UTILITY SERVICES INC., WAB No. 90-16 (WAB July 31, 1991)
CCASE:
UTILITY SERVICES INC.
DDATE:
19910731
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
UTILITY SERVICES, INC.,
Addition to Abert Hall WAB Case No. 90-16
Defense Mapping Agency
Gaithersburg, Maryland
BEFORE: Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Patrick J. O'Brien, Member
DATED: July 31, 1991
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition
of Utility Services, Inc. ("Utility Services" or "Petitioner")
for review of the February 6, 1990 ruling of the Acting
Administrator of the Wage and Hour Division denying Petitioner's
request to use the water and sewer line rates, rather than the
building construction rates, for its portion of a project in
Montgomery County, Maryland. For the reasons stated below, the
Board remands this matter to the Wage and Hour Division for further
proceedings consistent with this decision. [1]
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[2] I. BACKGROUND
On March 21, 1986, the Department of the Army issued a bid
solicitation for an addition to Abert Hall, Defense Mapping
Agency, Brookmont, Maryland (Contract No. DACA31-86-C-0065).
Included in the bid solicitation was Wage Decision No. DC86-1, a
general wage determination for Washington, D.C., and adjacent
jurisdictions in Maryland and Virginia. (This wage determination
was later modified, and the bid solicitation was amended
accordingly.)
Not all the rates listed in General Wage Decision No. DC86-1
were applicable in all the jurisdictions covered by the wage
decision. On the front page of the wage decision the types of
construction covered by the wage determination were described as
"BUILDING CONSTRUCTION PROJECTS (does not include single family
homes and apartments up to and including four (4) stories),
EXCLUDING INDEPENDENT CITY OF ALEXANDRIA; HEAVY CONSTRUCTION
PROJECTS (does not include Sewer and Water Lines Construction
Projects); HIGHWAY CONSTRUCTION PROJECTS IN DISTRICT OF COLUMBIA
ONLY; SEWER AND WATER LINES CONSTRUCTION PROJECTS IN DISTRICT OF
COLUMBIA AND MONTGOMERY COUNTY, MARYLAND ONLY." In the bid
solicitation package the contracting agency attached a cover
sheet to the wage decision. The cover sheet stated that Wage
Decision No. DC86-1 would be used to conform with the Davis-Bacon
Act requirements of the contract clauses. Typed on the cover
sheet was the following phrase: "BUILDING CONSTRUCTION WAGE
SCHEDULES FOR MONTGOMERY COUNTY, MD., ONLY APPLY TO THIS
PROJECT." The text of the wage decision also specified, with
respect to certain classifications and wage rates, the
jurisdictions in which those rates applied. Thus, for example,
the wage decision listed brick masonry rates for "Arlington and
Fairfax Counties, and the Independent City of Alexandria;" a
rate for painters in "Fairfax County, Virginia;" painters/drywall
finishers rates for "Washington, D.C.," and another set of
painters/drywall finishers rates for "Montgomery & Prince Georges
Counties, Maryland & Arlington County, Virginia."
The prime contract for the project was awarded to A.S.
McGaughan Company, Inc. ("McGaughan"), on June 6, 1986. The
prime contractor then subcontracted with Utility Services on July
14, 1986. Petitioner's work on the project consisted of
rerouting existing storm sewers and installing new storm sewers.
Construction on the project began on July 14, 1986.
On June 22, 1987, McGaughan and Utility Services submitted a
form for Request for Authorization of Additional Classification
and Rate, by which they requested that three classifications
(laborer, at $6.50 per hour plus $.56 in fringe benefits;
pipelayer, at $8.50 per hour plus $.56; and backhoe operator, at
$10.39 plus $1.45). However, these classifications and wage
rates for Montgomery [2]
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[3] County were already listed in Wage Decision No. DC86-1 under "Sewer
and Water Lines Construction" (as noted earlier, the wage decision
contained sewer and water line construction classifications and rates
for only two jurisdictions -- Washington, D.C., and Montgomery County,
Maryland, where the Abert Hall project was situated). The Director of
Wage and Hour's Division of Wage Determinations denied the request by
letter dated July 18, 1988. Citing 29 C.F.R. 5.5(a)(1)(ii), which sets
forth the criteria for approval of requests for additional
classifications and wage rates, the Director stated that the request of
Petitioner and the prime contractor could not be approved because the
work to be performed by the requested classifications "is performed by
classifications already included in the wage determination under
building construction." The appropriate building construction
classifications, the Director added, were "laborers, plumbers,
(pipelayers) and backhoe."
By letter dated November 6, 1989, Petitioner requested
reconsideration of the Director's decision. Petitioner first
took issue with the determination that building construction
classifications the appropriate classifications for the work done
by Utility Services. "Although the entire contract is for
building construction," Petitioner stated, "Utility Services
work is only the rerouting of existing storm sewers and
installation of new storm sewers. All of this work is done
separate and apart from the building construction and stops at
least 5 ft. from any building. Therefore, the Sewer and Water
Lines Construction Rates for Washington, DC and Montgomery County
should be used." Secondly, Petitioner stated,
the suggested additional classifications are in fact,
covered in General Wage Decision No. DC86-1 which was
included in the solicitation for the Addition to Abert
Hall. . . . The difficulty and request for additional
classification arose out of a disagreement between the
parties as to which construction classification--
building or water and sewer--applied to [Petitioner].
Perhaps additional classification was a misnomer. The
rates to which Utility Services should be obligated are
those of water and sewer construction, which are listed
in DC86-1.
The Acting Administrator denied Petitioner's request for
reconsideration by letter dated February 6, 1990. The Acting
Administrator stated that 29 C.F.R. 5.5(a)(1)(ii) permits the
addition of unlisted classifications and wage rates only when the
work to be performed by the requested classification is not
performed by a classification already listed in the wage
determination. "The building schedule of wage rates as
contained in Wage Determination No. DC86-1," the Acting
Administrator stated, "includes laborers, pipelayers and backhoe
operators classifications and wage rates." [3]
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[4] The Acting Administrator also rejected Petitioner's
contention that the building construction rates were not relevant
because Petitioner performed only utility work on the Abert Hall
project. Information provided by the Corps of Engineers
indicated that the sewer and water portion of the project was
only $387,000 out of the total project cost of $21,000,000, or
about 2% of the total project cost, the Acting Administrator
noted. Accordingly, she stated, "we concur with their decision,
as designated in their solicitation, that only the building
construction wage rates apply to this project. The decision to
consider the sewer and water construction incidental to the
overall building project was in accordance with All Agency
Memoranda Numbers 130 and 131 . . ., which provide guidance to
contracting agencies in the application of this policy."
II. DISCUSSION
We begin our analysis of this matter by defining the issue
presented for disposition by the Board. Although this case arose
as a conformance proceeding, it is not, strictly speaking, a
conformance matter, since the Montgomery County sewer and water
line construction classifications and rates which Petitioner
claims are applicable to its work on the Abert Hall project are
already listed in General Wage Decision No. DC86-1. By the same
token, the question presented by this case is not whether Wage
Decision No. DC86-1 should be modified in some manner since,
again, the requested sewer and water line rates are already
included in the wage decision. Thus, the central issue in this
matter is which classifications and rates listed in the wage
decision -- the building construction rates or the water and
sewer line construction rates -- apply to the work performed by
Utility Services on the Abert Hall project.
The Acting Administrator did not base her February 6, 1990
denial of Petitioner's reconsideration on the ground that
Petitioner had not timely raised its contention that the water
and sewer line rates were the appropriate rates for the work
performed by Petitioner's employees. Instead, the Acting
Administrator addressed the merits of Petitioner's contention and
concurred in the contracting agency's application of building
rates, since the utility work performed by Petitioner was only an
incidental portion (about 2%) of the total project cost. Before
the Board, however, the first line of argument by counsel for the
Acting Administrator is that "in including WD No. DC86-1 in the
bid solicitation, the contracting agency specified that only the
`building construction' schedule applied to the project. Thus,
Petitioner's request is most appropriately viewed as a request to
modify the wage determination specified by the contracting agency
by adding the schedule of rates for `Water and Sewer Line
Construction."' [4]
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[5] Invoking Board decisions /FN1/ and Department of Labor regulations
/FN2/ on the time requirements for a challenge to a wage determination,
counsel argues that Petitioner's request for application of the sewer
and water line rates should be rejected because the request was made a
year after award of the prime contract and the utility subcontract.
We note again, however, that this case does not present a
challenge to the substantive correctness of the classifications
and rates listed in General Wage Decision No. DC86-1, but instead
involves the question of which rates in that wage decision are
applicable to the utility work performed by Petitioner.
Regardless of whether the Board precedent and the regulations
cited by counsel for the Acting Administrator strictly apply to
such a question, we think that counsel properly emphasized the
responsibility of contractors to resolve questions of applicable
wage rates before contract award. The exercise of that
responsibility, however, presupposes that contractors have
adequate notice that a question requiring resolution does exist.
In this case, counsel for the Acting Administrator argues
(Statement, at p. 8) that the meaning of the contracting agency's
notation on the wage decision cover sheet ("BUILDING
CONSTRUCTION WAGE SCHEDULES FOR MONTGOMERY COUNTY, MD. ONLY APPLY
TO THIS PROJECT") is "unquestionably clear and precise" --
that is, only building construction rates apply to this project.
Petitioner, on the other hand, argues (Petition, at p. 5) that
the contracting agency did not strike the sewer and water line
rates from the text of the wage decision, and that the cover
sheet notation is "cryptic, imprecise and ineffective to fairly
direct attention from the clear division of services, recognized
in the industry . . . ." Upon review, the Board concludes that
the contracting agency's notation does not provide adequate
notice of the agency's intention that only building construction
rates were applicable to the Abert Hall project. The notation
does not precisely state that only building rates are applicable;
instead, the notation states that "BUILDING CONSTRUCTION WAGE
SCHEDULES [5]
/FN1/ E.g., Granite Builders, Inc., WAB Case No. 85-22 (Jan. 27,
1986).
/FN2/ 29 C.F.R. 1.6(c)(3) provides that
All actions modifying a general wage determination shall
be effective with respect to any project to which the
determination applies if notice of such actions is
published before contract award . . . .
* * * * *
(vi) A supersedeas wage determination or a modification
to an applicable wage determination, notice of which is
published after contract award . . . shall not be
effective. [5]
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[6] FOR MONTGOMERY COUNTY, MD. ONLY APPLY TO THIS PROJECT." One
possible interpretation of this statement is that only building
rates -- and no other category of rates -- are applicable to the
project. However, it is also possible, and perhaps far easier,
to read that notation as an advisory that does not address the
applicability of sewer and water line rates to the project's
utility work, but instead simply states that of the building
rates listed in the general wage decision which encompasses
several jurisdictions, the rates that are applicable to this
project are the rates for Montgomery County. In particular, we
think this would be likely reading of that notation by a utility
contractor such as Petitioner and the other contractors who bid
on the sewer work which was awarded to Utility Services.
In sum, the Board concludes that Petitioner did not have
adequate notice of the contracting agency's intention that only
building construction rates, and not water and sewer line rates,
were to apply to the Abert Hall project. Accordingly, the Board
declines to dismiss Petitioner's challenge to the application of
building construction rates to the utility work for lack of
timeliness.
On the merits of this matter, the Acting Administrator
concurred in the contracting agency's decision to apply building
rates to the entire project, since the utility work was only an
incidental portion of the total project cost. The Board agrees
with the Acting Administrator that as a general matter the
contracting agency's determination is consistent with the
guidelines set forth in All Agency Memoranda ("AAM") 130 and
131./FN3/ However, a principal argument by Petitioner before
the Board is that the area practice in Montgomery County entails
payment of water and sewer line rates for utility work up to a
certain distance from the foundation perimeter, at which point
plumbers and mechanical contractors performed the work. As
counsel for the Acting Administrator properly acknowledged, the
guidelines in AAM 130 and 131 would ordinarily give way to an
established area practice. The area practice issue was not
addressed by the Acting Administrator in her decision, and the
Board is unable to determine from the record before it whether
the area practice claimed by Petitioner does exist. Accordingly,
the Board remands this matter to the Wage and Hour Division for a
determination on Petitioner's area practice claim within 30 days.
[6]
/FN3/ In discussing the classifications and rates to be applied to
work which is incidental to the total project, AAM 130 offers the
following illustration:
For example, water or sewer line work which is a part of
a building project would not generally be separately
classified. [6]
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[7]
The petition for review is granted. This matter is remanded
to the Wage and Hour Division for further proceedings consistent
with this decision.
BY ORDER OF THE BOARD:
Charles E. Shearer, Jr., Chairman
Patrick J. O'Brien, Member
Ruth E. Peters, Member
______________________________
Gerald F. Krizan, Esq.
Executive Secretary [7]
