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benmac

Contractor Penalized for Labor Law not required in Contract

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I am looking for some advice, guidance, or precedence on a pending issue. I am a CO with the US Forest Service and we contract with companies to provide operated equipment (e.g. engines, dozers) for wildland firefighting support. We establish Commercial Item BPAs on a competitive basis, where vendors submit quotes in response to a RFQ published in FBO. Our specs, requirements, etc. are boilerplate throughout the country, so all the FAR clauses are standard (Part 12). These are all covered by the Service Contract Act. We establish BPAs with hundreds of vendors in my Region.

That said, one of our BPA vendors was recently investigated by the DOL Wage and Hour Division for an undisclosed allegation. During the investigation DOL discovered the vendor was not registered as a "farm labor contractor" in accordance to the Migrant and Seasonal Agricultural Worker Protection Act (MSPA) and is facing potential fines/penalties. MSPA was not the reason for the initial investigation, but came to light during.

The act identifies specific safety requirements, protective gear, driving requirements the contractor must adhere to. The registration is common in Forest Service contracts for labor intensive services such as fire handcrews, tree planting, reforestation work, etc. and we include an agency acquisition regulation in our applicable contracts stating the contractor must be registered and adhere to the standards. When MSPA is applicable, we verify the vendors are registered, perform inspections at the work site, etc. to ensure they are in compliance with the various requirements.

The CFR can be found here: http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&sid=48d6ee3b99d3b3a97b1bf189e1757786&rgn=div5&view=text&node=29:3.1.1.1.1&idno=29%C2'>

Issue: our fire equipment BPAs do not include the agency clause stating MSPA is required, so we do not expect them to register nor do we monitor for compliance. In other words, the Forest Service does not consider MSPA applicable to our equipment BPAs; but DOL is enforcing as if it were.

Questions:

1. While the applicability of MSPA is arguably debatable (I contend its being misapplied), the part I am struggling with is the fact our vendor could be found non-compliant and fined for a law/regulation they were not aware of since it was not included in their BPA. So, do you think its appropriate for DOL to fine our contractor for lacking a registration they were unaware of or was not required by the hiring agency? Has anyone experience this before?

2. Would the contractor have any remedies through the Disputes Act against the Gov? The contractor would have been under contract via BPA call when the alleged violation occurred.

3. If our agency contends the law is being misapplied, do we have any recourse to challenge DOL's interpretation?

This came out of nowhere and the implication MSPA is required for our equipment vendors could have significant impacts on what the Forest Service requires of our contractors and how we administer the BPAs. I appreciate any insight or advice on how to approach this and please dont hesitate with questions.

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Tell me if I'm staing the fact right--

1. You have FAR Part 13 BPAs with hundreds of vendors.

2. One of those vendors was working on a BPA call.

3. While that vendor was working on a BPA call, it was the subject of an investigation by the Labor Department.

4. The Labor Department cited the vendor for not complying with the Migrant and Seasonal Agricultural Workers Protection Act.

5. The BPA does not contain the MSPA clauses.

If the Service Contract Act is similar, I understand it applies if, in the Labor Departmenbt's opinion, the contractor is doing service work -- and this regardless of whether the contract has a wage determination. In such a case, the Labor Deparment cites the contractor and sends the contracting officer a notice requiring the wage determination be added to the contract.

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Thanks ji20874,

Affirmative on all but #3. DOL investigated the contractor after the call was completed. They were apparently looking at allegation, e.g., a wage complaint from an employee, and during the investigation brought up the MSPA requirements.

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benmac,

Lack of a clause in the contract does not excuse a contractor for failing to comply with a law or regulation--it just does not make them contractually liable for the infraction. There are a lot of laws and regulations that contractors must abide by that may not specifically be called out in the contract (e.g., ITAR, EAR, OSHA, other DoL regulations). The Government would probably not have any contractual remedies for noncompliance (T4D, withholding of payments, etc.), but that does not mean that a Government agency could not impose penalties. If the contractor had spilled toxic chemicals all over the place, do you think they would be immune from EPA fines because the contract they were working under didn't put them on notice that EPA regulations apply to them?

By the way, the contractor was aware of the MSPA. Ignorance of the law is no excuse.

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Guest Vern Edwards

I'm getting wind of a CO who wants to intercede with DOL on behalf of one of his contractors. This is none of your business at this point. Stay out of it.

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Thanks Don and Vern.

Don - I appreciate your point on the contract lacking the clause, which for the scenarios you listed I dont argue. In our agency we acknowledge when this law is applicable in our agency Acquisition Regs and add to our contracts when needed. This serves as notice to our vendors when they need to obtain the additional MSPA license - which in my case we've left out intentionally since we do not consider it applicable. I do not agree, however, that the contractor was aware they needed it though.. mainly because the vast majority of them rely on us to inform them of what federal laws, training, registrations, etc. they need to adhere to.. and in this case, we werent even aware it was needed so I wouldnt expect our vendors would be either. In fact, we have about 900 vendors in the same category in my region alone, and I would suspect 90% or more wouldnt even now what MSPA was. In light of that, I feel we have a responsibility to notify our vendors if MSAP is requried.

Vern - Without question I am strategizing on how to intercede, but its on a bigger scale as I am concerned about having 900 additional vendors in the same boat in my Region, thousands more across the agency. There are ramifications agency-wide that would be a significant challenge for us to absorb on this short of notice if DOL enforces this and abruptly expects us to require MSPA in all of our BPAs... so this has the potential to sting both the vendors and the agency.

Our agency may press this, so at this point I am simply researching and seeking opinions. This is a new wrinkle for myself and our policy staff so I really appreciate all of your input.

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Benmac asked, in his third question "If our agency contends the law is being misapplied, do we have any recourse to challenge DOL's interpretation?" The answer is yes, but I don't know the procedures. Benmac, is there anyone in Forest Service or USDA who can contact the Wage and Hour Division of DOL and find out the specific answer to your question?

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BenMac – I hope that you post the final outcome. Having swam in the same waters I have always thought that MSPA would apply but simply by agency action they have avoided it. Primary example there are contractors who have equipment BPA’s who have on occasion had contracts or otherwise performed where MSPA applied by the agency. It has been intriguing to me that MSPA would apply in one case and not in others. Likewise I would suspect that the BPA’s include SCA Wage Determination “Forestry and Land Management Services” which is the same found in other contracts that the agency wants to classify as being “labor intensive”. While SCA has no bearing it does seem the agency has blurred the definitive line in trying to suggest some subject to the wage determination are not agricultural workers and others are. My conclusion is that the Forest Service definition of “labor intensive” is flawed and not in keeping with DOL regulation. Again it will be interesting to see how this unfolds.

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Benmac, in regard to your agency's ability to intercede with DoL, have you contacted our General Counsel? I think they need to be involved in this issue if it is significnt to you. If two agencies are in a dispute over the interpretation of a law, they can ask the Justice Department for an interpretation of the law to settle the dispute.

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Guest Vern Edwards

If two agencies are in a dispute over the interpretation of a law, they can ask the Justice Department for an interpretation of the law to settle the dispute.

Retread:

Where did you get that idea with respect to this law, 29 U.S.C. 1801 et seq.?

29 U.S.C. 1861 expressly gives the Secretary of Labor the authority to issue the "rules and regulators" governing the law in question. Department of Justice (and the Forest Service) has no authority in that regard, unless a decision is made to pursue criminal charges or civil action in court. It's the agency who is authorized to administer a law and issue regulations that gets to interpret the law. See Bortone v. U.S., 110 Fed. Cl. 668 (2013):

The framework established in Chevron, U.S.A. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), sets the standard by which courts determine whether an agency's statutory interpretation is reasonable. Under Chevron, the court first determines “whether Congress has directly spoken to the precise question at issue.” Id. at 842, 104 S.Ct. 2778. The court looks to the language of the statute itself to determine Congressional intent. Delverde, SrL v. United States, 202 F.3d 1360, 1363 (Fed.Cir.2000). Beyond the statute's text, the court may use other tools of statutory construction to determine the intent of Congress. Heino v. Shinseki, 683 F.3d 1372, 1378 (Fed.Cir.2012). If Congress' intent is clear, the inquiry ends. If, however, the court cannot ascertain the intent of Congress, the court asks whether the implementing agency's interpretation of the statute is reasonable. Chevron, 467 U.S. at 843, 104 S.Ct. 2778; Heino, 683 F.3d at 1377.

Where the agency's decision is based on an interpretation of its own regulations rather than on the statute, its interpretation is controlling “unless plainly erroneous or inconsistent with the regulation.” Auer v. Robbins, 519 U.S. 452, 461, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997). Under the Auer standard, “an agency's interpretation need not be the only possible reading of a regulation—or even the best one—to prevail.” Decker v. Nw. Envtl. Def. Ctr., ––– U.S. ––––, 133 S.Ct. 1326, 1337, 185 L.Ed.2d 447 (2013). Rather, the court will consider whether the agency's interpretation of the regulation is a “fair and considered judgment on the matter in question.” Auer, 519 U.S. at 462, 117 S.Ct. 905. While deference is generally only afforded to an agency's interpretation of its own rules and regulations, Allegheny Teledyne, Inc. v. United States, 316 F.3d 1366, 1378 (Fed.Cir.2003), courts will give deference to an agency's interpretation of regulations drafted by another agency where, as here, the interpreting agency adopts and administers the subject regulations. Sec'y of Labor v. Excel Mining, LLC, 334 F.3d 1, 7 (D.C.Cir.2003). This is particularly true when an agency is given authority to implement the regulations of another agency. Paralyzed Veterans of Am. v. D.C. Arena L.P., 117 F.3d 579, 585 (D.C.Cir.1997).

The statute gives the Attorney General no authority to overrule an interpretation by the Secretary of Labor. The Attorney General can control attempts to seek judicial enforcement, but not administrative enforcement. I suppose the Secretary could ask the DOJ for its opinion, but why would the Secretary do that when the DOL has its own Solicitor? The law authorizes the Secretary to go directly to a U.S. District Court. Moreover, 29 USC 1962( c ) says:

It shall be a violation of this chapter for any person to unlawfully resist, oppose, impede, intimidate, or interfere with any official of the Department of Labor assigned to perform an investigation, inspection, or law enforcement function pursuant to this chapter during the performance of such duties.

Let's not even talk about the potential political consequences of appearing to try to thwart a law that benefits some constituency.

So on what do you base your assertion that the DOJ can settle a dispute between the DOL and the Forest Service, an agency that has no authority or role whatsoever with regard to the law in question? Can you cite anything? If I'm wrong, I want to know, and if you know, I want to get the skinny from you.

In my opinion, if Benmac has a brain in his head he'll mind his own business, refuse to discuss the matter with his contractors, referring them to the DOL, instead, and won't attempt to intercede on anybody's behalf. He should let the Chief of the Forest Service deal with this if he wants to.

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Joel - we are working our way towards that discussion at the agency level, we are hoping to sort this out Regioanlly first. That is one of the sticky points actually, from what we can gather this interpretation appears unique to a single state/distict DOL office and it may not be consistently interpreted and/or enforeced nationally.

Carl - Will do. We include a "Fire and Emergnecy Services" SCA Wage determination, so its actually different than the Forestry one. That unfortunately has been a saga too, DOL stopped publishing an annual WD due to some supposed abuse during Hurricane Sandy. We now have to request a new WD for each solicitation.. and technically for each Emergency Agreement, of which the latter isnt practical since the WD wouldnt be issued until after the work was completed. So now we incorporate a WD effective the date the RFQ is issued, but 1) the WD does not update annually anymore and 2) they are not updated/current for each BPA call.

Retread - We had the same situation with one of our national helicopter vendors, that office was prepping our counsel, but DOL backed off in that case and we stopped short of getting their take. We may revisit if needed though.

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Guest Vern Edwards

Tha authority of DoJ to give interpretations of laws to agencies is found in 28 U.S.C. 512.

28 U.S.C. 512 says:

The head of an executive department may require the opinion of the Attorney General on questions of law arising in the administration of his department.

That's not authority for the DOJ to "settle the dispute" between two agencies concerning the interpretation of a statute or agency regulations.

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Vern - I can all but guarantee it wouldnt go that far. The more I digest this its becoming clearer to me the issue has more to do with coordination/collaboration between the agencies than it does with procurement policy or administration. We are hearing about this from our vendors, not DOL, so in a perfect world we would have been notified ahead of time, modified our BPAs to incorporate the MSPA requirements, and wouldnt have been caught off guard. But the way this unfolded we, as the hiring agency, were not aware of the new enforcement and as such may be left scrambling to accomodate the changes, alter our eval processes, and ehance our administration procedures a couple months before fire season.

It may sound benign, but this type of change creates significant impacts for us downstream.

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Guest Vern Edwards

I wish I could say that I am sympathetic with your contractors, but I'm not. I know some of those guys, and they're a hard-headed bunch who are happy to get a government check but quick to damn the government as a bunch of bureaucrats.

They should have known the law (I bet many of them did) and complied with it. Now they're in trouble and they have persuaded the USFS that it's their fault for not putting a clause in their BPAs and orders telling them about the law and regulations that they should have known about. Well, they're lucky to have such sympathetic COs and higher level agency officials. I'll be interested in learning how this works out.

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28 U.S.C. 512 gives DoJ the authority to interpret laws that impact an agency's operations. That authority can be exercised if one agency askes for an interpretation of a law that another agency is attempting to implement in a way that adversely impacts the requesting agency. Specific authority to resolve disputes between agencies is found in Executive Order 12146.

For specific situations where DoJ has resolved disputes, see

http://www.justice.gov/olc/2004/usps-eeoc-092004.pdf and http://www.justice.gov/olc/opinions/01062003_eeocnavy.pdf

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Guest Vern Edwards

I'm not trying to nitpick you, but the E.O. you cited says this:

Whenever two or more Executive agencies whose heads serve at the pleasure of the President are unable to resolve such a legal dispute, the agencies shall submit the dispute to the Attorney General prior to proceeding in any court, except where there is specific statutory vesting of responsibility for a resolution elsewhere.

That language suggests that if the Attorney General cannot settle the matter to the mutual satisfaction of the two agencies, one or both of them can proceed to a court. Thus, the DOJ cannot force a settlement upon them. It also says "except where there is specific statutory authority... ." I'm not sure what that means, but it may be that where a statute vests authority in an agency head to implement the statute, the E.O. does not apply.

Rather than go on like this, I'll say that you have satisfied me that the DOL and USDA can go to the attorney general for an opinion about the proper application of the statute in question, which is what I said was the case in my first post. Beyond that, I don't see DOJ having any authority to force an interpretation upon the Secretary of Labor. I do presume that the president could do so, but maybe not.

Thanks for the two memos. They were very interesting and informative, but they did not resolve the matter for me since they appear to be nothing more than legal opinions and not settlement orders of any kind.

You taught me something.

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BenMac –It might just be that issuances like these have helped in confusing the issue.

The ICPI – Incident Contract Project Inspector Task Book references MSPA as a check area.

A power point from 2008 tilted “The Changing Composition of Firefighting Resources: Agency/Contractor Relations in Wildland Firefighting -November 2008” by the Wildland Fire Lessons Learned Center states contractors must comply with:

  • Fair Labor Standards Act
  • McNamara-O’Hara Service Contract Act
  • Migrant & Seasonal Agricultural Worker Protection Act
  • Field sanitation of Occupational Safety & Health Act

With a footnote that source for the slide was from a presentation by USDOL.

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Carl - appreciate the ICPI referfence, that was squarely under my nose.. considering I was on the team that developed the position.... That was carried over from the now defunct CRNW (Crew Rep NW) but is still part of the Crew inspections (MSPA is required in the Crew Agreement/Contract) - but we havent been checking this for the Engines (since MSPA wasn't inlcuded in the BPAs).

By the way, we know each other, I am your former peer a couple hundred miles to the west of you... would be receptive to elaborating on this offline if you are open to it. My first name is in my handle... email me if you still have it, otherwise our buddy Gary could link us up...

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Vern, one last thing about the XO. In your last post, you referenced section 1.402 of the XO. However, Section 1.401 says "Whenever two or more Executive agencies are unable to resolve a legal dispute between them, including the question of which has jurisdiction to administer a particular program or to regulate a particular activity, each agency is encouraged to submit the dispute to the Attorney General." Under this section, potential litigation is not a factor. Section 1.401 is discretionary, while 1.402 is mandatory.

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Guest Vern Edwards

I agree. Under 1.402 it's mandatory that one or both of the agencies should seek the DOJ's opinion before going forward.

Thanks again. I did not know about the E.O.

Separate comment: I have always wondered about the viability of a president's E.O.s after he (or she) leaves office. I know that some experts in administrative law have suggested that they are not binding. But I also know that many E.O.s have long outlived the presidents that issued them. I think the E.O. you referred us to was issued by Jimmy Carter and amended by Ronald Reagan. The DOJ memos you provided were issued under Bush II. Interesting. Does a new president have to cancel an E.O. if he or she does not want it to continue in effect?

See this Congressional Research Service report about the history of executive orders.

http://en.wikisource.org/wiki/Executive_Orders_and_Proclamations#1

President Obama just issued an E.O. ordering that contractors pay a minimum wage to their employees. I question whether he has authority under the constitution to issue an order like that.

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Having worked for the Forest Service, I think you're going to find that there is no disagreement between USDA and DOL. This matter might be VERY important to the contracting officer, but I think it will never rise to the attention of the Chief of the Forest Service. The DOL cited the contractor. The contractor needs to deal with its citation.

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President Obama just issued an E.O. ordering that contractors pay a minimum wage to their employees. I question whether he has authority under the constitution to issue an order like that.

I had the same question but don't have the legal knowledge concerning whether or not this authority is contained in some statute. The President probably has the same amount of authority to institute and determine minimum wages as the legal authority to decide which Federal Statutes or which portions of them that the Executive Branch will enforce. The latter seems to me to be occuring on a regular basis but is accelerating during this second term of office. Now we seem to have state AG's and Governors following suit.

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Vern, I have never thought about the duration of XOs. Certainly later presidents have the ability to cancel orders issued by their predecessor with the stroke of a pen. If I recall, that is what Bush II did regarding President Clinton's "black listing" rules issued shortly before leaving office. My big complaint about executive orders regarding procurement is that they make a mockery of the public comment process when they are implemented in regulations.

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