SENTINEL ELECTRIC CO., WAB No. 82-09 (WAB Apr. 5, 1984)
CCASE:
SENTINEL ELECTRIC COMPANY
DDATE:
19840405
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
SENTINEL ELECTRIC COMPANY WAB Case No. 82-09
VA Medical Center
Tucson, Arizona
Contract No. V-6-78-C464 Dated: April 5, 1984
APPEARANCES: James Glover, President for Sentinel Electric Co.
Terry R. Yellig, Esquire for International
Brotherhood of Electrical Workers
Leif Jorgenson for the Wage and Hour Division,
U.S. Department of Labor
BEFORE: Alvin Bramow, Chairman, Thomas X Dunn, Member
Stuart Rothman, Member, Dissenting
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition
of Sentinel Electric Company (hereinafter Sentinel) seeking
review of a ruling by the Assistant Administrator, Wage and
Hour Division, dated April 28, 1982. The ruling concerns the
appropriate classification and wage rate to be issued for the
work of installing a low voltage fire alarm system in a
Veterans Administration Medical Center in Tucson, Pima County,
Arizona.
Sentinel was the low bidder on a Veterans Administration
(hereinafter VA) contract awarded in September, 1980 to replace [1]
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[2] and install a fire alarm system at a cost of $372,000. The
bid specifications and contract contained general Wage
Determination AZ 80-5116. The determination contains a negotiated
wage rate for all classifications, including electricians. After
contract award, but before Sentinel began the project, it requested
the VA to approve 2 additional employee classifications which were
not included in the wage determination: Protective Signal
Installer and Station/PBX/Installer Repairer. The VA did not agree
that these two classifications were required for the project and
forwarded the request to the Department of Labor for final
determination in accordance with regulations, Section
5.5(a)(1)(ii)(C) 29 CFR, Part 5. Sentinel continued on with the
project paying its employees at the proposed installer/repairer
wage rate.
The Department of Labor conducted an area practice survey
at the request and with the assistance of Sentinel to determine
whether installer/repairers or electricians performed low
voltage fire alarm installation in Pima County during a one
year period running from May, 1980 to May, 1981. Data was obtained
on 50 projects in the area and it was demonstrated that
electricians performed low voltage work on 40 of these projects and
that on 10 projects installer/repairers performed the work. Based
on this survey the Wage and Hour Division determined that the
prevailing practice in the area was that electricians performed the
low voltage alarm installation and denied the [2]
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[3] request by Sentinel for the additional classifications.
Wage and Hour directed the VA to withhold $26,408.21 from
Sentinel under their contract to cover back wages due employees
not paid at the electrician's wage rate. On August 2, 1982,
Sentinel petitioned the Wage Appeals Board to review the
Assistant Administrator's decision.
Sentinel's appeal is based upon the fact that the Department
of Labor had permitted employment of low voltage installer/
repairers on other projects, two of which are said to be in
Tucson, and one in another state. Sentinel argues that it had
provided the Department of Labor with evidence of low voltage
alarm installations on government contracts being performed by
installer/repairers. Therefore Sentinel maintains its
classification practices cannot be said to be unjustified and the
monies withheld should be returned to Sentinel.
The Assistant Administrator argues that the employees
engaged in the installation of low voltage alarm systems in
Pima County, Arizona, must be paid the wage rate predetermined
for electricians. The Wage and Hour Division relies on the
area practice survey mentioned above and a subsequent clarification
and review thereof based upon petitioner's objections to certain
wage data included in the original survey, which found over 80
percent of the low voltage work being performed by electricians in
the Pima County area, and on the Board's [3]
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[4] decision in Fry Brothers Corp., WAB Case No. 76-06 (June 14, 1977).
The Assistant Administrator asserts that if petitioner wished to
establish a wage classification and rate for installer/repairer, it
should have arranged with the VA for the classification prior to the
time when the agency took bids. The Board held in Fry Brothers, supra,
at p. 17, "that the attack [on the wage determination must] come before
the Labor Department decision becomes the basis on which bids are
taken".
In response to petitioner's claim that a classification of
or similar to installer/repairer was recognized by the Department
of Labor in other areas of the country, the Assistant Administrator
relies on the language of the Davis-Bacon Act to the effect that
predetermined wages are determined from wages paid on projects of
a character similar in the "city, town, village or other civil
subdivision" of the State in which the project was performed.
Therefore, it is asserted that the Department of Labor cannot set
rates in Pima County on the basis of wages established elsewhere in
the country under the statute.
The Building Trades Department, AFL-CIO, and the
Intern[a]tional Brotherhood of Electrical Workers both submitted
memoranda in support of the position of the Assistant Administrator
prior to the hearing.
* * *
The Board considered this appeal on the basis of the Petition
for Review and supplemental submissions filed by [4]
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[5] Sentinel, a Statement on behalf of the Assistant Administrator, a
Supplemental Statement and the record of the appeal before the Wage and
Hour Division filed by the Solicitor of Labor for the Assistant
Administrator. An oral hearing was held on March 7, 1984, at which all
interested persons were present and participated.
The Board is disturbed that when an agency is advertising a
contract for some specialized construction work, it would utilize
an area or General Wage Determination contained in the Federal
Register. It seems reasonable that specialized construction
as in this case, installing a low voltage fire alarm system,
may not be performed by the usual building trades classifications
issued in most area wage determinations. This is evident by the
fact that the Department of Labor admitted at the hearing it has
issued wage rates for the specialized classification of low voltage
installer in other areas of the country. The agency, by requesting
a project wage determination, would have afforded the Department of
Labor an opportunity to make an initial decision as to the proper
classifications and wage rates to be placed in the bid proposal.
The Board is further concerned by the fact that petitioner's
bid was 25 percent lower than the next lowest bidder. Certainly
this should have put the agency on notice that all the bidders were
not considering the same classifications and wage rates to perform
the work in question. A preaward conference probably [5]
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[6] would have clarified the problem and prevented the petitioner being
placed in such a precarious position.
The record shows that the Wage and Hour Division made a post
award area practice survey as to what classifications and wage
rates are paid to workers employed in the installation of a low
voltage fire alarm system. Counsel for the Assistant Administrator
of the Wage and Hour Division, during the hearing and in response
to a direct question by one of the Board members, stated that the
results of an area practice survey, if it demonstrated that the
classifications and wage rates contained in contract specifications
were in error, would take precedence over the classifications and
wage rates issued as applicable to the work in question. In other
words, if the area practice survey showed another classification
other than electricians perform this type of work in the Tucson
area, Wage and Hour would authorize an additional classification
and wage rate, in accordance with Regulations 29 CFR 5.5.
The Board must agree with the petitioner that the Wage and
Hour survey leaves much to be desired. However, counsel for the
Assistant Administrator made it plain to the Board that data
collected is on a voluntary basis and Wage and Hour has no
authority to compel participation by construction contractors and
subcontractors. It was brought out at the hearing and the record
shows that Wage and Hour did request information from all the
companies known to it, including [6]
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[7] those furnished by the petitioner, performing the type of work in
question in the Tucson area. It is noted that only the petitioner and
one other company that petitioner furnished to Wage and Hour submitted
usable data as to the classification and wage rate paid. The survey
contained data from seven other construction firms.
There is no question that the results of this area practice
survey reveals that the work of installing low voltage fire alarm
systems in the Tucson, Arizona, area, is performed by electricians
being paid the rate contained in the applicable wage determination.
The petitioner has failed to show that it is the area practice for
protective signal installers/repairer or some other classification
to perform this work.
The petitioner further contends that Wage and Hour is estopped
from enforcing the payment of the electrician's wage rate. It
bases this contention on the fact that the agency acquiesced when
it took no exception to the petitioner's paying a wage rate for the
classification of protective signal installer/repairer, lower than
the rate for electricians contained in the contract specifications.
The Board rejects this argument. The record does not bear out that
the agency acquiesced in petitioner's proposed classification and
wage rate. On the contrary, the record shows that the agency
disagreed with the petitioner.
Even if the agency did acquiesce, this Board has rejected
estoppel arguments that a petitioner's reliance upon the advice [7]
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[8] of a contracting officer as to the appropriate wage rate
operates to relieve petitioner of its responsibility to pay the
correct 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 Act 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. Jos. J. Brunetti Construction Co. and Dorson
Electric and Supply Co., Inc., WAB Case No. 80-09 (November 18,
1982). See also Metropolitan Rehabilitation Corp., WAB Case No.
78-25 (August 2, 1979) and Tollefson Plumbing and [Heating] Co.,
WAB Case No. 78-17 (September 26, 1979).
In view of the foregoing, the Assistant Administrator's
decision is affirmed and the petition is dismissed.
* * *
Member Rothman, dissenting:
In dissenting, I am torn between two alternatives. One,
to direct the Assistant Administrator to take a no enforcement
position in this matter, with directions for the future with
respect to the degree of care required in making specialty project
surveys. The other would be to remand the case to the Assistant
Administrator for a further and more thorough current
investigation. Of the two I conclude that the remand is the safer
and appropriate route to follow. [8]
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[9] The result reached by the majority in this decision may well
be the correct one. But if that is so, it appears to me to be
based on a lucky guess by the Wage and Hour Division in making its
survey. I am not prepared to jump to the conclusion reached by the
Wage and Hour Division without a more thorough confirmation of the
facts, even though a request for such confirmation by remand would
further prolong this appeal.
At the oral argument the petitioner did not present argument
convincing enough to relieve him of the assessed back pay liability
to his regular employees who the Wage and Hour Division contends
must be classified as building and construction trades journeymen
electricians. But the petitioner has shown that in the Tucson
locality there is a class or group of employer-contractors who
supply the specialized equipment and install these low voltage fire
alarm systems with their own established working force. The
petitioner also showed that in the State of Arizona installers of
such equipment do not have to pass State imposed tests for an
electrician as such term is understood in the building and
construction industry in that state. This showing is enough to
justify some further inquiries.
While the amount of the construction award in this case,
$322,000, appears to be substantial for a contract of this type,
the Wage and Hour Division has made no distinction in its
presentation at the oral hearing or in its survey between cases in
which the project and contract call for no significant [9]
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[10] amount of work recognized as construction work in the building and
construction industry, and work which does. The Assistant
Administrator, in her presentation against granting the
petitioner's request for relief, has told the Board absolutely
nothing about the work called for by the plans and specifications
(if there were any) under petitioner's contract. Nor did the Wage
and Hour survey distinguish between cases in which the installation
of a low voltage fire alarm system was an integrated part of a
larger building and construction contract for new construction,
alteration or repair, with the work being performed on the same job
at the same time by the same contractor who was doing the general
electrical work and who would use his traditional electrical work
force for the entire job.
I am not prepared to conclude that a specialty contractor who
supplies specialized equipment and installs low voltage fire alarm
systems utilizing his own regularly employed work force (who may or
may not be members of an industrial type union such as the
Communication Workers of America -- a factor in the arguments in
this case) is precluded from bidding for this type of work in cases
in which the plans and specifications for the job do not call for
the kind of building and construction work normally performed by
journeymen electricians of the building and construction trades and
where the contracting agency has not set up the project work as a
part of or closely related to such new construction, repair or
alteration work. [10]
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[11] Had the Assistant Administrator addressed these questions,
they may all have been answered adversely to the petitioner's
position in this case. However, because they have not been
answered sufficiently for me to make an informed judgment, I
would remand the case to the Assistant Administrator for further
handling.
I would also point out that in making an area survey of local
practice with respect to special[]ty contracts such as the one
here, the Wage and Hour Division should build from the facts up and
should not seek to envelop everything it does by arguing from the
Fry Brothers, supra, principle down.
The petitioner made a fair effort to get this matter
straightened out before he undertook any work. He did so at a time
when the contracting agency was aware that his labor costs were
estimated at approximately 100% less than the next low bidder.
While this problem of installing low voltage fire alarm systems in
the Tucson locality must be straightened out for the future, I see
nothing to be gained by requiring this employer to pay his regular
employees normally employed only on low voltage work at the
building and construction trades electricians' rate when the work
that was done and performed by his regular employees met all
Arizona electrical code requirements and so long as the work that
was in fact done did not involve a substantial amount of new
construction, alteration or repair of buildings as normally
performed by electricians [11]
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[12] on construction work. This is something I would leave to
the Wage and Hour Division on a remand.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary
Wage Appeals Board [12]
