B-144901, APRIL 10, 1961, 40 COMP. GEN. 565

B-144901: Apr 10, 1961

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SURFACING AND LINING OF A RAILROAD TRACK INCIDENT TO A PRIME CONTRACT FOR OPERATION AND MAINTENANCE OF AN ORDNANCE PLANT IS SHOWN TO BE EQUIVALENT TO ONLY AN ESTIMATED 10 MILES OF A 90-MILE RAILWAY NETWORK. THE SUBCONTRACT MAY REASONABLY BE CONSIDERED AS ONE FOR "SERVICING AND MAINTENANCE" AS THOSE TERMS ARE USED IN THE LABOR STANDARDS REGULATIONS IN 29 CFR 5.2 (F) AND (G) WHICH EXCEPT SUCH CONTRACTS FROM THE MINIMUM WAGE REQUIREMENTS OF THE DAVIS-BACON ACT. IS NOT THE NATURE OF THE SPECIFIC WORK BUT THE NATURE OF THE CONTRACT. THAT IS. WHICH WAS CONSIDERED BY THE CONTRACTING AGENCY NOT TO BE SUBJECT TO THE DAVIS-BACON ACT. BE REGARDED AS ADVISORY ONLY IN VIEW OF THE LEGISLATIVE HISTORY OF THE PLAN WHICH INDICATES THAT THE ENFORCEMENT AND ADMINISTRATION OF LABOR STANDARDS WERE NOT TO BE TRANSFERRED BY THE PLAN BUT WERE TO REMAIN VESTED IN THE INDIVIDUAL AGENCIES AND DEPARTMENTS OF THE GOVERNMENT.

B-144901, APRIL 10, 1961, 40 COMP. GEN. 565

CONTRACTS - LABOR STIPULATIONS - DAVIS-BACON ACT - APPLICABILITY JURISDICTION - RETROACTIVE CORRECTION WHEN THE WORK TO BE DONE UNDER A SUBCONTRACT FOR REPLACEMENT, SURFACING AND LINING OF A RAILROAD TRACK INCIDENT TO A PRIME CONTRACT FOR OPERATION AND MAINTENANCE OF AN ORDNANCE PLANT IS SHOWN TO BE EQUIVALENT TO ONLY AN ESTIMATED 10 MILES OF A 90-MILE RAILWAY NETWORK, THAT DEFERRAL OF THE WORK FOR SEVERAL YEARS DUE TO BUDGETARY RESTRICTIONS DID NOT PREVENT FULL USE OF THE ROAD AND THAT THE SUBCONTRACT COST CANNOT BE CONSIDERED TO REPRESENT THE COST OF RECONSTRUCTION OR MAJOR REPAIR OF THE TRACT, THE SUBCONTRACT MAY REASONABLY BE CONSIDERED AS ONE FOR "SERVICING AND MAINTENANCE" AS THOSE TERMS ARE USED IN THE LABOR STANDARDS REGULATIONS IN 29 CFR 5.2 (F) AND (G) WHICH EXCEPT SUCH CONTRACTS FROM THE MINIMUM WAGE REQUIREMENTS OF THE DAVIS-BACON ACT, 40 U.S.C. 276A. THE TEST FOR DETERMINATION OF THE APPLICABILITY OF THE DAVIS-BACON ACT, 40 U.S.C. 276A, IS NOT THE NATURE OF THE SPECIFIC WORK BUT THE NATURE OF THE CONTRACT, THAT IS, WHETHER THE CONTRACT ESSENTIALLY OR SUBSTANTIALLY CONTEMPLATES THE PERFORMANCE OF WORK DESCRIBED BY THE ENUMERATED MS,"CONSTRUCTION, ALTERATION, AND/OR REPAIR, INCLUDING PAINTING AND DECORATING.' A LETTER DIRECTING THE RETROACTIVE INCLUSION OF MINIMUM WAGE RATES IN A MAINTENANCE SUBCONTRACT, WHICH WAS CONSIDERED BY THE CONTRACTING AGENCY NOT TO BE SUBJECT TO THE DAVIS-BACON ACT, 40 U.S.C. 276A, MUST, UNDER REORGANIZATION PLAN NO. 14 OF 1950, 5 U.S.C. 133Z-15, RELATING TO THE LABOR STANDARDS LAWS, BE REGARDED AS ADVISORY ONLY IN VIEW OF THE LEGISLATIVE HISTORY OF THE PLAN WHICH INDICATES THAT THE ENFORCEMENT AND ADMINISTRATION OF LABOR STANDARDS WERE NOT TO BE TRANSFERRED BY THE PLAN BUT WERE TO REMAIN VESTED IN THE INDIVIDUAL AGENCIES AND DEPARTMENTS OF THE GOVERNMENT. UNDER THE DAVIS-BACON ACT, 40 U.S.C. 276A, MINIMUM WAGE REPRESENTATIONS AND STIPULATIONS ARE EFFECTIVE ONLY WHEN, AS EXPRESSLY DIRECTED, THEY ARE INCLUDED IN ADVERTISED SPECIFICATIONS SO THAT THE OMISSION OF MINIMUM WAGE PROVISIONS FROM A CONTRACT, WHICH WAS ADVERTISED WITHOUT INCLUSION OF SUCH LABOR STANDARDS PROVISIONS, MAY NOT BE RETROACTIVELY CHANGED TO INCLUDE THEM, NOR IS THE ACT OF ITSELF BINDING UPON THE CONTRACTOR.

TO THE SECRETARY OF THE ARMY, APRIL 10, 1961:

REFERENCE IS MADE TO A LETTER DATED JANUARY 19, 1961, FROM DEPUTY ASSISTANT SECRETARY OF THE ARMY ( LOGISTICS) P. E. FEUCHT, REQUESTING GUIDANCE CONCERNING A PROBLEM THAT HAS ARISEN IN DETERMINING THE EXTENT, IF ANY, TO WHICH THE MINIMUM WAGE PROVISIONS OF THE DAVIS-BACON ACT, 40 U.S.C. 276A, ARE APPLICABLE TO CERTAIN WORK AT THE IOWA ORDNANCE PLANT.

THE FACTUAL SITUATION WAS OUTLINED IN THE DEPUTY ASSISTANT SECRETARY'S LETTER AS FOLLOWS:

ON FEBRUARY 24, 1951, THE DEPARTMENT OF THE ARMY ENTERED INTO A NEGOTIATED CONTRACT, NO. DA-11-173-ORD-85, WITH SILAS MASON COMPANY AT THE IOWA ORDNANCE PLANT FOR DESIGN AND CONSULTANT SERVICE AND OPERATION OF FACILITIES FOR LOADING, ASSEMBLY AND PACKAGING OF AMMUNITION AND COMPONENTS THEREOF, A SO-CALLED GOCO ( GOVERNMENT OWNED CONTRACTOR OPERATOR) CONTRACT. THIS CONTRACT HAS BEEN RENEWED WITH VARIOUS MODIFICATIONS AND SUPPLEMENTS FROM YEAR TO YEAR AND IS STILL CURRENT. COPY OF THE GENERAL PROVISIONS IS INCLOSED. ( IN FEBRUARY 1955, AS A RESULT OF A CORPORATE MERGER, A TRIPARTITE AGREEMENT WAS ENTERED INTO ASSIGNING THE CONTRACT TO MASON AND HANGER-SILAS MASON COMPANY, INCORPORATED.) THE BASIC CONTRACT AUTHORIZES THE CONTRACTOR, IN CARRYING OUT THE WORK THEREUNDER, TO DO ALL THINGS NECESSARY OR CONVENIENT IN THE OPERATING, MAINTENANCE OR CLOSING DOWN OF THE PLANT OR ANY PART THEREOF. ANOTHER SECTION OF THE CONTRACT PROVIDES THAT NEW CONSTRUCTION, REACTIVATION AND REHABILITATION OF THE FACILITY WILL BE PERFORMED BY COLLATERAL CONTRACT LET THROUGH A CORPS OF ENGINEERS CONTRACTING OFFICER. BY SUPPLEMENTAL AGREEMENT, DATED JUNE 23, 1955, THE CONTRACTOR'S RESPONSIBILITY FOR MAINTENANCE WAS INCREASED IN SCOPE AND FURTHER DEFINED.

ON JULY 29, 1960, THE PRIME CONTRACTOR LET A SUBCONTRACT TO W. H. NICHOLS AND COMPANY, INCORPORATED, IN THE AMOUNT OF $160,169.00 FOR TIE REPLACEMENT, SURFACING AND LINING OF RAILROAD TRACKS IN ACCORDANCE WITH SPECIFICATIONS FOR RAILROAD TRACK MAINTENANCE. THE WORK INVOLVED RESULTED FROM THE DEFERRAL OF THE TRACK MAINTENANCE WORK AT IOWA ORDNANCE PLANT FOR SEVERAL YEARS BECAUSE OF BUDGETARY RESTRICTIONS. THE WORK, WHICH WAS DONE INTERMITTENTLY ALONG A 90-MILE RAILROAD TRACK NETWORK, AGGREGATED APPROXIMATELY 10 MILES. THE CONTRACTING OFFICER EXAMINED THE PROPOSED SUBCONTRACT PRIOR TO ITS ADVERTISEMENT AND DETERMINED THAT THE WORK WAS WITHIN THE MAINTENANCE RESPONSIBILITY OF THE PRIME CONTRACT. THEREFORE, IN ACCORD WITH DEPARTMENT OF DEFENSE REGULATIONS ( ARMED SERVICES PROCUREMENT REGULATIONS 12-402), THE SUBCONTRACT WAS ADVERTISED AND AWARDED WITHOUT THE DAVIS-BACON ACT CLAUSES. (40 U.S.C. 276A ET SEQ.) ON PROVISION OF THE SUBCONTRACT SPECIFICALLY STATES THAT IT IS CONSIDERED PART OF THE MAIN SUPPLY CONTRACT AND IS NOT A CONTRACT FOR THE CONSTRUCTION, ALTERATION AND/OR REPAIR OF PUBLIC BUILDINGS OR PUBLIC WORKS.

THE SOLICITOR'S OFFICE OF THE DEPARTMENT OF LABOR, UPON RECEIVING A COMPLAINT THAT DAVIS-BACON WAGE RATES WERE NOT BEING PAID BY THE SUBCONTRACTOR, REQUESTED AN INVESTIGATION AND REPORT ON THE CIRCUMSTANCES RELATING TO THIS SUBCONTRACT. ENCLOSED IS THE CORRESPONDENCE BETWEEN OUR TWO DEPARTMENTS. IN SUBSTANCE, THE SOLICITOR OF LABOR HAS RULED THAT IN HIS JUDGMENT, UNDER THE REGULATIONS OF THE DEPARTMENT OF LABOR, THE WORK INVOLVED IS SUBJECT TO THE ACT, AND THE SUBCONTRACT SHOULD HAVE INCLUDED THE APPROPRIATE CONTRACT PROVISION. THE SOLICITOR OF LABOR HAS DIRECTED THIS DEPARTMENT TO AMEND THE CONTRACT TO INCLUDE THE CLAUSES AND THE APPROPRIATE WAGE DETERMINATION AND TO OBTAIN RESTITUTION FOR ANY EMPLOYEES PAID LESS THAN DAVIS-BACON SCALE. ON THE BASIS OF SEVERAL OPINIONS OF YOUR OFFICE AND THE APPLICABLE PROVISIONS OF THE ARMED SERVICES PROCUREMENT REGULATIONS, THE DEPARTMENT OF THE ARMY BELIEVES THAT IT IS NEITHER NECESSARY NOR PROPER TO ACCEPT SUCH DIRECTION.

TWO QUESTIONS WERE POSED---

1. CAN THE JUDGMENT OF A CONTRACTING OFFICER WITH RESPECT TO THE APPLICABILITY OF THE DAVIS-BACON ACT BE REVERSED BY A RULING OF THE SOLICITOR OF LABOR WHEN THE CONTRACTING OFFICER HAS MADE HIS DETERMINATION IN GOOD FAITH AND IN ACCORD WITH THE PRESCRIBED REGULATIONS OF THE DEPARTMENT FROM WHICH HE DRAWS HIS AUTHORITY?

2. IF THE FIRST QUESTION IS ANSWERED IN THE AFFIRMATIVE, MAY THE RULING OF THE SOLICITOR OF LABOR BE APPLIED RETROACTIVELY TO CONTRACTS OR SUBCONTRACTS ALREADY AWARDED OR COMPLETED?

SECTION 1 OF THE DAVIS-BACON ACT DIRECTS THAT " THE ADVERTISED SPECIFICATIONS FOR EVERY CONTRACT * * * FOR CONSTRUCTION, ALTERATION, AND/OR REPAIR, INCLUDING PAINTING AND DECORATING * * * SHALL CONTAIN" CERTAIN MINIMUM WAGE REPRESENTATIONS AND STIPULATIONS. USE THE TERM "MAINTENANCE" TO IDENTIFY WORK WHICH IS NOT "CONSTRUCTION, ALTERATION, AND/OR REPAIR, INCLUDING PAINTING AND DECORATING," IS CONFUSING AND PERHAPS, UNFORTUNATE. "MAINTENANCE" ENCOMPASSES KEEPING OR PRESERVING IN GOOD CONDITION, INCLUDING THE MAKING OF REPAIRS INCIDENTAL THERETO, AND IT THUS HAS A MUCH BROADER MEANING THAN "REPAIR.' BOTH ARE USED INTERCHANGEABLY TO MEAN A CORRECTION OF OBSOLESCENCE, WHETHER DUE TO WEAR AND TEAR OR TO NATURAL CAUSES, AND NEITHER SEEMS TO HAVE ANY SPECIALIZED MEANING IN THE LAW. SEE 54 C.J.S. MAINTENANCE AND 76 C.J.S. REPAIRS. MAY SEEM ANOMALOUS TO SUGGEST THAT "MAINTENANCE" COULD BE SUBSTITUTED FOR "REPAIR" IN THE STATUTORY DIRECTION WITHOUT AFFECTING ITS MEANING. HOWEVER,"PAINTING AND DECORATING," WHICH USUALLY ARE ACCOMPLISHED ON A ROUTINE BASIS AS CUSTODIAL OR SERVICING FUNCTIONS, WOULD MORE LIKELY BE CALLED ,MAINTENANCE" THAN "REPAIR," AND THE LANGUAGE THUS INDICATES THAT A BROAD CATEGORY OF MAINTENANCE AND REPAIR IS IDENTIFIED. IT SERIOUSLY IS TO BE DOUBTED THAT ANY DIFFERENTIATION BETWEEN THE TWO TERMS WAS INTENDED OR USEFULLY CAN BE EMPLOYED TO DELINEATE SITUATIONS IN WHICH THE ACT IS MEANT TO APPLY AND THOSE IN WHICH IT IS NOT.

MOREOVER, IT SHOULD BE NOTED THAT THE STIPULATIONS OF THE ACT ARE DIRECTED TO BE INCLUDED IN ,ANY CONTRACT * * * FOR * * * REPAIRS * * *," ETC. THE QUALIFYING LANGUAGE MODIFIES AND DESCRIBES THE WORD "CONTRACT.' CONSEQUENTLY, IT IS NOT NECESSARILY THE NATURE OF SPECIFIC WORK BUT CONTRACT CONTENT WHICH GOVERNS APPLICABILITY; WHETHER OR NOT THE WORK TO BE DONE IS IN THE NATURE OF REPAIRS OR MAINTENANCE IS NOT THE SOLE DETERMINATIVE FACTOR. A PROPER TEST TO DETERMINE APPLICABILITY WOULD BE WHETHER OR NOT A CONTRACT ESSENTIALLY OR SUBSTANTIALLY CONTEMPLATES THE PERFORMANCE OF WORK DESCRIBED BY THE ENUMERATED ITEMS.

THE TEST RELIED UPON BY THE DEPARTMENT OF LABOR DIFFERENTIATES BETWEEN ITEMS ENUMERATED IN THE ACT AND THE "MANUFACTURING, FURNISHING OF MATERIALS, OR SERVICING AND MAINTENANCE WORK" ( REGULATIONS, 29 CFR, SUBTITLE A, SECTION 5.2 (F) AND (G) ). THIS DIFFERENTIATION, INSOFAR AS SERVICING AND MAINTENANCE WORK IS CONCERNED, SEEMS TO MEAN THAT WORK PERFORMED ON A ROUTINE BASIS TO DEFER OBSOLESCENCE AND KEEP IN GOOD CONDITION, AS DISTINGUISHED FROM MAJOR REPAIR WORK, IS NOT REQUIRED TO BE COVERED. IN A LETTER DATED FEBRUARY 17, 1961, THE ACTING SOLICITOR OF LABOR ADVISED THAT THE WORK UNDER CONSIDERATION WAS NOT IN HIS OPINION "MAINTENANCE" IN SUCH SENSE. HE STATED IN PART AS FOLLOWS:

IT IS MR. FEUCHT'S CONTENTION THAT THE WORK BEING DONE IS "MAINTENANCE" IN CHARACTER RATHER THAN CONSTRUCTION, ALTERATION, AND/OR REPAIR OF A PUBLIC WORK WITHIN THE ACT'S SCOPE AND MEANING. I CANNOT AGREE. WEBSTER'S NEW INTERNATIONAL DICTIONARY, SECOND EDITION, DEFINES THE WORK ,MAINTAIN" AS MEANING "TO HOLD OR KEEP IN ANY PARTICULAR STATE OR CONDITION * * *," AND ,MAINTENANCE" AS "THE UPKEEP OF PROPERTY * * *.' CONTRAST,"CONSTRUCTION" IS DEFINED AS "* * * THE ACT OF BUILDING; ERECTION; ACT OF DEVISING AND FORMING * * *.' "ALTERATION" IS SAID TO MEAN ,* * * A MODIFICATION OR CHANGE MADE IN ALTERING ANYTHING * * *," AND "REPAIR" IS DEFINED AS "* * * RESTORATION TO A SOUND OR GOOD STATE AFTER DECAY, DILAPIDATION, INJURY, LOSS, WASTE, ETC * * *.' (ITALICS SUPPLIED.) MR. FEUCHT, IN A LETTER OF NOVEMBER 22, 1960, TO THIS OFFICE STATED THAT THE CONTRACT WORK WAS NECESSARY BECAUSE THE MAINTENANCE OF THE TRACKAGE HAD BEEN DEFERRED. TO ME THIS MEANS THAT THE TRACK HAD NOT BEEN MAINTAINED BUT, ON THE CONTRARY, HAD BEEN ALLOWED TO DECAY, DETERIORATE, TO BECOME DILAPIDATED, AND TO FALL INTO A STATE OF DISREPAIR SO EXTENSIVE (A CONCLUSION BORNE OUT BY THE SIZE OF THE CONTRACT) THAT "REPAIR" WITHIN BOTH THE DICTIONARY AND STATUTORY MEANINGS OF THE WORD BECAME NECESSARY. "MAINTENANCE," AS THE WORD IS GENERALLY USED IN BUSINESS AND INDUSTRY AND IN THIS DEPARTMENT'S REGULATIONS, PARTS 3 AND 5, REFERS TO THAT ROUTINE WORK, RECURRING ON A DAILY OR WEEKLY BASIS, WHICH IS NECESSARILY PERFORMED SO THAT A PLANT OR FACILITY MAY BE CONTINUOUSLY UTILIZED FOR ITS INTENDED PURPOSES. IN A SIZABLE PLANT OR FACILITY, THIS WORK IS USUALLY DONE BY A CONTINUOUSLY EMPLOYED FULL TIME FORCE, AND NOT, AS IN THIS CASE, ON THE BASIS OF A SIZEABLE CONTRACT WHICH WILL TERMINATE WHEN CERTAIN RESULTS HAVE BEEN ACCOMPLISHED. TRUE MAINTENANCE WORK NEVER ENDS BECAUSE, SO LONG AS A PLANT OR FACILITY IS IN ACTIVE OPERATION, ORDINARILY WEAR, TEAR AND DEPRECIATION MAKE IT ALWAYS NECESSARY. THIS IS ESPECIALLY TRUE IN THE RAILROAD INDUSTRY, WHERE MAINTENANCE CREWS MUST DAILY INSPECT AND WORK ON TRACKAGE IN ORDER TO KEEP IT IN A SAFE AND USABLE CONDITION. IT IS OBVIOUS, AS ALREADY POINTED OUT, THAT ORDINARY MAINTENANCE, WHEN NOT PERFORMED OVER A LONG PERIOD OF TIME, WILL RESULT IN A CONDITION WHICH WILL NECESSITATE THE CONSTRUCTION, RECONSTRUCTION, OR CERTAINLY THE REPAIR OF A FACILITY, DEPENDING UPON THE LENGTH OF TIME DURING WHICH THE NORMAL MAINTENANCE WORK IS DEFERRED. IN THIS INSTANCE, THE WORK BEING DONE CERTAINLY AMOUNTS TO THE SUBSTANTIAL ALTERATION AND/OR REPAIR OF A PUBLIC WORK, SINCE IT INVOLVES THE ALMOST COMPLETE RECONSTRUCTION OF SOME TEN MILES OF RAILROAD, WITH NOT EVEN THE ROADBED BEING LEFT UNTOUCHED. PLEASE NOTE THAT THE CONTRACT DESCRIPTION OF THE WORK CALLS FOR THE DOING OF ALL THE THINGS WHICH NORMALLY ARE DONE IN THE ORIGINAL CONSTRUCTION OF A RAILROAD, EXCEPT THE INITIAL GRADING AND THE FURNISHING OF NEW RAILS, AND THAT, ALLOWING FOR A FAIR PROFIT, THE PROPORTION OF THE CONTRACT ALLOCABLE TO MATERIALS IS INDICATIVE OF A SUBSTANTIAL REBUILDING JOB.

WHILE THE DEPARTMENT'S TEST APPEARS TO BE CONCERNED EXCLUSIVELY WITH THE NATURE OF THE WORK, RATHER THAN THE NATURE OF THE CONTRACT, IT UNDOUBTEDLY IS TRUE THAT CERTAIN MAINTENANCE AND REPAIR WORK, EVEN IF A PREDOMINANT ELEMENT OF A CONTRACT, IS NOT NECESSARILY WITHIN THE SCOPE OF THE ACT. ACCEPTING THE TEST FOR THAT PURPOSE, HOWEVER, IT IS BELIEVED THAT AN ACCURATE APPRAISAL IN ANY INSTANCE NECESSITATES A COMPLETE AND THOROUGH CONSIDERATION OF THE RELATIONSHIP OF THE WORK BEING DONE TO THE FACILITIES WHICH THEY SUPPORT, INCLUDING RELATED OPERATIONAL AND MAINTENANCE PROGRAMS AND POLICIES OF THE ADMINISTERING AGENCY.

THE ACTING SOLICITOR'S VIEW THAT MAINTENANCE HAD BEEN POSTPONED SO LONG THAT AN ALMOST COMPLETE RECONSTRUCTION OF THE ROADBED FOR 10 MILES WAS NECESSARY UNDOUBTEDLY WOULD ESTABLISH, IF BORNE OUT BY THE FACTS, THAT SOMETHING MORE THAN ROUTINE SERVICING AND MAINTENANCE, SOMETHING CONSTITUTING MAJOR REPAIRS, WAS INVOLVED. SINCE NO ADDITIONAL FACTS WERE PRESENTED IT APPEARS THAT THE ACTING SOLICITOR'S CONCLUSION IS BASED ON THE FACT THAT WORK NORMALLY DONE EACH YEAR HAD ACCUMULATED DUE TO DEFERRAL, ON THE SIZE OF THE SUBCONTRACT, AND ON THE FACT THAT THE WORK WAS NOT PERFORMED BY A CONTINUOUSLY EMPLOYED FULL-TIME FORCE.

IF WE UNDERSTAND THE SITUATION ACCURATELY--- AND SOME OF THE DETAILS HAVE BEEN ASCERTAINED INFORMALLY--- THE SUBCONTRACT COST OF APPROXIMATELY $160,000 COVERS WORK DONE IN CONDITIONING THE ENTIRE 90 MILE RAILWAY NETWORK, EVEN THOUGH THE WORK DONE IN SCATTERED LOCATIONS WAS EQUIVALENT TO ONLY AN ESTIMATED 10 MILES. THE AVERAGE EXPENDITURE PER MILE FOR MAINTAINING THE NETWORK THUS AMOUNTED TO LESS THAN $1,800, AND IN THE LIGHT OF THE REPLACEMENT COST (IT WAS CONSTRUCTED ABOUT 20 YEARS AGO) OF THE FACILITY, ROUGHLY ESTIMATED BY THE CORPS OF ENGINEERS TO BE ABOUT $12,000,000, OR $134,000 PER MILE, HARDLY CAN BE CONSIDERED EVIDENCE OF RECONSTRUCTION OR MAJOR REPAIR. THE PRIME CONTRACT FOR OPERATION AND MAINTENANCE OF THE IOWA ORDNANCE PLANT ENTAILS AN EXPENSE OF MILLIONS ANNUALLY AND THE SUBCONTRACT AMOUNT IS NOT DISPROPORTIONATE.

ORDINARILY THE USE OF A SPECIAL, RATHER THAN REGULAR, WORK FORCE TO CORRECT AN ACCUMULATION OF MAINTENANCE WORK WOULD INDICATE THAT SOMETHING MORE THAN ROUTINE SERVICING WAS BEING UNDERTAKEN. HOWEVER, THE SENSE IN WHICH UPKEEP WAS DETERRED WAS NOT ONE WHICH INTERFERED WITH FULL UTILIZATION. IN FACT, WHILE DESIRED STANDARDS OF MAINTENANCE HAD NOT BEEN REALIZED, IT IS REPORTED THAT THE RAILROAD WAS USED CONTINUOUSLY AND HEAVILY. DUE TO BUDGETARY LIMITATIONS, MAINTENANCE WORK AT THE IOWA ORDNANCE PLANT HAD BEEN DEFERRED GENERALLY, PREVENTING THE REGULAR EMPLOYMENT OF PERSONNEL FOR THE PURPOSE AND REQUIRING A DETERMINATION EACH YEAR OF THE MOST URGENT ITEMS AND THE ESTABLISHMENT OF PRIORITIES FOR THEIR ACCOMPLISHMENT. WE HAVE BEEN ASSURED THAT, WHILE DESIRABLE SAFETY FACTORS TO SOME EXTENT MAY HAVE BEEN SACRIFICED, THE IMPAIRMENT OF OPERATIONAL CHARACTERISTICS WHICH THREATENED WAS NOT SUCH AS TO PREVENT FULL AND CONTINUOUS UTILIZATION. IT THUS SEEMS CLEAR THAT THE DEFERRAL PROGRAM WAS INTEGRATED WITH THE OPERATIONAL PROGRAM AND DID NOT EXCEED LIMITS WITHIN WHICH THE FACILITIES COULD BE MAINTAINED WITHOUT REPLACEMENT OR MAJOR REPAIR. IN THE CIRCUMSTANCES, WE FIND NO ROOM TO DISAGREE WITH THE CONTRACTING OFFICER'S DECISION THAT THE WORK SUBCONTRACTED TO W. H. NICHOLS AND COMPANY, INC; FELL WITHIN A REASONABLE INTERPRETATION OF "SERVICING AND MAINTENANCE" AS THESE TERMS ARE USED IN THE REGULATIONS. NOR DOES THE FACT THAT IT WAS NECESSARY TO HAVE IT PERFORMED BY SUBCONTRACT, RATHER THAN PERMANENT EMPLOYEES, IN ANY WAY ALTER ITS STATUS AS A PROPER AND INCIDENTAL ITEM UNDER THE OPERATING AND MAINTENANCE CONTRACT WITH MASON AND HANGER-SILAS MASON COMPANY, INC; WHICH EXCLUDED NEW CONSTRUCTION, REACTIVATION AND REHABILITATION OF THE FACILITY. EVEN IF THERE WERE ROOM FOR DOUBT THAT THE WORK CONSTITUTED ONLY MINOR REPAIR OR MAINTENANCE OF A ROUTINE SERVICING NATURE NOT SUBJECT TO DAVIS-BACON ACT PROVISIONS, WE ARE SATISFIED THAT THE PRIME CONTRACT UNDER WHICH IT WAS OBTAINED BY THE GOVERNMENT WAS NOT, WHEN CONSIDERED AS A WHOLE, ESSENTIALLY OR SUBSTANTIALLY A "CONTRACT * * * FOR * * * REPAIR.'

THE CONCLUSION REACHED CONCERNING THE PROPRIETY OF THE CONTRACT AND SUBCONTRACT ARRANGEMENTS MAKES UNNECESSARY ANY EXTENDED CONSIDERATION OF THE TWO QUESTIONS SUBMITTED. SEVERAL OF THE FACTORS DISCUSSED APPARENTLY HAVE NOT BEEN CONSIDERED BY THE DEPARTMENT OF LABOR, AND IT IS BY NO MEANS CERTAIN THAT IT HOLDS, OR WILL CONTINUE TO HOLD, AN OPINION THAT THE WORK, THE SUBCONTRACT, OR THE CONTRACT, WAS NOT OF AN EXEMPTED NATURE WITHIN THE MEANING OF THE DAVIS-BACON ACT.

WITH RESPECT TO THE FIRST QUESTION, WE UNDERSTAND THAT THE AUTHORITY GIVEN TO THE SECRETARY OF LABOR UNDER REORGANIZATION PLAN NO. 14 OF 1950, 5 U.S.C. 133Z-15, TO "PRESCRIBE APPROPRIATE STANDARDS, REGULATIONS AND PROCEDURES" FOR THE PURPOSE OF INSURING COORDINATION OF ADMINISTRATION AND CONSISTENCY OF ENFORCEMENT, DOES NOT EXTEND TO ACTUAL ADMINISTRATION AND ENFORCEMENT OF THE ACTS AFFECTED. AS STATED IN SENATE REPORT NO. 1546, 81ST CONGRESS, BY THE SENATE COMMITTEE OF EXPENDITURES IN THE EXECUTIVE DEPARTMENTS IN REPORTING FORMALLY ON THE PLAN,"1THE ENFORCEMENT AND ADMINISTRATION OF LABOR STANDARDS ARE NOT TRANSFERRED BY THE PLAN BUT REMAIN VESTED IN THE INDIVIDUAL AGENCIES AND DEPARTMENTS OF THE GOVERNMENT.' THE ACTING SOLICITOR OF LABOR'S LETTER OF NOVEMBER 16, 1960, TO YOU, TRANSMITTING WAGE RATES FOR RETROACTIVE INCLUSION IN THE CONTRACT AND STATING THAT "1PROMPT ACTION SHOULD BE TAKEN TO ARRANGE FOR RESTITUTION (APPARENTLY MEANING WAGE ADJUSTMENTS) OR TO WITHHOLD SUFFICIENT FUNDS TO ASSURE THE WORKERS THE WAGES TO WHICH THEY ARE LEGALLY ENTITLED," THEREFORE WOULD SEEM TO HAVE ADVISORY FORCE ONLY. ANY OTHER VIEW WOULD ASSUME THE EXISTENCE OF SOMETHING MORE THAN REGULATORY POWER, WOULD IMPLY A TRANSFER OF ENFORCEMENT AND ADMINISTRATION RESPONSIBILITIES FROM THE CONTRACTING AGENCIES, AND WOULD OVERLOOK THE WAGE ADJUSTMENT AUTHORITY PLACED IN OUR OFFICE BY SECTION 3 OF THE DAVIS-BACON ACT, 40 U.S.C. 276A-2 (B), WHICH WAS NOT DISTURBED BY REORGANIZATION PLAN NO. 14 OF 1950. OF COURSE, THIS DOES NOT MEAN THAT THERE IS NOT AN AREA OF DECISION WITHIN WHICH APPLICATION AND INTERPRETATION OF THE REGULATIONS AND LABOR LAWS BY THE DEPARTMENT OF LABOR UNDER REORGANIZATION PLAN NO. 14 OF 1950 WOULD BE AUTHORITATIVE.

NOR, IN CONSIDERING THE SECOND QUESTION, CAN WE SEE HOW AN OMISSION OF MINIMUM WAGE REPRESENTATIONS AND STIPULATIONS, EVEN ASSUMING THAT THEY SHOULD HAVE BEEN INCLUDED, COULD BE CURED RETROACTIVELY. THE CONDITIONS ESTABLISHED BY THE ACT ARE EFFECTIVE ONLY WHEN, AS EXPRESSLY DIRECTED, THEY ARE INCLUDED IN "ADVERTISED SPECIFICATIONS.' AS POINTED OUT BY THE COURT IN PERKINS V. LUKENS STEEL COMPANY, 310 U.S. 113, COMMENTING UPON SIMILAR LANGUAGE IN THE WALSH-HEALEY ACT, 41 U.S.C. 35, THE CONGRESS IN DIRECTING THAT THE ACT BE MADE EFFECTIVE THROUGH ADVERTISED CONTRACT CONDITIONS "DID NO MORE THAN INSTRUCT ITS AGENTS WHO WERE SELECTED AND GRANTED FINAL AUTHORITY TO FIX THE TERMS AND CONDITIONS UNDER WHICH THE GOVERNMENT WILL PERMIT GOODS TO BE SOLD TO IT.'

ALTHOUGH WE HAVE NOT OBJECTED TO A CORRECTION OF CONTRACT WAGE RATES IN INSTANCES WHERE THE ADVERTISED CONDITIONS HAVE CONTAINED INADVERTENT ERRORS, THE ACT OBVIOUSLY DOES NOT CONTEMPLATE MAKING SUCH CONDITIONS EFFECTIVE IN ANY OTHER WAY. SEE 36 COMP. GEN. 341; 17 ID. 471, 473. WHERE THE CONDITIONS HAVE NOT BEEN INCLUDED, WHETHER PROPERLY OR IMPROPERLY, IT IS CLEAR THAT THE ACT DOES NOT OF ITSELF BECOME BINDING UPON A CONTRACTOR. SEE, ALSO, 20 COMP. GEN. 890 (1EIGHT-1HOUR LAW) AND 20 ID. 931 (1WALSH-1HEALEY ACT) AND CASES CITED THEREIN. WHILE WE MIGHT AGREE THAT THE PUBLIC POLICY MANIFEST IN THE PROVISIONS OF THE DAVID- 1BACON ACT WARRANTS CANCELLATION AND READVERTISEMENT, IF FEASIBLE, OF WORK AWARDED WITHOUT CLEARLY APPLICABLE CONDITIONS, NO CORRECTIVE ACTION WOULD APPEAR POSSIBLE WHERE, DUE TO SUBSTANTIAL COMPLETION OF THE WORK OR OTHER PRACTICAL CONSIDERATIONS, IT IS NOT REASONABLE TO CANCEL AND READVERTISE.

WE ARE TAKING THE LIBERTY OF FURNISHING A COPY OF THIS DECISION TO THE SECRETARY OF LABOR.