B-161172, JUN. 8, 1967

B-161172, JUN. 8, 1967

TO MR. ALBERT S. C. MILLAR, JR.:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 28, 1967, AND SUBSEQUENT CORRESPONDENCE WRITTEN IN BEHALF OF YOUR CLIENT, ROYAL SERVICES, INC., PROTESTING AGAINST ANY AWARD UNDER IFB NO. DABCO1-67-B-0050 WHICH WAS ISSUED BY THE PURCHASING AND CONTRACTING OFFICE, FORT RUCKER,ALABAMA. THE IFB IS FOR THE PROCUREMENT OF CUSTODIAL SERVICES TO BE PROVIDED AT FORT RUCKER DURING THE PERIOD FROM JULY 1, 1967, THROUGH JUNE 30, 1968. THE BASIS FOR THE PROTEST IS THAT THE IFB DID NOT CONTAIN A SCHEDULE OF PREVAILING WAGE RATES AND FRINGE BENEFITS FOR SERVICE EMPLOYEES AS DETERMINED BY THE SECRETARY OF LABOR, OR HIS AUTHORIZED REPRESENTATIVE, IN ACCORDANCE WITH THE SERVICE CONTRACT ACT OF 1965, PUB.L. 89-286 (41 U.S.C. 351-357). YOU REQUEST THAT THE IFB IN QUESTION BE CANCELLED AND THAT THE PROCUREMENT BE READVERTISED.

IN FURTHERANCE OF YOUR PROTEST YOU SAY THAT THERE WAS A VALID WAGE RATE DETERMINATION OF $1.57 PER HOUR PLUS FRINGE BENEFITS MADE BY THE SECRETARY OF LABOR FOR JANITORS EMPLOYED AT FORT RUCKER IN EFFECT AT THE TIME OF ISSUANCE OF THE IFB, NAMELY WAGE DETERMINATION NO. 67-46 ISSUED FEBRUARY 1, 1967, AND THAT SUCH DETERMINATION WAS IMPROPERLY EXCLUDED FROM THE IFB. ADDITIONALLY YOU POINT OUT THAT THE REGULATIONS ISSUED BY THE SECRETARY OF LABOR PROVIDE (29 CFR 4.4) THAT NOT LESS THAN 30 DAYS PRIOR TO ANY INVITATION FOR BIDS FOR CONTRACTS COVERED BY THE SERVICE CONTRACT ACT, OR AS SOON AS PRACTICABLE WHERE EXCEPTIONAL CIRCUMSTANCES PREVENT TIMELY NOTICE, THE CONTRACTING AGENCY WILL FILE WITH THE DEPARTMENT OF LABOR ITS NOTICE OF INTENTION TO MAKE A SERVICE CONTRACT, AND THAT UNDER THE CIRCUMSTANCES OF THIS PROCUREMENT AND WITHOUT SPECIFYING EXCEPTIONAL CIRCUMSTANCES, LESS THAN 30 DAYS ELAPSED BETWEEN TRANSMITTAL OF THE NOTICE TO THE DEPARTMENT OF LABOR AND THE ISSUANCE OF THE IFB. YOU ALSO CALL OUR ATTENTION TO THE FACT THAT ON APRIL 26, 1967, SUBSEQUENT TO THE OPENING OF BIDS, THE DEPARTMENT OF LABOR ISSUED WAGE DETERMINATION NO. 67-238 WHICH COVERED JANITORS, PORTERS, AND CLEANERS EMPLOYED ON CONTRACTS FOR CLEANING SERVICES IN DALE AND HOUSTON COUNTIES, ALABAMA, WITHIN WHICH AREA FORT RUCKER IS LOCATED.

WAGE DETERMINATION NO. 67-46 ISSUED FEBRUARY 1, 1967, CONTAINED A SCHEDULE OF WAGE RATES AND FRINGE BENEFITS APPLICABLE TO SERVICE EMPLOYEES "EMPLOYED ON CONTRACTS FOR AIRCRAFT SUPPORT SERVICES" AT FORT RUCKER, ALABAMA. WHILE ITEM 59 OF THE SCHEDULE CONTAINED A MINIMUM WAGE RATE OF $1.57 FOR JANITORS, THE DEPARTMENT OF THE ARMY STATES THAT DETERMINATION NO. 67-46 APPLIED ONLY TO PERSONS EMPLOYED UNDER CONTRACTS FOR "AIRCRAFT SUPPORT SERVICES" INVOLVING AIRCRAFT MAINTENANCE FACILITIES, WHICH INCLUDE AREAS CONTAINING TOXIC REFUSE, GREASE, AND OIL AND GASOLINE SPILLAGE, ALL OF WHICH REQUIRE SPECIAL HANDLING. THE WORK TO BE PERFORMED UNDER THE INSTANT IFB CONSISTED OF ROUTINE OFFICE CLEANING AND IS REPORTED TO BE CLEARLY NOT COVERED BY WAGE DETERMINATION NO. 67-46.

THE RECORD SHOWS THAT ON FEBRUARY 1, 1967, THE PROCURING ACTIVITY SUBMITTED TO THE DEPARTMENT OF LABOR A REQUEST FOR WAGE DETERMINATION FOR A CUSTODIAL SERVICE CONTRACT TO BE PERFORMED AT FORT RUCKER, ALABAMA. SIXTEEN DAYS LATER ON FEBRUARY 17, 1967, THE IFB WAS ISSUED, WITH OPENING SCHEDULED FOR MARCH 20, 1967, LATER EXTENDED TO MARCH 24, 1967. THE RECORD FURTHER SHOWS THAT AS LATE AS MARCH 23, 1967, THE PROCURING ACTIVITY MADE SPECIFIC TELEPHONIC INQUIRY TO THE COGNIZANT OFFICIAL OF THE DEPARTMENT OF LABOR AS TO A WAGE DETERMINATION FOR THE IFB AND WAS INFORMED THAT NO SUCH WAGE DETERMINATION WOULD BE MADE. BIDS WERE OPENED AT 2:00 P.M. ON MARCH 24, 1967. INDUSTRIAL MAINTENANCE SERVICES, INC., DOTHAN, ALABAMA, WAS THE LOW BIDDER. ROYAL SERVICES, INC., WAS THE SECOND LOW BIDDER. AWARD TO INDUSTRIAL MAINTENANCE SERVICES HAS BEEN HELD IN ABEYANCE PENDING DISPOSITION OF YOUR PROTEST.

THE SERVICE CONTRACT ACT PROVIDES, IN PART, AS FOLLOWS:

"SEC. 2. (A) EVERY CONTRACT (AND ANY BID SPECIFICATION THEREFOR) ENTERED INTO BY THE UNITED STATES OR THE DISTRICT OF COLUMBIA IN EXCESS OF $2,500, EXCEPT AS PROVIDED IN SECTION 7 OF THIS ACT, WHETHER NEGOTIATED OR ADVERTISED, THE PRINCIPAL PURPOSE OF WHICH IS TO FURNISH SERVICES IN THE UNITED STATES THROUGH THE USE OF SERVICE EMPLOYEES, AS DEFINED HEREIN, SHALL CONTAIN THE FOLLOWING:

"/1) A PROVISION SPECIFYING THE MINIMUM MONETARY WAGES TO BE PAID THE VARIOUS CLASSES OF SERVICE EMPLOYEES IN THE PERFORMANCE OF THE CONTRACT OR ANY SUBCONTRACT THEREUNDER, AS DETERMINED BY THE SECRETARY, OR HIS AUTHORIZED REPRESENTATIVE, IN ACCORDANCE WITH PREVAILING RATES FOR SUCH EMPLOYEES IN THE LOCALITY, WHICH IN NO CASE SHALL BE LOWER THAN THE MINIMUM SPECIFIED IN SUBSECTION (B).

"SEC. 4. (A) SECTIONS 4 AND 5 OF THE ACT OF JUNE 30, 1936 (49 STAT. 2036), AS AMENDED, SHALL GOVERN THE SECRETARY'S AUTHORITY TO ENFORCE THIS ACT, MAKE RULES, REGULATIONS, ISSUE ORDERS, HOLD HEARINGS, AND MAKE DECISIONS BASED UPON FINDINGS OF FACT, AND TAKE OTHER APPROPRIATE ACTION HEREUNDER.

"/B) THE SECRETARY MAY PROVIDE SUCH REASONABLE LIMITATIONS AND MAY MAKE SUCH RULES AND REGULATIONS ALLOWING REASONABLE VARIATIONS, TOLERANCES, AND EXEMPTIONS TO AND FROM ANY OR ALL PROVISIONS OF THIS ACT AS HE MAY FIND NECESSARY AND PROPER IN THE PUBLIC INTEREST OR TO AVOID SERIOUS IMPAIRMENT OF THE CONDUCT OF GOVERNMENT BUSINESS. * * *"

AS INDICATED ABOVE, SECTION 4 (B) OF PUB.L. 89-286 AUTHORIZES THE SECRETARY OF LABOR TO MAKE SUCH RULES AND REGULATIONS ALLOWING REASONABLE VARIATIONS, TOLERANCES, AND EXEMPTIONS TO AND FROM ALL OR ANY PROVISIONS OF THE ACT AS HE MAY FIND NECESSARY AND PROPER. BY SECRETARY'S ORDER NO. 36-65, THAT AUTHORITY WAS DELEGATED TO THE ADMINISTRATOR OF THE WAGE AND HOUR AND PUBLIC CONTRACTS DIVISIONS. 30 F.R. 15,305. PURSUANT THERETO THE ADMINISTRATOR HAS ISSUED THE REGULATION SET OUT AT 29 CFR 4.5 (B), WHICH EXEMPTS FROM THE WAGE AND FRINGE BENEFITS SECTION OF THE ACT THOSE CONTRACTS FOR WHICH NO SUCH WAGE AND FRINGE BENEFITS HAVE BEEN DETERMINED FOR ANY CLASS OF SERVICE EMPLOYEES TO BE EMPLOYED THEREUNDER.

29 CFR 4.5 (B) READS, IN PART, AS FOLLOWS:

"TO AVOID SERIOUS IMPAIRMENT OF THE CONDUCT OF GOVERNMENT BUSINESS, IT IS HEREBY FOUND NECESSARY AND PROPER TO PROVIDE EXEMPTION (1) FROM THE DETERMINED WAGE AND FRINGE BENEFITS SECTION OF THE ACT (2 (A) (1) AND (2) (, BUT NOT THE MINIMUM WAGE SPECIFIED UNDER SECTION 6 (A) (1) OF THE FAIR LABOR STANDARDS ACT OF 1938, AS AMENDED (2 (B) OF THIS ACT), OF ALL CONTRACTS FOR WHICH NO SUCH WAGE HAS BEEN DETERMINED FOR ANY CLASS OF SERVICE EMPLOYEES TO BE EMPLOYED THEREUNDER AND (2) FROM THE FRINGE BENEFITS SECTION (2 (A) (2) ( OF ALL CONTRACTS AND OF ALL CLASSES OF SERVICE EMPLOYEES EMPLOYED THEREUNDER FOR WHICH SUCH BENEFITS HAVE NOT BEEN DETERMINED. ACCORDINGLY, SUCH EXEMPTIONS ARE HEREBY PROVIDED.'

FROM THE FOREGOING, IT IS CLEAR THAT SECTION 4 (B) OF PUB.L. 89-286 AUTHORIZES THE SECRETARY OF LABOR TO MAKE RULES AND REGULATIONS ALLOWING REASONABLE EXEMPTIONS FROM THE ACT, AND THAT THE REGULATION SET OUT AT 29 CFR 4.5 (B) WAS PROMULGATED PURSUANT TO SUCH STATUTORY AUTHORIZATION. ATTENTION IS ALSO DIRECTED TO THE QUOTED PROVISIONS OF SECTION 4 (A) OF THE ACT, WHICH MAKE SECTIONS 4 AND 5 OF THE WALSH HEALEY ACT OF JUNE 30, 1936 (41 U.S.C. 38 AND 39) APPLICABLE TO THE SERVICE CONTRACT ACT OF 1965. UNDER THE LATTER SECTION THE SECRETARY OF LABOR APPEARS TO BE AUTHORIZED TO MAKE DECISIONS NECESSARY TO ENFORCE THE PROVISIONS OF THE 1965 ACT, EITHER UPON HIS OWN MOTION OR ON APPLICATION OF "ANY PERSON AFFECTED BY ANY RULING OF ANY AGENCY OF THE UNITED STATES IN RELATION TO ANY PROPOSAL OR CONTRACT" INVOLVING ANY OF ITS PROVISIONS. THE EXEMPTIONS GRANTED BY 29 CFR 4.5 (B) APPEAR TO BE BASED UPON A DETERMINATION BY THE DEPARTMENT OF LABOR THAT THE AWARD AND EXECUTION OF SERVICE CONTRACTS (WHICH ARE TO BE PERFORMED IN AREAS WHERE NO MINIMUM WAGES AND FRINGE BENEFITS DETERMINATIONS FOR THE TYPE OF SERVICE CONTRACTS INVOLVED HAVE BEEN MADE AS OF THE DATE INVITATIONS FOR BIDS ARE ISSUED OR NEGOTIATIONS COMMENCED) WOULD BE UNDULY DELAYED, IF THE SOLICITATION OF BIDS OR THE COMMENCEMENT OF NEGOTIATIONS FOR SUCH CONTRACTS WERE DELAYED UNTIL THE DEPARTMENT HAD GATHERED THE NECESSARY WAGE AND FRINGE BENEFITS INFORMATION, EVALUATED SUCH INFORMATION, AND ISSUED THE DETERMINATIONS SPECIFIED IN THE ACT. IN THE ABSENCE OF SUCH DETERMINATIONS, BOTH THE ACT AND THE REGULATION REQUIRE PAYMENT OF THE MINIMUM WAGE SPECIFIED BY THE FAIR LABOR STANDARDS ACT, AS AMENDED.

WE CANNOT CONCLUDE THAT THERE WAS NO REASONABLE BASIS, SUCH AS CONTEMPLATED BY SECTION 4 (B) OF THE ACT, FOR THE EXEMPTION SET OUT IN 29 CFR 4.5 (B). FURTHERMORE, SINCE 51 DAYS ELAPSED FROM FEBRUARY 1, 1967, THE DATE OF NOTIFICATION OF INTENT TO PROCURE A SERVICE CONTRACT, TO MARCH 24, 1967, THE DATE OF BID OPENING, AND SINCE IT DOES NOT APPEAR THAT THE DEPARTMENT OF LABOR HAS QUESTIONED THE ADEQUACY OF THE NOTICE, WE FIND NO SUFFICIENT LEGAL BASIS TO DIRECT CANCELLATION OF THE INVITATION, OR FOR OBJECTING TO AWARD OF A CONTRACT THEREUNDER.