CHAPTER 3

In Chapter 2, we considered the total universe of procurement-related laws, now scattered throughout the United States Code, and recommended a program for codifying the procurement statutes to the extent appropriate in one title of the Code. Here we identify specific constellations of related statutes, such as the labor laws, which could be condensed, simplified, and harmonized by consolidation. The following discussion deals in detail with this problem.

LABOR LAWS

A number of statutes govern the working conditions and pay of employees of Government contractors. These include the DavisBacon Act,1 the Contract Work Hours and Safety Standards Act (CWHSSA), the Copeland Anti-Kickback Act, the Walsh-Healey Act, the Service Contract Act,' the Fair Labor Standards Act in part, the Occupational Safety and Health Act of 1970 in part,' and the Convict Labor Act.8 These laws contain many complicated, ambiguous, overlapping, and inconsistent provisions, and responsibility for administration of these acts is fragmented among different agencies. As a result they are in

herently costly and inefficient because of the unnecessary time expended by Government administrators, contractors, and subcontractors in understanding and complying with the complex details.

In some cases (for example, CWHSSA, Walsh-Healey Act, Service Contract Act), the Secretary of Labor has been given broad discretionary powers to make rules and regulations allowing reasonable variances, tolerances, and exemptions,10 and he has used this authority to resolve some of these gaps and inconsistencies. However, the resolution of some inconsistencies at the administrative level does not accomplish the basic need to simplify this complex maze of statutes. Instead, it adds another layer of detail which must be dealt with.

11

A complete renovation of these laws would be helpful. Their substantive provisions could be combined in a single act which would take into account any necessary variations but which could provide consistent treatment of similar matters. The following paragraphs identify some of the existing differences in the labor statutes.

Geographic Coverage

The Davis-Bacon Act covers the States and the District of Columbia. The Service Con

10 40 U.S.C. § 331, 41 U.S.C. § 40, and 41 U.S.C. § 353 (1970). See also Reorganization Plan No. 14 of 1950, 5 U.S.C. App. (1970) at p. 534.

11 For example, the CWHSSA, which covers certain aspects of both construction and service contracts, contains no exclusion for contracts under specific dollar amounts as do the Davis-Bacon and Service Contract acts. By regulation, the Secretary of Labor has excluded construction contracts under $2,000 and service contracts under $2,500 to bring the CWHSSA in line with the other two acts. 29 CFR 5.14 (b) (3) and (4).

tract and Fair Labor Standards acts extend to possessions and territories. However, the CWHSSA, Copeland Anti-Kickback, and WalshHealey acts have no express geographic provisions.

Applicability

CONTRACTS OF UNITED STATES AGENCIES, DEPARTMENTS, INSTRUMENTALITIES, ETC.

The Walsh-Healey Act expressly applies to independent establishments, executive departments, United States instrumentalities, and corporations wholly owned by the United States, 12 while the Davis-Bacon Act applies to contracts to which the United States is a party.13 Other acts also use still different provisions to designate which agency contracts are covered.14

The Davis-Bacon, Walsh-Healey, CWHSSA, and Service Contracts acts apply specifically to District of Columbia contracts,15 but the Copeland Anti-Kickback Act, Convict Labor Act, and the applicable portion of the Fair Labor Standards Act do not mention the District of Columbia.

FEDERAL LOANS AND GRANTS

The Copeland Act by its own terms applies to grants and loans. The Davis-Bacon Act does not do so by its own terms. However, many grant statutes incorporate Davis-Bacon requirements by reference.

FORMALLY ADVERTISED AND NEGOTIATED CONTRACTS

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The language of the Davis-Bacon Act states that it applies to "advertised specifications"; by addendum, however, its coverage is extended to negotiated contracts." The FPASA and the ASPA redundantly make the DavisBacon and Walsh-Healy acts applicable to negotiated contracts. 18 The Walsh-Healey Act states that it applies to any contract,19 but later refers to "invitations for bids." 20 The Service Contract Act sometimes refers to bids and sometimes to negotiated or advertised contracts. The use of different and overlapping terms is confusing.

SUBCONTRACTS

The Davis-Bacon, Copeland Anti-Kickback, CWHSSA, and the Fair Labor Standards acts," though using different language, all apply specifically to subcontracts. The Walsh-Healey and Convict Labor acts do not mention subcontracts.

TYPES OF WORK

The Davis-Bacon and Copeland Anti-Kickback acts both cover construction, but the former adds "including painting and decorating" " while the latter adds the words "prosecution" and "completion." 24

PUBLIC WORKS

See Part E for discussion of application of the Davis-Bacon and Copeland acts to public works.

12 41 U.S.C. § 35 (1970).

13 40 U.S.C. § 276a (a) (1970).

14 For example, the CWHSSA at 40 U.S.C. § 329 (a) (1970), the Service Contract Act at 41 U.S.C. § 351(a) (1970), the Copeland Anti-Kickback Act at 18 U.S.C. § 874 (1970), and the Convict Labor Act at 18 U.S.C. § 436 (1970).

16 40 U.S.C. § 276(a) (1970), 41 U.S.C. § 35 (1970), 40 U.S.C. § 329 (a) (1970), and 41 U.S.C. § 351 (a) (1970).

FRINGE BENEFITS

The Davis-Bacon Act includes fringe benefits in its overall definition of "prevailing wages.' "33 That act however excludes these fringe benefits from the basic rate of pay to which the overtime premium is applicable.34 The Service Contract Act also defines fringe benefits and requires the contractor to pay prevailing fringe benefits 35 but excludes these from overtime compensation by incorporating by reference the Fair Labor Standards Act exclusions.36 The Walsh-Healey Act however makes no mention of fringe benefits as being included in basic wages or excluded from overtime pay computations, but the Secretary of Labor has interpreted the basic prevailing rate under the Walsh-Healey Act to include all compensation and bonuses.37

OVERTIME

The CWHSSA (which covers contracts under the Davis-Bacon and Service Contract acts) and the Fair Labor Standards Act automatically allow work in excess of certain standard hours but require premium wage rates for such overtime work.29 Under the Walsh-Healey Act, however, the Secretary of Labor must grant special permission to exceed the maximum number of hours.30

STRAIGHT TIME

The maximum hours for "straight pay" under the CWHSSA is an eight-hour "calendar" day, 40-hour workweek. This language is very similar to that of the Walsh-Healey Act except that the latter speaks of "eight hours in any one day." 32 The use of "calendar day" in the CWHSSA and "any one day" in the Walsh-Healey Act might have the unintended result of different overtime treatment where a worker's shift is split between two "calendar days."

26 See 10 U.S.C. § 2305 (c) and 10 U.S.C. § 2304 (g) (1970).

27 See 41 U.S.C. § 253 (b) (1970).

28 41 U.S.C. § 38 and 41 U.S.C. § 351 (a) (1) (1970).

29 40 U.S.C. § 328 (a) and 29 U.S.C. § 207(a)(1) (1970), respectively.

20 41 U.S.C. § 40 (1970).

31 40 U.S.C. § 328 (a) (1970).

32 41 U.S.C. § 35 (c) (1970).

PAY PERIODS

The Davis-Bacon Act requires a contractor to pay employees the full amount accrued not less than once a week,38 but the Walsh-Healey and Service Contract acts have no such requirement.

NOTICE TO EMPLOYEES

The Davis-Bacon, Walsh-Healey, and Service Contract acts are not consistent in requiring notice to the employee of the compensation or scale of wages to be paid. The provisions of the Service Contract Act are the most flexible and give the contractor the choice of either delivering notice to the employee or posting such notice.39 The Davis-Bacon Act requires that the scale of wages be posted in a prominent and easily accessible place at the site of work, 40 but the Walsh-Healey Act has no requirement for notice to the employee concerning the scale of wages to be paid.

33 40 U.S.C. § 276a (b) (2) (1970).

34 40 U.S.C. § 276a (b) (1970).

35 41 U.S.C. § 351 (a) (2) (1970).

36 41 U.S.C. § 355 (1970).

37 Speck, briefing paper No. 67-3 in the Briefing Paper Collection, vol. 1, 1963-1969, pp. 241-255.

38 40 U.S.C. § 276a (a) (1970).

39 41 U.S.C. § 351 (a) (4) (1970).

40 40 U.S.C. § 276a (a) (1970).

PAY RECORDS

The CWHSSA " and the Copeland AntiKickback Act 42 require the contractor to furnish weekly a statement of wages paid each employee. However, the Fair Labor Standards Act requires that employers make, keep, and preserve records of people employed and the wages, hours, conditions, and practices of the employee.13

Solicitation and Contract Provisions

The Davis-Bacon,"

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CWHSSA,45 WalshHealey, and the Service Contract" acts call for provisions to be placed in solicitations or contracts. The Davis-Bacon Act requires that each contract include a contract termination provision. Neither the Walsh-Healey or Service Contract acts require such a contract provision, although they both give the Government the right to cancel or terminate." The Davis-Bacon, CWHSSA, Walsh-Healey, and Service Contract acts authorize the Government to withhold payments to the contractor, but only the Davis-Bacon Act 50 and the CWHSSA 51 require a contract provision to that effect. The CWHSSA and the WalshHealey Act contain liquidated damages provisions, but only the CWHSSA 52 requires a liquidated damages provision in the contract.

Administration Responsibility

The Davis-Bacon, CWHSSA, Walsh-Healey, and Service Contract acts contain different pro

41 40 U.S.C. § 330 (d) (1970).

42 40 U.S.C. § 276c (1970). 43 29 U.S.C. § 211 (c) (1970).

4440 U.S.C. § 276a (a) (1970). 45 40 U.S.C. § 328 (b) (1970). 46 41 U.S.C. § 35 (1970).

47 41 U.S.C. § 351(a) (1970). The terms "advertised specifications" and "bid specifications" as discussed earlier are phrases normally associated with formally advertised contracts and should be avoided unless they are intended to be used in this specific sense. The term "contract solicitation" is a much broader term and could be used to denote solicitations used in both the formally advertised and the negotiated methods of procurement.

48 40 U.S.C. § 276a (a) (1970).

49 41 U.S.C. § 36 and 41 U.S.C. § 352 (c) (1970), respectively.

50 40 U.S.C. § 276a (a) (1970).

51 40 U.S.C. § 328 (b) (1970).

52 40 U.S.C. § 328 (b) (1970).

visions as to who has authority to administer various requirements such as determination of wage underpayments, withholding of payment, determination of violations for purposes of debarment, and payment of underpaid employees with withheld funds. The Davis-Bacon Act specifies the contracting officer as the official determining the amount of the wage underpayment.53 The CWHSSA is not as clear as to who makes this determination, merely stating that it will be "administratively determined," although a reasonable interpretation would be that the contracting agency is given this authority since, in the same sentence, the contracting agency is given the authority to withhold payments.54 The Walsh-Healey Act gives the authority for wage underpayment determination to the Secretary of Labor,55 although he is given wide discretion to delegate this authority.56 The Service Contract Act gives authority for determination of wage underpayment to either the Secretary of Labor or the agency head." The Davis-Bacon Act gives to the Comptroller General authority to determine violations for purposes of debarment.58 However, the Walsh-Healey Act gives such authority to the Secretary of Labor 59 and the Service Contract Act gives the authority to either the Secretary of Labor or the contracting agency.60 The Davis-Bacon Act 1 and CWHSSA 62 give authority to withhold payments from the contractor to the Comptroller General. The WalshHealey 63 and Service Contract 6 acts state that payment will be made on order of the Secretary of Labor.

Enforcement

DEBARMENT

The debarment provisions of the acts differ.65 See Part G for discussion of this problem.

53 40 U.S.C. § 276a (a) (1970).

54 40 U.S.C. § 330 (a) (1970).

55 41 U.S.C. § 37 (1970).

56 41 U.S.C. § 38 (1970).

41 U.S.C. § 352 (a) (1970).

58 40 U.S.C. § 276a-2(a) (1970). 59 41 U.S.C. § 37 (1970).

60 41 U.S.C. § 354 (a) (1970).

61 40 U.S.C. § 276a-2(a) (1970).

62 40 U.S.C. § 330 (a) (1970).

63 41 U.S.C. § 36 (1970).

441 U.S.C. §§ 352(a) and 354 (b) (1970).

Cf. 40 U.S.C. § 333 (d), 41 U.S.C. § 37, 41 U.S.C. § 354 (a), 40

U.S.C. 276a-2(a) (1970).