### PRICE DANIEL Ausruv II. TEXAB .4-I- "p1-
June 2 , 1940

Hon. T. B. Warden Board Of control Auetin, Texas

2 ., Dear sir: opinionNO. v-594
Re: Zegality of payment of contractortsclaim for difference-between amountspaid to meet aotua1 prevailingwages and amrounts

stipulated In publicworks .construotion contra& as prevalllng rage rktes.

Your letter of May 4, 1948 and the file aubmltted therewith apprise us of the following facts.

On April 15, 1947, a contractwas entered into by and betueen W. D. Anderson and the State of Texas, acting by and throiagh the State Board of Control. under the term3 of this contraatHr. Anderson agreed to provide all the materials, includ%ngplumbing,heating and electrical rlrhg, and perrorm all the work In the construction of the Marine Laboratoq a8 shown b certain drawi s and 

### 8 eclflcatlons

### whiahwm6 By A&$e Ix of tha oox&raot, 

### 53ae a part of the contrac Y
. it was mutually agreed that the smp to be p&Id far &ala **work** and material was 'tobe $77.800.00, subjeot to 

### vrrioua additions and deductions specifically

provided rer and not presently controverted.
Article 

### XII 0r the aontract reads aa 

### r0ii0wa:
'@MTICLJZ

%II. The provisick of the prevailing wags law, R.B. Ho. 54, Chapter 45, dots of the Regular'Sesaloii'6f the 4Srd Legl8latWe, ~111 be ins

effect 09 thlri

oontraqt..Prevailing wages scales by which the. adntractorwas governed in bidding upon this work and rhloh will constitute the wage saalh of the various classes of labor upon this work, and,uponuhlah the oontraot price (hereinabove stated) is predicated, are as fo~llow8:*.-

. c

. Hon. T. B. Warden - Page'2 (V-594)

Classification Per Hour Classification Per Hour AS SHOP m SPEOIFICATION~ FOR mum GIBOFLITORY "The Contractorshall forfeit as a penalty to the State, ten ($10.00)dollars for each laborer, work+n or meo$anlc~employed, for each calendarday, or portion thereof, such laborer, worlnnan

or mechanic is paid less than the said stipulatedwtes for any work done under said contraat,by him or by any sub-contractor under him." The wage rates embodied in ~the speclflcatlons were determinedby the Board of Control to w the general prevailingrate of wages in the Rockport area, where the work was to be performed,for each craft or type of workman or mmhanlc needed to execute the contract; and were the same rates which were specified in the call for bids on the aontract.

In.your letter of May 4, 1948,, you state that "shortlybefore this contraatwas entered into inquiry ooncerning

wage rates was made of the Labor Coamlssioner and we received a mimeographedsheet (not oertified)(,bearlng the purportedwage rates~ for the Rockport area. YOU further state that on Maroh 6, 1948 (approximately one year after the oontraotwas made) the Departmentof Labor, ,acting at the request of the attorney for W. D. Anderson and Company,has advised you that the information previously furnished on,prevaillng wage rates was erroneoiaa nd that they 

### have wg00aand ruffloientevldenor aonfa the Taotual wage rate in effect ln,(the~Boakport)

. . o wea in March 1947.' The &arl.ne Laboratoryhaa been~aompleted,and w. D. Anderson Is olalming that the final ertlmate of the +mount to be-paid under the oontract should lnolude the sum of $3481005, $32%82 of suoh amountbeing the dlfferenoe between the actual prevafling wage rates which he paid and the wage rates stipulatedin the spealfioatlons as the generallyprevailingwage sates. One hundred twenty-eight dollarsand three cents Is olalmed,asthe resulting additional amountpala~ for Social Securityand Unemployment Cwn-. pensationInsuranceand i$152.20 as .the resultingadditional amountpaid for Workmen8 Compensationand Public Llablllty Insurance. ,

This claim is based on then propositionthat Arti- ,' cle XII of the contract (previously quoted) furnishedan

.Hon. T. B. Warden - Page 3

erroneouswage scale,.tha& and ifi accordancewith bfs th6 actual prevailingwage mistake of Sict warrants a the contractorFder.the law ;zz;act was required to pays

, and that thXs~mutua1 ~a .. ^

. rerormatlonor tne.contraCt to cwer the sum-so expended.' OpinionNo. O-5187 oS the Attorney Ge,neral .supports this propositioti,andallowed paymen% OS tislmllarcla~ In subs,tantlally the-.same fact sl+&ioni '. . (V-594) *

You point out th@t':"should-this claimbe paid, then we must'+dmlt.that any contractdrawn incorporating House,Blll 54 la always subject to thb contingencythat an error arose with respeot to the prevailingrate bf per~diemwages. . .W and the further possiblllty~that .ln many Instances 'IS the clalm.ls allowed,

. .,. the oontract may exce,ed

the appropriationfor such work.?
Pursuant to.'yoti

request we hai* t&i&&en a reexaminationof the pro~lsions of the atatutea *elating. to the rat6 of wages'.oS persons employed In the construe- : : tion OS publiC.works.

### 'The provisions of H.B. No. 54, Ch. .45,Acts of the Regul~L.S8asl~n pf the 43rd.Legislature '~?Pca~ied'as'Ar$. -SlS9&, V. C. S., and Art, 1681a, . . In.'the followllig

excerpt from Article S159a we h&e'unie&ored'the.ptioviaions which we regard as deter' '_ ., 'inlnatlve

of the present queatldn: uSac* 1. Rot ldaa than the~generalpreivalling rate of per alem wage8 ror work of a sinular cMrao*oC In.tDA looality Lnwnlch t%e work Is perremd, and not lees than the genera* prevailingrate 

### 0r per 

### diemwages for le-

.- gal holiday ~~~overtlme work, 

### shall be paid '. to all laborera,workmen and meohanlca'employea. by or on tamer b bna3.r r c:tE '&nz d&at ol' other vision of the Statei'engaged~in the construecounty; 

### city and oounty; oity, town, district or other political subdivision of this State, or any officer or public body thereof, shall be deemed to be employedupon public woes. *

Hon. T. B. Warden - Page 4 (V-594)

“Sec. 2. The public body awardingany contract for public work on behalf of the State, or on behalf of any counts. cltv and countv. cftv. town, districtbr othei.'pollticalsubaiXsiOnVthereof.or otherwiseundertakinaanv oublic work, shall ascertainthe general PrevziiiGrate of uer diem wages in tne localitv in which the Boric la to

work, and it shall be.mandatorg upon the contractor to whom the contract is'awarded, and upon bny suocontractor

under him, to pay not less than %he said specifiedrates to all laborers,workmen and mechanics employedby them in the execution of the contract, The contractorshall Sorfelt as a penalty to the State, county, cimd county, city, town, districtor'otherpolitlcal subdlvision~on

whose behalf the~'oontra&. is made or awarded,Ten Dollars ($lO,OO)for e

"sec. 3. The~contractor and each suboontract& shall kee or cause to Abe kept, an ac--YmdL curate recor the nawma and oceupmm

"~~~c~iiT%~:~~~m;~=:~~*

P ag P to each of such workers,

. . . ~: %eo. 4. Any constructionor repair work done under contract,and paid forin whole or in part out of public funds,

. a . shall be held to be ~publlc,works*

within the meaning ofthisAct. The term Ilocalityin which the work is performedl shall be held to mean the county, aity andHon. T. B. warden - Page 5 (V-594)

County, 01~~ town, district or other political subdivialonof this State In which the building,highway, road, excavation,or other struoture,project, developmentor.lmprovement Is situated in all cases in which the contract is awardedby the State, or any public body thereof, and shallbe held to meanthe limits oSthe,oounty, city and county; city, town ~diatriat or other political subdivisionson whose behall the. bontract is

Appl ing the directionsof the statute to this case, we find t

LAt the Board of Control ascertainedthe "generalprevailingrate" of per diem wages In the locality in which the work was to be performed for each type of workman needed to exeoute the contract. This determination of the prevailingwage rate was a power and a 'dutyconferred exclusivelyin this case upon the aboard of Control~inasmuch as It was thevpublic body* awarding the contract. Southern Priaon Co..q. Rennels,.llO.S.W. 2d 606. The statutedoes not prescrlDe any particularmsthod for such ascertainment,ana'speclfically provides that the "generalprevailing wage rate" Is the wrote determined upon as auchxmte by the public body'awardlngtns aontract
. . . .whoBe..dbclsion in the matter
. . . (is) S$nal.".This **rate** was properly specified in the call SOr bids Sol? the.contraot

and in the contract-1tselr. There was thereby **Imposed** upon.the con-~ tractor an obllgatLon to pay enot'less thanthe sold specified rates t&all laborera,workmen and meohanics employed by him in the execution of the oontract." It Is thus appar- .ent that Article 5159a requires payment of a minimum wage rate, but thatthere is no inhibitionagainst= a greater wage than the rates specified. In the event of nonperformance of this provision requiring payment-of the stipulated minlmumwa~e rates, W:D. Andersonwould have forfeited to the State Ten Dollars ($10.00)for each

. . . workman.. . employed, for each calendarday or portion thereof; .-

. _.

.

. .
Hon. T. B. Warden - Page 6 (V-594)

such

. . . workman

. . . (was)paid less than the said stipulatedrates.
. : .'I This is the only 01~11 penalty 'provided

for the violation of~~the on1 obligationimposed upon the contractorby this prov s -73 on of the law, and thereforethe only obligationImposedupon Mr. Anderson by its Incorporationin A titleXII of the contractwas an obligationto pay not ]tesa than the wage rates etipulated.by the Board of Control; There is nothing in Article 5159a nor in the contract *hiti even suggeststhat the other part tional amount & to the aontractagreed to pay any addiat the contractor

might have-to pay to the laborershe.employed. It is a well known fact, and certainlyone that shouldbm conrlderedby any reasonably prudent contractorIn making his bid,'thatwages vary and that for,any number of reasons a contractor &ay desire or be forced to pay more than the stipulated minimum rates. Several sectionsof A+tlcle 5159a anticipatesuch varlantes. Section 3 reqtirea'thecontractorto keep a record OS the "actualper diem wages paid" as contradistinguished frommtipulated general nrevailina rat&r

The purpose of Ai;tiole 5159a Is to "protect workmen

. I
. from being required; if they accept employment, to work for less than the prevailing wages paid for the same class and characterof work." South- &i &on Coo-v. Rennela, 110‘8.W. 2d 606, 609. Seeal- ;
so the emergencyclause of H.B. 64, supra, expres$l .de-., clarlngthe need for an adequatelaw to protect war Len ,~ on-publicworks and prevent aontractorafrom taking ad-~ vantage of industrialand economicconditionsto reduoe wage levels

a We'thlnk it apparent that the Incorporation in the contract of the statute effectuatingthe determined minimumwage rates In no wise constitutesa covenant by the contractingpublic body to pay the contractorany additionalamount Sn the event actual wages exoeed the stipulated

wage rates. Many other stateshave similar statutesrelating to the ,rate of wages of persons employed on public workso Variousproblemshave arisen in con- 'C nectionwith such statutes (see the Sollowingannotations: 50 A.L.R. 1480; 81A.L.R. 349; 132 A.L.R. 1297; 144 A.L.R. 1035);but in none of the reported cases has It been asserted that the&r provisionsgave what would be in effect a guaranteeto the contractorof the rate of wag.es hewald have to pay to secure the labor necessaryto complete the contract*Hon. T. B. Warden - Page 7 (V-594)

Being clearly at variancewith the purpose of Article 5159a, and not being covered by any specialprovision of the contract,we are of the opinion that a payment of the additionalamounthere claimed would violate the provisions of Article III, fl 53 of the Constitutionof the State of Texas, which reads, In part, as follows:

"The Legislatureshall have no power to grant, or to authoriee.anycounty oremunlcipal authority to grant, any extra compensation;fee or allowance to a . . . contractor after service has been rendered,or a EoAtGact entered into and performed In whole or in part; .'

. .(I and'also that part of Section 44,of the same article which provides: "The Legislature shall~provide by law for the compensation of all officers, aervants, agents and public contractors, not provided for in this Constitution, but shall not grant.extracompensationto any officer, agent, servant, or public contractors,after such public services shall have been performed or contract entered into.. for the perform-

.-. , ante br tne same; . . .'I

. For all these reasons the claim for additional amounts expended for Insurancemust likewisebe denied, and Opinion O-5187 is hereby overruled In so far as it is in conflictwith this opinion. SUMMARY Where the general,prevailing wsge rates were determinedby the public body awarding public works constructioncontractand embodied In the contract aa the mInImum wage8 ~to be paid by the eontractorfor work done under the contract,aontractor'sclaim on oompletion of work for a cum additional to ~the agreed contractprice, In the amaunt actual prevailingwages rates exceeded rates stipulated as general prevailingwage rates, oannotHon. T. B. Warden - Page 8 (V-594)

be allowed; nor can the claim for reeulti% additIonal~Insurance coverageco.3ts.

MC/JCP/wb youra very **truly,** ATTCRliEYGENERAL

OFTEXA8

c ~CLCCC m ma. MariettaCreel Assistant 

# 77J!i.&9

ATTOFOBY 0-L

. .