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<![CDATA[
CCASE:
GRANITE BUILDERS, INC.
DDATE:
19860127
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of
GRANITE BUILDERS, INC. WAB Case No. 85-22
Rochester, New York Dated: January 27, 1986
APPEARANCES: Carl Krause, Esquire, James Holahan, Esquire, for
Granite Builders, Inc.
Kevin D. Jones, Esquire, Municipal Attorney for the
City of Rochester
Jules L. Smith, Esquire, for Rochester Building and
Construction Trades Council
Terry Yellig, Esquire, for Building and Construction
Trades Department, AFL-CIO
Katherine Waldbauer, Esquire, Gail V. Coleman,
Esquire, for Wage and Hour Division, U.S. Department
of Labor
BEFORE: Alvin Bramow, Chairman, Thomas X. Dunn, Member
Stuart Rothman, Member
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition of
Granite Builders, Inc., (hereinafter GBI) seeking review of a
ruling of the Assistant Administrator dated August 23, 1985, which
held that GBI's protest of wage rates issued in Wage [1]
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[2] Decision No. NY 81-3039 to the Wage and Hour Division was untimely.
GBI maintains that its protest of the wage rates applicable to the
Granite Building project was timely and that Wage and Hour could
not assume that wage rates contained in collective bargaining
agreements applicable to the Rochester, N.Y., area were prevailing
unless Wage and Hour had conducted a full wage survey of
construction in the vicinity of Rochester.
The facts in this appeal are not in dispute and may be simply
stated. The Granite Building is an historic building located in
downtown Rochester. It was determined by the City that the
building should be renovated into modern offices with the facade of
the building being preserved. The City obtained an Urban
Development Action Grant (UDAG) from the U.S. Department of Housing
and Urban Development, (DHUD) in November, 1983.
The City of Rochester then loaned the UDAG funds to the owners
of the Granite Building to carry out the renovation project. As a
result of this latter loan agreement the owners and their
contractors and subcontractors were subject to the labor standards
provisions of the Davis-Bacon Act, including the requirement that
they pay the predetermined wages to their laborers and mechanics,
although no wage determination was included in the loan
agreement.[2]
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[3] The petitioner herein, GBI, was the construction manager
hired by the owners to supervise the construction on the building
which began in August, 1984. It was not until October, 1984 that
the City gave one of the owners of the building a copy of various
specifications for the project, including the Davis-Bacon
provisions and the applicable wage determination. In November,
1984 GBI filed a protest of the wage determination with the City
which forwarded the protest to DHUD. GBI also sent a copy of its
protest to the Wage and Hour Division. In March, 1985 GBI
submitted to Wage and Hour wage payment data it had gathered in
support of its position that the wage rates contained in the wage
determination applicable to the renovation project were not
prevailing in Rochester, N.Y.
In August, 1985 the Assistant Administrator, Wage and Hour,
informed GBI that its protest was untimely since it was filed after
construction had started. On September 17, 1985 GBI filed a
Petition for Review of the Assistant Administrator's ruling of
August 23, 1985 with the Wage Appeals Board.
GBI argues to the Board that its protest was not untimely
under the circumstances because at the time it started
construction, the appropriate wage determination had not been
provided to it by the City which was administering the grant.
GBI claims that since it did not have the wage determination [3]
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[4] it could not know that the wage rates being paid by the contractors
and subcontractors were not those contained in the wage
determination for the project and therefore could not protest
the wage rates in the determination.
GBI also contends that the Department's regulations at 29 CFR
1.6(f) provide that when construction is begun without a wage
determination, the Administrator has the authority to issue a
determination subsequent to the start of construction. GBI
requests that the Administrator be ordered to issue a wage
determination for their project pursuant to this provision.
The Solicitor of Labor on behalf of the Assistant
Administrator maintains that the Department of Labor's regulation
at 29 CFR 1.6(c)(3) permits modification of wage determinations
only prior to the start of construction where there is no contract
award, as in this case. Wage and Hour also relies on a line of
Wage Appeals Board decisions from Gananda Development Corp., WAB
No. 73-13 and 74-01 (May 14, 1977) through Rite-Landscape
Construction Company, WAB No. 83-03 (October 18, 1983) which have
consistently held that a wage determination can only be challenged
before contract award or the start of construction.
The Wage Appeals Board considered this appeal on the basis of
the Petition for Review and Reply Brief filed by Counsel for GBI,
the record of the case before the Wage and [4]
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[5] Hour Division and a Statement on behalf of the Assistant
Administrator filed by the Solicitor of Labor, an affidavit filed by the
Attorney for the City of Rochester and affidavits filed by the Solicitor
of Labor on behalf of the Assistant Administrator. On December 17,
1985, an oral hearing was held by the Wage Appeals Board at which all
interested persons were present and participated.
* * *
The sole issue before the Board is whether the petitioner's
request for review of the wage rates contained in Wage
Determination No. NY 81-3039 which was made applicable to the
construction project was untimely. The petitioner contends
that it did not receive the wage determination prior to the
start of construction and, therefore, Department of Labor
Regulation 29 CFR 1.6(f) is effective and permits a challenge
to such a wage determination. That regulation reads in part
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-Bacon Act, . . .
The Board must conclude that the petitioner's argument that
Regulation 29 CFR 1.6(f) is applicable in this case is misplaced.
This is not the type of case for which this regulation was
promulgated. [5]
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[6] The Housing and Community Development Act of 1974, 42 U.S.C.
5310, under which the Urban Development Action Grant funds were
authorized require in pertinent part:
All laborers and mechanics employed by contractors or
subcontractors in the performance of construction work
financed in whole or in part with assistance received
. . . shall be paid wages at rates not less than those
prevailing on similar construction in the locality as
determined by the Secretary of Labor in accordance with
the Davis-Bacon Act, as amended . . . .
In this case, the record is clear that all the grant documents
and the loan agreement between the City of Rochester and the owners
of the Granite Building project contained a clause requiring
compliance with all Federal laws, including the Davis-Bacon
provisions. Petitioner has admitted that it was fully aware of the
Davis-Bacon provisions, but that it went forward with the start of
construction without obtaining the applicable wage determination.
It is the Board's understanding that under Urban Development
Action Grants wage determinations are not provided to the developer
or contractor until just prior to the start of construction. The
facts show that the City of Rochester discussed the necessity of a
pre-construction conference so that at that time the applicable
wage determination could have been presented to the petitioner or
the owners of the project. However, no notice was ever given to
the City of Rochester when construction would start. In fact,
construction started [6]
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[7] without a pre-construction conference with the City Officials.
In view of these facts, it appears to the Board that the only
reason an appropriate wage determination was not given to the
petitioner or the owners was due to their reluctance or negligence
in obtaining the labor standards required by the loan agreement.
It was incumbent upon them to go forward with all of the
requirements of their agreement. This type of activity cannot be
condoned by the Board as an excuse to avoid Federal labor standards
laws and regulations.
Thus, the Board must hold that the petition is untimely and
the petition is hereby dismissed.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary
Wage Appeals Board [7]
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