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<![CDATA[
CCASE:
CALLAHAN BROS., INC.
DDATE:
19910822
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
CALLAHAN BROS., INC. WAB Case No. 90-43
Notre Dame Bridge
Manchester, NH
U.S. DOT Contract
No. BRM-M-5285 (026)
C-2330-A
BEFORE: Charles E. Shearer, Jr., Chairman,
Ruth E. Peters, Member
Patrick J. O'Brien, Member
DATED: August 22, 1991
DECISION OF THE WAGE APPEALS BOARD
29 C.F.R. 5.11 permits the Administrator of the Wage and Hour
Division to deny a hearing before an Administrative Law Judge on a
dispute concerning the payment of prevailing wages where, in the
view of the Administrator, there are no material facts in question.
This case illustrates the potential consequences of an overly
restrictive view of when facts are contested.
This matter is before the Wage Appeals Board on the petition
of the Joint Heavy and Highway Construction Committee (a coalition
of seven labor unions representing workers on heavy and highway
construction projects) (hereinafter [1]
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[2] "Petitioner") from a determination of the Wage and Hour Division
that highway wage rates apply to the above-captioned project. For
the reasons contained herein the determination is affirmed.
I. BACKGROUND
Early in 1986, the New Hampshire Department of Transportation
("NHDOT") solicited bids for the first phase of construction of a
bridge across the Merrimack River in Manchester. Approximately 80%
of the funding was supplied by the federal government, and thus the
requirements of the Davis-Bacon Act were applicable to the project.
As conceded by the Petitioner in this matter, the bid
solicitation contained both the Heavy Construction wage
determination and the Highway Construction wage determination
applicable to the relevant geographic area (Petition for Review, p.
3). According to the Solicitor's Office and an affidavit supplied
by the Wage and Hour Division, the Department of Labor had
previously advised NHDOT that highway wage rates applied to the
project, but had cited the wage determination for heavy wage rates
in support of that proposition (an event which may have contributed
to the events which later transpired).
The contract was eventually awarded to Callahan Brothers, Inc.
("Callahan"). Work began in 1986 and has been completed. In 1987
the Wage and Hour Division investigated Callahan's Davis-Bacon
compliance on the project, and discovered that a laborer was
performing functions ordinarily done by an ironworker on a union
project. As the Heavy rates were based on collective bargaining
agreements, the Wage and Hour investigator concluded that employee
trade classifications were to based on union practices. Thus, in
September of 1988, the Administrator of the Wage and Hour Division
ruled that Callahan had underpaid its workforce over $64,000.00
in the belief that union wage rates and union work classifications
should apply to the Notre Dame Bridge project.
Callahan requested reference of the matter to an ALJ for a
factual determination of whether union practices prevailed in the
area (Record, Exhibit O). Its position that work of this type was
"open shop" was supported by a letter from the office of the
Attorney General for the State of New Hampshire (Record, Exhibit
P). Nevertheless, the Wage and Hour Division took the position
that a hearing was unnecessary, as "it does not appear that
there are relevant facts at issue". (Record, Exhibit J). When this
determination was appealed to the Board on the ground, inter alia,
that the project should have been classified as highway
construction, Wage and Hour then moved for a remand to consider
that issue, a motion which the Board granted on May 25, 1989. [2]
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[3] On November 20, 1989, Wage and Hour found that highway
construction wage rates applied to similar projects in the relevant
area. This determination was appealed by the Petitioner. Callahan
intervened, raising a number of substantive and procedural issues
(most notably whether Petitioner has standing to appeal, and,
if so, whether the Petition is timely). The Solicitor's Office
argues, that the Wage and Hour Division was correct.
The specific issues raised by the Petitioner are: first, that
Callahan is effectively challenging a wage determination after the
award of the contract; and second, that the Notre Dame Bridge
project is inherently heavy construction. The Solicitor's Office
argues that the Wage and Hour Division properly applied the highway
rate schedule to the project; that Callahan's petition does not
amount to a post-award challenge to the wage determination; and
that if the Board should find the heavy construction wage schedule
applicable to the project, the matter should be remanded yet again.
Callahan, technically an Intervenor, supports the final position of
Wage and Hour that the project is properly classified as highway
construction; objects to the Petition on the grounds of standing
and timeliness; and more or less agrees with the Solicitor that a
remand would be necessary in the event heavy construction wage
rates are deemed applicable to the project. Each of these issues
will be discussed seriatim.
II. DISCUSSION
A. Heavy or Highway Construction
The Petitioner takes the position that the Wage and Hour
Division knowingly and consistently regarded the Notre Dame Bridge
project as heavy construction, when, as noted, Wage and Hour deemed
the project highway construction but was unable to effectively
communicate with the interested parties.
Petitioner also argues that the terms of certain Department of
Labor documents such as All Agency Memorandum ("AAM") No. 130
compel the conclusion that the project is inherently heavy
construction. The Board notes, in passing, that it has
consistently regarded internal Department guidelines such as AAM
130 as advisory at best -- unless and until promulgated as
regulations following opportunity for notice, comment, and judicial
review.
Notwithstanding the positions of the Wage and Hour Division or
the terms of internal Department guidelines, the Davis-Bacon Act
requires the payment of prevailing wages as determined by those
wage levels paid "for the corresponding classes of laborers and
mechanics employed on projects similar to the contract work in the
local areas [29 C.F.R. 1.1] . . . during the period in question"
[29 [[3]
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[4]] C.F.R.1.2]." The record in this matter clearly
demonstrates that workers on projects of this nature in the
relevant geographic area are paid highway rates. To hold otherwise
would permit a regulatory preemption of workplace reality -- a
result clearly contrary to Congressional intent. Accordingly, the
Wage and Hour Division's ultimate ruling that highway rates
apply to the Notre Dame Bridge project is affirmed.
B. Post-award Challenge
Petitioner contends that Callahan's original petition in this
matter amounts to a post-award challenge to the wage determination
contained in the bid solicitation. As the Petitioner correctly
states, the rationale behind the prohibition of post-award
challenges is the protection of a fair and competitive bidding
process, i.e., the ideal of a "level playing field."
The Board shares Petitioner's high regard for the
preservation of the integrity and fairness of the bidding process;
however, it finds Petitioner's concerns misplaced in the present
context. Both the heavy and highway wage determinations were
included in the contract (Record, Exhibit D), and there is no
evidence that NHDOT advised the bidders as to which schedule
applied. Thus there is no basis to question the fairness of the
competition.
C. Standing and Timeliness
Callahan contends that Petitioner has no standing to seek
review of the Wage and Hour ruling because it has not articulated
"a direct, personal interest in the agency action being challenged"
(Callahan Bros., Inc.'s Objection to Petition for Review, p. 5).
The Board has repeatedly held that a direct, personal interest in
the result of a Board proceeding (analogous to the type of
standing required for participation in a federal court proceeding)
is unnecessary where the party in question or its members will be
affected in the future and it is in a position to assist the Board
in a proper resolution of the question under consideration.
Petitioner meets both criteria; hence, it has standing.
Petitioner disagrees with the argument that its failure to
participate in earlier proceedings in this case should render its
current petition untimely. Petitioner contends it had no notice or
opportunity to be heard prior to this time. There is nothing in
the record which disputes Petitioner's contention, nor has the
Solicitor suggested the contrary. Therefore the Board sees no
reason to question the timeliness of the petition, nor does it see
how any party has been prejudiced by Petitioner's participation.
[4]
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[5] III. CONCLUSION
For the foregoing reasons the petition is dismissed and the
Wage and Hour determination is affirmed.
BY ORDER OF THE BOARD:
Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Patrick J. O'Brien, Member
____________________________
Gerald F. Krizan, Esq.
Executive Secretary [5]
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