B-119373, JUL 27, 1954

B-119373: Jul 27, 1954

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PRECIS-UNAVAILABLE GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO YOUR LETTER OF MARCH 18. WHICH FIGURE HAD BEEN DETERMINED BY THE DEPARTMENT OF LABOR AS THE PREVAILING RATE PRIOR TO THE TIME THE CONTRACT WAS AWARDED. SECTION 4-2 OF THE SAME SPECIFICATIONS PROVIDES IN PART AS FOLLOWS: "WHILE THE WAGE RATES GIVEN ARE THE MINIMUM RATES REQUIRED BY THESE SPECIFICATIONS TO BE PAID DURING THE LIFE OF THE CONTRACT. IT IS THE RESPONSIBILITY OF BIDDERS TO INFORM THEMSELVES AS TO LOCAL LABOR CONDITIONS AND PROSPECTIVE CHANGES OR ADJUSTMENTS OF WAGE RATES. THE ACTUAL RATE BEING PAID AT THE SITE WAS $2.75 PER HOUR. THE RATE OF $2.85 WAS IN ERROR. THAT IT SHOULD HAVE BEEN SHOWN AS $2.75. WAS DEEMED TO BE REQUIRED IN THE INTEREST OF GOOD RELATIONS WITH OTHER CONTRACTORS AND UNIONS.

B-119373, JUL 27, 1954

PRECIS-UNAVAILABLE

GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 18, 1954, REQUESTING A DECISION AS TO THE PROPRIETY OF REQUIRING THE HACKART CONSTRUCTION COMPANY, INC., OF NEW YORK TO ADJUST ITS PRICE UNDER CONTRACT NO. GS-00 B-2427, DATED JUNE 19, 1952, AS A RESULT OF ITS FAILURE TO PAY WAGES TO CARPENTERS AT RATES EQUAL TO THOSE SET FORTH IN THE CONTRACT.

THE RECORD INDICATES THAT SECTION 4 OF THE SPECIFICATIONS, ENTITLED "APPLICABLE MINIMUM HOURLY RATES OF WAGES," SETS FORTH $2.85 AS THE MINIMUM HOURLY RATE OF WAGES FOR CARPENTERS, WHICH FIGURE HAD BEEN DETERMINED BY THE DEPARTMENT OF LABOR AS THE PREVAILING RATE PRIOR TO THE TIME THE CONTRACT WAS AWARDED. HOWEVER, SECTION 4-2 OF THE SAME SPECIFICATIONS PROVIDES IN PART AS FOLLOWS:

"WHILE THE WAGE RATES GIVEN ARE THE MINIMUM RATES REQUIRED BY THESE SPECIFICATIONS TO BE PAID DURING THE LIFE OF THE CONTRACT, IT IS THE RESPONSIBILITY OF BIDDERS TO INFORM THEMSELVES AS TO LOCAL LABOR CONDITIONS AND PROSPECTIVE CHANGES OR ADJUSTMENTS OF WAGE RATES, *** NO INCREASE IN THE CONTRACT PRICE SHALL BE ALLOWED OR AUTHORIZED ON ACCOUNT OF THE PAYMENT OF WAGE RATES IN EXCESS OF THOSE LISTED HEREIN."

BASED UPON THIS LATTER PROVISION, THE CONTRACTOR CONTACTED THE LOCAL UNION AND ASCERTAINED THAT, NOTWITHSTANDING THE MINIMUM WAGE RATE OF $2.85 SET FORTH IN THE CONTRACT, THE ACTUAL RATE BEING PAID AT THE SITE WAS $2.75 PER HOUR, WHICH FACT HAS BEEN CONFIRMED BY THE CONSTRUCTION INDUSTRY STABILIZATION COMMISSION IN ITS LETTER DATED SEPTEMBER 11, 1951. FURTHERMORE, THE DEPARTMENT OF LABOR, BY LETTER DATED JANUARY 9, 1953, HAS FORMALLY ACKNOWLEDGED THAT, DUE TO AN INADVERTENCE, THE RATE OF $2.85 WAS IN ERROR, AND THAT IT SHOULD HAVE BEEN SHOWN AS $2.75. HENCE, THERE WOULD APPEAR TO BE MERIT IN THE CONTRACTOR'S CONTENTION THAT ITS ACTION IN PAYING THE $2.75 RATE, IN ADDITION TO COMPLYING WITH THE PREVAILING LOCAL SOALE, WAS DEEMED TO BE REQUIRED IN THE INTEREST OF GOOD RELATIONS WITH OTHER CONTRACTORS AND UNIONS.

IN YOUR LETTER OF MARCH 18, YOU STATE THAT UPON A REVALUATION OF THE FACTS YOUR ADMINISTRATION HAS CONCLUDED THAT THE STATEMENT FROM THE DEPARTMENT OF LABOR IS RETROACTIVE AND CURES ANY BREACH OF THE CONTRACT THERE MAY HAVE BEEN. WHILE TECHNICALLY THERE WAS A VIOLATION OF THE TERMS OF THE CONTRACT SPECIFICATIONS WITH REGARD TO THE AMOUNT OF WAGES AGREED UPON FOR CARPENTERS, THE FACT REMAINS THAT PREVAILING WAGES ACTUALLY WERE PAID, AS CONTEMPLATED BY THE DAVIS-BACON ACT, AS AMENDED, AND SUBSEQUENTLY CONFIRMED BY THE DEPARTMENT OF LABOR; AND THUS, THERE WOULD NOT APPEAR TO BE ANY REQUIREMENT FOR COLLECTION ACTION AGAINST THE CONTRACTOR FOR THE BENEFIT OF ITS EMPLOYEES. FURTHERMORE, THERE IS PERCEIVED NO LEGAL BASIS FOR REQUIRING AN EQUITABLE ADJUSTMENT IN THE CONTRACT PRICE AS THE RECORD CLEARLY INDICATES THAT, BASED UPON THE CURRENT SCALE OF WAGES EXISTENT AT THE SITE OF PERFORMANCE, THE SUBJECT CONTRACTOR, ALONG WITH OTHER BIDDERS, EMPLOYED THE RATE OF $2.75 IN COMPUTING ITS BID AND THAT A MUCH HIGHER RATE ACTUALLY WAS PAID BY THE CONTRACTOR PRIOR TO THE COMPLETION OF THE PROJECT.

ACCORDINGLY, THIS OFFICE CONCURS IN THE CONCLUSION REACHED BY YOUR ADMINISTRATION THAT A REQUEST UPON THE CONTRACTOR FOR A DEDUCTION PROPOSAL SHOULD BE ABANDONED.