B-129205, OCTOBER 30, 1956, 36 COMP. GEN. 341

B-129205: Oct 30, 1956

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ARE BASED ON MINIMUM WAGE RATES DETERMINED BY THE SECRETARY OF LABOR AS WAGES PREVAILING IN THE CONTRACT AREA. THE VALIDITY OF A CONTRACT WHICH CONTAINED A MINIMUM WAGE SCHEDULE IS NOT AFFECTED BY A SUBSEQUENT DETERMINATION BY THE SECRETARY OF LABOR THAT THE WAGE SCHEDULE WAS INCORRECT. 1956: REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 10. IT IS REPORTED THAT. THERE WAS INCORPORATED INTO THE SUBJECT CONTRACT A SCHEDULE OF LABOR CLASSIFICATIONS AND WAGE RATES AS DETERMINED BY THE SECRETARY OF LABOR ON SEPTEMBER 9. THE DEPARTMENT OF LABOR ADVISED THE COMMISSIONER OF RECLAMATION THAT DUE TO AN INADVERTENCE THE WAGE RATE FOR CARPENTERS SHOULD HAVE BEEN SPECIFIED IN ITS ORIGINAL DECISION AS $2.05 PER HOUR.

B-129205, OCTOBER 30, 1956, 36 COMP. GEN. 341

CONTRACTS - LABOR STIPULATIONS - DAVIS-BACON ACT - REVISION OF WAGE SCHEDULE THE WAGE SCHEDULES REQUIRED TO BE INCLUDED IN GOVERNMENT CONTRACT PURSUANT TO THE DAVIS-BACON ACT, 40 U.S.C. 276A, ARE BASED ON MINIMUM WAGE RATES DETERMINED BY THE SECRETARY OF LABOR AS WAGES PREVAILING IN THE CONTRACT AREA, AND, THEREFORE, THE VALIDITY OF A CONTRACT WHICH CONTAINED A MINIMUM WAGE SCHEDULE IS NOT AFFECTED BY A SUBSEQUENT DETERMINATION BY THE SECRETARY OF LABOR THAT THE WAGE SCHEDULE WAS INCORRECT, AND A REVISION OF THE WAGE SCHEDULE DOES NOT JUSTIFY REFORMATION OF THE CONTRACT.

TO THE SECRETARY OF THE INTERIOR, OCTOBER 30, 1956:

REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 10, 1956, FROM THE UNDER SECRETARY OF THE INTERIOR, WHICH TRANSMITTED A COPY OF A LETTER, WITH ENCLOSURES, FROM THE ASSISTANT COMMISSIONER AND CHIEF ENGINEER OF THE BUREAU OF RECLAMATION TO THE COMMISSIONER OF RECLAMATION, CONCERNING A CLAIM BY THE PLATTE VALLEY CONSTRUCTION COMPANY FOR REIMBURSEMENT OF CERTAIN ALLEGED INCREASED COSTS UNDER CONTRACT NO. 14 06-D-1037, DATED NOVEMBER 3, 1954, AND REQUESTED OUR DECISION UPON THE QUESTIONS THEREIN PRESENTED.

BRIEFLY STATED, IT IS REPORTED THAT, PURSUANT TO THE PROVISION OF THE DAVIS-BACON ACT, AS AMENDED, 40 U.S.C. 276A, THERE WAS INCORPORATED INTO THE SUBJECT CONTRACT A SCHEDULE OF LABOR CLASSIFICATIONS AND WAGE RATES AS DETERMINED BY THE SECRETARY OF LABOR ON SEPTEMBER 9, 1954. NINE MONTHS LATER, ON JUNE 10, 1955, THE DEPARTMENT OF LABOR ADVISED THE COMMISSIONER OF RECLAMATION THAT DUE TO AN INADVERTENCE THE WAGE RATE FOR CARPENTERS SHOULD HAVE BEEN SPECIFIED IN ITS ORIGINAL DECISION AS $2.05 PER HOUR, INSTEAD OF $1.85 PER HOUR, AND REQUESTED "APPROPRIATE ACTION IN THIS CONNECTION.' THE CONTRACTING OFFICER ( ASSISTANT COMMISSIONER) CONCLUDED THAT THE "APPROPRIATE ACTION" REQUESTED BY THE SOLICITOR OF LABOR IN THE LETTER OF INADVERTENCE DATED JUNE 10, 1955, WAS TO REQUIRE THE CONTRACTOR TO PAY CARPENTERS AT THE RATE OF $2.05 PER HOUR, BOTH PROSPECTIVELY AND RETROSPECTIVELY. THE CONTRACTOR COMPILED WITH THE DEMAND AND AN INVESTIGATION OF HIS RESULTING CLAIM FOR AN INCREASE IN THE CONTRACT PRICE HAS ESTABLISHED THAT HE HAD NO DIFFICULTY IN STAFFING HIS JOB AT THE $1.85 RATE FOR CARPENTERS PRIOR TO RECEIPT OF THE NOTICE OF INADVERTENCE.

INSOFAR AS PERTINENT HERE, THE DAVIS-BACON ACT, AS AMENDED, 40 U.S.C. 276A, PROVIDES THAT---

THE ADVERTISED SPECIFICATIONS FOR EVERY CONTRACT IN EXCESS OF $2,000, TO WHICH THE UNITED STATES OR THE DISTRICT OF COLUMBIA IS A PARTY, FOR CONSTRUCTION * * * OF PUBLIC BUILDINGS OR PUBLIC WORKS * * * SHALL CONTAIN A PROVISION STATING THE MINIMUM WAGES TO BE PAID VARIOUS CLASSES OF LABORERS AND MECHANICS WHICH SHALL BE BASED UPON THE WAGES THAT WILL BE DETERMINED BY THE SECRETARY OF LABOR TO BE PREVAILING FOR THE CORRESPONDING CLASSES OF LABORERS AND MECHANICS (IN THE LOCALITY OF THE CONTRACT WORK) * * * AND EVERY CONTRACT BASED UPON THESE SPECIFICATIONS SHALL CONTAIN A STIPULATION THAT THE CONTRACTOR OR HIS SUBCONTRACTOR SHALL PAY * * * WAGE RATES NOT LESS THAN THOSE STATED IN THE ADVERTISED SPECIFICATIONS * * * ( ITALICS SUPPLIED.)

AS STATED IN OUR DECISION OF MAY 8, 1953, B-106987, THE ACT DOES NOT REQUIRE THAT A CONTRACTOR PAY WAGE RATES WHICH ARE ACTUALLY THE PREVAILING RATES DURING THE PERIOD OF PERFORMANCE OF THE CONTRACT, BUT MERELY THAT THERE BE FIXED BY EVERY CONTRACT A MINIMUM WAGE SCHEDULE TO BE PAID, WHICH SHALL BE BASED UPON RATES DETERMINED BY THE SECRETARY OF LABOR PRIOR TO NEGOTIATION OF THE CONTRACT TO BE PREVAILING IN THE LOCALITY. PROVISION IS MADE FOR CHANGE OF THE MINIMUM WAGE SCHEDULE OR REDETERMINATION OF THE PREVAILING RATES DURING PERFORMANCE OF THE CONTRACT --- 19 COMP. GEN. 568--- AND IN THE CASE OF UNITED STATES V. BINGHAMTON CONST. CO., DECIDED MARCH 8, 1954, 347 U.S. 171, THE SUPREME COURT HAS HELD THAT SUCH A SCHEDULE IS NOT A "REPRESENTATION" OR "WARRANTY" BY THE GOVERNMENT TO THE CONTRACTOR AS TO THE WAGE RATES PREVAILING IN THE CONTRACT AREAS. SEE, ALSO, L. BALKIN BUILDER, INC. V. UNITED STATES, C.1CLS. NO. 153-53, DECIDED JUNE 5, 1956.

THE STATUTORY REQUIREMENT FOR INCLUSION OF WAGE SCHEDULES IN CONTRACT SPECIFICATIONS IS DIRECTED TO THE GOVERNMENT'S CONTRACTING OFFICER, AND IT SEEMS APPARENT THAT THE DAVIS-BACON ACT CONTEMPLATED MAKING DEFINITE AND CERTAIN, AT THE TIME THE CONTRACT WAS ENTERED INTO, THE CONTRACT PRICE AND THE MINIMUM WAGES TO BE PAID DURING THE PERFORMANCE OF THE CONTRACT. COMP. GEN. 471, 473. CONSEQUENTLY, A SUBSEQUENT CORRECTION BY THE SECRETARY OF LABOR OF A WAGE SCHEDULE (WHICH, INSOFAR AS ALL PARTIES KNEW OR COULD HAVE ASCERTAINED AT THE TIME OF EXECUTION OF THE CONTRACT, WAS PROPER FOR INCLUSION IN THE CONTRACT SPECIFICATIONS) DOES NOT IN OUR OPINION, PER SE, EFFECTUATE A CHANGE IN THE TERMS OF THE CONTRACT NOR AFFECT THE VALIDITY OF THE EXISTING CONTRACT. INASMUCH AS THE WAGE SCHEDULE INCLUDED IN THE INSTANT CONTRACT SPECIFICATION WAS IN ACCORDANCE WITH THE STATUTORY REQUIREMENT, AND THE TRUE INTENTION OF THE CONTRACTOR AND THE GOVERNMENT'S CONTRACTING OFFICER IN THAT REGARD WAS EXPRESSED THEREIN, REFORMATION WOULD NOT BE AN APPROPRIATE REMEDY. REFORMATION OF A CONTRACT IS APPROPRIATE ONLY WHEN THE INSTRUMENT, BECAUSE OF A MISTAKE MADE, DOES NOT EXPRESS THE TRUE INTENT OR AGREEMENT OF BOTH PARTIES TO THE CONTRACT. 76 C.J.S. SECTION 25 (B).

ON THE OTHER HAND, SINCE THE CONTRACTING OFFICER REQUIRED THE INCREASE IN THE MINIMUM WAGE SCHEDULE SPECIFICATION IN ACCORDANCE WITH THE CORRECTION REPORTED IN THE SECRETARY OF LABOR'S LETTER OF INADVERTENCE, WE WOULD NOT DEEM IT PROPER TO DENY THE CONTRACTOR AN ADJUSTMENT IN THE CONTRACT PRICE TO COVER ANY INCREASE IN HIS CONTEMPLATED COSTS RESULTING THEREFROM, AND WE WILL INTERPOSE NO OBJECTION TO THE ISSUANCE OF A CHANGE ORDER UNDER THE CONTRACT TO COMPENSATE THE CONTRACTOR FOR ANY SUCH INCREASE IN HIS COST OF PERFORMANCE. SEE B-106987, MAY 8, 1953.

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