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<![CDATA[
CCASE:
ATCO CONSTRUCTION, INC.
DDATE:
19860822
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D.C.
In the Matter of
ATCO CONSTRUCTION, INC. WAB Case No. 86-01
405 Family Housing Units
Adak NAS, Alaska Dated: August 22, 1986
Contract N62474-83-C2569
APPEARANCES: Terry R. Yellig, Esquire, for the Oregon State
Building and Construction Trades Council, AFL-CIO,
and the Building and Construction Trades Department,
AFL-CIO.
Robert J. Miller, Esquire, Douglas Davidson,
Esquire, for the Wage and Hour Division, U.S.
Department of Labor
BEFORE: Alvin Bramow, Chairman, Thomas X, Dunn, Member, and
Stuart Rothman, Member, filing a separate opinion.
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition
of the Oregon State Building and Construction Trades Council,
AFL-CIO, and the Building and Construction Trades Department,
AFL-CIO, (hereinafter petitioners) seeking review of an October 30,
1985 ruling of the Deputy Administrator of the Wage and Hour
Division, U.S. Department of Labor. This ruling concerned the
application of the Davis-Bacon Act to the fabrication of 405
modular housing units by ATCO Construction, Inc., (ATCO) in [1]
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[2] Portland, Oregon, for erection at the Adak Naval Air Station,
Alaska. The Deputy Administrator ruled that in view of the 3000
mile distance between the fabrication site in Oregon and the
location where the housing units are to be erected, the fabrication
site was not part of the site of work for Davis-Bacon
purposes. Therefore, he concluded that ATCO's employees working
in Portland were not subject to the prevailing wage requirements
of the Davis-Bacon Act.
The facts concerning this dispute are not complicated. ATCO
is a subsidiary of J.A. Jones Construction Company, the
prime contractor, which was awarded a contract by the U.S. Navy
to design and construct 405 housing units on government-owned
land at the Adak Naval Air Station in the Aleutian Islands in
Alaska. ATCO is constructing the houses in Oregon and shipping
them on concrete slabs to Alaska. J.A. Jones is constructing the
utility services, roads, walks, site grading and drainage
and overseeing the installation of the houses on Adak, which will
result in a complete and usable housing facility.
At Portland, ATCO constructed a temporary metal building
for the purpose of fabricating the modular housing units for
delivery to Adak. The metal building, which is to be removed
by December, 1986, is described as a "temporary framing shop
to fabricate housing units for shipping to Alaska". The work
being performed in Alaska is subject to the labor standards
provisions of the Davis-Bacon Act. The construction in Portland [2]
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[3] was not covered by the Davis-Bacon labor standards provisions.
The Deputy Administrator's October 30, 1986 ruling in response to
an inquiry by petitioners stated that the Davis-Bacon Act pro-
visions apply only at the "site of the work" and that in this
case the distance of 3000 miles between the fabrication facility
and the location where the modular housing units are to be
assembled is too great for the facility to be considered as a
part of the "site of the work".
On December 30, 1985, the petitioners appealed this ruling
to the Wage Appeals Board. The petitioners argue that the
fabrication facility devoted exclusively to the construction of
military family housing in Alaska should be covered by the Davis-
Bacon Act regardless of its distance from the actual construction
site.
The Wage and Hour Division relies on a line of cases decided
by this Board which have established an exclusive or nearly
exclusive use or dedication test, and a geographical test for
covering fabrication plants, batch plants, and borrow or gravel
pits located on adjacent or nearby property to a covered
construction site. Following these cases, Wage and Hour argues that
it would not be proper for the Board to cover the work performed
by ATCO in Oregon or to consider a challenge to the Secretary's
regulations. It further urges that the Department is bound by
its own regulations. [3]
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[4] The Wage Appeals Board considered this appeal on the basis
of the Petition for Review filed by petitioners, and the Statement
on Behalf of the Deputy Administrator and the record of
the case before the Wage and Hour Division filed by the Solicitor
of Labor. On May 20, 1986, the Board held an oral hearing
at which all interested persons were present and participated.
* * *
The Wage Appeals Board realizes that the Davis-Bacon Act
requires the payment of those rates found to be prevailing to
all laborers and mechanics employed "directly upon the site of
work". The Department of Labor's regulation defines this
statutory language at 29 CFR [sec] 5.2(l) which reads in pertinent
part as follows:
(l) The term "site of the work" is defined as
follows:
(1) The "site of the work" is limited to the physical
place or places where the construction called for in
the contract will remain when work on it has been
completed and, as discussed in paragraph (l)(2) of
this section, other adjacent or nearby property
used by the contractor or subcontractor in such
construction which can reasonably be said to be
included in the "site".
(2) Except as provided in paragraph (l)(3) of this
section, fabrication plants, mobile factories,
batch plants, borrow pits, job headquarters, tool
yards, etc., are part of the "site of the work"
provided they are dedicated exclusively, or nearly
so, to performance of the contract or project,
and are so located in proximity to the actual
construction location that it would be reasonable
to include them. [4]
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[5] The Wage Appeals Board in past cases has consistently
upheld functional and geographical tests in determining the
"site of the work". See United Construction Company, Inc.,
WAB Case No. 82-10 (January 14, 1983), Mayfair Construction
Company, WAB Case No. 81-16 (April 18, 1983), Ontario Pipeline,
Inc., and Farmington Concrete Products, Inc., WAB Case Nos.
81-12, 81-13 (January 28, 1985), and ABC Paving Co , WAB Case
No. 85-14 (September 27, 1985).
The Wage and Hour Division based its decision that all
work in connection with this project not performed on Adak
Island was not within Davis-Bacon Act coverage because it was
performed 3000 miles away from the Adak construction site. It
concluded that this was too remote to come within the Davis-
Bacon Act axioms, principles and the Department's regulations.
Therefore, the work was not covered.
However, the Wage Appeals Board is of the opinion that this
case may be an anomaly. The Department of the Navy contracted
for construction of residential housing to house military personnel
and their families on Adak Island. Adak Island is far out
in the Aleutians. The successful bidder performed a portion of
the work at Portland, Oregon, some 3000 miles away, by sea. An
examination of the map shows that Portland is about as close in
the Continental United States as you can get to Adak Island.
Mainland Alaska isn't that much closer for purposes of this
case. [5]
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[6] The Board was not told what the work was that was performed at
Portland. Therefore, the Board asked the Office of the Solicitor
representing Wage and Hour to secure and submit to the Board a copy
of the bid documents including the project specifications and also
photographs of the residential units in the course of construction
if such photographs were available. Such photographs of the
housing units at Portland, Oregon, and copies of specifications,
but not the bid document forms, were submitted after the close of
oral arguments.
The documents and photos submitted show that the houses
were substantially built in Portland. This information further
shows that these residential housing units were built or assembled
at Portland upon a concrete slab. Then the slab and the housing
built or assembled on it are taken by barge to Adak Island.
This appears to be the factual situation. Under this set of
facts Portland, where the housing units are being built or
assembled on concrete slabs, must be considered part of the "site
of the work". Therefore, the Davis-Bacon Act is applicable to the
construction of these housing units pursuant to the applicable
Davis-Bacon Act wage rates in the Portland, Oregon, area for
the crafts involved based on area practice for the type and
nature of the work. [6]
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[7] The factory fabrication and prefinishing of metal roofing,
fascia, panels, clapboard siding, trim bands, board and batt[e]n
siding, other metal siding and other prefabricated and prefinished
"closures" are not generally covered by the Davis-Bacon
Act, taking into account standard Davis-Bacon principles concerning
materials and supplies. However, the temporary fabrication
framing shop used to fabricate the housing units is located in
reasonable proximity to the actual construction location. Under
the rules laid down in 29 CFR [sec] 5.2(l)(2) this fabrication
plant (shop) would be considered to be included as part of the
"site of the work". It follows that the Davis-Bacon Act is
applicable to this fabrication work as well as the construction of
the housing units on the concrete slabs.
In view of the above, the case is remanded to the Wage and
Hour Division to include the appropriate prevailing wage rates
for the workers performing work on housing units built or assembled
on the concrete slabs and the workers performing work at
the fabrication shop in Portland, Oregon.
* * *
Member S. Rothman files the following separate opinion.
I would remand this case to the Wage and Hour Administrator
for a fuller determination of the facts pursuant to the following
guidelines. The Board has not been given enough facts to decide [7]
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[8]all of the issues in this case.
1. If this residential housing which was built on concrete
slabs at Portland, Oregon, for removal to Adak Island used
conventional construction and erection methods and technologies,
and employed laborers and mechanics in the conventional and
identifiable building and construction crafts, the prevailing
Davis-Bacon wage determination should apply to such construction.
Photographs of the housing would indicate that this was
conventional residential construction to be erected at Portland and
transported to Adak Island on barges. But this should be checked
out by the Wage and Hour Administrator. I concur in principle with
the decision of the majority on this point.
2. If, upon a fuller factual investigation, this residential
housing was manufactured according to the methods and technologies
presently prevailing in the Portland, Oregon, area for the
manufacture of mobile homes, and this housing is more comparable to
a mobile home than it is to conventional construction and erection
of residential housing, the Davis-Bacon wage determination
should not apply.
3. This is indeed an anomalous situation with the fabrication
of materials and the construction of housing at a temporary
location in preparation for transporting the product constructed
3000 miles away to Adak Island. Although the fabrication of the
basic components of the buildings took place in proximity to
the construction project, it does not necessarily follow under [8]
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[9] the special circumstances that the fabrication work should be
governed by the Davis-Bacon Act. If the prefinished metal roofing,
fascia panels, clapboard siding, trim bands, board and batten
siding, other metal siding and other prefabricated and prefinished
"closures" as specified in the project plans are comparable to
factory-fabricated or shop-fabricated materials, equipment, and
supplies, this portion of the work should not be covered by the
Davis-Bacon Act, taking into account standard Davis-Bacon
principles concerning procurement of material and supplies.
However, if the fabrication of these component parts of the housing
was integrated, part and parcel, with the construction of the
buildings using the same laborers' and mechanics' crafts and
classifications interchangeably with the construction of the
buildings, then it would appear that the Davis-Bacon Act would have
to apply. These are factual questions requiring fuller
investigation.
4. As meager as is the information given to the Board by
the parties to this dispute, there is reason to believe that
the logistics of this project including where construction
prefabrication or manufacture were to take place being obviously
p[er]tinent to government costs and the successful bidders' overall
performance, the government agency or agencies involved may have
overlooked specifying matters required to be specified in the
contract documents, including the application of the Davis-Bacon
Act Although it seems apparent that this housing would be
constructed and erected away from Adak Island, namely, on the [9]
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[10] mainland, the contracting agency did not include the
appropriate Davis-Bacon wage determinations in the contract
document. I infer that any responsible contracting agency would
have required the successful bidder to explain its construction
plans before the award. On the remand which I propose, the Wage and
Hour Administrator has the alternative of determining the extent
and status of completion of the project in view of the delays which
have taken place and to apply the Davis-Bacon Act or if the project
is completed to take a non-enforcement position; the principles
established herein to be applicable to future projects of this
kind.
BY ORDER OF THE BOARD
Craig Bulger
Executive Secretary,
Wage Appeals Board [10]
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