Dive Brief:
- Maryland's Frederick County Public Schools (FCPS) officials have determined that due to the state's prevailing wage laws, construction of a local high school cost an additional $9.2 million, the Frederick News Post reported.
- The $9.2 million increase in costs is part of a total cost overrun of approximately $17 million for the construction of Frederick High School and was determined after the school board requested that subcontractors re-submit informational bids without using prevailing wage figures.
- Maryland requires prevailing wages be paid if the state provides 25% of funding for school construction, down from the 50% threshold in effect before the law changed in 2014.
Dive Insight:
The issue of prevailing wage has always been a point of contention in the construction industry. Proponents say it puts all bidders on a level playing field and eliminates the risk of employees being paid lower-than average wages in order for the low bidder's numbers to "work." But critics maintain that the law interferes with the free market and uses union wages as the benchmark, even in areas where that wage may be higher than the market would normally support.
Not all of the Frederick school's cost increases were as a result of prevailing wage. Ray Barnes, FCPS chief operating officer, attributes the other half of the overruns to the better contractor market conditions and, possibly, to the requirement that new schools be LEED Silver certified, the News-Post reported.
Whatever is behind the project's higher costs, the school board and members of Frederick County’s state delegation are exploring various ways to reduce school construction costs, ranging from a cost-share plan with the state to eliminating the prevailing wage requirement altogether.