McGEE CREEK PROJECT, WAB Nos. 81-11 and 82-01 (WAB Dec. 24, 1982)
CCASE:
MCGEE CREEK PROJECT
DDATE:
19821224
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[1] WAGE APPEALS BOARD
STATES DEPARTMENT OF LABOR
WASHINGTON, D.C.
In the Matter of
McGEE CREEK PROJECT WAB Case Nos. 81-11
Review of wage rates issued in & 82-01
Wage Determination No. 81-OK-122
for McGee Creek Project, Farris,
Atoka County, OK Dated: December 24, 1982
APPEARANCES: Michael R. Fanning, Esquire for International Union
of Operating Engineers
Terry R. Yellig, Esquire for Building and
Construction Trades Department, AFL-CIO
Douglas J. Davidson, Esquire, Gail V. Coleman (on
Brief) for the Wage and Hour Division, U.S.
Department of Labor
BEFORE: Alvin Bramow, Chairman, Stuart Rothman, Member
Thomas X. Dunn, Member, Concurring in Part and
Dissenting in Part
DECISION OF THE WAGE APPEALS BOARD
These cases are before the Wage Appeals Board on the petition
of the International Union of Operating Engineers (hereinafter
IUOE), on behalf of the IUOE and Local Union No. 627, IUOE, of
Tulsa, Oklahoma. Local Union No. 627 bargains wage rates for
operating engineers in Oklahoma on a statewide basis and now seeks
review of a decision of the Assistant Administrator, Wage and [1]
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[2] Hour Division, dated January 11, 1982, denying
reconsideration of wage rates which were issued in wage decision
No. 81-OK-122 to apply to the construction of the McGee Creek
Project, Atoka County, Oklahoma. A hearing on this matter was held
on September 23, 1982 pursuant to the Board's Notice of Hearing.
All interested parties were represented at the hearing.
The overall contract work being considered in this appeal is
a project in Atoka County of the Bureau of Reclamation, Department
of Interior, called the McGee Creek project and costing
$105,575,000. The project will provide a water supply system to
Oklahoma City and surrounding communities. The plans call for
construction of an earthen dam and reserv[oi]r, water conveyance
facilities and recreation facilities. The project will cover
30,340 acres of land.
The Bureau of Reclamation divided the McGee project into two
parts and requested separate wage determinations for the two
segments. The first wage determination was for "clearing about 200
acres for McGee Creek damsite and borrow area". This wage
determination was requested from the Wage and Hour Division in
June, 1981. The second segment described the contract work as
"zoned earthfill dam and dike with concrete spillway, concrete
river outlet works, municipal and industrial outlet works,
including concrete gate chamber and access shaft, metal grates
and associated piping and access roads."
The Wage and Hour Division undertook surveys of "Heavy [2]
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[3] Construction - Dam and Related Only" in 22 counties in southeastern
Oklahoma upon being notified of the pending McGee Creek project.
This survey yielded limited results from eight heavy projects. But
wage data from the construction of dikes, levees, settling ponds
and basins at a power plant, the Hugo Power Plant project in
adjoining Choctaw County, were also included in the survey. The
wage data from the $400 million Hugo Power Plant project reflected
wage rates identical to the negotiated building construction wage
rates for operating engineers in Oklahoma, while the wage data
from the eight other heavy projects being considered reflected
lower, heavy-type construction wage rates for operating engineers.
Since the wage data from Hugo was much more voluminous in the
number of employees involved than the data from the eight other
projects, the Wage and Hour wage determination issued pursuant to
the Davis-Bacon Act and applicable regulations for the first
segment of McGee reflected negotiated wage rates for operating
engineers.
The Bureau of Reclamation requested reconsideration of the
wage decision applicable to the first segment, noting the fact that
the work on Hugo which was included in the survey established the
wage rates issued for McGee. The Bureau of Reclamation argued that
power plant projects were considered to be "building" construction
according to Wage and Hour's All Agency Memorandum No. 130 which
sets guidelines for the contracting agencies to aid them in
classifying their various construction projects. Reclamation
stated that the statewide negotiated agreement of the Operating [3]
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[4] Engineers Local Union No. 627 classifies power houses as
"building" construction also, and that the general contractor and
unions who performed the work at Hugo considered the ponds, dikes,
etc., at Hugo as incidental to the power house building
construction. For these reasons Reclamation argued that wage rate
data from Hugo should not have been included in the survey for the
McGee heavy project.
Upon reconsideration the Wage and Hour Division agreed that
the wage data from the Hugo project should be excluded from the
survey for McGee Creek. A new wage decision was issued in August,
1981 for the first segment of McGee Creek. This determination did
not include wage data from Hugo and reflected the lower wage rates
paid on the other eight heavy projects previously surveyed.
Petitioner sought reconsideration of the new wage
determination by Wage and Hour which was denied. Petitioner
appealed this decision of the Assistant Administrator to the Wage
Appeals Board. This appeal became WAB Case No. 81-11. Thereafter,
Counsel for the Assistant Administrator filed a motion to dismiss
the appeal to the Board because the clearing contract was awarded
in October, 1981 before the Board could consider the appeal. In
December, 1981 counsel for Petitioner filed a motion in opposition
to Wage and Hour's motion to dismiss.
The Bureau of Reclamation then requested a wage determination
for segment two of the McGee Creek project. This wage [4]
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[5] determination, which contained the same wage rates as the
superseding decision issued for the first segment, is the
determination which is the subject of WAB Case No. 82-01.
Petitioner also requested reconsideration of the last wage
determination on the same grounds as the earlier request.
Reconsideration was denied by the Assistant Administrator in
January, 1982, and Petitioner appealed this decision of the
Assistant Administrator to the Wage Appeals Board also in January,
1982.
In June, 1982, Counsel for the Assistant Administrator filed
a motion to dismiss the petition in WAB Case No. 82-01 because the
Bureau of Reclamation had advised that the contract for the second
segment of the McGee Creek project had been awarded in May, 1982.
In July, 1982, Counsel for Petitioner filed a motion in
opposition to the motion to dismiss. Thereafter the Wage Appeals
Board considered these two appeals in executive session and, noting
the identity of the issues in both appeals, the Board ordered the
consolidation of WAB Case Nos. 81-11 and 82-01 in August, 1982.
Furthermore, the Board denied both of Wage and Hour's motions to
dismiss the respective appeals.
It is the position of the IUOE that the wage data from the
Hugo project that Wage and Hour excluded when the survey was
reconsidered should have remained in the survey. Petitioner argues
that however the heavy work at Hugo is viewed, the $20,000,000
value of the heavy portion of the overall project [5]
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[6] must be considered substantial and therefore qualify for treatment
as a separate, independent type of construction under which the power
plant is classified pursuant to Wage and Hour's regulations and
guidelines. Also Petitioner asserts that area practice in Oklahoma
would support the payment of building wage rates on major heavy
projects throughout the State.
Petitioner also indicates that the Wage and Hour Division has
incorrectly evaluated the Project Agreement for the Hugo project as
compared to the statewide building construction agreement when it
determined that Hugo was building construction because the wage
rates paid on heavy construction at Hugo were identical to those in
the building agreement. Petitioner points out numerous non-wage
differences between the two agreements and asserts that many
beneficial working conditions in the building construction
agreement had to be sacrificed in order for the union to bargain
the wage rates that it did.
Petitioner requests the Board to direct the Wage and Hour
Division to issue corrected wage decisions for the McGee Creek work
in progress and also asks that in the future wage surveys in which
the McGee rates would be included, that the corrected wage rates be
substituted for the wage rates actually paid.
The Wage and Hour Division's argument for excluding wage data
from Hugo from the wage survey for McGee is that the $400,000,000
Hugo project is an overall building construction project, and even
if certain aspects of the construction at [6]
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[7] Hugo valued at slightly less than $20,000,000 (that is the dikes,
levees, settling ponds and basins) could be viewed as heavy construction,
Wage and Hour considers this work as incidental to the entire power plant
project. Wage and Hour cites All Agency Memorandum No. 131 to the
effect that incidental work should exceed 20% of the project before
it is considered substantial enough to warrant a separate wage
scale as a different type of construction, in this case heavy
construction. Although the dirt work at Hugo was allowed to be a
substantial amount of work by Counsel for Wage and Hour, it is
argued that compared to the total value of the entire project the
dirt work is nevertheless incidental and wage data from this work
should not be included in the survey of McGee Creek.
Counsel for the Building and Construction Trades Department
supported the position of the International Union of Operating
Engineers that wage data from the heavy construction at Hugo should
have been included in Wage and Hour's survey for McGee.
* * *
After considering the briefs filed in these two appeals and
hearing the oral arguments, the Board sees that the Petitioner
seeks to have the Wage Appeals Board issue an advisory decision to
the Wage and Hour Administrator to provide guidance when making
future wage determination surveys for dam construction in Oklahoma.
More specifically, Petitioner asks that the Wage [7]
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[8] and Hour Administrator be instructed to include wage data
from that portion of the Hugo Power Plant project consisting of
dikes, levees, settling ponds and basins, and which was awarded
to Green Construction Company in the amount of approximately
$20,000,000 in the survey for McGee Creek. Petitioner contends
that the work performed by Green at Hugo was clearly heavy
construction and although performed at a power plant site, wage
data from Green's contract should be taken into account in any
survey for wages to be paid on dam construction. The Board takes
note of the fact that the Hugo project is being built under a
project agreement specially negotiated. It is not being built
under the normal statewide operating engineers agreement.
The Petitioner concedes that only an advisory decision for
future application could be issued here because the construction
contracts were awarded by competitive bidding and the work had
already commenced before the Wage Appeals Board was able to hear
its appeal. The Petitioner points out, however, that the Board in
Mobile Bay Bridge, WAB 77-02, (October 21, 1977) issued an advisory
decision to the Wage and Hour Administrator with respect to future
wage determinations. In that case the particular construction
contract had already been awarded under competitive bidding to the
low bidder. [8]
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[9] The Board declines Petitioner's request to issue an advisory
decision under the circumstances of this case for the following
reasons. The Board does not intend to adopt the procedure of the
earlier Board in issuing a decision that is merely advisory. Nor
does the Board believe that the earlier Board intended its action
in Mobile Bay Bridge, supra, to become a routine practice. Each
case will have to be evaluated on its own circumstances. The Board
does not see that this case warrants the requested relief. The
Board prefers to have the issue presented in a live case or
controversy. The Board does not consider this to be one.
On the basis of the prehearing briefs submitted and the oral
arguments of the counsels for Petitioner, the Building and
Construction Trades Department and the Wage and Hour Division on
September 23, 1982, the Board is unable to say with any positive
assurance that Wage and Hour did anything wrong in excluding the
Hugo Power Plant project or any of its parts or individual
contracts or subcontracts from a wage determination survey to
determine the appropriate rate to be paid for dam construction.
The Board sees no sufficient reason at this time to direct any
change in the routine and familiar practices of the Wage and Hour
Division excluding wage data from power plant construction when
making locality wage survey for dam projects. [9]
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[10] The Petitioner, or other persons similarly interested, are
not prejudiced or precluded in any way from asserting their
contentions on a timely basis in a matter that can be considered
a live controversy when the pertinent comparative elements can be
considered, and when those local persons or organizations that may
be of a different view from a petitioner will have an immediate and
direct incentive to participate. This should be done before bid
opening takes place.
Counsel for the Wage and Hour Administrator requested the
dismissal of the petition insofar as the appeal was not heard
before bid opening and contract award. The Board denied such
motions as made on the paper record. It wanted to hear oral
argument. After oral argument, the Board finds itself in agreement
with the request of the Counsel for Wage and Hour that the best way
to handle the petitions and the questions raised by them is to
dismiss the petitions and permit the parties to wait for an actual
case if they wish to raise the matter again. Accordingly, the
petitions are hereby dismissed for the reasons stated.
Member Dunn Concurring in Part and Dissenting in Part:
I reluctantly concur with the majority that these petitions
for review are untimely and, therefore should be dismissed. My
concurrence is based on two considerations. First, any decision by
the Board would be strictly advisory inasmuch as the Secretary of
Labor may not change a wage determination that he issues once a
contract incorporating that determination is awarded. [10]
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[11] Universities Research, Inc. v. Coutu, 450 U.S. 754 (1981). Second,
and most important, post-award review of wage determinations will
be unnecessary in the future inasmuch as the Board is prepared to
afford any petitioning party a speedy hearing and decision prior to
contract award.
I disagree with the majority, however, when, after declining
to issue an advisory decision, it proceeds to do exactly that.
Why, if the Board does not wish to issue advisory opinions, does
the majority state it "is unable to say with any positive assurance
that Wage and Hour did anything wrong in excluding the Hugo Power
Plant project or any of its parts or individual contracts or
subcontracts from a wage determination survey to determine the
appropriate rate to be paid for dam construction. The Board sees
no sufficient reason at this time to direct any change in the
routine and familiar practices of the Wage and Hour Division
excluding wage data from power plant construction when making
locality wage surveys for dam projects." If this isn't an advisory
opinion, I don't know what is. I not only disagree with the
substance of this advisory opinion, but with its inclusion in this
decision.
Petitioner has told the Board that it desired an advisory
opinion to the end that the Administrator would utilize the opinion
as a wage determination yardstick for future similar projects in
the area, which Petitioner also states are in the offing. Obviously
the statement of the majority noted above is a clear signal to the
agency, the bidding contractors and particularly to the
Administrator that the majority supports the [11]
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[12] erroneous determinations of the Administrator in the two projects
involved in this case. For the above reasons, I strongly dissent from
this part of the majority's decision.
Accordingly, I would expressly overrule the preceding Board's
decision in Mobile Bay Bridge, supra, and dismiss the instant
petition (and unlike the majority) without discussion of the merits
of the case.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary
Wage Appeals Board
