CCASE:
BROWN'S MILL ROAD BUS
DDATE:
19760419
TTEXT:
~1
[1] UNITED STATES OF AMERICA
DEPARTMENT OF LABOR
DECISIONS AND ORDERS OF THE WAGE APPEALS BOARD
IN THE MATTER OF
The Prevailing Wage Rates WAB
Applicable to the Metropolitan CASE NO. 75-11
Atlanta Rapid Transit Authority's
Contract GN-01, Site Clearance, Dated: April 19, 1976
Grading, Paving and Related Work
for the Brown's Mill Road Bus
Facilities, Atlanta, Georgia
DECISION AND ORDER
APPEARANCES: Ronald S. Cooper, Esq., Steptoe & Johnson for
Petitioners
George E. Rivers, Esq., Counsel for Construction
Wage Standards, for U.S. Department of Labor
Joseph Jacobs, Esq., Jacobs, Jacobs and Davis for
North Georgia Building and Construction Trades
Council
BEFORE: Oscar S. Smith, Chairman, and Clarence D. Barker,
Member and Stuart Rothman, Member. [1]
~2
[2] THE PETITION
This matter is before the Board on a petition of the
Metropolitan Atlanta Rapid Transit Authority (herein MARTA) dated
September 3, 1975, seeking reversal of a decision made by the
Assistant Administrator, Wage and Hour Division, United States
Department of Labor (herein ESA) pursuant to section 13 of the
Urban Mass Transportation Act of 1964, as amended, 49 U.S.C. [sec]
1609. On May 15, 1975, ESA advised the Regional Engineer of the
Urban Mass Transportation Administration, Department of
Transportation (herein UMTA) that the inclusion of the "highway"
wage rate schedule in the advertised specifications for Contract
GN-01 on the Brown's Mill Road Bus Facilities (herein "the project"
or "Brown's Mill project" was incorrect. UMTA was advised that the
building wage rate schedule published in the Federal Register /FN1/
should be included in the invitations for bid. On July 18, 1975,
MARTA requested reconsideration of ESA's determination. ESA
affirmed its decision on August 4, 1975.
Following numerous postponements prompted in part by priority
interests of the parties on other MARTA matters before the Board
/FN2/ and concurrent litigation instituted [2]
??????????????????????????????
/FN1/ 40 FR 6020, February 7, 1975, modified by 40 FR 16478, April
11, 1975.
/FN2/ WAB Decision No. 75-05, August 25, 1975, supplemented on
October 15 and 30, 1975.
~3
[3] by the North Georgia Building and Construction Trades Council
(herein North Georgia) to enjoin MARTA from awarding a contract
which included the highway wage rate schedule, a hearing was held
before the Board on December 16, 1975. Sometime prior to the
hearing, MARTA awarded Contract GN-01 to Blount Construction
Company (herein Blount) incorporating the highway wage rate
schedule.
THE BROWN'S MILL ROAD BUS FACILITIES
PROJECT OF WHICH CONTRACT GN-01 IS A
PART
The project is a facility utilizing approximately seventeen
acres in southeast Atlanta and includes (1) off-schedule parking
spaces for 227 buses, (2) an operating garage (34,359 square feet)
for minor repairs and routine service and maintenance such as
lubrication and oil changes, (3) between 175 to 200 parking spaces
for private cars of bus drivers and employees of the operating
garage, (4) a "heavy maintenance" garage (113,380 square feet) for
major repairs and maintenance of the MARTA fleet and (5) an
additional 250 to 300 parking spaces for employees, vendors and
others with business associated with the heavy maintenance garage
including spaces for use in scheduling business in and out of the
garage.
For the Brown's Mill Project, MARTA served as its own general
contractor using a "contract administrator," J. A. Jones
Construction Company, to coordinate the work of the separately
awarded contract "packages of work [,]" [3]
~4
[4] sub-items "Description and Scope of the Work," "Work by Others,"
"Time of Completion," "Coordination with other Contractors," and "Delays
Caused by Other Contracts," as follows:
Description and Scope of Work: Perform all Site Work
shown on the-drawings and/or described in the
specifications. For the convenience of the Contractor,
such work includes, but is not limited to, the following:
A. In Phase I of the site work, complete the following
items of work.
1. Extend and hook-up temporary utilities to
Construction Manager's trailers, including water, sewer,
and power.
2. Furnish access and parking area for Construction
Manager's trailers. Provide the storage areas, as
designated on the drawings, graded and with stone base
and binder course in place for use of other contractor's
trailers, and material storage.
3. Furnish and install temporary fencing and gates.
4. Complete all clearing, grubbing and removal of debris.
5. Complete all site excavation, fill, rough grading
work, and compaction, including the building areas to
floor slab subgrade (+0.10 feet).
6. Complete the storm water retention structure
including compact fill, concrete spillways, associated
piping, and permanent fencing.
7. Complete all storm drainage, beginning 5 feet outside
the buildings, including catchbasins, manholes,
headwalls, ditchpaving, etc. Adjust tops of existing
manholes and catchbasins to final grade.
8. Excavate, construct and backfill all site retaining
walls except the East wall of the Heavy Maintenance
Building and its extensions North and South of the
Building. The excavation [4]
~5
[5] for the retaining wall at the East side of the Heavy Maintenance
Building shall be performed in this contract under Phase I. The
machine backfill to the subgrade of the Parking lot on the East
side of the retaining wall will be done in this contract.
The actual construction of this wall will be done by
others.
9. Excavate, furnish, install, test and backfill water
lines and fire lines from the meter or property line to
within 5 feet of the buildings at locations as shown on
the drawings. Furnish and install concrete encased ducts
for electrical primary power feeds and phone lines from
the property line to within 5 feet of the building at
locations shown on the drawings.
10. Furnish and install temporary power located as shown
on the drawings and specified in S.C. 1.14.
11. Extend the sanitary sewer lines from 5 feet of the
building to tie into the existing sanitary sewers as
shown on the drawings, including manholes and drop
manholes as shown.
12. The gas lines will be run to the buildings by the
utility companies before the paving base course is
started.
13. Install, cap and test water lines from 5 feet of the
building for the future bus wash area and lawn
sprinklering systems as shown on the drawings.
14. Install temporary drain lines so that the building
site area will be able to be drained of water during
construction.
15. Furnish and install site lighting, including
foundations, poles, lights, underground conduits from 5
feet of building (capped at this point). Wiring between
poles and poles themselves shall be under this contract.
Wiring of home runs shall be done by others.
16. On the bank slopes indicated on the drawings, plant
ground cover LO control the erosion of the slopes. This
should be done as soon after the bank slopes are
completed as possible. [5]
~6
[6] 17. Provide curb and gutter work as shown on the
drawings.
18. Provide base course for concrete and asphaltic
paving. Hold the base back from the buildings and
underground tanks twenty (20) feet during Phase I.
19. Provide the binder course for the asphaltic concrete
paving.
20. Provide all engineering layout work as required to
complete your work.
21. Safety barricades, trench bracing, warning lights,
etc.
B. In Phase II of the site work, complete the following
items of work:
1. Complete base course work around buildings and over
the underground tanks. Dress up the remainder base
course as required.
2. Provide the wearing course on the asphaltic concrete,
as indicated in the drawings.
3. Provide the concrete paving as shown on the drawings.
4. Provide painting, striping and marking of parking
areas, drives, ramps, etc., as shown on the drawings.
5. Provide precast concrete bumpers as shown for the
parking areas.
6. Excavate, form, pour, finish, and backfill exterior
steps and sidewalks; furnish and install rails for the
steps, as shown on the drawings.
7. Remove temporary fencing and gates. Provide the
permanent security fencing gates, and guard rails as
shown on the drawings.
8. Furnish and install the flag pole(s) as shown on the
drawings.
9. Complete the corrective work as listed on the
Punch-List.
10. Furnish As-Built Drawings as follows: [6]
~7
[7] Underground Power Distribution -
Electrical
* Water
* Storm & Sanitary Sewer System
* Fire Lines
* Gas
* Telephone
1.02 Work by Others: The work described below, which precedes,
relates to or follows the work in Article 1.01 above, will be
accomplished by others:
Concrete work inside the building lines, footing excavations
for building footings, pits, etc. The retaining walls at the East
side of the Heavy Maintenance Building. Water, sewer, storm
drainage, underground piping, and conduits all within the foot
print of the buildings and 5 feet outside the building lines.
Underground tanks, their excavation, installation and backfill.
Masonry work in the buildings, roofing, doors, windows, partitions,
painting, fixed equipment, tools, and furnishings. The application
fees and monthly charges for temporary utilities for the
Construction Manager's trailer and building sites. Gas piping on
site, primary electrical feeds on site, and telephone cables.
Preparation of approved re-inforcing steel shop drawings and
bar list for retaining walls.
1.03 Time of Completion: The work as described in Article 1.01
above shall be completed within three hundred seventy eight (378)
days after the effective date of the Notice to Proceed. In
addition to meeting the final completion date, portions of the work
which affect the work of other contractors shall be completed as
follows (coordination dates):
Portion of the Work [:] Within Number of Days
From NTP [:]
Temporary Fence and Gates 20
Building Areas Grading Complete 75
Storage Areas Ready for Use 82
Temporary Power and Water at Buildings 82
Start Backfill behind Heavy Maintenance
Retaining Wall 146
Complete Base Course and Binder Course
and Phase I Operations 174
Begin Final Operations, Phase II 319
Complete Contract 378 [7]
~8
[8] 1.04 Coordination with other Contractors. This project will
be constructed using phased construction involving approximately 10
packages of work, each awarded to the low, responsible bidder. The
work will be scheduled and coordinated by MARTA's Construction
Manager, J. A. Jones Construction Company. Cooperation and
coordination with other contractors will be required.
1.05 Delays Caused by Other Contractors: The completion of
certain work-described in Article 1.02 above may in some cases
determine the date upon which a portion of your work can commence.
While every effort will be made to stay on or ahead of schedule, it
is possible that some such work will, under extenuating
circumstances, be delayed. Therefore, each contractor should plan
on adjusting the coordination dates above by up to 30 days. If you
are delayed in starting any portion of your work, you will of
course be eligible for a corresponding extension of time on that
portion and any other portions affected by the delay.
1.06 Liquidated Damages, specified in Article GC8.9, shall be in
the amount of $500.00 per day.
* * *
Contract GN-01 is one of approximately fifteen separate
contracts to be advertised for the construction of the Brown's Mill
facility. More specifically, Contract GN-01 and the nine other
contracts awarded prior to t-he December 16, 1976 hearing and their
status [DO NOT] follow: [8]
~9
[PAGES 9, 10, AND 11 ARE THREE PAGES
OF HORIZONTAL CHARTS WITH THE FOLLOWING INFORMATION PERTAINING TO
NINE MARTA CONTRACTS: CONTRACT NUMBER, PRIME CONTRACTOR, ORIGINAL
CONTRACT DOLLAR AMOUNT, WAGE SCHEDULE TYPE, NOTICE TO PROCEED DATE,
DESCRIPTION OF CONTRACT WORK, AND CURRENT STATUS; THE CHARTS ARE
AVAILABLE UPON REQUEST FROM THE BOARD'S OFFICES] [9][10][11]
~12
[12] THE BACKGROUND OF THE DISPUTE BETWEEN
MARTA AND ESA AS TO WHETHER CONTRACT
GN-01 SHOULD INCLUDE THE BUILDING WAGE
RATE SCHEDULE OR THE HIGHWAY RATE SCHEDULE
On April 11, 1975, MARTA solicited bids for construction of the
Brown's Mill Road Bus Facilities. The bid specifications included
a highway wage rate schedule published in the Federal
Register./FN3/ On the date of bid opening the Assistant
Administrator advised MARTA by telegram that the building
construction wage rates schedule for the Atlanta area are the
proper rates for the contract. On the same day and without
responding to the telegram, MARTA opened the bids. Blount
Construction Company was the apparent low bidder. On May 22, 1975,
the North Georgia Building Construction Trades Council filed its
action in United States District Court seeking to enjoin the award
of the contract with the highway wages in it.
In its decision and order granting the injunction, the
District Court deferred to the Department of Labor. /FN4/ The
Court enjoined the award of GN-01 pending a final ruling on the
applicable wage scale by the Wage Appeals Board unless such
contract contains a clause providing that the wage scales in it are
subject to adjustment on order of the Secretary of Labor or the
Wage Appeals Board.
????????????????????????????????
/FN3/ 39 F.R. 34984, September 2,, 1974.
/FN4/ North Georgia Building Construction Trades Council v. U. S.
Department of Transportation, et al., 399 F. Supp. 58 (N.D. Ga.
1975). [12]
~13
[13] THE APPLICABLE DAVIS-BACON ACT PROVISIONS
The construction of the Brown's Mill Road Bus Facility will be
financed, in part, by a grant under the Urban Mass Transportation
Act of 1964 (49 U.S.C. [sec] 1601, et seq.). Accordingly, it is
subject to the Labor Standards Section of that Act, 49 U.S.C. [sec]
1609, as follows:
(a) The Secretary [of Transportation] shall take such
action as may be necessary to insure that all laborers
and mechanics employed by contractors or subcontractors
in the performance of construction work financed with the
assistance of loans or grants under section 1602 of this
title shall be paid wages at rates not less than those
prevailing on similar construction in the locality as
determined by the Secretary of Labor in accordance with
the Davis-Bacon Act, as amended. The Secretary shall not
approve any such loan or grant without first obtaining
adequate assurance that required labor standards will be
maintained upon the construction work.
(b) The Secretary of Labor shall have, with respect to
the labor standards specified in subsection (a) of this
section, the authority and functions set forth in
Reorganization Plan Numbered 14 of 1950 (15 F.R. 3176; 64
Stat. 1267), and section 276c of Title 40.
MARTA'S BASIC CONTENTIONS THAT APPROPRIATE
WAGE CLASSIFICATIONS AND WAGE RATES FOR THE
WORK IN QUESTION ARE THE SAME AS THE WAGE
RATES AND CLASSIFICATIONS THAT ARE USED FOR
HIGHWAY CONSTRUCTION
MARTA contends that the construction work required for Contract
GN-01 is more nearly similar to highway work than building work.
MARTA relies upon the conclusion of UMTA that (a) the work involved
is properly classified as highway work and (b) the "prevailing
practice" for building projects in the metropolitan Atlanta area
similar to the Brown's Mill Road Bus Facility is to award the site
preparation and paving [13]
~14
[14] work as separate contracts to be performed at lower rates than those commonly paid for on the
"actual" building construction. In support, MARTA points to its
own recent construction project in which it did this without
enforcement proceedings against it.
MARTA further contends that ESA's determination that Contract
GN-01 must use the building construction wage schedule because:
a. The decision was based on the Brown's Mill project as a
whole, rather than on the nature of the work involved in Contract
GN-01 only;
b. The work in Contract GN-01 is "indisputably more
similar" to highway work than building work;
c. ESA ignored its prior administrative practice and prior
Board decisions permitting a separate rate schedule for site work
for a building construction project when consistent with area
practice;
d. ESA ignored an alleged "predominant" local practice for
large building construction projects of a character similar to the
Brown's Mill project to award separate contracts at less than the
building rates for clearing, grading, paving and other site
preparation work;
e. ESA erred in failing to give appropriate weight to
MARTA's decision to use the highway rates.
THE ISSUES TO BE CONSIDERED BY THE BOARD
The Board must consider three questions in order to dispose of
this case.
~15
1. Whether the building or the highway wage rate schedule is
the most appropriate under the Davis-Bacon Act requirements for the
work performed under Contract GN-01.
2. Did MARTA meet Davis-Bacon Act requirements when it awarded
Contract GN-01 to Blount on the contingency that the wage scales
included therein are subject to adjustment if MARTA is unable to
reverse ESA's decision.
3. If there has been a violation of Davis-Bacon Act
requirements in question 1 or 2, or both, what is the appropriate
remedial action required under the circumstances.
THE APPROPRIATE WAGE SCHEDULE
MARTA does not contend that the Contract GN-01 is work on a
highway project. MARTA urges, however, that (1) the Blount
contract calls for large amounts of paving, preparation of site for
paving and other site preparation and improvements which is the
kind of work usually performed upon highways. If GN-01 is
considered a separate undertaking the site preparation work as
described in Exhibit No. 1, SITE-SPECIAL CONDITIONS is indisputably
more similar to highway work than building work.
MARTA also contends that since the principal purpose of the
Brown's Mill Road project is to decrease operating expenses and to
increase efficiency of its bus services by providing overnight
parking Contract GN-01 does not require building construction wage
rates even if other parts of the project require such rates. In
support of this contention, MARTA argues that the site preparation
work, for buildings executed in close development sequence with the
buildings, has [15]
~16
[16] always been considered by ESA as building construction.
The Board has carefully examined the entire record and all
documents submitted including prehearing and post-hearing
statements and matters considered at the oral hearing of December
16, 1975. The Board does not agree that any of the conclusions
advanced by the petitioner are substantiated under Davis-Bacon Act
practice or principle. The Board does not agree that decisions
cited by MARTA support the contention that the work specified in
Contract GN-01 is the kind which when separately awarded, can be
undertaken at wage rates lower than those specified for the nine
other building construction contracts on the site.
The Board does not accept MARTA's contention that site
preparation work for buildings in the Atlanta area is
"predominantly" performed at highway construction wage rates.
MARTA's reliance upon a conclusionary statement by UMTA's regional
representative and on a few other conclusionary letters is
misplaced.
Under long established Davis-Bacon Act practice, a project can
not be broken down into "packages of work." This smacks strongly
of little more than an effort to break a project down into items of
work for which the claim can be made that the "nature" of each item
is indisputably more similar to a project of some other nature.
The nature of the Brown's Mill Bus Facility and Contract GN-01 must
be examined together.
The situation in this case is in no way comparable to the
separate contracts awarded by MARTA in Contracts 330 and 540 [16]
~17
[17] for entire segments of the new subway and rapid rail
construction. A bus facility with two large garages cannot be
broken into layers each a separate project. Similarly, each of the
other 8 construction contracts awarded prior to December 16, 1975
are not separate projects.
The decisions of this Board dealing with local paving
contracts, or with contracts akin to local public utility contracts
in a new political subdivision are not decisions under which
MARTA's claims can be subsumed.
The Board does not view the construction of the two buildings
in the project with the insignificance that MARTA would attach to
them. An examination of the "Site-Special Conditions" requires the
conclusion that Contract GN-01, as one of the nine packages into
which the Brown's Mill project has been separated, cannot be
considered separately from the total project development for wage
comparability purposes. Even if it were to be so considered, the
work required by Contract GN-01 includes work which is considered
building construction when done on any self-contained project which
includes the erection of buildings. Although MARTA would contend
that such work is an incidental part of Contract GN-01 as a
contract for general site preparation, it embraces part of the
construction of a large maintenance garage and an operating garage
combined with an off-schedule employees' parking lot. MARTA cites
the Board's decision In the Matter of Bell Helicopter, WAB Case
No. 66-04 (December 28, 1966), as precedent for severing a project
into separate contracts for wage determination purposes. However, [17]
~18
[18] in Bell Helicopter, the parties stipulated that all that
was under consideration was a specific local paving contract. If
MARTA had wished to write a contract limited to such a local area
practice, it could have done so. It did not attempt to do so in
this case. /FN5/
Other decisions of the Board which MARTA referred in support
of its decisions to go ahead despite a clear determination of the
Labor Department not to use them are not helpful. Airport
construction and similar construction encompassing many square
miles within the contract lines and meeting different scheduling
requirements do not establish the general protective umbrella MARTA
claims for its decision to split the Brown's Mill project site into
at least nine packages of related work, each package dependent upon
the other. Nor are situations involved in laying out new political
subdivisions by local utility contractors or similar utility work
in public streets apropos. The Board has considered whether the
construction industry in a locality has recognized a carving out of
such local paving work or [18]
??????????????????????????????
/FN5/ In its supplemental brief, MARTA places considerable
reliance on its own construction at three Park & Ride facilities
and at its Brady Avenue Bus Parking Facility. The Board
understands that there are neither operating nor heavy maintenance
garages at the Park & Ride facilities and that there is no heavy
maintenance garage at the Brady Avenue facility. It seems
improbable that the Park & Ride construction involved building
construction in the way that Contract GN-01 does. While the Brady
Avenue project is not before the Board, questions have been raised
in respect to it sufficient to persuade the Board that it cannot,
without more facts, accept MARTA's handling of this project as
evidence or an appropriate application of the Davis-Bacon Act in
the Atlanta area. [18]
~19
[19] local utility work. But neither the Labor Department nor this
Board has extended such limited exceptions to what MARTA calls site
preparation work for buildings when the work is sequentially a
closely coordinated part of the building construction. We see no
justification under the circumstances to make a change in basic
past interpretation. Even the rates MARTA selected, the highway
rate schedule which was at hand, has not been shown to be the
rates in fact paid when certain work in connection with building
construction has been done at less than building rates.
Under Davis-Bacon Act principles, site preparation work in
Contract GN-01 is simply not of the nature of a highway project.
If this were so, than all such work including the building
construction rates when used and paid for all building site
preparation work would be included by ESA in the determination of
highway wage rates.
The Board in this case will not go into the background and the
history of the federal aid highway program under which highway
rates are determined in cooperation with state highway departments.
But avoidance of this background and history, which parties before
this Board seek to obliterate, has resulted in a highly erroneous
and mischievous situation in which, in this case, MARTA has
deliberately decided to place itself.
The Board concludes that the nine contracts, including GN-01,
already awarded for the construction of the Brown's Mill Road
project, contemplates a total development to be [19]
~20
[20] simultaneously undertaken. Close and overall coordination
and cooperation between the nine construction contractors,
including Blount, in the execution of the work, is required. /FN6/
The Board further concludes that, since the work specified in
Contract GN-01 is not highway work and not work of a nature similar
to highway work under long-established and basic Davis-Bacon Act
principles, highway rates should not have been selected as the
appropriate rates for the work in question.
THE AWARD OF THE BLOUNT CONTRACT SUBSEQUENT TO
THE COURT DECISIONS IN NORTH GEORGIA BUILDING
AND CONSTRUCTION TRADES COUNCIL V. U.S.
DEPARTMENT OF TRANSPORTATION, USDC, NORTHERN
DISTRICT OF GEORGIA, ATLANTA DIVISION, CIVIL
ACTION NO. C75-955A
Apprehensive that MARTA would proceed with an award of the
work on the basis of highway construction rates despite ESA's
decision of May 15, 1975, North Georgia sought injunctive relief.
A local United States Attorney first "aligned the executive branch
with the defend[a]nts" as the court said. The court wisely ordered
the Department of Labor joined as a party. Two Assistant United
States Attorneys filed briefs. One presented the views of the
Department of Transportation; the other, the Department of Labor's.
The court noted:
Finally, by letter dated June 10, 1975, the court was
informed that this intra-executive squabble had been
resolved and the entire executive branch should now be
regarded as supporting the plaintiff's position. The
[20]
????????????????????????????????????
/FN6/ There is no evidence in this case that J. A. Jones, the
contract coordinator, is responsible for MARTA's policy decision to
proceed to award contract GN-01 at highway wage rates. [20]
~21
[21] letter also requested permission to withdraw the brief
filed on behalf of DOT. This development both clarifies
and muddies the waters of this case. On the one hand it
brings the federal defendants into a harmonious posture,
albeit on the side of the plaintiff. On the other hand
it casts some doubt on the wisdom of the remaining
defendants' tactical decision to heavily rely on DOT
having positioned itself as their ally.
As for UMTA, the governmental agency subject to and operating
under Reorganization Plan 14, it should have known better than to
have sanctioned or condoned MARTA's action after the Court's order
in this matter. All it had to do, was to do what the Labor
Department told it to do.
The court recognized that questions of Davis-Bacon Act policy
and administration were novel to the court. While it listened to
MARTA's "suggestions" on basic law it did not accept such
"suggestions" as established policy, administration or law.
More must be said concerning the order of the court in
connection with the appropriate relief required as the result of
this proceeding.
The court took jurisdiction under Title 28, Section 1361 U.S.C.
insofar as plaintiffs sought to compel a federal agency to perform
its duty. The court concluded that plaintiffs had standing to
bring this suit under section 702, Title 5 U.S.C., citing
International Union of Operating Engineers v. Arthurs, 355 F. Supp.
7, 14 (W.D. O[kl]a.) aff'd 280 F.2d 603 (1Oth Cir. 1973). The
court noted however:
The Court'[s] role in this controversy, however, is not
to decide the entire controversy but rather is limited to
entering an order which will '(1) compel [21]
~22
[22] agency action unlawfully withheld or unreasonably delayed;
and (2) hold unlawful and set aside agency action, findings,
and conclusions found to be -- (A) arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance
with law; [or] -- (D) without observance of procedure
required by law.' 5 U.S.C. [sec] 706. The role of this
court does not include a determination de novo of the
appropriate wage scale to be applied to this contract.
That determination is committed to the agency proceedings
provided by the statute and regulations and this court
will therefore express no opinion whatsoever on that
aspect of this controversy. What this court can
undertake to do is to compel agency compliance with
lawful procedures.
The agency referred to was DOT for not doing what the Labor
Department said, not to the Department of Labor.
Inasmuch as the Department of Labor came into this action to
ensure that MARTA and DOT did what ESA said they were required to
do under the Davis-Bacon Act, this Board has no quarrel with the
District Court's position. This is because the court made clear
that it believed judicial intervention was necessary to assure,
under the peculiar circumstances of this case, that DOT and MARTA,
not the Labor Department, observed the Labor Department's
directions.
The Board seriously questions, however, whether a court can
order the Department of Labor to do this or that with respect to
any practice or procedure in making a wage predetermination. The
Board believes it is established law that a court cannot.
There are other ways than judicial intervention for the departments and
agencies of the federal establishment to resolve their problems. The
decisions of the Secretary of Labor under Reorganization Plan 14 are
preeminent within [22]
~23
[23] the federal administration. They are not subject, in the view of
the Board, to further judicial review. Only in the last dozen years has
an appellate review procedure under Regs. Part [] 7 of the U. S.
Department of Labor, been provided through this Board. This procedure
is an appellate procedure to be taken only from a final decision of the
Assistant Administrator of the Wage & Hour Administration. The decision
of ESA is a final decision which must be observed unless stayed
administratively.
As the court noted it cannot determine the minimum wage
schedules at which the work shall be performed. The Board believes
that the courts will not be taken in by tactics alleging procedural
improprieties in the discharging of Davis-Bacon Act
responsibilities. Such tactical delays can be the equivalent of
victory in efforts to frustrate needed public works and other
development programs.
With respect to the court's view of North Georgia's request for
an injunction and the qualifications the court placed upon granting
one, it is important that the order of the court be set out in this
decision.
The plaintiff has also requested that this court enjoin
execution of the contract on the basis of the bids opened
on May 5, 1975 and require that it be readvertised. The
court declines to go so far. The plaintiff was found to
have standing in order to protect the rights conferred by
the Davis-Bacon Act on laborers in general and
plaintiff's members in particular. Its only interest is
to insure that the appropriate wages under the Act are
paid to all laborers hired under the contract.
Accordingly, the court ENJOINS the defendants from
executing any contract for the Brown's Mill project until
such time as a final ruling has been made on the
appropriate [23]
~24
[24] applicable wage scale to be included
therein unless such contract contains a clause providing
that the wage scales in it are subject to adjustment on
order of the Secretary of Labor or of the Wage Appeals
Board.
That injunction having been entered, there remains the
question what action should be taken on the Brown's Mill
project. Three possibilities suggest themselves (1) All
action on the project can be deferred until there is a
final ruling on the appropriate wage scale. (2) The
contract can be executed as bid with a clause providing
for a later retroactive adjustment of the wage scale if
necessary. (3) The contract can be withdrawn and
resolicited with an adjustment provision.
[*] Which of these possibilities is legally appropriate
has not vet been adequately briefed by the parties and
the court is not entirely convinced it is even
appropriately before this court. Hence the court
expresses no opinion on this issue at this time and will
leave its determination to the defendants. [*] [*]
(Underlining supplied.) [*]
It is the opinion of this Board that MARTA was without color of
any claim to "suggest" to the court that the disputed contract
could be executed on the basis of the highway wage scales with a
clause providing for a later adjustment in minimum wage. /FN7/ The
Board concludes that such a suggestion to the court flies in the
face of the cardinal principle of the Davis-Bacon Act, "that the
advertised specifications for every contract . . . and which
requires or involves the employment of mechanics and/or laborers
shall contain a provision [*] stating the minimum wages to be paid
various classes of laborers and mechanics which shall be based upon
the wage that will be determined by the Secretary of Labor [*] to
be [24]
??????????????????????????????
/FN7/ The court said, "Defendant MARTA has suggested that this is
possible under the contract as bid." [24]
~25
[25] prevailing for the corresponding classes of laborers and
mechanics employed on projects of a character similar to the
contract work . . ." [*] (Underlining supplied.) [*]
The Act further provides that every Davis-Bacon contract
[*] shall contain a stipulation [*] that the contractor and his
subcontractor shall pay the full amounts accrued at the time of
payment computed at wage rates not less than those [*] stated in
the advertised specifications [*] regardless of any contractual
relationship which may be alleged to exist between the contractor
or subcontractor and such laborers and mechanics. [Emphases in
original]
The Act further goes on to provide that the scale of wages to
be paid shall be posted by the contractor in a prominent and easily
accessible place at the site of the work.
These three requirements are written in the statute. It is not
a matter of interpretation of gloss. The appropriate wage schedule
must be [*] stated [*] in the contract bid documents upon which the
award is made. This is the schedule which must be [*] posted [*].
[Emphases in original]
When the Department of Labor directed the use of building rates
for Contract GN-01, it was DOT's obligation under Reorganization
Plan 14 to accept that determination and to pass it on to MARTA
through control over financial assistance. The remedy in this case
will have to speak to that matter. If DOT wished to use other
administrative procedures than this Board, it could have entered
into policy or other discussions with the Department of Labor. The
one thing that UMTA could not do was to let MARTA thumb its nose at [25]
~26
[26] the Department of Labor while violating the plain language
of the Act.
THE APPROPRIATE REMEDY
MARTA has failed to sustain its position in respect to the use
of the highway schedules. The Board sustains the May 15 and August
4, 1975 decisions of ESA that the correct schedules under the
circumstances are the building rate schedules.
The ESA decision (and in fact the later decision of the
District Court) put MARTA on notice that it would proceed only at
its peril. Such advice simply cannot be flou[]ted under the
circumstances of this case.
In view of MARTA's course of conduct, the Board must view this
case not only as an enforcement matter but one requiring special
remedies in the circumstances. These remedies need to be
three-pronged:
1. Before MARTA receives any further federal assistance
each laborer or mechanic employed by Blount, as
contemplated by CFR 29, Part 5.5(a)(1) must receive a
wage rate effective as of the date of original hire at
Brown's Mill Road that is not less than the rate for his
classification as defined by the ESA wire of May 15,
1975.
2. Action should be taken by ESA pursuant to 29 CFR Part
5.6(2)(c) and examination made of possible debarment of
MARTA from further Federal assistance. [26]
~27
[27] 3. Action should be taken to ensure that DOT employees,
if any, that may have aided and abetted MARTA in its
Contract GN-01 course of action are shown the error of
their ways to prevent a recurrence of inexcusable
conduct.
With respect to these three remedial items, Item 1 above should
present no problem as MARTA assured the Board that it has some
contractual arrangement with Blount to accomplish this. It should
be done with ESA assistance and subject to its approval.
With respect to Item 2 above, if it is not feasible to debar
MARTA from further financial assistance, it may be not unfeasible
to remove from MARTA those staff employees who are responsible for
flaunting the ESA decisions by proceeding with the award of
Contract GN-01 at the improper rates. In lieu of blacklisting
MARTA, the ESA should sit down with MARTA and obtain such
assurances as will satisfy it that henceforth those employees
responsible for the policy decisions to proceed with the GN-01
award will not participate in Davis-Bacon Act matters. MARTA
should make a recommendation to ESA [as] to the steps it will take
to avoid this situation in the future to avoid being considered for
the ineligible list. MARTA must give to ESA true assurances
that its staff employees who do participate in contract
award and administration are conversant with the requirements
of the Davis-Bacon Act and that MARTA will abide by the ESA
requirements. [27]
~28
[28] In respect to Item 3 above, the Department of Labor should
sit down with the Department of Transportation and request DOT to
undertake a training and educational program. Any employee that
aided, abetted or condoned MARTA's conduct should be considerately
dealt with. DOT should make a recommendation to the Labor
Department as to what it wants to do with respect to such
employees. The matter must be straightened out to the satisfaction
of the Labor Department as a matter within the federal
establishment. It is not feasible to declare another government
agency ineligible to use federal financial assistance because of
its disregard of required labor protection standards. [28]
~29
[29] Barker: Concurring.
I am in agreement with the majority decision and the three
points of the Board's order in all respects. I add this concurring
opinion for the purposes of pointing out that in those cases in
which there is an established local practice for certain types of
specialty work to be performed by identified segments of the
construction industry in the locality such as the existence of
contractors who specialize in local paving and similar work, or
local street and utility work, it would be possible for a
contracting agency to segregate project work into categories of
work which would utilize this distinction. If such local practices
exist in Atlanta, Marta could have awarded parts of the Blount
award on such a separate basis. But, the work involved in site
preparation for this kind of a project cannot be characterized
as a local paving contract or a local public utility contract,
nor is Blount such a local and specialized construction contractor.
It is far too late, after Marta went ahead as it did here to lump
building construction work in with work which possibly might have
been separated, for the claim to be made that the building work was
just an incidental part of the other work. That is not the test in
determining projects of a character similar to the questioned work
being tested, nor is the building work required for site
preparation for buildings in this case "insignificant", nor it did
not take place as an "incidental" matter. [29]
~30
[30] ROTHMAN: Concurring in part and dissenting in part:
I am in agreement with the Board majority decision except Item
1 of the order; what to do with the extra money MARTA arranged to
pay Blount under an arrangement never fully disclosed to the Board.
This is a case of extraordinary circumstances and warrants
consideration of extraordinary relief. The Board having the matter
before it must look at the total situation because, although the
award has been made and the work far along to completion, it is a
situation that could occur again without presentation and
concomitant proper remedy.
I see no obligation or at best no purpose here under the
Davis-Bacon Act for MARTA to pay extra compensation to Blount under
the extraordinary factual situation. I see no obligation by Blount
to pay to its employees more than the wage rates required to be
"stated" in the bid documents under these extraordinary facts. The
serious violation of the Act stems from MARTA's deliberate
insertion of the wrong schedule in the agreement, not in what
Blount did. The question is how should MARTA be held to a
responsible standard of accountability.
Blount has paid its employees not less than the wage rates
"stated" in the contract it executed with MARTA as the contracting
agency as well as its own general contractor. [30]
~31
[31] Blount is not required to do more. MARTA put itself in the shoes
of the Department of Labor and called the shot that the Labor Department
should have called and did. In this case it should not have run to the
benefit of individual employees.
The supplemental arrangement that MARTA would pay Blount an
amount above the minimum wage rates as "stated" in the bid
documents if MARTA could not overthrow the Labor Department before
this Board is not a legal Davis Bacon Act arrangement. The United
States District Court did not authorize it as a decision of the
Court in the injunction proceeding. Therefore, I would not honor
the arrangement (even if there has been a clear one).
MARTA had been cautioned when before this Board in other
proceedings that it could not and should not manipulate wage rates
to its own satisfaction in bid documents. But for MARTA to stay
off the ineligible list, it should make amends in some other way.
I do not emphasize in this dissent the correctness of ESA's
decision. I emphasize the fact that MARTA used a schedule of
rates ESA directed it should not use. MARTA cannot be excused for
making a mistake of law, because it made none. It proceeded
contrary to the direction and advices given to it by the
authoritative agency, ESA in the Labor Department. [31]
~32
[32] To pay an additional sum of money to Blount would only
compound the miscarriage of basic law and the injustice which took
place when MARTA expediently deprived a class of contractors who
would be reasonably expected to employ mechanics and laborers
affiliated with the North Georgia Building and Construction Trades
Council from bidding for Contract GN-01 work. It selected a
contractor by a prohibited process. It then dealt with that
contractor on a preferential basis. This redounded to the
detriment of laborers and mechanics the Act was designed to
protect.
The details of the alleged arrangement to increase Blount's
contract price, how it would be administered, the kind of notices
that were posted pursuant to the requirement of the Act have not
been explained.
MARTA's use of the wage rates the Labor Department said were
wrong even after it asked review of ESA's decision does relieve
MARTA of the requirement that ESA determination must be attached
and reversed before, not after the wrong rates are used. The Board
would be justified in dismissing the petition as untimely and let
the ESA decision stand for that reason alone. But this case has
gone too far to be disposed of on the basis that the MARTA
petition, realistically viewed, was untimely. ESA is now required
to consider an enforcement position. [32]
~33
[33] It is also worth a passing glance that the work of Contract
GN-01 is not part of a highway project. There has been no
acceptable showing by MARTA that the wages MARTA specified for the
work, even under MARTA's erroneous theory, were in fact the
prevailing wage rates paid for site improvement work on this kind
of project. The actual prevailing wage rates for such work when
independent of building construction or when part of building
construction may have been less more than highway construction.
Since Davis-Bacon Act rates (when correctly used) are minimum
rates only Blount may have paid over those rates to some employees
and so bid the job along with correlative items, such as overhead,
etc., based upon its estimates.
The vice of MARTA's decision to go ahead is that it gave one
class of contractors and the employees they would select an
advantage over another class. Subsequent efforts to rectify the
situation only points up the illegality. There is really nothing
that can come later as a remedy that can fully repair the harm that
has been done (a) in the administration of the Act by ESA and ([b])
to the laborers and mechanics who had a reasonable expectation to
work on this project.
If this were a case involving a small contractor, the
likelihood is that the contractor would find himself on the
ineligible list for three years. In order to avoid placing MARTA,
which acted as its own contractor, on the [33]
~34
[34] ineligible list for further federal participation in Davis-Bacon
Act programs, I would recommend the following procedures to the U.S.
Department of Labor.
1. The Department of Labor, in addition to the relief
required by the majority except for Item 1, (the payment of back
wages) should under Reorganization Plan 14, and together with North
Georgia, MARTA and UMTA determine upon a plan to provide that a sum
of money equivalent to the amount that would be paid to Blount be
paid into North Georgia jointly trusteed welfare, pension or other
trust funds for the crafts employed by Blount on this job.
2. If on the advice of ESA counsel there are legal impediments
to paying the moneys into such jointly trusteed trust funds for the
affected crafts, an arrangement should be considered to pay the
money to one or more charities designated by the North Georgia
Building and Construction Trades Council.
3. If neither of the foregoing arrangements can be worked
out, then and only then the fund should be distributed to Blount
employees. As I see it under the circumstances as a voluntary
arrangement by MARTA and not a statutory requirement. I believe my
colleagues, which make up the majority on this point would find
that employees of Blount must be [34]
~35
[35] paid these moneys in the first instance. If that is so, I am
suggesting that MARTA be required to do so, but also make a payment to
North Georgia.
4. ESA should place MARTA on the ineligible list for not more
than 3 years unless MARTA voluntarily agrees that no further work
will be awarded by MARTA on any project using Davis Bacon wage
predeterminations until ESA has indicated in writing that it is
satisfied with the solutions worked out for this case and that this
situation will not occur again.
SO ORDERED:
(s) Oscar S. Smith, Chairman
(s) Stuart Rothman, Member
(s) Clarence D. Barker, Member
