The Department
of the Treasury Financial Management Service intervened as an interested party on June 25,
1998.
DISCUSSION
In order to maintain a fair and efficient procurement
operation, it is essential that questions about SCA wage determinations be raised in a
timely fashion. The Administrator's initial December 18, 1997 ruling on the timeliness
of Diversified's request relied on a provision in the SCA regulations (29 C.F.R.
§4.56(a)) that precludes review of a wage determination by the Administrator
"later than 10 days before commencement of a contract in the case of a negotiated
procurement . . . ." AR Tab H. Section 4.56(a) explains that the time limitation
"is necessary in order to ensure competitive equality and an orderly procurement
process." Id.
[Page 3]
This reasoning was abandoned in the Administrator's March 13,
1998 final decision, in which the Administrator acknowledged that it would have been
impossible for the contractor to request review of the wage determination within the time
provided by Section 4.56(a) because the contractor was not aware of the wage
determination until it received the contract modification from FMS on October 7, 1997,
a week after the award of the contract. AR Tab A. As suggested by the
Administrator's March 13 ruling (and as explicitly conceded by the Administrator on
appeal), the circumstances in this case vary from the ordinary procurement process in
which a wage determination typically is issued and incorporated into a procurement
contract prior to its award. Id. ; Statement of the Acting Administrator in
Opposition to Petition for Review at 4; see 29 C.F.R. §4.5(a) (1998).
This Board's predecessor, the Board of Service Contract Appeals
(BSCA), similarly considered a challenge to a wage determination that was issued after a
procurement contract was awarded, under the mechanism outlined in 29 C.F.R.
§4.5(c)(2). In re Wage Determination No. 90-1029 (Rev. 6) as Applied to
Service Contracts in Jasper Co., Missouri, BSCA Case No. 94-10, Dec. 30, 1994.
Recognizing the need for some administrative mechanism for evaluating a wage
determination issued under such circumstances, in Jasper Co. the BSCA
concluded that any request for review of a wage determination incorporated post-award
must be filed before the Wage and Hour Division within a reasonable period of time.
Jasper Co., slip op. at 3. Under the facts before the BSCA in Jasper
Co. , the Board concluded that a challenge to the wage determination submitted two
months after the wage determination was received was unreasonable. As the Administrator
now concedes, the dispositive issue before us is whether Diversified acted within a
reasonable period of time in requesting review and reconsideration of the wage rates for
collection agents, WD 97-0364.
In concluding that Diversified's December 9, 1997 request for
review and reconsideration would not be considered, the Administrator relied on two
factors: (a) the conclusion that the period of time between Diversified's receipt of the
October 7 wage determination and its December 9 request for review was excessive, citing
Jasper Co. ; and (b) the assertion that Diversified's December 9, 1997 request
"did not include any data" from which the Wage and Hour Division could
review and reconsider the wage determination. AR Tab A. Based on the record before
us, we respectfully disagree.
[Page 4]
The allowable length of time between a party's receipt of a wage
determination and the filing of a request for review and reconsideration depends on the
particular circumstances of each case. It is undisputed in this case that Diversified had no
knowledge of the wage determination prior to the negotiated bid award on September 30,
that Diversified first learned of the wage determination rates when it received FMS's
contract modification on October 7, 1997, and that Diversified did not file its request for
review and reconsideration until approximately two months later on December 9, 1997.
In Jasper Co., the Board concluded that a two month delay was unreasonable,
and in this case Diversified's request similarly was filed two months after it became aware
of the wage determination. However, we find the two cases distinguishable.
In Jasper Co., the U.S. Department of Housing and
Urban Development (HUD) awarded a contract for property management and maintenance
services that included a wage determination that did not apply to the county where the
work was to be performed. Only after the award of the contract did HUD
recognize its error and ask the Labor Department's Wage and Hour Division for a correct
wage determination. The Division provided the new wage determination to HUD
approximately two months following HUD's request. Two months after HUD received
the new wage determination, it filed a request for review and reconsideration. Jasper
Co., slip op. at 2.
Several factors distinguish the present case from the matter before
the BSCA in Jasper Co. For example, the petitioning party in Jasper
Co. was a federal contracting agency familiar with the review and reconsideration
process, and which already had been in communication with the Wage and Hour Division
in connection with the issuance of the wage determination. Thus, the petitioning party
already was thoroughly engaged in the process before the disputed wage
determination was issued. Further, the wage determination issued for HUD involved semi-skilled employee classifications that are routinely issued by the Department, and thus did
not raise any unusual issues. In this context, the BSCA appropriately concluded that
HUD's two-month delay in requesting review and reconsideration of the post-award wage
determination was excessive and therefore untimely. In contrast, Diversified's first
awareness of the wage determination came when it received the FMS notice modifying the
collections services contract. Further, the arguments raised by Diversified suggest that
there are some novel problems associated with the collection agent classifications wage
schedule, because the industry's compensation policy is not based simply on an hourly
wage rate system.
[Page 5]
As Diversified correctly notes, the pertinent regulatory provisions
at 29 C.F.R. Part 4, Subpart B do not specifically address the circumstances in which
Diversified was placed when FMS modified the procurement contract post-award. Faced
with a lack of clarity in the regulations, Diversified represents that it contacted the Wage
and Hour Division by telephone but experienced delays attempting to reach a Wage and
Hour official who could provide guidance regarding those regulatory provisions.
Diversified Reply Brief at 5-6; see AR Tab G. In addition, the record
indicates that FMS was barraged by inquiries from other debt collection contractors who,
like Diversified, were unfamiliar with the procedures for objecting to a wage determination
issued by the Wage and Hour Division. AR Tab G. On the record before us, the Board
is satisfied that Diversified acted promptly to raise its concerns about the wage
determination, and did not delay in attending to the matter.
We note also that, unlike the circumstances considered in
Jasper Co. , the wage determination incorporated post-award into the
Diversified contract (WD 97-0364) did not supersede a previously issued wage
determination, but instead was the first wage determination that had been issued by the
Wage and Hour Division for incorporation into the debt collection contract awarded to
Diversified by FMS. See AR Tab D, Attachment A; Tab G.
Without question, interested parties seeking to protest a wage determination that has been
issued after the award of a contract must be diligent in pursuing their remedy before the
Administrator and the Board; in the full context of this case, however, we conclude that
Diversified's two-month delay in submitting a formal request for review and
reconsideration was not excessive.
With regard to the Administrator's March 13, 1998 assertion that
Diversified failed to submit appropriate data when it filed the request for review and
reconsideration, Diversified contends that its request was delayed by its efforts to obtain
data in support of its challenge to the wage determination, and the company further states
that it submitted such data to the Administrator as part of its review request. We find that
the record supports this claim. Contrary to the Administrator's final decision,
Diversified's December 9, 1997 request was accompanied by supporting wage data.
Specifically, Diversified submitted a 1996 Compensation Survey, compiled by the
American Collectors Association, Inc. AR Tab D, Attachment A. In addition,
Diversified's December 9 request stated that Diversified was in the process of compiling
wage data specific to Alameda County, California, pursuant to the statements of one Wage
and Hour official regarding the need for such data. Id. The record indicates
that data regarding wages paid to collectors in Alameda County was submitted by
Diversified to the Administrator on January 29, 1998. AR Tab E. Diversified's efforts
[Page 6]
to develop and provide wage data relevant to its challenge to WD 97-0364 provide further
support for the conclusion that Diversified made a diligent effort to perfect its request for
review and reconsideration, and that the time period required was reasonable under the
circumstances of this case.
ORDER
For the foregoing reasons, we conclude that Diversified
Collection Service's December 9, 1997 request for review and reconsideration of WD 97-0364 was timely. We therefore GRANT Diversified's petition with regard
to the timeliness issue and REMAND the case to the Administrator for a
decision on the merits of Diversified's request.
The Administrator is directed to issue a final ruling pursuant to
Section 4.56(a)(2) within 45 days of the date of this decision and order.
SO ORDERED.
PAUL
GREENBERG
Member
CYNTHIA L. ATTWOOD
Acting Member
[ENDNOTES]
1 The abbreviation
"AR" refers to documents found in the Administrative Record, which are further identified
by AR tab.
2 The Board's May
8, 1998 Order set June 25 as the deadline for the filing of briefs in reply to the Administrator's response
brief. Order at 3. FMS filed its initial brief in this matter on June 25, 1998. The Administrator filed
a response to the FMS brief on July 16, 1998. On August 3, 1998, FMS filed a reply brief. The July
16, 1998 response of the Administrator is hereby accepted and FMS' August 3 motion for filing of its
reply brief is hereby granted.