[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
TOWER CONSTRUCTION WAB Case No. 94-17
With respect to conformed classifications under
Wage Determination TN930020 applicable to Contract
No. IRW 5836 for installation of an air ventilation
system at Mary Walker Towers and Boynton Terrace
Apartments, Hamilton County, Tennessee
BEFORE: Karl J. Sandstrom, Presiding Member
James C. Riley, Member
Joyce D. Miller, Alternate Member
DATED: February 28, 1995
DECISION OF THE WAGE APPEALS BOARD
This matter is before the Wage Appeals Board on the petition of Tower Construction
("Tower" or "petitioner"), for review of the September 21, 1994 final ruling issued by the
Administrator, Wage and Hour Division. The Administrator ruled on reconsideration that
Tower's $9.65 hourly wage rate proposal for certain skilled construction classifications was not
conformable to a Davis-Bacon Related Act wage determination because there was not a
"reasonable relationship" -- as required by the applicable regulations -- between $9.65 and the
other wage rates listed in the wage determination. The Administrator further determined that an
hourly rate of $11.65 hourly for the conformed classifications was appropriate under the
"reasonable relationship" requirement. For the reasons set forth below, the Administrator's final
ruling is affirmed.[1]
[2] I. BACKGROUND
On September 22, 1993, Tower was awarded Contract Number IRW 5836 by the United
States Department of Housing and Urban Development ("HUD") for installation of an air
ventilation system at Mary Walker Towers and Boynton Terrace Apartments in Hamilton
County, Tennessee. The contract was subject to and contained Wage Determination ("WD") No.
TN930020, applicable to building construction projects in Hamilton County. On or about
November 5, 1993, Tower requested HUD to process its request for conformance of certain
classifications (and wage rates) which were not contained in WD TN930020. The omitted
classifications were those of Acoustical Ceiling Installer, Painter, Soft Floor Layer and Drywall
Finisher, all of which are skilled construction trades. Tower requested that a rate of $9.65 be
established for each of the four classifications upon their conformance.
On or about February 17, 1994, a HUD Labor Relations Specialist notified Tower that
HUD was submitting the conformance requests to the U.S. Department of Labor and that HUD
would "forward . . . the determination" when "the response from the Department of Labor" was
received. Petition Attachment, HUD Letter dated February 17, 1994. Wage and Hour Division's
initial response to HUD regarding Tower's conformance request was dated May 3, 1994. Wage
and Hour's Director, Division of Wage Determinations concluded that the proposed rate could
not be conformed, since the "wage rate, including any bona fide fringe benefits, does not bear a
reasonable relationship to the wage rates contained in the wage decision." Administrative
Record ("AR") Tab C, p. 1. The Director also noted that Wage and Hour "would not take
exception to a rate of at least $11.648," hourly. Id. The Director finally advised Tower that this
initial Wage and Hour determination was subject to further review if any interested party wished
to present additional information for reconsideration. Id. at p. 2.
On June 27, 1994, Tower requested reconsideration of the initial determination. In the
request for reconsideration, Tower stated that -- on an earlier, separate contract performed in
Hamilton County -- it had requested conformance (for three of the four classifications here in
dispute) under WD TN 910020 and that a rate of $9.65 hourly was approved for them in that
process. Tower also noted that a Tennessee State prevailing wage determination and information
from two local contractors supported Tower's $9.65 proposal rather than the $11.648 suggested
in Wage and Hour's May 3 initial determination. Finally, Tower questioned the rationale
underlying Wage and Hour's conclusion that the disputed classifications should be conformed to
the wage rate listed for Cement Mason in WD TN930020, rather than to Tower's proposed $9.65
rate. Tower's proposed rate was listed in the wage determination under the power equipment
category; the lowest-paid classification in that group was Roller Operator at $9.649 hourly.[2]
[3] Wage and Hour's Administrator replied to the request for reconsideration on September
21, 1994. In that letter -- Wage and Hour's final ruling -- the Administrator affirmed the
Director's earlier determination that the proposed classifications should be conformed at $11.65,
essentially the rate listed for cement masons in WD TN930020 ($11.648). Explaining the
reasons for her determination, the Administrator stated:
The original request for the addition of the proposed classifications was denied on
the basis that the wage rate proposed did not bear a reasonable relationship to those
in the contract WD. It has been a long-standing policy of the Wage and Hour
Division to require that the proposed rate for a skilled classification be equal to or
exceed the lowest rate of the skilled classifications already contained in the WD.
While we agree that the power equipment operators are, in most instances, skilled
classifications and that we have, in some cases in the past, approved non-power
equipment operator classifications at those rates, the power equipment operators
are a separate and distinct subgroup of construction worker classifications.
Consequently, when conforming an operator classification, we only look to the
operators to determine conformability. Likewise, when conforming a non-operator
skilled classification, such as those proposed in this instance, we do not look to the
operators for conformability. [AR Tab A, p.1.]
This long-standing policy, stated the Administrator, applied to the facts of the instant
dispute:
Since the cement masons' rate of $11.648 is the lowest of the skilled
classifications in the WD with the exception of the truck drivers and the grader and
roller operators, the rate requested for the acoustical ceiling installer, painter, soft
floor layers, and drywall finisher is not conformable. [Citations omitted; Id. at p.
2.]
Tower was notified of its appeal rights to this Board in the September 21, 1994 ruling and on
October 25, 1994 this petition for review was docketed.
II. DISCUSSION
The regulations governing conformance set out three criteria at 29 C.F.R. 5.5(a)(1)(ii)(A)
[*](emphasis added)[*] which must be satisfied in order to approve conformed classifications
and rates:[3]
[4] (1) The work to be performed by the classification requested is not performed by a
classification in the wage determination; and
(2) The classification is utilized in the area by the construction industry; and
(3) [*]The proposed wage rate, including any bona fide fringe benefits, bears a
reasonable relationship to the wage rates contained in the wage determination.[*]
In considering petitioner's request for conformed classifications, the Administrator did not
specifically address the first two regulatory criteria and ruled against Tower's conformance
requests based on the third factor, only. As to whether Tower's proposed rates bore "a reasonable
relationship to the wage rates contained in the wage determination," the Administrator found that
they did not. Based on our review of the parties' Statements and the administrative record, we
conclude that the Administrator did not exceed her discretion and affirm the determination that
disputed classifications be conformed at the rate of $11.648 hourly.
Tower argues that the Administrator erred in failing to approve its conformance requests,
given petitioner's assertion -- conceded by the Administrator -- that the same wage rate ($9.65)
was previously approved for some skilled trades omitted from another Hamilton County,
Tennessee wage determination (No. TN910020). The Board does not agree. The regulation at
29 C.F.R. 5.5(a)(ii)(3) requires conformed wage rates to bear a reasonable relationship only to
the rates contained in the wage determination applicable to the contract under consideration.
Bryan Electrical Construction Co., WAB Case No. 94-16 (Dec. 30, 1994).
The Board has adopted the position that a party seeking conformed classifications and rates
"may not rely on a wage determination granted to another party regardless of the similarity of the
work in question." Inland Waters Pollution Control, Inc., WAB Case No. 94-12 (Sep. 30, 1994),
slip op. at pp. 7-8. In fact, the Board has ruled that a contractor could not prospectively rely on
Wage and Hour's prior approval of conformed classifications and rates for application to a
contract performed at the same location. E&M Sales, Inc., WAB Case No. 91-17 (Oct. 4, 1991).
In short, the holdings in these cases demonstrate that there is no element of equitable reliance
available under the conformance procedures. Adequate remedies for challenging deficiencies in
wage determinations are available, but must be requested prior to the award of a contract.
In this regard, it is noted that Petitioner submitted to Wage and Hour and the Board wage
payment information regarding the area painter's classification:[4][5] 1) two construction
contractors' wage rates; and 2) the State of Tennessee Department of Labor prevailing wage rate.
No wage information concerning the other three trades for which conformance was sought
(acoustical ceiling installer, soft floor layer and drywall finisher) was submitted. This limited
wage information, however, is not pertinent to the criteria of the conformance regulations, which
do not operate as a substitute for a potential contract bidder's obligation to lodge a timely
challenge to a wage determination prior to the opening of bids. Jordan & Nobles Construction
Co. & W R. Pierce & Associates, WAB Case No. 81-18 (Aug. 19, 1983); Rite Landscape
Construction Co., WAB Case No. 83-03 (Oct. 18, 1983).
It is well established that after the award of a contract, the only method available under
Davis-Bacon and related Act procedures for amendment or correction of a contract wage
decision is through the conformance process, which is not a de novo proceeding to retroactively
determine prevailing wage rates. The Administrator has discretion to conform rates where there
has not been a timely challenge to a wage determination. "In fairness to all bidders and to assure
the government receives the full benefits of the competitive bidding process, the Administrator
should exercise this discretion sparingly." Kord's Metro Services, BSCA Case No. 94-06 (Aug.
24, 1994), slip op. at pp. 2-3.
Conformed rates are granted only if they are reasonable in relationship to the wage rates
already contained in the contract wage determination. We have long recognized as reasonable,
in the ordinary circumstance, Wage and Hour's policy of conforming rates for missing skilled
classifications to a level no less than the lowest rate for a skilled classification listed in the wage
determination. See M.Z. Contractors Co., Inc. (I) ("M.Z. I"), WAB Case No. 92-06 (Aug. 25,
1992). In administering the conformance process Wage and Hour further groups classifications
within the broad category of power equipment operators and distinguishes them from other
skilled classifications, since the operators are a "separate and distinct subgroup of construction
worker classifications." AR Tab A. Thus, when conforming omitted power equipment operator
rates, Wage and Hour only looks to listed equipment operator rates for determining a reasonable
relationship. Conversely, omitted skilled classifications are not conformed at operator rates. The
unique skills and duties of power equipment operators are sufficiently distinguishable from the
skills of mechanics in skilled construction trades, such that the Administrator's rejection of the
equipment operator rates was well within the discretion granted her under the regulation. Bryan
Electrical, supra at p. 5; see also Kord's Metro Services, supra.
The Board further notes that WD TN 930020 also listed a rate of $8.758 for the truck
driver classification -- separate from those for equipment operators -- which the Administrator
also excluded from consideration as a conformed rate. Truck drivers' skill levels are more akin
to those of operators. Furthermore, [5][6] the truck driver rate in this case was lower than the
$9.022 rate for an unskilled laborer, an equally inappropriate skill level at which to conform rates
for Tower's skilled classifications.
The Administrator's choice of $11.65 as the appropriate conformed rate was reasonable
and in keeping with Wage and Hour's policy of conforming rates the lowest skilled rate in the
wage determination. Here that rate was $11.648 for the category of cement mason. It is true --
as stated by petitioner -- that there is as little relationship between the skills of cement masons
and its four proposed classifications as there is between those of its proposals and the heavy
equipment classification of roller operator. However, under the conformance procedures,
comparison of skills is only an approximation, left, generally, to the discretion of the
Administrator.
The Board rejects Tower's purported distinction of the present conformance proceeding
from those concerned in the matters of M.Z. I and Miller Insulation Co., WAB Case No. 94-01
(May 2, 1994). Petitioner correctly notes that in both cases the petitions for review were filed
with the Board by a single labor union, the International Association of Heat and Frost Insulators
and Asbestos Workers, AFL-CIO. Tower is incorrect, however, in characterizing those cases as
"jurisdictional disputes between two trades," given that in neither matter did a second union
claim any "jurisdiction" over the work subject to the underlying conformance actions. Nor is
there a question of "jurisdictional dispute" in this case. Here, there is no issue of either
inter-union or union-open shop claims to controlling prevailing area practice.
Miller and M.Z. I arose in the context of conformance procedures. The question presented
in both cases was the appropriate rate at which to conform mechanical insulation installers. In
Miller, the Board affirmed the determination that mechanical insulation installers were to be paid
a rate conformed to non-union carpenters' rates listed in certain contracts' wage determinations.
M.Z. I presented the anomalous situation where the Administrator originally conformed a rate for
mechanical insulation installers to the rate listed for laborers under a wage determination where
the lowest-paid skilled classification -- painter -- was listed at a rate lower than for laborers. The
Board rejected Wage and Hour's use of the lowest-paid skilled trade as a "benchmark" in that
circumstance, where it resulted in a skilled trade being paid at an unskilled laborer's rate. The
Administrator subsequently conformed a rate for mechanical insulation installer at the rate for
one of the mechanical trades listed in the wage determination.
Here, the Administrator's application of the Board's rulings in Miller and M.Z. I was
reasonable. Conformance at the lowest listed skilled classification's rate is generally a policy
with which the Board has no quarrel as to reasonableness. However, where a rate within the
clearly distinct equipment operator group is the [6][7] "floor" for a wage determination, it is
reasonable to exclude those rates from consideration and conform missing skilled classifications
to the next higher wage level for a skilled trade.
For the foregoing reasons, the Administrator's final determination is affirmed.
BY ORDER OF THE BOARD:
Karl J. Sandstrom, Presiding Member
James C. Riley, Member
Joyce D. Miller, Alternate Member
Gerald F. Krizan, Esq.
Executive Secretary[7]
