A Short Primer on Davis-Bacon Act (“DBA”) Debarment Standards

"When an individual, vendor, or organization does not appropriately or responsibly use federal funds, they may be prohibited from receiving future federal funds resulting in suspension and debarment."

— Eide Bailly Compliance Insights

Under the Davis-Bacon Act (“DBA”), construction contractors on federal government covered contracts who fail to pay required prevailing wages and fringe benefits  or who have recordkeeping violations can be debarred from doing further business with the government for a period of three years. This is called the executioner’s axe, because if your business is government contracting , you are not going to be in business for long if you end up debarred. Debarment means that you personally and your business are placed on a so-called “blacklist” of excluded bidders and you can’t bid on future prime or subcontracts involving the federal government. 

This blog provides a short primer on federal government contractor DBA debarment rules (and is not meant to cover the debarment of contractors under federal assisted contracts).  

Section 3(a) of the DBA directs the Comptroller General to distribute a list to all departments of the Government containing the names of contractors whom the Comptroller has found to have “disregarded their obligations to employees.” 40 U.S.C. §3144(b)(1). Under the laws related to the Davis-Bacon Act, see 29 C.F.R. §5.1, contractors are to be debarred for “aggravated or willful violation.” 29 C.F.R. §5.12. No Federal Government contract may be awarded to firms or persons appearing on the debarred bidders list or to any firm in which such persons have an interest. Id. The statute specifies such debarment for a period of three years. Id.; 29 C.F.R. §5.12(a)(2).  

In applying this statutory directive, the US Department of Labor (“DOL”) has recommended debarment for those contractors who have willfully violated the Davis-Bacon requirements. Steel Bldg. Enters., Inc., DOL 89-DBA-29, Jan. 14, 1991 (“[contractor officials] were aware that they were not actually paying . . . employees the rates shown on the payroll records... [and] classified certain employees as unskilled Laborers, and paid them accordingly [despite the fact that] the regulations specifically provide that the prevailing rate is to be paid regardless of skill”). Unlike the Service Contract Act (“SCA”), there is no strict requirement for debarment “absent unusual circumstances” and thus the application of the DBA debarment rules to contractors can be very fact specific and nuanced. Not every DBA violation results in debarment.  

But debarment is a possible result of all violations of the DBA. It isn’t called for, however, when the contractor relied in good faith on an authoritative ruling of DOL. But the fact that an employer-subcontractor did not know the DBA applied at the time he submitted his bid to the prime contractor did not avoid debarment, nor did the fact that he made complete restitution to his employees. In Mashburn Elec. Co., Inc., B-189471, 78-1 CPD ¶277 (1978). In PBMC, Inc., WAB No. 87-57 (Feb. 8, 1991), the old Wage Appeals Board (“WAB”), the DOL’s former administrative tribunal, held that even when then was no wage underpayment, debarment may still be appropriate for contractor’s failure to maintain appropriate records. In PBMC, the contractor did not maintain piece rate production data and records of hours actually worked by employees and that was enough to get it debarred.

In addition, a contractor can be debarred for statutory wage and payroll violations committed by his managing partner or agent. According to the WAB, the contractor is responsible for the actions of his employees in fulfilling the requirements of government construction contracts, and partners are likewise responsible for their acts within the partnership. In re P.J. Stella Constr. Corp., WAB No. 80-13 (Mar. 1, 1984). Thus, a company president cannot escape debarment by blaming his contract administrator for the violations. Miller Insulation Co., WAB No. 91-38 (Dec. 30, 1992).  

Debarment is not a strict liability result of any finding of a DBA violation but rather depends upon an employer’s intent and must rise to a level of culpability beyond negligence. In a 2025 case, the Administrative Review Board (“ARB”) , the current name for DOL administrative panel, found that the Administrative Law Judge (“ALJ”), did not fulfill his duty of explanation in his findings that Respondent acted in gross negligence to justify a three-year debarment. Administrator v. Five Star Automatic Fire Protection LLC, ARB Case No. 2023-0051 (August 25, 2025). That marks a rare win for the contractor at the ARB.  Accordingly, debarment is proper only where there is more culpability than mere negligence or error. There remains an element of willfulness, and it requires some evidence of knowledge or deliberate conduct, whether actual or imputed.  

For contractors involved in DOL DBA investigations, debarment is always a possible outcome, and thus prudent contractors should engage legal counsel to help guide them to a softer landing. Contractors who face a debarment determination by the Wage and Hour Division (“WHD”), can appeal that determination. They are entitled to due process and a hearing before an ALJ. And then they can appeal the ALJ’s decision to the ARB. And even after that , they can go to court under the Administrative Procedures Act. (“APA”). But it is better in the first instance to persuade the DOL investigator of your interest in complying with the DBA, present the justification for your conduct, be reasonable, make any restitution to the workers which is required by law, and cooperate with WHD to try to avoid the need for this kind of expensive legal appeals.