Indiana Localities are Looking to Change Wage Determination on Contracts

A column at FortWayne.com discusses how local school systems are reviewing how they determine wages on their construction and maintenance contracts. A Federal law requires them to pay prevailing wage, and in most of the US that means localities defaulted to union wages. Obviously these will be larger then non-union shops. Now several school systems are interpreting the law to say that it is the prevailing wage of all workers in the area, which is allowing them to award contracts at below union wage. One forgets, or really doesn’t know, that many of the conditions on government contracts that drive up the cost are self imposed. Many are for social reasons. Like the one that directs funds to disadvantaged or minority business that a Federal court just threw out for defense contracts. There is always some inefficiencies in this because at a minimum there is an increased cost to find the right business to receive the money. This is a cost born by either the prime contractor or the government. With tax dollars getting tighter there may be further attempts to reform these type of business practices.