WAWACO METROPOLITAN AREA REGIONAL SEWERAGE SYSTEM IMPROVEMENT PROJECT, WAB No. 83-04 (WAB Apr. 22, 1983)
CCASE:
WACO METROPOLITAN AREA REGIONAL
SEWERAGE SYSTEM IMPROVEMENT PROJECT
DDATE:
19830422
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D.C.
In the Matter of
WACO METROPOLITAN AREA REGIONAL WAB Case No. 83-04
SEWERAGE SYSTEM IMPROVEMENT PROJECT
The Applicability of Prevailing
Wage Rates to the Construction of Waco
Metropolitan Area Regional Sewerage Dated: April 22, 1983
System Improvement Project, Waco-Metro
C-481229-03, Brazos River Authority,
Waco, McLennan County, Texas
APPEARANCES: Terry R. Yellig, Esquire for Waco Building and
Construction Trades' Council and the Building
and Construction Trades' Department, AFL-CIO
Charles W. Stuber, Esquire for Brazos River
Authority and Associated General Contractors,
Texas Heavy and Municipal Utilities Branch
Gerald F. Krizan, Esquire, Gail V. Coleman, Esquire
for the Wage and Hour Division, U.S. Department of
Labor
BEFORE: Alvin Bramow, Chairman, Stuart Rothman, Member
Thomas X. Dunn, Member, Dissenting
OPINION OF THE WAGE APPEALS BOARD
This case was before the Wage Appeals Board on the petition
of the Waco Building and Construction Trades' Council and the
Building and Construction Trades' Department, AFL-CIO, (hereinafter
petitioners) which seek review of a decision of the Assistant
Administrator, Wage and Hour Division, dated [1]
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[2] February 7, 1983 concerning wage rates predetermined for certain
components of the proposed Waco Metropolitan Area Regional Sewerage
System Improvement Project to be built by the Brazos River Authority of
Waco, Texas. Due to the requirement of the parties to receive the
Board's decision prior to bid opening, a telegraphic decision by the
majority members of the Board affirming the decision of the Assistant
Administrator was sent to all parties February 28, 1983. The Board's
decision stated that a full opinion explaining the majority members'
decision and the dissent would follow.
The proposed sewerage system project is more fully described
as a $30,000,000 regional sewerage system project consisting of
four contracts: the regional treatment plant, the transfer lift
station, the transfer force main and the east bank interceptor.
The regional treatment plant will replace the old City of Waco
Treatment Plant which is located approximately three miles from the
new plant. The transfer lift station will pump all flows from the
old plant to the new plant via the transfer force main.
The Wage and Hour Division determined the heavy construction
wage rates should apply to the construction of the entire
project with the exception of the administration building
alteration, the main building, the shop building and the
storage building which were to be built pursuant to the building [2]
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[3] construction rates for McLennan County, Texas.
The petitioners requested reconsideration of the Assistant
Administrator's decision applying the heavy wage rate schedule
to the dissolved air flotation structure, the activated sludge
pump station, the primary sludge pump station, the digester
pump station, the main lift station, revisions to the lift
station and the transfer lift station.
In a letter dated February 7, 1983 the Assistant Administrator
issued a ruling denying petitioners' request that the
aforementioned structures be changed from the heavy construction to
the building construction category. Petitioners were advised that
the decision could be appealed to the Wage Appeals Board and on
February 8, 1983, petitioners filed the Petition for Review with
the Board.
In view of the need for a prompt decision the Board notified
all interested persons that an oral hearing would be conducted on
February 25, 1983, in Washington, D.C. The hearing was held as
scheduled and all interested parties were present and participated.
* * *
After considering the briefs filed in this appeal and
hearing the oral arguments at the hearing the majority of the
Board recognize and will continue to direct the Wage and
Hour Division to follow the practice set forth in South Cobb [3]
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[4] Waste Water Treatment Plant, WAB Case No. 76-19 (November 19,
1976). This case affirmed the practice of issuing both heavy and
building wage rate schedules for projects properly characterized as
involving more than one category of construction.
The majority of the Board agrees with the Assistant
Administrator that the Waco project is this type of project and
that she properly issued both heavy and building wage schedules for
this work.
The question present in this case is whether the Assistant
Administrator erred in ruling that the following construction:
() the dissolved air flotation structure, (2) the activated
sludge pump station, (3) the primary sludge pump station,
(4) the digester pump station, (5) the main lift station,
(6) revisions to existing sludge pump station and (7) the
transfer lift station is heavy construction. The petitioners
contend it is building construction. Much emphasis has been
placed by petitioners on the Wage and Hour Division's Guidelines,
All Agency Memoranda Nos. 130 and 131, to resolve this controversy.
It is necessary to look into and beyond these Guidelines when
the facts so require. If general definitions do not fit as a
matter of natural meaning, they can't be made to fit by over
conceptualization. We must hold up a mirror to practice in
the industry in the locality. The dispute must be resolved on [4]
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[5] the basis of construction facts in each case helped by the
Guidelines which reflect experience. But when the Guidelines
do not reflect experience, it would be unreasonable to seek
to apply them.
The question frequently arises whether pumping stations
in sewerage treatment plants are building construction or are
more akin to heavy construction, utilizing heavy construction
methods and procedures.
The majority of the Board reaches the following conclusions:
1. The Guidelines themselves make clear that "pumping
stations" must be carefully examined as to their own setting
and facts because experience has shown that a literal application
of the Guidelines to such construction has proved to be
inappropriate.
2. In connection with the overall work to be awarded for this
sewerage treatment plant, there will be construction to house
administrative facilities and shops. If there were any factual
ambiguities or equivocation as to such type of construction, such
ambiguities or equivocalness should be resolved in favor of
building construction according to the natural meaning of that
term.
3. The work in dispute here, construction to serve as
foundations for and to house pumps and with a major electrical
motor placed on top of one structure does not have in the work
the kinds of construction elements and components that would [5]
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[6] clarify certain conceded ambiguities as to the category of work
in favor of building construction. The majority of the Board
concluded that the Assistant Administrator was on surer footed
ground when she concluded that this construction should be
treated as within the engineering processes of the sewerage
treatment system and not carved out of that process and placed
in the category of a building or buildings.
4. This part of the work will be awarded simultaneously
with the award of the overall construction of the sewerage
treatment plant. It will legitimately attract those segments
of the industry in the locality that bid, as heavy construction
contractors, for the other segments of the work which without
dispute have been accepted as heavy construction. As a process
plant for the treatment of sewage the Board is unable to
distinguish this part of the process and its construction from
other parts of the same project which are of a similar nature to
other sewerage treatment systems.
5. Although there will be a substantial amount of electrical
work in this disputed construction, the appropriate electrical rate
is not in dispute. The electrical work would still be there if the
construction eliminated an enclosed space, but utilized a single
wall or an unroofed area.
6. The design of the structures, according to the drawings,
has impressed the majority of the Board as it undoubtedly [6]
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[7] did the Wage and Hour Division that the pump housing as an
enclosed space came about only an as adjunct and only as
incidental to the installation of pumps and motors for the
mechanical requirements of these structures and accordingly,
has not been designed with building characteristics in mind.
7. To disturb the findings of the Wage and Hour Division
would leave it with no reasonable way in the future to administer
the Act according to local practice with respect to the way
in which certain types of construction are accepted in the industry
as being a part of either heavy construction or building
construction. True it is that in the case of [*] novel
construction [*] there will be no local practice. The Wage and
Hour Division will have to make hard decisions. But it appears
from the record, and from information supplied at the hearing that
in the Waco area this type of work, if it ever had been considered
building construction, has passed by predominant local practice
into the heavy segment of the industry. Under these circumstances,
the burden would be upon the petitioners to establish that the
building characteristics of this construction predominated over
heavy construction in terms of the harms the Davis-Bacon Act
seeks to prevent. The majority of the Board has too many
grave doubts that the petitioners sustained this burden to
justify a reversal of the Wage and Hour Division. The majority
reaches this decision despite the fact that part of the construction
of the transfer lift station which is above ground has a [7]
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[8] door and a loading platform, some metal stairs to reach
the pumps and to service the pumps, and an unloading area with an
anchored overhead crane. The majority does not believe that
these features will convert a transfer lift station in a main
trunkline in a sewerage treatment system to building construction
when at the same time other undIsputed work of similar construction
characteristics in other parts of the project, even in parts
leading to and from this lift station, is considered heavy in the
industry for purposes of the application of the appropriate wage
rates. For this to be considered a building it would have to be
carved out of the rest of the project. Such justification would
have to be established by clear and convincing evidence. That
burden has not been met.
Member Thomas X. Dunn, dissenting.
I disagree with the majority's conclusion that the structures
in question in this case are not clearly "building construction".
The Board has approved the Wage and Hour Division's general
practice of issuing both heavy and building wage rate schedules in
its wage determinations for water and sewer treatment plants. See,
South Cobb Waste Water Treatment Plant, WAB Case No. 76-19
(November 19, 1976), p. 3. This practice has been followed in
recognition of the fact that most treatment plants involve a
substantial amount of building structures and of non-building
structures, piping, and other appurtenances not directly a part of
the buildings. [8]
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[9] Some years ago the Board issued a decision concerning
wage rates applicable to high-rise apartment buildings in
Washington, D.C., 2900 Van Ness Street, WAB Case No. 76-11
(January 27, 1977). The Board announced in Van Ness Street
that similarity of construction for wage determination purposes
cannot be based on anything other than the nature of the project
itself in a construction sense. As a result, the Board refused
to recognize high-rise residential projects as a category of
construction separate from general building just because wage
rates generally paid on such projects in the District of Columbia
were arguably distinct from those prevailing on other building
projects. Thus, the Board explained in Van Ness Street:
If the Board were to adopt the rationale urged by
the petitioner, it would appear to be proper to
"carve out" not only high-rise apartments, but also
hospitals, schools or hotels or even to differentiate
between a 5-story office building and a 20-story office
building depending upon whether union or nonunion contractors
performed a majority of that particular type of construction.
Further, in a locality wherein nonunion wage rates
had been found to prevail, it would appear to be proper
to determine union wages for construction of a hospital
solely because recent hospital construction in the
locality was performed by contractors paying wages
negotiated with labor organizations. The Board does not
believe that this was the intent of Congress and therefore
rejects such an interpretation of the Davis-Bacon
Act. (Id. at 4-5.)
The legislative history of the Davis-Bacon Act supports
the rule enunciated in Van Ness Street. The language in
40 U.S.C. [sec] 276a which directs the Secretary of Labor to
determine rates of wages locally prevailing on "projects of a [9]
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[10] character similar to the contract work . . ." was not in the
original Act as it was passed in 1931. It was adopted for the
first time in the 1935 amendment of the Act, supplanting the
former language "work of a similar nature." The original
phrase left "some doubt as to whether the statute refers to
wages in the same craft or wages paid on [*] similar
construction [*]." S. Rept. No. 1155. Committee on Education and
Labor, 74th Cong., 1st Sess., 3 (1935) (emphasis added). The
amendment thus made clear that "similarity" refers to whether the
project is similar in a construction sense.
The Wage and Hour Division, in order to set forth its
policies with regard to the determination of "projects of a
character similar to the contract work" for wage determination
purposes, has issued Guidelines regarding the application of
multiple schedules of wage rates to a single project. The
Guidelines, known as All Agency Memorandum No. 130 (March 17,
1978), as amended by All Agency Memorandum No. 131 (July 14,
1978), define "building construction" as follows:
Building construction generally is the construction of
sheltered enclosures with walk-in access for the purpose
of housing persons, machinery, equipment, or supplies.
It includes all construction of such structures, the
installation of utilities and the installation of equipment,
both above and below grade level, as well as incidental
grading, utilities and paving. Additionally, such
structures need not be "habitable" to be a building
construction. The installation of heavy machinery and/or
equipment does not generally change the project's character
as a building.
This description is consistent with generally accepted notions
in the construction industry of what constitutes a "building". [10]
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[11] All the structures in dispute in this case, including the
transfer lift station, qualify as "building construction" according
to this description. Local area practice cannot change this
fact.
Finally, I am perplexed by several odd positions taken by
Counsels for the Wage and Hour Division during the course of
the hearing in this case. One of such Counsels noted that
All Agency Memoranda Nos. 130 and 131 were "not regulations",
presumably conceding that although the nature of the building
structures fitted the Guidelines laid down for "building
construction" such Guidelines need not be followed. Another
Counsel noted that when the nomenclature of a structure is
"dubious" it generally should fall in the class of "heavy".
Ignoring the clear definition of "building construction" as
laid down in the Guidelines and resolving the "doubt" in favor
of the contractors is contrary to U.S. v Binghampton Construction
Company, 347 U.S. 171 (1954). Under the principles as laid down by
the Supreme Court in Binghampton, the clear definition of "building
construction" in the Guidelines could, or should have been
followed, and any doubt as to the nature of the buildings should
have been resolved in favor of "building construction" rather than
"heavy construction".
Failure to recognize the principles of Binghampton leads
to an unreasonable conclusion that the benefits to which the
workers are entitled go not to them but instead to the
contractors.[11]
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[12] Accordingly, I would apply the locally prevailing wage
rates for building construction in the Waco, Texas area to the
disputed structures in this project.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary
Wage Appeals Board [12]
