Uploaded June 2026 | Updated September 2026, 2 weeks ago
Got a call last week from a drywall guy in the Southeast. He'd just been awarded an $18,000 sheetrock install-and-finish job at a federal facility. First federal contract. He was fired up.
Then he asked me the question that told me he was about to lose money: "Sean, what should I be paying my hangers on this one?"
I asked him what his wage determination said. Long pause. He didn't know what a wage determination was.
Here's the deal. Every federal construction contract over $2,000 falls under Davis-Bacon. That means before you ever wrote your number, the government already told you what you have to pay every trade on that jobsite. Hangers, finishers, laborers, painters, all of it. The rate is locked. The fringe is locked. You don't get to pay your guys what you pay them on private commercial work.
In his county, the drywall finisher rate was around $28/hr base plus close to $11/hr fringe. He was paying his guys $22 flat. He bid the job at his normal $22 number plus his normal markup. He thought he had a healthy margin. He actually had a loss baked in before he hung the first sheet, because the minute he submits certified payrolls showing $22, the contracting officer kicks them back and he owes the difference plus penalties.
This is the trap nobody warns new federal contractors about. Your private-sector labor cost is not your federal labor cost. Same guys, same trucks, same screws, totally different number. On an $18K job, getting the wage determination wrong is the difference between making $4K and losing $3K.
The fix is simple and it happens before you bid, not after. You pull the wage determination out of the solicitation. You build your labor cost off THAT rate, not your shop rate. You add fringe correctly (cash or bona fide benefits, your choice, but you have to account for it). Then you mark up from there.
The guys who get burned on their first federal job almost always get burned the same way. They priced the work like it was a private remodel and forgot they signed up to play by a different rulebook.
If you've got a federal bid in front of you and you're not 100% sure how to read the wage determination and build it into your number, let's get on a call before you submit.
Book a Zoom: gcexperts.com/zoom
▶ Read the full article on Skool: skool.com/gcexperts
Want to talk through how this applies to your situation? Book a Zoom: gcexperts.com/zoom
#FederalContracting #Construction #SmallBusiness #GovernmentContracts #SAMgov #Contractors #Shorts
⸻
DISCLAIMER: The strategies, regulations, and figures discussed in this video reflect Sean Reitmeyer's personal experience in federal contracting and are shared for informational and educational purposes only. This is not legal, financial, or business advice. Individual results vary. Viewers who have not completed the GC Experts training program are missing context that is essential to correctly applying these concepts. Nothing in this video creates a coaching, advisory, or contractual relationship. Consult qualified legal, financial, and business professionals before making any business decisions.
Got a call last week from a drywall guy in the Southeast. He'd just been awarded an $18,000 sheetrock install-and-finish job at a federal facility. First federal contract. He was fired up.
Then he asked me the question that told me he was about to lose money: "Sean, what should I be paying my hangers on this one?"
I asked him what his wage determination said. Long pause. He didn't know what a wage determination was.
Here's the deal. Every federal construction contract over $2,000 falls under Davis-Bacon. That means before you ever wrote your number, the government already told you what you have to pay every trade on that jobsite. Hangers, finishers, laborers, painters, all of it. The rate is locked. The fringe is locked. You don't get to pay your guys what you pay them on private commercial work.
In his county, the drywall finisher rate was around $28/hr base plus close to $11/hr fringe. He was paying his guys $22 flat. He bid the job at his normal $22 number plus his normal markup. He thought he had a healthy margin. He actually had a loss baked in before he hung the first sheet, because the minute he submits certified payrolls showing $22, the contracting officer kicks them back and he owes the difference plus penalties.
This is the trap nobody warns new federal contractors about. Your private-sector labor cost is not your federal labor cost. Same guys, same trucks, same screws, totally different number. On an $18K job, getting the wage determination wrong is the difference between making $4K and losing $3K.
The fix is simple and it happens before you bid, not after. You pull the wage determination out of the solicitation. You build your labor cost off THAT rate, not your shop rate. You add fringe correctly (cash or bona fide benefits, your choice, but you have to account for it). Then you mark up from there.
The guys who get burned on their first federal job almost always get burned the same way. They priced the work like it was a private remodel and forgot they signed up to play by a different rulebook.
If you've got a federal bid in front of you and you're not 100% sure how to read the wage determination and build it into your number, let's get on a call before you submit.
Book a Zoom: gcexperts.com/zoom
▶ Read the full article on Skool: skool.com/gcexperts
Want to talk through how this applies to your situation? Book a Zoom: gcexperts.com/zoom
#FederalContracting #Construction #SmallBusiness #GovernmentContracts #SAMgov #Contractors #Shorts
⸻
DISCLAIMER: The strategies, regulations, and figures discussed in this video reflect Sean Reitmeyer's personal experience in federal contracting and are shared for informational and educational purposes only. This is not legal, financial, or business advice. Individual results vary. Viewers who have not completed the GC Experts training program are missing context that is essential to correctly applying these concepts. Nothing in this video creates a coaching, advisory, or contractual relationship. Consult qualified legal, financial, and business professionals before making any business decisions.
