S.D.F., INC., WAB Case No. 92-12 (WAB Aug. 31, 1993)
CCASE:
S.D.F. INC.
DDATE:
19930831
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
S.D.F., INC., WAB Case No. 92-12
Subcontractor
BEFORE /FN1/: Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
DATED: August 31, 1993
DECISION OF THE WAGE APPEALS BOARD
This matter is before the Wage Appeals Board on the petition
of the Acting Administrator of the Wage and Hour Division for
review of a June 16, 1992 decision and order issued by
Administrative Law Judge ("ALJ") Joel R. Williams. Subcontractor
S.D.F., Inc., ("S.D.F.") also petitioned for review of the ALJ's
decision and order; the Board dismissed S.D.F.'s petition as
untimely on March 30, 1993. The Acting Administrator appeals from
two aspects of the ALJ's decision and order: (1) the ALJ's
determination that the work performed by S.D.F. under an agreement
which was supplemental to the basic subcontract and which did not
include labor standards provisions was not covered by the Davis-
Bacon provisions of the Urban Mass Transportation Act of 1964
("UMTA"); and (2) the ALJ's order that funds withheld by the
contracting agency and/or the prime contractor above the amount
that the ALJ awarded as back wages be remitted to subcontractor
S.D.F. For the reasons stated below, the petition for review is
granted and the ALJ's decision and order is reversed on both
points. [1]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ Member Anna Maria Farias took part in the April 2, 1993 oral
argument in this case, but did not participate in this decision.[1]
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[2] I. BACKGROUND
In June 1989 the Dallas Area Rapid Transit Authority ("DART")
awarded a contract to prime contractor Clearwater Construction,
Inc. ("Clearwater") for the construction of improvements and
renovations to DART's East Dallas Facility. That facility was used
for housing, maintenance and repair of DART buses and other
vehicles. Among other things, the contract provided for
construction of a new Equipment Services Garage ("ESG"), to be
erected with prepainted structural steel. Appended to the contract
were separate prevailing wage rates for "Highway/Heavy"
construction and for "Building" construction.
On June 15, 1989, Clearwater entered into a subcontract with
S.D.F. for painting of the project. The subcontract provided for
completing all drywall texturing, taping and floating; utility and
protective coating; painting; and vinyl coating. The basic
subcontract excluded "steel touch-up." Clearwater and S.D.F.
entered into a supplemental agreement on a time and materials basis
on March 19, 1991 for touch-up of the structural steel on the ESG.
The supplemental agreement did not contain any provisions setting
forth Davis-Bacon prevailing wage requirements.
Upon investigating S.D.F.'s performance on the project, the
Department of Labor determined that S.D.F. had not paid its
painters and laborers the prevailing wage required by the Davis-
Bacon provisions of the UMTA. The Department determined that
S.D.F. should have been paying its painters wages and fringe
benefits totaling $16.54 based on the "Building-Group 4" rate
listed in the "Building" wage schedule, and should have been paying
its painter helpers the Building rate for laborers of $9.90 per
hour for wages and fringe benefits. The Department further
determined that S.D.F. owed its employees back wages totaling
$93,783.82. Of total, $6,724 was for time spend by employees on
the structural steel retouching job. Both Clearwater and S.D.F.
were served charging letters advising them of their right to a
hearing; only S.D.F. requested a hearing. Clearwater was not made
a party to the instant proceeding.
A hearing was held in this case on April 14, 1992, and the ALJ
issued his decision and order on June 16, 1992. The ALJ concluded
that S.D.F. "was required to pay the `Building' rate of $16.54 per
hour to its painters and $9.90 per hour to its painter's helpers
for all work that they performed under the original subcontract."
The ALJ also concluded, however, that S.D.F. "is not
responsible for payment of the prevailing wage for the `touch up'
of the structural steel under the Extra Work Order." He stated
that although Clearwater's representative had "expressed optimism"
at the hearing that DART would reimburse Clearwater for the
structural steel touch up, the firm had not received any payment or
written commitment from DART at the time of the hearing. The ALJ
stated that he [2]
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[3] could not conclude "on the basis of the record in this case that the
work performed in the touch-up was `government-funded.' As there was no
Federal monies shown to be used for the separately contracted work, the
Davis-Bacon prevailing wage provisions of the Urban Mass Transportation
Act are not applicable" (citing MARTA Contracts CN-710 & CN-730 and
options thereto, WAB Case No. 83-09 (May 14, 1984) ("MARTA").
The ALJ ordered that out of the funds being withheld from
S.D.F. "by the contracting agency and/or Contractor," $87,059.82
was to be paid over to the Comptroller General of the United States
for distribution to the S.D.F. employees. The ALJ specified that
the payments to the employees were not to include amounts alleged
to be owed for the structural steel touch up work. He further
ordered that any funds withheld over and above $87,059.82 be
remitted to S.D.F.
On July 27, 1992, within the 40-day period prescribed by 29
C.F.R. 6.34 for filing a petition for review, the Acting
Administrator filed with the Wage Appeals Board a motion for a
extension of time to August 27, 1992 for filing a petition for
review from the ALJ's decision and order. Alternatively, the
Acting Administrator requested that the Board treat the motion as
a petition for review with leave to file a supporting statement by
August 27, 1992. The Board issued Notices of Appeal and Extension
on July 30, 1992, noting that the Board was in receipt of a
petition for review filed by the Acting Administrator, and granting
the Acting Administrator's request for an extension of time for
filing a statement in support of the petition.
S.D.F. mailed a petition for review, along with a motion for
extension of time within which to file the petition, on September
4, 1992; these documents were received and filed by the Board on
September 11, 1992. The Acting Administrator then moved to dismiss
S.D.F.'s motion for extension of time in which to file a petition.
The Board granted the Acting Administrator's motion in a Order of
Dismissal on March 30, 1993, stating:
In it[s] request for an extension, S.D.F. states that it
then "had an opportunity to review the Petition for
Review filed by the Acting Administrator and requests
relief in order to file its own Petition for Review as to
a finding made by the Administrative Law Judge below."
S.D.F. Motion for Extension, p.1. There is -- as noted
by the Acting Administrator -- no provision in the
applicable regulation for tolling of the time limit in
which to file a petition for review or extension request.
This includes situations where, as here, a timely
petition or extension request has first been filed by
another party. Thus, S.D.F.'s argument for accepting its
petition does not suggest any good cause for filing its
extension request and petition for review well beyond the
time limit specified [3]
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[4] in 29 C.F.R. 6.34. Similarly, the fact that the Acting
Administrator timely sought and was granted an extension of
time in which to perfect her petition is not comparable to
S.D.F.'s inordinate delay in requesting an extension and
submitting its petition.
S.D.F. subsequently filed a motion requesting that the Board set
aside the order of dismissal and grant the motion for extension of
time in which to file a petition.
The Board heard oral argument in this case on April 2, 1993.
II. DISCUSSION
A. Coverage of the structural steel touch up work
The Acting Administrator has appealed from two aspects of the
ALJ's decision and order, arguing that the ALJ erred in concluding
that work performed by subcontractor S.D.F. under the supplemental
agreement was not covered by the prevailing wage requirements of
the UMTA, and that the ALJ also erred in ordering that funds be
remitted to the subcontractor. We will first address the coverage
issue.
The statutory provisions relevant to the resolution of this
issue are found in the UMTA and the Davis-Bacon Act. The UMTA
provides (at 49 U.S.C. [sec] 1609(a)):
The Secretary shall take such action as may be necessary
to insure that all laborers and mechanics employed by
contractors or subcontractors in the performance of
construction work financed with the assistance of loans
or grants under this chapter 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. The
Secretary shall not approve any such loan or grant
without first obtaining adequate assurance that required
labor standards will be maintained upon the construction
work.
The Davis-Bacon Act requires payment of prevailing wage rates to
"all mechanics and laborers employed directly upon the site of the
work" by contractors and subcontractors on a government-funded
project for "construction, alteration, and/or repair, including
painting and decorating." The Department of Labor's Davis-Bacon
regulations define (at 29 C.F.R. 5.2(j)) "construction,
prosecution, completion or repair" as encompassing "[*] all types
of work done on a particular building or work at the site
thereof[*], . . . including without limitation, [4]
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[5] altering, remodeling, . . . [*] painting [*] and decorating . . . ."
[*](Emphases supplied.)[*] The Department's regulations define (at 29
C.F.R. 5.2(l)(1) the "site of the work" as the "physical place or places
where the construction called for in the contract will remain when work
on it has been completed...."
We agree with counsel for the Acting Administrator (Statement,
at p. 6) that the touch up painting of the structural steel comes
within the term "construction, alteration, and/or repair," since
the work was painting --performed as an alteration or as repair --
on the structural steel erected under the basic contract.
Furthermore, there can be no doubt that the touch up work was
performed on the "site of the work," since the touch up painting
was performed on the ESG, a new structure erected by another
subcontractor pursuant to the basic contract.
The ALJ, nevertheless, decided that the touch up work was not
subject to prevailing wage requirements, stating that he could not
conclude "on the basis of the record in this case that the work
performed in the touch-up was `government-funded.' As there were
no Federal monies shown to be used for the separately contracted
work, the Davis-Bacon prevailing wage provisions of the [UMTA] are
not applicable." However, the ALJ's reliance on the Board's MARTA
decision as support for his determination is misplaced. MARTA
involved construction of a subway rail system, of which some
segments were built with federal funds and other segments were not.
The instant case is not comparable to MARTA, since it does not
involve segregable portions of a project but instead involves touch
up work on a structure erected pursuant to the basic contract,
which called for a completed structure. As Clearwater's project
manager testified (Tr. 91-92), the touch up work was necessary in
order for the structure to be completed. Thus, in the Board's
view, whether the touch up work was performed onsite by
Clearwater's own employees, or was performed onsite by employees of
the structural steel supplier, or -- as actually occurred -- was
performed onsite by employees of the painting subcontractor
(S.D.F.), the work was subject to prevailing wage requirements.
See ALCOA Construction Systems, Inc., WAB Case No. 75-06 (Sept. 11,
1975) (onsite repair of factory prefabricated kitchen and bathroom
modules was subject to labor standards requirements, even though
the contract between the supplier and the prime contractor did not
include prevailing wage provisions).
Counsel for the Acting Administrator notes (Statement, at pp.
9-10) that the ALJ stated that if the touch up work was subject to
prevailing wage requirements, the responsibility for the
underpayment should rest with prime contractor Clearwater, not
subcontractor S.D.F. Counsel for the Acting Administrator further
states that the ALJ's conclusion is consistent with Wage and Hour's
enforcement position. As established in Board precedent (see,
e.g., Northern Colorado Constructors, Ltd., WAB Case No. 86-31
(Dec. 14, 1987)), a prime contractor has a contractual obligation
for payment of prevailing wage [5]
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[6] rates to the employees of its subcontractors. In this case, the
prime contractor did not meet its responsibility under 29 C.F.R. 5.5 to
incorporate labor standards provisions into the supplemental agreement
with S.D.F., and must undertake the obligation to pay the applicable
wage rates to the subcontractor's employees.
In short, the ALJ's decision that the structural steel touch
up work was not covered by prevailing wage requirements is
reversed. Prime contractor Clearwater is liable for the
underpayment of wages, in the amount of $6,724, for the touch up
work.
The Board also reverses the ALJ's order that withheld funds
(corresponding to the amount of back wages owed for the touch up
work) be remitted to the subcontractor. As counsel for the Acting
Administrator notes (Statement, at p. 11), funds are always
withheld from the contractor, not from a subcontractor. Further,
an ALJ lacks authority to order that withheld funds be returned to
a subcontractor, since the government has no contractual
relationship with the subcontractor.
B. S.D.F.'s motion to set aside the dismissal order
The Board has considered S.D.F.'s motion to set aside the
order dismissing S.D.F.'s motion for an extension of time within
which to file a petition for review. Upon consideration, the Board
reaffirms its dismissal order. S.D.F. did not file an extension
request within the time prescribed in 29 C.F.R. 6.34 for filing a
petition for review, and S.D.F. has demonstrated no extenuating
circumstances that prevented it from filing either a timely
petition or timely extension request. Accordingly, for reasons
stated here and in the Board's dismissal order, the motion to set
aside the order of dismissal is denied.
BY ORDER OF THE BOARD:
Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Gerald F. Krizan, Esq. Executive Secretary [6]
