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1 hour ago, Vern Edwards said:

The fact that the mapping was shown in the proposal is irrelevant.

The contractor is responsible for setting its price. The contractor should know whether it will have to conform some labor classifications and knows or should know that the DoL has the final say and might conform the classification to one with a higher minimum wage. It must take the chance, which is a reason to classify/conform conservatively and price accordingly.

The agreement between the parties on the contract price is not an agreement on individual elements of cost. The CO's agreement with the conformance proposal does not constitute a warranty that the DoL will approve the proposed conformance or that the contract price will cover the contractor's labor cost. It merely expresses agreement or disagreement with the contractor's conformance decision.

Finally, I believe (but am not sure) that the DoL's approval or disapproval of the conformance proposal is the government acting in its sovereign, not its contractual capacity, and the contractor will have to live with it, just as it would if the federal or a state government raised taxes or fees.

Seems outrageous, remarkably unconscionable, but perhaps true.  The Govt is the big bully on the block.

A fairer interpretation is that if the Govt made an award pursuant to the proposal, it accepted the mappings within the proposal.

And the KO and the DoL are the same person, the United States of America.

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Lotus, I think you are spitting into the wind here.  So far as I can tell, the conformance procedure is not required by statute.  Instead, it is a creation of DoL in its capacity to implement the SCA.   FAR 52.222-41 is a clause drafted by DoL and is set forth in 29  CFR 4.5.  That is where the conformance procedure is stated.

When contractors receive a solicitation for offers on work that is subject to the SCA, 52.222-41 is required to be in that solicitation.  Thus, offerors are placed on notice that if a conformance is necessary, DoL has the final say on what the conformed rates of pay will be.  Similarly, if a contractor receives a contract subject to the SCA and has to utilize the conformance procedure specified in FAR 52.222-41, the contractor has agreed that DoL will have the final say on what the conformed rates of pay will be.

As for the KO and DoL being the same person, that is not so.  The government is the entity with whom a contractor has contracted.  The KO and DoL official ruling on the conformance are agents of the government.  Agents of the government can only bind the government to the limit of their authority.  When the conformance procedure is called for, the KO has no authority to make final determinations.  Thus, the KO cannot commit or bind the government in this regard.  It is the DoL official who rules on the conformity that has the authority to do so. 

Finally, you have to recognize the purpose of the SCA.  The SCA is designed to protect workers not the contractor or government.  While the scales may be tipped in the employee's favor under the SCA, the welfare of the contractor was not a concern of congress when it passed the SCA.

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Guest Vern Edwards
1 hour ago, lotus said:

And the KO and the DoL are the same person, the United States of America.

That's wrong. The CO is an agent of the U.S. with limited powers. Certain persons in the DoL are agents of the U.S. with different limited powers. The CO has no power with regard to worker classification. He or she merely implements DoL policy. DoL is the ultimate decisionmaker.

I know that you are distressed by your situation, and I understand. But we are now edging into the realm of ignorant silliness, so I think it's time for me to say good luck to you and goodbye. I hope it works out.

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Perhaps it is because of a general hands off approach to service contract labor by those government program officials, contracting and contract administrators.  However, I wonder why the government wouldn’t know what the proper wage classification of 200 employees is on an existing contract that is being recompeted for a successor contract. FAR 22.1008 describes the process and responsibilities for obtaining the wage determination to be included in the solicitation for the successor contract. 

For instance, 22.1008-1 says, in part,

Quote

(d) Although the WDOL website provides assistance to the contracting agency to select the correct wage determination, the contracting agency remains responsible for the wage determination selected. If the contracting agency has used the e98 process, the Department of Labor will respond to the contracting agency based on the information provided on the e98. The contracting agency may rely upon the Department of Labor response as the correct wage determination for the contract.”

I don’t know here if the proposer was using the labor classification provided or proposed something different. If it was different for 200 employees, shouldn’t that have tipped off the government that something was amiss with the government provided wage determination? Then, the government agreed with it. 

If the proposer did use the provided wage decision but was unable to rehire [EDIT:some] employees at that wage level, did DOL re-classify [EDIT: all] the employees at a higher minimum wage/fringe? 

Pardon me for my ignorance, but something seems to be wrong with the contract formation here. I don’t think that the conformance procedures were intended to have to be used for determining the minimum pay for the entire work force.  Both the eventual contractor and the government should have known that something is wrong with the wage determination, if the proposer decided to propose a lower classification for the type of work included in the wage. determination.

The government should have known what the correct classification is for 200 existing employees,  if the eventual contractor confirmed it in its proposal only to find out later that that was incorrect. I don’t. Know if DOL ended up changing the classification that was in the wage decision or simply determined that the employees should have been classified at a higher level. 

EDIT: Lotus said in the original post:

Quote

In the proposal the then offeror, now contractor, clearly mapped all the SCA positions to General Clerk I in the applicable age determination, and built his rates on that rate as a base.   

Can Lotus or someone else please help clarify what happened and why, assuming that this is a successor contract?  Thanks. 

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20 hours ago, lotus said:

Seems outrageous, remarkably unconscionable, but perhaps true.  The Govt is the big bully on the block.

lotus –  To an extent maybe.   While I have already agreed that you are hosed an opinion I made in a general sense the facts of every situation vary.   I did a little research and found this informative article regarding “Recovering the Costs of DoL Wage Increases Under the Service Contract Act” and it does discuss conformance. 

 

Here is a link. https://scholarlycommons.law.hofstra.edu/cgi/viewcontent.cgi?article=1256&context=hlelj

Specific to your two questions I now say a contractor may or may not be hosed in either 1 or 2 as the facts will determine.  I suggest that if the scenarios you have provided are important to you I would suggest finding legal counsel that is experienced in the arena of SCA and appeals to DOL, the Administrative Procedures Act, and the Contracts Disputes Act.

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Guest Vern Edwards

I commend Carl for finding and providing a link to the article. Note that the article is dated 1998.

In Spectrum Sciences and Software, Inc., ASBCA 49769, 00-1 BCA ¶ 30663, decided in 1999, the year after the article was published, the ASBCA denied the contractor's claim for an equitable adjustment based on the DoL's rejection of a proposed conformance. The decision was grounded in a clause in the pre-FAR Defense Acquisition Regulation (DAR), DAR 7-1905, Labor Price Adjustment. From the decision:

Quote

When DOL conformed the Scoring Specialist, Scoring Specialist - A, Scoring Specialist - Chief, and Range Operator - Chief positions, it conformed them at the rate stipulated based on equivalence to other classifications, after rejecting the conformance proposed. It did not create a new classification, nor was its conformance decision a wage determination. Under DAR 7-1903-41, the Service Contract Act clause, the contractor bears the responsibility for classifying the unlisted position so that there is a reasonable relationship - an appropriate level of skill comparison - between the unlisted classification and the classifications listed in the wage determination. The resulting conformed class of employees must be paid the wages and given the fringe benefits finally determined by the Wage and Hour Division retroactive to the first day on which contract work is performed by workers in the conformed classifications. Failure to pay is a violation of the Act and a breach of the contract. Spectrum assumed the risk that it would not be able to obtain DOL approval for its conformed categories of employees and would instead have to pay the wages determined by DOL. Johnson Controls World Services, Inc., ASBCA Nos. 40233, 47885, 96-2 BCA ¶ 28,458 at 142,142. See also Northern NEF, Inc., ASBCA No. 44996, 94-3 BCA ¶ 27,094 at 135,004.

In Re Spectrum Scis. & Software, Inc., ASBCA No. 49769, 00-1 B.C.A. (CCH) ¶ 30663 (Nov. 15, 1999)
 

 Emphasis added.

I have not done extensive legal research. A quick search found only three BCA decisions dealing with the issue. I found only one pertinent Court of Federal Claims decision, the Burnside-Ott decision mentioned in the article. The Court found for the government on all counts in that decision. The Federal Circuit overruled, apparently on procedural grounds, and remanded the case to the claims court. There has been no subsequent decision, so maybe the parties settled out of court. I don't know of any way to find out at this late date following the Federal Circuit's 2003 ruling.

There is no indication that the board or the claims court decision has subsequently been overruled on the merits. So if, in fact, it hasn't been overruled, then lotus is "hosed," at least until he can find a lawyer who can win a case that makes new case law, perhaps based on mutual mistake.

lotus needs legal advice and should contact an attorney.

 

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