CCASE:
RITE LANDSCAPE CONSTRUCTION CO
DDATE:
19831018
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of
RITE LANDSCAPE CONSTRUCTION CO., INC. WAB Case No. 83-03
Army Contract No. DADA-03-80-C-0088
Fitzsimmons Army Medical Center, CO Dated: October 18, 1983
BEFORE: Alvin Bramow, Chairman, Thomas X. Dunn, Member
Stuart Rothman, Member, Dissenting
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition
of Rite Landscape Construction Co. seeking review of the ruling of
the Assistant Administrator, Wage and Hour Division, dated
September 21, 1982. This ruling concerns the appropriate wage rate
applicable to the classification of lawn sprinkler installer, and
the denial of an additional classification landscape laborers on an
Army contract awarded to petitioner in Colorado.
In the fall of 1980, Rite Landscape Construction Co.,
(hereinafter Rite) was awarded a contract for landscaping the
grounds around several buildings at Fitzsimmons Army Medical Center
in Adams County, Colorado. The contract was subject to the
Department of Labor's general wage determination No. CO 79-5117,
the Davis-Bacon Act and applicable regulations. [1]
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[2] In February 1981, Rite requested that two additional
classifications for landscape laborers and lawn sprinkler
installers be added to the general wage determination at a wage
rate of $4.50 per hour for each classification.
The Wage and Hour Division ruled that an additional
classification for landscape laborers was unnecessary because the
wage determination already contained a laborer classification.
After further negotiation between Rite and Wage and Hour, Wage
and Hour approved the addition of a lawn sprinkler installer
at a wage rate of $8.29 per hour plus f[r]inge benefits. This
rate was equal to the Laborers, Group 2, rate issued in the
applicable wage determination. During the performance of the
contract Rite did not pay the employees in question the wage
rate specified by the Wage and Hour Division, resulting in the
Army withholding $17,000 from payments to the company.
Rite requested reconsideration by the Assistant Administrator
of her ruling in this case and submitted data to Wage and Hour in
support of its contention that a landscape laborer's rate of $4.50
should be issued and that the lawn sprinkler installer's rate
should be changed to $4.50 per hour also. Wage and Hour did not
change its ruling and on January 21, 1983, Rite petitioned the
Board to review the Assistant Administrator's ruling.
The petitioner's argument before the Board is that Wage and [2]
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[3] Hour never issued wage rates for either of the
classifications it is requesting to be added to wage determination
CO 79-5117, the determination applied to the project in question.
Petitioner relies on wage data and surveys submitted to the Wage
and Hour Division after the project was completed which tended
to support petitioner's request for the rates at the $4.50 level.
This wage data was obtained by petitioner from the Association of
Landscape Contractors of Colorado, the Colorado Division of
Employment and Training and the Career Service of the City and
County of Denver, which is adjacent to Adams County where the
Fitzsimmons Army Medical Center is located. Petitioner argues that
all this wage information is substantial and credible since it was
produced by independent private or governmental units simply to
establish the amount of the wages being paid in the area. It is
also petitioner's position that there is nothing whatsoever in the
record to support the wage rates required to be paid by the Wage
and Hour Division for landscape laborers and lawn sprinkler
installers.
Petitioner further complains that it protested the wage rates
and requested additional classifications almost from the initiation
of the contract but was permitted to complete the contract before
it was advised that the rates that it paid were not acceptable.
Petitioner argues that on this basis alone, the government should
be estopped from asserting any higher wage rate. [3]
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[4] The Assistant Administrator argues that the regulations
applicable to the establishment of additional classifications,
29 CFR 5.5(a)(1)(ii), require that new classifications be
conformable to the other wage rates issued for the project.
The rate approved by Wage and Hour was equivalent to that issued
for Laborers, Group 2, the least skilled construction
classification in the wage determination. It is therefore
argued that the rate of $8.29 for lawn sprinkler installers
is conformable to other rates in the decision and to allow the
establishment of a rate of $4.50, as urged by petitioner, would
be unfair to any other bidders who competed for the contract.
The Wage and Hour Division also notes that the wage data which
Rite submitted after receiving award of the contract should have
been submitted prior to the receipt of bids in order to be timely
and to be fair to all bidders.
Finally, the Wage and Hour Division defends its denial of an
additional classification of landscape laborer on the basis that
the classification Laborers, Group 2, Building Construction
Laborer, was sufficiently broad to include the duties of landscape
laborer. It is suggested that even if the additional
classification were permitted it presumably would be issued at a
wage rate of $8.29, the same as the lawn sprinkler installer and
for the same reasons.
The appeal was considered by the Board on the basis of the
Petition for Review and a Reply brief filed by petitioner, [4]
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[5] a Statement on behalf of the Assistant Administrator and a record
of the appeal before the Wage and Hour Division filed by the
Solicitor of Labor. No request for an oral argument was made to
the Board.
* * *
It appears to the Board that the petitioner's contention that
the wage rates for the job classifications of landscape laborers
and lawn sprinkler installers should be $4.50 per hour is actually
a challenge to the wage rate determination itself.
The evidence submitted by the petitioner during this
additional classification procedure certainly leaves some doubt as
to whether the proper schedule of wage rates was included in the
bid specifications and contract documents. It might be that this
type of work when no building construction is involved is not
performed by craftsmen receiving building trades' rates.
However, as the Board held in one of its most recent
decisions, Jordan & Nobles Construction Co. & W R. Pierce &
Associates. WAB Case No. 81-18 (August 19, 1983):
*** that there is one time when a contractor in the
industry, whether the successful bidder or not, a
sponsor or anyone else in the industry can challenge
the accuracy of a Davis-Bacon wage determination.
That time is prior to the award of bids.
The Board has addressed the question of parties challenging
wage determinations since its first decision in 1964. [5]
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[6] See Huntsville-Madison County Airport, WAB Case No. 64-01 (August
31, 1964), Fry Brothers Corp., WAB Case No. 76-06 (June 14, 1977),
Holloway Sand and Gravel Trucking, Inc., WAB Case No. 79-13 (January 16,
1980), Southern Capital Corp., WAB Case No. 78-12 (January 16, 1979).
The Board further realizes that petitioner attempted to
clarify the problem at a very early stage. Still petitioner
proceeded with the construction work. In Espana Gardens, WAB Case
No. 76-15 (May 4, 1977) the Board ruled:
It is apparent here that the petitioner is still trying
to raise the question of what was the prevailing rate
for the craft in question before the project 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 initial endorsement
of the mortgage, as provided in Regulations, Part 1,
Section 1.7(b) (29 CFR); 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.
The time to have come to the contracting agency and/or the
Wage and Hour Division to show that the classifications and wage
rates furnished for this project (landscaping only) were not
realistic and in fact not those prevailing was prior to bid opening
and contract award. To do so after bid opening and contract award
was untimely. /FN1/ [6]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ 29 CFR Part 1 was revised and published on April 28, 1983
(48 F.R. 19532) to take effect on June 28, 1983. The new
regulation provides at section 1.7(f) that [FN1 CONTINUED ON PAGE
7] : [Continued]:
The Administrator may issue a wage determination after
contract award or after the beginning of construction
if the agency has failed to incorporate a wage determination
in a contract required to contain prevailing wage rates
determined in accordance with the [Davis-]Bacon Act, or has
used a wage determination which by its terms or the provisions
of this part clearly does not apply to the contract. Further,
the Administrator may issue a wage determination which shall
be applicable to a contract after contract award or after the
beginning of construction when it is found that the wrong
wage determination has been incorporated in the contract
because of an inaccurate description of the project or
its location in the agency's request for the wage
determination. Under any of the above circumstances,
the agency shall either terminate and resolicit the
contract with the valid wage determination, or incorporate the
valid wage determination retroactive the beginning of
construction through supplemental agreement or through change
order, Provided that the contractor is compensated for any
increases in wages resulting from such change. The method of
of the valid wage determination, and adjustment in
contract price, where appropriate, should be in accordance
with applicable procurement law.
Therefore, the ruling herein and in those Wage Appeals Board cases
cited above may not be controlling under certain factual situations
for contracts awarded after the effective date of this regulation.
[END FN1] [7]
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[7] The remaining question before the Board is whether the
Assistant Administrator's action in ruling that the appropriate
wage rate for lawn sprinkler installers is $8.29 per hour and
denying the additional classification of landscape laborer was
proper. [7]
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[8] The petitioner contends that the Assistant Administrator
must have some basis in fact (evidence) showing the rate actually
prevailing for lawn sprinkler installers and that the
classification of building laborers actually perform landscape
work. This contention has no merit in the situation at hand.
As the Board stated above, the prevailing rate argument is
untimely. Also, this is not a question of area practice as to
what classification in an existing wage determination performs
the work. The petitioner has requested two new classifications
to be employed on the project.
Once a contract has been awarded, there is only one method
by which a contracting agency or Wage and Hour can provide
additional classifications which have not been listed in the wage
determination made applicable to the contract and which the
contractor needs to perform the contract. That method is provided
for in the Department of Labor's Regulations at 29 CFR
5.5(a)(1)(ii) which read as follows:
The contracting officer shall require that any class of
laborers or mechanics, including apprentices and trainees,
which is not listed in the wage determination and which
is to be employed under the contract, shall be classified
or reclassified [*] conformably [*] to the wage
determination and a report of the action taken shall be
sent by the Federal agency to the Secretary of Labor. In
the event the interested parties cannot agree on the
proper classification or reclassification of a particular
class of laborers and mechanics, including apprentices and
trainees, to be used, the question accompanied by the
recommendation of the contracting officer shall be referred
to the Secretary for final determination. [*] (Emphasis
added). [*] [8]
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[9] To give any meaning to the words "shall be classified or
reclassified [*] conformably [*] to the wage determination" in 29
CFR 5.5(a)(1)(ii), the proposed wage rates must bear some
reasonable relationship to the wage rates contained in the wage
determination. [[*] [EMPHASIS IN ORIGINAL] [*] This does not mean
that the rate must be an identical rate to one in the wage
determination. In fact, it could even be lower than any rate in
the wage determination. But certainly it must be within close
proximity to those contained in the contract specifications. Here,
the rate of $4.50 per hour as requested by petitioner does not meet
the criterion of "reasonable relationship" to the other wage rates
contained in the contract.
With respect to the landscape laborer's classification, the
Board is not entirely convinced that a laborer performing landscape
work can be fitted into the duties of a building construction
laborer. However, the Board finds it unnecessary to determine
whether the Assistant Administrator correctly denied the additional
classification as the wage rate from the facts in the record would
not differ by using the method described in 29 CFR 5.5(a)(1)(ii).
In view of these considerations the Wage Appeals Board
affirms the ruling of the Assistant Administrator and dismisses
the petition.
* * * [9]
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[10] Member Rothman, dissenting:
I dissent. I would remand the case to the Wage and Hour
Administrator with the following instructions:
1. The Wage and Hour Division should undertake a locality
factual investigation. The purpose of the survey would be to
determine whether in that part of Colorado the structure of
the construction industry is such that the work in question
is considered by the industry under accepted usage and practice
to be building, heavy or highway work. The work to which I
am referring is landscape work awarded independently of any
building construction, which is the case here.
In short, the preparation of lawns and underground water
sprinkling systems awarded separately such as for general
landscaping or the preparation and care of golf courses, parks
or public areas must be factually established to be within
the three classifications for which wage rates were predetermined
-- building, heavy or highway.
There are locality situations where there are classifications
of construction work not performed under any of these schedules as
a matter of local usage and custom. Examples include local paving
and local public utility contracts performed independently of
building or other commercial construction.
2. If such a survey establishes that this kind of work has
not normally been considered to be within building construction [10]
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[11] work and is not normally considered covered by the
prevailing negotiated wage rates which were applied by the
administering agency to this work, the Wage and Hour Administrator
erred.
3. If the survey discloses that the work in question has been
normally and customarily considered outside of any of the foregoing
three categories, the Administrator's survey should determine what
was the appropriate wage rate for the two disputed classifications.
This is the rate to which the employer should be held in this case.
I reach the foregoing conclusions for the following reasons:
1. There are procedures for rectifying an error of this kind
(if, in fact, an error has been made). These procedures are within
the provisions and limitations of the then applicable Secretary's
rules and regulations. Within these applicable rules it is the
purpose of this Board to work out anomalies created by numerous
governmental agencies with different degrees of experience in the
administration of the Act. That is one of the reasons Congress in
1950 promulgated Reorganization Plan No. 14.
2. The petitioner has made a very strong prima facie case
that landscape work is not normally performed by the [11]
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[12] same crafts or by the same laborers and mechanics who work on or
around building construction as part of such construction.
3. The petitioner brought this problem to the administering
agency before work commenced. This would not save it if there had
simply been an error or other inadvertence in an appropriately
applicable wage within the building rate schedule. In this case,
however, if the work in question was not the appropriate subject
matter of any of the three published rates, then it is the same (at
least for the resolution of this case), as though there was not a
properly published wage predetermination in the bid documents at
all.
4. This case is distinguishable from the recently decided
case of Jordan & Nobles and W.R. Pierce, WAB Case No. 81-18, August
19, 1983. In that case, the petitioning contractors paid
pipefitters on building construction at the laborers' rate. It was
simply a question of misclassification. The petitioners in Jordan
& Nobles did not contend that the work in question was not building
construction but that the Wage and Hour Administrator had not
followed its own regulations in arriving at the appropriately
specified wage predetermination for pipefitters on building
construction.
For the foregoing reasons, I dissent from the decision [12]
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[13] reached by the majority and would remand the case to the
Administrator with the foregoing instructions.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary
Wage Appeals Board [13]
