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How to read a wage determination (Davis-Bacon and Service Contract Act)

A wage determination is the Department of Labor document that sets the minimum wages and fringe benefits you must pay on a federal contract. It is attached to the solicitation, it is not optional, and getting it wrong is one of the most expensive mistakes a new federal contractor can make.

Two kinds

  • Davis-Bacon (construction): for federal construction, alteration and repair contracts over $2,000. Rates are set by county and by type of construction (building, heavy, highway, residential).
  • Service Contract Act (services): for most federal service contracts over $2,500, such as janitorial, grounds maintenance, security and food service. Rates are set by locality and by occupation.

Both are published on SAM.gov, and the right one for each job is included in the solicitation.

Reading a Davis-Bacon determination

  1. General decision number and modification: identify the determination and its version. Use the one in the solicitation, including amendments.
  2. Construction type and counties: check that it matches the job.
  3. Classifications: each trade (for example electrician, laborer, operating engineer) with a basic hourly rate and a fringe benefit rate.
  4. Fringes: can be paid as benefits (health, pension) or added to the hourly wage in cash.

Every worker on site must be paid at least the rate of the classification for the work they do, and you submit certified payrolls weekly.

Reading a Service Contract Act determination

  1. Occupation list: each occupation with a code, title and minimum hourly rate.
  2. Health and welfare: an hourly fringe amount per employee, on top of the wage.
  3. Vacation and holidays: paid time off rules that depend on years of service.

Pricing with it

  • Build your labor rates up from the determination, then add payroll taxes, insurance, overhead and profit.
  • If your normal wages are lower, your federal price has to be higher. Bidding your usual rate is the classic way to win a job and lose money on it.
  • On multi-year service contracts, new determinations can apply to option years, so understand how price adjustments work in the contract.

More on the construction side in bonds and prevailing wages.

Last reviewed October 20, 2026. This guide is general information, not legal advice. Rules and dollar thresholds change, so check the solicitation and the official sources linked above.