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 New threshold allows cities to save money on smaller construction projects 

7/22/2011 | Contact: Sarah Erkmann 343-7103
Mayor's Office

ANCHORAGE- Mayor Dan Sullivan today lauded the passage and signing of House Bill 155 (HB155) that amends Alaska’s Little Davis-Bacon Act (LDBA). HB155 increases the dollar threshold that public works contracts must meet before they qualify for prevailing wages. Before amendment, Alaska’s LDBA applied to public construction contracts greater than $2,000; HB155 amends that threshold upward to $25,000.

Mayor Sullivan worked with Kenai Peninsula Borough Mayor Dave Carey to promote a resolution at last year’s Alaska Municipal League Annual Local Government Conference that supported a change to the law. “I am pleased to see the Legislature, particularly bill sponsor Rep. Kurt Olson and Gov. Sean Parnell, support a reasonable adjustment to the law,” said Mayor Sullivan. “The change allows municipalities to be more competitive in contracting for smaller construction projects, which saves us, and ultimately taxpayers, money.”

As Rep. Kurt Olson said in his sponsor statement: ”A dollar threshold for LDBA application exists due to the wide recognition that some projects are simply too small to justify the overhead associated with LDBA compliance. For small projects requiring less skilled labor, the rigidity of LDBA and the hoops that contractors must jump through drive up the price of a bid. Not only does the administrative burden of an LDBA job push a contract ever closer to the $2,000 mark, it discourages small, local contractors from entering bids. In this sense, raising the dollar threshold should be seen as an economic development issue for rural communities seeking local opportunities.”

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