In re the ruling of the Wage and Hour Administrator
concerning the applicability of the Service Contract
Act to Contract No. 98NNX-224696 with Burns International
Security Services.
BEFORE: THE ADMINISTRATIVE REVIEW BOARD
Appearances:
For Petitioner Tennessee Valley Authority:
Mary H. Moore, Esq., Michael L. Wills, Esq., Ralph E. Rodgers, Esq., Tennessee Valley Authority, Knoxville, Tennessee
For Respondent Administrator, Wage and Hour Division:
Roger W. Wilkinson, Esq., Douglas J. Davidson, Esq., Steven J. Mandel, Esq., Howard J. Radzely, Esq., U.S. Department of Labor, Washington, D.C.
For Intervenor United Government Security Officers of America:
Micheal Joyner, UGSOA Local 22, Florence, Alabama
FINAL DECISION AND ORDER
This case arises under the McNamara-O'Hara Service Contract Act, 41 U.S.C.A. §§ 351-358 (West 1994) (the SCA). The Tennessee Valley Authority (TVA) has appealed the ruling of the Administrator, Wage and Hour Division, that the SCA applies to the above-captioned contract between TVA and Burns International Security Services for security services at TVA nuclear power plants located at Browns Ferry, Alabama, and Watts Bar and Sequoyah, Tennessee (the Burns contract).
1 Service contracts that do not qualify for coverage by Section 2(a) of the SCA because they are for $2500 or less are nonetheless covered by the minimum wage requirements specified in Section 2(b)(1), 41 U.S.C.A. § 351(b)(1). See 29 C.F.R. §§ 4.2, 4.104, 4.140.
2 The UGSOA represents security officers working for TVA under the Burns contract. AR, Tabs D, G.
3 UGSOA filed a motion for expedited review of TVA's petition, on November 14, 2001. That motion is hereby rendered moot. TVA filed a letter with the Board on March 25, 2002, to call to the Board's attention Federal court decisions involving TVA that had recently been issued. We hereby acknowledge receipt of that letter and note that we have considered all relevant court pronouncements in our review of the Administrator's ruling.
4 The following abbreviations are used herein to refer to the parties' briefs: Statement in Support of
TVA's Petition for Review, TVA Brief; Reply Brief in Support of TVA's Petition for Review, Reply Brief; Statement for the Acting Administrator in Opposition to the Petition for Review, Resp. Brief; Statement for the UGSOA, Local 22, in Support of the Administrator's Final Determination, Intervenor's Brief.
5 The SCA contains a definition of "United States" that is relevant only to the use of that term in the statute "in a geographical sense." 41 U.S.C.A. § 357(d). The definition covers the States and the District of Columbia, Puerto Rico, the Virgin Islands, Outer Continental Shelf lands, American Samoa, Guam, Wake Island, Eniwetock Atoll, Kwajalein Atoll, Johnston Island, Canton Island, but not "other territory under the jurisdiction of the United States or any United States base or possession within a foreign country." Id.
6 Within the Department of Labor, the Wage and Hour Division is the department component charged with development of SCA policy and implementation of SCA requirements. The Administrator is the chief official of the Division. See 29 C.F.R. Part 4.
7 Nothing in the record before the Board suggests that TVA has pursued an exemption for a particular contract or category of contracts pursuant to Section 4(b) of the SCA, and TVA has not raised the Section 4(b) exemption issue in this case. See also 29 C.F.R. § 4.123 (d), (e) (listing types of contracts that have been deemed to be exempt pursuant to Section 4(b)). Section 4(b) was amended in 1972 to limit the granting of limitations, variations, tolerances or exemptions to those "special circumstances" where such action is not only "necessary and proper in the public interest or to avoid the serious impairment of government business" but also "is in accord with the remedial purpose of this Act to protect prevailing labor standards." Pub. L. 92-473, § 3, Oct. 9, 1972, 86 Stat. 789.
8 The Postal Reorganization Act of 1970, Pub. L. 91-375, § 2, Aug. 12, 1970, 84 Stat. 741, codified at 39 U.S.C. § 2008 (c), provides in relevant part:
Subject only to the provisions of this chapter [ Chap. 20, Finance, of Title 39, Postal Service], the Postal Service is authorized to make such expenditures and to enter into such contracts, agreements, and arrangements, upon such terms and conditions and in such manner as it deems necessary, including the final settlement of all claims and litigation against the Postal Service.
9 Section 2 of the Postal Reorganization Act, codified at 39 U.S.C. § 410 (a), (b), reads in relevant part:
(a) Except as provided by subsection (b) of this section, and except as otherwise provided in this title insofar as such laws remain in force as rules or regulations of the Postal Service, no Federal law dealing with public or Federal contracts, property, works, officers, employees, budgets, or funds, including the provisions of chapters 5 and 7 of title 5, shall apply to the exercise of the powers of the Postal Service.
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(b) the following provisions shall apply to the Postal Service:
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10
We have already discussed the USPS provision that is cited by TVA, which is codified at 39 U.S.C. § 410(a), (b). See text accompanying n.9 supra. The subsection that expressly names the SCA as applicable to the USPS is found at 39 U.S.C. § 410(b)(5)(B).
11 Some provisions of the Walsh-Healey Act were relied on by Congress in drafting the SCA. Section 4 (a) of the SCA incorporates Sections 4 and 5 of the Walsh-Healey Act, codified at 41 U.S.C. §§ 38, 39, to "govern the Secretary's authority to enforce this Act, make rules, regulations, issue orders, hold hearings, and make decisions based upon findings of fact, and take other appropriate action hereunder." 41 U.S.C. § 353(a).
12 Indeed, Donahue's reliance on Section 4 casts doubt on the significance he placed on TVA's independent contracting authority as it pertains to the inapplicability of the Davis-Bacon Act to TVA.