B-158879, JUL. 8, 1966

B-158879: Jul 8, 1966

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TO SOUTHEASTERN OKLAHOMA BUILDING TRADES COUNCIL: REFERENCE IS MADE TO YOUR LETTER OF MARCH 29. YOU ALLEGE THAT THE BIDDING ON THESE CONSTRUCTION CONTRACTS WAS NOT COMPETITIVE AND THAT THE EMPIRE CONSTRUCTION COMPANY. TRANSMITTED A REPORT TO THIS OFFICE CONCERNING THE SITUATION IN WHICH YOU ARE INTERESTED. THE FOLLOWING FACTS ARE ELICITED FROM THAT REPORT: THE MATTER IN QUESTION AROSE IN CONNECTION WITH AN ACCELERATED PUBLIC WORKS (APW) PROJECT. AT THE PRESENT TIME ITS FUNCTIONS ARE GENERALLY PERFORMED BY THE OFFICE OF METROPOLITAN DEVELOPMENT. CFA HAD ESTABLISHED PROCEDURES WHEREBY WAGE RATE DETERMINATIONS WERE OBTAINED. A SPECIFIC WAGE RATE DETERMINATION WAS REQUESTED FROM THE DEPARTMENT OF LABOR FOR EACH PROJECT.

B-158879, JUL. 8, 1966

TO SOUTHEASTERN OKLAHOMA BUILDING TRADES COUNCIL:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 29, 1966, WITH ENCLOSURES, ALLEGING CERTAIN IRREGULARITIES IN THE AWARDS OF CONSTRUCTION CONTRACTS BY THE CITY OF MUSKOGEE, OKLAHOMA, UNDER A GRANT FROM THE COMMUNITY FACILITIES ADMINISTRATION, HOUSING AND HOME FINANCE AGENCY. YOU ALLEGE THAT THE BIDDING ON THESE CONSTRUCTION CONTRACTS WAS NOT COMPETITIVE AND THAT THE EMPIRE CONSTRUCTION COMPANY, AND MCMICHAEL PAVING CO. HAD AN ADVANTAGE OVER THE OTHER CONTRACTORS.

BY LETTER OF JUNE 16, 1966, THE OFFICE OF METROPOLITAN DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, TRANSMITTED A REPORT TO THIS OFFICE CONCERNING THE SITUATION IN WHICH YOU ARE INTERESTED. THE FOLLOWING FACTS ARE ELICITED FROM THAT REPORT:

THE MATTER IN QUESTION AROSE IN CONNECTION WITH AN ACCELERATED PUBLIC WORKS (APW) PROJECT, APW-OKLA.-18G. THE CITY OF MUSKOGEE, OKLAHOMA, RECEIVED A 50 PERCENT GRANT-IN-AID UNDER THE PUBLIC WORKS ACCELERATION ACT, 76 STAT. 541, ADMINISTERED BY THE COMMUNITY FACILITIES ADMINISTRATION (CFA), AT THAT TIME A PART OF HOUSING AND HOME FINANCE AGENCY. AT THE PRESENT TIME ITS FUNCTIONS ARE GENERALLY PERFORMED BY THE OFFICE OF METROPOLITAN DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT. LONG BEFORE THE INCEPTION OF THE APW PROGRAMS, CFA HAD ESTABLISHED PROCEDURES WHEREBY WAGE RATE DETERMINATIONS WERE OBTAINED. GENERALLY, A SPECIFIC WAGE RATE DETERMINATION WAS REQUESTED FROM THE DEPARTMENT OF LABOR FOR EACH PROJECT, WITH INFORMATION BEING SUPPLIED BY THE REGIONAL OFFICE AS TO THE TYPE OF PROJECT INVOLVED AND ITS LOCATION. WHEN ISSUED, THE DETERMINATION WAS FORWARDED TO THE APPLICANT AND WAS INCORPORATED BY THE APPLICANT, ALONG WITH STATE WAGE DETERMINATION WHERE REQUIRED BY STATE LAW, INTO THE BID DOCUMENTS AND SUBSEQUENTLY INTO THE CONTRACT DOCUMENTS.

THIS ESTABLISHED PROCEDURE WAS VARIED FOR THE APW PROGRAM FOR SEVERAL REASONS. SINCE THE STATED PURPOSE OF THE APW ACT WAS TO ACCELERATE THE CONSTRUCTION OF NEEDED PUBLIC WORKS, THE CUSTOMARY PERIOD OF FROM THIRTY TO FORTY-FIVE DAYS FOR THE ISSUANCE OF WAGE DETERMINATIONS APPEARED OVERLY LONG IN LIGHT OF PROGRAM OBJECTIVES. IN ADDITION TO THE TIME ELEMENT, A LARGE NUMBER OF PROJECTS WERE INVOLVED, SO THAT A PROJECT-BY-PROJECT DETERMINATION WOULD HAVE BURDENED THE OPERATIONS OF THE DEPARTMENT OF LABOR. AS A RESULT OF MANY DISCUSSIONS, AN AGREEMENT WAS REACHED WITH THE DEPARTMENT OF LABOR WHEREBY THE LATTER WOULD FURNISH CFA WITH WAGE DETERMINATIONS ON A COUNTY BASIS. SUCH COUNTY-WIDE DETERMINATIONS WERE NECESSARILY BROADER THAN THOSE USUALLY ISSUED FOR SPECIFIC PROJECTS AND INCLUDED RATES FOR BOTH HIGHWAY AND BUILDING CONSTRUCTION.

ACCORDING TO PROCEDURE AND AS INDICATED IN THE MATERIAL YOU TRANSMITTED HERE, THE DETERMINATION FOR MUSKOGEE COUNTY WAS REPRODUCED IN ITS ENTIRETY IN THE BID DOCUMENTS, WITH NO INDICATION OF WHETHER THE BUILDING OR HIGHWAY RATES WOULD APPLY TO THE STREET PAVING PROJECT. ON JULY 8, 1963, THE DATE SCHEDULED FOR THE OPENING OF BIDS, THE CONSULTANT TELEPHONED THE CHIEF ENGINEER OF THE FORT WORTH REGIONAL OFFICE TO OBTAIN HIS OPINION AS TO THE APPLICABLE SCALE. THE REGIONAL ENGINEER GAVE HIS OPINION THAT THE HIGHWAY RATE WOULD PREVAIL. APPARENTLY, SEVERAL INQUIRIES WERE MADE TO THE CITY ENGINEER AND CITY ENGINEERING CONSULTANT BY PROSPECTIVE BIDDERS AS TO WHICH SCALE APPLIED. IT APPEARS FROM THE DEPOSITIONS THAT THOSE BIDDERS WHO INQUIRED, AS WELL AS UNION REPRESENTATIVES, WERE INFORMED THAT THE LOWER HIGHWAY RATE WAS CONTROLLING. THE CONTRACTS WERE SUBSEQUENTLY AWARDED IN ACCORDANCE WITH THIS INTERPRETATION.

THE PROJECT FILE INDICATES THAT THE ISSUE CONCERNING THE PREVAILING SCALE CONTINUED AFTER THE AWARD OF THE CONTRACTS. IT APPEARS THAT ATTORNEYS FOR THE CITY, THE UNION AND CERTAIN INTERESTED PERSONS PLACED A CONFERENCE CALL TO THE DEPARTMENT OF LABOR AND WERE INFORMED THAT THE BUILDING WAGE RATES WERE APPLICABLE TO THE CITY PROJECTS AND THAT THE WAGE RATE DETERMINATION FOR THE CITY SHOULD NOT THEREFORE HAVE INCLUDED THE HIGHWAY RATES. THE DEPARTMENT OF LABOR CONCLUDED, HOWEVER, THAT THE CONTRACTORS HAVING BID ON THE COUNTY DETERMINATION UNDER THE ASSUMPTION THAT THE HIGHWAY RATES APPLIED, THE HIGHER OR BUILDING RATES WOULD NOT BE ENFORCED. IT APPEARS THAT THE CITY RESOLUTION OF NOVEMBER 10, 1947, IN EFFECT REQUIRED THAT SPECIFICATIONS FOR PROJECTS AWARDED BY THE CITY CONTAIN WAGE RATES AS DETERMINED BY THE DEPARTMENT OF LABOR FOR BUILDING CONSTRUCTION.

IN VIEW THEREOF, THE OPINION EXPRESSED IN THE REGIONAL OFFICE AS TO THE APPLICABILITY OF THE HIGHWAY RATE ON THE CITY PAVING PROJECT WAS, UNDOUBTEDLY, ERRONEOUS. IT IS OBVIOUS THAT THE ISSUANCE OF COUNTY-WIDE DETERMINATIONS WAS A TIME-SAVING DEVICE AND AGREED UPON IN ORDER TO MEET CONSTRUCTION DEADLINES. ACCORDINGLY, WHEN THE CITY REQUESTED FURTHER CLARIFICATION FROM THE REGIONAL OFFICE AFTER RECEIPT OF THE BLANKET DETERMINATIONS, IT WOULD APPEAR THAT THE ENGINEER RENDERED AN OPINION WITHOUT KNOWLEDGE OF ALL THE FACTS NECESSARY TO MAKE SUCH A DECISION.

THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT DOES NOT APPEAR TO BE IN A POSITION TO SPECULATE AS TO THE REASONS WHY THE CITY AND ITS AGENTS WITH KNOWLEDGE OF THE 1947 RESOLUTION DID NOT APPLY THE BUILDING CONSTRUCTION RATE AND SO NOTE SUCH RATE AS APPLICABLE IN THE BID DOCUMENTS. IT APPEARS THAT THIS ISSUE WAS RAISED BY THE PLAINTIFFS IN A PETITION FILED IN THE DISTRICT COURT, MUSKOGEE COUNTY, OKLAHOMA, IN THE CASE OF ED LOYD, C. W. JENKINS, HORACE BOREN, AND ALL PERSONS SIMILARLY SITUATED V. CITY OF MUSKOGEE, OKLAHOMA, A MUNICIPAL CORPORATION, EMPIRE CONSTRUCTION, INC., A CORPORATION, MUSKOGEE PAVING CO., A CORPORATION, AND MCMICHAEL PAVING COMPANY, A CORPORATION. THE COURT, HOWEVER, FOUND THAT THE CONTRACTS COVERING PROJECT APW-OKLA. 18G "WERE PROPERLY INITIATED, CARRIED OUT, ADVERTISED, AWARDED AND ENTERED INTO, AND THAT ALL OF THE STATUTORY REQUIREMENTS OF THE STATUTES OF THE STATE OF OKLAHOMA AND THE ORDNANCES OF THE CITY OF MUSKOGEE * * * HAVE BEEN FULLY AND COMPLETELY FOLLOWED AND COMPLIED WITH * * *.' IN VIEW OF THE CIRCUMSTANCES AS OUTLINED ABOVE WE SEE NO VALID BASIS ON WHICH TO DISAGREE WITH THE COURT'S CONCLUSION.