How non-union contractors can be more competitive when bidding on Davis-Bacon Act or McNamara-O'Hara Service Contract jobs If you are bidding on Davis-Bacon or McNamara-O'Hara Service Contract jobs and the prevailing wage is higher than you normally pay, there are steps you can take to become more competitive. The prevailing wage is broken down into two sections – the base rate and the fringe benefit rate. Most non-union contractors will add the two rates and pay it to employees. They then have to pay Workers’ Compensation, payroll taxes, social security taxes, etc. on the total. However, if they take any or all of the fringe benefits portion and purchase bona fide fringe benefits on behalf of their employees then that portion is moved out of the payroll burden. To learn more, contact us.