FINAL DECISION AND ORDER
This case is before the Administrative Review Board on remand from the
United States District Court for the Western District of Missouri. Petitioners in this matter, Heavy
Constructors Association of the Greater Kansas City Area (HCA) and three construction union locals
(Unions) with whom HCA has collectively bargained relationships, filed an action in the District
Court seeking certain injunctive relief from a November 24, 1995 final ruling of the Administrator,
Wage and Hour Division. Administrative Record (R.) Tab Q. The Department of Labor (DOL)
moved to dismiss the court action on the basis that Petitioners had failed to exhaust administrative
remedies before the Wage Appeals Board, pursuant to 29 C.F.R. Part 7. The District Court by
Memorandum and Order of April 30, 1996, directed the Petitioners to file an appeal with the Wage
Appeals Board within five days. Pursuant to this Order, Petitioners filed the instant petition for
review with the Wage Appeal Board on May 3, 1996. Subsequent to the District Court's order, the
Secretary abolished the Wage Appeals Board and transferred its responsibilities to the newly created
Administrative Review Board. See n. 1, supra. The Board has considered the record and the
arguments of the parties and for the reasons given below dismisses the petition for review.
[Page 2]
BACKGROUND
Petitioners seek retroactive correction of Wage Determination No. KS950012
(Mod. 0), published on February 10, 1995. R. Tab S. This Wage Determination was incorporated
into the bid specifications for and governed the contract for reconstruction of approximately three
miles of Interstate Highway 1-35 in Johnson County, Kansas. Bid opening on this contract took
place on April 19, 1995 and the contract was awarded on April 26, 1995. R. Tab M.
For a number of years Petitioners have been parties to collectively bargained
agreements in the general Kansas City area, including all or parts of Jackson, Clay, Platte, Ray and
Cass counties in Missouri and Wyandotte, Johnson and Miami counties in Kansas. According to
Petitioners, HCA represents 80% to 90% of the heavy and highway contractors and the three Unions
represent virtually all of the mechanics and laborers performing work on heavy and highway
construction in the geographic area. Consequently, Petitioners assert that the collectively bargained
agreements between the three Unions and HCA establish the prevailing wage and fringe benefit rates
for the Kansas City area. On August 1, 1994, HCA and the Unions entered into new collectively
bargained agreements which called for an increase in the wage rates and fringe benefits effective
January 1, 1995.
On January 6, 1995, DOL -- through the Wage and Hour Division -- issued
the first of a series of wage determinations that did not include the newly negotiated rates for the
laborers and truck drivers. HCA requested, by letter of January 9, 1995, correction of the wage
determination's rates to reflect the newly negotiated rates. After publication of the wage
determination (dated February 10, 1995) that was incorporated into the contract documents in
question and that did not include the newly effective basic hourly rates for laborers and truck drivers,
HCA again by letter requested an update and correction of the rates. HCA asserted that the wage
rates identified for laborers and truck drivers in the wage determination were less than those included
in the collectively bargained wage escalator agreements between HCA and the Unions. The wage
determination's cement mason rate did include the escalator amount, but did not include an amount
of 50c hourly, designated as supplemental dues. Prior to the award of the contract that is the subject
of these proceedings, two additional modifications of the wage determination were issued, neither
of which included the increase in rates called for by HCA.
On June 9, 1995, HCA again wrote to request changes in the wage rates used
in the wage determination to reflect the collectively bargained agreements. R. Tab G. The laborer
rate was updated in Modification 6, published on June 16, 1995 and the truck driver rate was updated
in Modification 11, published on August 25, 1995. Lastly, the cement mason rate was corrected in
Modification 12. published on September 1, 1995 to include the supplemental dues amount. HCA's
initial request for retroactive application of the changes in the wage determination (based on the
"clerical error" exception under 29 C.F.R. § 1.6(d)) was made in its letter of July
21, 1995 to the Administrator. R. Tab J. HCA repeated this request in its letter of October 16, 1995
to the Administrator and specifically cited the Administrator's authority under .19 C.F.R. §
1.6(d) to retroactively correct "clerical errors." The Administrator denied HCA's request
for retroactive changes to the wage determination by ruling letter dated November 24, 1995.
[Page 3]
In her letter the Administrator expressed regret for "delays in issuance
of the most up-todate collectively bargained rates," but ruled that a "delay in
incorporating revised collectively bargained rates in a wage determination does not constitute a
'clerical error"' under 29 C. F. R. § 1.6(d). R. Tab Q, p. 5, 6. The Administrator also
noted that resort to section 1.6(d) to retroactively correct an error was a matter committed to the
discretion of the Administrator. The Administrator advised HCA that her letter constituted a final
determination that could be appealed to the Wage Appeals Board pursuant to 29 C . F. R. §
1. 9 and 29 C . F . R. Part 7 and that such petition should be filed within thirty days of the date of the
ruling letter. Petitioners then brought suit in the District Court. While the matter was pending in
the District Court, the Administrator notified the Kansas Department of Transportation that the
changes in cement mason wage were to be made retroactive to the start of construction on the I-35
highway project. This action was taken for the stated reason that the original wage determination
rate for cement masons "was not the mere result of processing delays, but constituted an
inadvertent clerical error." R. Tab R, p. 1.
On April 20, 1996 the Memorandum and Order that directed Petitioners to
seek review before the Wage Appeals Board was issued. On May 3, 1996 the Administrative
Review Board assumed jurisdiction over this matter.
DISCUSSION
The Board initially considers the Administrator's argument that the Petition
for Review in this matter is time-barred. As noted, the Administrator's final ruling was issued on
November 24, 1995. In that determination, Petitioners were advised of their right to file a petition
for review with the Wage Appeals Board within 30 days of the date of the ruling. We do not agree
that the petition for review was untimely under the facts of this case. Petitioners do not challenge
the validity of the wage determination. They seek retroactive application of two corrections
incorporated into the wage determination. Therefore, the general rules requiring timely challenges
to wage determinations are inapplicable. We accept this matter for review under the Board's
authority to accept a petition for review which is filed "within a reasonable time from any final
decision in any agency action under [29 C. F. R. ] part 1. . . . " 29 C. F. R. § 7.9(a).
The other issue before the Board is whether the Administrator wrongly denied
Petitioners' request to find "clerical error" and, upon that finding, retroactively correct
the wage determination to cover the contract in question. Under 29 C.F.R. § 1.6(d) the
Administrator is authorized to retroactively correct wage determinations containing "clerical
errors." Our exploration into the nature and extent of Administrator's authority under this
provision begins with the text of the regulation. Section 1.6(d) reads:
Upon his/her own initiative or at the request of an agency, the Administrator may
correct any wage determination, without regard to paragraph (c) of this section.
whenever the Administrator finds such a wage determination contains clerical errors.
Such corrections shall be included in any bid specifications containing the wage
determination, or in any on-going contract containing the wage determination in
question, retroactively to the start of construction.
[Page 4]
The Wage Appeals Board addressed the question of what constitutes a clerical
error in the case of United Association of Journeymen and Apprentices of the Plumbing and
Pipefitting Industry, Local 469, WAB Case No. 90-40, Mar. 29, 1991. In that case, the
Board held that delay by the Wage and Hour Division in utilizing revised collective bargaining rates
did not amount to "clerical error," within the-meaning of 29 C.F.R. § 1.6(d). We
conclude that Local 469 is on point and find that Wage and Hour's delay in adopting the
revised laborer and truck driver rates does not rise to the level of clerical error subject to the
Administrator's authority to issue retroactive corrections. On the other hand, failure to include the
supplemental dues payment for cement masons did not occur because of a delay in adopting new
rates. The new wage escalator for cement masons was included in the initial wage determination,
but because of an inadvertent omission, the supplemental dues payment was not.
Even if Wage and Hour's administrative delay in utilizing the wage data for
laborers and truck drivers could be considered to be clerical error, Petitioners err in suggesting that
Section 1.6(d) requires the Administrator to make such corrections whenever a clerical error is
brought to his or her attention. Quite to the contrary, the unmistakable intent and clear language of
Section 1.6(d) is to commit such corrections to the sole discretion of the Administrator.
Section 1.6(d) begins with a recitation of the process under which a correction
is to be originated. The regulation provides that a correction may be made upon the Administrator's
own initiative or at the request of a contracting agency. No procedure is provided under which an
interested party is entitled to invoke the correction process. If an error is brought to the attention of
the Administrator by an interested party, it is left to the Administrator to institute the correction
process. The fact that interested parties are not extended any procedural rights under Section 1.6(d)
underscores the discretionary nature of the regulation.
Even without the prefatory phrase, the first sentence of Section 1.6(d) clearly
establishes the discretionary nature of the Administrator's authority. The first sentence which invests
in the Administrator the authority to correct clerical errors provides that the Administrator
"may correct any wage determination" containing clerical errors. The clearly permissive
nature of the Administrator's authority is manifest in the language of the regulation.
Not only is the discretionary nature of the Administrator's authority dictated
by the clear language of the regulation, but it also well supported by policy considerations. Fairness
to all bidders and finality and regularity in the contracting agency's procurement process explain the
Administrator's long standing reluctance to employ Section 1.6(d) to correct wage determinations
after contract award. See Statement for the Administrator, p. 13. As Wage Appeals Board
Member Thomas X. Dunn stated in Beacon Place Corporation, WAB Case Nos. 87-34, -39,
Sep. 30, 1989, slip op. at 8:
[Page 5]
Contractors have few rights under the Davis-Bacon Act. Workers enjoy the benefits
of the Act, while generally the contractors have compliance obligations only.
However, throughout the years, one of the few protections given to contractors is.
that once the award has been made, the contractor has a right to rely on the wage
determinations on which he has made his bid.
These policy considerations do not, however, preclude an interested party from
timely seeking a correction in an inaccurate wage determination. The regulations specifically
provide an avenue for an interested party to challenge a wage determination. 29 C.F.R.
§§ 1.8 and 1.9 and 29 C.F.R. Part 7. This avenue was available to Petitioners to
challenge the wage determination in question, but was not pursued.
Petitioners' failure to pursue this avenue left it to the discretion of the
Administrator to determine the appropriate response to the inaccuracy in the wage
determination. The regulations do not compel the Administrator to correct every conceded mistake
in the wage determination. Mistakes in the very technical and complex wage determination process
are inevitable. Correcting those mistakes must be weighed against other important policy
considerations. The task of balancing these competing interests is assigned to the Administrator.
Absent a clear abuse of that discretion by the Administrator, the Board will not upset an
Administrator's ruling. No such abuse of discretion has been demonstrated in this proceeding.
Petitioners' reliance on the mandatory language of the second sentence of
Section 1.6(d) is misplaced. The second sentence begins "(S)much correction shall be
included" in any on-going contract. The word "Such" refers back to those
corrections which the Administrator elects to make pursuant to the discretion invested in her by the
first sentence of Section 1.6(d). It does not act as a limitation on that discretion. The case on which
Petitioners place great reliance to support their reading of the regulation, Anderson v. Yungkau,
329 U.S. 436 (1947) interpreted a rule constructed in a manner very similar to Section 1.6(d).2 The Supreme Court held in that case that:
"When the same Rule uses both `may' and `shall', the ordinary inference is that each is used
in its usual sense -- the one act being permissive, the other mandatory." The Board reads
Section 1.6(d) accordingly. The Administrator's authority is clearly permissive not mandatory.
SO ORDERED.
DAVID A. O'BRIEN
Chair
KARL J. SANDSTROM
Member
JOYCE D. MILLER
Alternate Member
[ENDNOTES]
1 On April 17, 1996, a
Secretary's Order was signed delegating jurisdiction to issue final agency decisions under the Davis-Bacon
and Related Acts and their implementing regulations to the newly created Administrative Review Board. 61
Fed. Reg. 19978 (May 3, 1996)(copy attached). Secretary's Order 2-96 contains a comprehensive list of the
statutes, executive order and regulations under which the Board now issues final agency decisions. A copy
of the final procedural revisions to the regulations (61 Fed. Reg. 19982), implementing this reorganization
is also attached.
2 The Supreme Court
in Anderson was called upon to interpret Rule 25(a) of the Federal Rules of Civil Procedure which
at that time read:
If a party dies and the claim is not thereby extinguished. the court within 2 years after the
death may order substitution of the proper parties. If substitution is not so made, the action
shall be dismissed as to the deceased party." [Emphasis added].