Court Opinion

ID: 9450925
Source: CourtListenerOpinion
Date Created: 2023-08-04 17:00:56.780289+00
Date Added: 2024-06-11T17:32:29.851659
License: Public Domain

WHITAKER, Senior Judge
(dissenting).
In the locality where the work called for in the contract in this case was to be done, there were two labor unions who employed operators of power equipment, the American Federation of Labor and the United Mine Workers. The American Federation of Labor employed them either on work which it denominated “Building and Heavy Construction” or on “Highway Construction.” The United Mine Workers employed them either on what it called “Heavy and Highway Construction” or on “Highway Construction.” Operators belonging to the American Federation of Labor engaged in “Building and Heavy Construction” received higher wages than those engaged in “Highway Construction.” However, operators belonging to United Mine Workers received the same wages whether employed in “Heavy and Highway Construction” or in only “Highway Construction.”
The work called for by the contract in this case was classified by the American Federation of Labor as “Buildihg and Heavy Construction,” but, by the United Mine Workers, as “Heavy and Highway Construction.”
When the Secretary of Labor issued his original determination, he fixed the wages for these operators engaged in “Building and Heavy Construction” and in “Highway Construction,” but not for “Heavy and Highway Construction.” He fixed the wages for a number of the crafts and laborers engaged in “Heavy and Highway Construction,” but omitted operators of power equipment, although they were necessarily employed in such work; it could not be done without them.
His second determination omitted “Highway Construction” altogether, because of the erroneous information given him that no highway construction was involved. Nor did he fix the wages for these operators engaged in “Heavy and Highway Construction.”
On account of this omission, the contractor agreed with the union on the wages to be paid them, as he was authorized to do under section 17(b) of the Special Conditions, quoted in footnote 2 of the majority opinion. The contracting officer refused to approve this contract.
There was no justification for this. The reason his approval of such a contract was required was not stated, but it could only have been to insure that workers on the contract were paid the prevailing wages. There is no doubt that the wages stipulated in the contract were the prevailing wages being paid operators engaged in “Heavy and Highway *541Construction,” if they belonged to the United Mine Workers Union, but not for American Federation of Labor operators. But the findings show that on all but one of the projects similar to the one here involved, operators belonging to the United Mine Workers were being employed and were being paid its scale of wages. On only one small project of a similar nature were American Federation of Labor operators being paid the scale for such operators engaged in “Building and Heavy Construction.”
There was, therefore, no justification for the contracting officer to disapprove the contract plaintiff had made with the union. It follows that the Chief of Engineers should have reversed the contracting officer and should have approved the contract. Instead, he referred the matter to the Secretary of Labor. If there was any doubt in his mind about the wages fixed in the contract being in accord with the prevailing wages, this was the proper procedure; but I do not see how there could have been any doubt in his mind about this. But since the Secretary of Labor was the person to determine the prevailing wages, I doubt if I would be justified in saying that the Chief of Engineers was without authority to refer the matter to the Secretary of Labor. I, nevertheless, think that the Secretary of Labor’s determination disregarded the facts and was based not on what actually were the prevailing wages but upon what he thought the prevailing wages ought to be. He had no right to classify operators of power equipment engaged in work similar to the contract work as operators engaged in “Building and Heavy Construction” since, on the large majority of the work being done in this locality, operators of power equipment on similar projects were employed under the United Mine Workers’ scale applicable to operators employed on “Heavy and Highway Construction.” There was only one small contract in this locality on which these operators were paid the wages specified for them under “Building and Heavy Construction.” To have singled out this one small contract for less than a million dollars as establishing the prevailing wages, and to have ignored the others on which many times as many contractors were involved and which involved many millions of dollars, was arbitrary and capricious. “Prevailing” means, “most frequent,” “generally current.”
Is such a decision final and conclusive? The majority says it was, under the decision of the Supreme Court in United States v. Binghamton Construction Co., 347 U.S. 171, 74 S.Ct. 438, 98 L.Ed. 594 (1954). In that case the Supreme Court did say that the decision of the Secretary of Labor was not subject to judicial review, but this was not necessary to a decision of the case. It was said only in passing. The issue in the case was whether or not the contractor had a right to rely upon the determination of the Secretary of Labor that the wages fixed by him were the prevailing wages. No question was raised about the finality of the Secretary’s determination. The only issue was whether or not it constituted a representation upon which the contractor had a right to rely.
The Supreme Court did not elaborate its statement that his decision was final. It merely made the statement and then passed on to a discussion of issue in the case. It did not say that his decision was final under any and all' circumstances; nor do I think it meant to say so. Did it mean to say that his decision was final if it was fraudulent? Did it mean to say that it was final if it was so grossly erroneous as to imply bad faith? Did it mean to say that it was final if it was purely arbitrary and capricious and in plain disregard of the actual facts ?
This court and the Supreme Court have been continually faced with the provision in Government contracts that the decision of the contracting officer on a dispute about any matter arising under a Government contract was “final and conclusive.” In cases too numerous to mention, we had held that any decision of the contracting officer which was arbitrary or capricious or not supported by substantial evidence could be reviewed by *542the court and, if found so to be, it could be set aside. Finally, however, the Supreme Court in United States v. Wunder-lich, 342 U.S. 98, 72 S.Ct. 154, 96 L.Ed. 113 (1951), said that the decision of the contracting officer could not be set aside unless it was fraudulent, by that meaning that the contracting officer had been guilty of conscious wrongdoing. After this decision, Congress passed what was known as the Wunderlich Act, 68 Stat. 81 (1954), 41 U.S.C. §§ 321-322 (1958). That Act provided that, notwithstanding the provision in Government contracts that the decision of the contracting officer was final and conclusive, it could be reviewed by the courts if fraudulent or so grossly erroneous as to imply bad faith or if arbitrary or capricious or not supported by substantial evidence.
Could the Congress have intended to give any more finality to the decision of the Secretary of Labor than to that of a contracting officer whose decision was expressly made final and conclusive, whereas there is nothing in the Davis-Bacon Act, 40 U.S.C. § 276a (1952 ed.), that says that the decision of the Secretary of Labor shall be final and conclusive?
Of course, there was some evidence to support the decision of the Secretary of Labor, but the Supreme Court has said that in determining whether or not there was substantial evidence to support a finding, the entire evidence must be considered. Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1950). When the entire evidence in this case is considered, as the findings show, there can be no question that the prevailing wage in this community was not that specified for the operators of power equipment under the classification of “Building and Heavy Construction” but rather that prevailing for them under the classification of “Heavy and Highway Construction,” which was the same as that under “Highway Construction.”
Therefore, even if the Chief of Engineers had the right to refer this question to the Secretary of Labor, I still think that we are not bound by his decision since it was not supported by substantial evidence when the evidence is considered in its entirety and not merely one isolated piece of evidence.
As a result of this decision, this contractor has been required to pay many thousands of dollars more than he was due to pay had the operators of this power equipment been properly classified under “Heavy and Highway Construction” rather than under “Building and Heavy Construction.”
For these reasons I respectfully dissent.