The Labor Department was wrong to declare a privately financed development project  a “public work” that would be subject to higher wages under the Davis-Bacon Act, a federal court ruled Monday in a lawsuit brought against the labor agency by the District of Columbia.

In the ruling, the U.S. District Court for the District of Columbia said the “CityCenterDC” development won’t be built or used by the government or the public. While the mixed-use project of condominiums, apartments, offices, hotel, retail stores and some public open spaces will sit on a parcel of land owned by the District of Columbia, it will be entirely privately funded, occupied, and maintained for the duration of the developers’ 99-year leases with the city, Judge Amy Berman Jackson said in her decision.

That contradicts the decision that was made by the Labor Department’s Administrative Review Board, which had determined the project was a “public work” for purposes of the Davis-Bacon Act. That law — enacted during the Great Depression to stop contractors from driving down wages with cheap labor — requires the payment of local prevailing wages to workers on federal construction projects. The Labor Department determines the wages.

Legal experts who’d watched the case had said the Labor Department’s decision could have a significant effect on construction projects if it were to stand.

Keep reading this article at: http://blogs.wsj.com/washwire/2014/04/01/court-rules-against-labor-department-in-citycenterdc-case