Southern Electrical Services bid on a Houston airport project using prevailing wage rates provided by the City. When the City later provided corrected (higher) minimum wage rates, SES claimed damages for increased labor costs. The Texas Court of Appeals ruled against SES, finding that the contract did not shift the risk of wage rate changes to the City, and that the rates were minimums only—SES could have paid more if needed. Subcontractors cannot rely on initial wage information from government clients to lock in labor costs without explicit contract language protecting them.
Always include explicit contract language that allocates risk of prevailing wage rate increases to the party providing the rates (usually the government client). Without it, you bear the cost.
Prevailing wage rates are minimums, not caps. Budget conservatively and assume rates may increase during the project—do not bid assuming rates will stay flat.