CCASE:
BRYAN ELECTRICAL
DDATE:
19941230
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
BRYAN ELECTRICAL WAB Case No. 94-16
CONSTRUCTION, INC.
With respect to conformed classifications
under Wage Determination GA 91-0031 applicable
to Contract No. DABT10-93-C-0036 for line
construction at Fort Benning (Chattahoochee
and Muscogee Counties), Georgia
BEFORE: David A. O'Brien, Chair
Ruth E. Peters, Member
Karl J. Sandstrom, Member
DATED: December 30, 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.) and the Regulations at 29 C.F.R.
Part 7, on the petition of Bryan Electrical Construction, Inc. and its
president, Ellene Bryan (collectively referred to as "Petitioners" or
"Bryan"). Petitioners seek review of the August 15, 1994 ruling on
reconsideration issued by the Administrator, Wage and Hour Division.
The Administrator approved conformed classifications for "linesman,"
"groundman" and "derrick equipment operator;" the Administrator also
denied approval of a conformed classification for "linesman helper."
Conformed hourly wage rates were approved at wage rates suggested by the
contracting agency, rather than at higher rates proposed by Bryan. For
the reasons set forth below, the Administrator's ruling is affirmed.[1]
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[2] I. BACKGROUND
Bryan is a construction contractor specializing in "line work." On
August 6, 1992, the United States Department of the Army solicited bids
to replace power line poles and damaged electrical hardware on the high
voltage lines at Fort Benning, Georgia. The solicitation was subject to
and contained the labor standards provisions applicable to the
Davis-Bacon Act and Wage Determination ("WD") No. GA 91-0031. The wage
determination was captioned for application to heavy and sewer and water
line construction projects. Classifications in this determination
included "electrician" (at $8.78 hourly); "unskilled laborers" (at $4.25
hourly); and several categories of equipment operators (including
"crane, derrick, dragline" operator at $7.85 hourly). There were no
classifications listed for high voltage linesman, groundman, digger
derrick operator, or linesman helper.
The contracting agency opened sealed bids for the solicitation
on September 10, 1992 and Bryan -- the low bidder -- was awarded the
contract for construction by the Army on January 29, 1993. Contract
work commenced on March 2, 1993. After contract award (on May 18, 1993)
Petitioner submitted a request through the Army's contracting officer
for addition of the three line construction classifications (and the
helper classification) to its contract wage determination. Bryan
proposed the following hourly rates linesman, $17.65 basic hourly rate
and $2.55 plus 4% for fringe benefits; digger derrick operator, $15.34
basic hourly rate plus $2.55 fringe benefits; and groundman, $11.67 plus
$3.87 fringe benefits. (Rates equivalent to the groundman rate were
sought for the linesman helper classification.) (Administrative Record
"AR") Tab H)
The Army submitted Bryan's conformance request to the Wage and
Hour Division for a final determination, noting on the form that the
"interested parties cannot agree on the proposed classification and wage
rate." (Id.). The Army also provided a synopsis of Bryan's statement
of the work to be performed under the contract: "work with live 12,740
voltage overhead powerlines, move conductors, tie in transformers,
replace power poles and hardware, and tie in grounding system." (AR Tab
G, p. 1).
On August 10, 1993 the Army submitted its views regarding the
conformance requests (AR Tab F). The Army's contracting officer agreed
that the proposed classifications should be approved. However, the Army
further recommended that the wage rates be conformed at rates already
listed for certain classifications in the line construction contract's
wage determination. Specifically, the Army recommended that linesman be
conformed at the $8.78 rate for "electrician;" digger derrick operator
at the $7.85 rate for "power equipment operator: derrick;" and
groundman at the unskilled "laborer's" rate of $4.25.[2]
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[3] The Army's contracting officer further submitted information
documenting the fact that Bryan based its contract bid on the wage rates
contained in the wage determination. The Army also submitted certified
payrolls showing that Bryan was actually paying rates much closer to the
wage determination rates than the rates it proposed for conformance.
On August 18, 1993, Wage and Hour's Director, Division of Wage
Determinations responded to the Army's request for additional
classifications. The Director noted the contracting officer's position
regarding proper rates:
in part, is based on the fact that the wage rates proposed by the
contractor are excessively higher than those in the wage determination
and are also higher than what he [sic] has paid and is currently paying
his employees.
(AR Tab C, p. 1). The Director concurred with the Army's proposed
classifications and wage rates for linesman, groundman and operator,
basing his position "on the wage rates contained in the certified
payroll. . . ." Id. The Director also declined to permit addition of a
linesman helper classification, given that "the revised helper clauses
were not included in the subject contract."/FN1/
On September 13, 1993, Bryan requested Wage and Hour's reconsideration.
Bryan stated that it had:
discussed this wage rate and classification with Mrs. Foster and others
with the Department of Labor in Washington [sic] D.C. prior to bid
opening. I was informed that the correct wage rate and classification
could only be added after award through the local contract
administration. Award was made 29 January 1993 and still there is no
applicable wage rate despite my many efforts beginning 29 January 1993
through this date.
(AR Tab D, p.1.). Bryan also stated that "[t]he government is aware
that I am paying much higher wage rates than those published. . . ."
Id.
The contracting officer submitted copies of the Bryan's certified
payrolls to the Wage and Hour Division. These reports indicated that
Petitioner paid $5.00 hourly to the groundman classification; $8.00 to
the equipment operator classification; and $10.00 to $12.00 to the
"linesman" classification. (AR Tab F, attachment). Bryan also stated
in the September 13 reconsideration request that "... all the bidders
were forced to use the published rate in order to stay [3]
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[4] competitive with one another. . . ." AR Tab D, p.3. The record
contains a copy of Bryan's labor estimate for the line construction
contract and it demonstrates Petitioner bid the solicitation using the
rates contained in Wage Determination GA 91-0031. (AR Tab F,
attachment).
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.
In considering Petitioner's request for conformed classifications,
the Administrator did not specifically address the first two regulatory
criteria and ruled against Bryan's conformance requests based on the
third factor. As to whether Bryan's proposed rates bore "a reasonable
relationship to the wage rates contained in the wage determination," the
Administrator stated:
Approval of the wage rates requested was based on an evaluation of the
requested rates in relation to the rates contained in the contract wage
determination. 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 wage determination. The rates proposed by both
you and the contracting agency satisfy all three criteria listed above
and are therefore conformable. However, the rates approved only
establish the minimum that must be paid. You are free to pay anything
above the minimum. According to payroll information submitted by the
Department of the Army, the rates you were actually paying were closer
to those submitted by the contracting agency and approved by us. Those
wage rates are hereby reaffirmed.
AR Tab A, p. 2. The Administrator reasoned that both Petitioner's and
the contracting agency's proposed rates were [*]within a range of
conformable rates[*], since both parties' skilled classification
proposals equalled or exceeded the lowest [4]
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[5] rate for skilled classifications in the contract wage determination.
In the ordinary circumstance (as here) the referenced, long-standing
Wage and Hour Division policy is a reasonable exercise of the
Administrator's discretion to conform wage rates. See M.Z. Contractors,
Inc. (I), WAB Case No. 92-06 (Aug. 25, 1992).
However, the Administrator found that the contracting agency's -- and
not Petitioner's -- proposed rates were in reasonable relationship to
the contract wage determination. After full examination of the parties'
respective positions, the Board affirms the wage rates conformed by the
Administrator as reasonable in relationship to the prevailing rates
listed in WD GA 91-0031.
The contracting officer's recommendations -- adopted in the
Administrator's ruling -- are more reasonable in relationship to the
contract wage determination than were Petitioner's proposals. Bryan's
proposed rates were far in excess of the wage rates contained in the
line construction contract for the applicable classifications.
Petitioner's proposed rates were, moreover, far in excess of the hourly
rates it actually paid employees for work under the disputed
classifications. As noted, petitioner alleged it paid its employees
additional amounts for "fringe payments such as lodging, food and
transportation. . . ." These expenses would not be considered bona fide
fringe benefits if paid for the convenience of the employer rather than
the employees. See Calculus, Inc., WAB Case No. 93-06 (Oct. 29, 1993)
slip op. at p. 5.
In adopting the rates recommended by the contracting agency, Wage
and Hour conformed the linesman classification to the wage determination
rate for electrician, which is the highest wage rate in the wage
determination listed for any skilled classification other than that of
boilermaker. Similarly, the duties and skills of a groundman are
roughly comparable to those of a laborer. Skills and duties of a
derrick digger operator are similarly roughly equivalent to those of a
"crane, derrick, dragline" operator. Establishment of conformed rates
for the three disputed classifications -- based on distinctions between
skilled and unskilled employees levels -- at rates listed in the
contract wage determination is within the Administrator's broad
discretion. See M.Z. Contractors, Inc. (I), supra.
Bryan also argues that the Administrator erred in failing to examine
the relationship between its proposed rates and those contained in another
wage determination -- applicable to a second line construction contract
-- at Fort Benning. The Board disagrees. In the first place, the
regulation at 29 C.F.R. 5.5(a)(ii)(3) requires conformed wage rates to
bear a reasonable relationship to the rates contained [*]in the wage
determination applicable to the contract under consideration.[*] There
is no authority for reference to wage rates contained in another,
unrelated wage determination, even one where -- as here -- the nature of
construction and place of performance are the same. In any event, the
value of comparing Bryan's proposed rates to the wage determination in
the second line construction contract would be questionable -- even if
authorized -- given the fact that
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this second wage determination was issued by the Wage and Hour Division
on September 17, 1993, nearly one year after opening of sealed bids for
Petitioner's contract.
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, citing E&M Sales, Inc., WAB Case No. 91-17
(Oct. 4, 1991).
The conformance procedure cannot be used as a substitute for the
obligation to timely challenge the correctness of wage determinations.
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). The record demonstrates that bidders (including
Bryan) for the line construction solicitation utilized WD GA 91-0031's
rates in formulating their bids. Petitioner performed the contract
paying rates very close to those listed in the contract.
As the Board recently stated in the context of a conformance
request arising under the McNamara-O'Hara Service Contract Act of 1965,
as amended (41 U.S.C. [sec] 351 et seq.):
. . . . The Administrator may resort to the conformance process to
relieve a contractor of the undue hardship that would result from
application of a classification in the wage determination that could
not be reasonably be anticipated at the time of bidding.
The Administrator's recourse to this process is discretionary
and a contractor may not rely on this process to relieve himself of his
obligation under the regulations to seek review and reconsideration of a
wage determination prior to opening of bids. 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.
Bryan alleges it discussed the question of missing classifications with
Department of Labor personnel in Washington, D.C. prior to the award of
the contract. However, no written challenge to WD GA 91-0031 was filed
with the Wage and Hour Division prior to contract award. Therefore, the
Board will not address the substantive correctness of the wage
determination.[6]
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[7] For the foregoing reasons, the Administrator's conformance ruling 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[7]
FOOTNOTES
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ Petitioner has not raised the question of Wage and Hour's denial
of the helper classification. The Board therefore deems Bryan to have
waived this portion of the original requests for conformed
classifications.
