Today’s post is about the Davis-Bacon Act and whether the failure to pay Davis-Bacon wages triggers liability under the federal False Claims Act. This is in response to a conversation I had recently with a fellow Virginia lawyer who asked me whether (and when) the Davis-Bacon Act could trigger FCA liability. She was rather displeased, I think, with an answer that I felt was quite lawyerly. My lawyerly answer was “It depends.” An examination of the interplay between Davis-Bacon and the FCA serves as yet another opportunity to revisit my theme of FCA liability. When I size up a potential FCA case, I look for an “objective falsehood.” But I am jumping ahead of myself, and a little background will be helpful. As regular readers know, the big-ticket items in the federal budget are healthcare and military spending. I think it is a safe bet however that construction projects would be somewhere in the top five. Construction projects for the government are some of the most regulated projects in the modern world, and that is saying something. Among the more important laws and regulations governing federal construction projects is Davis-Bacon. In a nutshell, the Davis-Bacon Act of 1931 is a federal law requiring payment of prevailing wages on public works projects. All federal government construction contracts (and most contracts for federally assisted construction projects) worth a certain dollar threshold (which I believe is $2,000) must include provisions for paying construction workers on-site no less than the locally prevailing wages and benefits paid on similar projects. Davis-Bacon is an important priority of the United States Government. We know the importance of this statute because payments to construction companies doing federal work are expressly contingent upon a weekly certification of compliance with the Davis-Bacon Act. See, 40 U.S.C. § 3142. In addition to the certification of compliance, contractors and subcontractors must furnish weekly payroll certifications of wages paid to each employee for that week. The certification can either be submitted on a special Wage and Hour Division form known as a THE WILLFUL FALSIFICATION OF ANY OF THE ABOVE STATEMENTS MAY SUBJECT THE CONTRACTOR OR SUBCONTRACTOR TO CIVIL OR CRIMINAL PROSECUTION. SEE SECTION 1001 OF TITLE 18 AND SECTION 231 OF TITLE 31 OF THE UNITED STATES CODE. A further indicia of the importance of this statutory framework is the fact that the requirement “flows-down” in the parlance of government contracting, from the prime to the subs. In other words, the prime contractor is responsible for ensuring that all employees of all subcontractors are paid the applicable wage. Given all of the above, it is obvious that a Davis-Bacon violation can sometimes subject the contractor to liability for making a false claim to the government, but when and under what circumstances? As just two examples, if a contractor misrepresents the wages actually paid to its employees, or lies about the frequency with which they receive paychecks, the contractor has made an objectively false statement or claim and FCA liability will most likely attach. However, qui tam cases alleging that a contractor has misclassified employees under Davis-Bacon, for example, usually go the opposite way. A classic example is U.S. ex rel. Windsor v. DynCorp, Inc., 895 F. Supp. 844, 852-53 (E.D. Va. 1995). There, Windsor claimed that DynCorp’s classification of certain workers was erroneous. To determine that however it was necessary to look at complex Department of Labor regulations and make a determination regarding the application of the regulations. In other words the claim was not objectively false on its face. In order to show the falsity of the claim, it was first necessary to interpret lengthy regulations in a particular way. That is not to say that misclassification cases under DBA will never be viable. I dare say that if a qui tam relator could generate evidence showing that workers on a Davis-Bacon project were misclassified AND the relator could show evidence that the contractor misclassified those workers on purpose in order to avoid paying premium wages, an FCA action might be viable. So my answer to the question is “It depends on the existence of an objective falsehood.” 
The Department of Labor calculates these prevailing wages and benefits on a regular basis, and the specific rate is then included in the contract itself.
We know this because the regulations say: “[t]he prime contractor is responsible for the submission of copies of payrolls by all subcontractors,” 29 C.F.R. § 5.5(a)(3)(ii)(A). The regulations also say that “the prime contractor shall be responsible for the compliance by any subcontractor or lower tier subcontractor with all the contract clauses in 29 C.F.R. 5.5.”
A qui tam case based on a violation of Davis-Bacon is strongest when there is an objective falsehood on the face of the claim or invoice submitted to the Government. In other words, when the “falsity” of the false statement is apparent on the face of the document itself and is not dependent on anything else.