PRICE DANIEL Ausruv II. TEXAB 

.4-I- "p1- 

June 2 , 1940 

Hon. T. B. Warden 

Board Of control 

Auetin, Texas 

2 ., 

Dear sir: 

opinion NO. v-594 

Re: Zegality of payment of 

contractorts claim for 

difference-between 

amounts paid to meet 

aotua1 prevailing wages 

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 contract was 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 contraat Hr. Anderson agreed to provide 

all the materials, includ%ng plumbing, 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 whiah wm6 

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

53ae a par t of the contrac Y . 

it was mutually agreed that 

the smp to be p&Id far &ala work and material was 'to be 

$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. adntractor was governed in bidding upon this work and rhloh will constitute the wage saalh of the various classes 

of labor upon this work, and,upon uhlah 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 Contractor shall forfeit as a penalty 

to the State, ten ($10.00) dollars for each laborer, work+n or meo$anlc ~employed, for each 

calendar day, or portion thereof, such laborer, 

worlnnan or mechanic is paid less than the said 

stipulated wtes for any work done under said 

contraat, by him or by any sub-contractor under 

him." 

The wage rates embodied in ~the speclflcatlons 

were determined by the Board of Control to w the general 

prevailing rate 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 

"shortly before this contraat was entered into inquiry 

ooncerning wage rates was made of the Labor Coamlssioner 

and we received a mimeographed sheet (not oertified)( ,bearlng the purported wage rates~ for the Rockport area. YOU 

further state that on Maroh 6, 1948 (approximately one year 

after the oontraot was made) the Department of 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 erroneoiaand that 

they have wg00a and ruffloient evldenor aonfa the Taotual wage rate in effect ln,(the ~Boakport) . . o wea in 

March 1947.' The &arl.ne Laboratory haa 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 amount being the dlfferenoe between the actual prevafling wage rates which he paid 

and the wage rates stipulated in the spealfioatlons as the 

generally prevailing wage sates. One hundred twenty-eight 

dollars and three cents Is olalmed,as the resulting additional amount pala~ for Social Security and Unemployment Cwn-. 

pensation Insurance and i$152.20 as .the resulting additional 

amount paid for Workmen8 Compensation and Public Llablllty 

Insurance. , 

This claim is based on then proposition that Arti- ,' 

cle XII of the contract (previously quoted) furnished an 

. 
Hon. T. B. Warden - Page 3 

erroneous wage scale,.tha& 

and ifi accordance with bfs 

th6 actual prevailing wage 

mistake of Sict warrants a 

the contractor Fder.the law 

;zz;act was required to pays 

, and that thXs~mutua1 ~a . . ^ . rerormatlon or tne.contraCt 

to cwer the sum-so expended.' Opinion No. O-5187 oS 

the Attorney Ge,neral .supports this propositioti,and allowed paymen% OS ti slmllarcla~ In subs,tantlally the-.same 

fact sl+&ioni '. 

. 

(V-594) * 

You point out th@t':"should-this claim be paid, 

then we must'+dmlt.that any contract drawn incorporating 

House,Blll 54 la always subject to thb contingency that 

an error arose with respeot to the prevailing rate bf 

per~diem wages. . .W and the further possiblllty~that .ln 

many Instances 'IS the clalm.ls allowed, . .,. the oontract may exce,ed the appropriation for such work.? 

Pursuant to.'yoti request we hai* t&i&&en a 

reexamination of 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~general preivalling 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* prevailing rate 0r per diem wages 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 employed upon public woes 
. * 

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

“Sec. 2. The public body awarding any contract for public work on behalf of the State, or 

on behalf of any counts. cltv and countv. cftv. 

town, district br othei.'polltical subaiXsiOnVthereof. or otherwise undertakina anv oublic 

work, shall ascertain the 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 specified rates to all laborers, workmen and mechanics employed by them in the execution of the contract, The contractor shall Sorfelt as a penalty to the State, county, cimd 

county, city, town, district or'other politlcal 

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 accurate recor --YmdL the nawma and oceupmm 

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

P ag P 

to each of such workers, . . . ~: 

%eo. 4. Any construction or 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 ofthis Act. 

The term Ilocality in which the work is performedl shall be held to mean the county, aity and 
Hon. T. B. warden - Page 5 (V-594) 

County, 01~~ town, district or other political subdivialon of this State In which the 

building, highway, road, excavation, or other struoture, project, development or.lmprovement Is situated in all cases in which 

the contract is awardedby the State, or any 

public body thereof, and shall be held to 

meanthe limits oSthe,oounty, city and county; city, town ~diatriat or other political 

subdivisions on whose behall the. bontract is 

Appl ing the directions of the statute to this 

case, we find t LA t the Board of Control ascertained the 

"general prevailing rate" 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 prevailing wage rate was a power and a 'duty conferred exclusively in 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 particular msthod for such ascertainment, ana'speclfically provides that the "general prevailing wage rate" Is the wrote determined upon as auchxmte 

by the public body'awardlng tns 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 inhibition against= 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. Anderson would have forfeited to the State Ten Dollars ($10.00) for each . . . workman.. . employed, for each calendar day or portion thereof; 

. 
- 

. 

_. 

. 

. 

. 

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

such . . . workman . . . (was) paid less than the said 

stipulated rates. . : .'I This is the only 01~11 penalty 

'provided for the violation of~~the on1 obligation imposed upon the contractor by this prov -73 s on of the law, and 

therefore the only obligation Imposed upon Mr. Anderson 

by its Incorporation in A title XII of the contract was 

an obligation to 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 suggests that 

the other part 

tional amount & 

to the aontract agreed to pay any addiat the contractor might have-to pay to 

the laborers he.employed. It is a well known fact, and 

certainly one that should bm conrldered by any reasonably 

prudent contractor In making his bid,'that wages vary and 

that for,any number of reasons a contractor &ay desire or 

be forced to pay more than the stipulated minimum rates. 

Several sections of A+tlcle 5159a anticipate such varlantes. Section 3 reqtirea'the contractor to keep a record OS the "actual per 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 character of work." South- 

&i &on Coo-v. Rennela, 110‘8.W. 2d 606, 609. Seeal- 

; 

so the emergency clause of H.B. 64, supra, expres$l .de-., 

clarlng the need for an adequate law to protect war Len ,~ 

on-public works and prevent aontractora from taking ad-~ 

vantage of industrial and economic conditions to reduoe 

wage levels a We'thlnk it apparent that the Incorporation 

in the contract of the statute effectuating the determined minimum wage rates In no wise constitutes a covenant 

by the contracting public body to pay the contractor any 

additional amount Sn the event actual wages exoeed the 

stipulated wage rates. Many other states have similar 

statutes relating to the ,rate of wages of persons employed on public workso Various problems have arisen in con- 'C 

nection with such statutes (see the Sollowing annotations: 

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 provisions gave what would be in effect 

a guarantee to the contractor of the rate of wag.es hewald 

have to pay to secure the labor necessary to complete the 

contract* 
Hon. T. B. Warden - Page 7 (V-594) 

Being clearly at variance with the purpose of Article 5159a, and not being covered by any special provision 

of the contract, we are of the opinion that a payment of 

the additional amount here claimed would violate the provisions of Article III, fl 53 of the Constitution of the State 

of Texas, which reads, In part, as follows: 

"The Legislature shall have no power to 

grant, or to authoriee.any county ore munlcipal 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.extra compensation to 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 Insurance must likewise be denied, and 

Opinion O-5187 is hereby overruled In so far as it is in 

conflict with this opinion. 

SUMMARY 

Where the general,prevailing wsge rates 

were determined by the public body awarding 

public works construction contract and embodied In the contract aa the mInImum wage8 

~to be paid by the eontractor for work done 

under the contract, aontractor's claim on oompletion of work for a cum additional to ~the 

agreed contract price, In the amaunt actual 

prevailing wages rates exceeded rates stipulated as general prevailing wage rates, oannot 
Hon. T. B. Warden - Page 8 (V-594) 

be allowed; nor can the claim for reeulti% 

additIonal~Insurance coverage co.3ts. 

MC/JCP/wb 

youra very truly, 

ATTCRliEYGENERAL OFTEXA8 

c 

m ~CLCCC 

ma. Marietta Creel 

Assistant 

77J!i.&9 

ATTOFOBY 0-L 

. .