In re: Lease Contract No. NCL-990099
awarded by the U.S. Department of Interior,
Bureau of Land Management, for a
Field Office and Storage Building at
21605 N. Seventh Ave., Phoenix, Arizona1
Id. at 11-13 (footnotes omitted). The Ft. Drum Board similarly was unmoved by the argument that the housing units might lose their "public character" at the
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expiration of the Army's 20-year lease and revert to private uses in the hands of their private owner/developers:
[A]ny structure constructed pursuant to the direct authority of a Federal agency, or with Federal funds, for the public benefit, may well be converted to a private use at some time in the future. The fact that the Department of the Army is only assured of the use and benefit of the Ft. Drum housing for 20 years does not diminish the "public" nature of these structures.
Id. at 17.
The question of Davis-Bacon coverage of leased construction was revisited by the Wage Appeals Board in Outpatient Clinic, Crown Point, Indiana, WAB No. 86-33 (June 26, 1987) (Crown Point), involving a privately-owned building constructed to Veterans Administration (VA) specifications as part of a 15-year lease arrangement. Using essentially the same analysis applied in the Ft. Drum case, the Board majority similarly concluded (a) that the lease contemplated substantial construction activity and therefore was a "contract for construction" within the terms of the Davis-Bacon Act, and (b) that the VA clinic was a "public building" within the Secretary's definition at 29 C.F.R. 5.2(k).
1 This case has been recaptioned to simplify citation.
2 This appeal has been assigned to a panel of two Board members, as authorized by Secretary's Order 2-96. 61 Fed. Reg. 19,978 §5 (May 3, 1996).
3 The Board's decision was issued by a 2-member majority. Member Stuart Rothman filed a separate concurrence.
4 Remarkably, this 1947 regulatory definition has survived unchanged for more than 50 years. See 29 C.F.R. §5.2(k) (2000).
5Peterson involved the scope of coverage of the Heard Act, the predecessor to the modern-day Miller Act, 40 U.S.C. §270a et seq., requiring contractors that perform work on "public buildings" and "public works" of the United States to post payment bonds. The coverage language of these two bonding statutes closely parallels the coverage language of the Davis-Bacon Act.
6 The particular term used in the 1988 OLC Opinion "construction contracts" is not actually found in the text of the Davis-Bacon Act itself. Although the distinction is subtle, it can be argued that the statutory language "contract[s] . . . for construction, alteration, and/or repair . . . of public buildings" has broader application than the term "construction contracts." At the very least, courts and the Labor Department repeatedly have construed the "contract[s]. . . for construction" text under the Davis-Bacon Act and the Miller Act (and its predecessor) as extending beyond what are viewed narrowly as "construction contracts."
7 Although not quoted by the Administrator in AAM 176, this footnote in the 1994 OLC Opinion ends by with OLC's summary observation that "we further believe that the fact that a novel financing mechanism is employed should not in itself defeat the reading of such a contract as being a contract for construction of a public building or public work." Id.
8 As an aside, we share the Administrator's skepticism that any existing facility could meet BLM's needs without significant alteration, in light of the detailed specifications listed in the solicitation. Therefore, even if construction of a new facility was not mandated under the lease, it appears likely that the lease of an existing facility would have required substantial "alteration" to the building alteration that also have been covered under the Davis-Bacon Act. See 40 U.S.C. §276a(a).