B-164097, JUNE 20, 1968, 47 COMP. GEN. 754

B-164097, JUNE 20, 1968, 47 COMP. GEN. 754

CONTRACTS - LABOR STIPULATIONS - DAVIS-BACON ACT - MINIMUM WAGE DETERMINATIONS - PROSPECTIVE WAGE RATE INCREASE UNDER AN INVITATION CONTAINING A PREVAILING MINIMUM WAGE DETERMINATION BY THE SECRETARY OF LABOR TO COVER LABORERS AND MECHANICS TO BE EMPLOYED ON A PROPOSED FLOOD CONTROL PROJECT, THE FACT THAT BIDS ARE SCHEDULED TO BE OPENED A FEW DAYS BEFORE THE OCCURRENCE OF AN AUTOMATIC ESCALATION OF WAGE RATES PURSUANT TO A LABOR AGREEMENT WITH THE UNION IS NO REASON TO POSTPONE THE SCHEDULED OPENING OF BIDS. THE DAVIS-BACON ACT, 40 U.S.C. 276A, DOES NOT PROVIDE FOR THE MODIFICATION OR ADJUSTMENT OF ADVERTISED PREVAILING MINIMUM WAGE RATES FOR LABORERS AND MECHANICS EMPLOYED ON CONSTRUCTION PROJECTS, NOR DOES THE SPECIFICATION OF MINIMUM WAGES IN THE INVITATION CONSTITUTE A REPRESENTATION THAT LABOR CAN BE OBTAINED AT SUCH RATES.

TO STANDARD DREDGING CORPORATION, JUNE 20, 1968:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED APRIL 22, 1968, PROTESTING AGAINST THE WAGE RATE DETERMINATION CONTAINED IN INVITATION FOR BIDS NO. DACW17-68-B-0051 AS BEING UNFAIR TO CONTRACTORS BOUND BY AN AGREEMENT WITH LOCAL 25, MARINE DIVISION, INTERNATIONAL UNION OF OPERATING ENGINEERS, AND REQUESTING THAT THIS OFFICE ARRANGE FOR A POSTPONEMENT OF THE DATE SET FOR THE OPENING OF BIDS.

THE INVITATION, WHICH WAS FOR SHOAL REMOVAL AT CANAL 43, CENTRAL AND SOUTHERN FLORIDA FLOOD CONTROL PROJECT, WAS ISSUED BY THE JACKSONVILLE DISTRICT CORPS OF ENGINEERS, DEPARTMENT OF THE ARMY, ON APRIL 1, 1968, WITH OPENING SET FOR APRIL 25, 1968. (AN ADVANCE NOTICE TO BIDDERS HAD BEEN DISTRIBUTED ON MARCH 22, 1968). INASMUCH AS THE PROPOSED CONSTRUCTION CONTRACT WAS SUBJECT TO THE DAVIS-BACON ACT,AS AMENDED, 40 U.S.C. 276A, THE SPECIFICATIONS INCLUDED IN THE INVITATION CONTAINED, AS REQUIRED THEREBY, A PROVISION STATING THE MINIMUM WAGES TO BE PAID VARIOUS CLASSES OF LABORERS AND MECHANICS, BASED UPON THE WAGES DETERMINED BY THE SECRETARY OF LABOR TO BE PREVAILING FOR THE CORRESPONDING CLASSES OF LABORERS AND MECHANICS EMPLOYED ON PROJECTS OF A CHARACTER SIMILAR TO THE CONTRACT WORK IN THE CITY, TOWN, VILLAGE, OR OTHER CIVIL SUBDIVISION OF THE STATE IN WHICH THE WORK IS TO BE PERFORMED. THE PREVAILING WAGE DETERMINATION OF THE SECRETARY OF LABOR USED IN THIS INSTANCE WAS DECISION NO. AH 12,434, DATED MARCH 14, 1968.

BIDS WERE OPENED AS SCHEDULED AND SEVEN BIDS WERE FOUND TO HAVE BEEN SUBMITTED. THE NORFOLK DREDGING CO. WAS LOW BIDDER WITH A BID OF $998,000. YOUR BID AT $1,098,800 WAS THIRD LOW. ON MAY 6, 1968, AWARD WAS MADE TO NORFOLK DREDGING CO.

YOU SAY THAT THE WAGE RATES CONTAINED IN THE INVITATION WERE THE SAME AS THOSE FIXED BY YOUR AGREEMENT WITH THE UNION, BUT THAT UNDER THE TERMS OF THAT AGREEMENT, WHICH PROVIDES FOR AUTOMATIC ESCALATION EVERY 3 YEARS, THOSE RATES EXPIRED ON APRIL 30, 1968. IT THUS APPEARS THAT YOU HAVE REQUESTED POSTPONEMENT OF BID OPENING SOLELY BECAUSE THE WAGE RATE DETERMINATION IN EFFECT AT THE TIME OF THE ISSUANCE OF THE INVITATION FOR BIDS DID NOT REFLECT WAGE INCREASES NEGOTIATED WITH THE UNION WHICH BECAME EFFECTIVE MAY 1, 1968, ABOUT 45 DAYS AFTER THE DETERMINATION WAS ISSUED AND 5 DAYS AFTER THE DAY SET FOR BID OPENING.

THE ORIGINAL DAVIS-BACON ACT OF MARCH 3, 1931, 46 STAT. 1494, REQUIRED THAT GOVERNMENT CONSTRUCTION CONTRACTS CONTAIN A PROVISION THAT THE RATE OF WAGES FOR LABORERS AND MECHANICS EMPLOYED ON THE WORK BE NOT LESS THAN THE PREVAILING RATE FOR SIMILAR WORK. BY THE ACT OF AUGUST 30, 1935, 49 STAT. 1011, THERE WAS SUBSTITUTED THE REQUIREMENT, STILL IN FORCE, THAT THE ADVERTISED SPECIFICATIONS FOR SUCH CONTRACTS CONTAIN A MINIMUM WAGE RATE PROVISION. NO PROVISION WAS MADE FOR ANY MODIFICATION OR ADJUSTMENT OF THE ADVERTISED MINIMUM WAGE RATES, AND IT HAS BEEN HELD BY THE SUPREME COURT THAT THE SPECIFICATION OF MINIMUM WAGE RATES DOES NOT CONSTITUTE A REPRESENTATION BY THE GOVERNMENT THAT LABOR CAN BE OBTAINED BY THE CONTRACTOR AT SUCH RATES. SEE UNITED STATES V BINGHAMTON CONSTRUCTION CO., 347 U.S. 171.

SINCE THE MINIMUM RATES REQUIRED TO BE FIXED IN THE ADVERTISED SPECIFICATIONS FOR THE CONTRACT, IT IS CLEAR THAT SUCH RATES ARE TO BE BASED ON THE PREVAILING RATES EXISTING AT THE TIME THE CONTRACT IS ADVERTISED. UNDER THE CURRENT PROCEDURES OF THE DEPARTMENT OF LABOR, PREVAILING WAGE RATES IN THE CONSTRUCTION INDUSTRY ARE DETERMINED PERIODICALLY FOR VARIOUS AREAS OF THE COUNTRY, AND UNTIL SUCH DETERMINATIONS ARE MODIFIED BY LATER DETERMINATIONS OR EXPIRE BY THEIR OWN TERMS THEY REPRESENT THE CORRECT RATES TO BE USED IN ADVERTISING FOR BIDS ON CONTRACTS IN THOSE AREAS. WE ARE AWARE OF NO AUTHORITY FOR CONSIDERING AS "PREVAILING" A RATE WHICH IS NOT IN FACT BEING PAID AT THE TIME A CONTRACT SPECIFICATION IS ADVERTISED IN A SOLICITATION OF BIDS, HOWEVER DEFINITE THE BELIEF MAY BE THAT IT WILL THEREAFTER BECOME THE PREVAILING RATE.

INASMUCH AS THE REGULATIONS OF THE SECRETARY OF LABOR, 29 CFR 5.4 (A), PROVIDE THAT WAGE DETERMINATIONS SHALL BE EFFECTIVE FOR 120 CALENDAR DAYS, WAGE RATE DETERMINATION NO. AH-12,434 WAS PROPERLY INCLUDED IN THE ADVERTISED SPECIFICATIONS FOR THE SUBJECT CONTRACT, AND WE ARE OF THE VIEW THAT THE PROSPECTIVE WAGE RATE INCREASE FURNISHED NO LEGAL REASON FOR POSTPONING THE BID OPENING.

IN THE CIRCUMSTANCES THE AWARD MADE WAS A VALID AND PROPER ONE, AND YOUR PROTEST MUST BE DENIED.