MAURICE A. LAWRUK BUILDERS INC., WAB No. 92-16 (WAB Jan. 12, 1993)
CCASE:
MAURICE A. LAWRUK BUILDERS INC.
DDATE:
19930112
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
MAURICE A. LAWRUK WAB Case No. 92-16
BUILDERS, INC.,
With respect to application of Davis-Bacon labor
standards to Project No. PA28-E031-13, Penn Alto
Hotel Renovation, Altoona, Blair County, Pennsylvania
BEFORE: Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Anna Maria Farias, Member
DATED: January 12, 1993
DECISION OF THE WAGE APPEALS BOARD
This matter is before the Wage Appeals Board on the petition
of Maurice A. Lawruk Builders, Inc. ("Lawruk Builders" or
"Petitioner"), for review of an August 31, 1992 ruling by the
Deputy Assistant Administrator of the Wage and Hour Division that
Davis-Bacon labor standards requirements were applicable to the
Penn Alto Hotel Restoration project, and denying as untimely
Petitioner's request for reconsideration of the wage determination
applicable to the project. For the reasons stated below, the
petition for review is denied. [1]
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[2] I. BACKGROUND
A. Factual background
The Penn Alto Hotel is located in Altoona, Blair County,
Pennsylvania, and is owned by Penn Alto Associates Limited
Partnership. Robert "Ted" Brant and Penn Alto Services, Inc., are
general partners in the firm; Maurice A. Lawruk is president of
Penn Alto Services, Inc.
Renovation of the hotel apparently has been an ongoing project
since 1972. In 1979, the ownership decided to convert the hotel
rooms into apartments. Over the next 10 years apartments were
added on an "as required" basis, and the hotel operation was
reduced. Penn Alto Associates began applying for assistance under
Section 8 of the U.S. Housing Act of 1937, as amended (42 U.S.C.
1437f) in the early 1980s. Penn Alto Associates received the first
indication that Section 8 funding would be approved for the Penn
Alto Hotel on October 13, 1988. The House Conference Report on
H.R. 4352 published in the Congressional Record on that date stated
that the Secretary of the U.S. Department of Housing and Urban
Development ("HUD") was authorized under 42 U.S.C. 1437f(d)(2)
to "permit the attachment of contracts for assistance payments to
. . . the Penn Alto Hotel and . . . include not less than 140 units
of housing for the elderly." HUD notified the Altoona Housing
Authority ("Housing Authority") on December 30, 1988 that its
application for Section 8 "Existing Housing Certificates" for the
Penn Alto had been approved. The project approved for the Section
8 Housing Assistance Payments Program was conversion of 150 of the
235 hotel rooms then being used as apartments into apartments for
the elderly.
On January 31, 1989 Penn Alto Associates and Lawruk Builders
entered into a contract for renovation of the hotel. Maurice A.
Lawruk signed on behalf of Penn Alto Associates as president of its
corporate general partner; Thomas W. Haught signed as president of
Lawruk Builders. On February 1, 1989 HUD issued its Section 8
Housing Assistance Payments Program ACC/HAP Contract List for the
Penn Alto project, listing approved annual assistance in the amount
of $597,036 for a five-year period. On February 16 and 17, 1989
the Housing Authority and HUD executed the Annual Contributions
Contract, which provided the annual funding to the Housing
Authority to cover the housing assistance payments and other
expenses under the program for the Penn Alto Renovation and several
other projects.
Penn Alto Associates and the Housing Authority signed the
Agreement to Enter into a Housing Assistance Payments Agreement
(the "preliminary housing assistance agreement") on April 28, 1989;
the agreement listed February 1, 1989 as its effective date.
Pursuant to HUD regulations (24 C.F.R. 882.717(c)(7)), this
agreement contained Davis-Bacon labor standards provisions and the [2]
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[3] applicable wage determination (General Wage Decision No.
PA89-11). Execution of this agreement was delayed because the
project architect, employed by Penn Alto Associates, did not
complete the "Work Write-UP" attachment for the agreement until
late April. Brant signed the agreement on behalf of Penn Alto
Associates.
The construction work began on March 16, 1989. The Housing
Authority requested a Davis-Bacon wage determination from HUD on
March 14, 1989 and received the wage determination on March 17,
1989. The Housing Authority delivered the wage determination to
Brant on March 17, 1989; Lawruk Builders also received the wage
determination on that day.
The project ended on December 20, 1989. Brant certified in a
notarized document on March 8, 1990 that the project had been
completed "in accordance with the requirements of the Agreement to
Enter Into Housing Assistance Payments Contract dated February 1,
1987 [sic]." Brant also stated that Penn Alto Associates had
complied with "any applicable labor standards requirements in the
Agreement." However, a labor standards investigation conducted by
HUD disclosed Davis-Bacon violations. On May 29, 1990, to assure
that the Housing Authority would proceed with execution of the
Housing Assistance Payments Contract, Penn Alto Associates agreed
to escrow $347,240 to cover the back wage liability. The Housing
Assistance Payments Contract was executed on June 1, 1990.
B. Procedural history
On July 25, 1990, Lawruk Builders requested the Acting
Administrator of the Wage and Hour Division to issue a ruling,
pursuant to 29 C.F.R. 5.13 on whether the Davis-Bacon provisions of
the U.S. Housing Act of 1937, as amended (42 U.S.C. 1437 et
seq.) applied to the Penn Alto Hotel Renovation. Petitioner also
sought reconsideration of the wage determination applicable to the
project pursuant to 29 C.F.R. 1.8.
The Deputy Assistant Administrator issued a ruling on August
31, 1992, concluding that Davis-Bacon prevailing wage requirements
applied to the Penn Alto Hotel Renovation. The Deputy Assistant
Administrator rejected Petitioner's argument that Davis-Bacon labor
standards were not applicable to the project because the
rehabilitation work began on March 16, 1989, before the preliminary
housing assistance agreement was signed on April 28, 1989. "[T]he
parties established their contractual obligations as of the
effective date [February 1, 1989] of the contract as opposed to the
execution date of the agreement," the Deputy Assistant
Administrator stated. Furthermore, he stated, "even assuming the
absence of Davis-Bacon coverage by operation of the statute, it is
our opinion that Penn Alto Associates was contractually bound to
comply with Davis-Bacon requirements because the Davis-Bacon labor
standards provisions were part of the [3]
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[4][preliminary housing assistance agreement] with the Altoona Housing
Authority and Penn Alto Associates." Accordingly, the Deputy Assistant
Administrator concluded that the renovation of the Penn Alto Hotel was
subject to the labor standards provision of the U.S. Housing Act of
1937.
The Deputy Assistant Administrator also addressed Petitioner's
request for reconsideration of the wage determination applicable to
the hotel renovation. He noted that the Wage Appeals Board has
consistently held that the appropriate time for challenging a wage
determination is before award of the contract or beginning of
construction where there is no contract award. In this case, the
Deputy Assistant Administrator stated, Lawruk Builders could not
have challenged the wage determination before the beginning of
construction, since the wage determination was delivered the day
after the construction start date. Nevertheless, he continued, "it
is reasonable for the Department to insist that a challenge to a
contract wage determination be made within a reasonable period of
time after its receipt and certainly before any notification of
prevailing wage violations." He added that Petitioner's request
for reconsideration of the wage determination was filed with the
Department some 16 months after the wage determination was
delivered, and also was filed after completion of the contract and
after HUD's investigation findings were communicated to Penn Alto
Associates. Accordingly, the Deputy Assistant Administrator ruled
that the challenge to the wage determination was untimely.
Lawruk Builders filed a petition for review of the Deputy
Assistant Administrator's ruling with this Board on September 28,
1992.
II. DISCUSSION
As discussed above, the Deputy's Assistant Administrator's
decision under review in this matter addressed two points -- the
applicability of Davis-Bacon labor standards to the Penn Alto Hotel
Renovation, and Petitioner's request for reconsideration of the
wage determination. In its written pleadings, Petitioner contested
both aspects of the Deputy Assistant Administrator's decision.
However, at oral argument before the board on January 7, 1993,
counsel for Petitioner conceded that the Penn Alto Hotel Renovation
was subject to Davis-Bacon requirements. Accordingly, the only
issue remaining in this case is whether the Deputy Assistant
Administrator properly decided that Petitioner's challenge to the
applicable wage determination was untimely.
Upon review, the Board concludes that the ruling on the
timeliness issue should be affirmed. As the Deputy Assistant
Administrator noted, this Board has consistently held that the time
for challenging a wage determination is before award of the
contract or before beginning of construction where there is no
contract award. See, e.g., ICA Construction Corp., WAB Case No.
91-31 (Dec. [4]
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[5] 30, 1991); Dairy Development, Ltd., WAB Case No.
88-35 (Aug. 24, 1990). In this matter, neither Penn Alto
Associates nor Lawruk Builders received the wage determination
until a day after the construction start date. Nevertheless, we
agree with the Deputy Assistant Administrator that "it is
reasonable for the Department to insist that a challenge to a
contract wage determination be made within a reasonable period of
time after its receipt and certainly before any notification of
prevailing wage violations." Penn Alto Associates and the Altoona
Housing Authority signed the preliminary housing assistance
agreement on April 28, 1989 -- about six weeks after receipt of the
wage determination. Furthermore the signed agreement (which listed
February 1, 1989 as its effective date) contained both the Davis-
Bacon labor standards provisions and the applicable wage
determination. Yet, as noted by the Deputy Assistant
Administrator, Petitioner's request to the Department of Labor for
reconsideration of the wage determination "was not only some 16
months after their receipt, but was also after completion of
construction and after the HUD investigation findings were
communicated to Penn Alto Associates." Given these circumstances,
and given that the record indicates that both Brant and Maurice
Lawruk had previous experience with government construction
contracts, the Board affirms the Deputy Assistant Administrator's
determination that Petitioner's request for reconsideration was
untimely.
The petition for review is denied. The decision of the Deputy
Assistant Administrator is affirmed.
BY ORDER OF THE BOARD:
Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Anna Maria Farias, Member
Gerald F. Krizan, Esq.
Executive Secretary [5]
