B-165906, OCT. 22, 1969

B-165906, OCT. 22, 1969

LABOR STIPULATIONS--DAVIS-BACON ACT--WAGE UNDERPAYMENTS--DISPUTED CONCERNING GENERAL SERVICES ADMINISTRATION REQUEST FOR JUSTIFICATION OF ACTION WITHHOLDING CONTRACTOR'S FUNDS FOR ALLEGED VIOLATIONS OF DAVIS- BACON ACT INVOLVING QUESTION OF HOW MANY HOURS WERE WORKED BY EMPLOYEES AS LABORERS AND HOW MANY AS MECHANICS, GAO IS NOT IN POSITION TO DETERMINE PROPER DISTRIBUTION PENDING ADVICE OF FURTHER AGENCY ACTION SINCE CONTRACTING OFFICER'S PURPORTED DECISION -- REFERRING SAID QUESTION TO DEPARTMENT OF LABOR UNDER 29 CFR 5.12--- IS NOT BELIEVED TO CONSTITUTE DECISION CONTEMPLATED BY DISPUTES CLAUSE ON COGNIZABLE MATTERS, INASMUCH AS SAID REGULATION CANNOT BE INTERPRETED TO TRANSFER CONTRACTING AGENCY'S DUTY TO DETERMINE FACTUAL QUESTIONS OR AFFECT CONTRACTOR'S RIGHT TO ADMINISTRATIVE DETERMINATION THEREOF IN ACCORDANCE WITH DISPUTES CLAUSE.

TO MR. KUNZIG:

REFERENCE IS MADE TO THE LETTER OF FEBRUARY 19, 1969, FROM YOUR GENERAL COUNSEL IN REPLY TO OUR REQUEST FOR JUSTIFICATION FOR ACTION TAKEN BY YOUR AGENCY CONCERNING CERTAIN FUNDS WITHHELD FROM AMOUNTS OTHERWISE DUE THE MISHARA CONSTRUCTION COMPANY, INC. (MISHARA) OF EAST NATICK, MASSACHUSETTS, ON ACCOUNT OF ALLEGED VIOLATIONS OF THE DAVIS BACON ACT, 40 U.S.C. 276A, UNDER CONTRACT NO. GS-01B-PCC-0230 FOR CONSTRUCTION OF THE U.S. BORDER STATION AT DURBY LINE, VERMONT.

THE CONTRACT WAS AWARDED ON NOVEMBER 5, 1964, WITH THE ESTIMATED COMPLETION DATE SET AS OCTOBER 23, 1965. ON JULY 15, 1966, AFTER COMPLETION OF THE WORK THE GENERAL SERVICES ADMINISTRATION (GSA) NOTIFIED MISHARA THAT 11 WORKERS HAD BEEN UNDERPAID A TOTAL OF $1,583.31. THE RECORD SHOWS THAT ON AUGUST 8, 1965, SEVEN WORKERS COMPLAINED TO GSA THAT THEY HAD BEEN UNDERPAID. IT APPEARS THAT THESE WORKERS HAD WORKED AS LABORERS, IRONWORKERS, CARPENTERS, CEMENT MASONS, AND MACHINE OPERATORS, AND HAD BEEN PAID NO LESS THAN THE DAVIS-BACON ACT MINIMUM WAGE RATES FOR THE TIMES THAT MISHARA'S RECORDS SHOWED THAT THEY HAD WORKED AT EACH CLASSIFICATION. THE WORKERS DISAGREED WITH THE TIMES SHOWN ON MISHARA'S RECORDS SAYING THAT THEY HAD WORKED DIFFERENT HOURS.

BASED PRIMARILY ON THE WORKERS' STATEMENTS, WHICH WERE FOUNDED SUBSTANTIALLY ON MERE RECOLLECTION, THE GSA COMPLIANCE DIVISION DETERMINED THAT THE WORKERS HAD BEEN UNDERPAID AND THE PRECISE AMOUNTS THEREOF, AND MISHARA WAS DIRECTED TO MAKE RESTITUTION IN ACCORDANCE WITH THIS DETERMINATION. MISHARA DISAGREED WITH SUCH FINDINGS AND ATTEMPTED TO UTILIZE THE DISPUTES PROCEDURE CONTAINED IN THE CONTRACT, WHICH PROVIDED FOR DETERMINATION OF DISPUTED FACTS BY THE CONTRACTING OFFICER, SUBJECT TO APPEAL TO YOU OR YOUR DESIGNATED REPRESENTATIVE.

PURSUANT THERETO ON MAY 7, 1968, MISHARA REQUESTED THAT "A CONTRACTING OFFICER'S FINAL DECISION BE ISSUED IN THIS MATTER, FROM WHICH WE CAN TAKE AN APPEAL.' BY LETTER DATED MAY 8, 1968, THE CONTRACTING OFFICER MADE A CONTRACTING OFFICER'S DECISION "IN ACCORDANCE WITH THE DISPUTES CLAUSE" AFFIRMING THE FINDINGS OF THE COMPLIANCE DIVISION AND INFORMING MISHARA OF THEIR RIGHT TO APPEAL TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION. THE MAY 8, 1968, LETTER CONTAINED THE FOLLOWING STATEMENT: "THIS DECISION IS MADE IN ACCORDANCE WITH THE DISPUTES CLAUSE AND SHALL BE FINAL AND CONCLUSIVE AS PROVIDED THEREIN, UNLESS, WITHIN THIRTY (30) DAYS FROM THE DATE OF RECEIPT OF THIS DECISION, A WRITTEN NOTICE OF APPEAL (IN TRIPLICATE) ADDRESSED TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, GENERAL SERVICES BUILDING, WASHINGTON, D.C. 20405, IS MAILED OR OTHERWISE FURNISHED TO THE CONTRACTING OFFICER. THE NOTICE OF APPEAL, WHICH IS TO BE SIGNED BY YOU AS THE CONTRACTOR OR BY AN ATTORNEY ACTING ON YOUR BEHALF, AND WHICH MAY BE IN LETTER FORM, SHOULD INDICATE THAT AN APPEAL IS INTENDED, SHOULD REFER TO THIS DECISION AND SHOULD IDENTIFY THE CONTRACT BY NUMBER. THE NOTICE OF APPEAL MAY INCLUDE A STATEMENT OF THE REASONS WHY THE DECISION IS CONSIDERED TO BE ERRONEOUS.'

HOWEVER, ON THE VERY NEXT DAY, MAY 9, 1968, THE CONTRACTING OFFICER DISPATCHED THE FOLLOWING LETTER TO THE CONTRACTOR: "THIS LETTER SUPERSEDES LETTER OF MAY 8, 1968 WHICH WAS IN REPLY TO YOUR LETTER OF MAY 7, 1968 REQUESTING A CONTRACTING OFFICER'S DECISION IN ACCORDANCE WITH THE DISPUTES CLAUSE OF THE REFERENCED CONTRACT.'NO NEW EVIDENCE HAS BEEN SUBMITTED TO ALTER THE OPINION OF THE CONTRACTING OFFICER OR THE DISPUTES REVIEW COMMITTEE.'THIS DECISION IS MADE IN ACCORDANCE WITH PART 5, SUB TITLE A OF TITLE 29 OF CODE OF FEDERAL REGULATIONS AND WITH THE WAGE DETERMINATION AS ESTABLISHED BY THE DEPARTMENT OF LABOR AS INCLUDED IN THE CONTRACT SPECIFICATIONS AND SHALL BE FINAL AND CONCLUSIVE UNLESS, WITHIN THIRTY (30) DAYS FROM RECEIPT OF THIS DECISION, A WRITTEN NOTICE OF APPEAL (IN TRIPLICATE) ADDRESSED TO THE SECRETARY OF LABOR, WASHINGTON, D.C. IS MAILED OR OTHERWISE FURNISHED TO THE CONTRACTING OFFICER. THE NOTICE OF APPEAL, WHICH IS TO BE SIGNED BY YOU AS THE CONTRACTOR OR BY AN ATTORNEY ACTING ON YOUR BEHALF, AND WHICH MAY BE IN LETTER FORM, SHOULD INDICATE THAT AN APPEAL IS INTENDED, SHOULD REFER TO THIS DECISION AND SHOULD IDENTIFY THE CONTRACT BY NUMBER. THE NOTICE OF APPEAL MAY INCLUDE A STATEMENT OF THE REASONS WHY THE DECISION IS CONSIDERED TO BE ERRONEOUS.'

UNDER SUCH CIRCUMSTANCES, ON JUNE 5, 1968, MISHARA TRANSMITTED ITS APPEAL TO THE SECRETARY OF LABOR THROUGH GSA BY THE FOLLOWING COVERING LETTER: "WE ARE ENCLOSING HEREWITH, IN TRIPLICATE, OUR APPEAL, ADDRESSED TO THE SECRETARY OF LABOR, FROM YOUR FINAL DECISION DATED MAY 9, 1968 DIRECTING US TO COMPLY WITH THE FINDINGS OF YOUR COMPLIANCE DIVISION.'AS STATED IN OUR LETTER OF APPEAL, IT IS OUR POSITION THAT THE PROCEDURE OUTLINED IN YOUR LETTER OF MAY 9, 1968 IS NOT IN ACCORDANCE WITH THE LAW OR THE CONTRACT, AND THE FILING OF THIS APPEAL IN NO WAY CONSTITUTES A WAIVER OF OUR POSITION.' THE REGIONAL ADMINISTRATOR, GSA, FORWARDED THAT LETTER TO THE SOLICITOR OF LABOR BY TRANSMITTAL LETTER DATED JUNE 12, 1969.

ON SEPTEMBER 2K, 1968, THE ADMINISTRATOR, WAGE AND HOUR AND PUBLIC CONTRACTS DIVISIONS, DEPARTMENT OF LABOR, WROTE TO THE DIRECTOR OF THE COMPLIANCE DIVISION OF GSA AS FOLLOWS:

"WE DO NOT UNDERSTAND WHY THE LETTER OF MAY 8, 1968, WAS WITHDRAWN AND SUPERSEDED BY THE LETTER OF MAY 9, 1968, WHICH INFORMED THE CONTRACTOR OF A RIGHT TO APPEAL TO THE SECRETARY OF LABOR, SINCE REGULATIONS, PART 5, DO NOT APPEAR TO PROVIDE FOR SUCH AN APPEAL.'

"FOR YOUR INFORMATION, WE HAVE REVIEWED THE INVESTIGATION REPORT AND ARE IN AGREEMENT WITH THE CONCLUSIONS REACHED BY THE CONTRACTING OFFICER. THE REPORT ADEQUATELY SUBSTANTIATES THE FACT THAT EMPLOYEES WHO WORKED BOTH AS LABORERS AND CARPENTERS AND IRONWORKERS AND CEMENT MASONS WERE NOT PAID THE APPROPRIATE RATES FOR ALL HOURS WORKED.

"WE WILL APPRECIATE RECEIVING YOUR REPORT AND RECOMMENDATIONS UPON COMPLETION OF THE FURTHER ADMINISTRATIVE ACTION BY YOUR OFFICE.'

UNDER DATE OF NOVEMBER 25, 1968, HOWEVER, PRESUMABLY AS THE RESULT OF FURTHER COMMUNICATIONS BETWEEN YOUR AGENCY AND THE DEPARTMENT OF LABOR, THE ACTING SOLICITOR OF LABOR ADVISED MISHARA AS FOLLOWS: "UPON A REVIEW OF THE RECORD WE CONCUR IN THE FINDINGS OF THE GENERAL SERVICES ADMINISTRATION. DURING THE PERFORMANCE OF THE CONTRACT WORK EMPLOYEES HIRED AS LABORERS WERE PERMITTED TO WORK VARIOUSLY AS IRONWORKERS, CARPENTERS AND CEMENT MASONS. SINCE THEY WERE NOT CONSIDERED BY THE JOB SUPERINTENDENT AS COMPETENT CRAFTSMAN HE INSTRUCTED THE TIMEKEEPER TO SPLIT THE HOURS WORKED IN THESE JOURNEYMEN TRADES, ONE-HALF AT THE PREDETERMINED JOURNEYMAN RATE AND ONE-HALF AT THE LABORERS RATE. THIS ARBITRARY BREAKDOWN DOES NOT REFLECT THE WORK ACTUALLY PERFORMED IN EACH CLASSIFICATION AND IS AN INADEQUATE SEGREGATION FOR PURPOSES OF JUSTIFYING THE PAYMENT OF DIFFERING RATES.'

IT DOES NOT APPEAR FROM THE FILE FURNISHED OUR OFFICE THAT EITHER THE COMPLAINING WORKERS OR THE COMPLIANCE DIVISION, GSA, HAD EVER CONTENDED THAT THE HOURS WORKED HAD BEEN SPLIT ONE-HALF AT THE JOURNEYMEN RATE AND ONE-HALF AT THE LABORERS' RATE, AND THE SUPPLEMENTAL STATEMENT OF THE COMPLIANCE DIVISION SHOWING THE COMPUTATION OF THE ALLEGED UNDERPAYMENTS CLEARLY SHOWS THAT THE ADJUSTMENTS MADE DID NOT ACCORD WITH THAT THEORY.

ON DECEMBER 26, 1968, MISHARA PROTESTED THE MATTER TO OUR OFFICE, REQUESTING THAT THE CONTRACTING OFFICER BE DIRECTED TO FOLLOW THE REQUIREMENTS OF THE DISPUTES CLAUSE OF THE CONTRACT.

YOUR GENERAL COUNSEL BY THE ABOVE REFERENCED LETTER OF FEBRUARY 19, 1969, TAKES THE POSITION THAT UNDER 29 CFR 5.12 THE LABOR DEPARTMENT HAS MADE PROVISION FOR REFERRAL OF CERTAIN QUESTIONS TO THE DEPARTMENT FOR APPROPRIATE RULINGS. THAT REGULATION PROVIDES THAT "ALL QUESTIONS ARISING IN ANY AGENCY RELATING TO THE APPLICATION AND INTERPRETATION OF THE RULES CONTAINED IN THIS PART AND IN PARTS 1 AND 3 OF THIS SUBTITLE * * * SHALL BE REFERRED TO THE SECRETARY (LABOR) FOR APPROPRIATE RULINGS AND INTERPRETATIONS.' WE INTERPRET THAT REGULATION TO PROVIDE FOR GUIDANCE TO BE FURNISHED BY THE SECRETARY OF LABOR TO A CONTRACTING AGENCY AS THE BASIS FOR ENFORCEMENT ACTION BY THE AGENCY, IN CASES OF DOUBT OR DISPUTE AS TO CLASSIFICATIONS OR WAGE RATES APPLICABLE TO PARTICULAR WORK. CANNOT INTERPRET IT AS TRANSFERRING TO THE SECRETARY OF LABOR THE CONTRACTING AGENCY'S DUTY TO DETERMINE HOURS WORKED BY INDIVIDUAL LABORERS AND MECHANICS IN THE SEVERAL CLASSIFICATIONS IN WHICH THEY WERE EMPLOYED, OR AS AFFECTING A CONTRACTOR'S RIGHT TO ADMINISTRATIVE DETERMINATION OF SUCH PURELY FACTUAL QUESTIONS IN ACCORDANCE WITH THE DISPUTES CLAUSE OF HIS CONTRACT.

WE FAIL TO FIND IN ANYTHING WHICH HAS BEEN SUBMITTED TO US ANY BASIS FOR YOUR GENERAL COUNSEL'S CONTENTION THAT THE UNDERLYING QUESTION IN ISSUE WAS WHETHER THE "PARTICULAR FUNCTIONS PERFORMED BY THE EMPLOYEES IN QUESTION BROUGHT THEM WITHIN THE LIMITS CONSIDERED BY THE LABOR DEPARTMENT AS CONSTITUTING THE CLASSIFICATIONS OF CARPENTER," ETC. THE ONLY DISPUTED MATTERS REFLECTED IN THIS RECORD IS HOW MANY HOURS WERE WORKED BY THE INDIVIDUAL EMPLOYEES AS LABORERS AND HOW MANY AS OTHER TYPES OF WORKERS. THIS IS IN FACT PLAINLY INDICATED BY THE STATEMENT AT THE TOP OF PAGE 2 OF THE GENERAL COUNSEL'S LETTER THAT "THE JOB SUPERINTENDENT'S DESCRIPTION OF THE ACTUAL DUTIES PERFORMED BY THE EMPLOYEES IN QUESTION CONFLICTED WITH THE DESCRIPTIONS FURNISHED BY THE EMPLOYEES * * *.' IT IS NOT STATED THAT THE JOB SUPERINTENT OR THE CONTRACTOR QUESTIONED THE CLASSIFICATION APPLICABLE TO THE WORK DESCRIBED BY THE EMPLOYEES, OR THAT THE COMPLIANCE DIVISION QUESTIONED THE CLASSIFICATION APPLICABLE TO THE WORK DESCRIBED BY THE JOB SUPERINTENDENT; THE DISPUTE IS SIMPLY AS TO WHICH KIND OF WORK WAS IN FACT BEING PERFORMED DURING THE HOURS WORKED. THE CONTRACTOR CLAIMED THAT THE SEVERAL WORKERS EACH WERE ENGAGED IN LABORER'S WORK FOR CERTAIN HOURS AND IN CARPENTER'S OR IRONWORKER'S WORK FOR CERTAIN OTHER HOURS, AND HIS PAYROLL RECORDS SHOW THAT THEY WERE PAID ON THAT BASIS.

IN DETERMINING UNDERPAYMENTS THE COMPLIANCE DIVISION FOUND THAT THE NUMBER OF HOURS RECORDED AND PAID FOR AS LABORERS WAS MORE, AND THOSE RECORDED AS PAID FOR AS OTHER CRAFTS LESS, THAN THE HOURS ACTUALLY WORKED IN THOSE RESPECTIVE CLASSIFICATIONS. THE CORRECTNESS OF THE REALLOCATIONS OF TIME, WHICH MUST DEPEND UPON FINAL DETERMINATION OF WHAT THE WORKERS WERE IN FACT DOING DURING THE HOURS INVOLVED, IS THE MATTER IN DISPUTE. IN OUR VIEW THIS IS A FACTUAL MATTER COGNIZABLE UNDER THE DISPUTES CLAUSE. CF. DOLL PAINTING CO., INC. ASBCA NO. 9305, SEPTEMBER 18, 1964.

SINCE WE DO NOT FEEL THAT THE CONTRACTING OFFICER'S PURPORTED DECISION OF MAY 9, 1968, WAS SUCH A DECISION AS CONTEMPLATED BY THE DISPUTES CLAUSE, WE CONCLUDE THAT WE ARE NOT IN A POSITION TO DETERMINE THE PROPER DISTRIBUTION OF THE FUNDS WITHHELD, WHICH HAVE BEEN FORWARDED HERE IN ACCORDANCE WITH THE PROVISIONS OF THE DAVIS-BACON ACT.

WE SHALL AWAIT YOUR ADVICE AS TO THE FURTHER ACTION OF YOUR AGENCY IN THE MATTER, WHICH WE HOPE MAY BE EXPEDITED. COPIES OF THIS LETTER ARE BEING FORWARDED TO THE SECRETARY OF LABOR AND TO THE CONTRACTOR'S ATTORNEY.