B-160778, AUG 19, 1970, 50 COMP GEN 103

B-160778, AUG 19, 1970, 50 COMP GEN 103

CONTRACTS - LABOR STIPULATIONS - DAVIS-BACON ACT - CLASSIFICATION OF WORKMEN - ERRONEOUS THE CLASSIFICATION OF WORKMEN WHO INSTALLED "ORANGEBURG" FIBER DUCTS AS A CONDUIT FOR UNDERGROUND ELECTRICAL WIRING AS LABORERS UNDER A CONTRACT INCLUDING A WAGE DETERMINATION FOR ELECTRICIANS AND LABORERS, AND A DISPUTES CLAUSE WAS A VIOLATION OF THE DAVIS-BACON ACT, 40 U.S.C. 276A, AND THE REFERRAL OF THE ERRONEOUS CLASSIFICATION TO THE SECRETARY OF LABOR UNDER THE DISPUTES CLAUSE WHEN THE CONTRACTOR DISAGREED WITH THE CONTRACTING OFFICER'S DETERMINATION BASED ON THE PREVAILING AREA PRACTICE BUT REFUSED TO SUBMIT CONTRARY EVIDENCE DID NOT VIOLATE THE CONTRACT OR PREJUDICE THE CONTRACTOR BECAUSE IT HAD NOT BEEN ADVISED OF THE REFERRAL, AND THE SECRETARY'S CONFIRMATION, EVEN THOUGH BASED ON THE RECORD ONLY, TO REVIEW - ENTITLES THE LABORERS WHO WERE NOT SUPERVISED BY A JOURNEYMAN THAT THE CLASSIFICATION WAS ERRONEOUS - A DETERMINATION THAT IS NOT SUBJECT ELECTRICIAN TO A WAGE ADJUSTMENT AS ELECTRICIANS AND NOT ELECTRICIAN APPRENTICES.

TO THE SOUTHWEST ENGINEERING COMPANY, INC., AUGUST 19, 1970:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JULY 31, 1969, AND SUBSEQUENT CORRESPONDENCE, IN EFFECT, REQUESTING THAT WE REVIEW YOUR CLAIM IN CONNECTION WITH THE INSTALLATION OF FIBER DUCT AT THE MCCONNELL AIR FORCE BASE, WICHITA, KANSAS, UNDER CONTRACT NO. DA-23-028 ENG-7904. THIS CLAIM ARISES BECAUSE OF THE CONTRACTING OFFICER'S DECISION TO WITHHOLD THE SUM OF $410.47 COVERING ALLEGED VIOLATIONS OF THE DAVIS-BACON ACT, 40 U.S.C. 276A. THE SUM SO WITHHELD, REPRESENTING UNPAID WAGES DUE TO 13 WORKERS, WAS FORWARDED TO OUR OFFICE BY THE DEPARTMENT OF THE ARMY FOR DISPOSITION IN ACCORDANCE WITH THE DAVIS BACON ACT.

THE CONTRACT UNDER WHICH YOUR CLAIM ARISES WAS AWARDED ON APRIL 20, 1966, AND WAS FOR THE CONSTRUCTION OF AN APPROACH LIGHTING SYSTEM FOR THE MCCONNELL AIR FORCE BASE, WICHITA, KANSAS, FOR THE LUMP SUM OF $191,119. THE SCOPE OF THE WORK TO BE DONE UNDER THE CONTRACT INCLUDED EARTHWORK, CONCRETE WORK, UNDERGROUND ELECTRICAL DUCTS AND MANHOLES, TRANSFORMER VAULT, GENERATOR ROOM AND CONTROL TOWER MODIFICATION, 250 KW GENERATING UNIT, AND INSTALLATION OF CERTAIN GOVERNMENT-FURNISHED EQUIPMENT. THE INSTALLATION OF THE UNDERGROUND DUCTS IS THE PARTICULAR PORTION OF THE WORK UNDER CONSIDERATION HERE. WORK ON THE DUCTS COVERED THE PERIOD FROM JULY 1, 1966, THROUGH NOVEMBER 16, 1966.

THIS WORK WAS PERFORMED AT THE MCCONNELL AIR FORCE BASE, WHICH IS LOCATED IN SEDGWICK COUNTY, KANSAS, SOUTHEAST OF THE CITY LIMITS OF WICHITA, KANSAS. THE CONTRACT PROVIDED FOR THE INSTALLATION OF EITHER FIBER OR ASBESTOS-CEMENT DUCT FOR THE UNDERGROUND ELECTRICAL CONDUITS, AND YOU ELECTED TO INSTALL FIBER DUCT, SOMETIMES REFERRED TO AS "ORANGEBURG." ALL OF THE FIBER DUCT WAS INSTALLED BY LABORERS, WHO WERE PAID AT A $2.15 HOURLY RATE. THE LABORERS WERE SUPERVISED BY A FOREMAN WHO WAS NOT AN ELECTRICIAN. THE CONTRACT IN THIS CASE INCLUDED WAGE DETERMINATION NO. AE -10-064 WITH TWO MODIFICATIONS. THE MINIMUM WAGE SET FORTH THEREIN FOR ELECTRICIANS WAS $4.65 PER HOUR, PLUS CERTAIN FRINGE BENEFITS, WHILE THE MINIMUM RATES SET FORTH FOR LABORERS WAS $2.15 PER HOUR FOR "HEAVY AND HIGHWAY CONSTRUCTION." YOU ESTIMATE THAT 80 PERCENT OF THE ACTUAL LABOR INVOLVED IN THE INSTALLATION OF THE UNDERGROUND DUCT, WHICH IS THE PARTICULAR PORTION OF THE WORK UNDER CONSIDERATION HERE, WAS USED IN PLACING, PUDDLING, AND LEVELING CONCRETE AROUND THE FIBER DUCT AND THAT "CONCRETE PUDDLERS" WERE INCLUDED IN THE WAGE RATE SCHEDULE UNDER THE CLASSIFICATION OF "LABORERS." YOUR CLAIM ARISES SOLELY OUT OF INSTALLATION OF THE FIBER DUCT, AND IS NOT CONCERNED WITH THE SUBSEQUENT PLACING OF WIRES IN THE DUCT.

CLAUSE 1 OF STANDARD FORM 19-A, ATTACHED TO AND FORMING A PART OF THE CONTRACT, SETS FORTH THE DAVIS-BACON ACT, 40 U.S.C. 276A, REQUIREMENTS AS THEY PERTAIN TO MECHANICS AND LABORERS EMPLOYED OR WORKING DIRECTLY UPON THE SITE OF WORK.

CLAUSE 6, "DISPUTES," OF THE CONTRACT'S GENERAL PROVISIONS PROVIDES THAT THE CONTRACTING OFFICER SHALL DECIDE DISPUTES CONCERNING QUESTIONS OF FACT ARISING UNDER THE CONTRACT WHICH ARE NOT SETTLED BY AGREEMENT AND FOR AN APPEAL BY THE CONTRACTOR FROM SUCH A DECISION TO THE HEAD OF THE AGENCY. HOWEVER, CLAUSE 49 OF THE CONTRACT'S GENERAL PROVISIONS, "DISPUTES CONCERNING LABOR STANDARDS" (JAN. 1965), PROVIDES AS FOLLOWS:

DISPUTES ARISING OUT OF THE LABOR STANDARDS PROVISIONS OF THIS CONTRACT SHALL BE SUBJECT TO THE DISPUTES CLAUSE EXCEPT TO THE EXTENT SUCH DISPUTES INVOLVE THE MEANING OF CLASSIFICATIONS OR WAGE RATES CONTAINED IN THE WAGE DETERMINATION DECISION OF THE SECRETARY OF LABOR OR THE APPLICABILITY OF THE LABOR PROVISIONS OF THE CONTRACT WHICH QUESTIONS SHALL BE REFERRED TO THE SECRETARY OF LABOR IN ACCORDANCE WITH THE PROCEDURES OF THE DEPARTMENT OF LABOR. (ASPR 7-603.26).

THE RECORD INDICATES THAT YOU CLASSIFIED THE WORKMEN WHO PLACED THE DUCT AS LABORERS AND PAID THEM $2.15 PER HOUR, THE PREDETERMINED RATE FOR LABORERS AS SET FORTH IN THE WAGE DETERMINATION. WHEN THIS WAS CALLED TO THE ATTENTION OF THE CONTRACTING OFFICERS, HE CONDUCTED A SURVEY ON AUGUST 23 AND 24, 1966, OF SIX COMPANIES WHICH HAD INSTALLED FIBER DUCT IN THE WICHITA AREA. THIS SURVEY SHOWED THAT FOUR OF THE FIVE COMPANIES WHICH HAD INSTALLED FIBER DUCT AS A CONDUIT FOR ELECTRIC WIRES HAD USED ELECTRICIANS TO PERFORM BOTH THE JOINING OF THE DUCT AND THE PUDDLING OF CEMENT. THE FIFTH COMPANY ADVISED THAT IT HAD USED ELECTRICIANS WORKING WITH LABORERS TO PERFORM THE WORK, WHILE THE SIXTH COMPANY ADVISED THAT IT HAD ONLY INSTALLED FIBER DUCT AS CONDUIT FOR TELEPHONE LINES AND HAD USED LABORERS FOR BOTH THE JOINING AND PUDDLING OPERATIONS.

ON SEPTEMBER 20 THE CONTRACTING OFFICER ADVISED YOU OF THE SURVEY, AND OF HIS CONCLUSION THAT THE SURVEY HAD NOT PRODUCED EVIDENCE OF A SUBSTANTIAL PRACTICE IN THE AREA OF USING LABORERS TO INSTALL FIBER DUCT TO ENCASE ELECTRICAL WIRING. YOU WERE OFFERED THE OPPORTUNITY TO FURNISH EVIDENCE THAT SUCH A SUBSTANTIAL PRACTICE DID EXIST, EITHER CURRENTLY OR WITHIN A REASONABLE PERIOD PRIOR THERETO. BY LETTER DATED SEPTEMBER 23, YOU DECLINED TO SUBMIT SUCH EVIDENCE, CLAIMING THAT THE BURDEN OF PROOF SHOULD REST WITH THE "COMPLAINANT OR ACCUSER."

BY LETTER OF OCTOBER 5 THE CONTRACTING OFFICER REFERRED TO THE PREVIOUS CORRESPONDENCE, AGAIN ADVISED YOU OF HIS INABILITY TO LOCATE EVIDENCE OF A SUBSTANTIAL AREA PRACTICE OF USING LABORERS, AND FURTHER ADVISED AS FOLLOWS:

AS A CONSEQUENCE, UNLESS YOU CAN FURNISH SPECIFIC EVIDENCE THAT IT IS A PREVAILING PRACTICE TO USE LABORERS TO PLACE FIBER DUCT AT MCCONNELL AIR FORCE BASE, AND TO PAY SUCH EMPLOYEES AT THE LABORER RATE, YOU WILL BE EXPECTED, AS A CONTRACT OBLIGATION, TO PAY THE LABORERS OR MECHANICS, WHO HAVE PLACED OR WILL PLACE FIBER DUCT UNDER YOUR CONTRACT, AS A MINIMUM, THE HOURLY RATE PRESCRIBED FOR ELECTRICIANS IN THE SCHEDULE OF CLASSIFICATIONS AND WAGE RATES IN YOUR CONTRACT.

THE RECORD DOES NOT INDICATE THAT YOU RESPONDED IN ANY MANNER TO THE LETTER OF OCTOBER 5, AND ON NOVEMBER 17, 1966, THE CONTRACTING OFFICER (APPARENTLY ACTING UNDER THE DISPUTES CLAUSE OF YOUR CONTRACT), ISSUED FINDINGS OF FACT AND A FINAL DECISION WHICH CONCLUDED THAT YOUR WORKMEN WHO INSTALLED THE DUCT SHOULD HAVE BEEN PAID ELECTRICIAN'S WAGES, AND WHICH DIRECTED YOU TO RECLASSIFY SUCH WORKERS AND TO MAKE RESTITUTION OF THE DIFFERENCE BETWEEN ELECTRICIAN'S WAGES AND THE WAGES ACTUALLY PAID. YOU APPEALED THIS DECISION TO THE ARMED SERVICES BOARD OF CONTRACT APPEALS ON NOVEMBER 21.

ON MARCH 7, 1967 THE CORPS OF ENGINEERS, APPARENTLY IN RECOGNITION OF THE PROVISIONS OF CLAUSE 49 OF THE CONTRACT'S GENERAL PROVISIONS, AND THE CORRESPONDING DEPARTMENT OF LABOR REGULATIONS PUBLISHED AT 29 CFR 5.12, REQUESTED AN INTERPRETATION BY THE SECRETARY OF LABOR. THIS REQUEST WAS ACCOMPANIED BY A FILE WHICH CONSISTED OF THE FOLLOWING:

1. COPIES OF THE CORRESPONDENCE BETWEEN YOU AND THE CONTRACTING OFFICER DATED SEPTEMBER 20, SEPTEMBER 23, AND OCTOBER 5, 1966, REFERRED TO ABOVE.

2. A COPY OF THE REPORT ON THE AREA PRACTICE SURVEY MADE UNDER THE DIRECTION OF THE CONTRACTING OFFICER.

3. A COPY OF THE FINDINGS OF FACT BY THE CONTRACTING OFFICER AND A COPY OF THE CONTRACTING OFFICER'S FINAL DECISION LETTER OF NOVEMBER 17, 1966.

4. A COPY OF ASPR 18-706, WHICH REQUIRES THAT THE OPINION OF THE SECRETARY OF LABOR BE OBTAINED IN APPEALS OF THE TYPE HERE INVOLVED.

BASED UPON THIS RECORD, AND WITHOUT AFFORDING YOU FURTHER OPPORTUNITY TO PRESENT EVIDENCE OF A SUBSTANTIAL PRACTICE OF USING LABORERS TO INSTALL FIBER DUCT USED FOR ENCASING ELECTRICAL WIRING, ON APRIL 5, 1967, THE SOLICITOR OF LABOR ADVISED THE CORPS OF ENGINEERS AS FOLLOWS:

ON THE BASIS OF LOCAL LABOR STANDARDS, AS REFLECTED IN YOUR REPORT, IT IS OUR CONCLUSION THAT THE INSTALLATION OF FIBER DUCT USED AS A CONDUIT FOR UNDERGROUND ELECTRICAL WIRING UNDER THE ABOVE CONTRACT FALLS WITHIN THE KIND OF WORK COMPRISING THE CONTRACT CLASSIFICATION OF ELECTRICIANS AND ELECTRICIANS' APPRENTICES.

ON AUGUST 8, 1968, AFTER CONSIDERING THIS DETERMINATION BY THE DEPARTMENT OF LABOR, THE PROVISIONS OF CLAUSE 49 OF YOUR CONTRACT, AND THE PERTINENT REGULATIONS OF THE DEPARTMENT OF LABOR, THE ASBCA DISMISSED YOUR APPEAL WITH THE FOLLOWING STATEMENT:

*** THE SECRETARY OF LABOR HAVING RENDERED A DETERMINATION WHICH IS FINAL AND NOT SUBJECT TO REVIEW, THIS BOARD LACKS JURISDICTION THEREIN.

THEREAFTER, YOU SUBMITTED YOUR CLAIM TO THIS OFFICE.

IT IS OUR VIEW THAT, HAVING AGREED TO THE INCLUSION OF CLAUSE 49 IN YOUR CONTRACT, THE REFERRAL OF THE DISPUTE TO THE DEPARTMENT OF LABOR ON MARCH 7, 1967, WAS PROPER, AND YOU ARE BOUND BY THE DECISION RENDERED BY THE SOLICITOR OF LABOR UNLESS SUCH DECISION WAS ARBITRARY, CAPRICIOUS, OR UNSUPPORTED BY SUBSTANTIAL EVIDENCE. 41 U.S.C. 321. WHILE OUR REVIEW OF YOUR CLAIM MUST THEREFORE BE LIMITED TO THIS ASPECT OF THE DISPUTE, WE ARE INCLINED TO THE VIEW THAT THE FIRST QUESTION TO BE ANSWERED IS WHETHER THE FAILURE OF THE DEPARTMENT OF LABOR TO SOLICIT EVIDENCE FROM YOU, AND ITS SUBSEQUENT ACTION IN RENDERING A DECISION BASED SOLELY ON THE RECORD SUBMITTED BY THE CORPS OF ENGINEERS, IS SUFFICIENT IN ITSELF TO RENDER THE DECISION ARBITRARY.

WHILE IT IS OUR OPINION THAT A CONTRACTOR SHOULD GENERALLY BE ADVISED WHEN A REFERRAL IS MADE TO THE DEPARTMENT OF LABOR IN DISPUTES OF THIS NATURE, WE FIND NO SUCH REQUIREMENT IN EITHER THE APPLICABLE REGULATIONS OR IN YOUR CONTRACT. IN VIEW THEREOF, AND SINCE YOU HAD BEEN GIVEN ADEQUATE OPPORTUNITY TO PRESENT EVIDENCE TO THE CONTRACTING OFFICER AND HAD DECLINED TO DO SO, WE CANNOT CONCLUDE THAT THE FAILURE TO ADVISE YOU OF THE REFERRAL TO THE DEPARTMENT OF LABOR WAS A VIOLATION OF THE CORPS' OBLIGATIONS TO YOU UNDER THE CONTRACT, OR WAS NECESSARILY PREJUDICIAL TO YOUR RIGHTS. WHILE THE DEPARTMENT OF LABOR REGULATIONS (29 CFR 5.11B) DO PROVIDE FOR NOTICE AND HEARING WHEN CERTAIN CIRCUMSTANCES ARE PRESENT AND A FEDERAL AGENCY REQUESTS A HEARING, SUCH CIRCUMSTANCES DO NOT APPEAR TO HAVE BEEN INVOLVED IN THE INSTANT DISPUTE. ACCORDINGLY, AND SINCE THE RECORD FORWARDED TO THE DEPARTMENT OF LABOR INCLUDED COPIES OF THE CONTRACTING OFFICER'S LETTERS OF SEPTEMBER 20 AND OCTOBER 5, 1966, GIVING YOU THE OPPORTUNITY TO SUBMIT EVIDENCE, TOGETHER WITH A COPY OF YOUR LETTER OF SEPTEMBER 23, 1966, DECLINING SUCH OPPORTUNITY, WE FIND NO VALID BASIS ON WHICH TO CONSIDER THE SOLICITOR'S DECISION ARBITRARY SOLELY BECAUSE IT WAS BASED ONLY UPON THE RECORD FORWARDED BY THE CORPS OF ENGINEERS.

FURTHER, WHILE YOU SUBMITTED EVIDENCE TO THE CORPS WHICH INDICATED USE OF LABORERS TO INSTALL DUCTS, IT APPEARS THAT SUCH EVIDENCE WAS NOT RECEIVED UNTIL AFTER THE SOLICITOR RENDERED HIS DECISION. WE THEREFORE DO NOT BELIEVE SUCH EVIDENCE CAN PROPERLY BE CONSIDERED BY THIS OFFICE IN DECIDING YOUR CLAIM.

THE REMAINING QUESTION WOULD APPEAR TO BE WHETHER, ON THE BASIS OF THE RECORD BEFORE HIM, THE SOLICITOR OF LABOR'S DETERMINATION CAN BE CONSIDERED ARBITRARY, CAPRICIOUS, OR UNSUPPORTED BY SUBSTANTIAL EVIDENCE.

AS INDICATED ABOVE, THE SURVEY CONDUCTED BY THE CONTRACTING OFFICER SHOWED THAT FOUR OUT OF THE FIVE CONTRACTORS HAD EXTENSIVE EXPERIENCE IN INSTALLING FIBER DUCT AS A CONDUIT FOR ELECTRICAL WIRING, AND THAT ALL OF THOSE CONTRACTORS USED ELECTRICIANS FOR THE INSTALLATION WORK. WITH RESPECT TO THE FIFTH CONTRACTOR, MCBRIDE ELECTRIC COMPANY, THE SURVEY REPORT READS AS FOLLOWS:

COMMENTS: I PRESENTED OUR PROBLEM TO MR. MCBRIDE AND HE ADVISED THAT HIS FIRM WAS PRIMARILY A RESIDENTIAL ELECTRICAL CONTRACTOR, BUT THEY WERE ENTERING THE COMMERCIAL AND INDUSTRIAL FIELD. HE STATED THAT HIS FIRM WAS NON-UNION AND HIS FIRM NORMALLY DOES NOT DO THIS TYPE OF UNDERGROUND DUCT WORK. HOWEVER, HE DID STATE THAT IF HIS FIRM WOULD BE INVOLVED IN THIS TYPE OF WORK, WHICH THEY WILL, AND HAVE IN THE PAST, THAT HE WOULD DEFINITELY ASSIGN AN ELECTRICIAN THAT WOULD CLOSELY WORK WITH ONE OR TWO LABORERS TO INSTALL THE DUCT. THE ELECTRICIAN WOULD BE THERE TO SEE THAT THE WORK WAS COMPLETED AND WOULD POSSIBLY DO MOST OR ALL OF THE SLIPPING TOGETHER OF THE JOINTS OF THE DUCT.

THE SIXTH COMPANY SURVEYED INDICATED IT USED LABORERS FOR THE INSTALLATION OF FIBER DUCT; HOWEVER, THE COMPANY'S ONLY INSTALLATION WAS FOR THE PURPOSE OF HOUSING TELEPHONE, RATHER THAN ELECTRICAL WIRES. THE SOLICITOR APPARENTLY IGNORED THE PRACTICE OF THIS COMPANY BECAUSE OF ITS LACK OF EXPERIENCE WITH ELECTRICAL WIRE INSTALLATION, AND UNDER THE CIRCUMSTANCES WE ARE UNABLE TO DISAGREE WITH SUCH ACTION.

BASED UPON OUR REVIEW OF THE RECORD BEFORE THE SOLICITOR, WE MUST THEREFORE CONCLUDE THAT THERE WAS SUBSTANTIAL EVIDENCE TO SUPPORT A DETERMINATION THAT IT WAS THE PREVAILING AREA PRACTICE TO USE ELECTRICIANS FOR THE INSTALLATION OF FIBER DUCT AS A CONDUIT FOR ELECTRICAL WIRES. FURTHER, WE ARE UNABLE TO CONCLUDE FROM SUCH REVIEW THAT THE RECORD WOULD HAVE REQUIRED OR SUPPORTED A CONCLUSION THAT THERE WAS A SUBSTANTIAL PRACTICE IN THE AREA OF USING LABORERS, EITHER SEPARATELY OR UNDER THE SUPERVISION OF ELECTRICIANS, FOR SUCH INSTALLATION. CF. B-147602, JANUARY 23, 1963. ACCORDINGLY, WE MUST CONCUR IN THE SOLICITOR'S DECISION THAT INSTALLATION OF THE FIBER DUCT "FALLS WITHIN THE KIND OF WORK COMPRISING THE CONTRACT CLASSIFICATIONS OF ELECTRICIANS AND ELECTRICIANS' APPRENTICES." THERE REMAINS ONLY THE QUESTION OF WHETHER THE WAGES OF THE LABORERS YOU EMPLOYED IN THE INSTALLATION SHOULD BE ADJUSTED TO CONFORM WITH THAT PAID ELECTRICIANS, OR THAT PAID ELECTRICIANS' APPRENTICES. THIS CONNECTION, ALL OF THE EVIDENCE OF RECORD INDICATES THAT ELECTRICIANS' APPRENTICES ARE ONLY USED FOR INSTALLATION OF FIBER DUCT WHEN THEY ARE UNDER THE SUPERVISION OF AND ASSISTING JOURNEYMEN ELECTRICIANS IN THE INSTALLATION. SINCE YOU DID NOT EMPLOY A JOURNEYMAN ELECTRICIAN AT ANY TIME IN THE INSTALLATION WORK, IT FOLLOWS THAT YOU CANNOT NOW CLAIM THAT YOU COULD HAVE USED ONLY APPRENTICES FOR THE INSTALLATION, OR THAT YOUR LABORERS SHOULD NOW ONLY BE ENTITLED TO HAVE THEIR WAGES ADJUSTED TO THAT OF APPRENTICE ELECTRICIANS.

ACCORDINGLY, WE MUST CONCLUDE THAT THE LABORER WAGES PAID TO SUCH WORKERS MUST BE ADJUSTED TO THE WAGES OF JOURNEYMEN ELECTRICIANS, AND YOUR CLAIM FOR PAYMENT OF THE MONIES WITHHELD TO COVER SUCH UNDERPAYMENTS MUST THEREFORE BE DENIED.

I AM TODAY DIRECTING THAT SUCH MONIES BE DISTRIBUTED TO THE UNDERPAID EMPLOYEES.

AS REQUESTED, WE ARE RETURNING THE FILE OF DOCUMENTS SUBMITTED IN SUPPORT OF YOUR CLAIM.