B-160910, AUG. 27, 1968

B-160910, AUG. 27, 1968

TO MR. SECRETARY:

WE REFER TO LETTER DATED APRIL 3, 1968, ADDRESSED TO THE SOLICITOR OF THE DEPARTMENT OF LABOR BY COLONEL REAGAN A. SCURLOCK, FORMER CHAIRMAN, ARMED SERVICES PROCUREMENT REGULATION COMMITTEE, SUGGESTING A REVISION TO 29 CFR 5.4 (A) REGARDING EXTENSION OF WAGE DETERMINATIONS ISSUED BY YOUR DEPARTMENT PURSUANT TO THE DAVIS-BACON ACT AND RELATED STATUTES, WHICH ARE CURRENTLY EFFECTIVE FOR AN INITIAL PERIOD OF 120 DAYS FROM DATE OF ISSUANCE.

COLONEL SCURLOCK FURNISHED A COPY OF THE LETTER TO OUR OFFICE IN A LETTER OF THE SAME DATE WITH WHICH THERE WAS ALSO FURNISHED A COPY OF PROPOSED REVISIONS OF ASPR 18-704.2 RELATING TO THE SUBMISSION BY THE CONTRACTING AGENCIES OF REQUESTS TO YOUR DEPARTMENT FOR EXTENSIONS OF WAGE DETERMINATIONS INCLUDED IN ADVERTISED SOLICITATIONS WHENEVER IT APPEARS THAT AWARD CANNOT BE MADE WITHIN THE 120 DAY PERIOD.

THE ASPR COMMITTEE'S ACTIONS WERE PROMPTED BY A RECOMMENDATION MADE BY OUR OFFICE IN A LETTER DATED JUNE 2, 1967, B-160910, TO THE SECRETARY OF DEFENSE, IN CONJUNCTION WITH OUR DECISION OF THE SAME DATE PUBLISHED AT 46 COMP. GEN. 825. THE DECISION INVOLVED THE PROTEST OF A LOW BIDDER AGAINST THE FAILURE OF THE CONTRACTING OFFICER TO REQUEST EXTENSION OF AN AREA WAGE DETERMINATION INCLUDED IN THE INVITATION FOR BIDS WHERE IT WAS OBVIOUS THAT THE PERIOD OF 18 DAYS BETWEEN THE DATE OF BID OPENING AND THE DATE OF EXPIRATION OF THE WAGE DETERMINATION WOULD NOT BE SUFFICIENT FOR THE PURPOSE OF BID EVALUATION AND AWARD. WHILE WE UPHELD THE CANCELLATION OF THE INVITATION ON OTHER GROUNDS, WE RECOMMENDED TO THE SECRETARY OF DEFENSE THAT CONSIDERATION BE GIVEN TO MODIFYING ASPR 18-704.2 (A) (3) TO REQUIRE THE CONTRACTING OFFICER TO INSTITUTE ACTION TO OBTAIN AN EXTENSION OF THE WAGE RATE DETERMINATION INCLUDED IN THE ADVERTISED SPECIFICATIONS AS SOON AFTER BID OPENING AS HE BECOMES AWARE THAT IT WILL PROBABLY NOT BE FEASIBLE TO MAKE AN AWARD BEFORE THE EXPIRATION OF SUCH DETERMINATION. COPIES OF OUR DECISION AND OF OUR LETTER TO THE SECRETARY ARE ENCLOSED.

AS COLONEL SCURLOCK'S LETTER TO YOUR SOLICITOR INDICATES, THE REVISION OF 29 CFR 5.4 (A) WHICH THE ASPR COMMITTEE HAS SUGGESTED IS BASED ON THE REPORTED EXPERIENCE OF THE CONTRACTING AGENCIES THAT THE GRANT BY YOUR DEPARTMENT OF EXTENSIONS OF WAGE DETERMINATIONS IS A RARITY, AND THAT IN THE FEW RECENT CASES IN WHICH EXTENSIONS HAVE BEEN GRANTED THEY HAVE BEEN QUALIFIED ON BASES TO WHICH OUR OFFICE HAS TAKEN EXCEPTION. SEE B-162944, DECEMBER 8, 1967, AND B-163845, APRIL 17, 1968, COPIES ENCLOSED, WHICH ARE REPRESENTATIVE OF SUCH CASES.

UNDER THE SUGGESTED REVISION, A 120 DAY WAGE DETERMINATION WOULD BE AUTOMATICALLY EXTENDED, IF NECESSARY, IN ORDER TO PROVIDE A MINIMUM PERIOD OF 30 DAYS AFTER BID OPENING FOR THE NORMAL PROCUREMENT PROCEDURES AND AWARD UNDER THE SOLICITATION IN WHICH THE WAGE DETERMINATION WAS INCLUDED. THIS REVISION, COLONEL SCURLOCK STATES,"WOULD DO MORE TO AVOID SERIOUS IMPAIRMENT OF THE CONDUCT OF GOVERNMENT BUSINESS THAN THE PRESENT REGULATION PROVIDING FOR WAGE DETERMINATION EXTENSIONS WHICH AS A PRACTICAL MATTER HAVE NOT BEEN OBTAINABLE.' HOWEVER, WE HAVE BEEN ADVISED THAT THE SOLICITOR OF THE DEPARTMENT OF LABOR, WHILE EXPRESSING APPROVAL OF THE PROPOSED ASPR REVISIONS, HAS REJECTED THE SUGGESTED REVISION OF 29 CFR 5.4 (A).

FOR SOME TIME, WE HAVE BEEN INCREASINGLY CONCERNED OVER THE FREQUENCY WITH WHICH THE ORDERLY AWARD OF CONTRACTS FOR GOVERNMENT CONSTRUCTION PROJECTS HAS BEEN PREJUDICED BY THE TIME LIMITATIONS IMPOSED BY 29 CFR 5.4 (A) ON THE LIFE OF WAGE DETERMINATIONS AND BY THE ABSENCE OF A LIBERAL APPLICATION OF THE PROVISIONS IN THE REGULATIONS WHICH WERE PRESUMABLY INTENDED TO MITIGATE SUCH EFFECTS. ACCORDINGLY, WE ARE TAKING THIS OPPORTUNITY TO BRING THE MATTER TO YOUR ATTENTION WITH THE REQUEST THAT YOU GIVE FURTHER CONSIDERATION TO THE REQUEST OF THE ASPR COMMITTEE, TO THE LEGAL BASES FOR THE POSITION OF YOUR DEPARTMENT, AND TO ITS IMPACT UPON THE CONTRACTING PROCEDURES OF THE AGENCIES RESPONSIBLE FOR THE GOVERNMENT'S CONSTRUCTION PROGRAMS.

BY WAY OF BACKGROUND, WE CALL YOUR ATTENTION TO 41 COMP. GEN. 593 (MARCH 13, 1962), IN WHICH WE HELD THAT AN AWARD OF A CONTRACT ON THE BASIS OF MINIMUM WAGE RATES OTHER THAN THOSE INCLUDED IN THE ADVERTISED SPECIFICATIONS WOULD VIOLATE ESTABLISHED PRINCIPLES OF COMPETITIVE BIDDING. WE STATED, AT PAGES 594 AND 595, THAT "* * * IN SITUATIONS INVOLVING A CHANGE IN WAGE RATES, THE GOVERNMENT PROPERLY COULD NOT REQUIRE OR PERMIT AN OTHERWISE SUCCESSFUL BIDDER TO PERFORM AT HIS ORIGINAL PRICE OR AT A DIFFERENT PRICE IN THE ABSENCE OF A PROVISION IN THE INVITATION FOR BIDS SPECIFICALLY PROVIDING FOR SUCH PROCEDURE.' THAT TIME WAGE DETERMINATIONS WERE ISSUED FOR EACH INDIVIDUAL PROCUREMENT AND HAD A LIFE OF ONLY 90 DAYS FROM THE DATE OF ISSUANCE, A PERIOD WHICH PROVED TO BE INADEQUATE FOR CARRYING THROUGH THE NORMAL AND LONG ESTABLISHED ADMINISTRATIVE PROCEDURES FOR AWARD OF CONTRACTS.

SHORTLY AFTER THE ISSUANCE OF THAT DECISION, THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, C., PROTESTED TO OUR OFFICE AGAINST THE USE IN INVITATIONS FOR BIDS ON CONSTRUCTION PROJECTS OF THE CORPS OF ENGINEERS, DEPARTMENT OF THE ARMY, OF A CLAUSE WHICH RESERVED TO THE GOVERNMENT THE RIGHT TO MAKE AN AWARD NOTWITHSTANDING EXPIRATION OF THE WAGE DETERMINATION INCLUDED IN THE INVITATION AND WHICH PROVIDED FOR THE SUBSTITUTION OF A NEW WAGE DETERMINATION WITH NO CHANGE IN BID PRICE. OUR INQUIRY INTO THE MATTER REVEALED THAT THE CLAUSE HAD AS ITS PURPOSE AVOIDANCE OF THE NECESSITY OF READVERTISING IN EVERY CASE IN WHICH AWARD BY THE CORPS OF ENGINEERS WITHIN 90 DAYS AFTER THE DATE OF THE ADVERTISED WAGE DETERMINATION WAS NOT FEASIBLE AND THAT SUCH PRACTICE WAS PROMPTED BY OUR DECISION OF MARCH 13, 1962, SUPRA.

WHILE THE PROTEST WAS PENDING IN OUR OFFICE, WE RECEIVED FROM THE SOLICITOR OF LABOR A MEMORANDUM DATED OCTOBER 22, 1962, REQUESTING OUR COMMENTS ON A DRAFT OF PROPOSED NEW REGULATIONS RELATING TO WAGE DETERMINATIONS, WHICH, AMONG OTHER THINGS, PROVIDED THAT AN INITIAL WAGE DETERMINATION WOULD BE EFFECTIVE FOR A PERIOD OF 120 CALENDAR DAYS FROM THE DATE OF SUCH DETERMINATION.

ON NOVEMBER 8, 1962, THE PROBLEM WHICH GAVE RISE TO THE USE OF THE DISPUTED CLAUSE BY THE CORPS OF ENGINEERS WAS DISCUSSED AT A MEETING ATTENDED BY REPRESENTATIVES OF THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC., AND BY REPRESENTATIVES OF INTERESTED GOVERNMENT AGENCIES, INCLUDING YOUR DEPARTMENT. AT THE MEETING, YOUR DEPARTMENT'S REPRESENTATIVE SOLICITED COMMENTS FROM THE OTHER PARTICIPANTS REGARDING THE PROPOSED REVISIONS OF THE DAVIS-BACON ACT REGULATIONS, AND THE CONSENSUS WAS THAT THE MOST ACCEPTABLE SOLUTION TO THE PROBLEM WOULD BE A REVISION TO THE REGULATIONS WHICH WOULD PROVIDE THAT A WAGE DETERMINATION PROPERLY INCLUDED IN ADVERTISED SPECIFICATIONS WOULD BE VALID FOR 120 DAYS AFTER BID OPENING.

CONSISTENT WITH THE FOREGOING, IN OUR LETTER OF DECEMBER 3, 1962, B 150223, COMMENTING ON THE DRAFT OF THE PROPOSED REVISION OF THE REGULATIONS, WE ADVISED YOUR DEPARTMENT OF THE PROPOSAL WHICH HAD BEEN ADVOCATED AT THE NOVEMBER 8 MEETING AND WE URGED AN AMENDMENT TO THE REGULATIONS IN ACCORDANCE THEREWITH. FURTHER, IN THE DECISION WHICH WE ISSUED ON APRIL 3, 1963, B-148284, TO THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC., REGARDING THE CLAUSE USED BY THE CORPS OF ENGINEERS, WE MADE REFERENCE TO THE SUGGESTION WHICH WE HAD INCORPORATED IN OUR LETTER OF DECEMBER 3 TO YOUR DEPARTMENT, AND WE STATED THAT, WHILE THE CLAUSE WAS NOT FREE FROM QUESTION, WE DID NOT BELIEVE THAT WE WOULD BE JUSTIFIED IN DISTURBING THE PRACTICE OF THE CORPS OF ENGINEERS PENDING A FINAL POSITION BY YOUR DEPARTMENT ON THE REVISION OF THE REGULATIONS. IN A LETTER OF THE SAME DATE, B-148284, WE FURNISHED YOUR DEPARTMENT A COPY OF THE DECISION, AND WE AGAIN REFERRED TO THE NOVEMBER 8 MEETING AND TO THE SUGGESTED SOLUTION OF THE PROBLEM AND URGED THAT YOUR DEPARTMENT GIVE THE MATTER FAVORABLE CONSIDERATION AND MAKE APPROPRIATE REVISIONS IN THE REGULATIONS.

WHILE CONSIDERATION OF THE PROPOSED NEW REGULATIONS AND OF OUR RELATED COMMENTS AND SUGGESTION WERE PENDING BEFORE YOUR DEPARTMENT, WE RECEIVED FROM A VETERANS ADMINISTRATION (VA) CONTRACTING OFFICER A LETTER DATED AUGUST 16, 1963, REQUESTING OUR DECISION CONCERNING THE PROPRIETY OF A PROVISION IN A VA INVITATION FOR BIDS WHICH STATED THAT IN THE EVENT OF EXPIRATION OF THE ADVERTISED WAGE RATES AFTER BID OPENING BUT PRIOR TO AWARD AN ADVISORY DETERMINATION WOULD BE OBTAINED FROM YOUR DEPARTMENT AND INCORPORATED INTO THE CONTRACT BY CHANGE ORDER. ON THE GROUNDS THAT IN SUCH CASE THE BIDDERS WERE COMPETING ON THE BASIS OF THE RATES ADVERTISED IN THE INVITATION AND THEREFORE ON AN EQUAL BASIS, AND THAT AN EQUITABLE ADJUSTMENT TO THE SUCCESSFUL LOW BIDDER WOULD NEITHER PREJUDICE THE GOVERNMENT NOR THE OTHER BIDDERS, WE STATED IN OUR DECISION B-152313, SEPTEMBER 9, 1963, PUBLISHED AT 43 COMP. GEN. 238, THAT WE WOULD NOT OBJECT TO AN AWARD UNDER A CONTRACT BASED ON THE INVITATION IN QUESTION.

ON JANUARY 4, 1964, YOUR REVISED REGULATIONS (PARTS 1, 3 AND 5, TITLE 29, CODE OF FEDERAL REGULATIONS) WERE PUBLISHED IN THE FEDERAL REGISTER, 29 F.R. 95-104. THE INTRODUCTORY MATERIAL PUBLISHED WITH THE REGULATIONS INCLUDED THE FOLLOWING:

"THE PRINCIPAL CHANGES ACCOMPLISHED BY THE REVISIONS ARE DESIGNED:

"/1) TO FACILITATE THE ADMINISTRATION OF THE PREVAILING WAGE PROVISIONS OF THE DAVIS-BACON ACT AND ITS RELATED STATUTES BY MAKING WAGE DETERMINATIONS EFFECTIVE FOR 120 CALENDAR DAYS FROM THE DATE OF THEIR ISSUANCE, BY PROVIDING A UNIFORM PROCEDURE FOR THE ESTABLISHMENT OF WAGE RATES FOR CLASSIFICATIONS NOT INCLUDED IN WAGE DETERMINATIONS, AND BY GIVING THE ADMINISTERING AGENCIES MORE TIME FOR IMPLEMENTING CHANGES IN WAGE DETERMINATIONS.'

THE PROVISIONS CONCERNING THE LIFE OF WAGE DETERMINATIONS, CONTAINED IN SECTION 5.4 (A), AT PAGE 100, WERE AS FOLLOWS:

"WAGE DETERMINATIONS INITIALLY ISSUED SHALL BE EFFECTIVE FOR 120 CALENDAR DAYS FROM THE DATE OF SUCH DETERMINATIONS. IF SUCH A WAGE DETERMINATION IS NOT USED IN THE PERIOD OF ITS EFFECTIVENESS, IT IS VOID. IF IT APPEARS THAT A WAGE DETERMINATION MAY EXPIRE BETWEEN BID OPENING AND AWARD, THE AGENCY SHOULD REQUEST A NEW WAGE DETERMINATION SUFFICIENTLY IN ADVANCE OF THE BID OPENING TO ASSURE RECEIPT PRIOR THERETO. HOWEVER, WHEN DUE TO UNAVOIDABLE CIRCUMSTANCES A DETERMINATION EXPIRES BEFORE AWARD AND AFTER BID OPENING, THE SOLICITOR UPON A WRITTEN FINDING TO THAT EFFECT BY THE HEAD OF THE FEDERAL AGENCY IN INDIVIDUAL CASES MAY EXTEND THE EXPIRATION DATE OF A DETERMINATION WHENEVER HE FINDS IT NECESSARY AND PROPER IN THE PUBLIC INTEREST TO PREVENT INJUSTICE OR UNDUE HARDSHIP OR TO AVOID SERIOUS IMPAIRMENT IN THE CONDUCT OF GOVERNMENT BUSINESS.'

WHILE THE PERIOD OF THE EFFECTIVENESS OF WAGE DETERMINATIONS WAS THUS MEASURED FROM THE DATE OF THE DETERMINATION RATHER THAN FROM THE DATE OF BID OPENING AS HAD BEEN RECOMMENDED BY OUR OFFICE WITH THE SANCTION OF ALL BUT ONE OF THE PARTICIPANTS IN THE NOVEMBER 8, 1962, MEETING, IT APPEARED THAT THE DIFFICULTIES WHICH HAD BEEN ENCOUNTERED UNDER THE FORMER 90-DAY REGULATION HAD BEEN AMELIORATED BY PROVIDING THE ADDITIONAL 30 DAYS DURING WHICH A CONTRACTING AGENCY COULD COMPLETE THE REQUIRED PROCEDURAL STEPS LEADING TO A CONTRACT AWARD, AND IT WAS ANTICIPATED THAT THIS ADDITIONAL TIME, PLUS A POSSIBLE EXTENSION AS AUTHORIZED BY THE REVISED REGULATIONS, WOULD PROVE ADEQUATE "TO PREVENT INJUSTICE OR UNDUE HARDSHIP OR TO AVOID SERIOUS IMPAIRMENT IN THE CONDUCT OF GOVERNMENT BUSINESS.' SUCH VIEWS WERE REFLECTED IN 44 COMP. GEN. 776, JUNE 7, 1965, AND IN 45 ID. 325, DECEMBER 13, 1965.

IN A STATEMENT OF JANUARY 22, 1964, TO THE GENERAL SUBCOMMITTEE ON LABOR OF THE HOUSE COMMITTEE ON EDUCATION AND LABOR, THE SOLICITOR OF LABOR REPORTED AS FOLLOWS:

"WE HAVE EXTENDED THE EFFECTIVE DATE OF THE WAGE DETERMINATIONS FROM 90 TO 120 DAYS FROM THEIR ISSUANCE. WE HAVE ALSO EXTENDED, FROM 5 TO 10 DAYS BEFORE THE OPENING OF BIDS, THE PERIOD IN WHICH CHANGES IN WAGE RATES NEED NOT BE MADE. THESE ACTIONS WILL SIGNIFICANTLY IMPROVE THE USE OF WAGE DETERMINATIONS AND REDUCE THE PAPER WORK IN THE CONTRACTING AGENCIES, AS WELL AS THE DEPARTMENT OF LABOR. AS YOU REALIZE, THESE CHANGES WERE BEFORE THE COMMITTEE AT THE TIME THE REPORT WAS ISSUED AND RECEIVED ITS FULL APPROBATION.'

UNDER DATE OF MARCH 22, 1965, YOU FURNISHED TO THE HONORABLE JAMES ROOSEVELT, CHAIRMAN OF THE SUBCOMMITTEE, IN RESPONSE TO HIS REQUEST, A REPORT ON YOUR DEPARTMENT'S EXPERIENCE UNDER YOUR REVISED REGULATIONS DURING THE FIRST YEAR AFTER THEIR PROMULGATION, WHICH INCLUDED THE FOLLOWING STATEMENT:

"3. CHANGE OF EFFECTIVENESS OF WAGE DETERMINATIONS FROM 90 TO 120 DAYS (SEC. 5.4 (A) ).

"COMMENT: THESE CHANGES WERE DESIGNED TO LEND STABILITY TO THE PROCUREMENT PROCESS WITH RESPECT TO WAGE DETERMINATIONS ISSUED UNDER THE PERTINENT LEGISLATION, BUT STILL PROVIDE FOR THE ISSUANCE OF WAGE DETERMINATIONS WITH SUFFICIENT FREQUENCY TO MAINTAIN CURRENT PREVAILING WAGE PRACTICES. OUR EXPERIENCE UNDER THESE CHANGES HAS REACHED FULLY OUR EXPECTATIONS. "AN INDICATION OF THE EFFECTIVENESS OF THIS PROVISION IS THE FACT THAT WE HAVE HAD NUMEROUS VERBAL COMMENTS FROM REPRESENTATIVES OF CONTRACTING AGENCIES STATING THAT THIS HAS ASSISTED THEM CONSIDERABLY IN ORDERLY PROCUREMENT. THAT IS, THE EXTRA 30 DAYS GIVES THEM GREATER FLEXIBILITY IN ESTABLISHING THEIR ADVERTISING, BID OPENING, AND AWARD DATES WITHOUT INTERRUPTION OR READVERTISING. PREVIOUSLY, IT WAS THEIR EXPERIENCE THAT THE 90 DAY LIMITATION WAS INADEQUATE AND OFTEN CAUSED THEM TO READVERTISE BECAUSE OF THE EXPIRATION OF A WAGE DETERMINATION. FURTHERMORE, THE EXTENDED LIFE OF THE WAGE DETERMINATIONS MEAN THAT THEY DO NOT HAVE TO BE ISSUED AS OFTEN AT MILITARY INSTALLATIONS WHERE CONTRACTS ARE CONTINUALLY BEING AWARDED FOR CONSTRUCTION. THIS PROCEDURE HAS SUBSTANTIALLY REDUCED THE NUMBER OF REISSUES THAT WERE NECESSARY DUE TO THE EXPIRATION OF THE WAGE DETERMINATION PRIOR TO OPENING OF BIDS. THIS HAS ELIMINATED A LOT OF PAPERWORK IN THIS OFFICE AND IN THE REQUESTING AGENCIES.'

IN RESPONSE TO A REQUEST FROM REPRESENTATIVE ROOSEVELT FOR OUR VIEWS ON YOUR REPORT, WE COMMENTED AS FOLLOWS IN A LETTER DATED JUNE 18, 1965, B- 148956, WITH RESPECT TO THE EXTENSION OF EFFECTIVENESS OF WAGE DETERMINATIONS FROM 90 TO 120 DAYS:

"3. CHANGE OF EFFECTIVENESS OF WAGE DETERMINATIONS FROM 90 TO 120 DAYS (SECTION 5.4 (A) ).

"PRIOR TO THE JANUARY 1964 REVISION OF THE DEPARTMENT'S REGULATIONS THE CONSTRUCTION CONTRACTING ACTIVITIES OF FEDERAL AGENCIES WERE SERIOUSLY BURDENED BY THE EFFECT OF THE 90 DAY AWARD RESTRICTION ON THE EFFECTIVENESS OF THE DEPARTMENT'S WAGE DETERMINATIONS. THIS RESTRICTION WAS IMPOSED BY THE SECRETARY OF LABOR'S REGULATION PROVIDING THAT A PREVAILING WAGE DETERMINATION SHOULD BE EFFECTIVE ONLY FOR 90 DAYS FROM ITS DATE, THUS IN EFFECT PROHIBITING AWARD OF A CONTRACT SPECIFYING SUCH WAGE RATES AS THE MINIMUM WAGE SCHEDULE UNLESS THE AWARD WAS MADE WITHIN 90 DAYS. SINCE THE DAVIS-BACON ACT REQUIRES THE MINIMUM WAGE SCHEDULE TO BE INCLUDED IN THE ADVERTISED SPECIFICATIONS, THE CLOSE SCHEDULING NECESSITATED BY THE 90 DAY LIMITATION AFFORDED LITTLE IF ANY LEEWAY FOR NORMAL HANDLING OF ANY OF THE FREQUENTLY ENCOUNTERED DELAYS IN THE ADVERTISING, BIDDING AND AWARD PROCESS. IN AN ATTEMPT TO AMELIORATE THE DIFFICULTIES IMPOSED UPON THE PROCUREMENT PROCESS BY THE 90 DAY REGULATION THE DEPARTMENT OF LABOR REVISED ITS REGULATIONS TO INCREASE THE EFFECTIVE LIFE OF A WAGE DETERMINATION FROM 90 TO 120 DAYS AND ALSO TO PROVIDE AN EXTENSION OF A WAGE DETERMINATION WHEN DUE TO UNAVOIDABLE CIRCUMSTANCES THE DETERMINATION EXPIRES AFTER BID IPENING BUT PRIOR TO AWARD, AND IT IS NECESSARY AND PROPER IN THE PUBLIC INTEREST TO PREVENT INJUSTICE OR UNDUE HARDSHIP OR TO AVOID SERIOUS IMPAIRMENT IN THE CONDUCT OF GOVERNMENT BUSINESS. WHILE CASES MAY ARISE IN THE FUTURE IN WHICH CONTRACTS CANNOT BE AWARDED WITHIN THE 120 DAY EFFECTIVE PERIOD OF A WAGE DETERMINATION, WE FEEL THAT ANY DIFFICULTIES WHICH COULD RESULT FROM THE 120 DAY LIMITATION COULD BE ELIMINATED BY THE GRANTING OF AN EXTENSION BY THE SOLICITOR OF LABOR UNDER SECTION 5.4 (A). HOWEVER, WE HAVE NO INFORMATION AS TO WHAT THE POLICY OF THE SOLICITOR WILL BE IN THE EXERCISE OF THIS AUTHORITY.'

HOWEVER, AS IS INDICATED EARLIER IN THIS LETTER THE JANUARY 1964 REVISIONS TO THE DAVIS-BACON ACT REGULATIONS HAVE NOT ACHIEVED THE OBJECTIVES SOUGHT TO BE ACCOMPLISHED. THE PROBLEMS ARE TWOFOLD. FIRST, THE CONTRACTING AGENCIES ARE REQUIRED TO USE THE PERIODIC AREA WAGE DETERMINATIONS WHICH YOUR DEPARTMENT NOW ISSUES IN MOST MAJOR CONSTRUCTION AREA IN LIEU OF INDIVIDUAL WAGE DETERMINATIONS FOR EACH PROCUREMENT, WITH THE FREQUENT RESULT (AS IN 45 COMP. GEN. 325 AND 46 ID. 825) THAT THE PERIOD BETWEEN BID OPENING AND EXPIRATION OF THE ADVERTISED WAGE DETERMINATION IS FAR TOO SHORT FOR MAKING AWARD UNDER ESTABLISHED PROCUREMENT PROCEDURES. SECOND, IN SUCH CIRCUMSTANCES OR IN OTHER CASES IN WHICH FOR SOME VALID REASON, SUCH AS CONSIDERATION OF A BID PROTEST, THE AWARD CANNOT BE PROCESSED DURING THE 120 DAY LIFE OF THE ADVERTISED AREA WAGE DETERMINATION, YOUR DEPARTMENT HAS EITHER DENIED THE CONTRACTING AGENCY'S REQUEST FOR EXTENSION OF THE WAGE DETERMINATION, OR HAS ISSUED A DETERMINATION AS IN B-162944 AND B 163845, SUPRA, WITH SUCH QUALIFICATIONS THAT AN AWARD ON THE BASIS THEREOF WOULD NOT BE IN ACCORD WITH THE DAVIS- BACON ACT AND WOULD ALSO VIOLATE THE BASIC PRINCIPLES OF THE COMPETITIVE BIDDING PROCEDURE.

AS A MATTER OF STRICT LEGAL PRINCIPLE WE HAVE CONSIDERABLE DIFFICULTY IN FINDING SUPPORT FOR THE APPARENT OBJECTIVE OF YOUR REGULATIONS, WHICH SEEMS TO BE THAT EVERY CONSTRUCTION CONTRACT AWARDED SHOULD INCORPORATE MINIMUM WAGE RATES EQUAL TO THOSE PREVAILING AT THE TIME OF AWARD. THIS NOT ONLY IS NOT REQUIRED BY THE DAVIS-BACON ACT, BUT APPEARS TO BE POSSIBLY INCONSISTENT WITH THE PURPOSE OF THE 1935 AMENDMENT TO THAT ACT, WHICH WE BELIEVE WAS TO SUBSTITUTE FOR THE PREVIOUS REQUIREMENT THAT THE WAGE RATES PAID THROUGHOUT THE PERIOD OF CONTRACT PERFORMANCE BE NOT LESS THAN THE PREVAILING RATES IN THE LOCALITY, A CONTRACTUAL STIPULATION OF MINIMUM WAGE RATES, BASED UPON RATES PREVAILING AT THE TIME OF INSTITUTION OF THE PROCUREMENT PROCESS. WE THINK THIS IS CLEAR FROM THE REQUIREMENT OF THE AMENDED ACT, THAT THE ADVERTISED SPECIFICATIONS SHALL CONTAIN THE MINIMUM WAGE RATES TO BE PAID IN THE PERFORMANCE OF THE CONTRACT WORK, AND FROM THE ABSENCE OF ANY PROVISION IN THE ACT FOR MODIFICATION OR ADJUSTMENT OF SUCH CONTRACTUAL RATES AT ANY TIME AFTER THE ORIGINAL ADVERTISING, NO MATTER HOW LONG A TIME MAY BE REQUIRED FOR PERFORMANCE.

WE HAVE NO QUESTION AS TO YOUR AUTHORITY TO ISSUE REASONABLE REGULATIONS FOR IMPLEMENTATION OF THE ACT, AND DO NOT QUESTION THE PROPRIETY OF A LIMITATION, SUCH AS IS IMPOSED BY THE FIRST TWO SENTENCES OF 29 CFR 5.4 (A), UPON THE TIME WITHIN WHICH A WAGE DETERMINATION FURNISHED BY YOU IN ACCORDANCE WITH THE ACT MAY BE "USED" BY THE CONTRACTING AGENCY. IN THE LIGHT OF THE STATUTORY LANGUAGE, HOWEVER, WE QUESTION WHETHER "USE" OF THE DETERMINATION PROPERLY SHOULD BE CONSIDERED AS INVOLVING ANYTHING MORE THAN THE INCORPORATION OF THE RATES DETERMINED INTO THE ADVERTISED SPECIFICATIONS UPON WHICH BIDS ARE SOLICITED. IF YOUR DETERMINATION IS SO USED WITHIN THE PERIOD PRESCRIBED BY YOU, WE FIND NO JUSTIFICATION IN THE STATUTE FOR ANY CHANGE, MODIFICATION OR ADJUSTMENT THEREOF AFTER THE ADVERTISING OR SOLICITATION, PROVIDED THE PROCUREMENT PROCEEDS AND A CONTRACT IS AWARDED IN THE NORMAL MANNER PRESCRIBED BY THE PROCUREMENT LAWS AND REGULATIONS, WITHOUT UNREASONABLE OR UNNECESSARY DELAY. THEREFORE QUESTION THE REASONABLENESS OF THE PROVISIONS OF THE THIRD SENTENCE OF THE REGULATION IN QUESTION, UNLESS THE REMEDIAL PROVISIONS OF THE FOLLOWING SENTENCE ARE LIBERALLY APPLIED TO FACILITATE RATHER THAN TO IMPEDE THE NORMAL CONTRACTING PROCESS IN ACCORDANCE WITH THE LEGAL REQUIREMENT FOR AWARD OF A CONTRACT ON THE BASIS OF THE MOST FAVORABLE BID OR PROPOSAL RESPONSIVE TO THE TERMS OF THE GOVERNMENT'S SOLICITATION.

AS INDICATED ABOVE, THE PRINCIPAL DIFFICULTY CURRENTLY BEING ENCOUNTERED BY THE CONTRACTING AGENCIES RESULTS FROM THE PRACTICE OF YOUR DEPARTMENT OF ISSUING GENERAL WAGE DETERMINATIONS FOR PARTICULAR AREAS, PURSUANT TO 2. CFR 5.3 (B), AND INCLUDING IN SUCH DETERMINATIONS A SPECIFIC EXPIRATION DATE, GENERALLY 120 DAYS AFTER THE DATE OF ISSUANCE OF THE DETERMINATION. BY INTERPRETATION OF THIS LIMITATION IN CONJUNCTION WITH THE PROVISIONS OF 29 CFR 5.4 (A) THE RESULT IS REACHED THAT UNLESS AN AGENCY ISSUES A SOLICITATION WITHIN 30 DAYS AFTER THE DATE OF SUCH A GENERAL AREA DETERMINATION IT DOES NOT HAVE AVAILABLE FOR CONTRACT AWARD EVEN THE 90 DAYS PROVIDED UNDER YOUR FORMER REGULATIONS, WHICH WAS GENERALLY CRITICIZED AS INADEQUATE. IT IS THUS CLEAR THAT YOUR 1964 AMENDMENT OF THE REGULATIONS HAS NOT ONLY FAILED TO ACCOMPLISH THE OBJECTIVE OF AMELIORATING THE DIFFICULTIES EXPERIENCED UNDER THE 90 DAY LIMITATION, BUT HAS IN FACT SUBSTANTIALLY INCREASED THEM.

WE BELIEVE THAT UNDER THE LANGUAGE OF THE DAVIS-BACON ACT THE MINIMUM WAGE RATES REQUIRED TO BE INCLUDED IN THE SPECIFICATIONS ADVERTISED IN A CONTRACT SOLICITATION ARE TO BE BASED UPON YOUR DETERMINATION OF WAGES "PREVAILING" AT THE TIME THE DETERMINATION IS PROVIDED TO THE AGENCY. SEE B-164097, JUNE 20, 1968, 47 COMP. GEN. ----. SINCE A GENERAL AREA DETERMINATION ISSUED BY YOU, AT LEAST SO LONG AS IT REMAINS IN EFFECT, MAY BE REGARDED AS A CONTINUING REPRESENTATION THAT THE RATES THEREIN STATED ARE THE RATES PREVAILING ON ANY GIVEN DATE, WE HAVE SERIOUS DOUBT AS TO THE REASONABLENESS OF THE ATTEMPTED RESTRICTION ON THE RIGHT OF A CONTRACTING AGENCY TO AWARD A CONTRACT ON THE BASIS OF ADVERTISED SPECIFICATIONS CONTAINING SUCH RATES WITHIN 120 DAYS FROM THE DATE OF THE SOLICITATION.

WE THEREFORE RECOMMEND THAT YOU RECONSIDER APPROVAL OF THE REVISION OF 29 CFR 5.4 (A) AS PROPOSED BY THE ASPR COMMITTEE OR, IN THE ALTERNATIVE, A REVISION THEREOF WHICH WOULD MAKE THE WAGE DETERMINATION EFFECTIVE FOR 120 DAYS FROM THE DATE OF BID OPENING AS WAS ORIGINALLY PROPOSED IN OUR LETTER OF DECEMBER 3, 1962, B-150223, TO YOU, OR AT THE LEAST FROM THE DATE OF ISSUANCE OF THE SOLICITATION IN WHICH THE MINIMUM WAGE RATE WAS INCORPORATED.

WE SHALL BE GLAD TO ARRANGE FOR FURTHER DISCUSSION OF THESE MATTERS WITH YOUR REPRESENTATIVES OR TO RECEIVE AN EXPRESSION OF YOUR VIEWS AND COMMENTS THEREON.