at least every three years. (2) Length of time from receipt of survey data in National Office to issuance of wage determination; update 90% of DBA wage rates within 60 days of receipt of underlying survey data. Other measures: Goal to complete DBA modernization; separate measures for wage rate database transition, completion of survey data collection; proportion of jurisdictions surveyed; wage rate error rate. In years past, WHD has lacked the infrastructure to make certain goals achievable; 2003 goals followed a series of long-planned process and technological improvements that made the goals more realistic. To an extent, fluidity of measures to date reflect ongoing program improvements, in part in response to findings of independent reviews.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: The program currently has no timeframe or numerical targets for its long-term goals. WHD has convened a task group to evaluate additional measures and appropriate numerical goals; the group will submit recommendations for review and approval by the WHD executive team.

Evidence: The WHD staff has briefed OMB on program operations, including timing of the development and implementation of new program goals. As DOL performance plans and reports show, during the late 1990s WHD sought to address GAO and OIG recommendations within a larger context of designing, testing, choosing and, ultimately, implementing two major program reform alternatives. While initial efforts focused on providing a programmatic and technological framework to support the piloting of each alternative, once a reform track was chosen, efforts turned to building an infrastructure that would support the program's broad long-term goals. WHD staff strongly believe that substantial completion of these underlying improvements was necessary before a new phase of strategic planning could begin, and that evaluation and revision of goals and measures becomes appropriate only now, when major improvements are nearing completion.

Does the program have a limited number of specific annual performance measures that demonstrate progress toward achieving the program's long-term measures?

Explanation: The program currently has no annual performance measures to demonstrate progress toward long-term goals. As stated above, WHD has convened a task group to evaluate additional measures and appropriate numerical goals; the group will submit recommendations for review and approval by the WHD executive team.

Evidence: The WHD staff has briefed OMB on program operations, including timing of the development and implementation of new program goals. As explained above, once a reform track was selected, WHD made a deliberate decision to use a series of qualitative, project-specific goals to measure programmatic progress as it designed and implemented major technological and process improvements to the DBA wage determination system. Though more traditional program statistics continued to be tracked, these were not used as measures or applied toward existing goals.

Does the program have baselines and ambitious targets and timeframes for its annual measures?

Explanation: The program has not developed annual targets. Data from fiscal year 2002 surveys is being tallied and analyzed to provide baseline information for the first performance goal (completing surveys for all States every three years), and as a first step toward more effective strategic planning.

Evidence: Draft WHD 2003 Performance Plan; WHD 2002 Performance Plan, 2001 Performance Report; and DOL Strategic Plan for FYs 1999-2004.

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, etc.) commit to and work toward the annual and/or long-term goals of the program?

Explanation: Neither federal contractors governed by the statute nor other interested parties are statutorily required to participate in wage surveys which form the basis of DOL's wage determinations. Given that accurate wage data provided by interested parties such as individual employers, contractors associations, and labor organizations is one critical determinant of the reliability of wage determinations, the voluntary nature of these submissions can always threaten data quality because it potentially allows for significant reductions in the response rate -- or consistently low response rates -- for any given wage survey.

Evidence: DOL 9/18/2002 press release on electronic submission of survey data (www.dol.gov/opa ; "[WHD] determines local prevailing wage rates using the data submitted voluntarily on the WD-10 form by construction contractors, unions, and associations during statewide surveys of construction projects."). The voluntary nature of the survey impacts participation rates for the initial surveys and, once surveys are returned, rates at which employers permit WHD or its agents access to wage data for purposes of verification. DOL has authority to subpoena payroll records of federal contractors, but is reluctant to do so for purposes of wage verification. See, for example, OIG Rept. 04-98-003-04-420 2/19/98, pp.4-5 (www.oig.dol.gov; "[WHD] believes it is not appropriate to use its subpoena authority under the Fair Labor Standards Act to force employers to allow examination of payroll records for WD-10 verification purposes...Upon learning that participation was voluntary, several contractors refused to cooperate with [the firm WHD had contracted to assist with on-site verification of wage survey data].").

Are independent and quality evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: Recent reviews have focused on specific issues, primarily data verification; have neither directly addressed other conditions that impact effectiveness such as survey response rates nor retraced major issues identified by earlier evaluations; and were completed before program modernization efforts were substantially complete. Though GAO concluded in 1999 that either of the two reform tracks being tested at the time by WHD had the potential to improve the program, no study has assessed the impact of these redesigns. A process evaluation would help to determine whether the numerous weaknesses identified by stakeholders and independent reviewers have been reduced or eliminated; provide a clearer understanding of current program design and practices, as well as of potential trade-offs between alternatives; perhaps, recommend program measures; and set a more current, post-redesign baseline for judging program performance. WHD plans an external review of the DBA program for 2004.

Evidence: GAO reports HEHS-99-21 1/11/99 (www.gao.gov/ archive/1999/he99021.pdf; focused primarily on verification procedures) and HEHS-99-97 5/28/99, pp10, 13 (www.gao.gov/archive/1999/he99097.pdf; "On the basis of our review of Labor's efforts and our past work on the Davis-Bacon Act, we believe that a number of Labor's efforts under both tracks, if successfully implemented, have the potential to improve the accuracy and timeliness of wage determinations." Also, briefly discussed need for performance measurement and referenced DBA-related goals, to "survey each area of the country for all four types of construction at least every 3 years" and "issue 90 percent of all wage determinations within 60 days of Labor's national WHD office receiving wage survey data from regional offices.").

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: Although DOL is moving toward a fully integrated budget, the ESA budget submission currently does not track FTE and other resources for the wage determination program separately from the rest of the WHD request. In addition, the DBA program currently lacks performance measures to which to tie funding. Given the high level of stakeholder interest in this program, and in furtherance of budget and performance integration, it would be helpful for future budget submissions to describe resource levels for the program.

Evidence: WHD Congressional Justification submitted each February with the President's Budget.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: While WHD has taken important steps in recent years to address weaknesses identified in past evaluations of the wage determination program, it has not tied existing performance goals to numerical targets or evaluated the design, appropriateness, or sufficiency of current long-term or annual performance measures. The program needs a long-term strategy for identifying key outcomes, and effectively designing and implementing numerical targets, for major determinants of the timeliness and accuracy of wage determinations.

Evidence: Draft WHD 2003 Performance Plan; WHD 2002 Performance Plan, 2001 Performance Report; and DOL Strategic Plan for FYs 1999-2004.

Are all regulations issued by the program/agency necessary to meet the stated goals of the program, and do all regulations clearly indicate how the rules contribute to achievement of the goals?

Explanation: The program does not systematically review existing regulations and conducts no look-back studies to better understand the impact of chosen alternatives. Many stakeholder groups express strong concerns about the program. Systematic regulatory review and more consistent, aggressive outreach to stakeholder groups would increase confidence that all regulations continue to be needed, appropriate revisions have been considered, and that the program is implementing the Department-wide goal to maximize regulatory flexibility and benefits while it minimizes regulatory burden.

Evidence: Draft DOL Strategic Plan for FYs 2003-2008, Strategic Goal 4.2: Promote job flexibility and minimize regulatory burden.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: Important performance information is missing. For example, program goals require both timeframes and numerical targets, and must evolve to reflect program performance in the most appropriate, and critical, areas. Although WHD does collect and track certain performance information regarding the status of DBA wage surveys, it does not currently link this data to long-term or interim goals designed to measure improvement in performance. Program evaluations are outdated, having been conducted before DBA modernization efforts were substantially complete, and have only briefly addressed performance measurement. Program partners are not statutorily required to submit wage survey data that would more fully assist WHD in determining precise levels of prevailing wages and benefits, information which can be critical to informed program management and effective strategic planning.

Evidence:  

Are Federal managers and program partners (grantees, subgrantees, contractors, cost-sharing partners, etc.) held accountable for cost, schedule and performance results?

Explanation: DOL ties performance ratings for managers and supervisors to the achievement of Departmental and program-specific goals and outcomes; employee evaluations are aligned on a fiscal year cycle to help cascade standards to non-supervisory personnel, and a system accountability review is planned for 2004. However, although the current goals of the DBA program may provide some general reference against which to assess managerial performance, the absence of a broader, solid strategic framework for the wage determination program that includes specific long-term and annual targets makes accountability less clear.

Evidence: Revised Performance Management Plans for Senior Executives (Form DL 1-2059, Rev. 10/2001) and for Supervisors and Managers (Form DL 1-382, Rev. 10/2001); briefings by DOL staff; DOL goals supporting the Human Capital Initiative of the President's Management Agenda; Draft WHD 2003 Performance Plan; WHD 2002 Performance Plan; WHD 2001 Performance Report; and DOL Strategic Plan for FYs 1999-2004.

Are all funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: One of ESA's outcome goals is to enhance the agency's fiscal integrity and effective management of program funds. Neither DOL CFO reports, reviews by DOL's OIG, nor documents supporting ESA apportionment requests to OMB reveal reportable or problematic conditions related to the spending or obligation of DBA program funding. WHD closely monitors financial management systems at the DOL and bureau level that support the wage determination program's daily activities, and reports monthly to executive staff on current and planned spending.

Evidence: Estimated and actual obligations reported by quarters in OMB apportionments and DOL reports to the Treasury Department. ESA Strategic Plan for FYs 1999-2004. DOL's OIG audited the DBA program in 1997, and reviewed (non-audit based) DBA-related expenditures in 1998. Neither assessment identified anomalies in spending or obligations. OIG Reports No. 04-98-003-04-420 (February 19, 1998), and No. 04-97-013-04-420 (March 10, 1997) (both found at www.oig.dol.gov/cgi-bin/oa_rpts.cgi?s=davis-bacon&y=all&a=all).

Does the program have procedures (e.g., competitive sourcing/cost comparisons, IT improvements, approporaite incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: WHD has created efficiencies in select areas of the DBA program, including more effective use of technology, and the outsourcing -- at least in part -- of critical activities such as verification of wage survey data and the distribution and data entry of wage survey forms. However, other important areas still require attention. WHD does not calculate unit costs for the DBA program; does not link performance measures to numerical or progressive, efficiency-based targets; and does not appear to have mechanisms in place to consistently incorporate cost-effectiveness considerations into day-to-day operations or long-term planning.

Evidence: Draft WHD 2003 Performance Plan; WHD 2002 Performance Plan; WHD 2001 Performance Report; and DOL Strategic Plan for FYs 1999-2004. WHD has contracted consultants to design and develop improvements -- including technological, efficiency-based changes -- to the DBA program. Commercial off-the-shelf software options have been evaluated and selected based on cost efficiency and suitability to overall program needs. WHD contracts with a Certified Public Accounting firm to conduct on-site verification of wage survey data, and has outsourced the printing, mailing, and scanning of wage survey forms to the Census Bureau. As required, cost analyses were conducted during the deliberation of these contracts.

Does the program collaborate and coordinate effectively with related programs?

Explanation: WHD collaborates and coordinates effectively with DOL's Solicitor and the Administrative Review Board in the administration of the DBA program. WHD may also work with other DOL, federal, and -- as needed -- State programs to fulfill DBA-related responsibilities. For example, when WHD was deliberating alternative reforms to the DBA program, it worked closely with the Bureau of Labor Statistics (BLS) to explore the possible use of BLS survey data; WHD regional staff regularly work with State and federal agencies to collect wage rate data; and WHD has entered into agreements with the Census Bureau for the printing, mailing, and scanning of wage survey forms.

Evidence:  

Does the program use strong financial management practices?

Explanation: There have been no material control weaknesses reported by auditors. WHD closely monitors financial management systems at the DOL and bureau level that support the wage determination program's daily activities, and reports monthly to executive staff on current and planned spending.

Evidence:  

Has the program taken meaningful steps to address its management deficiencies?

Explanation: WHD has redesigned and automated its wage survey form; contracted for automated printing and mailing of surveys through the Census Bureau; begun use of imaging and knowledge management software to speed survey processing, optimize use of analysts' skills; created a comprehensive DBA website linking to wage rates, compliance assistance; and "fully addressed" GAO's recommendations for better data verificiation. However, improvements continue to be needed in many areas, and additional steps must be taken to demonstrate WHD's commitment to sustained progress. For instance, WHD must increase accountability of program managers; complete surveys more frequently and effectively to significantly improve timeliness of wage rates; continually evaluate verification procedures to ensure and maintain the integrity of underlying wage data; brainstorm further modifications to survey methodology or outreach strategies to boost survey participation; and work more closely with stakeholders to identify, recommend and implement regulatory, administrative, or statutory changes, where those are in order.

Evidence: DOL FY 1999 Annual Perf. Rpt. (program redesigns targeted for and completed in 1999); GAO Rpt. HEHS- 99-97 (DOL reforms have potential to improve wage rates), Letter 11/21/2000 (new procedures "fully addressed" GAO recommendations for verification; will help improve completeness, accuracy of data), and Rpt. 01-251 1/2001 (WHD addressed management challenges by, for example, changing data verification procedures to improve accuracy, timeliness of wage rates). However, some wage rates have not been updated in as many as 13 years. And although DOL ties performance ratings for managers and supervisors to the achievement of Departmental and program goals, DBA program goals cover only timeliness and have no timeframes or targets. Accountability would be strengthened by adding specific, numerical targets to goals that cover all appropriate areas of the program. Revised Perf. Mgmt. Plans for Senior Execs. (Form DL 1-2059, Rev. 10/2001) and for Supervisors and Managers (Form DL 1-382, Rev. 10/2001); briefings by DOL staff; and DOL goals supporting the Human Capital Initiative of the President's Management Agenda.

Did the program seek and take into account the views of all affected parties (e.g., consumers; large and small businesses; State, local and tribal governments; beneficiaries; and the general public) when developing significant regulations?

Explanation: ESA agencies have formally incorporated increased collaboration and feedback loops into their outcome goals. WHD collaborates with key stakeholders, including government, private, industry and advocacy groups on program direction and effectiveness. Major regulations have analyzed and responded to comments received.

Evidence: ESA Strategic Plan for FYs 1999-2004 (one ESA outcome goal is to "foster organizational excellence and increase collaboration"; plan states that "cooperation with employers is paramount to goal attainment for all ESA programs" and describes WHD consultation with stakeholders; www.dol.gov/esa/aboutesa/str-plan/SP99_04final.PDF). When WHD commenced deliberations over potential reforms to the DBA wage survey process, it reached out to academic and statistical organizations and used the input received to help formulate six alternative approaches; these were subsequently discussed with key stakeholders, including contractor associations, labor unions, and federal agencies. Once the options were narrowed to two, WHD met periodically with stakeholders to keep them apprised of progress in evaluating the two alternatives.

Did the program prepare adequate regulatory impact analyses if required by Executive Order 12866, regulatory flexibility analyses if required by the Regulatory Flexibility Act and SBREFA, and cost-benefit analyses if required under the Unfunded Mandates Reform Act; and did those analyses comply with OMB guidelines?

Explanation: A review of WHD regulations implementing the DBA found no cases in which rulemaking failed to meet the requirements. For example, in its rulemaking process for changes to 29 CFR Parts 1 and 5, DOL determined that the proposed rule would have economically significant effects and prepared, for OMB consideration, a full economic impact analysis.

Evidence:  

Does the program systematically review its current regulations to ensure consistency among all regulations in accomplishing program goals?

Explanation: Although WHD reviews its regulatory agenda on a quarterly basis, it conducts no look-back studies and does not systematically review regulations implementing the DBA. WHD should consider initiating a review to update and simplify its DBA regulations.

Evidence:  

Are the regulations designed to achieve program goals, to the extent practicable, by maximizing the net benefits of its regulatory activity?

Explanation: Ongoing stakeholder concerns and findings from those program evaluations conducted in years past point to serious questions of implementation, of which the regulatory scheme is a primary tool. The absence of systematic regulatory reviews and look-back studies further undermines confidence that net benefits are being maximized. More active consultation with stakeholder could help identify new areas of concern and/or additional strategies to address stakeholder burden or unease.

Evidence:  

Has the program demonstrated adequate progress in achieving its long-term outcome performance goals?

Explanation: The program's completion of a series of key projects, combined with GAO's recent positive evaluations of select program activities, signals important progress toward long-term goals. However, such progress cannot be quantified; long-term goals focus only on timeliness and have no associated numerical targets, and no recent evaluation exists to confirm or assess effectiveness. The program has no interim, short-term goals to measure progress toward long-term objectives. Measuring progress is made more difficult because, as stated above, the evolution of DBA goals and measures has not been linear; in recent years, goals have been eliminated, added, revised. As recommended above, existing long-term measures and their corresponding indicators must be closely reviewed for their usefulness, focus, and number.

Evidence: DOL Annual Performance Reports FY1999, p.249, FY2000, p.273, and FY2001, p.322 (all describing DBA modernization goals for the coming year and/or met for the previous year). GAO Rept. 01-251 1/2001, p.9 ("Based on recommendations made by us and others, [DOL] has made a number of improvements..., such as increasing the accuracy and timeliness of wage rate determinations."), Letter 11/21/2000 (DOL improvements "fully address" GAO proposals for better data verification and will likely improve the accuracy of wage determinations), and Rept. HEHS-99-97 (DOL reforms have potential to improve performance). Since 1999, WHD has established a comprehensive, one-stop DBA website; redesigned and automated its wage survey form; increased survey efficiencies by transitioning from county to statewide surveys; and made more effective use of technology -- including databases and knowledge management applications -- to collect, organize, and analyze wage data.

Does the program (including program partners) achieve its annual performance goals?

Explanation: As stated above, the program currently lacks numerical performance targets. However, to date, WHD has set and met important qualitative (non-numerical) goals for key improvements to the wage determination process, some made in response to recommendations from GAO and DOL's OIG. Some of these goals have involved discrete, short-term outcomes, like the completion of a given process redesign, whose contribution to the program's long-term success -- while not readily measurable -- is significant.

Evidence: DOL Annual Performance Reports FY1999, p.249, FY2000, p.273, and FY2001, p.322 (all describing DBA modernization goals for the coming year and/or met for the previous year).

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program performance goals each year?

Explanation: In recent years, efficiencies created and/or cost-effectiveness achieved have been measured through the successful completion of major projects, including effective implementation of mission-critical software. GAO has also remarked that WHD's improvements to the data verification portion of the wage determination process would not only made verification itself more efficient and effective, but also contribute to greater accuracy and timeliness of the wage rates. However, other program areas need additional attention. For example, the program must develop efficiency measures with which to demonstrate year-to-year progress, and give due consideration to competitive sourcing guidelines in its decisionmaking. WHD has convened a task group to evaluate additional measures and appropriate numerical goals; the group will submit recommendations for review and approval by the WHD executive team.

Evidence: The WHD staff has briefed OMB on program operations, including timing of the development and implementation of new program goals. GAO has acknowledged some of the efficiencies that WHD reforms have created. GAO Rpt. 01-251 1/2001, p.18 ("[I]n response to concerns we raised about the accuracy and timeliness of its wage rate determination process under the [DBA], WHD increased the efficiency and effectiveness of its wage data verification procedures to ensure greater accuracy and timeliness in the wage data used to determine prevailing wages.") DOL FY 2002 Annual Perf. Report, OIG Statement (one key to DOL's successful integration of budget and performance is "effective strategic planning ' and the ability to improve the quality and accessibility of program and cost data").

Does the performance of this program compare favorably to other programs, including government, private, etc., that have similar purpose and goals?

Explanation: Conceptually, the DBA wage determination program is similar to WHD's wage determination program under the Service Contract Act (SCA), and to the 32 programs implementing State prevailing wage laws. However, the DBA program's performance relative to these programs is not currently known, and it is unclear whether a comparison is appropriate. For example, the SCA program implements a separate law; serves a different industry (services, not construction) with distinct requirements, dynamics, and stakeholder interests; and uses a different mechanism for calculating wage rates. Before an analysis is initiated, OMB and DOL must discuss and agree on which programs lend themselves to an appropriate comparison.

Evidence:  

Do independent and quality evaluations of this program indicate that the program is effective and achieving results?

Explanation: Program evaluations through the mid 1990s cite major weaknesses in program administration and data quality. Historically, wage rates have been based on data that is years old, poorly verified, or from surveys with low response rates. These and other factors have resulted in wage rates that may have underestimated or overestimated the true local wage, thereby contravening the intent of the act not to undermine local wage and benefit standards. Evaluations since the mid 1990s have made general reference to persistent weaknesses but have not looked at the program comprehensively and were conducted before program modernization efforts were substantially complete. GAO has favorably reviewed two major reform alternatives WHD developed for the program and its improvements to data verification, a key process. The program has continued to make key process and technological improvements, but the impact of these changes has not been evaluated. WHD plans an external review of the DBA program for 2004.

Evidence: GAO (www.gao.gov) reports HEHS-94-95R 2/94 (low survey participation rates; infrequent or irregular surveys; poor data analysis, verification), HEHS-96-130 5/96, HEHS-96-166 6/96 (must improve data verification; update technology; advertise, explain appeals options; correct other, "larger weaknesses"; use of fraudulent, inaccurate data could yield wage rates that are lower, higher than those prevailing), and HEHS-99-21 1/99 (verification process costly, time-intensive, of limited short-term impact); and OIG Rept. 04-97-013-04420 3/97 (voluntary nature of surveys, inaccurate data, weaknesses in survey methodology, all threaten reliability of wage rates; www.oig.dol.gov). Academic studies, independent program reviews, and other analyses estimate DBA inflationary effects of between 3% and 38%; studies conflict on the impact of repealing prevailing wage laws. But see GAO report HEHS-99-97 5/99 (DOL reforms have potential to improve wage rates) and GAO letter 11/2000 (new procedures "fully addressed" GAO recommendations for verification; will help improve completeness, accuracy of data).

Were programmatic goals (and benefits) achieved at the least incremental societal cost and did the program maximize net benefits?

Explanation: Ongoing stakeholder concerns and findings from those program evaluations conducted in years past point to serious questions of implementation, of which the regulatory scheme is a primary tool. The program could conduct a regulatory review to identify alternative approaches, creative strategies, or other changes to regulations that might be appropriate.

Evidence: