RAYTHEON SYSTEMS COMPANY
(formerly Hughes Technical Services),
Prime Contractor and Cubic Corporation,
Subcontractor,
Re: Contract No. N61339-94-C-0027,
Ft. Irwin, California
BEFORE: THE ADMINISTRATIVE REVIEW BOARD
Appearances:
For the Petitioners: Gregory D. Wolflick, Esq., Wolflick & Simpson, Glendale,
California
For the Respondent: Ford F. Newman, Esq., Douglas J. Davidson, Esq., Steven J. Mandel,
Esq.,
U.S. Department of Labor, Washington, DC
For the Intervenor Voice and Video Control and Editing Center DOL Committee: Marcus Bunnett, Barstow, California
FINAL DECISION AND ORDER
Raytheon Systems Company and Cubic Corporation petition for review
of administrative action by the Administrator of the Wage and Hour Division in this case arising
under the McNamara-O'Hara Service Contract Act of 1965, as amended (SCA), 41 U.S.C.
§§351-358 (1994), and implementing regulations at 29 C.F.R. Part 4 (1999). The
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Administrator affirmed an action conforming a wage determination issued for Contract No.
N61339-94-C-0027 at the National Training Center (NTC), Fort Irwin, San Bernardino County,
California, to add classes of employees conformed as the Audio Visual (AV) Specialist I, II and
III classifications. The Administrator stated that conformed wage rates for the classifications
were determined by establishing a corresponding Federal Grade Equivalency (FGE) for each of
the three levels of AV Specialists, and by assigning wage rates to those three levels which
corresponded to the average rates of comparable employee classifications with the same FGEs
listed in the wage determination. Petitioners complain that the Administrator denied them
adequate process, and that he conformed the employee classes erroneously. We conclude that,
on the record as it now exists, Petitioners received adequate process, and the Administrator's
choice of methodology in conforming the classes was consistent with the SCA and its
implementing regulations and was reasonable.
BACKGROUND
A. Regulatory Framework
Under the Service Contract Act, the Secretary of Labor is responsible for
determining the minimum wage rates to be paid to various classifications of service workers who
may be employed on service procurement contracts subject to the Act. 41 U.S.C. §351
(1994). The minimum wage and fringe benefit rates are based either on the locally prevailing
rates for service workers, or the rates in any collective bargaining agreements that already may
be in effect governing the pay of the workforce at the facility. Id. Prior to entering into
a service contract, a contracting agency is required to notify the Department of Labor's Wage and
Hour Division of the various classifications of workers that will be employed pursuant to the
contract, typically submitting a Standard Form (SF-)98 (Notice of Intention to Make a Service
Contract) and SF-98A. 29 C.F.R. §4.4 (1999); see also 48 C.F.R. Part 22,
Subpart 22.10 (Federal Acquisition Regulations) (1999). In response to the contracting agency's
request, the Wage and Hour Division issues a wage determination identifying the minimum
hourly wages and fringe benefits that must be provided to the classifications of workers
employed on the contract. 29 C.F.R. §4.3 (1999).
There are occasions when the performance of a service contract may
require a contractor to hire a classification of worker that is not listed in the wage determination.
When a job classification necessary to carry out the contract has been omitted from the wage
determination, "the contracting officer shall require that any class of service employee
which is not listed . . . be classified by the contractor so as to provide a reasonable relationship
. . . between such unlisted classification and the classifications listed in the wage
determination." 29 C.F.R. §4.6(b)(2) (1999). This procedure for adding a
"missing" job classification and wage rate to a wage determination is known as a
"conformance action." Conformance entails compiling a description of duties
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performed by the employee classification under the contract and deriving wage rates for the
classification which reasonably relate to rates already included in the wage determination for
comparable classifications.
The SCA implementing regulations discuss the procedure to be used to
establish wage rates that bear a reasonable relationship to those listed in the wage determination.
The regulations emphasize that "[t]he process of establishing wage and fringe benefit rates
that bear a reasonable relationship to those listed in a wage determination cannot be reduced to
a single formula." 29 C.F.R. §4.6(b)(2)(iv)(A). However, methods are suggested:
Standard wage and salary practices which rank various job
classifications by pay grade pursuant to point schemes or other job
factors may . . . be relied upon. Guidance may also be obtained
from the way different jobs are rated under Federal pay systems
(Federal Wage Board Pay System and the General Schedule) or
from other wage determinations issued in the same locality. Basic
to the establishment of any conformable wage rate(s) is the concept
that a pay relationship should be maintained between job
classifications based on the skill required and the duties performed.
Id. The federal contractor is required to compensate employees performing in a
conformed classification at the conformed wage rate retroactive to the date work began. 29
C.F.R. §4.6(b)(2)(v).
The conformance procedure is carried out in one of two different ways.
In the typical case, the contracting officer of the contracting agency requires the contractor to
classify any class of employee employed under the contract but not listed in the wage
determination "so as to provide a reasonable relationship (i.e., appropriate level
of skill comparison)" between the unclassified employees and classifications of employees
listed in the wage determination. 29 C.F.R. §4.6(b)(2)(i).
Thereafter, the responsibility for initiating a conformance falls to the
contractor, who is required to begin that process prior to performance of the work by the unlisted
class of employees. The contractor must submit a written report of the proposed conformance
action, including information about agreement or disagreement by the affected employees or
their authorized representative, to the contracting officer no more than 30 days after the
unclassified employees begin to perform any work under the contract. The contracting officer
is required to review the report and to submit it promptly along with the contracting agency's
recommendation and all pertinent information, including the positions of the contractor and
employees, to the Wage and Hour Division (Division). The Division then approves, modifies
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or disapproves the action or renders a final determination in the event of disagreement. 29
C.F.R. §4.6(b)(2)(ii). The Division transmits the final determination to the contracting
officer who then must notify the contractor. The contractor in turn must furnish the affected
employees with a written copy of the determination or post it as part of the wage determination.
29 C.F.R. §4.6(b)(2)(iii).
The second method for conforming a classification of employees to a wage
determination occurs if the Division discovers that the contracting agency and the contractor
have not initiated a conformance and determines that one is required. In that circumstance the
Division "shall make a final determination of conformed classification, wage rate, and/or
fringe benefits which shall be retroactive to the date such class of employees commenced
contract work." 29 C.F.R. 4.6(b)(2)(vi).
B. Procedural History
In February 1994 the Department of the Navy (Navy) awarded prime
contractor Hughes Technical Services Company (HTSC), now Raytheon Services Company
(Raytheon), a contract for the provision of support operations at Fort Irwin, California. HTSC
in turn subcontracted with Cubic Corporation (Cubic) for the provision of audio visual and
photographic support services. Contract performance commenced in May 1994.
Cubic determined that contract performance would require the services of
Audio Visual Systems Specialists employed by its subdivision, Cubic Applications, Incorporated
(CAI), for purposes of producing battle training films and related functions. The contract wage
determination did not include an AV Specialist classification, however. AV Specialists
employed by CAI and assigned to perform the audio visual portion of the contract at the Voice
and Video Control and Editing Center (VVCEC) at Fort Irwin complained to the contractors
immediately upon discovering the omission and anticipated that HTSC, on behalf of Cubic,
would initiate a conformance. Administrative Record (AR) Tab I. However, in late 1994, HTSC
determined instead that the AV Specialists should receive the wage rates designated for
Photographer I, II and III classifications in the wage determination.1 In 1995, Cubic concurred that conformance
was unnecessary. CAI proposed using the first three skill grades of the photographer series. The
Intervenor VVCEC DOL employee committee thereafter complained to the Division about the
wage rates adopted by the contractors.
A position description for "Audio/Visual Systems
Specialist" at Ft. Irwin, written by Tom Gibbons (otherwise
unidentified), and approved by Jim Wood (otherwise unidentified)
dated December 12, 1995. Attached to the CAI Memorandum, AR
Tab F, Attachment II.
A 1996 vacancy announcement for a Photographer I, attached to
the CAI Memorandum, AR Tab F, Attachment III.
All of these documents were provided to the Division investigator by Petitioners. And all
of them were used to some extent in describing the job duties of the AV Specialist positions at
Ft. Irwin in the course of conforming the positions.
First, in his narrative, the Division investigator relied almost exclusively
on the description of the AV Specialists' job duties contained in the May 15, 1996 Cubic Letter.
AR Tab H at 6-7. Cubic counsel Celentino devoted the body of that letter (which was written
in response to the investigator's initial determination that the AV Specialists were classified at
too low a level in the Photographer classification) to a detailed description of the job duties of
the AV Specialists who were then employed at Ft. Irwin. She noted that:
There are currently twenty three audio/video systems
specialists ("video technicians") working at Fort Irwin.
Six are classified as Photographer III's, sixteen are classified as
Photographer II's and one is classified as a Photographer I. As you
are aware, once a video technician completes ninety days of
employment, he/she is reclassified as a Photographer II. Shift
leaders are classified as Photographer III's.
Cubic letter at 2. Attorney Celentino identified the attached job descriptions as follows:
"Position descriptions for Photographers I, II and III were also included in the Hughes
proposal and were incorporated into CAI's subcontract. (See Exhibit B)."
Id. (emphasis supplied).
Although the Cubic letter is far more detailed than the position
descriptions which were attached to it, it is in large part consistent with those descriptions. A
comparison of the Cubic letter and the Division investigator's narrative leaves no room to doubt
that the Cubic letter was the source of almost the whole of the investigator's description of the
AV Specialist positions.15[Page 21]
1 The photographer classifications in the
wage determination ranged from the entry-level Photographer I classification to the supervisory
Photographer V classification.
2 We requested the Administrator
to supplement the record by filing an accounting of the methodology applied to conform the AV
Specialists. We note that the record is incomplete in other respects. Exhibits are missing, for example,
from the Division investigator's narrative report at AR Tab H and from the important May 15, 1996 letter
from Cubic counsel Anne Celentino to the Division investigator, which the investigator discussed in his
report, and which the Administrator submitted belatedly. See Admin. Motion for Leave to File
Memorandum in Response to Petitioner's Reply filed February 18, 2000. We deem the record sufficient
for requisite findings, however, and note that Petitioners have not complained about the referenced
omissions.
3 The Administrator submitted the
May 15, 1996 letter from Cubic to the Division investigator with his February 18, 2000 Memorandum
in Response to Petitioner's Reply. Appended to that letter were an organizational chart depicting the AV
production operation and position descriptions for the AV Specialists which had been incorporated into
CAI's subcontract. This document was not included in the Administrative Record filed in September
1998, and the Administrator offers no explanation for its omission. However, the letter is discussed in
detail in the investigator's narrative at AR Tab H at 8.
4 The Photographer IV description
states that "[t]ypical examples of equipment used at this level include ultra-high speed, motion
picture production, studio television, animation cameras, specialized still and graphic cameras,
electronic timing and triggering devices, etc." AR Tab B.
5 According to the Navy, a similar
letter was sent to CAI. Petition for Review (Pet. for Rev.), Exhibit (Exh.) 6 at unnumbered p. 2.
6 During this period Petitioners
continued to adhere to their position that no conformance was necessary, and that AV Specialists were
properly classified at the Photographer I, II and III levels. Thus, for example, the record includes a May
29, 1997 memorandum from CAI to Cubic in which CAI suggested that Cubic and CAI modify their
position and instead classify AV Specialists variously at Photographer II, III and IV levels depending
on an employee's individual job duties. Job descriptions would be revised to segregate particular tasks.
Few individuals, detailed to perform the most complex tasks almost exclusively, would be compensated
as Photographer IVs. Most AV Specialists would be compensated at the Photographer III level. AR Tab
F. Nothing in the record indicates that this proposal was ever acted on by Cubic.
7 Of course, Petitioners had
submitted information to the Division investigator in the course of his investigation. As we discuss
below, it is that information that the Division used to conform the positions.
8 In the letter to the ADD,
Petitioners' attorney stated: "We are in receipt of your April 24, 1998, letter in which you advised
us that the conformance of the Audio-Visual Specialist position had been completed, and provided us
with the newly conformed wage rates." In the letter to the Administrator, he stated: "[T]he
Wage and Hour Division recently conducted a conformance for the position and set new wage rates. We
were advised of these new rates by letter dated April 24, 1998 . . . ."
9 In fact, it is by no means clear that
it would have been at all difficult; Cubic had already classified the AV Specialists at three different
levels within the Photographer classification.
10 We review the Administrator's
action in this case to ensure that it comports with the SCA and implementing regulations and is
reasonable. Environmental Chemical Corp., ARB Case No. 96-113, Feb. 6, 1998, slip op. at
3.
11 Participation prior to issuance of
the conformance is prudent given that the regulations are silent as to any procedure for reconsideration
of the Division's determination by the Administrator. Thus, although the Administrator did consider
Petitioners' objection to the conformance, the regulations did not require him to do so.
12 Indeed, Petitioners belatedly
proposed an alternative methodology in their reply brief filed before the Board. Pet. Reply Br. at 14-22,
Exhs. 9 and 10.
13 It is extraordinary that, after
having refused to engage in the conformance process, as required by 29 C.F.R. §4.6(b)(2), and
instead objecting throughout the process that conformance of the AV Specialist positions was not
appropriate, Petitioners have abandoned that argument before us, and argue only that the conformance
was not done properly. We note that there can be no doubt that conformance of the AV
Specialist positions was necessary. The job duties of the Photographer classifications bear little
resemblance to the work of the AV Specialist positions. Indeed, this is precisely the type of
circumstance for which the conformance process was designed.
14 These position descriptions also
appear at AR Tab D, Appendices "Photographer" I, II and III.
15 The investigator's narrative
contains a more detailed description of the real time operations duties of the AV Specialists. AR Tab
H at 6. No source is specifically listed for this description. However, the investigator does refer to a
CAI memorandum dated September 19, 1995, "which outlines the functional aspects of CAI's
video effort and includes the video technician's job description within the Photographer series."
AR Tab H at 6 n.11. This CAI document was not included in the Administrative Record. See discussion
at n.2, supra.
16 We quote this passage of the
Administrator's final ruling in full and identify source documents in brackets:
[T]he Audio-Visual Specialist series operates a variety of audio and
video equipment [12/12/95 Job Description]; edits and dubs
audio/video tape [same]; creates computer graphics, duplicates
and transfers audio/video products to various formats [same];
replays audio/video products for use in mobile and fixed theater
presentations and operates real-time computer system and remote
camera display systems [same]; develops and mounts 35mm
film [Position Description for Photographer I attached to May
15,1996 Cubic Letter(PD I); SOW item "k"];
tactically deploys the Mobile Video Units on the battlefield to record
key learning points [PD I]; locally records video information
from locations where transmission is not possible [PD I];
performs preventative maintenance and inventory control duties on
related equipment [12/12/95 Job Description]; ensures that
the quality of all products [is] sufficient to clearly record computer
displays, maps/overlays, terrain models [SOW]; maintains an
archive library of video products [SOW item "f"]
and prepares audio/visual products for shipment [SOW item
"i"]; writes scripts, treatments, and storyboards for
audio/visual products [12/12/95 Job Description].
17 The Alston evaluation statement
of AV Specialist II job duties also includes the following language which derives from the December
12, 1995 job description appended to CAI Memorandum: "[T]he incumbent normally performs
duties making routine technical decisions based on their knowledge of equipment specifications,
standard operating procedures and customer direction. Consults the shift lead audio/visual systems
specialist on clarifications of standard[] procedures and non-routine customer issues." AR Tab
F, second attachment at 2.
18 The declaration may be
summarized as follows: The AV Specialist I classification provides technical support to Real-time
operations by monitoring Mobile Video Unit (MVU) taping from a control room station to ensure that
Real-time feed is transmitting to the recorder. The military, rather than the AV Specialist, deploys the
MVU cameras. The AV Specialist verifies MVU sites from the control room station. AV Specialists
relay information to the military and the contractors rather than direct any of their activities. AV
Specialists do not monitor "all" microwave signals. They monitor only the microwave
signals from specified MVUs to ensure quality and to assist in adjusting the signal. AV Specialists do
not develop and mount 35 millimeter film, or log or label raw video from the field. Nor do they record
FM audio traffic. They do not keep a maintenance discrepancy log and merely report inoperative
equipment to Raytheon technicians for repair and replacement. AV Specialists are not responsible for
collecting battlefield footage and company/platoon After Action Reviews or for transmitting to the Real-
time operation for distribution to the theater and to analysts for viewing in Real-time or near Real-time.
They similarly are not responsible for video recording at locations inaccessible to MVUs or for
maintaining the MVUs.
19 It is highly significant that at the
time the various position and job descriptions were provided to the Division, AV Specialists were
working on the contract at Ft. Irwin. Thus, at the time Petitioners provided those documents to the
investigator, the job duties the AV Specialists were actually performing were no secret to them.
20 Given the evident fit of AV
Specialists within the audiovisual production series, we consider nonsensical Petitioners' assertion that
the Specialists come within the series exclusion of "positions that involve such work as
carpentry, electrical work, audio recording, and other similar work in a trade or craft in connection with
audiovisual productions." U.S. OPM Audiovisual Production Series GS-1071 at 1. This exclusion
contemplates labor performed in arranging for taping, rather than taping and editing. Nor do we find
compelling Petitioners' distinction between "professional" and "non-
professional" series. Pet. Reply to Supp. at 10-11. The Audiovisual Production Series applies to
the positions enumerated in the series definition and described in the ensuing information. If, for
example, an individual produces, directs or edits television, radio or other audiovisual productions, then
his position would be evaluated pursuant to the series. That an individual filling such a position has not
"complet[ed] a specified curriculum at a recognized college or university" (id. at
11) does not, in itself, render the position a "trade" or "craft" subject to exclusion
from the series.
21 Because the wage rate for one of
the four GS-7-equivalent classifications differed significantly from the others in the Information and Arts
broad category of the wage determination, Alston conformed the AV Specialist I classification at an
average rate slightly lower than that accorded the high-end Photographer III classification. All three GS-
9-equivalent classifications were compensated at the same wage rate; the rates for the AV Specialist II
and Photographer IV classifications thus were identical. The wage rates for the AV Specialist III and
Photographer V classifications also were identical since no averaging was possible. These
circumstances explain the identity of wage rates for the AV Specialist II and Photographer IV
classifications and for the AV Specialist III and Photographer V classifications, which caused Petitioners
to opine that the Division had not applied the stated methodology in achieving the conformance results.
See Pet. Reply Br. at 17.