United States v. Binghamton Construction Co.

Background

A construction company won a Government flood control contract after the Corps of Engineers included a wage schedule from the Secretary of Labor in the bid specifications. The schedule listed minimum hourly rates of $1.00 for carpenters and $.50 for laborers. Before bidding, other determinations and union increases set higher rates (for example, $1.125 for carpenters and up to $.625 for laborers). After work began, the contractor paid the higher union rates and sought money from the Government, arguing the schedule had represented the prevailing wages it could rely on when bidding.

Reasoning

The Court addressed whether the contract schedule was a Government promise about prevailing local wages. It held that the Davis‑Bacon schedule merely sets minimum wages and is intended to protect workers, not to assure bidders of what labor will cost. The contract and specifications require payment of wages “not less” than the listed minima and do not promise that listed minima will be the prevailing rates. Because the schedule is a floor for workers rather than a warranty to bidders, the contractor could not recover damages for relying on it. The Court therefore reversed the portion of the judgment that awarded recovery.

Real world impact

Contractors on Government projects cannot treat Davis‑Bacon schedules as guarantees of local pay levels and may need to investigate local labor conditions before bidding. The decision emphasizes that the wage schedule protects workers by setting a minimum, and does not obligate the Government to cover higher local rates paid in practice.