Opinion ID: 730861
Heading Depth: 2
Heading Rank: 2

Heading: Davis-Bacon Act

Text: 7 The Davis-Bacon Act, 40 U.S.C. § 276a, was passed in 1931. It provides that for all contracts involving federal construction projects, mechanics and laborers employed directly on the site of the work shall be paid local prevailing wage rates as determined by the Secretary of Labor. The dual purposes of the Act are to give local laborers and contractors fair opportunity to participate in building programs when federal money is involved and to protect local wage standards by preventing contractors from basing their bids on wages lower than those prevailing in the area. See S.Rep. No. 963, 88th Cong., 2d Sess. (1964), reprinted in 1964 U.S.C.C.A.N. 2339, 2340. 8 In finding that the truck drivers employed by St. John's Trucking Company were entitled to prevailing wages under the Davis-Bacon Act, the Department of Labor included in the site of the work both a batch plant located at a quarry more than three miles away from the highway construction project and the Indiana highway system that was used to transport materials from the batch plant to the construction project. In support of this determination, the Department of Labor relied on its own definition of site of the work contained in 29 C.F.R. § 5.2(l). That regulation states: 9 (1) The site of the work is limited to the physical place or places where the construction called for in the contract will remain when work on it has been completed and, as discussed in paragraph (l )(2) of this section, other adjacent or nearby property used by the contractor or subcontractor in such construction which can reasonably be said to be included in the site. 10 (2) Except as provided in paragraph (l )(3) of this section, fabrication plants, mobile factories, batch plants, borrow pits, job headquarters, tool yards, etc. are part of the site of the work provided they are dedicated exclusively, or nearly so, to performance of the contract or project, and are so located in proximity to the actual construction location that it would be reasonable to include them. 11 (3) Not included in the site of the work are permanent home offices, branch plant establishments, fabrication plants, and tool yards of a contractor or subcontractor whose locations and continuance in operation are determined wholly without regard to a particular Federal or federally assisted contract or project. In addition, fabrication plants, batch plants, borrow pits, job headquarters, tool yards, etc., of a commercial supplier or materialman which are established by a supplier of materials for the project before opening of bids and not on the project site, are not included in the site of the work. Such permanent, previously established facilities are not a part of the site of the work, even where the operations for a period of time may be dedicated exclusively, or nearly so to the performance of a contract. 12 29 C.F.R. 5.2(l) (emphasis added). 13 Our review of Cavett's statutory challenge is governed by the framework established in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984). First, we must determine whether Congress has directly spoken to the precise question at issue. Id. at 842, 104 S.Ct. at 2781. If we find that Congress has spoken to the precise question at issue that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. Id. at 842-43, 104 S.Ct. at 2781. However, if the relevant statute is ambiguous or silent with respect to the matter in question, we must then assess whether the agency's interpretation is based on a permissible construction of the statute. Id. at 843, 104 S.Ct. at 2781-82. 14 In the present case, the magistrate judge found that the phrase directly upon the site of the work was ambiguous because in constructing a highway it was necessary that work would spill over onto nearby areas not occupied by the final construction work. The magistrate judge then determined that the definition of site of the work contained in 29 C.F.R. § 5.2(l)(2) was a permissible construction of the Davis-Bacon Act--thereby satisfying the two pronged inquiry of Chevron. 892 F.Supp. at 980-81. We find that the magistrate judge erred in determining that the relevant statutory language was ambiguous. 15 In reaching our decision, we rely on the reasoning employed by the D.C. Circuit court in Ball, Ball & Brosamer, Inc. v. Reich, 24 F.3d 1447 (D.C.Cir.1994), and Building & Construction Trades Dep't, AFL-CIO v. United States Dep't of Labor Wage Appeals Bd., 932 F.2d 985 (D.C.Cir.1991) (the Midway case). 16 In Ball, a contractor entered into a federal construction contract to build a thirteen mile aqueduct between Phoenix and Tucson, Arizona. Ball, 24 F.3d at 1448. The contractor, Ball, subcontracted with an Arizona based company (Red Rock Products) for the concrete and gravel it needed for the project. Id. Red Rock obtained raw materials from a local sand and gravel pit and set up a portable batch plant for mixing concrete. Id. at 1449. The borrow pit and batch plant were located two miles from the nearest point of the construction site. The question facing the District of Columbia Circuit Court was whether the batch plant could be considered as part of the site of work for purposes of the Davis-Bacon Act. That Court held that the provisions of the Davis-Bacon Act were clearly and unambiguously intended to apply only to workers on the actual physical site of the public work under construction. Id. at 1452-1453. As the Court did not find any ambiguity in the relevant language of the Davis-Bacon Act, it did not reach the question of whether 29 C.F.R. § 5.2(l) was a permissible construction of that statute. Id. 17 Similarly, in Midway, a public contractor sought review of a Department of Labor Regulation, 29 C.F.R. § 5.2(j), which extended coverage under the Davis-Bacon Act to truck drivers employed by government contractors to transport materials to the site of a federally funded construction project. 932 F.2d at 986. The court found that the phrase mechanics and laborers employed directly upon the site of the work, within the meaning of the Davis-Bacon Act, restricted the coverage of the Act to employees working directly on the physical site of the building. Id. at 990. In reaching its decision, the court commented that [n]othing in the legislative history suggests, as the DOL has ruled, that Congress intended the employment status of the worker, rather than the location of his job, to be determinative of the Act's coverage. Id. at 991. 1 18 The magistrate judge found that the Midway case was distinguishable on its facts and that the Ball decision was unclear. 892 F.Supp. at 980. We disagree. Although in Midway the truck drivers transported the materials from commercial suppliers, whereas in the present case the materials were transported from a contractor's batch plant, the District of Columbia Circuit Court expressly held in Midway that the words directly upon the site of the work contained in the Davis-Bacon Act were not ambiguous. 932 F.2d at 990. 19 In addition, we do not find the court's reasoning in Ball to be unclear. The magistrate judge believed that dicta in the Ball decision--which noted that off-site facilities in actual or virtual adjacency to the construction site (as opposed to facilities two miles away) could possibly satisfy the site of the work requirement of the Davis-Bacon Act--rendered the opinion inconsistent. 892 F.Supp. at 980. However, we find no inconsistency in this logic. The Ball court was simply trying to give an example of the type of facility which might meet the precise geographical limitation requirement of the Davis-Bacon Act. In our view it is not unreasonable to conclude that while a facility in virtual adjacency to a public work site might be considered part of that site, a facility located two (or in this case three) miles away from the site would not. 20 In sum, the language of the Davis-Bacon Act is not ambiguous. As this Court noted with approval in Jewish Hospital v. Secretary of Health and Human Services, 19 F.3d 270, 274 (6th Cir.1994), 21 Where the language of the regulation is clear and plain, not only is there no reason to let the Director offer an interpretation of it, and no reason to consult the legislative history, but there is every reason not to do so. 22 The statutory phrase employed directly upon the site of the work means that only employees working directly on the physical site of the public work under construction have to be paid prevailing wage rates. 23 Moreover, if the geographic proximity of the Davis-Bacon Act were expanded in the manner advocated by the Department of Labor, we would create the difficult problem of determining which off-site workers were indeed closely enough related to the public work site to justify inclusion under the Act. The Ball court noted as much when it stated, 24 [T]he Secretary attempts to find any tiny crack of ambiguity remaining in the phrase directly upon the site at the work and cram into it a regulation that encompasses other sites miles from the actual location of the public works--in this case two miles, in another as much as 24 miles and in still another, 3,000 miles from the actual construction location. See Ross Bros. Const., Inc., WAB Case No 87-36 (Nov. 21, 1988) (sand and gravel facility 24 miles from construction location); In re ATCO Const., Inc., WAB Case No. 86-1 (Aug. 22, 1986) (including fabrication facility for modular housing units located in Portland, Oregon in construction site on Adak Island, Alaska). 25 Ball, 24 F.3d at 1452. As a result, and for the same reasons twice articulated by the District of Columbia Circuit Court, we dispose of the Department of Labor's argument on the grounds articulated in step one of the Chevron test.