ALARM CONTROL CO., WAB No. 93-24 (WAB May 27, 1994)
CCASE:
ALMARM CONTROL
DDATE:
19920527
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
ALARM CONTROL COMPANY WAB Case No. 93-24
BEFORE: David A. O'Brien, Chair
Ruth E. Peters, Member
DATED: May 27, 1994
DECISION OF THE WAGE APPEALS BOARD
This matter is before the Wage Appeals Board pursuant to the
Davis-Bacon Act (40 U.S.C. [sec] 276a et seq.; the "Act") and the
regulations at 29 C.F.R. Part 7, on the petition of Alarm Control
Company ("ACC" or "Petitioner"), seeking review of the November
10, 1993 ruling issued by the Administrator, Wage and Hour
Division. In her ruling, the Administrator affirmed an earlier
determination denying ACC's request for addition of a conformed
classification and wage rate for "Alarm Installer" -- to a wage
determination applicable to a construction contract subject to
the labor standards provisions of the Act. The Administrator
also reaffirmed denial of ACC's request to add a classification
and wage rate for an Alarm Installer Helper. For the following
reasons, the Administrator's ruling is reversed and remanded for
further action consistent with this opinion.
I. BACKGROUND
This labor standards dispute arises under a construction
contract awarded by the Federal Aviation Administration ("FAA")
to prime contractor Comtrol, Inc. The prime contractor then
subcontracted work under the contract to ACC. There is no
dispute that the solicitation and contracts were subject to and
contained Davis-Bacon labor standards provisions and Wage
Determination ("WD") UT90-07. The scope of the work under the
subcontract was described by the contracting officer (in her
conformance request):
Halon 1301 System - Installing a low voltage limited
power (24 VDC) automatic fire detection and fire alarm
system and mounting [1]
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[2] the control panel, graphic annunciator panel and
field devices such as manual release stations, abort
stations and smoke detectors to include the conduit
(EMT) and low voltage wiring to those devices.
Administrative Record ("AR") Tab F.
As noted, WD UT90-07 was included in Comtrol's contract for
the FAA low-voltage contract. There was no classification for
alarm installer (or helper) contained in the wage determination
and the contracting officer submitted to Wage and Hour a request
for authorization of additional classifications: "alarm
installer" at $8.30 hourly and "alarm installer helper" at $6.40
hourly.
On December 8, 1991, Wage and Hour disapproved the requested
classifications. First, alarm installer was rejected because:
[t]he work to be performed by this classification may
be performed by a classification already included in
the wage decision [citation omitted]. The appropriate
classification is Electricians.
AR Tab C, p. 1. Secondly, the helper classification was
disapproved on the ground that:
Pursuant to longstanding practice, helper
classifications and other subclassifications can be
added to a wage decision where the use of helpers is an
established prevailing practice, the duties are clearly
defined and distinct from those of the journeyman
classification and from laborers, and where the term
"helper" is not synonymous with a trainee in an
informal training program. Any request should be
accompanied by sufficient information to support a
contention that the above criteria have been met.
Id. at p. 2. ACC protested the conformance denials on January 9,
1992 and the Administrator issued her decision on reconsideration
on November 10, 1993. In short, the Administrator affirmed the
conformance denials for the reasons stated in the original
determination.
The Salt Lake County wage determination -- No. UT90-7 --
listed the "Electricians" classification as:
ELECTRICIANS:
Electricians
Cable Splicers[1]
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[3] AR Tab F. Another, contemporaneous, wage determination -- WD
UT90-4 -- was issued by Wage and Hour for application to
contracts for construction in Davis and Weber Counties, Utah.
(Davis is contiguous to Salt Lake County and Weber in turn abuts
Davis County.) This wage determination listed the classification
for "Electrician" in the following manner:
ELECTRICIANS (includes low-voltage work):
Electricians
Cables [sic] Splicers
Id. Both wage determinations list the same basic hourly rates
and fringe benefits for the respective subclassifications of
Electricians and Cable Splicers, irrespective of the notation
concerning low-voltage work in Davis and Weber Counties.
Some additional historical background is significant to
understanding the context of this matter. Some time prior to
1980, Wage and Hour conducted a wage survey for five Utah
counties: Salt Lake (now under consideration with respect to WD
UT90-07); Davis and Weber (for which WD UT90-4 was recently
issued); Tooele; and Utah. Wage and Hour publicized the result
of that survey by letters in 1980. One such letter sent to a
low-voltage contractor states:
This is to advise you that the area practice survey
recently conducted to determine the proper
classification for the installation of low-voltage
security, fire, and communication systems has been
completed. The survey revealed that "alarm installers"
rather than "electricians" perform this work in Weber,
Davis, Salt Lake, Tooele and Utah Counties in Utah.
Your interest and participation in the area practice
survey is appreciated.
AR Tab D, attachment (Wage and Hour letter dated October 6,
1980); emphases supplied. Another Wage and Hour letter (dated
October, 1980 and attached to Petitioner's supplemental
statement), states additionally "that this survey revealed that
electricians do not prevail in the performance of this work...."
Petitioner states that no subsequently issued wage
determination in the area contained a classification for "alarm
installer." The Administrator does not dispute this assertion.
ACC states -- also without contradiction -- that from 1980 to the
time of this dispute, all requests for conformed alarm installer
classifications for all contracts in these five counties were
recommended by contracting officers and approved for application
to contract work by Wage and Hour. The record documents several
such conformances approved by Wage and Hour. See Tab C,
enclosures. In fact, one contracting agency letter (id.), signed
[3]
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[4] by the Assistant District Counsel for the Army's Corps of
Engineers office, states with respect to another ACC conformance:
I have informed Alarm Control Company in the past that
the Department of Labor will not include rates for
Alarm Installer or helper in the published wage rates,
and that they must submit a DD 1565 [Army contract
conformance request] at the beginning of each federal
job. This is mostly a paperwork exercise, forms over
substance, but that is what the contract and the law
require.
II. DISCUSSION
The Administrator's ruling and her counsel before the Board
pose the issue for resolution of this dispute to be the
correctness of Wage and Hour's decision on the conformance
request submitted by the contracting agency. However, our review
of the record convinces us -- as in another case -- that
"[a]lthough this case arose as a conformance proceeding, it is
not, strictly speaking, a conformance matter. . . ." Utility
Services, Inc., WAB Case No. 90-16 (July 31, 1991); slip op. at
p. 4. Similarly, the Board's view of this dispute convinces us
that considerations regarding notice and area practice make this
classification dispute inappropriate for resolution under the
conformance regulations.
In Utility Services the Board was presented with Wage and
Hour's denial of conformed classifications under a contract for
building construction and attendant, yet incidental, sewer and
water line work in Montgomery County, Maryland. In that case,
the wage determination -- applicable to several Washington,
D.C.-area jurisdictions and types of construction -- contained
separate classifications with lower wage rates for sewer and
water line work, as well as higher-paid building construction
classifications such as laborer, pipelayer and backhoe operator.
The contract further contained an ambiguous proviso, which was
added by the contracting agency: ("BUILDING CONSTRUCTION WAGE
SCHEDULES FOR MONTGOMERY COUNTY, MD. ONLY APPLY TO THIS
PROJECT"). Although there were, as noted, also sewer and water
rates listed for Montgomery County, Wage and Hour ruled that
conformances were not proper since the building trades
classifications were listed and performed the work in question.
Wage and Hour defended its Utility Services decision partly
on the basis that it was reasonable to determine the utility work
at issue was incidental to the building construction portion of
the contract (approximately 98%) and therefore the wage rates
were governed by the building construction schedule. However,
the petition for review in Utility Services was principally
opposed on the ground that it constituted an untimely challenge
to the substantive correctness of the wage determination,
contrary to long-standing precedent of this Board.[4]
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[5] In this case, the Administrator raised the defense that
Alarm Control's petition presents an untimely challenge to the WD
UT90-7. The Board does not agree. As we stated in Utility
Services:
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 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.[*]
Utility Services, slip op. at pp. 5-6; [*]emphases supplied.[*]
In Utility Services, the contractor argued that there was an
established area practice in Montgomery County, Maryland
permitting use of the so-called "utility rates" in sewer and
water line construction up to five feet from the foundation of a
building construction project. The Board remanded the case to
Wage and Hour for reconsideration and the question of appropriate
area practice did not return to the Board.
The ACC dispute, too, arose as a conformance request, but
the Board concludes that the conformance procedure is not
appropriate to resolve this matter. The proper questions for
resolution are those of area practice and whether ACC and other
federal contractors had proper notice that Wage and Hour's
ten-year conformance practice with regard to alarm installers and
helpers was ending. With respect to the installer
classification, the Administrator ruled that:
the addition of any unlisted classification and wage
rate to this wage determination can be approved only
when the work to be [5]
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[6] performed by the classification to be added
is not performed by a classification already
contained in the wage determination.
* * *
The electrician wage rate listed in WD No. UT90-7
reflects a collectively bargained rate. Therefore in
accordance with [citation omitted] Fry Brothers
Corporation . . ., we must look to union practice in
the area to determine which craft performs the work in
question. .... In the instant situation, information
furnished by Local Union No. 354, International
Brotherhood of Electrical Workers, which has
jurisdiction in the area, clearly indicates that the
type of work in question is within the scope of duties
being performed by the journeymen electrician as
contained in WD No. UT90-7.
AR Tab A, p. 1. The Board cannot agree with this ruling, given
our conclusion that this dispute cannot be properly characterized
as a conformance question.
In this regard, we note that information supporting the
claim that electricians perform some of this low-voltage work in
the area was supplied at Wage and Hour's request in the
conformance reconsideration itself. But reaching this stage of
the conformance process presupposes that the Alarm Installer and
Helper classifications were validly omitted from the wage
determination compiled from the 1988 survey. There is no basis
in the record before us to conclude that the listing for
electricians in the wage decision constitutes Wage and Hour's
determination that the use of electricians prevailed for
low-voltage system installations in Salt Lake County. In fact,
the 1980 survey demonstrated that electricians did not "prevail"
in performing low-voltage work; this meant that the electricians
in 1980 did not demonstrate that they performed even 30% of the
work. Compare 29 C.F.R. 1.2(a)(1) (1993), which establishes a
50% threshold requirement for determination of a "prevailing"
classification.
Here, as in Utility Services, the Board is most struck by
the fact that at no time would it appear ACC had any notice, let
alone adequate notice that Wage and Hour conducted a new wage
survey in 1988. Petitioner avers that:
[ACC has] repeatedly asked when a new survey would be
done knowing it was in sore need of update. We were
told by the DOL not to worry about it, we would be
notified. In twenty-five years of business, ACC or the
Utah Alarm Association has yet to be asked to
participate in a survey other than the 1980 survey."[6]
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[7] Supplemental Statement, p. 1. The Administrator has not
challenged this statement; however, in her ruling of November 10,
1993, the Administrator stated:
With respect to wage surveys, the classifications and
wage rates listed in WD UT90-7 are based on a survey of
building construction projects in Salt Lake County that
was completed in September 1988. [*]This survey, which
supersedes all previous surveys, did not produce any
data for the alarm installer or helper classifications.
[*] Another survey of building construction in Salt
Lake County has just been completed by our Regional
Office in Denver. Appropriate changes in the WD will
be made, after a thorough analysis of the information
yielded by the new survey, for application to
prospective construction contracts in the area.
However, WD's already incorporated in contracts will
not be changed retroactively.
AR Tab A, p. 2; [*]emphasis supplied.[*] If ACC and members of
the contractors' association were not contacted to participate in
the 1988 survey -- as they were for the 1980 survey -- it is not
surprising that no data for the alarm installers' classification
were obtained.
Moreover, since there was no adequate notice of the 1988
survey, ACC and other contractors likewise had no notice from the
face of WD No. UT90-7 that the [*]continued[*] lack of an Alarm
Installer represented any change in Wage and Hour's pattern and
practice of approving these conformance requests for over 10
years. That WD No. UT90-7 lacked notice of a change in the area
practice is self-evident, given the patent distinction presented
by the electrician's classification in WD UT90-4, which clearly
includes "low-voltage work" within its scope.
Failure to allow these contractors the opportunity to
participate in the 1988 wage survey -- where Wage and Hour had
clear notice of their previous interest and participation -- runs
counter to the spirit, if not the letter, of wage determination
regulations. The regulations governing procedures for making
wage determinations under the Davis-Bacon and Related Acts
provide for obtaining wage survey information from several
sources:
[*]The Administrator will encourage the voluntary
submission of wage rate data by contractors,
contractors' associations, labor organizations, public
officials and other interested parties, [7]
/FN1/ Petitioner and other similar contractors may not have been
contacted to participate in yet another survey, announced by the
Administrator as "just ... completed" in the November 10, 1993
ruling.[7]
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[8] reflecting wage rates paid to laborers and mechanics on
various types of construction in the area.[*] The Administrator
may also obtain data from agencies on wage rates paid on
construction projects under their jurisdiction. The information
submitted should reflect not only the wage rates paid a
particular classification in an area, but also the type or types
of construction on which such rate or rates are paid, and whether
or not such rates were paid on Federal or federally assisted
projects subject to Davis-Bacon prevailing wage requirements.
29 C.F.R. 1.3(a); emphasis supplied. In this case, Wage and Hour
knew or should have known that fair notice of the 1988 wage
survey should have been afforded ACC and other low-voltage
contractors similarly situated. These contractors had in fact
participated in the 1980 survey; been thanked for their efforts;
and informed that their firms performed the majority of
low-voltage work.
The question of proper notice -- again -- taints the
conformance denial on the merits. The Board emphasizes several
facts in this regard. Year after year since 1980, Wage and Hour
routinely approved conformed classifications for both alarm
installers and helpers. In fact, Petitioner alleges that
conformed classifications had just been approved for application
to its last two contracts [*]at the same FAA facility[*], albeit
under the aegis of a prior wage determination issued prior to the
1988 survey of which ACC had no notice.
Having found the conformance process inadequate to address
the merits of this dispute, we turn now to the issue of remedy
and instructions upon remand. This case presents troublesome
questions, as disputes over validity of wage determination
processes do. In an analogous case, the Board concluded that
Wage and Hour improperly issued a multiple-county wage
determination without documenting that there was first
insufficient wage data to issue county-by-county determinations.
Regarding instructions on remand, the Board stated:
It would be inconsistent with ... Board precedent if in
this case we were to acquiesce to Wage and Hour's
request to leave in effect the laborers' wage rate for
Philadelphia County listed in GWD No. PA91-25. The
Board recognizes that the pendency of a new wage
determination and the inability of Wage and Hour to
reconstruct a county-by-county response rate for the
1987-88 wage survey present some peculiar circumstances
for Wage and Hour on remand in this case. [*]However,
Petitioner had no role in the acknowledged failure to
determine the sufficiency of the data on a
county-by-county basis, and should not have to suffer
adverse consequences as a result of that error. [*]
Furthermore, Wage and Hour has some degree of latitude
on remand. If, for example, a [8]
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[9] new wage determination will indeed be issued shortly,
Wage and Hour may decide simply to pronounce a moratorium
on the use of the existing laborers' rate in GWD No.
PA91-25 in Philadelphia County pending issuance of the
new wage determination. On the other hand, if it will
be some time before the new wage determination is published,
Wage and Hour may decide to issue an interim laborers'
wage rate based upon a presumption of an adequate
useable response rate from Philadelphia County in the
1987-88 survey. [*]The crucial stipulation upon
remand, however, is that the error acknowledged in this
matter cannot remain uncorrected nor, as Petitioner has
noted ... should the error be perpetuated in future
wage determinations.[*]
Laborers' District Council, WAB Case No. 92-11 (Oct. 21, 1992),
slip op at 6-7; emphasis added.
Counsel for the Administrator suggests that the conclusions
reached by Wage and Hour in the instant conformance ruling are
consistent with the position adopted by the Board in the matter
of E&M Sales, Inc., WAB Case No. 91-17 (Oct. 4, 1991). We
disagree. In E&M Sales, the Petitioner argued that it had a
right to rely on a conformance action (again for low-voltage
work), which Wage and Hour had erroneously granted to a
predecessor contractor at the same location. The Board rejected
this claim, stating that:
... Davis-Bacon could be compromised out of existence.
If, for example, an incorrect wage determination was
issued on a highway construction project, any highway
builder in that geographic area could rely on it merely
because of the similarity of the work in question.
Over time, an initial error would be compounded to the
point where collective bargaining agreements or other
area wage practices would have little relevance to
Davis-Bacon construction projects. The Board sees no
point in continuing error, regardless of how
time-honored the precedent.
Id. at p. 3. There is clear distinction between the present
circumstances and the situation presented in E&M Sales. Here,
indisputably correct conformed classifications were issued for
more than 10 years in a multi-county area based on Wage and
Hour's own 1980 wage and area practice survey. Further, the
petitioner in E&M Sales failed to demonstrate -- even after
remand -- that there was any legal deficiency in Wage and Hour's
denial of its conformance request.
In denying a conformed classification for alarm installer
helpers, the Administrator stated:[9]
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[10] prior to regulation changes effective February 4, 1991
helper classifications and other subclassifications
could be added to a WD only if the duties of the helper
were clearly defined and distinct from those of the
journeymen and where the term "helper" was not
synonymous with a "trainee" in an informal training
program.
Tab A, p. 1. Petitioner has not directly addressed this aspect
of the Administrator's ruling in either its petition or
supplemental statement. However, neither does our review of the
Administrator's ruling discern that the Wage and Hour fully
considered this question or specifically addressed the propriety
for approving a helper classification in the context of the
foregoing criteria. Accordingly, this aspect of the November 10,
1993 ruling is also reversed.
III. ORDER
This matter is remanded to the Wage and Hour Division for
further consideration. The Administrator is directed to complete
reconsideration of this matter and take appropriate action
consistent with this decision within 60 days from the date of
this decision and order. The Administrator shall file a report
of the action taken and/or a copy of any new ruling with the
Board on the date of issuance.
BY ORDER OF THE BOARD:
David A. O'Brien, Chair
Ruth E. Peters, Member
Gerald F. Krizan, Esq.
Executive Secretary [10]
