CCASE:
SWANSON'S GLASS
DDATE:
19910429
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
SWANSON'S GLASS
Des Moines, Iowa WAB Case No. 89-20
Wage Decision 86-IA-1095
BEFORE: Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Patrick J. O'Brien, Member
DATED: April 29, 1991
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition of
Swanson's Glass ("Petitioner"), for review of a June 13, 1989 final
ruling by the Administrator of the Wage and Hour Division denying
Petitioner's request for addition of a "glazier" classification to
a wage determination. For the reasons stated below, the Board
denies the petition for review.
I. BACKGROUND
Swanson's Glass entered into a subcontract on November 17,
1986 with M.A. Mortenson Company, prime contractor on a contract
with the Environmental Protection Agency for construction of a
waste water treatment plant in Des Moines, Iowa. The subcontract
between Petitioner and the prime contractor was for installation of
doors, windows and glass. Both the prime contract and the
subcontract were subject to the Davis-Bacon Act (40 U.S.C. [sec]
276a et seq.), and the Contract Work Hours and Safety Standards Act
("CWHSSA") (40 U.S.C. [sec] 327 et seq.), as well as Wage Decision
No. 86-IA-0195. That wage determination did not contain a wage
rate for glaziers.
In October 1987, Petitioner submitted to the Iowa Department
of Natural Resources ("DNR") a Request for Authorization of
Additional Classifications and [1]
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[2] Rates. Petitioner requested the addition of a glazier classification
to the wage determination at a wage rate of $9 per hour plus 6.62% in
fringe benefits. On October 15, 1987, DNR notified the City of Des
Moines that the requested rate was to be used on the project, subject
to the approval of the Wage and Hour Division of the U.S. Department of
Labor. DNR also submitted the request to the Wage and Hour
Division on October 15. The Wage and Hour Division had no record
of receiving the request, and the State of Iowa renewed the request
in July 1988.
The Wage and Hour Division denied the request for the
additional classification on November 16, 1988, on the basis that
the proposed rate did not bear a reasonable relationship to the
wage determination as required by 29 C.F.R. 5.5(a)(1)(ii)(A)(3),
and that the request did not reflect the concurrence of the
employees, as required by 29 C.F.R. 5.5.(a)(1)(ii)(B). The State
of Iowa requested reconsideration of the Wage and Hour ruling on
January 19, 1989. The request included five "Wage Acknowledgement
Forms" which had been signed by employees on the project and that
stated that the employees agreed to be paid at $9 per hour plus
6.6% in fringe benefits for their work as glaziers.
On June 13, 1989, the Administrator issued a final decision
affirming the previous denial of the request for the additional
glazier classification. The Administrator stated that the "Wage
Acknowledgment Forms" were a sufficient demonstration of the
employees' concurrence with the additional classification.
However, the Administrator stated, "no information has been
submitted regarding the conformability of the proposed wage rate."
II. DISCUSSION
On review of the record in this case, the Board concludes that
the Administrator's denial of the request for the additional
glazier classification should be affirmed. The regulations
governing conformance procedures provide, at 29 C.F.R.
5.5(a)(1)(ii)(A) that "[t]he contracting officer shall require that
any class of laborers or mechanics which is not listed in the wage
determination and which is to be employed under the contract shall
be classified in conformance with the wage determination." Section
5.5(a)(1)(ii)(A) also specifies that an additional classification
and wage rate is to be approved only when three criteria have been
met:
(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 [2]
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[3]
(3) [*] The proposed wage rate, including any bona fide fringe
benefits, bears a reasonable relationship to the wage rates
contained in the wage determination. [*] [*] (Emphasis
supplied.) [*]
In this matter, the Wage and Hour Division initially
disapproved the request for addition of a glazier classification at
$9 per hour and 6.62% in fringe benefits because the request did
not reflect the concurrence of employees, and required by 29 C.F.R.
5.5(a)(1)(ii)(B), and because the requested wage rate did not bear
a reasonable relationship to the wage determination. With respect
to the relationship of the requested wage rate to the wage
determination, the Wage and Hour Division's November 16, 1988
letter specifically called attention to the rate listed in the wage
determination for roofers, the lowest paid skilled classification
on the wage determination. When the State of Iowa requested
reconsideration, the Administrator ruled that the submission of
"Wage Acknowledgement Forms" signed by employees was sufficient to
demonstrate the employees' concurrence in the request, but denied
reconsideration on the basis that no information was submitted with
regard to the conformability of the proposed wage rate to the wage
determination.
The record indicates that the Administrator properly ruled
that Petitioner failed to show a reasonable relationship between
the proposed wage rate and the wage rates contained in the wage
determination, since the wage rate requested for glaziers ($9, plus
6.62% in fringe benefits) is substantially lower than the wage rate
for roofers ($12.65, plus $1.45 in fringe benefits) -- the lowest
paid skilled classification on the applicable wage determination.
Furthermore, the wage rate proposed for glaziers is substantially
lower than the hourly rate in the wage determination for laborers
($12.95, plus $1.45 in fringe benefits). See Rite Landscape
Construction Co., Inc., WAB Case No. 83-03 (Oct. 18, 1983) (the
$4.50 rate proposed for lawn sprinkler installer was not reasonably
related to a wage determination in which the rate specified for
laborers was $8.29 plus fringe benefits). As noted by the
Solicitor (Statement for the Administrator, at pp. 6-7), the wage
determination put Petitioner on notice at the time of bidding on
the subcontract of the wage rates the lowest paid skilled
classification and the laborer classification; Petitioner could not
reasonably assume that an additional skilled classification could
be paid at a substantially lower rate unless the wage determination
itself was amended.
Indeed, Petitioner essentially challenges the applicable wage
determination by arguing before the Board that the proposed glazier
wage rate "is in reasonable conformity with the prevailing wage
rate for glaziers for this locality" (Petition, at p. 3), and that
the applicable wage determination is "artificially inflated and the
wage rates are not comparable to the prevailing rates paid in the
industry in Central Iowa" (Affidavit of Tim Woolworth, at [par] 7).
However, the Board has consistently ruled that in order for a
challenge to a wage determination to be [3]
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[4] timely, the challenge must be made prior to contract award
(or the start of construction if there is no contract award).
Harper County, Kansas, WAB Case No. 90-30 (Oct. 23, 1990), at p. 6,
citing Dairy Development, Ltd., WAB Case No. 88-35 (Aug. 24, 1990);
(FOOTNOTE 1) Rite Landscape Construction Co., supra. See 29 C.F.R.
1.6(c)(3). Once the contract is awarded, the only method -- absent
certain limited exceptions not applicable here (FOOTNOTE 2) -- for
establishing an additional classification and wage rate is through
the conformance procedure. As discussed above, that procedure requires
the demonstration of a reasonable relationship between the proposed
wage rate for the additional classification and the wage rates in
the applicable wage determination, and the Administrator properly
determined that no such showing was made in this case.
Petitioner additionally contends that it began work on the
project only after receiving approval from the Iowa DNR as
contracting officer (Woolworth Affidavit, at [par] 9), that the DNR
had the right to approve the rate, and that the contracting
officer's approval of the rate should be affirmed (Petition, at pp.
2-3). However, the record shows that the DNR specifically informed
the City of Des Moines that use of the requested rate was subject
to the approval of the Wage and Hour Division of the Department of
Labor (see p. 2, supra). Furthermore, the Department's conformance
regulations do not give the contracting officer final authority to
approve requested classifications and wage rates, but instead
provide, at 29 C.F.R. 5.5(a)(1)(ii)(B), for approval by the
Administrator of the Wage and Hour Division. Finally, even if the
Iowa DNR had described its actions as the authoritative approval of
the glazier classification and wage rate, Board precedent
establishes that erroneous contracting agency advice does not bar
the Department of Labor from requiring payment of the appropriate
wage rate. Metropolitan Rehabilitation Corp., WAB Case No. 78-25
(Aug. 2, 1975); Tollefson Plumbing and Heating, WAB Case No. 78-17
(Sept. 24, 1979). [4]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
(FOOTNOTE 1) "Manifest injustice to bidders would result," the Board has
noted, "if the successful bidder on a project could challenge his
contract's wage determination rates after all other competitors
were excluded from participation." Dairy Development, Ltd., at p.
19.
(FOOTNOTE 2) 29 C.F.R. 1.6(f) provides:
The Administrator may issue a wage determination after
contract award or after the beginning of construction if
the agency has failed to incorporate a wage determination
in a contract required to contain prevailing wage rates
determined in accordance with the Davis-Bacon Act, or has
used a wage determination which by its terms or the
provisions of this part clearly does not apply to the
contract. Further, the Administrator may issue a wage
determination which shall be applicable to a contract
after contract award or after the beginning of construction
when it is found that the wrong wage determination has
been incorporated in the contract because of an
inaccurate description of the project or its location in
the agency's request for the wage determination. . . . [4]
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[5] Petitioner also argues that the Administrator did not act on
the requested glazier wage rate in a timely manner, and that the
Administrator should be estopped from denying the request
(Petition, at p. 3). Petitioner's timeliness argument is based on
29 C.F.R. 5.5(a)(1)(ii)(B), which provides that where the
contractor, the employees or their representative, and the
contracting officer agree on the proposed additional classification
and wage rate, a report of the contracting officer's action is to
be sent to the Wage and Hour Division. Section 5.5.(a)(1) (ii)(B)
further provides that the Administrator "will approve, modify, or
disapprove every additional classification action within 30 days of
receipt and so advise the contracting officer or will notify the
contracting officer within the 30-day time period that additional
time is necessary."
In this case, the Wage and Hour Division's November 16, 1988
decision denying the requested glazier classification and wage rate
was not issued within the 30-day timeframe contemplated in Section
5.5(a)(1)(ii)(B). However, as stated by the Deputy Secretary in a
decision regarding an essentially identical provision (29 C.F.R.
4.6(b)(2)(ii) of the regulations governing conformance procedures
under the Service Contract Act, that provision is not
jurisdictional, and does not preclude the Wage and Hour Division
from taking action outside the 30-day period. CACI, Inc. -
Federal, Case No. 86-SCA-OM-5 (Mar. 27, 1990), at p. 29. Indeed,
the Board observes that the 29 C.F.R. 5.5(a)(1)(ii)(B) expressly
references the possibility that additional time may be needed to
complete action on the requested classification and wage rate. The
Board also notes, as did the Deputy Secretary in CACI, that the
conformance regulations do not specify that the failure of the
Administrator to act within 30 days is effectively the
Administrator's approval or acquiescence in the proposed
classification or wage rate. In sum, the 30-day time period
referenced in Section 5.5(a)(1)(ii)(B) does not provide a basis for
Petitioner to presume that in the absence of a response from the
Administrator, the glazier classification and wage rate had been
approved.
For all the foregoing reasons, the petition for review is
denied and the final ruling of the Administrator is affirmed.
BY ORDER OF THE BOARD:
Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Patrick J. O'Brien, Member
_____________________________
Gerald F. Krizan, Esq.
Executive Secretary [5]
