Courtland Construction Corp. (agency decision, September 30, 2019)

Plain-English summary

Courtland Construction asked the Wage and Hour Division to add a Concrete Finisher classification to a Vermont Davis-Bacon wage determination at $25.34 per hour without fringe benefits. The Administrator rejected that proposal because it fell below every skilled-classification rate in the contract and instead selected the median skilled rate, $21.69 per hour plus $17.39 in fringe benefits. Courtland argued that concrete finishing was not skilled work and that rates from other wage determinations were more appropriate. The Board held that conformance must be based on the classifications in the contract's own wage determination and found the Administrator's choice reasonable. It denied Courtland's motion challenging a notice letter and affirmed the wage determination.

Decision snapshot

• Cited authorities: 40 U.S.C. § 3141; 29 C.F.R. §§ 5.5(a)(1)(ii)(A), 7.1(d), and 7.1(e)
• Outcome: The Administrator's rejection of Courtland's proposed rate and selection of the median skilled-classification rate were affirmed.
• Key point: A conformed Davis-Bacon rate must reasonably relate to wage rates in the contract's own wage determination, not unrelated contracts or general local pay practices.

Full text (DOL official public release)

U.S. Department of Labor Administrative Review Board
200 Constitution Avenue, N.W.
Washington, D.C. 20210

  IN THE MATTER OF:



  COURTLAND CONSTRUCTION                           ARB CASE NO. 2017-0074
  CORP., WASHINGTON
  COUNTY, VERMONT.                                 DATE: September 30, 2019

  With respect to wage Determination
  VT140033, Modification No. 2, for
  Concrete Finisher Classification
  In Washington County, Vermont

  Appearances:

  For the Respondent:

         C. Roth Perry; pro se; Washington, Pennsylvania

  For the Administrator, Wage and Hour Division:

         Kate S. O’Scannlain, Esq.; Jennifer S. Brand, Esq.; William C. Lesser,
         Esq.; Jonathan T. Rees, Esq.; and Wilson Osorio, Esq.; U.S.
         Department of Labor, Office of the Solicitor; Washington, District of
         Columbia

  Before: William T. Barto, Chief Administrative Appeals Judge; Thomas H.
  Burrell and Heather C. Leslie, Administrative Appeals Judges



                         FINAL DECISION AND ORDER

        PER CURIAM. This matter is before the Administrative Review Board (the
  Board) pursuant to the provisions of the Davis-Bacon Act (DBA) and “Related Acts”


  (DBRA), 40 U.S.C. § 3141 et seq. (2006), and the applicable implementing
  regulations at 29 C.F.R. Parts 1, 3, 5, and 7 (2018). The DBRA apply DBA labor
  standards to certain federally-assisted construction projects, such as the project at
  issue here. Courtland Construction Corp. seeks review of a determination by the
  Administrator of the U.S. Department of Labor’s Wage and Hour Division
  (Administrator) denying its request to add a “Concrete Finisher” classification to a
  wage determination under a DBA contract. We affirm.



                                      BACKGROUND

         The Administrator has denied Courtland Construction’s requests (and
  requests for reconsideration) to add the Concrete Finisher classification to the
  applicable wage determination at a conformed hourly rate of $25.34 without any
  fringe benefits. The Administrator ruled that the requested rate did not satisfy the
  regulatory requirements for adding a classification to a wage determination because
  the proposed wage rate did not bear a reasonable relationship to the wage rates
  contained in the wage determination. The Administrator explained that the
  requested hourly wage rate was “considerably below the lowest wage rate for a
  skilled classification” under the contract.

        The Administrator instead approved a wage rate of $21.69 per hour plus
  $17.39 in fringe benefits for the Concrete Finisher classification. The Administrator
  explained that as the contract contained three skilled classifications, the agency had
  properly conformed the skilled Concrete Finisher classification to the median of the
  three wage rates. The Administrator rejected Courtland Construction’s arguments
  that Wage & Hour should consider wage rates in unrelated wage determinations
  based on the regulations and Board precedent.

       Courtland Construction petitioned the Board for review. Both the
  Administrator and Courtland Construction filed briefs.




                        JURISDICTION AND STANDARD OF REVIEW

         This Board has jurisdiction to hear appeals concerning questions of law or
  fact from the Administrator’s final decisions under the DBA.1 The ARB’s review of
  the Administrator’s ruling is in the nature of an appellate proceeding and the Board
  “will not hear [factual] matters de novo except upon a showing of extraordinary
  circumstances.” 29 C.F.R. § 7.l (e). The ARB will assess the Administrator’s rulings
  to determine whether they are consistent with the DBA and its implementing
  regulations, and are a reasonable exercise of the discretion delegated to the
  Administrator to implement and enforce the DBA. William J. Lang Land Clearing,
  Inc., ARB Nos. 01-072, -079; ALJ Nos. 1998-DBA-001 through -006, slip op. at 5
  (ARB Sept. 28, 2004). “In considering the matters within the scope of its
  jurisdiction,” the Board acts “as fully and finally as might the Secretary of Labor.”
  29 C.F.R. § 7.l (d).

         In establishing a conformed rate for a wage classification, “the Administrator
  is given broad discretion and his or her decisions will be reversed only if
  inconsistent with the regulations, or if they are unreasonable in some sense, or . . .
  exhibit[] an unexplained departure from past determinations . . . .” Millwright Local
  1755, ARB No. 98-015, 2000 WL 670307, at *6 (ARB May 11, 2000) (quoting Envtl.
  Chem. Corp., ARB Case No. 96-113, slip op. at 3 (ARB Feb. 6, 1998).



                                        DISCUSSION

  1. Courtland’s Motion

         As an initial matter, there is a pending motion before the Board. Before
  briefing in this matter, Courtland Construction filed a Motion to Review the
  Validity of the Administrator’s Ruling and Strike Tab I from the Administrative
  Record. In support of its motion, it argues that it never received a letter dated
  January 27, 2016, notifying it that the Administrator needed additional time to
  provide a response to Courtland Construction’s request for reconsideration.
  Courtland Construction questions the authenticity of the letter itself and asks that


  1     Secretary’s Order 01-2019 (5)(a)(1) (Delegation of Authority and Assignment of
  Responsibility to the Administrative Review Board), 84 Fed. Reg. 13072 (Apr. 3, 2019).
  Reference to DBA in this decision shall include the DBRA unless otherwise noted.


  it be stricken from the record. For these reasons, Courtland Construction requests
  that the Board determine whether the Administrator’s July 24, 2017 ruling is valid.

         The Administrator filed a response to Courtland Construction’s motion. In it
  the Administrator requests that the Board deny the motion. The Administrator first
  asserts that Wage & Hour mailed the January 27, 2016 letter to Courtland
  Construction regardless of whether it was received and asks that the Board deny
  the motion to strike it from the record. With respect to the validity of its ruling, the
  Administrator asserts that regardless of whether Courtland Construction received
  the letter or whether it remains in the administrative record, it had the authority to
  issue its July 24, 2017 conformance ruling. We agree. Precedent establishes that the
  Administrator retains authority over this matter even if regulatory time periods for
  issuance have elapsed.2 Courtland Construction’s motion is hereby DENIED.

  2. Merits of the Appeal

         On appeal, Courtland Construction makes the same arguments it made to
  the Administrator below. To summarize, it argues that Wage & Hour’s conformed
  rate does not represent an appropriate wage rate for the classification Concrete
  Finisher because the position is not a skilled position, Vermont is not a union state,
  and application of a wage rate from another wage determination and contract is
  more appropriate.

         In opposition, the Administrator argues that the Administrator’s denial of the
  conformance request was within the Administrator’s discretion because the wage
  rate proposed by Courtland Construction did not bear a reasonable relationship to
  the wage rates contained in the wage determination, as it was well below any of the
  applicable skilled wage rates. The Administrator argues that the wage rate
  determination was proper because it bears a reasonable relationship to the wage
  rates contained in the determination. The Administrator explained that Concrete
  Finisher is a skilled position,3 so only skilled wage classifications were considered in
  making the determination.

  2        The Law Company, Inc., ARB No. 98-107, 1999 WL 801184, at *10 (ARB Sept. 30,
  1999).
  3      Brief at 14 (citing Coleman Constr. Co., ARB No. 15-002, 2016 WL 4238468, at *6
  (ARB June 8, 2016). Courtland Construction appears to take issue with the Administrator’s
  position that Concrete Finisher is skilled. It argues that it can train anyone to do the work
  in a day, and this is not true of other skilled classifications. Other than these assertions,


         Further, under longstanding agency policy and Board precedent, the
  reasonableness of a wage rate is determined with respect to wage rates in the wage
  determination incorporated into the contract at issue and not to any other contract.4
  The contract at issue lists three skilled classifications with wage rates of $22.36 per
  hour plus $20.07 in fringe benefits, $21.69 per hour plus $17.39 in fringe benefits,
  and $25.00 per hour plus $4.50 in fringe benefits. Again, Courtland Construction’s
  requested rate of $25.34 with no fringe benefits fell below all three of the wage rates
  for skilled classifications in the contract and so was rejected.

         To determine a wage rate that bore a reasonable relationship to the wage
  rates in the wage determination, the Administrator chose the median rate of the
  three skilled classifications ($21.69 per hour plus $17.39 in fringe benefits). While
  the wage rate is a union rate, the Administrator explained that two out of the three
  wage rates for skilled classifications in the contract are union rates, and thus
  selection of the median rate (and lowest union rate) was reasonable.

         The Administrator stresses that she must conform wage rates based on the
  relevant wage rates in the wage determination and not on what pay practices exist
  in a particular geographical area, on other contract or wage determination wage
  rates, what would normally be paid to a wage classification on contracts in a
  particular area, or any other method of determining wage rates.

         With the parties’ arguments in mind, we turn to our analysis and we begin
  with the regulations. The regulations implementing the DBA provide a mechanism
  for contractors to challenge the accuracy or completeness of a wage determination
  prior to bidding or the award of a contract in order to provide the government the
  full benefits of the procurement process, assure fairness to potential bidders, and
  “provide a reasonable floor [] within the context of a local wage-determination for
  federal construction contract wages.” Sumlin & Sons, Inc., WAB No. 95-08, 1995
  WL 732673, at *2 (WAB Nov. 30, 1995); see 29 C.F.R. § 1.6(c)(3). By allowing for a
  challenge prior to the initiation of work, the regulations seek to avoid unfair

  Courtland Construction has failed to cite to law or other authority that persuades us that
  the Administrator abused her discretion in considering Concrete Finisher a skilled
  classification.
  4      All Agency Memorandum (AAM) No. 213, at 3 (March 22, 2013) (wage rate for
  additional classifications relates to same category in the wage determination); Tower
  Constr., WAB No. 94-17, 1995 WL 90010, at *4 (WAB Feb. 28, 1995).


  surprise to an employer, its employees, or the government respecting the wage
  standards governing a particular contract. Id. Thus, “[t]here is an attendant
  obligation on the part of would-be contractors to familiarize themselves with the
  governing wage determination and to take advantage of the challenge procedure
  should the wage determination be deficient.” Id.

          Through the conformance process, the Administrator may grant a measure of
  relief to a contractor “(w)here due to unanticipated work or oversight, some job
  classifications necessary to complete the work are not included in the wage
  determination . . . . ” Clark Mech. Contractors, Inc., WAB No. 95-03, 1995 WL
  646572, at *2 (WAB Sep. 29, 1995). “However, the conformance procedure is not
  intended to be a substitute process for challenging wage determinations in a timely
  manner.” Id. The Administrator has broad discretion to accept or reject any given
  conformance request. Id.

         In order for a proposed job classification to be approved to be added to an
  existing wage determination in conformance with a wage determination, the
  following criteria must be met: (1) the work to be performed by the classification
  requested is not performed by a classification already in the wage determination; (2)
  the classification is utilized in the area by the construction industry; and (3) the
  proposed wage rate, including any bona fide fringe benefits, bears a reasonable
  relationship to the wage rates contained in the wage determination. 29 C.F.R.
  § 5.5(a)(1)(ii)(A); AAM No. 213.

         In this matter, the Administrator acted within the broad discretion afforded
  her to both reject Courtland Construction’s conformance request and determine the
  appropriate wage rate for the conformed wage classification as added to the wage
  determination.

                                      CONCLUSION

         Because we conclude that the Administrator did not abuse her discretion in
  rejecting Courtland Construction’s conformance request and by determining a wage
  rate for the Concrete Finisher classification that bears a reasonable relationship to
  the wage rates in the contract, we AFFIRM.

         SO ORDERED.