U.S. DEPARTMENT OF ENERGY,
RICHLAND, WASHINGTON OFFICE'S
DAVIS-BACON DETERMINATION FOR
PROJECT NO. W-211,
Petition by Hanford Atomic Metal Trades
Council Seeking Review of the August 27, 2002
Ruling Letter as applied to the Project No. W-211.
BEFORE: THE ADMINISTRATIVE REVIEW BOARD
Appearances:
For Petitioner The Hanford Atomic Metal Trades Council: Daniel M. Katz, Esq., Louise P. Zanar, Esq., Aaron Larks-Stanford, Esq., Katz & Ranzman, P.C., Washington, D.C.
For Respondent Administrator, Wage and Hour Division:
Leif G. Jorgenson, Esq., Douglas J. Davidson, Esq., Steven J. Mandel, Esq., U.S. Department of Labor, Washington, D.C.
For Intervening Interested Party The Building and Construction Trades Department, AFL-CIO:
Terry R. Yellig, Esq., Sherman, Dunn, Cohen, Leifer & Yellig, P.C., Washington, D.C.
FINAL DECISION AND ORDER
This case arises under the Davis-Bacon Act, as amended (DBA), 40 U.S.C.A. §§ 3141-3148 (West Supp. 2003), and regulations at 29 C.F.R. Parts 1, 5, and 7 (2003). Also at issue is the McNamara-O'Hara Service Contract Act, as amended (SCA), 41 U.S.C.A. §§ 351-358 (West 1987); 29 C.F.R. Parts 4 and 8 (2003).
The Hanford Atomic Metals Trades Council (HAMTC) petitions for review of a ruling by the Administrator, Employment Standards Administration, Wage and Hour Division, that DBA standards, rather than SCA standards, apply to certain "items of work" on Project W-211 at the Department of Energy (DOE) Hanford Site, Richland, Washington. HAMTC represents service employees who traditionally have performed the types of activities involved in these items of work. The Building and Construction Trades Department, AFL-CIO (Building Trades Department) opposes HAMTC's petition. It represents construction employees who now perform or will perform these items of work because DBA standards apply as the result of the Administrator's ruling. Under the applicable wage determinations, service employees are more highly paid than construction employees.
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In ruling that DBA standards applied, the Administrator reconsidered her earlier ruling that SCA standards applied. She argues here that she had authority to reconsider that ruling and to reverse and rescind it. We conclude, however, that the Administrator abused her discretion when she reconsidered her earlier ruling. We accordingly grant HAMTC's petition.
Jurisdiction and Standard of Review
We have jurisdiction to decide appeals from the Administrator's final decisions concerning DBA wage determinations. 29 C.F.R. § 7.1(b). See Secretary's Order 1-2002, 67 Fed. Reg. 64,272 (Oct. 17, 2002). Our review of the Administrator's decision is in the nature of an appellate proceeding. 29 C.F.R. § 7.1(e). We review the Administrator's decision to determine whether it is consistent with the statutes and regulations and is a reasonable exercise of the discretion delegated to the Administrator to implement and enforce the DBA. Millwright Local 1755, ARB No. 98-015, slip op. at 7 (ARB May 11, 2000) (DBA conformance proceeding); Miami Elevator Co. and Mid-American Elevator Co., Inc., ARB Nos. 98-086, 97-145, slip op. at 16 (ARB Apr. 25, 2000) (same); Dep't of the Army, ARB Nos. 98-120/121/122, slip op. at 16 (ARB Dec. 22, 1999) (SCA), citing ITT Fed. Services Corp. (II), ARB No. 95-042A (ARB July 25, 1996), and Service Employees International Union (I), BSCA No. 92-01 (BSCA Aug. 28, 1992).
Statutory and Regulatory Provisions
The DBA applies to every contract of the United States for construction, alteration, and/or repair, including painting and decorating, of public buildings or public works in the United States. 40 U.S.C.A. § 3142(a). The SCA applies to every contract entered into by the United States, the principal purpose of which is to furnish services in the United States through the use of service employees. 41 U.S.C.A. § 351(a).
The DBA requires that the advertised specifications for construction contracts to which the United States is a party contain a provision stating the minimum wages to be paid to the various classifications of mechanics or laborers to be employed under the contract. The Administrator issues minimum wage determinations. 29 C.F.R. § 1.1(a). The minimum wage rates contained in the determinations derive from rates prevailing in the geographic locality where the work is to be performed or from rates applicable under collective bargaining agreements. 29 C.F.R. § 1.3. "Prevailing" wages are wages paid to the majority of the laborers or mechanics in classifications on similar projects in the area. 29 C.F.R. § 1.2(a)(1). "All questions relating to the application and interpretation of wage determinations (including the classifications therein) . . . shall be referred to the Administrator for appropriate [authoritative] ruling or interpretation." 29 C.F.R. § 5.13. The SCA imposes a comparable scheme. 41 U.S.C.A. § 351(a); 29 C.F.R. §§ 4.3(a), 4.50, 4.54, 4.56. Under certain circumstances, DBA (construction) and SCA (non-construction) components of contracts must be segregated. 29 C.F.R. § 4.116(c)(2); 48 C.F.R. § 970.2204-1-1(a) and (b) (2003) (applicable DOE regulation).
Background
Project W-211 is designed to provide systems for storage, treatment, and retrieval of radioactive waste in giant double-shell tanks located on "tank farms" at the Hanford Site, formerly a nuclear weapons plant. Project W-211 is performed under a prime contract subject to the SCA, but also involves construction activity subject to the DBA.
1 HAMTC contends that the following items of work are service activities subject to the SCA: (i) removing and disposing of contaminated equipment and components, (ii) installing mixer pumps in the tanks, (iii) installing transfer pump systems in the tanks, (iv) installing temperature probes and attendant cabling in the tanks, (v) installing television cameras, mast assemblies, purge systems, cables, and hoses in the tanks, and (vi) hooking up "jumpers" in the tanks for moving liquid.
2 In Macktal, the respondent filed its motion for reconsideration ten days after the ARB issued its decision, and the ARB notified the parties of its intent to reconsider three and one-half weeks thereafter. The court concluded that the ARB had not abused its discretion in reconsidering its decision.