General Exhibits, Inc., WAB No. 1972-11 (WAB Feb. 28, 1973)
CCASE:
GENERAL EXHIBITS, INC. & RHOMBI-12, LTD.
DDATE:
19730228
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
GENERAL EXHIBITS, INC. WAB Case No. 72-11
& RHOMBI-12, LTD.
A Joint Venture, Prime Contractor
TRIM CONSTRUCTION CORP.
Subcontractor
Compliance with Labor Standards
Requirements of the Davis-Bacon
and Related Acts under Contract
No. DOT-FA72WA-2766, Transpo 72
Project, Dulles International
Airport, Virginia by General
Exhibits, Inc., and RHOMBI-12,
Ltd., a Joint Venture (Prime
Contractor), and Trim
Construction Corporation Dated:
(Subcontractor) February 28, 1973
General Exhibits, Inc., and RHOMBI-12, Ltd., a Joint Venture,
Petitioner
Appearances: Murray M. Chotiner, Esquire, Washington, D. C. for
the Petitioner
George E. Rivers, Esquire, Counsel for Construction Wage Standards,
Office of the Solicitor, United States Department of Labor
Thomas X. Dunn, Esquire, Associate General Counsel for the
Building and Construction Trades Department, AFL-CIO and for the
International Brotherhood of Electrical Workers, Washington,
D.C.[1]
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[2]
Mr. Thomas L. Jones, Labor Advisor, Federal Aviation
Administration, Department of Transportation
Before: Oscar S. Smith, Chairman, Wage Appeals Board, and Stuart
Rothman, Member
DECISION OF THE WAGE APPEALS BOARD
In 1971, the Department of Transportation was authorized to
establish and conduct an International Transportation Exposition to
provide the United States Transportation industry and related
science the opportunity to display their exportable products.
Dulles International Airport, located in both Fairfax and Loudon
Counties, Virginia, 29 miles west of Washington, D. C., was
selected as the site for the Exposition (Transpo 72) scheduled to
run from May 27 through June 4, 1972. Dulles Airport is owned by
the United States government and operated by the Department of
Transportation.
To house the transportation exhibitors during Transpo 72, the
Department of Transportation required a number of temporary
structures. Accordingly, contracts were awarded by the Federal
Aviation Administration (FAA), including the one currently in
dispute involving the Petitioner. This was a negotiated contract
effective December 10, 1971, in the amount of $384,000 for the
furnishing of certain buildings. Instead of using a construction-
type contract, including the usual provisions of the Davis-Bacon
Act, the Contract Work Hours and Safety [2]
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[3] Standards Act (CWHSSA), the Copeland Act, and the Miller Act, FAA
utilized a lease contract with no Miller Act payment bond requirements.
It did include: a) Standard Form 23-A (Construction contract General
Provisions); b) Standard Form 19-A (Labor Standards Provisions
Applicable to Contracts in Excess of $2,000 -- i.e., Davis-Bacon Act,
CWHSSA, and Copeland Act provisions); and c) Standard Form 32 (Supply
Contract General Provisions).
The contract described the work as:
Lease, erect, and remove prefabricated buildings for use
as business centers at the U. S. International
Transportation Exposition (Transpo 72).
On the contract form, the work was further described under the
headings "Supplies/Services," "Quantity," and "Unit Price,"
respectively, as follows:
1. Lease single unit with minimum of 800 sq. ft. -- 20
at $3,600 each;
2. Lease double unit with minimum of 1,600 sq. ft. --
13 at $7,200 each;
3. (a) Lease triple unit with minimum, of 2,400 sq. ft.
-- 18 at $10,800 each
(b) Lease triple unit with minimum of 2,400 sq. ft.
(configural single/double) -- 1 at $10,500; and [3]
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[4] 4. Lease Reception Center with minimum of 3,000 sq. ft.
-- 1 at $13,500
Despite the procurement arrangement being cast as a lease
contract with overtones throughout of a supply contract, FAA
included in the contract specifications Wage Determination No. AM-
1,842 of August 20, 1971, as modified by Modification No. 1 dated
October 22, 1971. This was an area wage determination reflecting
generally the Washington, D. C. prevailing wage rates. It
specified that it was applicable to Montgomery and Prince Georges
Counties, Maryland; City of Alexandria, Virginia; Arlington County,
Virginia; and Dulles Airport for "Building Construction (excluding
single family homes and garden-type apartments up to and including
54 stories), and Dredging." It contained, among others, the
following classifications and wage rates (including fringe
benefits) which are pertinent to the matters under consideration:
Carpenter $7.37; Glaziers $7.44; Laborers $5.72; Composition
Roofers $6.20; and Roofers Helpers $4.90.
The lease contract specified a kind of structure parts of
which were somewhat innovative in nature, using panels which formed
unique geometric patterns in the roof called "rhombic." /FN1/ The
panels used [4]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ A "rhombus," says Webster's Seventh New Collegiate
Dictionary is "an equilateral parallelogram having oblique angles."
The top of the structure was composed of several panels joined
together creating a surface of diverse angulations. [4]
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[5] for the roof or top of the structures were interchangeable with
those used for the walls. According to the Petitioner, the panels
and the structures were designed to be used mainly for residential
housing. The prefabrication plan technique purportedly was such as
to allow for disassembling, shipping, and re-using the panels for
other buildings; such panels having been primarily used or were to
be used, according to the Petitioner, for building camps and
low-cost housing. The panels were covered with fiberglass, with an
aluminum edge. They contained no additional roofing membrane or
other weather protective material. To assemble, they were bolted
one to another while on the ground, with the bolts going through
predrilled pipe. The panels were not prefabricated to meet the
Dulles job alone. The parts used for the roof or top were single
(assembled on the ground) 63-foot configurations raised by crane
and bolted to other configurations.
The wall panels were plywood, joined by single headed nails,
one edge of the panel to the adjacent panel. The panels were
nailed together flat on the ground and raised into positions and
nailed to the deck. The corners were nailed when joining the
panels together. These panels also were pre-engineered and pre-
constructed by carpenters and machines off-site at the
prefabrication shop.
One reason Petitioner accepted the Dulles contract was to be
able to get publicity for what Petitioner considers a unique
building technique for housing. These structures, however, when in
the process [5]
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[6] of being erected, were notably fragile and unable to withstand high
winds. /FN2/ In fact, when Petitioner's contract was terminated, the
Philadelphia contractor who completed the job used standard modular
construction methods.
Although the rhombic concept looked elaborate, Petitioner
stressed that the actual site assemble does [*] not [*] require any
special skills. [*Emphasis in original*] The skills, Petitioner
stated, are those utilized by the shop employees in Delaware where
the prefabrication work was performed. The site assembly "roof"
work was done under the supervision of "site architects" and
"project managers." The tools used on site were socket wrenches
for zinc bolts made specially for the Petitioner. As to the tops
of the structures, after being assembled on the ground a crane
lifted them up where they were simply secured to the walls by
bolts. None of the other contractors at Dulles on the Transpo 72
project used the rhombic system.
The Petitioner started its work under the contract at Dulles
in January of 1972. Trim (the one subcontractor also found in
alleged violation of the Davis-Bacon Act and CWHSSA) started its
work in March of 1972. On April 24, 1972, the structures in the
process of erection by Petitioner collapsed under a relatively mild
30-miles-per hour wind [6]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN2/ The WAB is not concerned with the performance or
nonperformance of the contract but with the nature of the
construction for Davis-Bacon purposes. [6]
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[7] and, on the same date, FAA terminated the Petitioners's
contract. FAA thereafter awarded a contract for the needed
structures to another firm which met the construction deadline,
using standard modular housing techniques.
From January, 1972, to April, 1972, the Petitioner submitted
to FAA the payrolls require under the contract terms. They
consistently showed "Laborers" at the contract rate of $5.72 per
hour. Also shown were a Superintendent at $8.49 per hour, and
Project Manager W. Macleod Snaith and several site architects who
obviously were on salary and not deemed "laborers and mechanics"
within the meaning of the Davis-Bacon and related Acts.
Subcontractor Trim was on the job site only a short time.
That firm never did submit payrolls. The record indicates that
Trims's employees were paid $6.00 per hour. Counsel for Petitioner
further stated that their were regular employees, employed year-
round at $6.00 per hour, with 2-weeks paid vacation. Counting
other fringe benefits, Counsel stated that their actual hourly pay
would average $10.50 per hour.
On March 2, 1972, the Petitioner requested approval by FAA of
two classifications not contained in the contract wage
determination, namely, "Panel Assemblers" at a basic rate of
$5.19 per hour, and "Panel Assemblers Helpers" at a basic rate of
$3.64 per hour. On March 8, 1972, the Contracting Officer approved
the new classifications, but at $7.00 and $5.45 per hour,
respectively. [7]
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[8] Some time thereafter, on receipt of complaints from the
Carpenters Union regarding this job, the March 8th approval was
withdrawn by the Contracting Officer and a field investigation was
made by the Wage and Hour Division of the Department of Labor. As
a result, those employees of the Petitioner who had been paid $5.72
an hour for "assembling prefabricated fiberglass panels into roof
sections" were found due the Composition Roofers' rate of $6.20
per hour; and those employees of Trim who "installed wall and
floor panel assemblies" at $6.00 per hour, were found due the
Carpenters' rate of $7.37 per hour. A total of 26 employees of the
Petitioner were found to be due a total of $1,241.64 in straight-
time amounts under the Davis-Bacon Act; and 19 were found due
$31.69 for overtime premiums under the CWHSSA. Liquidated damages
under the CWHSSA of $100 were also computed. In addition, 15
employees of subcontractor Trim were found due $4,118.33 in
straight-time back wages under the Davis-Bacon Act; and 11
employees were found due $971.60 under the CWHSSA, with liquidated
damages computed at $1,400.
* * *
The question in this case important to Davis Bacon
administration is whether the procurement arrangement between FAA
and Petitioner was a lease. For if under the circumstances this
arrangement was a straight lease by the government (for the short
period of only about [8]
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[9] one month) of premises owned by the Petitioner the provisions of the
Davis-Bacon Act would not apply. /FN3/
One of the Petitioner's contentions in this matter is that the
procurement arrangement was a lease; -- FAA called it a lease
because it was a lease. Petitioner cited the following language of
the Comptroller General in 452 Comp. Gen. 47 (1962):
We know of no case in which the Davis-Bacon Act has been
interpreted to apply to agreements for use of occupancy
of construction, as distinguished from actual
acquisition. . . .
The contention is a serious one. The FAA's characterization, the
limited use and occupancy by the Government, the requirement of
immediate removal by the contractor all lend credence to that
view, [9]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN3/ The Department of Labor has rendered opinions regarding
noncoverage of lease contracts (even though the situations involved
alterations and repairs and event the construction of buildings).
In Lease-purchase contracts "to build, lease and convey,
a bidder agrees to execute a ground lease as lessee of
Government-owned land; erect certain buildings on the
land; and, upon completion of the buildings, execute a
lease-purchase agreement which will provide for the
vesting of title in the Government at or before the
expiration of the leasehold term. Such contracts are
agreements for construction of buildings to which the
United States is a party and the leasing of the buildings
is only incidental to the construction. The
determination as to the applicability of the Davis-Bacon
Act is dependent upon whether the work to be performed
consists of public buildings or public works of the
United States. . . . While the building may be
constructed with private funds, the cost of construction
is eventually paid for from appropriated funds." (See
Comp. Gen. Dec. B-122382 of June 27, 1955.). [9][FN3
CONTINUED ON PAGE 10]
In straight lease contracts involving construction
financed entirely with private funds, the only
relationship between the Federal Agency and the
contractor is that of lessee and lessor. In an opinion
of May 4, 1956, the Solicitor of Labor advised that
"Under this arrangement, which materially differs from a
lease-purchase situation, none of the labor standards
generally applicable to Federally-financed or assisted
construction would apply. This conclusion was predicated
on the statutory scope of the Davis-Bacon Act which by
its terms is applicable to contracts to which the United
States is a party for the construction of public
buildings or public works of the United States, which
require or involve the employment of mechanics or
laborers." [END FN3]
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[10] or to the view that this was a contract for supply and not
construction. However, looking at the transaction as a whole, the
substantive general conditions applicable to site work on
Federally-owned property, the nature of the specifications for site
work, the working drawings and the methods of payment, the Board
concludes that the work in question was a public work of the United
States and that the procurement arrangement was a contract for
construction subject to the Davis-Bacon Act.
The Petitioner applied for approval of two classifications not
in the wage determination, namely, "Panel Assemblers" and "Panel
Assembler Helpers." The construction character of the project and
Davis-Bacon applicability were recognized by all concerned.
Although it could have been possible that everyone was in error, in
this case they were not. Although the FAA called the matter of a
lease arrangement, it did include the Supply Contract forms, the
Construction Contract forms and general conditions, and the
pertinent Davis-Bacon wage predetermination, with subsequent
modification. [10]
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[11] Even if arguably it was a lease, compliance with the Davis-
Bacon Act became a condition of the lease and the contractor-
Petitioner could not blithely disregard it. The Board agrees on
this point with the FAA and the Wage and Hour Division that this
was a contract calling for construction at the erection site and
that this contract was subject to the provisions of the Davis-Bacon
Act.
Having determined that the work in question was covered under
the Davis-Bacon Act, it is necessary to assess a number of related
issues and, from this point on, the Wage Appeals Board is unable to
concur in the conclusions of the investigation made by the Wage and
Hour Division. The specifications called for fragile and temporary
construction. The structures were scheduled to be used for the 10-
day period of Transpo 72 and the government was to have possession
for not much more than a month. Thereafter, they were to be
dismantled and removed by the Petitioner. An examination of the
specifications and drawings raises serious question whether such
structures would have met the local building codes for temporary
housing construction, let alone permanent housing To equate this
kind of structures with, for example, the construction of the J.
Edgar Hoover Building currently underway on Pennsylvania Avenue, N.
W., in Washington, D. C.; -- that is, to apply the commercial or
general building rates prevailing in Washington, D. C., to the
temporary quasi-housing structures here involved, does not appear
[11]
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[12] warranted. This project should have characterized as a
project of a character similar to housing construction, and the
Employment Standards Administration (ESA) should have adverted to
appropriate wage determinations for housing when confronted with
the issue of the rates applicable to this project. A wage rate
survey of both Fairfax and Loudoun Counties of the rates currently
prevailing on housing construction of the character here involved,
including the construction in nearby Reston, Virginia, could have
provided a sufficient basis for issuing a wage determination
applicable to Petitioner's contract.
In addition, Petitioner requested approval of two rates for
the assembling of the panels, namely, "Panel Assemblers" at a
basic rate of $5.19 per hour, and "Panel Assembler Helpers" at a
basic rate of $3.64 per hour. Both these rates were less than the
$5.72 rate predetermined for "Laborers." The FAA did approve an
assembler's rate above the contract rate for roofers, but less than
the contract rate for carpenters. It also approved a helper's rate
above the contract rate for roofer's helper, but less that the
laborer's rate. There is no explanation in the record of the basis
for this action. The FAA subsequently withdrew this approval on
receipt of complaints from the Carpenters District Council of
Washington, D. C. The Board does not consider this to be an
appropriate case to review the question [12]
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[13] whether the above additional classifications were justified and at
what wage rates. Such a determination is not necessary for the
disposition of this part of the case. /FN4/ The Wage and Hour Division
investigator concluded that since every housing structure must have a
roof, the roofers' rate was applicable when the prefabricated top panels
were bolted together on the ground by use of a socket wrench and zinc
bolts and noting more, and when, after the top panel sections were
raised by crane into position, a socket wrench was used to secure the
sections. While the Carpenters Council of Washington did enter a
protest in this case with respect to wall panels and floor work, the
record shows no complaints on the part of the Roofers Union. Had this
Board been required to reach the question of misclassification of the
work of bolting the structures' top panels together on the ground, the
problem would not [13]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN4/ It is worth noting that the major construction of Dulles
International Airport (dedicated in 1961) is long past. The case
under consideration is not one where a large volume of Government
construction carrying general building rates under unique and
special circumstances is simultaneously in progress in immediately
adjacent areas on the same site. [13]
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[14] have involved misclassification of roofers. The Board does
not reach this question, nor will ESA have to back into this
matter.
In the investigation it was further developed that
subcontractor Trim's employees were entitled to the contract rate
for carpenters. As detailed in the contract specifications, the
party walls between units were to "separate joints as well as
transmit the roof load to the floor." The floor was to consist of
"7'-4" x 21'-0 plywood stressed skin panels, which were to be
supported by double 2" x 12" joists 10'-6" O.C." The joists were
to rest on concrete blocks. The exterior walls facing the deck and
runway were to be "5/8 CDX plywood, pained and lap joined, and
6'8" x 12'-0" aluminum sliding glass doors (0 x 0)." The two
panels above the glass doors were to be 3/16" clear acrylic.
The interior partitions were to be "free standing 8'-0" high
2" x 3" stud unfinished wall construction with 1/4" plywood on both
sides." The exterior walls opposite the deck were to be "5/8"
CDX plywood painted and lap joined. All doors in these walls
. . . set in wood frames." Knockout panels above doors were to
provide air conditioning placement by user. Openings from the 8'
wall height to the roof line were to be 3/16" clear acrylic. The
end walls of each [14]
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[15] combination of units were to be typical 5/8" CDX plywood painted
and lap jointed.
Even though the panels were pre-engineered and preconstructed
at the shop, the specifications cited indicate that unless
subcontractor Trim paid the appropriate rates prevailing for
carpenters on projects of a character similar in the area there
would be a violation of the Davis-Bacon Act. The Petitioner
was not unaware of the requirement to pay the prevailing
carpenter's rate inasmuch as it specifically requested relief in
its request for approval of the panel assemblers' rates. It is not
clear what the contractor and the FAA meant by panel assembly. The
wall and floor erection using carpenters for on-site assembly work
involving prefabricated wood or plywood components was without
question quite distinguishable from the assembly of the panels
composing the roof. /FN5/
The Employment Standards Administration did not make a wage
predetermination during or after construction of the carpenter's
rate prevailing on low-rise housing construction in Loudon-Fairfax
Counties that would then have been used for this wage
predetermination. Not [15]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN5/ The Petitioner stated that the panels used on the roof and on
the walls were the same and interchangeable. Pictures of the
structures during erection showed many structures, if not all with
plywood wall panels. [15]
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[16] having done so, the ESA is confronted with the task of going
back and establishing the appropriate rate prevailing at the time
the work was done. It is noted that it was not possible for
Counsel for ESA to show in this case how the rate in fact paid for
this carpentry work ($6.00 per hour, exclusive of fringe benefits)
compared with the appropriate prevailing rate for carpenters on
low-rise housing construction. If ESA has the evidence necessary
to establish this rate, it should apply it in this case. If it
does not have such evidence, it may, under the facts and
circumstances, that a nonenforcement position if it believes it
administratively preferable to do so because of the inherent
difficulty at this time of determining the appropriate rate in
Loudon-Fairfax Counties applicable to this work.
There remains in this case, therefore, only the question
whether there was any misclassification in the wall and floor
erection work. The Wage Appeals Board finds that on the basis of
the record before it the work in question should have been paid for
at the appropriate prevailing carpenter's rate. The ESA should see
to it that such a rate is paid pursuant to usual enforcement
methods or it may under the circumstances of this case take a
nonenforcement position because of the administrative difficulties
posed by an attempt to determine that rate after the erroneous
positions taken by the several administrative agencies having
Davis-Bacon Act jurisdiction. [16]
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[17] ORDER
The case is remanded to ESA in accordance with this
decision for disposition of the question whether the appropriate
prevailing rate was paid for the wall and floor erection work.
SO ORDERED
Oscar S. Smith, Chairman
Stuart Rothman, Member [17]
