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Monday, March 16, 2015

The wages of omission

Sunshine Week: Beat reporter shines light on schools' use of federal contracts
Using the state Freedom of Information Act to access copies of contracts, emails and bid documents, the Daily Press Isle of Wight County beat reporter found that the school division had omitted wage standards from the construction contract that are required under the federal Davis-Bacon Act. The effect was to lower the cost of construction by underpaying local workers hundreds of thousands of dollars.

"I spent a couple of months digging into the documents and digging into legislation to figure out exactly what had happened," Murphy said.

Murphy learned that hundreds of workers should have received wages that complied with the much higher "locally prevailing wage" standards required under the Davis-Bacon Act.

To date, the amount the schools division will have to make up in back pay to the workers has topped $620,000.

How did this happen? Murphy's reporting has forced the schools' leadership to address the pay discrepancy.

In 2010, Isle of Wight County Schools and the county administration applied for and later received $7.5 million in federally subsidized interest-free bonds from the Virginia Department of Education.

The Davis-Bacon Act, which has been in effect since 1931, requires that workers on federally funded projects be paid a minimum wage determined by the Department of Labor. The rate, called the locally prevailing wage, is based on the location of the project, the type of job and pay rates for similar work in the area.

The federal requirement and the local wage rates are supposed to be included in the contract. They weren't. Those payments cover eight of the 46 contractors and subcontractors that worked on the project, meaning the schools are likely to pay a significant amount more to workers.
This is a simple but salient story. It is amazing that the local authorities failed to include the wage rate requirement. (Guam law specifically requires it.) It is more amazing that the federal funding folk didn't pick it up. It is extraordinary that the workers themselves didn't blow the whistle.

My dismay with this story it that it reveals an error of significant proportion that escaped all inside government controls. How many of such events escape our notice because it has not drawn the notice of the people hired to provide governance oversight of our money?

This highlights the importance, in the first instance, of investigative reporting and the well founded policy of transparent government by sunshine laws.

It also highlights the need for protests brought by competitors, because no one else provides real time policing of the system as effective as jealous competitors. In this case, the oversight got past the procurement protest phase, for whatever reason, and was only unveiled after the contract was awarded. Neither the competing bidders nor the public has any right to bring a contract dispute protest to disclose this kind of error, other than by letting that little light shine on the misdeeds.



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