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CCASE:
GREAT LAKES CONSTRUCTION
DDATE:
19800116
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D.C.
In the Matter of
GREAT LAKES CONSTRUCTION CORP. WAB Case No. 78-08
Wage Rates for HUD Proj. No.
WI-39-H200-028 Dated: January 16, 1980
La Crosse County, Wisconsin
DECISION BY: Alfred L. Ganna, Chairman, William T. Evans, Member,
Thomas M. Phelan, Member
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition of
Great Lakes Construction Corp. to review the decision of the Acting
Assistant Administrator holding that the wage rates contained in
wage decision No. AR-3160 and included in Petitioner's contract for
construction of a LaCrosse County housing project are those which
must be paid to laborers and mechanics that were employed on the
project.
In September, 1976 Petitioner bid on the subject DHUD housing
project on the basis of a Project Manual provided by DHUD. This
manual contained the bid specifications for the housing project
including the Federal wage determination noted above, dated October
11, 1974, a modification to the same wage determination dated April
25, 1975, and a State of Wisconsin prevailing wage determination
dated June 10, 1976. The State rates were [1]
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[2] different from and lower than the Federal wage rates and it is
because of this that Petitioner secured the negotiated union wage
rates for residential construction in LaCrosse County to use as the
basis for its bid on the project.
On November 1, 1976 the contract was awarded to Petitioner and
a preconstruction conference was held. Construction began the next
day.
In May, 1977 the LaCrosse County Housing Authority was
informed that the Petitioner was paying its laborers and
mech[an]ics less than the predetermined prevailing wage rates
contained in the Federal wage determination applicable to the
project (AR-3160). By the time the project was completed a DHUD
audit of Petitioner's certified payrolls indicated the Petitioner
had underpaid its laborers and mechanics by $21,706.83, and that
subcontractors were similarly in arrears in the amount of
$2,101.36, for a total of $23,808.19.
In April, 1978 Petitioner requested reconsideration by the
Wage and Hour Division of the assessment of the underpayment by
DHUD. And in June, 1978 the Acting Assistant Administrator, Wage
and Hour Division, sent a letter to Petitioner concurring in DHUD's
decision that the wage rates contained in wage determination No.
AR-3160 were applicable to the project and that any protest of such [2]
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[3] rates should have been filed prior to starting construction.
Petitioner then sought review by the Wage Appeals Board of the
Acting Assistant Administrator's decision. It is Petitioner's
position before the Board that it is unfair to compel Petitioner to
pay the assessed underpayment. Petitioner claims the Project
Manual contained a patent ambiguity in that the Federal wage
determinations were partially cancelled by cross-marks being drawn
over portions of the determinations. The lower State of Wisconsin
wage rates which applied specifically to the project were more
currently dated than the Federal rates and were placed immediately
beneath the Federal rates and were also included in the final
signed contract which, it is claimed, resulted in Petitioner's
confusion. Petitioner defends as reasonable and in good faith its
turning to the negotiated union schedules for residential
construction on which it based its bid and subsequently paid its
employees. Petitioner also relies on its inexperience to justify
it paying its employees in the way that it did. It claims that to
require it to pay the employees the underpayment would result in
undue hardship on Petitioner and unjustly enrich its employees.
Finally, Petitioner argues that the mistake of fact was not the
basis for awarding the contract since its bid would still have
been $60,000 lower than the next lowest bid, and therefore [3]
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[4] the contract should be reformed by changing the wage rates to those
in the negotiated agreements that it used to prepare its bids.
The Wage and Hour Division argues that if the Project Manual
contains the patent ambiguity Petitioner claims it did, then
Petitioner had an obligation to seek clarification of the ambiguity
from HUD upon receipt of the wage determination or at the
preconstruction conference. Wage and Hour does not consider that
the Project Manual contains an ambiguity and cites various sections
of the Supplementary General Conditions of the Contract which, it
is claimed, would have explained or resolved any questions
Petitioner may have had. Finally, the Solicitor argues on behalf
of Wage and Hour that Petitioner by its appeal is trying to
protest the determination of the prevailing wage rates after the
award of the contract. Wage and Hour asserts that this question
should have been resolved prior to contract award and start of
construction. The Solicitor cites several decisions of the Board
that have held that an appeal to challenge the wage rates after
award and start of construction has not been considered timely.
The Board considered this appeal in executive session on the
basis of the petition with attachments filed by Petitioner, and a
Statement on behalf of the Wage and Hour Division and the record of
the case before [4]
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[5] Wage and Hour filed by the Solicitor of Labor. It was
determined that a hearing by the Board would not be required
to decide the case since the factual situation was not
contested.
Peti[ti]oner has argued that its petition is timely because it
promptly forwarded the union rates it believed were in force to the
Wisconsin Housing Finance Authority and that it pursued its appeal
to the Board immediately following DHUD's denial of reconsideration
of the wage rates. Although Petitioner has proceeded with its
appeal to this Board promptly, this is not the timliness that is at
question in this case. Petitioner was not timely in questioning
the Federal wage rates predetermined for the housing project, if in
fact it felt that those wage rates were erroneous. This Board has
held in a line of cases that challenges to wage rates must be made
before the contract is awarded and construction started, or prior
to initial endorsement of the mortgage for contracts entered into
pursuant to the National Housing Act. See Southeastern Capital
Corp., WAB 78-12 (January 16, 1979), Espana Gardens, WAB 76-15 (May
4, 1977), Gananda Development Corp., WAB 73-13 & 74-01 (May 14,
1974) Huntsville-Madison County Airport WAB 64-01 (August 31,
1974).
In Espana Gardens, supra, the Board found:
It is apparent here that the petitioner is
still trying to raise the question of what was [5]
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[6] the prevailing rate for the craft in question
before the project was started. Petitioner
had at the time the question first arose in
1972 the options of appearing before the
Wage Appeals Board to protest the prevailing
wage rates in contention prior to the start
of construction . . .; or he could have chosen
not to proceed with the construction of the
project until such time as the question of
the wages was finally settled. Following
neither of these options he chose to proceed
with construction. He cannot be allowed to
question the wage rates in the wage
determination provided to him.
As to Petitioner's argument that there was a patent ambiguity
in the Project Manual and that it therefore made a mistake, the
Board finds that there was no mutuality of mistake. If anything,
it was a unilateral mistake on Petitioner's part. It has not been
shown that the rates contained in the Department's wage
determination were in error. The format of the wage schedules
published in the Project Manual was identical to those used by all
other contractors without the problems claimed to exist here. The
Supplementary General Conditions of the contract cited in the
Statement for Wage and Hour contemplate that there may be a
variation between the Federal and State wage determinations and
clearly explain how this is to be resolved. There appears to be no
justification whatever for Petitioner taking recourse to the
negotiated union agreements or any other wage rates which it may
choose to use.
The Board readily concurs in the Solicitor's observation that
if Petitioner was uncertain about the wage [6]
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[7] rates to be used on the project, it could have requested
clarification from HUD after receipt of the wage determination
or at the preconstruction conference. As in Espana Gardens,
supra, Petitioner by this appeal is trying to change the deter-
mination of wage rates for laborers and mechanics after the
contract has been awarded to it and construction begun. This
is not permissible under the Regulations and decisions of this Board.
In view of these considerations, the decision of the Acting
Assistant Administrator is hereby affirmed and the Petition is
dismissed.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary [] [7]
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