CCASE:
TOWER CONSTRUCTION
DDATE:
19950228
TTEXT:
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[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]
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[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]
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[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]
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[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]
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[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]
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[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]
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[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]