B-168511, FEB. 2, 1970

B-168511: Feb 2, 1970

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TO GOVERNMENT SERVICE CONTRACTORS ASSOCIATION: REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 30. YOU SAY THAT YOU ARE. THAT THE SITUATION RAISES THE QUESTION AS TO WHAT IS THE "PREVAILING RATE". THE WAGE RATE FOR FEDERAL WAGE BOARD EMPLOYEES IN THE JANITORIAL OCCUPATIONAL FIELD FOR THE SAN DIEGO AREA IS $2.78 TO $3.12 PER HOUR. THAT A GENERAL COMPARISON OF FEDERAL WAGE BOARD RATES AND SERVICE CONTRACT RATES FOR JANITORIAL EMPLOYEES IN THE SAME LOCALITY REVEALS THAT WAGE BOARD RATES ARE CONSISTENTLY AND CONSIDERABLY HIGHER AND FAR EXCEED THE PREVAILING SERVICE CONTRACT RATE. YOU MAKE THE FOLLOWING STATEMENT: "IT IS DIFFICULT TO UNDERSTAND HOW TWO FEDERAL AGENCIES CAN ARRIVE AT DIFFERENT PREVAILING WAGE RATES.

B-168511, FEB. 2, 1970

BID PROTEST--WAGE BOARD V. SERVICE CONTRACT MINIMUM WAGE RATES DECISION TO GOVERNMENT SERVICE CONTRACTORS ASSOCIATION CONCERNING MINIMUM WAGE DETERMINATIONS FOR JANITORIAL SERVICES AT NAVAL TRAINING CENTER. THE DISPARITY BETWEEN PREVAILING RATES DETERMINED FOR NON-GOVERNMENT EMPLOYEES PURSUANT TO THE SERVICE CONTRACT ACT AND THOSE FOR GOVERNMENT EMPLOYEES HAS BEEN A MATTER OF CONCERN TO CONGRESSIONAL COMMITTEES, GOVERNMENT DEPARTMENTS AND AGENCIES AND THE GAO. SINCE JULY 1, 1968, A COORDINATED FEDERAL WAGE SYSTEM HAS BEEN IN EFFECT TO PROVIDE A FRAMEWORK FOR ELIMINATION OF THE DIFFERENCES. SINCE THE SYSTEM HAS BEEN IN OPERATION FOR A SHORT PERIOD OF TIME ITS EFFECTIVENESS HAS NOT BEEN EVALUATED. HOWEVER IT MAY CURE SOME OF THE FAULTS.

TO GOVERNMENT SERVICE CONTRACTORS ASSOCIATION:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 30, 1969, WITH ENCLOSURE, REGARDING YOUR EARLIER PROTEST AGAINST WAGE DETERMINATION NO. 66-515 (REV. 1) ISSUED BY THE ADMINISTRATOR, WAGE AND HOUR AND PUBLIC CONTRACTS DIVISIONS, DEPARTMENT OF LABOR, IN CONNECTION WITH CONTRACTS FOR JANITORIAL SERVICES FOR THE NAVAL TRAINING CENTER, SAN DIEGO, CALIFORNIA, PURSUANT TO THE SERVICE CONTRACT ACT OF 1965, 41 U.S.C. 351, ET SEQ. (SUPP IV).

YOU INFORM US THAT THE ADMINISTRATION HAS WITHDRAWN THIS DETERMINATION AND HAS DIRECTED THAT WAGE DETERMINATION NO. 67-321 (REV. 3) APPLY TO THE PENDING PROCUREMENT FOR JANITORIAL SERVICES AT THE NAVAL TRAINING CENTER. THE NOW APPLICABLE DETERMINATION REFLECTS THE LOWER RATE DETERMINED TO BE PREVAILING FOR THE REMAINDER OF THE SAN DIEGO METROPOLITAN AREA.

YOU SAY THAT YOU ARE, OF COURSE, SATISFIED WITH THE ADMINISTRATOR'S ACTION, BUT THAT THE SITUATION RAISES THE QUESTION AS TO WHAT IS THE "PREVAILING RATE"; THE WAGE RATE FOR FEDERAL WAGE BOARD EMPLOYEES IN THE JANITORIAL OCCUPATIONAL FIELD FOR THE SAN DIEGO AREA IS $2.78 TO $3.12 PER HOUR, WHEREAS WAGE DETERMINATION NO. 67-321 (REV. 3) APPLICABLE TO THE SAME AREA FOR THE SAME CLASS OF PRIVATELY-EMPLOYED PERSONNEL SPECIFIES A RATE OF $2.25 PER HOUR; AND THAT A GENERAL COMPARISON OF FEDERAL WAGE BOARD RATES AND SERVICE CONTRACT RATES FOR JANITORIAL EMPLOYEES IN THE SAME LOCALITY REVEALS THAT WAGE BOARD RATES ARE CONSISTENTLY AND CONSIDERABLY HIGHER AND FAR EXCEED THE PREVAILING SERVICE CONTRACT RATE.

YOU MAKE THE FOLLOWING STATEMENT:

"IT IS DIFFICULT TO UNDERSTAND HOW TWO FEDERAL AGENCIES CAN ARRIVE AT DIFFERENT PREVAILING WAGE RATES. THIS IS A SITUATION WHICH WE FEEL MAY BE WORTHY OF YOUR ATTENTION."

THE DISPARITY BETWEEN PREVAILING RATES DETERMINED FOR NON GOVERNMENT EMPLOYEES PURSUANT TO THE SERVICE CONTRACT ACT AND THOSE DETERMINED PURSUANT TO 5 U.S.C. 5341 FOR SERVICE EMPLOYEES HIRED DIRECTLY BY THE GOVERNMENT IS KNOWN BOTH BY THIS OFFICE AND BY THE DEPARTMENTS AND AGENCIES INVOLVED, AND HAS ALSO BEEN A MATTER OF CONCERN TO COGNIZANT CONGRESSIONAL COMMITTEES.

UNDER THE SERVICE CONTRACT ACT, THE MINIMUM WAGES TO BE PAID SERVICE EMPLOYEES BY CONTRACTORS WITH THE GOVERNMENT ARE DETERMINED BY A SINGLE AUTHORITY, THE SECRETARY OF LABOR OR HIS AUTHORIZED REPRESENTATIVE, "IN ACCORDANCE WITH THE PREVAILING RATES FOR SUCH EMPLOYEES IN THE LOCALITY." THE RATES SO ESTABLISHED ARE INCORPORATED IN CONTRACTS AS MINIMUMS, BUT DO NOT OTHERWISE CONTROL THE ACTUAL RELATIONS BETWEEN CONTRACTORS AND THEIR EMPLOYEES.

THE PAY OF WAGE BOARD EMPLOYEES IS REQUIRED BY 5 U.S.C. 5431 TO BE "FIXED AND ADJUSTED FROM TIME TO TIME AS NEARLY AS IS CONSISTENT WITH THE PUBLIC INTEREST IN ACCORDANCE WITH PREVAILING RATES" BY THE HEADS OF THE VARIOUS EMPLOYING DEPARTMENTS AND AGENCIES, AND THE RATES OF PAY SO FIXED ARE THE ONLY RATES WHICH MAY BE PAID BY SUCH AGENCIES TO THEIR EMPLOYEES COVERED THEREBY. UNTIL JULY 1, 1968, THE EFFECTIVE DATE OF THE COORDINATED FEDERAL WAGE SYSTEM PROMULGATED BY THE CIVIL SERVICE COMMISSION, THERE WERE NO PROVISIONS FOR CONTROL OR COORDINATION OR REVIEW OF AGENCY PROCEDURES ABOVE THE AGENCY LEVEL FOR THE ENTIRE EXECUTIVE BRANCH, AND EACH AGENCY OPERATED UNDER PROCEDURES DEVELOPED IN PRACTICE OVER PERIODS OF TIME RUNNING BACK TO 1862.

DIFFERENCES BETWEEN THE BASIC PHILOSOPHIES AND POLICIES THAT HAD BEEN DEVELOPED WERE REFLECTED IN THE KINDS AND COVERAGE OF PAY SCHEDULES, WHICH DIFFERED FROM AGENCY TO AGENCY, SOMETIMES EVEN IN THE SAME DEPARTMENT. DIFFERENCES EXISTED IN THE NUMBER OF GRADES PER SCHEDULE, IN THE INDUSTRIES IN WHICH WAGES WERE SURVEYED, IN THE AGENCY PROCEDURES FOR COLLECTING AND ANALYZING THE DATA THAT WERE COLLECTED FROM PRIVATE INDUSTRY, IN THE KIND AND USE OF JOB EVALUATION, AND IN THE DIVERSITY OF OCCUPATIONAL STRUCTURES, AND FINALLY IN THE NUMBER, SPREAD, AND USE OF THE STEP RATES WITHIN THE SYSTEM.

THE SYSTEM DOES NOT AFFECT THE ACTUAL PAY-FIXING AUTHORITY, WHICH UNDER THE STATUTE IS STILL IN THE HEADS OF THE EMPLOYING AGENCIES WHERE IT HAS BEEN SINCE THE ORIGINAL STATUTORY AUTHORITY WAS ESTABLISHED. HOWEVER, BY PROVIDING THAT ACTION TAKEN WILL BE UNDER THE LEADERSHIP OF THE CHAIRMAN OF THE CIVIL SERVICE COMMISSION, IT PROVIDES A FRAMEWORK FOR EFFORTS TO BRING ABOUT THE ELIMINATION OF THE DIFFERENCES BETWEEN WAGE BOARD PROCEDURES TO THE END THAT THE SAME RATE WILL BE PAID FOR THE SAME JOB IN THE SAME COMMUNITY, REGARDLESS OF THE EMPLOYING FEDERAL AGENCY.

SINCE THE SYSTEM HAS BEEN IN OPERATION ONLY FOR A RELATIVELY SHORT PERIOD OF TIME IT IS NOT POSSIBLE AT THIS TIME TO EVALUATE ITS EFFECTIVENESS TO ACCOMPLISH ALL OF ITS OBJECTIVES. IT DOES, HOWEVER, REPRESENT A SERIOUS EFFORT TO CURE AT LEAST SOME OF THE FAULTS OF THE PRESENT SYSTEM REFERRED TO BY YOU.

YOUR INTEREST IN BRINGING THE MATTER TO OUR ATTENTION IS APPRECIATED.