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<![CDATA[
CCASE:
BROCK CONSTRUCTION
DDATE:
19710430
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[1] UNITED STATES OF AMERICA
UNITED STATES DEPARTMENT OF LABOR
WAGE APPEALS BOARD
In the Matter of
WAGE APPEALS BOARD
The Appeal of Brock Brothers
Construction Company for review of Case No. 70-03
Wage Determination AG-308 applicable
to a contract for the construction DATED: April 30, 1971
of water facilities and appurtenances
on Department of Housing and Urban
Development Project No. WS-DY-1
(WS-3-18-0001), Danville, Kentucky
Brock Brothers Construction Company,
PETITIONER
John W. Morgan, Esquire, Lexington,
Kentucky, for Brock Brothers
Construction Company, Petitioner
Mr. George E. Rivers for the Solicitor,
U.S. Department of Labor
Record Reviewed by Full Board:
Oscar S. Smith, Chairman,
Wage Appeals Board; Stuart Rothman
and Clarence D. Barker, Members.
DECISION AND ORDER
This matter was considered on written presentations, oral
argument having been declined by the Petitioner.
On September 1, 1966, the Department of Labor, at the request
of the Department of Housing and Urban Development, under a water
and sewer grant program subject to the labor standards requirements
of the Davis-Bacon Act, [1]
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[2] issued Wage Decision No. AG-308. The project for which this wage
decision was issued was described as the construction of water facilities
to include expansion of the existing treatment plant; construction of
additional mains, three elevated storage tanks, and other appurtenances;
for the City of Danville, Kentucky.
The contract for the work in question was awarded on December
21, 1966, by the City of Danville, with a cost of approximately
$1,435,000.00. The successful bidder was the Brock Brothers
Construction Company, the Petitioner in this case. The record
confirms that the conformed, signed copy of the construction
contract between the City of Danville and the Petitioner contains
a full copy of Wage Decision AG-308, predetermined for this
project. The record further confirms that Wage Decision AG-308, as
predetermined and as incorporated into the contract, contained two
rates for laborers (the classification here in issue), namely,
$2.95 per hour for "construction laborers", under the "Building
Construction" schedule; and $3.13 per hour for "Laborer", under the
"Heavy and Highway Construction" schedule.
The project was completed on September 18, 1968. However, the
City of Danville, which administered the contract, ascertained
before closing out the contract, that the contractor had paid less
than the predetermined contract rates for laborers. In fact, the
contractor admittedly paid $2.40 per hour to "skilled laborers",
and $1.95 per hour to "unskilled laborers", both of which
classifications and corresponding wage rates were not in the wage
decision issued for the job and included in the contract therefor.
Consequently, the City of Danville, relying on the wage
determination contained in the contract and on the contract labor
standards enforcement requirements, withheld funds otherwise due
Petitioner, to provide [2]
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[3] for restitution for the laborers found to have been misclassified
and underpaid.
By letter dated April 16, 1970, the Department of Housing and
Urban Development forwarded to the Department of Labor an appeal by
the subject contractor that the $2.40 and $1.95 per hour rates it
paid for laborers be recognized as the applicable rates, and that
the contract be amended to add "skilled" and "unskilled" laborers
rates of $2.40 and $1.95 to Wage Decision No. AG-308 as contained
in the contract specifications.
In his response of June 25, 1970, the Associate Administrator,
Division of Wage Determinations, Wage and Labor Standards
Administration, Office of the Assistant Secretary, U.S. Department
of Labor, advised the Assistant to the Secretary for Labor
Relations, Department of Housing and Urban Development, that the
predetermined contract rates of $2.95 (for building construction),
and $3.13 (for heavy and highway construction), were so
predetermined baaed on the Department's evidence of record as to
the rates prevailing for such work in the Danville area at the time
(1966) when Wage Decision AG-308 was issued for the Danville job
here in question. Moreover, until receipt of the April 16, 1970
appeal (after contract completion), no protest had been received by
the Department regarding the correctness of these predetermined
rates as prevailing for the type of work in question in the
Danville area.
The Associate Administrator in his June 25, 1970 letter
advised that he was unable to grant the contractor the relief
requested. First, no sufficient evidence had been submitted to
establish that the schedules of wage classifications and rates
issued for the project and included in the contract terms were not
those prevailing in the area for the types of work covered [3]
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[4] by the contract. Secondly, it was pointed out that, once the
contract was awarded, substantial changes as requested by the
contractor, would be illegal under applicable law, Department
Regulations, and under the published opinions of the Comptroller
General of the United States on the subject of modifying contract
provisions after award.
On September 29, 1970, Petitioner filed an appeal from the
above decision with the Wage Appeals Board, received by the Board
on October 5, 1970, more than four years after the wage decision in
question was issued, and more than two years after the contract was
completed. In its Petition, the Brock Brothers Construction
Company contended that Wage Decision No. AG-308 should have
included laborers classifications and rates under a separate "Water
and Sewer" schedule, and that such rates should have been
substantially less than the laborers rates specified in Wage
Decision AG-308 and included in the construction contract. In
support of its contention, the Petitioner cited wage decisions
which had been issued for Harlan, Marion, Floyd, Mercer, Bell,
Perry, and Whitley Counties, some of which counties are far removed
from the Danville area. In this connection it is also noted that
Danville is in Boyle County and that none of the wage decisions
cited pertained to Boyle County.
As further evidence in support of its contention that lower
rates for "common" and "skilled" laborers under a "Water and Sewer"
schedule should have been included in the wage decision and in the
contract, Petitioner submitted nine form-type statements from
contractors stating that they had performed work similar to the
Danville job in the State of Kentucky (locations not specified),
and that it was their experience "that the wage scale for both
common and skilled labor for heavy and highway work and water [4]
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[5] and sewer work were always classified differently, and the
water and sewer labor was always considerAbly less than the heavy
and highway labor."
In its written submission, Petitioner states:
The question involved in this case in our opinion would
never have arisen but for the untimely death of G.
Reynolds Watkins in an airplane crash. Mr. Watkins, who
was the engineer in charge of the job for HUD had agreed
with Mr. Brock that the plans and specifications prepared
for the job had erroneously left out the pay rates for
skilled and unskilled labor on water and sewer
improvements (see petitioner's Exhibit B, Contract
Documents, page 2). Under the classification of
Laborers, the basic hourly rate was left blank. During
negotiations, the Department imposed the hourly rates for
laborers and skilled laborers listed under the Heavy and
Highway classification. This resulted in the ridiculous
situation that Common Laborers were to be paid Three and
13/100 ($3.13) Dollars an hour since the Heavy and
Highway rate was imposed, and only two ($2.00) Dollars an
hour was paid for truck drivers in that this hourly rate
was not left out and was categorized under the rate for
construction of water facilities.
The Solicitor of Labor, in a Statement dated November 25,
1970, supported the June 25, 1970 position of the Associate
Administrator as follows: Granted that the Department has and
still does recognize lower rates for sewer and water construction
where such rates have been found to be prevailing, the Petitioner
has presented nothing which would indicate that the rates
predetermined and made a part of the contract specifications for
this project were not the rates prevailing for this type of work in
the Danville area. Further, even assuming arguendo that the rates
predetermined were incorrect, there is no relief which can be
afforded the contractor after the contract has been awarded and the
work completed. Finally, the Solicitor concluded that the appeal
was not timely pursued and recommended that the Petition be
dismissed. [5]
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[6] The Solicitor further states in his written submission:
The contractor asserts that in past years lower wage
rates for such sewer and water construction have been
found prevailing in the area and in support of his
position submitted with his petition copies of decisions
issued by the Department for this type of work. However,
a review of those determinations indicates that they were
issued for projects in other counties and not for Boyle
County. /FN1/ It is true that this Department has and
still does recognize lower rates for this type
construction where wage payment evidence shows that it is
the prevailing practice. There is no evidence of this
practice in Boyle County. The contention that the wage
determination contained no schedule for sewer and water
construction is a matter which it would appear should
have been raised prior to the award of the contract and
a review requested at that time. In the Petition counsel
states that the laborer's rate was left blank with the
result that the heavy and highway laborer rates were
required to be paid. However, an examination of wage
determination AG-308 included in the contract
specifications indicates that the laborers rates
applicable to building construction were listed on page
3 and those for heavy and highway construction on page
5. /FN2/ There was no intention to include special sewer
and water rates since there was no evidence available to
this Department that such special rates were prevailing
for the type work proposed under the subject contract in
Boyle County.
The Petitioner identified its Petition as an appeal of Wage
Decision AG-308 issued September 1, 1966. More particularly, it is
an appeal from a decision of the Department of Labor made June 25,
1970, denying Petitioner's request made in April, 1970 for a
modification of Wage Decision AG-308. But by April, 1970, the
matter was already being processed as an enforcement case for
misclassification and underpayments charged to have occurred on a
project completed a year and one-half earlier.
The Board notes that Wage Decision AG-308 as issued and as
included in the contract documents did in fact contain the
classifications of [6]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ See the pertinent provisions of the statute and 29 CFR 1.2
quoted on page 3.
/FN2/ As verified by HUD. [6]
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[7] construction laborers and, under a separate "Heavy and Highway
Construction" schedule, "Laborer", at $2.95 and $3.13 per hour,
respectively. The laborers on this job were entitled to receive
not less than those $2.95 and $3.13 per hour rates predetermined
and provided for contractually in the absence of objections made to
the Department of Labor in accordance with the provisions of
Regulations, Part 5 (29 CFR, Subtitle A), pertaining to the
modification of wage decisions prior to contract award. The
Petitioner failed to object at any timely time and disregarded the
contract rates of $2.95 and $3.13 per hour for laborers. No
satisfactory explanation for not straightening out any reservAtions
it may have had before or when the lower rates were being paid has
been presented. Also, neither the Department of Housing and Urban
Development nor the City of Danville has suggested the existence of
any extenuating circumstances. On the basis of the written
submissions, the Board in this case accepts the explanation of the
Solicitor of Labor as quoted above, and concludes that enforcement
action was proper]y taken to reimburse the laborers found to have
been underpaid.
This appeal is dismissed and the Solicitor's Office is
directed to process the enforcement aspects of this case to an
appropriate conclusion under existing Departmental Regulations and
in cooperation with the Department of Housing and Urban
Development.
SO ORDERED
Oscar S. Smith, Chairman
Stuart Rothman, Member
Clarence D. Barker, Member
WAGE APPEALS BOARD [7]
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