Warren Oliver Co., WAB No. 84-08 (WAB Nov. 20, 1984)
CCASE:
Warren Oliver Company
DDATE:
19841120
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of
Warren Oliver Company WAB Case No. 84-08
Lake Oswego, Oregon Dated: November 20, 1984
BEFORE: Alvin Bramow, Chairman, Thomas X. Dunn, Member, Stuart
Rothman, Member, Concurring in part and dissenting in
part.
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition of
the Warren Oliver Company seeking review of a decision dated
February 3, 1984, by the Chief of the Branch of Construction
Contract Wage Determinations of the Wage and Hour Division. This
decision relates to the denial of petitioner's request for the
additional classification of halon fire extinguisher installers
on a Bonneville Power Administration (hereinafter BPA) contract
for the construction of a fire protection and extinguishing
system at the Dittmer Control Center in Vancouver, Clark County,
Washington. The Wage and Hour Division's denial of petitioner's
request was based on its determination that the work could be
performed using the sprinkler fitter classification already
included in the wage determination applicable to the project,
WA 83-5110.
The petitioner was awarded the contract to construct the
fire protection system by BPA on October 20, 1983. Since [1]
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[2] wage determination WA 83-5110 did not contain a classification of
halon system installer, petitioner requested the addition of this
classification to the wage determination pursuant to Regulations,
29 CFR 5.5(a)(1)(ii)(A) /FN1/ After Wage and Hour denied
petitioner's request for the halon system installer, petitioner
appealed the agency's decision to the Wage Appeals Board on April
24, 1984.
It is petitioner's position that the Wage and Hour Division
erred in claiming the halon system installation should be
considered work to be performed by sprinkler fitters and
electricians at a wage of $25.55 per hour. Petitioner also points
out that identical work had been performed by it six months earlier
at a location 40 miles from the Vancouver project at $11.08 per
hour for BPA. Petitioner argues that the work involved in
installing the halon fire protection system is conformable to
neither the sprinkler fitter nor the electrician classification.
Finally, petitioner contends that the Wage and Hour Division should
be estopped from enforcing the $25.55 rate when petitioner bid the
job based on a [2]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ The contracting officer shall require that any class of
laborers or mechanics which is not listed in the wage determination
and which is to be employed under the contract shall be classified
in conformance with the wage determination. The contracting
officer shall approve an additional classification and wage rate
and fringe benefits therefor only when the following criteria
have been met: (1) The work to be performed by the classification
requested is not performed by a classification in the wage
determination; and (2) The classification is utilized in the area
by the construction industry; and (3) The proposed wage rate,
including any bona fide fringe benefits, bears a reasonable
relationship to the wage rates contained in the wage determination.
(Revised and published on April 28, 1983 (48 FR 19532), effective
June 28, 1983.) [2]
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[3] rate of $12.00 per hour or less, and had been able to perform
the nearby job for the same agency at the rate of $11.08 within 8
months of bidding the Dittmer Control Center project.
The Solicitor of Labor relies on the collective bargaining
agreement of the Sprinkler Fitter Local Union 669 which claims
jurisdiction over all fire alarm systems and a memorandum
indicating several projects performed by the members of Sprinkler
Fitters Local in Clark County, Washington. It is also argued
on behalf of Wage and Hour that petitioner has brought it[]s claim
that only a halon system installer should performed the required
work after the award of the contract and cites several decisions
of this Board which have held to the effect that the accuracy of
wage determinations may be questioned only prior to contract
award. See Jordan & Nobles Construction Co. & W. R. Pierce
Associates, WAB Case No. 81-18 (Aug, 19, 1983) and Rite Landscape
Construction Co., WAB Case No. 83-03 (Oct. 18, 1983). The
Solicitor also disputes petitioner's contention that the government
should be estopped from enforcing the Davis-Bacon Act in this
instance because a rate for halon installers had been recently
approved and paid at another project by BPA in the vicinity of this
project. A line of Wage Appeals Board cases is cited to show that
the Board has consistently held that actions undertaken by a
contracting agency do not estop the Department of Labor from
requiring the payment of the proper wage rates. See Metropolitan
Rehabilitation Corp, WAB Case No. 78-25 (Aug. 2, 1979), Clevenger
Roofing [3]
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[4] & Sheet Metal Co., WAB Case No. 79-14 (Aug. 20, 1980), Tollefson
Plumbing & Heating Co., WAB Case No. 78-17 (Sept. 24, 1979) and Jos. J.
Brunetti Constr[u]ction Co. and Dorson Electric & Supply Co,, WAB Case
No. 80-09, (Nov. 18, 1982).
The Board considered this appeal on the basis of the Petition
for Review and a subsequent response to the Statement on behalf
of the Assistant Administrator filed by petitioner, the Statement
on behalf of the Assistant Administrator and the record of the
appeal in the Wage and Hour Division filed by the Solicitor of
Labor. No request for an oral hearing has been received by the
Board.
* * *
The Board indicated in its Notice of June 18, 1984 that at the
time of the Board's decision it would consider the motion from
counsel on behalf of the Wage and Hour Division to dismiss the
petition for lack of jurisdiction and/or mootness. The Board has
considered the question of its jurisdiction to rule on this appeal
and the extent of its authority to award damages to the petitioner.
The Board is constrained to agree with the Solicitor that
there is no authority, either by statute, regulation, or case
law, which grants the Secretary of Labor the right to award money
damages as requested by petitioner. The Board acts only as fully
and finally as the Secretary of Labor concerning the [4]
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[5] matters within its jurisdiction. /FN2/ Therefore, the Board lacks
authority to award petitioner money damages.
This, however, does not prevent the Board from taking
jurisdiction and ruling on the primary issue of whether the Wage
and Hour Division erred in denying a request in accordance with
Regulations, 29 CFR 5.5(a)(i)(ii)(A) for addition[al]
classification and wage rate for halon system installers to be
utilized in the construction of a fire protection and extinguishing
system. To rule otherwise, would deny petitioner due process and
preclude it from pursuing any other avenue of relief.
The Board is again confronted by a situation where an agency
is advertising a contract for some specialized construction work
utilizing an area or General Wage Determination contained in the
Federal Register. It seems reasonably clear that specialized
construction as in this case, installation of a halon fire
protection system, may not be performed by the usual building
trades classifications issued in most area wage determinations.
This is evident by the fact that the agency and the Department of
Labor permitted a classification and a wage rate for halon system
installers on a recently completed project for BPA in the same
area.
To help resolve this type of problem in the future, the Board
suggests that the Wage and Hour Administrator issue an All-Agency
Memorandum. This should set forth that the proper procedure
for [5]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN2/ Secretary of Labor's Order 24-70, Dated October 7, 1970
(F.R. Vol. 36, No. 5 at 306, January 8, 1971) and 29 CFR [sec]
7.1(d). [5]
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[6] requesting a wage determination for specialized types of
construction is contained in 29 CFR 1.5(a)(1) and that General Wage
Determinations in the Federal Register which onlY contain the usual
building trades classifications may not be applicable to the
contract work.
The record leaves much to be desired as to the prevailing
practice concerning the classification which performs halon
installation and the wages paid to such workers in the area in
question. Unfortunately, as the Board indicated in a most recent
decision, Rite Landscape Construction Co., (supra), 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 were not those actually prevailing was prior to
bid opening and contract award. To do so after bid opening and
contract award was untimely. The Board has held so since its first
decision in 1964. See Huntsville-Madison County Airport, WAB Case
No. 64-01 (August 31, 1964), Fry Brothers Corp., WAB Case No. 76-06
(June 14, 1977), Southeastern Capital Corp., WAB Case No. 78-12
(Jan. 16, 1979), Holloway Sand and Gravel Trucking, Inc. , WAB Case
No. 79-13 (Jan. 16, 1980), Jordan & Nobles Construction Co. &
W.R. Pierce & Associates, supra.
The petitioner relies on In the Matter of Interstate Project
No. I-65-1 (85) 23, WAB Case No. 77-02 (Oct. 21, 1977), that claims
that wage rates and classifications on wage determinations are
not prevailing [*] need not [*] be raised prior to award of the
contract. [EMPHASIS IN ORIGINAL] [6]
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[7] In the Clarification of the Order Denying Motion for Reconsideration
of the Interstate Project decision (March 6, 1978), the Board stated
that it was aware that the wage decision issued was [*] clearly
erroneous [*] and that a corrected wage decision be provided only as a
matter of record. The Board recognized that it had no authority to take
any other type of action. [EMPHASIS IN ORIGINAL]
The case in question is distinguishable. The record does
not show that the classifications and wage rates contained in
the wage decision are clearly erroneous. There is some information
in the record that not only the classification requested by
petitioner performs this type of work but that contractors under
the Sprinkler Fitters Local Union #669 agreement have performed
halon system installations in Clark County, Washington.
The ruling in the Interstate Project decision has been
incorporated in the Department of Labor's Regulations 29 CFR 1.7(f)
published on April 28, 1983 (48 FR 19532), effective on June 28,
1983. This regulation reads as follows:
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-
Bac[on] 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 [7]
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[8] the agency shall either terminate and resolicit the
contract with the valid wage determination, or incorporate
the valid wage determination retroactive to 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 incorporation of the valid wage determination, and
adjustment in contract price, where appropriate, should be
in accordance with applicable procurement law.
However, the Board must conclude that the factual situation of
this case does not come within the purview of the above regulation.
Since this contract has been awarded and the factual situation
does not come within relief under 29 CFR 1.7(f), 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)(A). See footnote 1.
Here, criteria (1) set forth in 29 CFR 5.5(a)(1)(ii)(A) has
not been met, i.e., the work performed by the classification
requested is not performed by a classification in the wage
determination. The record definitely shows that the work can and
is also performed by the sprinkler fitter classification contained
in the wage determination. It is not a standard or even necessary
that the classification in the wage determination be the prevailing
one, but only that work in the area be performed by that
classification of worker. The record satisfies this requirement
and, therefore, [8]
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[9] the additional classification request must be denied.
The petitioner further contends that the U.S. Department of
Energy should be estopped from claiming that the prevailing wage
of a halon installer exceeds $12.00 per hour. It bases this
estoppel upon its reliance on the acceptance by the U.S. Department
of Energy, BPA, of a wage of $11.08 per hour on the Celilo
Converter Station contract in the same locale, some eight months
earlier.
This Board has rejected estoppel arguments that a petitioner's
reliance upon the advice of the contracting agency as to the
appropriate wage rate operates to relieve petitioner of its
responsibility to pay the proper wage rate to laborers and
mechanics employed on the project. The Secretary of Labor was
given the power to regulate the interpretation and enforcement of
the Davis-Bacon Act and related acts by Reorganization Plan No. 14
of 1950. This authority has been reinforced by two opinions of the
Attorney General of the United States. Sentinel Electric Company,
WAB Case No. 82-09 (April 5, 1984). See also Jos. J. Brunetti
Construction Co., and Dorson Electric and Supply Co., Inc.,
supra); Metropolitan Rehabilitation Corp., supra; and Tollefson
Plumbing and Heating Co., supra.
In view of the foregoing, the decision of the Wage and Hour
Division is affirmed and the petition is dismissed.
* * * [9]
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[10] Member Rothman, Concurring in part and dissenting in part.
I concur in that part of the majority decision that denies
monetary relief and rejects petitioner's estoppel argument. But
there is a basic error in administration of the Davis-Bacon Act in
this case. It comes about because the Wage and Hour Administrator
has treated special project work predominantly performed by
employees of specialty contractors when it is not part of a project
for new construction of buildings and structures, the same as if
such work were included in the initial design and engineering for
such original construction.
There has been no showing in this case that any other
contractor or his employees was hurt by the award to the
petitioner. There has been no showing that contractors who work
under the general building and commercial wage schedules in the
locality perform this specialty work except in the case in which it
is part and parcel of initial construction of structures or
buildings.
It has been said that the Davis-Bacon Act is to be used as
a shield to protect employees against the erosion of their
traditional and legitimate work, but it is not to be used as a
sword to acquire work which they have never had or work which has
been lost through structural changes due to technological
developments in the construction industry. From the record as I
understand it, this appears to be such a case.
The initial construction has been fully completed in this [10]
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[11] case, assumedly with the passage of a number of years. The
contracting agency then desired to install a specified fire
protection and extinguishing system which under local practice
is performed by specialty contractors utilizing their own work
force of installers. I am unable to conclude that such a
project is the kind of project that has to be built under the
same project schedule that was applicable to the initial
construction of the facility.
A problem arises in these cases when the contracting agencies
are not alert to recognize the situation in which the wage schedule
included in the bid documents should include a classification
for specialty work of this kind when such work is all there is
to the project. I would agree with the petitioner's contention
that in this case an entire wage rate classification was omitted
from the wage schedule because the prepublished prevailing wage
schedule for new construction of buildings and structures is not
applicable at all.
To clarify this situation for the future, I would recommend to
the Wage and Hour Administrator as a part of this dissenting
statement that appropriate steps be taken to require all
contracting agencies and sponsors of all projects subject to the
Davis-Bacon Act to see that bidding documents contain a provision
that bidders who contemplate performing work at classifications
different [11]
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[12] from the published schedule direct attention of the contracting
agency to the claimed error prior to the award of bids.
I would remand this case to the Wage and Hour Administrator
to determine the prevailing practice with respect to the
installation of halon fire extinguishing systems after and apart
from the initial construction of the facility into which such
system is placed. If such quick check were to show that the
prevailing practice is for such work to be performed by specialty
contractors who install halon fire extinguishing systems with a
stabilized work force of their own, the Wage and Hour Division
should modify its enforcement position in this case. The Wage
and Hour Administrator could take a "no enforcement" position.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary
Wage Appeals Board [12]
