BDM MANAGEMENT SERVICES CO., 1988-SCA-OM-1 (Dep. Sec'y Aug. 1, 1988)
CCASE:
BDM MANAGEMENT SERVICES COMPANY
DDATE:
1988081
TTEXT:
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U.S. DEPARTMENT OF LABOR
DEPUTY SECRETARY OF LABOR
WASHINGTON, D.C.
20210
DATE: August 1, 1988
CASE NO. 88-SCA-OM-1
IN THE MATTER OF
BDM MANAGEMENT SERVICES COMPANY
AND
ADMINISTRATOR, WAGE AND HOUR
DIVISION, EMPLOYMENT STANDARDS
ADMINISTRATION, UNITED STATES
DEPARTMENT OF LABOR
BEFORE: THE DEPUTY SECRETARY OF LABOR
DECISION AND ORDER
This case is before me /FN1/ pursuant to the Service Contract
Act of
1965 (the Act), as amended, 41 U.S.C. [secs] 351-358 (1982), and
the rules
and regulations promulgated thereunder, 29 C.F.R. Parts 4 and 8
(1987). Petitioner, BDM Management Services Company (NBDM"),
pursuant
to 29 C.F.R. [sec] 8.7, seeks review of the Wage and Hour
Administrator's
decision of November 2, 1987, in response to a conformance request
submitted by BDM in connection with a service contract with the
Department of the Army ("Army"). In a determination (issued by
Alan
L. Moss, Director, Division of Wage Determinations), the
Administrator
acted upon 37 separate requests for conformed classifications. BDM
seeks review of only one of the conformance actions, disagreeing
with
the Administrator's determination that the duties of the
Installation [1]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ The Deputy Secretary has been designated by the Secretary to
perform the functions of the Board of Service Contract Appeals
pending the appointment of a duly constituted board. 29 C.F.R.
[sec] 8.0 (1987); Department of Labor Executive Level Conforming
Amendments of 1986, Pub. L. No. 99-619 (November 6, 1986). [1]
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[2] Technician are within the scope of those of the Technician I
classification in Wage Determination (WD) 74-748 (Rev. 14).
BDM contends that its conformance of the Installation
Technician
to the Supply Clerk classification under WD 74-748 (Rev.14) (June
12,
1985) was proper under applicable regulations, and that the
Administrator erred in matching it to the Technician I
classification. BDM also contends that the Administrator is
estopped from
retroactively applying the determination to the commencement date
of
the contract, because BDM has been conforming the Installation
Technician (IT) classification to that of Supply Clerk (SC) since
1980
under the predecessor contract and because the government has not
timely acted upon BDM's conformance requests.
The Administrator has filed a Statement in support of her
decision and BDM has filed a reply /FN2/ to the Administrator's
Statement. The Army's contracting officer has been served with all
submissions in this case but has not filed any statement or
response.
BDM was awarded a contract by the Army for "Operation,
Maintenance and Engineering Support of TCATA Testing, Training and
Demonstrations." This contract, No. DABT 62-85-C-1226, was awarded
to
BDM on October 1, 1985. An earlier, predecessor contract (No.
DAEA-18-80-C-0053) covering substantially the same services had
been [2]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN2/ BDM requested an extension of time until March 28, 1988,
within which to reply to the Administrator's statement. BDM filed
its reply on that date. It is accepted and so much of BDM's
submission as was before the Administrator has been considered.
Where BDM's submission goes beyond the record, I may not, and have
not, relied upon it in this appellate review. 29 C.F.R. [secs]
8.1(d), 8.8(b) and 8.9(b). [2]
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[3] awarded to and performed by BDM from October 1, 1980, to
September 30, 1985. The pertinent regulations covering conformance
procedures are contained in 29 C.F.R. [sec] 4.6(b)(2) (1987) as
follows:
(2)(i) If there is such a wage determination attached to
this contract, the contracting officer shall require that
any class of service employee which is not listed therein
and which is to be employed under the contract (i.e., the
work to be performed is not performed by any
classification listed in the wage determination), be
classified by the contractor so as to provide a
reasonable relationship (i.e., appropriate level of skill
comparison) between such unlisted classifications and the
classifications listed in the wage determination. Such
conformed class of employees shall be paid the monetary
wages and furnished the fringe benefits as are determined
pursuant to the procedures in this section.
(ii) Such conforming procedure shall be initiated by the
contractor prior to the performance of contract work by
such unlisted class of employee. A written report of the
proposed conforming action, including information
regarding the agreement or disagreement of the authorized
representative of the employees involved or, where there
is no authorized representative, the employees
themselves, shall be submitted by the contractor to the
contracting officer no later than 30 days after such
unlisted class of employees performs any contract work.
The contracting officer shall review the proposed action
and promptly submit a report of the action, together with
the agency's recommendation and all pertinent information
including the position of the contractor and the
employees, to the Wage and Hour Division, Employment
Standards Administration, U.S. Department of Labor, for
review. The Wage and Hour Division will approve, modify,
or disapprove the action or render a final determination
in the event of disagreement within 30 days of receipt or
will notify the contracting officer within 30 days of
receipt that additional time is necessary.
(iii) The final determination of the conformance action
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by the Wage and Hour Division shall be transmitted to the
contracting officer who shall promptly notify the
contractor of the action taken. Each affected employee
shall be furnished by the contractor with a written copy
of such determination or it shall be posted as a part of
the wage determination.
(iv)(A) The process of establishing wage and fringe
benefit rates that bear a reasonable relationship to
those listed in a wage determination cannot be reduced to
any single formula. The approach used may vary from wage
determination to wage determination depending on the
circumstances. Standard wage and salary administration
practices which rank various job classifications by pay
grade pursuant to point schemes or other job factors may,
for example, be relied upon. Guidance may also be
obtained from the way different jobs are rated under
Federal pay systems (Federal Wage Board Pay System and
the General Schedule) or from other wage determinations
issued in the same locality. Basic to the establishment
of any conformable wage rate(s) is the concept that a pay
relationship should be maintained between job
classifications based on the skill required and the
duties performed.
On October 1, 1986, the Army exercised its option and extended
contract No. DABT 62-85-C-1226 for an additional year. Pursuant to
the current regulations, which became effective in December, 1983,
the
Army did not have the authority to approve the conformance but was
required to submit it to the Wage and Hour Division, for a final
determination. 48 Fed. Reg. 49,762 (October 27, 1983.) /FN3/
According
to the record, it was not until June 19, 1987, that the Army
forwarded [4]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN3/ The regulations in effect prior to these amendments
pertaining to conformance actions were different from those in
effect during the term of this contract, No. DABT 62-85-C-1226.
The preceding regulations provided that the Administrator decided
the appropriate conformance classification and wage rate only when
the other parties, i.e., the employer, employees affected, and the
contracting agency, could not agree. See 29 C.F.R.[sec] 4.6(b)(2)
(1983). [4]
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[5] BDM's request for conformance to Wage and Hour for a ruling.
Administrative Record, R-3. /FN4/
Army's request for review, which recommended approval of BDM's
proposed conformance classifications, included five positions for
which there were no classifications listed on WD 74-748 (Rev 16)
and a
request that the classification of Installation Technician be
combined
with the existent Supply Clerk classification. Id. The Wage and
Hour
Administrator ruled on November 2, 1987, that the duties performed
by
Installation Technician were within the scope of the Technician,
Class
I, classification at a base hourly wage rate of $8.96 and thus a
conformed wage rate of $6.27, as paid to Supply Clerks, was
incorrect.
In arriving at this decision, the Administrator compared the
job
description for the Installation Technician, Technician I, with the
job description for the Supply Clerk. A comparison of the position
descriptions (PDs) for Installation Technician (IT) and Supply
Clerk
(SC) reveals that there is little in common between the two jobs.
The
IT position requires one year of directly related electronic
experience and an ability to read electronic schematics and
installation drawings. These qualifications are not required by
the
SC. The job functions are unrelated, with the IT assisting senior
[5]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN4/ In its Reply to the Administrator's Statement, BDM presents
numerous documents concerning the history of prior contracts and
investigations, going back to 1980, as justification for its
practice and position. Most of these documents were not part of
the record before the Administrator when the final ruling on
conformance of the IT classification was made and, therefore,
cannot be relied upon in my decision. See note 2, supra at 2.
BDM's references to previous regulations and investigations are not
relevant to the Administrator's interpretation of present
regulations and consequently should not have affected the
Administrator's decision even if BDM had made these points to the
Administrator. [5]
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[6] technicians in the installation and removal of electronic
equipment on
military vehicles while the SC assists in inventory control, item
accounting and shipping and receiving functions. According to the
PDs, the IT is an assistant to the senior electronics technician
whereas the SC "acts as a shipping and receiving clerk." Id. Upon
review of the record, I concur with the Administrator that the work
performed by Installation Technicians is within the scope of the
currently listed Technician I, which is the least skilled and
experienced position in this classification.
I also consider significant the fact that when the Army
submitted
its notice of Intention to Make a Service Contract and Response to
Notice (SF-98) to the Wage and Hour Division on March 14, 1985, the
notice listed the classes of service employees to be employed on
the
Contract and contained the wage rate that would be paid if service
employees were employed directly by the federal government. Two
Installation Technician positions were listed with a federal
equivalency rate of $8.62 which was identical to the rate for
Technician "C", the least skilled technician classification. Id.,
R-1. Thus, the Army would have paid the Technician "C" and
Installation Technician identical rates if it hired them directly,
supporting the conclusion that there is a closer relationship
between
the IT and Technician I classifications than between the IT and
Supply
Clerk classifications. [6]
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Having found that the correct rate for Installation Technician is
$8.96 per hour plus fringe benefits rather than the Supply Clerk
rate
of $6.27 plus fringe benefits which BDM has been paying, I turn to
the
question of when the $8.96 rate should become effective. BDM
argues
that the Administrator is estopped from retroactive application in
this case to the commencement date of the contract because BDM has
been conforming the Installation Technician classification to that
of
Supply Clerk since 1980 under the predecessor contract and that "at
all times BDM has followed regulatory conformance requirements by
timely sending its conformance actions to the contracting officer."
Petition for Review of Final Decision, p.2.
If BDM believes that the Army has not complied with its
contractual obligations to BDM, that is a matter between BDM and
the
Army. It is not, however, a reason for BDM to avoid its
obligations
to employees imposed by the SCA nor is it a reason to estop the
Department of Labor from carrying out its obligations under the
law.
The primary concern in this case is to see that the remedial
purpose
of the SCA, as stated in Section 4(b) of the Act, is carried out,
i.e., to protect prevailing labor standards. The employees who
have
been performing the required functions at skill levels commensurate
with the Technician I classification are entitled to the protection
of
the Act and must be compensated at the appropriate prevailing rate
for
all hours worked in that classification. The regulations are
explicit
in this respect:
(v) The wage rate and fringe benefits finally
determinated pursuant to paragraphs (b)(2)(i) and
(ii) of this section shall be paid to all
employees performing in the classification from
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the first day on which contract work is performed
by them in the classification. Failure to pay
such unlisted employees the compensation agreed
upon by the interested parties and/or finally
determined by the Wage and Hour Division
retroactive to the date such class of employees
commenced contract work shall be a violation of
the Act and this contract.
(vi) Upon discovery of failure to comply with
paragraphs (b)(2)(i) and Hour Division shall make
a final determination of conformed classification,
wage rate and/or fringe benefits which shall be
retroactive to the date such class of employees
commenced contract work. (emphasis added).
29 C.F.R. 4.6(2)(v) and (vi).
Accordingly, the Administrator's denial of BDM's request for
conformance IS AFFIRMED and all Installation Technicians shall be
paid
the same wage rates as Technician, Class I, retroactive to the
commencement of the disputed work under contract No. DABT 62-85-C-
1226.
SO ORDERED.
[Dennis E. Whitfield]
Deputy Secretary of Labor
Washington, D. C. [8]
