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NEVADA TEST SITE
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[1] BOARD OF SERVICE CONTRACT APPEALS
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D.C.
In the Matter of:
NEVADA TEST SITE BSCA Case No. 93-02
U.S. Department of Energy
Cementing Services Subcontract,
Nye County, Nevada
BEFORE: Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
DATED: September 20, 1993
DECISION OF THE BOARD OF SERVICE CONTRACT APPEALS
This case is before the Board of Service Contract Appeals on
the petitions of the United States Department of Energy ("DOE") and
the Building and Construction Trades Department, AFL-CIO ("BCTD").
DOE has petitioned for review of Wage Determination ("WD") Nos.
87-1167 and 1167 (Rev.-1), applicable to work performed under a
"cementing services" subcontract at DOE's Nevada Test Site in Nye
County, Nevada. The BCTD has petitioned for review of ruling
letters issued by the Acting Administrator of the Wage and Hour
Division on November 23, 1992 and December 11, 1992, regarding
application of the Davis-Bacon Act (40 U.S.C. [sec] 276a et
seq.)("Davis-Bacon Act" or "DBA") to work performed pursuant to the
cementing services subcontract. For the reasons stated below, the
BCTD's petition for review is granted, the rulings of the Acting
Administrator are reversed, and this matter is remanded for further
consideration consistent with this decision. With respect to DOE's
petition, the wages rates specified in Wage Determinations 87-1167
and 87-1167 (Rev.-1) and [1]
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[2] in the Administrator's letter dated January 22, 1988
(reconsideration denied, July 25, 1988) are affirmed.
I. BACKGROUND
A. Wage and Hour's initial position on labor standards
coverage
On October 1, 1984, DOE awarded Contract No. TS-82-411 to
Fenix & Scisson, Inc., which in turn subcontracted the cementing
services to Halliburton Services under subcontract SC-TS-82-411.
DOE's contract with Fenix & Scisson was for three years (October 1,
1984 to September 30, 1987), with one two-year option.
During the first year of the subcontract the Wage and Hour
Division investigated Halliburton Services' compliance with the
Contract Work Hours and Safety Standards Act (40 U.S.C. [sec] 327
et seq.) ("CWHSSA"). The investigation disclosed unpaid overtime
compensation totaling $17,563.01 due 22 employees. The back wages
were paid by the subcontractor, and the prime contractor paid
liquidated damages in the amount of $2,980.
A February 26, 1985 letter from Sylvester L. Green, Director
of Wage and Hour's Division of Contract Standards Operations, to
the Director of DOE's Office of Industrial Relations summarized the
findings of the CWHSSA investigation. Green also addressed whether
the contract was subject to the Service Contract Act /FN1/ or the
Davis-Bacon Act, stating:
Additionally, it appears that this subcontract should
have been subject to the provisions of the Davis-Bacon
Act rather than the Service Contract Act. As you know,
the Davis-Bacon Act applies to Federally-financed
contracts in excess of $2,000 for the construction,
alteration, and/or repair, including painting and
decorating, of a public building or a public work. In
this instance, the subcontractor is placing cement
slurries in drilled or mined holes and tunnels, which are
public works within the meaning of the Davis-Bacon Act.
DOE did not respond to Green's letter. In March 1985 DOE
submitted to the Department of Labor Standard Form ("SF") 98 No.
A1109287 ("Notice of Intention to Make a Service Contract") (DOE
did not submit an SF-98 for this contract during the first year of
the contract). The notice stated that the [2]
컴컴컴컴컴컴컴컴컴컴
/FN1/ McNamara-O'Hara Service Contract Act of 1965, as amended (41
U.S.C. [sec] 351 et seq.)("Service Contract Act" or "SCA").
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[3] contemplated work was "Oilfield Type Cementing Services," and
requested wage determinations for five classifications of "service
employees" to be employed on the cementing services subcontract.
William W. Gross, Chief of Wage and Hour's Service Contract
Operations Branch, responded to DOE by letter dated April 4, 1985,
stating:
Based on the information provided in your SF-98, the
proposed contract would be subject to the Davis-Bacon Act
rather than the Service Contract Act. The Davis-Bacon
Act applies to Federally-financed contracts in excess of
$2,000 for the construction, alteration, and/or repair,
including painting and decorating, of a public building
or a public work.
Accordingly, the Davis-Bacon Act stipulations and
applicable wage decision must be included in this
contract. The Branch of Construction Wage Determinations
is currently processing your SF-98 as an SF-308, the form
used for requesting wage determinations under the Davis-
Bacon Act, and you will receive a further response to
notify you of the Davis-Bacon wage decision applicable to
this contract.
On May 30, 1985, DOE submitted a new SF-98 (No. A681932) that
requested, pursuant to the Service Contract Act, a determination of
wage and fringe benefits applicable to the same five
classifications listed in the earlier SF-98. The new SF-98 stated
that the work was to "provide maintenance of Government furnished
equipment at the cement batch and storage plant. Blend and haul
cement slurries to job site." In a July 8, 1985 letter to Green,
DOE official Myers stated that DOE had "undertaken an exhaustive
review of this subcontract to assure the appropriateness of the
determination that the Service Contract Act is applicable." He
stated that in the course of that review of the subcontract,
it was decided that the Nevada Operations Office Davis-
Bacon Committee reexamine the scope of work and conduct
a thorough study of Halliburton's operation during the
previous 12 months to determine if the original decision
regarding labor standards coverage was still appropriate.
It is the opinion of the Committee that this cementing
subcontract is not covered by the Davis-Bacon Act but is
subject to the Service Contract Act.
On July 31, 1985 James L. Valin, Assistant Administrator of
the Wage and Hour Division, responded to Myers' July 8 letter.
Valin stated: [3]
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[4] With respect to your assertion that the Service Contract
Act was properly applicable to this subcontract, no
supporting evidence was submitted in that regard. While
we would be happy to review any additional information
which you believe may be relevant, based on available
material, we find no reason to change our prior
determination that the cementing of drilled or mine[d]
holes and tunnels constitutes the construction,
alteration, and/or repair of a public work within the
meaning of the Davis-Bacon Act.
Valin again wrote to Myers on January 7, 1986, and stated:
Since you did not provide any further information
regarding the labor standards issue in this case, we
assume that you will include the provisions of the Davis-
Bacon Act in all such current and future contracts for
the cementing of drilled or mine[d] holes and tunnels.
Myers responded to Valin on January 14, 1986, stating that
you may assume only that we will include provisions of
the Davis-Bacon Act in those contracts for the cementing
of drilled or mine[d] holes and tunnels that are
determined by the appropriate representatives of
[*]this[*] Department to be covered by the Davis-Bacon
Act. [*](Original emphasis.)[*]
Valin wrote to Myers for a third time on April 17, 1986,
stating:
As noted in our letters of July 31, 1985 and January 7,
1986, we would be happy to review any information which
led to your agency's conclusion that the referenced
subcontract was subject to the Service Contract Act. In
the absence of such information, however, it remains our
position that, based on available material, the cementing
of drilled or mined holes or tunnels constitutes the
construction, alteration, and/or repair of public works
within the meaning of the Davis-Bacon Act.
B. Wage and Hour's issuance of Service Contract Act wage
determinations
As noted above, Wage and Hour repeatedly took the position
during this period that the work performed under the cementing
services subcontract at the Nevada Test Site was covered by the
Davis-Bacon Act. Nevertheless, Wage and Hour did issue a wage
determination pursuant to the Service Contract Act on October 28,
1985 (WD No. 74-489 (Rev. 9)). That wage determination [4]
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[5] contained only one classification -- cementing technician. The
SF-98 submitted by DOE in 1985 had requested wage rates for the
classifications of cementing specialist, dispatcher, cementing
equipment operator, mechanic, and bulk materials equipment
operator. A new subcontractor, BJ Titan Services, Inc., ("BJ
Titan") successfully bid for the cementing services subcontract in
the fall of 1985. DOE stated that in the absence of wage rates for
the classifications listed in its 1985 SF-98, the subcontractor
conformed wage rates for those classifications, and the wage rates
were approved by the prime contractor and DOE. However, DOE did
not submit the conformance proposal to Wage and Hour for review as
is required by 29 C.F.R. 4.6(b).
DOE did not submit an SF-98 for 1986. However, DOE did submit
an SF-98 (No. A1109293) on October 14, 1987. The 1987 SF-98
requested classifications and rates for equipment operator;
equipment operator, Sr.; bulk plant operator; mechanic; and lead
mechanic. In a January 22, 1988 letter to DOE, Wage and Hour
Administrator Paula V. Smith stated that "[a]s a result of an
ongoing labor standards investigation, we have learned that the
[cementing services subcontract] did not contain Service Contract
Act conformed wage rates for the initial contract year commencing
October 1, 1985, or an updated wage determination for the second
contract year." Wage and Hour issued retroactive wage rates of
$13.43 (mechanic) and $16.28 (equipment and bulk plant operators)
for the first contract year. The Administrator also stated that no
SF-98 had been submitted for the second contract year, and issued
WD No. 87-1167 for that year and WD No. 87-1167 (Rev. 1) for the
third year. Those wage determinations contained the following
classifications and rates: mechanic ($14.00 and $14.77), equipment
operator ($17.18), and bulk plant operator ($17.18).
C. DOE's request for reconsideration of the wage rates
issued by Wage and Hour
By letter dated June 21, 1988 DOE requested reconsideration of
the wage rates listed in the Administrator's January 22 letter and
in WD Nos. 87-1167 and 87-1167 (Rev.-1). DOE stated:
Cementing service work has been performed at NTS since
1963 and this work has been performed as a service
subject to the Service Contract Act (SCA). SCA wage
determinations have been incorporated into this and
predecessor subcontracts for cementing services since
1974. The determination of coverage has been made by our
Nevada Operations Office (NV) Labor Standards Committee
based upon established general criteria. For example,
exploratory work and supporting activities, such as
exploratory drilling, have been determined to be subject
to the provisions of the SCA while site development work
to the point of readiness to [5]
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[6] receive devices and/or instruments is subject to the
Davis-Bacon Act (DBA). Likewise, post-shot activities
(including drilling, sampling, decontamination, etc.) and
the maintenance and operation of facilities and utilities are
not subject to the provisions of the DBA, but may be
subject to the SCA. Some items of work may be determined
to be covered or noncovered by DBA depending on the
purpose of the work or project.
As a result of a concurrent SCA and [CWHSSA]
investigation conducted by Wage-Hour (WH), we were
requested in a February 26, 1985, letter from Mr.
Sylvester L. Green of your office to ". . . look into the
matter of whether Davis-Bacon Act or Service Contract Act
provisions should be applicable to this subcontract for
cementing services." Pursuant to that request, the NV
Labor Standards Committee conducted a thorough review of
the cementing operation at NTS for the previous year.
That review showed that the majority of time spent on
this subcontract was for maintenance of both Government-
owned and contractor-owned equipment and in material
storage and handling which includes receiving, batching,
loading, and hauling of Government-furnished dry cement
materials. Less than 25 percent of the time was spent in
mixing and pumping cement slurries into place at the job
site and only three percent of that site work would have
been considered to be covered by DBA. Accordingly, in
our July 8, 1985, response, we advised Mr. Green of the
Committee's reaffirmation of SCA coverage.
DOE challenged the wage rates established by the Administrator,
contending that the conformed rates and the rates in the wage
determinations were "not based upon data relevant to [the drilling]
industry"; and that the rates bore an "inverse relationship" to
rates for the same classifications if employed directly by the
Federal government.
In ruling on DOE's reconsideration request, the Administrator
(in a letter dated July 25, 1988) reaffirmed the wage rates. With
respect to the wage rates for the mechanic classification, the
Administrator explained that those rates were based on Bureau of
Labor Statistics surveys of the Las Vegas-Tonopah, Nevada area,
which includes the Nevada Test Site in Nye County. She further
explained that the wage rates for the equipment operator and bulk
plant operator classifications were based on survey data from
Davis-Bacon Act wage decisions applicable to Nye County. Since
specific wage rates were not available for those classifications,
the Administrator stated, the adopted wage rates were based on the
average of rates listed in the Davis-Bacon Act wage decisions for
five classes of power equipment operators. The Administrator
further stated:[6]
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[7] As you know a question of appropriate labor standards
coverage for this contract was raised in previous
correspondence between our agencies, and the application
of SCA rather than DBA is a borderline determination.
Under such circumstances, DBA wage data often provide the
bases for SCA wage determination rates where contract
requirements involve the use of job classifications
commonly employed in the construction industry, e.g.,
building demolition or disaster clean-up services. Based
on the position descriptions submitted for equipment
operator and bulk plant operator, the work performed by
individuals so classified would be common in the
construction industry and not restricted to the drilling
industry. . . . Accordingly, use of DBA wage data in
determining prevailing rates for these classes is
appropriate.
D. Wage and Hour's decision upon remand by the Secretary of
Labor
DOE filed a petition for review of the Administrator's
reconsideration ruling on August 15, 1988. In the October 17, 1988
Statement in response to DOE's petition, counsel for the
Administrator defended the wage rates issued pursuant to the
Service Contract Act but acknowledged (Statement, at p. 4) that
"[t]he question of Davis-Bacon coverage has never been resolved
between DOE and the Administrator." On October 30, 1991 Secretary
of Labor Lynn Martin /FN2/ remanded the matter (Case No. 88-SCA-
WD-1) to Wage and Hour. She stated that "[t]he record reveals an
ongoing controversy between DOE and the Wage and Hour Division as
to whether the cementing of drilled oil wells constitutes
construction activity covered under the [Davis-Bacon Act], or
service activity covered under the [Service Contract Act]."
Secretary Martin added that "it is inappropriate for this case to
proceed until this primary issue is resolved" (footnote omitted).
Accordingly, the Secretary remanded the matter to the Acting
Administrator of the Wage and Hour Division to determine whether
the work in question is subject to the Davis-Bacon Act or the
Service Contract Act.
Acting Administrator John R. Fraser issued a decision in
response to the remand order on January 9, 1992. The Acting
Administrator stated:
As you know, DBA applies to Federally-financed contracts
in excess of $2,000 for the construction, alteration,
and/or repair,[7]
컴컴컴컴컴컴컴컴컴컴
/FN2/ At that time, the Deputy Secretary was designated pursuant to
29 C.F.R. 8.0 to perform the functions of the Board of Service
Contract Appeals pending appointment of a duly constituted Board.
(The Board of Service Contract Appeals was subsequently established
by Secretary's Order No. 3-92 on July 10, 1992.) Since there was
a vacancy in the Office of the Deputy Secretary, Secretary Martin
reassumed the Board's function. [7]
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[8] including painting and decorating, of a public building
or a public work. Contracts for the demolition of public
buildings or public works are subject to DBA if
subsequent on-site construction is planned. As noted in
29 CFR 4.131(f), however, contracts that call for the
demolition of public buildings or public works are
subject to SCA when no further construction activity at
the site is contemplated.
The contract at issue called for the placement of cement
slurries in drilled or mined holes and tunnels
(considered to be similar in nature to demolition
services), as well as for the operation, maintenance, and
repair of the Government-furnished batch plant; material
loading and storage facility; specialized pumping,
blending, and mixing equipment; and field storage bins.
Therefore, SCA coverage was determined to be appropriate,
and SCA Wage Determinations 87-1167 and 87-1167 (Rev.-1)
were issued for contract application accordingly.
Under these circumstances, I affirm the application of
SCA coverage in this instance.
E. Wage and Hour's decision upon remand by the Deputy
Secretary of Labor
After the Acting Administrator's decision on remand, the BCTD
on April 9, 1992 was granted an extension of time within which to
file a memorandum of points and authorities in Case No. 88-SCA-
WD-1. However, on April 20, 1992 the BCTD filed a petition with
the Wage Appeals Board /FN3/ (WAB Case No. 92-08) for review of the
Acting Administrator's January 9, 1992 opinion letter. The Acting
Administrator, DOE and the BCTD filed statements regarding the Wage
Appeals Board's jurisdictional authority to decide the coverage
issue. While WAB Case No. 92-08 was pending before the Wage
Appeals Board, Deputy Secretary Delbert L. Spurlock, Jr. issued a
decision in Case No. 88-SCA-WD-1 on May 28, 1992 in which he
remanded the matter to the Acting Administrator. The Deputy
Secretary stated that "there is nothing [in the administrative
record] which appears to support the Acting Administrator's
conclusion [in the January 9, 1992 ruling] that the purpose of the
work performed by [Equipment Operators and Bulk Plant Operators] is
similar to demolition." Since he was unable to decide on the basis
of the administrative record whether the Acting Administrator's
determination of SCA coverage was supported by a [8]
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/FN3/ The Wage Appeals Board hears appeals on matters arising under
the Davis-Bacon Act and Related Acts and the Department of Labor's
implementing regulations. Secretary's Order 1-91 (Jan. 18, 1991);
29 C.F.R. Part 7. [8]
~9
[9] preponderance of the evidence, the Deputy Secretary remanded
the matter "for supplementation of the record and any further
proceedings which may be appropriate."
Acting Administrator Karen R. Keesling issued a ruling in
response to the remand order by letter to DOE dated November 23,
1992. /FN4/ The Acting Administrator affirmed SCA coverage of the
work in question, stating:
The subcontract at issue called for the placement of
cement slurries in drilled or mined holes and tunnels, as
well as for the operation, maintenance, and repair of the
Government-furnished batch plant; material loading and
storage facility; specialized pumping, blending, and
mixing equipment; and field storage bins. After nuclear
test devices are placed in the drilled holes, the cement
slurries are used to fill the holes to prevent escape of
radioactive materials during the nuclear explosion. The
purpose of the subcontract is similar, therefore, to
exploratory drilling under SCA (29 CFR 4.130(a)(16)) - as
part of a project to gather information/data (from the
nuclear test) rather than to construct or alter a public
building or public work. Accordingly, SCA coverage was
determined to be appropriate, and SCA Wage Determinations
87-1167 and 87-1167 (Rev.-1) were issued for subcontract
application accordingly.
DOE renewed its petition for review of WD Nos. 87-1167 and
87-1167 (Rev.-1) by filing a petition with this Board, and the BCTD
petitioned for review of the coverage issue. Oral argument was
held in this matter on August 23, 1993.
II. DISCUSSION
A. Applicability of labor standards requirements to the work
performed under the cementing services subcontract
1. The positions of the parties
The critical issue in this case is whether the work performed
pursuant to the cementing services subcontract at DOE's Nevada Test
Site is subject to the labor standards requirements of the Davis-
Bacon Act, or is within the coverage of the Service Contract. The
Davis-Bacon Act covers contracts in excess of [9]
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/FN4/ The Acting Administrator subsequently issued a virtually
identical letter to DOE on December 11, 1992. [9]
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[10] $2,000 to which the United States is a party "for
construction, alteration, and/or repair, including painting and
decorating, of public buildings or public works of the United
States. . . ." 40 U.S.C. [sec] 276a(a). The Service Contract Act,
on the other hand, applies to contracts entered into by the United
States, in excess of $2,500, "the principal purpose of which is to
furnish services in the United States through the use of service
employees. . . ." 41 U.S.C. [sec] 351.
Section 7(1) of the Service Contract Act expressly exempts
from its provisions any contract of the United States "for
construction, alteration and/or repair, including painting and
decorating of public buildings or public works." 41 U.S.C. [sec]
356(1). As explained in the Department of Labor's regulations (at
29 C.F.R. 4.116(a), the Service Contract Act's legislative history
"indicates that the purpose of the provision is to avoid
overlapping coverage of the two acts by excluding from the
application of the McNamara-O'Hara Act those contracts to which the
Davis-Bacon Act is applicable and in the performance of which the
labor standards of that Act are intended to govern the compensation
payable to the employees of contractors and subcontractors on the
work." (Citations omitted.) In other words, the Department's
regulations explain, "The intent of section 7(1) is simply to
exclude from the provisions of the Act those construction contracts
which involve the employment of persons whose wage rates and fringe
benefits are determinable under the Davis-Bacon Act." Thus, when
confronted -- as in this case -- with the issue whether the Davis-
Bacon Act or the Service Contract Act applies to a particular
contract or subcontract, the starting point of the analysis is
whether the work performed under the contract or subcontract
involves the "construction, alteration, and/or repair, including
painting and decorating, of public buildings or public works." For
if the contract or subcontract is within the coverage of the Davis-
Bacon Act, the contract is exempt from the provisions of the
Service Contract Act.
Throughout the long history of this matter, the Wage and Hour
Division has taken a variety of positions on whether the work
performed under the cementing services subcontract was subject to
the Davis-Bacon Act or the Service Contract Act. Initially (in
1985), Wage and Hour took the position that the subcontract was
subject to Davis-Bacon labor standards requirements, because the
drilled or mined holes and tunnels at the Nevada Test Site were
"public works" within the meaning of the Davis-Bacon Act. When DOE
persisted in the view that the subcontract was subject to the
Service Contract Act, Wage and Hour persisted (during 1985 and
1986) in its position that the work was covered by the Davis-Bacon
Act. Nevertheless, Wage and Hour issued a Service Contract Act
wage determination applicable to the subcontract in 1985, and in
1988 issued the wage rates challenged by DOE in this appeal. The
Administrator defended those wage rates which were based on Davis-
Bacon survey data by stating that "application of the SCA rather
than the DBA is a borderline determination." [10]
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[11] When DOE filed its first petition for review of the wage
rates issued by Wage and Hour, counsel for the Administrator
acknowledged that "[t]he question of Davis-Bacon coverage has never
been resolved between DOE and the Administrator." Upon the remand
by the Secretary of Labor, Wage and Hour noted that contracts for
demolition of public buildings or public works "are subject to SCA
when no further construction activity at the site is contemplated."
Therefore, the Acting Administrator stated, SCA coverage had been
determined to be appropriate and SCA wage determinations had been
issued because the subcontract "called for the placement of cement
slurries in drilled or mined holes or tunnels (considered to be
similar in nature to demolition services). . . ." Upon the remand
by the Deputy Secretary, Wage and Hour altered course somewhat and
stated that SCA coverage had been determined appropriate because
the "purpose of the subcontract is similar . . . to exploratory
drilling under SCA (29 CFR 4.130(16)) - as part of a project to
gather information/data (from the nuclear test) rather than to
construct or alter a public building or public work." At oral
argument, counsel for the Administrator stated that the essence of
Wage and Hour's position is that the holes and tunnels at the
Nevada Test Site are not "public works."
The positions of the other parties in this matter are more
easily summarized. DOE has been consistent in its view that the
cementing services subcontract is subject to the Service Contract
Act. At oral argument, DOE's representative took no quarrel with
the notion that the holes and tunnels are "public works," but
stated that it was DOE's view that the work performed under the
subcontract was "maintenance," rather than "construction,
alteration, and/or repair." The BCTD takes the position that most,
if not all, of the work performed under the subcontract is within
the coverage of the Davis-Bacon Act. The Laborers' International
Union of North America, AFL-CIO ("LIUNA") (involved in this appeal
as an intervening interested person), likewise takes the position
that the work performed under the subcontract is subject to the
Davis-Bacon Act. For the reasons stated below, this Board
concludes that most -- and perhaps all -- of the work performed
under the subcontract is within the coverage of the Davis-Bacon
Act. The Board further concludes that this matter must be remanded
to Wage and Hour for a determination of what labor standards
requirements are applicable to the work connected with certain
exploratory drill holes at the Nevada Test Site.
2. Definition of "public works"
As stated earlier, the Davis-Bacon Act provides for coverage
of a contract or subcontract involving "construction, alteration,
and/or repair . . . of public buildings or public works." The term
"public works" is not defined in the Davis-Bacon Act. It is
noteworthy, however, that use of the term "public [11]
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[12] works," like use of the statutory term "laborers and mechanics,"
/FN5/ has a history in the public contract arena that predates the
Davis- Bacon Act. The term "public works" was used, for example, in the
Eight-Hour Laws which were the predecessors to the CWHSSA. In that
context, the term "public works" was apparently construed broadly. See,
e.g., 26 Op. Atty. Gen. 64, 66 (1906) (irrigation works for the
storage, diversion, and development of waters for the reclamation of
arid and semi-arid lands are "public works of the United States")./FN6/
The breadth of the definition applied to "public works" historically is
reflected in the breadth of the Department of Labor's regulatory
definition of the terms "building" or "work." Those terms are defined
(at 29 C.F.R. 5.2(i)) as follows:
The terms building or work generally include construction
activity as distinguished from manufacturing, furnishing
of materials, or servicing and maintenance work. The
terms include without limitation, buildings, structures,
and improvements of all types, such as bridges, dams,
plants, highways, parkways, streets, subways, tunnels,
sewers, mains, power lines, pumping stations, heavy
generators, railways, airports, terminals, docks, piers,
wharves, ways, lighthouses, buoys, jetties, breakwaters,
levees, canals, dredging, shoring, rehabilitation and
reactivation of plants, scaffolding, drilling, blasting,
excavating, clearing and landscaping. . . . (Original
emphasis.)
The regulations also define (at 29 C.F.R. 5.2(k)) "public building"
or "public work" as including
building or work, the construction, prosecution,
completion, or repair of which, as defined above, is
carried on directly by authority of or with funds of a
Federal agency to serve the interest of the general
public regardless of whether title thereof is in a
Federal agency.
Thus, the Department's regulations provide that "tunnels,"
"drilling," "blasting," and "excavating" are "public works" when
"carried on directly by [12]
컴컴컴컴컴컴컴컴컴컴
/FN5/ See Aleutian Constructors, WAB Case No. 91-22 (Sept. 27,
1991), at p. 12 (Member Peters, concurring).
/FN6/ It is also worthy of note that when the Supreme Court (in
Ellis v. United States, 206 U.S. 246, 258-260 (1907)) interpreted
narrowly "laborers and mechanics" and "public works" as excluding
the dredging of Boston Harbor, Congress amended the Eight-Hour Laws
to provide for express coverage of dredging work. See 39 Op. Atty.
Gen. 232, 237 (1939) and legislative history cited therein. That
amendment is reflected today in the provisions of the CWHSSA (40
U.S.C. [sec] 329(a)). [12]
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[13] authority of or with funds of a Federal agency to serve the
interest of the general public." There can be no dispute that the
work at the Nevada Test Site involves "tunnels," "drilling,"
"blasting," and "excavating." Counsel for the Acting
Administrator, however, argues that the Acting Administrator made
a "reasonable determination of SCA coverage, which views the
plugging of the tunnels with cement slurries with no further use
planned for these tunnels, in conjunction with the other contract
requirements, as providing services subject to the SCA" (Statement
of the Acting Administrator in Opposition to the Cross-Petition for
Review, at p. 13). Before examining the Acting Administrator's
rulings on remand, which liken the work at the Nevada Test Site to
"demolition" and "exploratory drilling," it is appropriate to
consider a description by the U.S. Congress' Office of Technology
Assessment ("OTA") of the nuclear testing program conducted at the
Nevada Test Site.
3. The nuclear testing program at the Nevada Test Site
A 1989 report by OTA /FN7/ notes that the Nevada Test Site was
designated in December 1950 by President Truman as a continental
proving ground for testing nuclear weapons. The first test was
conducted a month later using a device dropped from a B-50 bomber.
(Report, at p. 11.) A Limited Test Ban Treaty was signed in 1963,
banning all aboveground or underwater testing. The Threshold Test
Ban Treaty was signed in 1974, restricting all nuclear test
explosions to a defined test site and to yields no greater than 150
kilotons. As a result, all United States underground nuclear tests
have been conducted at the Nevada Test Site since 1974./FN8/ (Id.
at pp. 12-13.) The Nevada Test Site is located 65 miles northwest
of Las Vegas and covers 1,350 square miles (Id. at p. 15).
At the time of the OTA report, an average of more than 12
tests per year were conducted at the Nevada Test Site. The tests
are conducted at the bottom of a vertical drill hole or at the end
of a horizontal tunnel. The purpose of most vertical drill hole
tests is the development of new weapon systems. Tunnel tests
generally are conducted to evaluate the effects of various weapons
on military hardware and systems. (Report, at p. 18.) It can take
6-8 weeks to drill a hole, depending on the depth and location.
The diameter of the holes range from about 4 1/2 feet to 10 feet.
(Id. at pp. 18-19.) It may require 12 months of mining, [13]
컴컴컴컴컴컴컴컴컴컴
/FN7/ U.S. Congress, Office of Technology Assessment, The
Containment of Underground Nuclear Explosions, OTA-ISC-414
(Washington, DC: U.S. Gov't Printing Office, Oct. 1989)
("Report"). This document was supplied by the BCTD as an
attachment to its reply memorandum.
/FN8/ DOE's representative at the oral argument noted that no
nuclear tests are being conducted at the present time, although
testing could be resumed if circumstances warranted resumption.[13]
~14
[14] using three shifts a day, to remove the 1 million cubic feet
of rock that may be needed to prepare for a horizontal tunnel test
(Id. at p. 20).
Chapter 3 of the OTA report, entitled "Containing Underground
Nuclear Explosions," notes that as public concern about fallout
increased during the initial years of testing in Nevada, the
testing guidelines became more stringent. In 1956 the weapons
laboratories pursued approaches to reduce fallout, and underground
testing was the only approach that offered hope for eliminating
fallout. (Report at p. 31.) The report adds (Id. at p. 32):
Today, safety is an overriding concern throughout every
step in the planning and execution of an underground
nuclear test. Underground nuclear test explosions are
designed to be contained, reviewed for containment, and
conducted to minimize even the most remote chance of an
accidental release of radioactive material.
The report lists the factors contributing to the containment
underground of the radioactive material produced by a nuclear
explosion: the sealing nature of the compressed rock around the
cavity, the porosity of the rock, the depth of burial, the strength
of the rock, and the stemming (fill-in) of the emplacement hole
(Id. at p. 34).
In a vertical hole, the stemming that is put in place after
emplacement of the nuclear device is designed to prevent gas from
traveling up the emplacement hole. Impermeable plugs are placed at
various distances along the stemming column and force the gases
into the surrounding rock where the gases are "sponged up" into
pore spaces. (Report, at p. 35.) The objective of the stemming
plan prepared for a vertical hole is to keep the emplacement hole
from being the path of least resistance for the flow of radioactive
material. The stemming is installed after the nuclear device has
been lowered into the emplacement hole. (Id. at p. 40.) A typical
stemming plan for one testing laboratory uses sanded gypsum
concrete plugs, with a layer of sand-size fine material under each
plug to provide a base for the plug. Coarse gravel alternates
between the plugs and fine material to fill in the rest of the
stemming. Cable fan-out zones separate diagnostic cables (running
from the nuclear device through the stemming column) at the plugs
so that the grout and fine material can seal between them.
Radiation detectors are often installed between plugs to monitor
post-shot flow of radiation through the stemming column. (Id. at
pp. 40-41.)
Horizontal tunnel test containment differs from vertical drill
hole test containment, because in a horizontal tunnel test the
experimental apparatus is intended to be recovered. The objective
of most horizontal tunnel tests is to permit direct radiation to
reach the experiment but to prevent debris from [14]
~15
[15] destroying the experiment. Horizontal test containment is designed
with two purposes: "to prevent uncontrolled release of radioactive
material into the atmosphere for public safety," and to prevent debris
from reaching the experimental test chamber. (Report, at p. 41.)
Horizontal tunnel tests utilize three redundant containment vessels that
nest inside each other and are separated by plugs. Each vessel is
designed to contain the nuclear explosion independently, even if the
other vessels fail. Vessel I is designed to prevent damage to the
equipment to permit the equipment to be recovered. Vessel II is
designed to protect the tunnel system so that it can be reused if Vessel
I fails. The sole purpose of Vessel III is containment, so that
radioactive material will not escape into the atmosphere even if the
tunnel system is contaminated and the experimental equipment is lost.
(Id.) The plugs separating the vessels are constructed of high strength
grout or concrete that is 10-30 feet thick. The sides of the Vessel II
plugs facing the working point (where the nuclear explosive is located)
are made of steel. Vessel III plugs are made of massive concrete.
Besides the three containment vessels, an additional safety measure is a
gas seal door at the entrance of the tunnel system. (Id. at pp. 41-42.)
A horizontal line of sight pipe extends from the working point
to the test chamber where the experimental apparatus is located.
The diameter of the pipe, which may be only a few inches at the
working point, increases to about 10 feet before it reaches the
test chamber. A bypass drift (access tunnel) is located next to
the light of sight pipe, and provides access to the closures and
different parts of the tunnel system. The bypass drifts permit the
nuclear device to be placed at the working point and also permit
late-time placement of test equipment. After the nuclear device
has been placed at the working point, the bypass drift is filled
with grout. After the experiment, portions of the bypass drift are
reexcavated to allow access to the tunnel system and to recover the
pipe and experimental equipment. (Report, at pp. 42-43.)
The area around the line of sight pipe is also filled with
grout, so as to leave the pipe as the pathway between the explosion
and the test chamber. Grout with properties similar to the
surrounding rock is used near the explosion. Strong grout or
concrete is used near the end of the pipe to support the pipe and
closures. In between those points, the stemming is filled with
super-lean grout that is designed to fill in and plug any fractures
that may result as ground shock collapses the pipe. (Report, at p.
43.)
Chapter 4 of the OTA report, entitled "Monitoring Accidental
Radiation Releases," notes that "[d]epending on the design of the
explosive device and its percentage of fission and fusion, a wide
range of radioactive material can be released with half lives of
less than a second to more than a billion years." Half-life is
defined as "the time required for half of the atoms of a
radioactive [15]
~16
[16] substance to undergo a nuclear transformation to a more stable
element." (Report at p. 59 & n.2.)
DOE is responsible for monitoring within the boundaries of the
Nevada Test Site in order to assess the containment of
radioactivity and to assess doses-to-man from radioactive
releases/FN9/ as a result of DOE operations. DOE uses a real-time
monitoring system for prompt detection after a test, and sample
recovery equipment to assess long-term dose and risk. The real-
time monitoring system utilizes a network of Remote Area Monitors
("RAMs") that are arrayed around the test hole for all tests. In
addition, radiation detectors are often installed down the stemming
column to monitor the flow of radioactive material up the
emplacement hole. In tunnel tests RAMs are placed above the shot
point, throughout the tunnel complex, outside the tunnel entrance,
and in each containment vessel. A permanent RAM network with
stations throughout the Nevada Test Site is in continual operation.
During each test a helicopter equipped with closed-circuit
television circles ground zero, a second helicopter and airplane
are ready to track any release that might occur, and a third
helicopter and an airplane are on stand-by. About 50 radiation
monitoring personnel are available if needed. (Report, at p. 65.)
In addition to the real-time monitoring system, air and water
samples are collected throughout the Nevada Test Site and are
monitored regularly. Each year more than 4,500 samples are
collected and analyzed. (Report, at p. 65.)
In addition to the onsite monitoring conducted by DOE, offsite
monitoring is conducted by the Environmental Protection Agency,
which is responsible for evaluating human radiation exposure as the
result of ingesting air, water or food that may have been affected
by nuclear testing. EPA collects more than 8,700 samples each year
and performs more than 15,000 measurements on water, milk, air,
soil, humans, plants and animals. (Report, at p. 66.) [16]
컴컴컴컴컴컴컴컴컴컴
/FN9/ Types of radiation releases include containment failures;
late-time seeps (small releases of noncondensable gases that
usually occur within days or weeks after a vertical drill hole
test); controlled tunnel purging (an intentional release of
radioactive material to recover experimental equipment and
ventilate test tunnels); and operational releases (small releases
of radioactivity as the result of vertical drill hole test
operations). Such operations include drilling back down to the
explosion location to collect core samples ("drill back"),
collecting gas samples from the explosion, and sealing the "drill
back" holes ("cement back"). (Report, at pp. 46-47.) [16]
~17
[17] 4. The work performed under the cementing services
subcontract
The cementing services subcontract /FN10/ describes the
subcontractor's duties as
furnishing all labor, equipment (except Government-
furnished items), supplies, transportation, and services
required at a Base of Operations within the NTS. . .; to
operate, maintain and repair the Government-furnished
batch plant and material storage and loading facility; to
operate, move, maintain and repair the Government-
furnished specialized pumping, blending, and mixing
equipment and field storage bins. . .; to use Government-
furnished cementing materials and to perform all
operations required to blend, mix, and place cement
slurries in drilled or mined holes and tunnels; and, as
directed by the Contractor, to provide auxiliary
services, materials, and equipment available through the
Subcontractor.
DOE and the BCTD informed the Board that BJ Titan is no longer
the cementing services subcontractor. The cementing services work
is currently being performed by Reynolds Electric and Engineering
Company ("REECO"), DOE's management and operating contractor at the
Nevada Test Site. DOE states that REECO is signatory to collective
bargaining agreements at the Nevada Test Site, and the workers who
currently are performing the cementing services work are paid
pursuant to the applicable agreement. According to the BCTD, the
cementing services work is being performed by REECO employees
pursuant to a collective bargaining agreement with Local No. 12 of
the International Union of Operating Engineers, an agreement that
is known as the Project Agreement for Construction and Drilling and
that applies to all work covered by the Davis-Bacon Act. DOE also
states that the work that is in dispute in this case primarily
involves operation of equipment and delivery of materials, and that
the employees involved are equipment operators and truck drivers.
DOE states that the cementing work performed once the materials are
discharged from the delivery vehicle has always been done by REECO
employees and is not part of the cementing service subcontract.
DOE's representative at oral argument stated that cement slurries
are placed in three types of holes -- exploratory holes,
emplacement holes and instrument holes. [17]
컴컴컴컴컴컴컴컴컴컴
/FN10/ Counsel for the Administrator filed a motion with this Board
on August 19, 1993 to supplement the administrative record with a
copy of the cementing services subcontract. That motion is hereby
granted. [17]
~18
[18] 5. The drilled holes and mined tunnels at the Nevada
Test Site are "public works," and the work performed
pursuant to the cementing services subcontract is
covered by the Davis-Bacon Act
On the basis of the administrative record in this case, the
parties' submissions, and the information set forth in the OTA
report (a public document of which this Board may take
administrative notice), the Board concludes that the drilled holes
and mined tunnels at the Nevada Test Site are "public works" within
the meaning of the Davis-Bacon Act and the Department's regulations
and the work performed under the cementing services subcontract is
subject to Davis-Bacon labor standards requirements. Although Wage
and Hour in 1988 described the question whether the Davis-Bacon Act
or the Service Contract Act applied to the cementing services work
as a "borderline determination," we must respectfully disagree. It
is obvious from the information before this Board that the drilled
holes and mined tunnels are sophisticated structures -- constructed
on public land, with public funds, and under the authority of a
Federal agency -- that are used to conduct tests with the public
purpose of promoting the national defense, and that are constructed
in a manner intended to protect the public health and public
safety. The conclusion is inescapable that the drilled holes and
mined tunnels come within the broadly-defined term, "public works."
Or as the Attorney General described the coverage of irrigation
works under the Eight-Hour Laws (see p. 12, supra, and 26 Op. Atty.
Gen. at 66), "there can be no doubt" that the drilled holes and
mined tunnels "perfectly and comprehensively fill the idea of
`public works of the United States.' "
Upon remands from the Secretary of Labor and the Deputy
Secretary, Wage and Hour alternatively described the decision that
the cementing work is subject to the Service Contract Act as based
on the work's similarity to "demolition" or to "exploratory
drilling" that comes within Service Contract Act coverage. As to
the "demolition" analogy, suffice it to say that we, like the
Deputy Secretary and LIUNA, "do not understand how the grouting of
tunnels and the operation of a batch plant is similar to
`demolition' " (LIUNA Statement, at p. 16). The comparison to
"demolition" perhaps arises from Wage and Hour's view that the
holes and tunnels are plugged with cement slurries "with no further
use planned" for those structures after the conclusion of the
underground nuclear test. Even if Wage and Hour had correctly
characterized the holes and tunnels as having only a temporary
usefulness, that would not take the holes and tunnels out of the
realm of Davis-Bacon coverage. See General Exhibits, Inc. &
Rhombi-12, Ltd., WAB Case No. 72-11 (Feb. 28, 1973) (re Davis-Bacon
coverage of temporary structures). But in any event it is patent
from OTA's description of the lifespan of radioactive materials,
from the fact that safety is defined as the "overriding concern" in
the planning and execution of nuclear tests, and from the real-time
and long-term monitoring that is conducted both on the Nevada Test
Site and offsite, that containment of radioactive materials that [18]
~19
[19] result from underground nuclear tests is a concern both at
the time of the tests and long afterward. Thus it seems to us that
the holes and tunnels, constructed in a manner intended to protect
public health and safety, serve an ongoing role as facilities for
containment of radioactive materials. As noted by the BCTD (Reply
at p. 12), the role played by the holes and tunnels in protection
of the public is analogous to the role played by dams, jetties,
breakwaters and levees, all of which are expressly included in the
definition of "building or work" set forth at 29 C.F.R. 5.2(i).
Wage and Hour's decision on remand from the Deputy Secretary
describes the "purpose of the subcontract" as "similar . . . to
exploratory drilling under SCA (29 CFR 4.130(a)(16)) - as part of
a project to gather information/data (from the nuclear test) rather
than to construct or alter a public building or public work." That
ruling has several infirmities. First the ruling -- like the
earlier determination that the work of the subcontract was similar
to "demolition" --overlooks the role of the holes and tunnels (and
the stemming of the holes and tunnels) in containment of
radioactive materials and protection of the public health and
safety. Second, the ruling reaches much too far, for it could
arguably take within its compass (and exclude from Davis-Bacon
coverage) any number of government research facilities that are
built to facilitate the gathering of information or data. Finally,
the ruling extends far beyond Wage and Hour's own guidance, as set
forth in its Fields Operations Handbook ("FOH"), regarding the
extent to which "exploratory drilling" is excluded from the term
"public works." Section 15d03(b) of the FOH provides:
Drilling, like excavating generally, is usually
considered "construction" activity. The critical
question is whether the holes which would be dug during
the course of the exploratory drilling would be "works"
within the statutory term "public works." The word
"works" in the term "public works" refers typically to
improvements, such as buildings, canals, or roads, rather
than mere progress or activity. Consequently,
exploratory drilling for the purpose of obtaining data to
be used in engineering studies and the planning of a
project, such as a dam or reservoir, the actual
construction of which has not been authorized, nor funds
appropriated, would not be within the term "work" because
it relates to an activity as distinguished from a project
or improvement. Also, the holes themselves, which are
opened to obtain cores and which are subsequently to be
filled in or abandoned, would not be "works" because they
are not improvements. The products sought by the digging
are the cores of the earth and not the holes themselves.
. . . In contrast, wells drilled to obtain a water
supply for a military base or a contract for digging of
test holes which later may become "public works" [19]
~20
[20] or permit conversion to water wells, oil wells, or other
"public works" are covered.
The exploratory holes referred to by DOE (see p. 18, supra)
seem to be the type of "exploratory drilling" described in the FOH
guidance, since the holes are drilled "for the purpose of obtaining
data to be used in . . . the planning of a project." The other
holes and tunnels at the Nevada Test Site do not meet the FOH
description however, for those holes and tunnels are not merely
preliminary to execution of a construction project; rather those
holes and tunnels are projects constructed for the purpose of
providing a facility for conducting nuclear tests and for
containing radioactive materials produced by such tests.
As for the exploratory holes at the Nevada Test Site, the OTA
report explains that when the general parameters for a drill hole
have been established, the sponsoring test laboratory requests a
pre-drill Geologic Data Summary ("GDS") from the U.S. Geological
Survey ("USGS"). The GDS reviews the structures, the rock type,
and the water content of the area. The USGS looks for features
that may have caused containment problems in the past. When the
final site location is drilled, data are collected and evaluated,
and samples are collected and analyzed. (Report, at p. 37.) Both
the BCTD and LIUNA acknowledged at oral argument that drilling
conducted to aid in selecting a location for a nuclear test is the
type of "exploratory drilling" that might appropriately be regarded
as being outside the scope of the Davis-Bacon Act. This Board
agrees that the exploratory holes are the type of drilling
described in the FOH guidance, but we cannot say that all the
criteria set forth in the guidance and in Wage Appeals Board
precedent for exclusion from Davis-Bacon coverage have been met.
Thus, the FOH guidance refers to "exploratory drilling for the
purpose of obtaining data to be used in . . . the planning of a
project, . . . the actual construction of which has not been
authorized, nor funds appropriated." (Emphasis supplied.) Thus, we
do not know from the record before us whether, for example, the
exploratory holes referred to by DOE are drilled before the
authorization of construction or the appropriation of funds. See
also CTL Engineering, WAB Case No. 80-07 (July 22, 1983) (drilling
of pilot holes in conjunction with a relief well system is covered
by the Davis-Bacon Act where award of the prime contract preceded
the test borings). In addition, in the event that the exploratory
holes at the Nevada Test Site are determined not to be covered by
the Davis-Bacon Act, we do not know from the record before us
whether the exploratory holes would be subject to the Service
Contract Act, for we do not know if drilling of exploratory holes
is provided for in a contract "the principal purpose of which is to
furnish services. . . ." Accordingly, this matter must be remanded
to the Administrator of the Wage and Hour Division for a
determination of the labor standards coverage applicable to the
cementing work performed in connection with the drilling of
exploratory holes at the Nevada Test Site. [20]
~21
[21] As noted earlier, DOE's representative at oral argument
stated no quarrel with the notion that the drilled holes and mined
tunnels at the Nevada Test Site are "public works," but instead
stated DOE's view that the work performed under the cementing
services subcontract is not "construction." Indeed, DOE noted in
its brief (at pp. 9-10) that the work in dispute essentially
involved operation of equipment and delivery of materials and did
not involve the cementing work performed once the materials are
discharged from the delivery trucks, since that work has always
been performed by REECO employees. DOE's position that the
cementing services work is not "construction" cannot be squared
with the definition of "construction, prosecution, completion, or
repair" set forth in 29 C.F.R. 5.2(j). That regulation provides
that "construction, prosecution, completion, or repair" includes
"[a]ll types of work done on a particular building or work. . . ."
(Emphasis supplied.) In this case, not only does the cementing
work performed in connection with the holes and tunnels at the
Nevada Test Site meet the definition of "construction" in Section
5.2(j), but it is also evident that the cementing work is an
integral part constructing a facility for conducting a nuclear test
and containing the radioactive fallout from such a test.
At bottom, the dispute in this case seems to arise from a
contracting agency's misunderstanding of Davis-Bacon coverage of
batch plant operations and the delivery of materials from batch
plants. Davis-Bacon coverage does, however, extend to batch plant
operations and delivery of materials, even in instances where it
must first be determined whether the batch plant in question meets
the regulatory definition of the "site of the work." See, e.g.,
United Construction Company, Inc., WAB Case No. 82-10 (Jan. 14,
1983); L.P. Cavett Company, WAB Case No. 89-15 (July 20, 1993). Of
course, no "site of the work" issue has been raised in this case,
nor do we see from the record before us how such an issue
appropriately could be raised.
6. The authority of the Department of Labor to make
labor standards coverage determinations
Throughout these proceedings, DOE has taken the position that
DOE made a good faith determination based on an "exhaustive review"
of the cementing services subcontract (Brief, at p. 10) that the
Service Contract Act -- and not the Davis-Bacon Act -- applied to
the subcontract. DOE also argues that determination of Davis-Bacon
coverage is within the authority of contracting agencies. DOE's
contentions are perhaps best answered by reference to Wage Appeals
Board decisions, including those involving DOE's predecessor, the
Atomic Energy Commission ("AEC"). In an early case (Stanford
Linear Accelerator Center, WAB Case No. 65-02 (April 12, 1965)),
the Wage Appeals Board responded to the AEC's argument that the
AEC's coverage decisions should be accorded strong presumptive
validity by stating (at p. 11): [21]
~22
[22] It is always assumed that agencies are acting in good
faith when they are performing their official duties.
The Wage Appeals Board does not take a different view.
A decision as to the [Davis- Bacon] Act's coverage
must be set aside when the weight of the evidence
demonstrates that it is not in accord with the Act and
regulations issued pursuant thereto.
See also, Atomic Energy Commission, WAB Case No. 67-06 (Apr. 8,
1967) at pp. 11-13. More recently, in AT&T Communications, WAB
Case No. 91-09 (Aug. 21, 1991)), the Wage Appeals Board discussed
the authority vested in the Department of Labor by Reorganization
Plan No. 14 of 1950, stating (at p. 3):
In the interests of government-wide consistency and the
guidance of contracting officers throughout the United
States, Congress and the Truman Administration enacted
Reorganization Plan No. 14 (5 U.S.C. App.), wherein the
Secretary of Labor was given the authority and the
responsibility to achieve uniformity and consistency in
Davis-Bacon administration. Pursuant to the Davis-
Bacon Act and Reorganization Plan No. 14, the Secretary
has promulgated the regulations found at 29 C.F.R. Parts
1, 3, 4, 5, 6, and 7, which permit an agency holding a
different view from the Department of Labor to secure a
resolution of that dispute.
Likewise, the primary responsibility for interpreting,
administering and enforcement the Service Contract Act is vested in
the Secretary of Labor. See [secs] 3 & 4 of the SCA (41 U.S.C.
[secs] 352, 353); District Lodge No. 166, Int'l Assoc. of
Machinists and Aerospace Workers, AFL-CIO v. TWA Services, Inc.,
731 F.2d 711, 716 (11th Cir. 1984), cert. denied, 469 U.S. 1209
(1985). Thus, as stated by counsel for the Administrator in a
post-hearing memorandum (at p. 6), "[P]ursuant to statute,
regulations, and the caselaw, the Secretary [of Labor] has the
clear authority under the Davis-Bacon Act and the Service Contract
Act to administer and interpret the labor standards requirements,
including the review of DOE's coverage determinations concerning
the Davis-Bacon Act and the Service Contract Act."
B. The wage determinations made by Wage and Hour pursuant to
the Service Contract Act
As noted earlier, this matter must be remanded to Wage and
Hour for a determination of the labor standards coverage applicable
to exploratory holes drilled at the Nevada Test Site. Since it is
possible, although not certain, that the Administrator may
determine that the Service Contract Act is applicable to the
cementing services work performed in connection with the
exploratory holes, this [22]
~23
[23] Board must consider the appropriateness of the Service Contract Act
wage rates set forth in the Administrator's January 22, 1988 letter to
DOE.
The wage rates at issue are those for equipment operator and
bulk plant operator. The Administrator found that the subcontract
called for work performed by classifications of workers commonly
employed in the construction industry. Thus, the Administrator
decided that it was appropriate to base the wage rates for those
two conformed classifications in the Service Contract Act wage
determinations on prevailing wages for Davis-Bacon work in the
area. DOE objects to the use of Davis-Bacon construction wage data
in setting wage rates for those two classifications under the
Service Contract Act. However, as counsel for the Administrator
noted in the Statement filed in Case No. 88-SCA-WD-1 (at p. 13),
"DOE concedes that `the work being performed by [equipment and bulk
plant operators] may not be unique to the drilling industry . . .,'
but insists that construction industry data is not appropriate
because the contract work is akin to that of a material supplier,
which is `not covered by the Davis-Bacon Act.' " However, as
stated earlier in this decision (see pp. 21-22, supra), batch plant
operations and deliveries from batch plants are considered to be
with the coverage of the Davis-Bacon Act when the batch plants are
part of the "site of the work." Thus, this Board concludes that
the Administrator reasonably used Davis-Bacon wage data as the
basis for the wage rates for equipment and bulk plant operators set
forth in the Administrator's January 22, 1988 letter. Accordingly,
the Board affirms the wage rates set forth in that letter.
In sum, the ruling of the Acting Administrator regarding labor
standards coverage of the work performed under the cementing
services subcontract at the Nevada Test Site is reversed; this
matter is remanded to Wage and Hour for a determination (which
shall be issued within 60 days from the date of this decision) of
the labor standards applicable to the cementing work performed in
connection with exploratory holes drilled at the Nevada Test Site.
The wage rates set forth in the Administrator's January 22, 1988
letter to DOE are affirmed.
BY ORDER OF THE BOARD:
Charles E. Shearer, Jr., Chairman
Ruth E. Peters, Member
Gerald F. Krizan, Esq.
Executive Secretary [23]
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