Executive Order 11588—Providing for the Stabilization of Wages and Prices in the Construction Industry

WHEREAS, the stabilization of wages and prices in the construction industry is essential to the maintenance of a strong national economy; and

WHEREAS, wages and prices in the construction industry have tended in recent years to increase at a rate greater than that for the economy as a whole; and

WHEREAS, the Congress has expressed its concern over the unrestrained rise in wages and prices through the enactment of the Economic Stabilization Act of 1970 (84 Stat. 799 as amended); and

WHEREAS, it was necessary to suspend the prevailing rate provisions of the Davis-Bacon Act in order to assist in alleviating the inflationary spiral of wages and prices in the construction industry, which suspension is no longer required due to the establishment of an equitable stabilization plan under this order; and

WHEREAS, the national leaders of labor and management in the construction industry have indicated, since the suspension of the Davis-Bacon Act, that under such an order they will participate with the Government in fair measures to achieve greater wage and price stability; but are unable to agree on any voluntary arrangement; and

WHEREAS, stabilization of wages and prices is most effectively achieved when accompanied by positive action of labor and management; and

WHEREAS, this order is required to establish an arrangement for the application of general criteria by an operating structure with a minimum of Government involvement and sanctions within which labor and management may act to effectuate the stabilization of wages and prices consistent with and in furtherance of effective collective bargaining in the industry.

Now, THEREFORE, by virtue of the authority vested in me by the Economic Stabilization Act of 1970 (84 Stat. 799 as amended) and as President of the United States, it is ordered as follows:

SECTION 1(a). A Construction Industry Stabilization Committee (hereafter referred to as "Committee") is hereby established to assure generally conformance of any increase in any wage or salary in the construction industry to the provisions of this order.

(b) The Committee shall be composed of twelve members appointed by the Secretary of Labor and selected as follows: four of the members shall be representative of labor organizations in the construction industry; four of the members shall be representative of employers in the construction industry; and four of the members shall be representative of the public. The Secretary of Labor shall appoint one of the public members as chairman of the committee.

SEC. 2. Associations of contractors and national and international unions shall jointly establish craft dispute boards (hereinafter referred to as "boards") to determine whether wages and salaries are acceptable in accordance with the criteria established in section 6. Each board shall be composed of appropriate labor and management representatives.

SEC. 3(a). It shall be the responsibility of each board, in relation to the craft or branch over which it has jurisdiction, to provide advice and assistance in an effort to resolve any unresolved collective bargaining disputes involving wages and salaries and to promptly examine every collective bargaining agreement negotiated on or after the date of this order and to determine, in accordance with the criteria established in section 6, whether wage and salary increases in the agreement are acceptable and may thus be approved. The board shall make determinations within a reasonable time and shall notify the parties and the Committee of action taken. When it is determined by the board that a wage or salary increase is not acceptable, the board shall also notify the Secretary of Labor.

(b) Each board shall also have the authority to examine collective bargaining agreements negotiated prior to the date of this order which contain wage or salary increases scheduled to take effect on or after such date to determine whether any increase is unreasonably inconsistent with the criteria established in section 6.

SEC. 4(a). Upon receipt of notification by a board that it has found a wage or salary increase acceptable, the Committee shall have fifteen days in which to determine whether it will assume jurisdiction over the matter. If the Committee does not determine within that time, and so notify the parties and the board, that it will assume jurisdiction, the board's determination will be deemed final and the increase may take effect. If the Committee determines that it will assume jurisdiction it shall he a violation of this order to implement the increase unless and until the Committee affirms the board's initial determination. The Committee shall notify the parties, the board and the Secretary of Labor of its final action.

(b) The Committee is also authorized, upon its own motion, if a board has not yet reported or an appropriate board has not been established, to review any proposed wage or salary increase to determine its acceptability.

(c) Unless and until an increase in wage or salary has been approved in accordance with the provisions of sections 3(a) and 4 of this order, it shall be a violation of this order to put such wage or salary increase into effect.

SEC. 5. Upon a determination by a board or the Committee that a proposed wage or salary increase is not acceptable and certification of that determination by the Secretary of Labor, the following actions shall be taken:

(a) In implementing the provisions of the Davis-Bacon Act of March 3, 1931 (46 Stat. 1494, as amended) and related statutes the provisions of which are dependent upon determinations by the Secretary of Labor under the Davis-Bacon Act, and including state statutes or laws requiring similar wage standards, the Secretary of Labor and all states shall not take into consideration any wage or salary increase in excess of that found to be acceptable in making determination under that Act and related statutes.

(b) In order to assure that unacceptable wage rates shall not be utilized in Federal or federally-related construction, the heads of all Federal departments and agencies, subject to the direction and coordination of the Secretary of Labor;

(1) shall review all plans for construction and financial assistance for construction in localities in which wage or salary increases have been certified by the Secretary of Labor to be unacceptable and shall, on the basis of that review, determine whether such plans can he approved or continued; and

(2) shall review current and prospective construction contracts for Federal construction and for construction on projects receiving Federal financial assistance in the area affected by a certification by the Secretary of Labor and shall, on the basis of such review, determine whether such contracts can be awarded or continue.

(c) The Committee and the boards shall make public their determinations, specifying the craft and area affected and the wages or salaries deemed unacceptable.

(d) Any other action authorized by law to carry out the purposes and policy of this order shall be available to the Secretary of Labor to assure the stabilization of wages and prices in the construction industry.

SEC. 6. The following criteria shall be applied in determining whether any wage or salary increase is acceptable:

(a) Acceptable economic adjustments in labor contracts negotiated on or after the date of this order will be those normally considered supportable by productivity improvement and cost of living trends, but not in excess of the average of the median increases in wages and benefits over the life of the contract negotiated in major construction settlements in the period 1961 to 1968.

(b) Equity adjustments in labor contracts negotiated on or after the date of this order may, where carefully identified, be considered over the life of the contract to restore traditional relationships among crafts in a single locality and within the same craft in surrounding localities.

SEC. 7. The parties to a labor contract negotiated in the construction industry shall promptly submit that contract to the appropriate board or boards. Where there is no appropriate board to consider the acceptability of a proposed wage or salary increase, the affected national or international union, and the affected association of contractors shall promptly submit that contract to the Committee.

SEC. 8. The Interagency Committee on construction (hereinafter referred to as "Interagency Committee"), is hereby established to develop criteria for the determination of acceptable prices in construction contracts as well as criteria for acceptable compensation, including bonuses, stock options and the like. Officers and employees of Federal departments and agencies shall be designated to serve as members of the Interagency Committee by the Secretary of Housing and Urban Development who shall also designate its chairman. The Interagency Committee shall consult with the Secretary of Labor, with major Government procurement agencies and with the Committee in developing such criteria and concerning the application of such criteria. Until criteria have been developed and applied and prices and compensation are determined to be unacceptable, prices, and compensation shall not be deemed in violation of this order.

SEC. 9. In the conduct of every Federal or federally-assisted construction project or program the affected Federal agency shall assure the conformance of such project or program with the criteria established in section 8.

SEC. 10. The Committee and the Interagency Committee, subject to approval by the Secretary of Labor, and the Secretary of Labor are authorized to issue such rules and regulations as may be necessary to provide for the expeditious and effective conduct of their responsibilities under this order and to effectuate its purposes. Such authority of the Committee under this section shall include the authority to issue such rules and regulations as may be necessary to assure the effective operation of any board which may be established under this order, and to provide for the resolution of impasses within any board.

SEC. 11 (a). The term "construction" shall mean, for the purpose of this order (1) all work relating to the erecting, constructing, altering, remodeling, painting, or decorating of installations such as buildings, bridges, highways and the like, when performed on a contract basis, but shall not include maintenance work performed by workers employed on a permanent basis in a particular plant or facility for the purpose of keeping such plant or facility in efficient operating condition; (2) the transporting of materials and supplies to or from a particular building or project by the workers of the contractor or subcontractor performing the construction or the manufacturing of materials, supplies, or equipment on the site of a project by such workers; and (3) all other work classified as construction in section 5.2(g) of Part 5, Title 29 of the Code of Federal Regulations.

(b) The term "wage or salary" shall mean, for the purpose of this order, all wage or salary rate schedules and economic benefits established pursuant to a collective bargaining agreement in the construction industry.

SEC. 12 (a). Expenses of the Committee and the Inter-agency Committee shall be paid from such appropriations to the Department of Labor and other Federal agencies as may be made available therefor.

(b) All departments and agencies of the Federal Government are authorized and directed to cooperate with the Committee and the Interagency Committee in order that they may carry out their responsibilities under this order.

SEC. 13. There shall he periodic examination of the effectiveness of this order to determine whether further measures will be required to effectuate a stabilization of wages and prices in the construction industry.

SEC. 14. This Order shall be effective immediately.

RICHARD NIXON

The White House

March 29, 1971