The International Union of Operating Engineers, WAB Nos. 73-04 and 73-05 (WAB May 16, 1973)
CCASE:
MOUNTAIN PARK DAM
DDATE:
19730516
TTEXT:
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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 Prevailing Wage Rates Applicable Cases Nos. WAB 73-04
to the Construction of Bureau of and 73-05
Reclamation, Department of Interior
Mountain Park Dam, Kiowa County, Dated: May 16, 1973
Oklahoma
The Bureau of Reclamation,
Department of the Interior,
Case No. WAB 73-04
and
The International Union of
Operating Engineers,
Case No. WAB 73-05,
PETITIONERS
APPEARANCES:
Moody R. Tidwell, Esquire, for the
U.S. Department of the Interior,
Washington, D.C.;
John R. Little, Jr., Esquire, for the
U.S. Department of the Interior,
Denver, Colorado [1];
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[2]Gerard F. Treanor, Esquire, and Frank Hanley for the
International Union of Operating Engineers,
Washington, D.C.;
George E. Rivers, Esquire,
Counsel for Construction Wage Standards,
U.S. Department of Labor;
Thomas X. Dunn, Esquire, for the
Building and Construction Trades
Department, AFL-CIO,
Washington, D.C.
BEFORE: Oscar S. Smith, Chairman,
Stuart Rothman
[and] Clarence D. Barker, Members,
Wage Appeals Board
The Petitioner in Case No. WAB 73-04 is the Department of the
Interior, Bureau of Reclamation. The Petitioner in Case No. WAB
73-05 is the International Union of Operating Engineers. The two
Petitions relate to the same project and arise out of the same wage
determinations made by the Department of Labor, Employment
Standards Administration (ESA). The two cases have been
consolidated for all purposes. /FN1/
The project is a $2,800,000 thin arch concrete dam in Kiowa
County, [Okla.] to be undertaken by the Department of Interior,
Bureau of Reclamation. The bid invitations issued in September,
1972 contained Davis-Bacon Wage Decision No. AM-3606 dated August
25, [2]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ This case may be cited as Mountain Park Dam, Kiowa County,
Oklahoma, WAB 73-04 & -05. [2]
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[3] 1971, for highway construction. This ESA wage decision was
obtained from the Federal Register.
As a result of protests by the International Union of
Operating Engineers that AM-3606, a highway construction schedule,
was inapplicable, the Bureau of Reclamation requested ESA to issue
a project wage determination for "heavy construction" for Mountain
Park Dam. Reclamation received a new Wage Decision No. 72-OK-569,
on or about November 30, 1972 which was substituted for AM-3606 in
the bid invitation which had been postponed.
ESA then issued Modification No. 1 to Wage Determination No.
72-OK-569 on November 30, 1972 on the basis of a submission by the
International Union of Operating Engineers of wage rates being paid
on Hugo Dam, a Reclamation project some 225 miles from Mountain
Park Dam. ESA revised upward the rates for power equipment
operators on the basis of the latest rates paid on Hugo Dam.
Because Modification No. 1 was received less than 10 days before
December 12, 1972, the bid opening date, the Contracting Officer
found that there was not a reasonable time within which to notify
bidders of the modification and concluded that the change was not
effective pursuant to 29 CFR 1.7(b)(1). /FN2/ ESA notes that
Reclamation was advised by telephone [3]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN2/ Department of Labor Regulations, Part 1, Sec. 1.7(b)(1)
provides that all actions modifying an original project wage
determination prior to the award of the contract or contracts for
which the determination was sought shall be applicable thereto, but
modifications received by the Federal agency . . . later than 10
days before the opening of bids shall not be effective except when
the Federal agency . . . finds that there is a reasonable time in
which to notify bidders of the modification . . . . [3]
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[4] before the 10-day period that a modification of 72-OK-569 was
being issued. However, Modification No. 1 to 72-OK-569 was not
issued until November 30 and not received until December 4, 1972,
8-days before bid opening. On December 11, 1972, one day before
bid opening, Local Union 627 of the International Union of
Operating Engineers (IUOE) filed a suit in the U.S. District Court
for the Western District of Oklahoma for a restraining order
enjoining the opening of bids. On December 12, 1972 the
bid-opening day, a hearing was held on the IUOE application for a
restraining order. There was an entry of an order temporarily
restraining opening of bids or awarding of a contract by reason of
the failure of the Bureau of Reclamation to include Modification
No. 1 in the invitation. But by the time the bid-opening officer
received word of the Court's order, four bids had already been
opened. To preclude prejudicing the four contractors, the
officer opened the remaining seven bids.
On December 19, 1972, after a further hearing, the District
Court declared the bids opened on December 12, 1972 to be void,
permanently enjoined award of a contract on the basis of such bids,
and ordered the agency to include in the specifications for the
Mountain Park Dam project the wage determination "with all
modifications thereto, as properly determined pursuant to the
Davis-Bacon Act." On or about February 1, 1973, the United States
Attorney on behalf of Reclamation appealed from the District Court
order to the United States Court of Appeals for the Tenth Circuit
and requested [4]
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[5] a stay pending appeal. On February 21, 1973 the Department of
Justice argued the case before the Tenth Circuit Court of Appeals.
The Court has not yet issued its decision.
Because of the foregoing events, RecLamation determined to
proceed against Modification No. 1 on the substantive issue
whether, under the regulations and procedures for ascertaining
prevailing wage rates, Modification No. 1 correctly reflected the
wages prevailing in the area of the Mountain Park Dam project. In
response to Reclamation's January 9, 1973 request for review and
cancellation of Modification No. 1, ESA advised that, as soon as
the IUOE was notified, an expeditious and thorough review of the
wage rates for Mountain Park Dam would be made. ESA through its
Dallas Regional Office then conducted a statewide survey including
Hugo Dam (225 Miles from Mountain Park Dam); Kaw Dam (200 miles
away); Optima Dam (spanning Texas and Oklahoma, 200 miles away);
and Waurika Dam (one county removed from Kiowa County and 75 miles
away). ESA subsequently issued supersedeas Wage Decision No.
73-OK-79, dated February 2, 1973 based on that survey superseding
Decision No. 72-OK-569 as modified by Modification No. 1.
Petitioner Reclamation, denied reconsideration of 73-OK-79 by
ESA, seeks WAB review of ESA's final decision to issue 72-OK-79.
Petitioner (IUOE) seek WAB review because 73-OK-79 fails to include [5]
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[6] a 25 cents per hour Health and Welfare fringe benefit and
also failed to use both the peak period of employment on Hugo Dam
to determine the true number of employees in the survey as well as
the highest rates paid at the end of the job when only a relatively
few employees received the high rates.
The basic issue in this case is whether Wage Determination No.
73-OK-79 reflects the wage rates prevailing in the area of Kiowa
County, Oklahoma for construction of a character similar to the
proposed Mountain Park Dam pursuant to the provisions of the Davis-
Bacon Act, the applicable regulations of the Department of Labor,
and the recognized procedures of the Department. /FN3/ [6]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN3/ The subject wage determination was issued pursuant to the
Davis-Bacon Act, the wage determination provisions of which provide
for[:]
. . . minimum wages to be paid various classes of
laborers and mechanics which shall be based upon the
wages that will be determined by the Secretary of Labor
to be prevailing for the corresponding classes of
laborers and mechanics employed on [*] projects of
a character similar to the contract work [*] in the city,
town, village or other civil subdivision of the State in
which the work is to be performed. . . [*](Emphasis
added.)[*]
The pertinent provisions of the Department's Regulations as they
relate to this matter read as follows:
Sec. 1.2 Definitions.
(b) The term "area" in determining wage rates under the Davis-
Bacon Act and the prevailing wage provisions of the other
statutes listed in Appendix A shall mean the city, town,
village, or other civil subdivision of the State in which the
work is to be performed. . .
***
[FN3 CONTINUED ON PAGE 7]
Sec. 1.7 Use and effectiveness of wage determinations.
(a)(1) Project wage determinations initially issued
shall be effective for 120 calendar days from the date
of such determinations. If such a wage determination
is not used in the period of its effectiveness it is
void. If it appears that a wage determination may
expire between bid opening and award, the agency
should request a new wage determination sufficiently
in advance of the bid opening to assure receipt prior
thereto. However, when due to unavoidable
circumstances a determination expires before award and
after bid opening, the Administrator upon a written
finding to that effect by the head of the Federal
agency in individual cases may extend the expiration
date of a determination whenever he finds it necessary
and proper in the public interest to prevent injustice
or undue hardship or to avoid serious impairment in
the conduct of Government business.
* * *
(b)(1) All actions modifying an original project wage
determination prior to the award of the contract or
contracts for which the determination was sought shall
be applicable thereto, but modifications received by
the Federal agency . . . later than 10 days before the
opening of bids shall not be effective except when the
Federal agency . . . finds that there is a reasonable
time in which to notify bidders of the modification...
Sec. 1.8 Scope Or consideration.
* * *
(b) If there has been no similar construction within
the area in the past year, wage rates paid on the
nearest similar construction may be considered.
* * *
[FN3 CONTINUED ON PAGE 8]
Sec. 1.16 Review by Wage Appeals Board.
Any interested person may appeal to the Wage Appeals Board
for a review of a determination of wage rates made under this
part, or any findings and conclusions made on the record of
any hearings held under [sec] 1.3(c). Any such appeal may,
in the discretion of the Wage Appeals Board, be received,
accepted, and decided in accordance with the provisions of 29
CFR Part 7 and such other procedures as the Board may
establish. [END FN3]
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[7] The District Court stated:
. . . Defendants [Petitioner (Interior)] are
compelled to hereafter include in the Specifications
DC-6980 to bidders on the Mountain Park Dam proJect,
the wage determination [*] with all modifications
thereto, as properly determined pursuant to the
Davis-Bacon Act [*] . . . [*](Emphasis added.)[*][7]
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[8] A review of the District Court's ruling with regard to the
propriety of opening of bids by Reclamation pending in the
Court of Appeals for the Tenth Circuit makes clear that the
Wage Appeal Board in disposing of these petitions is acting
within the District Court's order since the responsibility to
determine the appropriateness of a particular wage rate in a
wage rate schedule rests here and not in a court. It is up to
this Board to determine whether Modification No. 1 or any other
part of the applicable wage schedule is right or wrong.
Counsel for Reclamation in conjunction with the Department of
Justice has reviewed the permanent injunction and have jointly
concluded that it is not a bar to an administrative review of
the rates in Wage Decision No. 72-OK-569 and the other Wage
Decision schedules involved in this case.
Did the wage rates in ESA Wage Decision No. 73-OK-79
properly reflect the rates actually prevailing in the Kiowa
County area for projects of a character similar to Mountain
Park Dam? The first wage schedule issued for Mountain Park Dam
by ESA as "heavy construction" [8]
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[9] (72-OK-569) was the same schedule predetermined and in use for nearby
Waurika Dam (some 75 miles away in once-removed Jefferson County).
Waurika Dam is a Corps of Engineers Job, running $14,500,000, involving
substantial rock excavation, and 13,000 cubic yards of concrete
work. Mountain Park Dam has 35,000 cubic yards of concrete
work. The grouting is similar on both jobs. The Davis-Bacon
wage determination schedules for both jobs are described as
"heavy".
The Waurika Dam project is a "project of a character
similar" to the Mountain Park Dam for wage determination
purposes. All parties are in agreement that Waurika Dam is one
of the appropriate projects that should be used in any survey.
Reclamation says there are other projects that could be used in
the locality if a survey beyond Waurika Dam was needed.
Petitioner IUOE say a survey should include all dams anywhere
in the State and at the peak pay periods at Hugo Dam.
Thus, Petitioner Reclamation questions the failure of ESA
to include within the predetermination survey if a survey had
to be made, certain local mining operations, highway and
railway construction related to Mountain Park Dam and the
nearby Deep Red Run Dam, a Soil Conservation Project.
Industrial mining operations are not projects of a character
similar for wage predetermination purposes. ESA stated that it
has followed a consistent practice of not treating [9]
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[10] Soil Conservation Projects as of a character similar to dams
such as Mountain Park Dam. The Board does not have to review or
decide in this case whether in the case in which there is no pattern
or practice in the locality or other appropriate history
germane to the construction industry a project with the
physical characteristics of Deep Red Run Dam may be equated
with a project like Waurika in a particular or special case.
All parties are in agreement that Waurika Dam was an
appropriate project for ESA to go to for Davis-Bacon wage
predetermination purposes. Under the special circumstances of
this case, the Board is in agreement with Reclamation that ESA
had no need to exten[d] its circle of search beyond the 75
miles distance to Waurika. /FN4/ Waurika has a set of rates
that are being paid and the Board sees no need here to move the
inquiry a step further back to determine the justification for
the rates at Waurika Dam. Such an inquiry could raise
questions of ESA's justification of going too far outside the
particular "locality" to ascertain appropriate rates for
projects of a character similar to the contract work in the
locality.
Modification No. 1 to 72-OK-569 reflected negotiated wage
rate increases for power equipment classifications on Hugo Dam,
225 miles [10]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN4/ When ESA surveyed the Waurika job, payrolls for the
period December 24-30, 1972 showed 2 mechanics, 3 oilers, 18
laborers, 1 tractor operator, 2 roller operators, 5 bulldozer
operators, 4 scraper operators, 2 motor patrol operators and 1
semi-trailer operator. But these rates had been obtained from
an earlier determination made for the Hugo Dam project 150
miles away. [10]
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[11] southeast of Mountain Park Dam. /FN5/ Until the closeout
phase of the Hugo job on or about November 9, 1972 when the
higher rates became effective, the wage schedules for Hugo,
Waurika, and the original ESA predetermination for Mountain
Park Dam (72-OK-569) were the same. It appears that these
higher rates were terminal rates paid only for the closing days
of the project pursuant to an arrangement to increase the rates
at the end of that job. For this reason ESA had no knowledge
of their existence until it was advised by IUOE and then
included them in Modification No. 1. The ESA survey made in
late December and early January showed that these higher rates
were not picked up by the Waurika Dam contractor and are not
paid or prevailing there. For wage predetermination purposes,
the current project at Waurika cannot be leapfrogged and
disregarded for terminal rates on a nearly completed project
some 225 miles away.
The Davis-Bacon wage predetermination standards are by
statute oriented to geographic localities. No contention is
made that the four dams of the survey are in the same labor
market area or that recruitment of workers for Mountain Park
Dam will be required from geographic areas that are more than
200 miles away and even in another State. In this case, the
Board confirms the propriety of the [11]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN5/ Hugo Dam, a Corps of Engineers project estimated at
$8,500,000 was 98% complete. At the time of ESA's survey, only
6 mechanics and 6 bulldozer operators were shown on the
payrolls. [11]
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[12] use of Waurika as the source for prevailing rates and
agrees with Petitioner Reclamation that it is not appropriate
to include the three remote dams, Kaw, Optima and Hugo within
the wage orbit used for predetermination of rates for Mountain
Park Dam. It is unnecessary to consider or rule on other
objections by Reclamation to the inclusion of these three
remote dams.
ORDER
Wage Determination No. 72-OK-569 of November 27, 1972 is
hereby reinstated for application to the Mountain Park Dam
project of the Bureau of Reclamation. The Petition of
Reclamation is granted and the Petition of IUOE is denied.
SO ORDERED
Oscar S. Smith, Chairman
Stuart Rothman, Member
Clarence D. Barker, Member [12]
