Every federal construction solicitation over $2,000 includes a wage determination (WD): the minimum hourly pay for each trade on the job. It looks like a wall of codes, but you only need to read a few parts to price your labor correctly. (New to the rules themselves? Start with Davis-Bacon wages explained.)
New to the term? Read prevailing wage explained, or run the numbers with the prevailing wage calculator.
Free tool: Turn wage determination rates into a real hourly cost with the free labor burden calculator.
1. The header
- General decision number and modification number, for example "Modification 3". Use the one attached to the solicitation, and watch amendments for a newer one.
- State and county: must match the job's location.
- Construction type: building, heavy, highway or residential. A roof on a federal office is usually "building"; a culvert is usually "heavy" or "highway". The solicitation chooses; if it looks wrong, ask the contracting officer before you bid.
2. The rate table
Each row is a trade classification (roofer, electrician, plumber, laborer and so on) with:
- Rates: the minimum basic hourly wage.
- Fringes: the minimum hourly fringe benefit, paid as benefits, as extra cash, or a mix.
Your cost per hour for that trade starts at rate + fringe, before payroll taxes, insurance and overhead.
3. The codes in front of each group
- A union code (letters and numbers, such as an electricians' local) means the rate comes from a collective bargaining agreement that prevails in the area. You don't have to be union, but you must pay at least that rate.
- Codes starting with SU mean the rate came from a Labor Department survey.
- Codes starting with UAVG mean a weighted average of union rates.
The legend at the bottom of every WD explains the codes for that document.
4. Trades that aren't listed
If you need a classification the WD doesn't list (a specialty installer, for example), it isn't a free-for-all. After award, the contractor requests an added classification and rate through the contracting officer, using a conformance request (SF-1444). Price the work as if the closest related trade's rate applies, and mention it in your questions before bidding.
5. Modifications
WDs are updated over time. A modification published shortly before bids are due may or may not apply, depending on timing and on whether the agency issues an amendment. Simple rule: price with the WD in the latest amendment, and acknowledge every amendment.
Checklist before you price labor
- Right county and construction type?
- Latest modification from the amendments?
- Every trade you'll use is listed (or noted)?
- Rate + fringe + your burden in every labor line?
- Time for weekly certified payroll in your overhead?