Highway, Street, and Bridge Construction Business Guide
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We documented 9 challenges in Highway, Street, and Bridge Construction. Now get the actionable solutions — vendor recommendations, process fixes, and cost-saving strategies that actually work.
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All 9 Documented Cases
Fines and Back Wages from Prevailing Wage and Certified Payroll Violations
$13,508 per violation plus back wages doubled via liquidated damages; industry-wide misclassification costs exceed $15B annuallyConstruction companies in highway, street, and bridge projects fail to comply with Davis-Bacon prevailing wage requirements and certified payroll reporting (e.g., WH-347 forms), leading to audits, back wage payments, liquidated damages, and civil penalties. Errors like incorrect wage rates, fringe benefit miscalculations, and missing documentation trigger investigations that impose maximum penalties. Debarment from federal contracts for up to three years eliminates major revenue streams.
Excessive Administrative and Labor Costs for Prevailing Wage Compliance
1-3% of total labor costs annually; state penalties add $50 per day per workerCertified payroll preparation, record-keeping, and compliance monitoring consume significant resources in highway and bridge construction, often requiring manual verification of wage rates and fringes across projects. Non-compliance escalates costs through back wages and penalties, while ongoing compliance drains 1-3% of total labor budgets. Prime contractors bear liability for subcontractor errors, amplifying overruns.
Worker Misclassification to Evade Prevailing Wage Obligations
Part of $15B annual industry misclassification losses; back wage liabilities plus penaltiesContractors in construction misclassify employees as 1099 independent contractors to bypass certified payroll and prevailing wage rules on highway projects, leading to DOL audits, back wages, and penalties. This gray scheme creates lost tax revenue and exposes companies to debarment. Even corrected, compliance history damages future bidding.
Retainage Return Violations in DBE Highway Contracts
$Fines/penalties per violation - systemic DBE program non-complianceState DOTs and prime contractors fail to monitor and enforce prompt return of retainage to DBE subcontractors per 49 CFR §26.29, leading to regulatory non-compliance. Contracts lack proper clauses or monitoring for phased retainage releases, exposing firms to federal oversight failures. FHWA requires active monitoring of payments and retainage returns to avoid breaches.