CCASE:
INLAND WATERS POLLUTION CONTROL,
DDATE:
19940930
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
INLAND WATERS WAB CASE NO. 94-12
POLLUTION CONTROL, INC.
With respect to reconsideration of
TV/Grout work classification applied
to work performed on four projects in
Oakland and Wayne Counties, Michigan
BEFORE: David A. O'Brien, Chair
Ruth E. Peters, Member
Karl J. Sandstrom, Member
DATED: September 30, 1994
DECISION OF THE WAGE APPEALS BOARD
This matter is before the Wage Appeals Board on the petition
of Inland Waters Pollution Control, Inc. ("Inland Waters" or
"petitioner"). Inland Waters seeks review of a ruling of the
Administrator of the Wage and Hour Division dated May 5, 1994
denying its request for the addition of a TV/Grout technician
classification to Wage Determination MI90-7 through Modification
No. 2 and Wage Determination MI90-7 through Modification No. 5.
For the reasons given below the petition for review is denied
and the ruling of the Administrator is affirmed.[1]
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[2] I. BACKGROUND
Petitioner, Inland Waters, was the successful bidder on
seven contracts for manhole rehabilitation work to be performed
as part of four projects in two counties in the State of
Michigan. These projects were undertaken by the State of
Michigan with the financial assistance of construction grants
provided by the Environmental Protection Agency. Consequently,
the construction contracts involved are subject to the
requirements of the Davis-Bacon Act, as amended, 40 U.S.C. 276a-
276a-7.
Two of the contracts were for construction work to be
performed in Oakland County, Michigan. The bid documents for
these contracts (EPA Grant No C262912-04, Contract Nos. 17 and
18) recited the fact that the Davis-Bacon Act applied and that
Wage Determination, MI90-7 (Modification No. 2) would govern
wages under the contract. Wage Determination MI90-7
(Modification No. 2) expressly excludes from its coverage
"TV/Grout work." Inland Waters was awarded the contracts on
December 20, 1990.
The other five contracts were for construction work to be
performed in Wayne County, Michigan. Again the bid documents for
these contracts (EPA Grant No. C-262912-12, Contracts 1C,
Brownston Township, Van Buren Township, Dearborn Heights and City
of Wayne) recited the applicability of the Davis-Bacon Act and
the governing Wage Determination (MI90-7 (Modification No. 5)).
The Wage Determination contained the same language excluding
"TV/Grout work" as did the prior contract documents. The five
contracts were awarded between May 3, 1991 and October 16, 1991.
Prior to bidding on the contracts, petitioner and other
potential bidders attended meetings with representatives of the
contracting agency, Michigan Department of Natural Resources (the
"MDNR") and the local jurisdictions to discuss the nature of the
work to be performed. Notes taken by the consulting engineer at
one of those meetings have been made part of the record of this
proceeding. The minutes of a second meeting have also been
included in the record.
According to the notes of the first meeting taken by
Hubbell, Roth & Clark, Inc. ("HRC"), the consulting engineers for
one of the projects, and distributed to all attendees, a number
of questions relating to the project were asked by the attendees
and answered by representatives of the MDNR. The following
question is recorded as having been asked and answered:
"Q14: 'No wage rates have been included
for TV/Grouting?"'[2]
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[3] "A14: 'Wage guidelines for TV/Grouting
have not been received from MDNR.
The Wage Rates will be issued as
Addendum if received prior to
bidding or by change order if
issued after bidding."'
The notes do not identify who asked and who answered this
question. No other question regarding TV/Grouting work is
recorded as having been asked at the meeting.
The second meeting took place after the bidding for the
other contracts had closed. Like the earlier meeting, the second
meeting was attended by representatives of the MDNR and the local
jurisdictions along with potential bidders. The minutes of the
meeting indicate the following question was asked and answered.
"Question: 'If there is a wage determination for sewer
routing and cleaning people I notice that one of the
contracts has that wage determination, I'm not sure if
it is included in any of the others, can we assume that
those would be across the board for any contract that
has sewer routing and cleaning?"
"Answer: Gerry Knapp, HRC - ' I'm sure you can. They
are all federally funded projects and the Davis-Bacon
Regulations apply on all of these.' "
Mr. Knapp who is recorded as having answered the above
question worked for Hubbell, Roth & Clark, the consulting
engineers on the project. No further discussion regarding the
job classifications to be employed on these projects is recorded.
Prior to the opening of the bidding process, the Department
of Labor did not reconsider nor did it receive any request to
reconsider the wage determinations. Subsequent to the award of
the contracts, it remained the position of the contracting agency
that no modification was necessary. The position of the MDNR as
reflected in a December 16, 1991 letter from Mr. Richard Emerson
to the Department of Labor was that all the work included in the
bid documents was covered by the Federal wage rates set forth in
the wage determinations accompanying the bid documents and no
additional classifications were needed.
On November 27, 1991, representatives from the MDNR met with
the petitioner and its subcontractor to inform them that the
petitioner apparently was not paying its workers in accordance
with the wage rates specified in the applicable wage determinations.
Petitioner disagreed with this assertion and the [3]
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[4] MDNR agreed to request a concurrence from DOL on this
issue. This was done by the above cited letter dated December
16, 1991.
On December 17, 1991 petitioner requested that the DOL defer
consideration of the matter until the petitioner had the
opportunity to assess whether the wage determinations were deemed
to be part of the contract as a matter of Michigan contract law.
Subsequently on January 16, 1992 petitioner, believing DOL was
intending to review and respond to MDNR's request for a
concurrence, sought through counsel to have the applicable wage
determinations reconsidered and a job classification for TV/Grout
technician added.
The Administrator of the Wage and Hour Division of DOL
responding to the contracting agency's and the petitioner's
request fully investigated the matter. On October 19, 1993 the
Administrator denied petitioner's request for the inclusion in
the wage determination of the additional classifications of
TV/Grout technician, sewer cleaner operator and helper. In
setting the wage rates that were to apply, the Administrator made
inquiries to determine whether union laborers performed the
duties in question on heavy construction in Oakland and Wayne
counties. Finding insufficient evidence that union laborers did
perform the work in question, the Administrator conformed the
wage determinations to require that the employees performing
these duties be compensated at a minimum at the lowest rate
listed in the determination. This portion of the Administrator's
decision was timely appealed to the Wage Appeals Board (Case No.
93-23) by Inland Waters. By letter of November 18, 1993 the
Laborers' International Union of North America ("LIUNA")
intervened, seeking the Administrator's reconsideration of the
October 19 ruling in order to examine information that LIUNA
wished to submit. The Board remanded the matter to the
Administrator for the purpose of making further inquiry into
whether the work in question was in fact performed by union
laborers in these geographic areas.
After reviewing the additional evidence, the Administrator
by letter of May 5, 1994 reversed her earlier ruling and found
that there was sufficient evidence to conclude that the duties in
question were performed by union laborers in Oakland and Wayne
counties. Consequently, no conformance was necessary and the
employees performing these duties were to be compensated at the
wage rate for the laborer classification in the wage
determinations. [4]
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[5] II. DISCUSSION
The regulations governing conformance set out three criteria
at 29 C.F.R. 5.5(a)(1)(ii)(A) which must be satisfied in order to
approve a conformance:
(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.
The facts of this case clearly support the Administrator's
ruling that the first criterion has not been satisfied.<1> The
record establishes that the work to be performed by the proposed
TV/Grout technician classification is performed by the "laborer,
open cut construction" classification already contained in the
applicable wage determinations. Conformance being unavailable,
petitioner looks elsewhere for relief.
Petitioner relies on statements made at pre-bid meetings by
representatives of the MDNR, the contracting agency, to argue:
(1) that the contracts in question should be retroactively
modified to include the TV/Grout technician classification; and
(2) in the alternative, that DOL should be estopped from
enforcing the wage rates contained in the wage determinations.
For the reasons discussed below, each of these arguments must
fail.
When a contracting agency fails to incorporate a wage
determination into a contract, the DOL may retroactively
incorporate the appropriate wage determination into the contract
provided that the contractor is compensated for [5]
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[6] any increase in wages resulting from the change.<2> Relief is
available under this regulation only in the rare case in which the
contracting agency has failed to include the wage determination in the
contracting documents. The matter before us is not such a case. There
is no question that the wage determinations which the Administrator is
seeking to enforce were included in all the relevant contracts.
In fact, not only were the applicable wage determinations
included but by express language the wage determinations excluded
TV/Grout work. Petitioner was clearly on notice that unless
modified prior to bidding, the wage determinations included in
the contract would apply. As noted, those determinations
expressly excluded the classifications which petitioner now seeks
to have incorporated into the contracts. In fairness to all
bidders it is important that the wage determinations be issued
prior to bidding and be as comprehensive as possible. If a
bidder believes a wage determination to be deficient in some
respect, the bidder is to make his objection known and through
the contracting agency seek the advice of the Administrator.<3>
In response to a request, the Administrator is to issue a
determination within thirty days of receipt. The importance of
this procedure should not be overlooked. In order for the
government to obtain the full benefits of the competitive bidding
process all bidders must be aware of the contractual
requirements. Fairness dictates that bidders be treated equally
including having access to all relevant information. Therefore
the bidding documents to the extent possible should reflect all
of the relevant requirements.
In this case petitioner did not follow the prescribed
procedure and request the contracting agency to seek the advice
of the DOL. The petitioner bid on these contracts aware that the
wage determinations did not include the classification which it
now seeks. Consequently, petitioner is bound by the express
terms of those contracts.
Petitioner relies on the case of E&M Sales, Inc., WAB Case
No. 91-17 (Oct. 4, 1991) to support its argument. This reliance
is misplaced. In that case the contractor was hired to complete
work on a project to install a fire alarm system. The original
contract had included a classification for "low voltage wireman."
The petitioner in that case requested that the contracting agency
submit a request for this additional classification. Because of
the emergency nature of the work, the contractor began work on
the project. The initial request was approved by the DOL but was
later reversed. The contractor appealed that ruling but the
contracting agency delayed for several months in submitting the [6]
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[7] appeal and when the appeal was denied, the contracting
agency waited six months before notifying the contractor. In all
nearly two years had passed before the contractor learned of the
denial of its request. In the interim the contracting agency had
negotiated changes and modifications to the original contract.
Under those circumstances, the Board found that the
contractor having followed the prescribed procedures and having
relied on the fact that the work classification sought had been
previously issued for the very same project should be given some
relief given the emergency nature of the work and the inexcusable
tardiness of the contracting agency in seeking and transmitting
the advice of the DOL. It should be borne in mind that the E & M
Sales contract was a negotiated cost plus contract in which the
integrity of the bidding process was not at issue.
The case at hand is clearly distinguishable. Petitioner did
not follow the prescribed procedures and seek the advice of DOL
prior to bidding. This was not an emergency situation in which
the contractor commenced work under a negotiated cost plus
contract. This was a competitively bid contract where the wages
paid to the workers employed on the project directly impacted on
the contractor's profit margin. The wages required to be paid
were a critical factor in fashioning a bid. At the time of
bidding petitioner was aware and bound by published wage
determinations as were all the bidders. This Board would be
setting a terrible precedent if it permitted contractors to
ignore DOL's procedures and gamble that additional
classifications might be added to a contract notwithstanding the
fact that classifications in the wage determinations clearly
governed the work in question.
Petitioner attempts to strengthen its case by suggesting
that a previous wage determination for a similar project had
included a TV/Grout technician classification. This Board has
long rejected this argument as a basis for reversing the
Administrator's determination. As we stated in the cited case of
E&M Sales, Inc.:
Were the Board to accept this position, Davis-Bacon
administration 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. Accordingly, the Board holds,
for the purposes of the legal argument arising under
the Portal-to-Portal [7]
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[8] Act, that E & M may not rely on a wage determination
granted to another party regardless of the similarity
of the work in question.<4>
Similarly, petitioner could not reasonably assume that a
TV/Grout technician classification would subsequently be
incorporated into the contract because a contract for a similar
project had included the classification.
Nor could petitioner reasonably assume that the contract on
which it was bidding would be modified because a representative
of the contracting agency indicated that if a modification of a
wage determination were forthcoming it would be included in the
contract. This was merely a statement of fact and not a promise
to amend the contract to include the additional wage
classification. It was clearly beyond contracting agency's power
to modify the wage determination. Petitioner's unwarranted
expectation then that the wage determination would be modified is
certainly not binding on DOL.
Having examined petitioner's first argument, the Board
concludes that there is no basis for modifying the contract and
turns to the second argument that DOL should be estopped from
enforcing the wage determinations. The essence of
petitioner's estoppel claim is that the statements by
representatives of the contracting agency led petitioner to
believe that the wage determinations would be amended to include
the TV/Grout technician classification. This Board has often
considered estoppel arguments by contractors and others seeking
to avoid compliance with Davis-Bacon labor standards. The Board
has consistently rejected these claims. As the Board stated in
Warren Oliver Company<5> :
This Board has rejected estoppel arguments that a
petitioner's reliance upon the advice of the
contracting agency as to the appropriate wage rate
operates to relieve petitioner of its responsibility to
pay the proper wage rate to laborers and mechanics
employed on the project. The Secretary of Labor was
given the power to regulate the interpretation and
enforcement of the Davis-Bacon and related acts by
Reorganization Plan No. 14 of 1950. This authority has
been reinforced by two opinions of the Attorney general
of the United States.
Even assuming arguendo that representatives of the
contracting agency had misrepresented the position of the DOL and
petitioner reasonably believed that [8]
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[9] the wage determination would be amended, this would not provide,
under the clear precedents of this Board, a basis to relieve petitioner
of its obligation under Federal statute to pay the required wages.
The Board finds, after a thorough review of the record,
petitioner's reliance on the oral statements made by contracting
agency representatives at the pre-bid meeting to be misplaced.
First those statements were phrased in conditional language and
fell far short of a promise even to seek, let alone, to amend the
wage determination. Vague and ambiguous statements made in the
course of a question and answer session hardly constitute the
sort of misrepresentation that a person can reasonably rely upon
in making out a claim under traditional estoppel principles.
Consequently even if estoppel were available as a defense, the
facts of this case would not support its invocation.
For the foregoing reasons, the Administrator's conformance
ruling of May 5, 1994 is affirmed.
BY ORDER OF THE BOARD:
David A. O'Brien, Chair
Ruth E. Peters, Member
Karl J. Sandstrom, Member
Gerald F. Krizan, Esq.
Executive Secretary[9]
FOOTNOTES
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
<1> Petitioner appears to concede that the Administrator's
decision not to grant a conformance in this matter was
appropriate. See Petitioner's Supplemental Statement at p. 8
(emphasis supplied), where Inland Waters states:
Based on the survey evidence conducted by the Wage and
Hour Division from exclusively Union Contractors and
[LIUNA], the Administrator concluded that there was
sufficient evidence to show that laborers identified in
the existing wage determination performed the work at
issue. . . . . In making her finding, the
Administrator only had to find some evidence that the
work at issue was performed by a wage classification
contained in the Wage Determination. 29 CFR [sec]
5.5(a)(1)(ii)(A).
<2> 29 C.F.R. 1.6(f).
<3> 29 C.F.R. 5.5 (a)(ii)(c)
<4> WAB Case No. 91-17, slip op. at p.3.
<5> WAB Case No. 84-08 (Nov. 20, 1984)
