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USDOL/OALJ Reporter
General Services Administration, Region
3, ARB No. 97-052 (ARB Nov. 21, 1997)
U.S. Department of Labor
Administrative Review Board
200 Constitution Avenue, N.W.
Washington, D.C. 20210
DECISION AND ORDER
[Page 2]Motion to Dismiss
Administrative Review Board
200 Constitution Avenue, N.W.
Washington, D.C. 20210
ARB Case No. 97-052
DATE: Nov. 21, 1997
In the Matter of:
GENERAL SERVICES
With respect to application of
ADMINISTRATION, REGION 3
Section 4(c) of the McNamara-O'Hara
Service Contract Act to Contract
No. GS-03P-95-DWC-0035, Armed Guard
Services, Health Care Financing Administration,
Woodlawn, Maryland
BEFORE: THE ADMINISTRATIVE REVIEW BOARD
This case is before the Board on the petition of the General Services Administration, Region 3 (GSA), seeking review of the November 25, 1996 final ruling issued by the Administrator, Wage and Hour Division, pursuant to the McNamara-O'Hara Service Contract Act of 1965, as amended, 41 U.S.C. §351, et seq. (SCA). See 29 C.F.R. §§4.189, 8.1(b)(6), 8.7(b) (1996). The GSA challenges the Administrator's ruling that Section 4(c) of the SCA, 41 U.S.C. §353(c) (1994), applies to Contract No. GS-03P-95-DWC-0035 for armed guard services at the Health Care Financing Administration (HCFA) facility in Woodlawn, Maryland. For the reasons set forth below, the final ruling of the Administrator is affirmed.
[Page 2]
As a threshold matter, we address the question of whether this appeal
has been properly and timely filed. See In re Institutional & Environmental
anagement, Inc., and Transport Workers Union of American, Local 525, AFL-CIO,
Case No. 88-CBV-4, Dep. Sec. Dec.,1 Jan. 11, 1989, slip op. at 3; 29 C.F.R. §§8.7(b), 8.9(a)(1996).
On February 5, 1997, the United Union of Security Guards (Union) filed a Motion to Dismiss
Appeal, in which it argued that the GSA's petition was not timely filed. January 24, 1997 was
the deadline of the sixty-day period provided for seeking review of the Administrator's
November 25, 1996 ruling pursuant to 29 C.F.R. §8.7(b). On January 23, 1997, the
GSA filed a request for extension of time in which to file its petition for review, which was
granted by Board order on January 27, 1997. See Notice of Appeal and Order
Establishing Briefing Schedule of Jan. 27, 1997. On January 30, 1997, the GSA filed its
petition for review. The Union was served a copy of the GSA's petition for review, Petition
for Review at Certificate of Service, which the Union received on January 31, Motion to
Dismiss Appeal at 1. The Union objects to the extension granted the GSA because the GSA
had not served the extension request on the Union, or other interested persons, and the Union
thus did not have notice and an opportunity to respond prior to the Board's granting of the
request. Motion to Dismiss Appeal at 1-2. The Union emphasizes the importance of the
GSA, as a governmental agency, being held by the Board to the same standard as parties from
the private sector. Id. at 2. The Union's concern that proceedings before this
Board be conducted in a fair and even-handed manner is well taken. Our examination of
pertinent regulations and relevant procedural principles demonstrates, however, that the GSA's
January 23, 1997 extension request was properly granted.
The regulations pertinent to this Board proceeding are found at 29
C.F.R. Part 8, Subparts A, C, D,2 and were promulgated by the Secretary pursuant to the grant of authority
provided by Section 4(a) of the SCA, codified at 41 U.S.C. §353(a).3 See 49 Fed. Reg.
10636 (Mar. 21, 1984). The Union does correctly note that motions, including requests for
extensions of time, and other documents filed in this Board proceeding are required by
regulation to be served on "all interested parties."4 29 C.F.R.
§§8.10(d), (e), 8.15(a), (b).5
In response to the Union's dismissal motion, the GSA observes that the
Union was not identified as a party or an "interested person" by the
Administrator's November 25, 1996 final ruling.6 Response to the Motion to
Dismiss Appeal at 2; see Exh. 17. The Administrator's final ruling is issued in
letter form and is not accompanied by a certificate of service. Exh. 17. Nonetheless, the legal
representatives for the Union were listed as copy recipients, not only on the Administrator's
final ruling but also on previous documents addressed to or generated by the GSA, Exhs. 11,
12, 13, 14, 15, 17, thus indicating that the Union qualified as an interested person for
purposes of service under 29 C.F.R. §§8.10(d), (e), 8.15(a). See 29
C.F.R. §8.11.
We therefore agree with the Union that the GSA's January 23, 1997
request for extension of time should have been submitted as a motion and served on the Union.
The GSA's failure to follow that procedure, or even to submit a copy of the Administrator's
final ruling with the extension request, deprived the Board of the information necessary to
notify all interested parties of the filing of the appeal, pursuant to 29 C.F.R. §8.11(a).
Although the Board's order of January 27, 1997 was served on various other union and trade
organizations, the order was not served on the Union or on the successor contractor. See
Notice of Appeal and Order Establishing Briefing Schedule of Jan. 27, 1997 at
Certificate of Service; cf. In re Institutional & Environmental Management,
Inc., supra (remanding case for rehearing before ALJ under 29 C.F.R. Part 6 because
successor contractor and employees' union had not received proper notice of hearing).
It is well established that an agency may waive strict compliance with
regulations that are directory or procedural, when such waiver does not prejudice the
respective interests of the parties involved. See, e.g., Tipps v. Comm'r, 74 T.C.
458, 468 (1980). Similarly, an administrative adjudicative agency may relax or modify
procedural rules that have been promulgated to promote the orderly adjudication of matters
before the agency, when doing so does not impair the respective rights of the parties involved.
National Labor Relations Board v. Monsanto Chemical Co., 205 F.2d 763, 764-65
(8th Cir. 1953), quoted in American Farm Lines v. Black Ball Freight Service, 397
U.S. 532 (1970); see Safety-Kleen Corp. v. Dresser Industries, Inc., 518 F.2d
1399, 1402-03 (C.C.P.A. 1975); see generally In re Charles Judd, Case No.
SCA-1018, Under Sec. Dec., Oct. 26, 1984, slip op. at 7-10 (quoting Monsanto
Chemical Co. decision in support of conclusion that Secretary's failure to comply with
timeframes provided by statute and regulation for recommending debarment to Comptroller
General did not deprive Secretary of jurisdiction to do so). The Board could thus properly
waive the service and filing requirements of Sections 8.10(d), (e), and 8.15(a), (b), provided
that such waiver did not impinge upon the ability of the respective parties to participate in this
appeal.
In regard to the foregoing issue, the Federal Rules of Civil Procedure
(FRCP) provide support for the conclusion that the granting of the GSA's January 23, 1997
extension request was consistent with basic tenets of fundamental fairness. As the regulations
pertinent to this proceeding do not specifically address the grounds on which an enlargement
of time for the filing of a petition for review may be granted, see 29 C.F.R. Part
8, Subparts A, C, D, it is appropriate to look to the FRCP for guidance.7 See In re Cindy
onohan, Case No. 87-SCA-32, Dep. Sec. Dec. on Recon., Mar. 23, 1992, slip op.
at 1-2; In re Military Sealift Command, Case No. 86-SCA-OM-1, Sec.
Ord. on Recon., Oct. 23, 1991, slip op. at 1;8
cf. In re Tri-Way Security and Escort Services, Inc., BSCA
Case No. 92-05, July 31, 1992, slip op. at 3 (in cases involving hearings, the Rules of Practice
and Procedure for Administrative Hearings, 29 C.F.R. Part 18, apply but the FRCP is
applicable to situations not addressed by the Part 18 regulations, 29 C.F.R. §18.1(a)).
Rule 6(b) of the FRCP governs requests for enlargements of time, including requests for
enlargements of time in which to file an appeal. Fed.R.Civ.P. 6(b). Rule 6(b) distinguishes
between requests for enlargement of time that are submitted prior to the running of a deadline
and those requests that are submitted after the deadline has passed. Id.; Lujan v.
National Wildlife Federation, 497 U.S. 871, 894-95 (1990). The former may be
granted in the discretion of the court, with or without prior notice to other parties to the case,
whereas the latter must be presented in a motion, which may be granted by the court only for
good cause shown and only if other parties to the case are provided an opportunity to respond.
Id.; Plant Economy, Inc. v. Mirror Insulation Co., 308 F.2d 275 (3d Cir. 1962);
North Umberland Mining Co. v. Standard Accident Ins. Co., 193 F.2d 951 (9th
Cir. 1952). By analogy under Rule 6(b), the GSA's January 23, 1997 extension request,
which was filed within the appeal period provided by Section 8.7(b), would qualify for
approval at the Board's discretion, without prior notice to the other parties, or interested
persons, to the case. We thus conclude that granting GSA's extension request, without
providing the other parties or interested persons to this case prior notice or opportunity to
respond, was not in conflict with well established principles of fundamental fairness.
We further conclude that our disposition of the GSA's extension request
has not impaired the Union's rights to fairly participate in the Board's consideration of the
merits of this appeal. The Union's receipt of the GSA's petition for review on January 31,
1997 put the Union on notice regarding the GSA's appeal, thus curing any procedural defect
resulting from the lack of service on the Union of the Board's January 27, 1997 order.9 We accordingly conclude that
the GSA's January 23, 1997 request for extension of time was properly granted and that this
appeal is properly before us.
The material facts pertinent to the Administrator's ruling in this matter
are not in dispute. The offices of the HCFA were housed, until May 1995, in several
buildings contained within the Social Security Administration (SSA) complex, located in
Woodlawn, Maryland. See Exh. 2. In May 1995, the HCFA relocated to a new
facility that had been constructed in Woodlawn near the SSA complex. See Exhs.
5, 6, 7A. For the purpose of procuring guard services for the entire SSA complex in August
1993, the SSA entered into a contract with Watkins Security Agency, Inc., (Watkins) for a
base year, to run from September 5, 1993 through September 4, 1994, followed by two option
periods of one year and six months, respectively. Exhs. 1, 1A. In that contract, No. 600-93-07326, the SSA segregated the costs of the guard services to be provided for the HCFA offices
at the SSA complex from the costs of guard services for the remainder of the SSA complex.
Id. The SSA also reserved the option of terminating the HCFA portion of the
contract, either at the beginning of the contract period or thereafter, on a monthly basis. Exh.
1 at 3; Exh. 1A at 39.
On August 8, 1994, Watkins entered a collective bargaining agreement
(CBA) with the Union. Exh. 2. That agreement provided that it would be in force until May
31, 1997. Id. The SSA did exercise its option to continue the contract with
Watkins for guard services for the SSA complex, including offices then occupied by the
HCFA, through the base year and into the first option period, which ran from September 5,
1994 through September 4, 1995. Exh. 1A. On July 27, 1995 the HCFA advised the SSA
that relocation to its newly constructed offices was imminent and that it would no longer be
occupying offices in the SSA complex in September 1995. Exh. 7A. Accordingly, with
regard to the second option period, September 5, 1995 to April 4, 1996, the SSA exercised
its option to continue the contract for the remainder of the SSA complex but not for the part
of the contract covering services for the space formerly occupied by the HCFA. See
id.
Although the SSA had been responsible for contracting for services at
the SSA complex, the GSA was responsible for contracting for services at the new HCFA
facility. Exh. 15; compare Exh. 1 with Exhs. 3, 6. In order to
provide guard services for the new HCFA facility following completion of its construction but
prior to its occupancy by HCFA staff, the GSA awarded a contract to run from November
1994 through May 1995, Contract No. GS-03P-94-DWC-0048. See Exh. 3. The
GSA also solicited bids for a long term contract for armed guard services at the new HCFA
facility, under Contract No. GS-03P-95-DWC-0002, to be effective May 1, 1995. Exh. 5.
The contract was initially awarded to Scotlandyard, which defaulted. In response to the
default, the GSA awarded an emergency contract for guard services, which provided for a
base period of one month, with two one month option periods. Exh. 7 (Contract No. GS-03P-95-DWC-0031). The long term contract, Contract No. GS-03P-95-DWC-0035, which
provided for one base year and four one year option periods, was subsequently awarded to
aster Security, Inc. (Master). See Exhs. 5, 6, 8.10
On September 7, 1995, counsel for the Union, acting as representative
for the Union members working at the new HCFA facility, requested that GSA obtain a
corrected wage determination for the Master contract based on the CBA entered into between
Watkins and the Union under SSA Contract No. 600-93-07326, and the mandate of Section
4(c) of the SCA. Exh. 9. Correspondence between the GSA contracting officer and the
Wage and Hour Division regarding whether Section 4(c) of the SCA was applicable to the
aster contract at the new HCFA facility followed.11
The initial response from the Wage and Hour Division concluded that
the "first time contract" at the new HCFA facility was not a successor contract
within the meaning of Section 4(c) of the SCA. Exh. 10. Based on receipt of further
information pertinent to the Section 4(c) issue, the Wage and Hour Division conducted an
investigation and determined that the Master contract was a successor contract and therefore
subject to Section 4(c). Exh. 12. The GSA was advised, in April and June 1996, to
retroactively apply the Section 4(c) ruling to the Master contract, but refused to do so. Exhs.
12-16.
On November 25, 1996, the Administrator issued a final ruling that the
collectively bargained wage rates under the CBA between Watkins and the Union at the SSA
complex were applicable to Contract No. GS-03P-95-DWC-0035 for guard services at the new
HCFA facility that had been entered into by GSA with Master for the period of September 1,
1995 through August 31, 1996. Exh. 17. The Administrator specifically concluded that guard
services for the HCFA offices formerly located at the SSA complex constituted
"identifiable contract work requirements" within the meaning of 29 C.F.R.
§4.163(g), thus invoking coverage under Section 4(c) of the SCA. Id. On
January 30, 1997, the GSA petitioned for review of the Administrator's final ruling.
Section 4(c) of the SCA mandates, inter alia, that a
successor contractor, operating in the same locality as the predecessor contractor and
furnishing substantially the same services, pay its employees under the successor contract no
less than the wages and fringe benefits that were paid to employees under the predecessor
contract. 41 U.S.C. §353(c); see 29 C.F.R. §§4.1b, 4.163
(1995). The Administrator concluded that the foregoing conditions had been met and thus that
the GSA contract with Master for guard services for the new HCFA facility in Woodlawn,
aryland was subject to the wage and fringe benefit provisions of the CBA in effect between
Watkins and the Union during the predecessor contract term of September 5, 1994 through
September 4, 1995. The thrust of the GSA's challenge to the Administrator's decision is that
the contract for guard services at the SSA complex that was in force after HCFA's September
1995 move to the new HCFA facility constitutes the only successor contract to the September
1994/95 predecessor contract between the SSA and Watkins. For the reasons that follow, we
agree with the Administrator that the contract reconfiguration provisions of Section 4.163(g)
are applicable to Contract No. GS-03P-95-DWC-0035.
Section 4.163 provides detailed guidelines for application of the Section
4(c) mandate for the incorporation of CBA provisions into successor contracts. 29 C.F.R.
§4.163; see, e.g., In re Clear Air Force Base, Alaska, BSCA Case No. 94-07, Oct. 31, 1994. Section 4.163(g) states that "specific contract requirements from one
contract may be broken out and placed in a new contract . . ." without negating the
protection afforded employees under the new contract as a successor contract under Section
4(c). 29 C.F.R. §4.163(g). Section 4.163(g) also provides that "the precedessor
contractor's collectively bargained rates follow identifiable contract work requirements into
new or consolidated contracts, provided that the new or consolidated contract is for services
which were furnished in the same locality under the predecessor contract." Id.
In the instant case, the "specific contract requirements" that were broken
out and placed in a new contract are for the provision of armed guard services for the offices
and staff of the HCFA. See Exhs. 1, 1A. As previously noted, SSA Contract No.
600-93-07326 for guard services at the SSA complex for the period September 5, 1994
through September 4, 1995 separately identified the costs for guard services for the HCFA
offices there. Id. Comparison of the aforesaid SSA contract for armed guard
services at the HCFA offices within the SSA complex with GSA Contract No. GS-03P-95-DWC-0035, for armed guard services for the new HCFA facility, clearly demonstrates that
both contracts concern the same "identifiable contract work requirements," with
a change in little more than the address of the office buildings occupied by the HCFA.
See generally In re Harry A. Stroh Associates, Inc., and Amer. Federation of Gov't
Employees, AFL-CIO, Local 2263, Case No. 87-CBV-2, Dep. Sec. Dec., Apr. 24, 1991
(services rendered by personnel at Air Force base hospital not "of a character
similar" to those rendered in the locality for purposes of Section 4(c)); In re
Professional Helicopter Pilots Ass'n, Case No. 89-SCA-WD-4, Dep. Sec. Dec., Jan.
30, 1991 (services rendered under two contracts not "substantially the
same" and therefore not covered by Section 4(c)).
Specifically, the SSA and GSA contracts each list the following
responsibilities as "typical duties" to be performed by the uniformed guards:
enforce a personal identification and package inspection system at the entrance control post;
patrol the facility in accordance with established routes and schedules; direct pedestrian and
vehicular traffic; receive, issue and account for all facility keys; maintain and operate facility
fire alarm, intrusion detection and other protective systems; perform minor operations and/or
record data in connection with facility utility systems; observe building occupants and visitors
for compliance with posted rules and regulations;12 accept, provide receipt for
and store found articles; maintain law and order within assigned area; discover and detain
individuals attempting to gain unauthorized access; report potentially hazardous conditions and
items in need of repair; obtain professional assistance in the event of injury or illness; perform
duties attendant to ensuring that the United States flag, and others as authorized, are flown as
required; turn off unnecessary lights, ensure that doors and windows are closed, check
repositories and safes; prepare reports and records regarding accidents, fires, bomb threats,
unusual incidents and unlawful acts; perform such other duties as required in the event of civil
disturbances, attempts to commit espionage, sabotage or other criminal acts adversely affecting
safety and security at the facility; respond to emergency conditions requiring immediate
attention by diverting guards from normal assigned duties and notifying agency representative
immediately. Exh. 1 at 9-11; Exh. 5 at 0009-0011. Although the GSA contract includes the
use of computerized HCFA badge and other computerized identification systems as an
additional guard duty, Exh. 5 at 0011, this distinction is minor and does not undermine the
conclusion that the work requirements for the SSA contract and the GSA contract are
substantially similar. Cf. Professional Helicopter Pilots Ass'n, slip op. at 5-6
(discussing "significant differences that transcend the mere introduction of new
tools'" and thereby undermine the conclusion that work is substantially similar).
Furthermore, the two contracts specify virtually identical education and experience
qualifications for guard personnel. Exh. 1 at 13; Exh. 5 at 0019-20. Finally, both contracts
specify that the guards' duties be performed from comparable work posts during similar hours
and days of the week. Compare Exh. 1A, attachment J-1 at 4-5 with
Exh. 5 at 0095-0097. We thus conclude that GSA Contract No. GS-03P-95-DWC-0035
covers services for the new HCFA facility that are substantially similar to those provided the
HCFA offices in the SSA complex under SSA Contract No. 600-93-07326.
There is also no question that the guard services rendered under the
aforesaid GSA contract were performed in the same locality as under the SSA contract. Both
work sites are located in Woodlawn, Maryland. See Exhs. 1B, 4, 5. The wage
determinations that are in evidence for the two work sites indicate that the pertinent locality
includes, at a minimum, Baltimore County, in which Woodlawn, Maryland is located.13 Exhs. 1B, 4, 6; see
29 C.F.R. §4.54(a); cf. C & H Reforesters, Inc., 88-3 B.C.A. (CCH)
¶21,067, 1988 AGBCA LEXIS 27 (1988) (designated locality covered all counties in
state); Electra-Mechanical of America, Inc., 83-2 B.C.A. (CCH) ¶16,806,
1983 GSBCA LEXIS 183 (1983) (designated locality covered city in which work site was
located); C & S Service Corp., 76-1 B.C.A. (CCH) ¶11,889, 1976 ASBCA
LEXIS 113 (1976) (designated locality covered county in which work site was located);
see generally In re Big Boy Facilities, Inc. and the National Maritime Union, Case
No. 88-CBV-7, Dep. Sec. Dec., Jan. 3, 1989, slip op. at 15-17 (discussing
"locality" concept under the SCA). Although a self-contained facility may
constitute a locality separate from the surrounding geographic area in certain circumstances,
see A & C Bldg. and Indust. Maint. Corp., 82-1 B.C.A. (CCH)
¶15,634, 1982 GSBCA LEXIS 96 (1982) (Air Force base designated as a separate
locality), there has been no showing that such circumstances exist in this case.
We therefore agree with the Administrator that the statutory and regulatory requirement that
the services be performed in the same locality has been met.
We reject the GSA's contention that the temporary contracts that the
GSA entered into for guard services at the new HCFA facility prior to that facility's
occupation in September 1995 preclude Section 4(c) coverage of the Master contract. See
Pet. for Rev. at 10-13. Section 4.163(h) addresses various circumstances that may
result in the interruption of contract services but which will not undermine the
predecessor/successor contract relationship. 29 C.F.R. §4.163(h); see In re Fort
Hood Barbers Ass'n, ARB Case No. 96-181, Nov. 12, 1996, slip op. at 4 n.3. As
previously described, the GSA entered into short term and emergency contracts for limited
guard services during the interim period -- November 1994 through August 1995 -- between
the completion of construction on the new HCFA facility and the occupation of that site by
HCFA staff. See Exhs. 3, 5, 6, 7 , 8. Factors that played a role in the instant
case, viz., the change in the contracting agency and the default of one of the
contractors, are among those circumstances specified by Section 4.163(h) as exigencies that
could result in the interruption of contract services but which would not undermine the
predecessor/successor contract relationship under Section 4(c). In addition, Section 4.163(h)
refers to the temporary closing of a government facility for renovation, an eventuality in the
operation and maintenance of office buildings that is similar to the closing of the HCFA offices
in the SSA complex and the relocation to the new HCFA facility that is involved here. We
therefore conclude that the short term contracts entered into by the GSA during the November
1994 through August 1995 period qualify as interim contracts of the type that, pursuant to
Section 4.163(h), do not undermine the predecessor/successor contract relationship of the full
term contracts here involved. See 29 C.F.R. §4.163(h).14
Similarly without merit is the GSA's alternative contention that, if a
predecessor/successor contract relationship does exist for purposes of Section 4(c) coverage,
the CBA in effect under the predecessor contract is binding on the successor contract for a
period of one month only. The GSA bases this argument on the provision in the predecessor
contract between the SSA and Watkins that reserved to the SSA the right to exercise its option
to continue the contract for guard services for the HCFA offices at the SSA complex on a
monthly basis, during the September 5, 1994 through September 4, 1995 period. Pet. for
Rev. at 16-18. That monthly option provision, the GSA urges, requires that the predecessor
contract be considered to be a monthly, rather than a yearly contract and, pursuant to the
Board's decision in In re International Union of Operating Engineers and Local
387, BSCA Case No. 92-23, Jan. 27, 1993, to be binding on the successor contract for
a period of one month only. Id. In further support of this argument, the GSA
quotes text from the regulations found at Sections 4.143(b) and 4.145(a).15 The Administrator urges
that adoption of the GSA's reading of the Operating Engineers decision would not
serve the purposes of the SCA. Statement of the Adm'r in Opp. to Pet. for Rev. at 18-19.
The Administrator also notes that the SSA did not exercise its option to terminate the
predecessor contract with Watkins during the September 1994/95 contract year.
Id.
We initially note that we must read the regulatory language that is relied
on by the GSA within the context of the regulations as a whole and in a manner that is
consistent with the purposes of the SCA.16 See Colorado Dep't of Labor and Emp't v. United States Dep't of
Labor, 875 F.2d 791, 798 (10th Cir. 1989)(construing regulations under the
Comprehensive Employment and Training Act, 29 U.S.C. §801 et seq).;
see also 2A Norman J. Singer, Sutherland, Statutes and Statutory
Construction, §46.06 at 119-20 (5th ed. 1992)(provisions must be construed in
a manner that gives effect to all); see generally Amer. Federation of Labor and Congress
of Industrial Orgs. v. Donovan, 757 F.2d 330 (D.C. Cir. 1985)(examining validity of
regulations promulgated under the SCA); Clear Air Force Base, slip op. at 4-6
(construing 29 C.F.R. §4.163(a)). We cannot agree with the GSA's contention that
Sections 4.143 and 4.145, as construed in Operating Engineers, require that the
predecessor contract between the SSA and Watkins be deemed a monthly contract. Rather,
we conclude that the monthly option provision included in the SSA predecessor contract must
be considered to be another of the exigencies covered by Section 4.163(h).
Several factors militate against a reading of Sections 4.143 and 4.145,
and the Operating Engineers decision, as sanctioning the result advocated by the
GSA in this case. In the Operating Engineers decision, the Board agreed with the
Administrator that service contracts that provide for a base year contract with additional one
year option periods should be considered to be separate one year contracts for purposes of
Section 4(c). In concluding that the Administrator's interpretation of "contract"
under the SCA was reasonable, the Board reviewed the text of Section 4(c) and the regulatory
provisions found at 29 C.F.R. §§4.143(b) and 4.145(a), and noted that, "as
a matter of administrative policy, multi-year service contracts with a basic year and option
periods have been consistently treated by the Wage and Hour Division as separate contracts
since 1968." Operating Engineers, slip op. at 5; see also Clear Air
Force Base, slip op. at 5 (observing deference due agency in interpretation of its own
regulations). The foregoing reasoning focuses on option periods of one year in duration, for
two primary reasons.
First, as Section 4.145(a) explains, multi-year contracts that are subject
to appropriation of funds by Congress must be considered to be a series of yearly contracts in
view of the contingent nature of their continued funding. 29 C.F.R. §4.145(a). In
addition, as cited in Section 4.145(b) and discussed in the Board's Fort Hood
Barbers decision, Section 4(d) of the Act, 41 U.S.C. §353(d), requires that wage
determinations be periodically adjusted at intervals of no less than two years. See
29 C.F.R. §4.145(b); Fort Hood Barbers, slip op. at 3-4. Comments
made by the Administrator in the course of revising Section 4.145(a) in 1983 state that
"[t]his section is intended to cover only those contracts for terms in excess of one year
. . . ." 48 Fed. Reg. 49736 (Oct. 27, 1983). At that time, the Administrator also noted
that the GSA had commented that the regulation as previously drafted was unclear and
"could be interpreted to require incorporating a new (revised) wage determination at the
beginning of the new fiscal year, even though the contract had been in effect only a few
months." Id. The comments of the GSA on that occasion clearly anticipate
the impracticality of the interpretation of the "wholly new contract" language of
Section 4.145 that the GSA is now advocating. All of the foregoing indicate that the option
periods contemplated by Sections 4.143 and 4.145 are for one year's duration, consistent with
the primary purpose of those regulations to ensure that updated wage determinations are
incorporated into multi-year contracts. See 61 Fed. Reg. 19770 (May 2, 1996)
(Proposed rules, 29 C.F.R. Part 4; commenting that Federal agencies typically award contracts
for one year with options for additional years and that option periods are deemed to be new
contracts "for wage determination purposes and must include new or updated wage
determinations (see 29 C.F.R. 4.145).").
By reserving the right to terminate the contract for guard services for
the HCFA offices on a monthly basis, the SSA served the interests of efficiency and fairness
by placing Watkins on notice that the HCFA portion of the contract was subject to termination
at any time during the contract year. The monthly option provision in the SSA predecessor
contract thus served the function of facilitating the transition from one full term contract to
another that is contemplated by Section 4.163(h). In construing these regulations, it is
necessary to keep in mind that Section 4(c) attempts to strike a balance between the protection
of prevailing labor standards and the safeguarding of other legitimate Federal government
interests. See Trinity Services, Inc. v. Marshall, 595 F.2d 1250, 1256-57 (D.C.
Cir. 1978)(quoting from legislative history of Section 4(c), S. Rep. 1131, 92d Cong., 2d Sess.
4-5, reprinted in 1972 U.S. Code Cong. & Ad. News 3537); see also
41 U.S.C. §353(b) (authorizing the Secretary to establish exemptions from all
provisions of SCA except Section 10, 41 U.S.C. §358). To hold that the predecessor
contract was converted from a yearly into a monthly contract for purposes of Section 4(c)
coverage based on the SSA's having efficiently and fairly facilitated the transition from one
full term contract to another would serve neither of these objectives. We therefore reject the
GSA's argument that the successor contractor is bound for a period of one month only by the
predecessor contract.
Finally, the GSA's reliance on Section 4.55(a)(1) in support of its
argument that the Administrator cannot now require application of Section 4(c) to the
successor contract between the GSA and Master is misplaced. Pet. for Rev. at 18-19.
Although Section 4.55(a)(1) limits the period of time in which a party may request
reconsideration of a wage determination by the Administrator, 29 C.F.R.
§4.55(a)(1),17 its
provisions are not controlling here. As urged by the Administrator, Section 4(c) of the Act
imposes a direct statutory obligation and is self-executing. See 29 C.F.R.
§4.163(b); In re Houston Building Services, Inc., ARB Case No. 95-041A,
Aug. 21, 1996, slip op. at 5. As expressly provided in Section 4.163(b), it is unnecessary for
Section 4(c) coverage to be reflected in the pertinent wage determination. Rather, the
Administrator's final ruling regarding the applicability of Section 4(c) is an action independent
of the wage determination issued for the GSA contract here involved, and that action is before
the Board pursuant to 29 C.F.R. §§8.1(a)(6), 8.7(b).
For the foregoing reasons, the Petition for Review is
DENIED.
SO ORDERED.
DAVID A. O'BRIEN
KARL J. SANDSTROM
JOYCE D. MILLER
1 The foregoing decision was issued
by the Deputy Secretary prior to the establishment of the Board of Service Contract Appeals on July 10,
1992. See Secretary's Order 3-92, 57 Fed. Reg. 33,414 (July 28, 1992); 29 C.F.R.
§8.0 (1991). For purposes of review of matters arising under the SCA, the Board of Service
Contract Appeals was the predecessor to the Administrative Review Board. See Secretary's
Order 2-96, 61 Fed. Reg. 19978 (May 3, 1996).
2 Subparts A, C and D of Part 8
are pertinent to this appeal of the "final action[] of the Wage-Hour Administrator" under 29
C.F.R. §8.1(b)(6). See 29 C.F.R. Part 8. Subpart B of Part 8 concerns Review of
Wage Determinations and is thus not controlling in this case.
3 Section 4(a) of the SCA
incorporates Sections 4 and 5 of the Walsh-Healey Act, as amended, 41 U.S.C. §§38, 39,
41 U.S.C. §353(a); see United States v. Deluxe Cleaners and Laundry, Inc., 511 F.2d
926 (4th Cir. 1975). The Secretary is expressly authorized "to prescribe rules and
regulations" as he finds necessary to the administration of the statute. 41 U.S.C. §38.
4 As pointed out by the GSA in
response to the dismissal motion, the Union erroneously relies upon 29 C.F.R. §7.18, which is
found in 29 C.F.R. Part 7, and which pertains to practice before the Board in regard to Federal and
Federally assisted construction contracts, Motion to Dismiss Appeal at 1.
5 Section 8.10 provides, in pertinent
part:
Section 8.15(a) provides, in pertinent part:
6 Section 8.11(a) directs the Board,
following receipt of a petition of review, "to notify the parties known or believed to be interested
in the case." 29 C.F.R. §8.11(a); cf. 29 C.F.R. §8.2(b) (defining
"interested party" to include employees, labor organizations, contractors, industry
associations, contracting agencies and "any other party whom the Board finds to have a sufficient
interest . . . ," for purposes of appeals of wage determinations to the Board under Subpart B of
Part 8, Title 29).
7 We note that the regulations
concerning enforcement proceedings under the SCA, Subpart B of Part 6, Title 29, do provide for
enlargements by the Administrative Review Board of the time period in which a party may file a petition
for review of a decision issued by an Administrative Law Judge. 29 C.F.R. §6.20. Part 6
concerns enforcement actions only, however, and does not address an appeal from a ruling of the
Administrator as is involved in this case. See 29 C.F.R. §6.1.
8 The foregoing rulings were issued
by the Deputy Secretary and Secretary, respectively, prior to the establishment of the Board of Service
Contract Appeals. See n.1 supra.
9 On March 28, 1997, the Union
filed its brief opposing the petition for review; the arguments advanced by the Union in that brief have
been given careful consideration in our review of the petition filed by the GSA.
10 The contract that is in the
record as Exhibit 5 represents the substance of the contract that was awarded to Scotlandyard, as
Contract No. GS-03P-95-DWC-0002, and the contract that was later awarded to Master, and designated
as Contract No. GS-03P-95-DWC-0035. Pet. for Rev. at 7.
11 On January 30, 1996,
aster entered into a CBA with the Union, the terms of which stated that it would be in effect for the
period from September 1, 1995 until May 31, 1996. Exh. 8.
12 The GSA contract for the
HCFA facility details the corrective actions to be taken when occupants or visitors are observed
violating facility rules and regulations; actions to be taken are implied by the corresponding SSA
contract item, when read in conjunction with the duties to maintain law and order in the assigned area
and to prepare reports regarding unusual incidents and unlawful acts. Exh. 1 at 10, 11; Exh. 5 at 0010.
13 The Wage Determination
dated April 6, 1993, covers Baltimore County; the Wage Determination dated December 23, 1993,
covers, in addition to Baltimore County, Anne Arundel, Howard, Carroll, Harford Counties and
Baltimore City. Exhs. 1B, 4, 6; see 29 C.F.R. §4.54(a).
14 Section 4.163(h)
summarizes the restrictions on the applicability of Section 4(c) thus:
15 The GSA quotes from
Section 4.145(a), as follows:
16 As has been frequently
noted by the Board, it is axiomatic that we are bound by the implementing regulations promulgated by
the Secretary. See, e.g., In re Fort Hood Barbers Ass'n, ARB Case No. 96-181, Nov. 12,
1996, slip op. at 3 n.2; see also 29 C.F.R. §8.1(b).
17 The regulation at 29
C.F.R. §4.55 was redesignated as Section 4.56 in 1996. See 61 Fed. Reg. 68664
(Dec. 30, 1996).
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Chair
Member
Alternate Member
29 C.F.R. §8.10(d), (e).
Section 8.15(b) provides:
29 C.F.R. §8.15 (1996).
29 C.F.R. §4.163(h).
The GSA quotes from Section 4.143(b), as follows:
Pet. for Rev. at 16-17.
