Ashford v. United States

43 Fed. Cl. 1, 1997 U.S. Claims LEXIS 325, 1997 WL 1074284
CourtUnited States Court of Federal Claims
DecidedDecember 3, 1997
DocketNo. 96-473 C
StatusPublished

This text of 43 Fed. Cl. 1 (Ashford v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ashford v. United States, 43 Fed. Cl. 1, 1997 U.S. Claims LEXIS 325, 1997 WL 1074284 (uscfc 1997).

Opinion

OPINION

WIESE, Judge.

Plaintiff, Tay Ashford, doing business as Ashco General Services, Inc. (Ashco), was awarded a competitively bid contract calling [2]*2for the furnishing of custodial services to the United States Army at Fort Sill, Oklahoma. In the performance of this work, the Army required Ashco to adhere to wage rates set forth in a collective bargaining agreement that was incorporated into the contract. These rates, being higher than those upon which Ashco had based its bid, imposed an economic hardship on Ashco that eventually forced it to abandon the work. As a result, the Government terminated the contract for default.

Following termination, Ashco submitted a claim to the contracting officer seeking relief from the default determination and an equitable adjustment in contract price to cover the unanticipated increase in labor costs that it had been obliged to absorb. Ashco based its claim for relief on the contention that the collective bargaining agreement adopted in the contract — and whose pay scale Ashco had been required to honor — was, in fact, a legal nullity; ie., it was an agreement that had been abandoned by the originating parties prior to its incorporation into the contract by the Government. Hence, the Government’s enforcement of that agreement, Ashco contended, amounted to the imposition of an extra-contractual obligation. Ashco’s claim was rejected by the contracting officer. This suit followed. The case is now before the court on defendant’s motion to dismiss and plaintiffs opposition thereto. Oral argument was heard on November 20, 1997. We decide in defendant’s favor.

FACTS

On February 21, 1992, the United States Army issued an invitation for bids (IFB)-for a contract to provide custodial services at Fort Sill, Oklahoma. Section H of the IFB, titled “Special Contract Provisions,” notified bidders that the contract was subject to the provisions of the Service Contract Act of 1965 (the Act) and included, as a requirement of that Act, a wage determination by the Department of Labor (DOL) specifying the minimum wages that the contractor would be obliged to pay its employees.1 The wage determination set forth in the solicitation adopted as its governing standard the wage rates prevailing in the neighboring counties of the locality involved.

On March 13, 1992, the Army issued an amendment to the solicitation. Amendment 0001 deleted the initial wage determination “in its entirety” and, in its place, substituted a wage determination that directed payment of “wage rates and fringe benefits set forth in the current collective bargaining agreement(s)” between A.M.E., Inc. (the predecessor contractor) and Local 100, SEIU (Service Employees International Union) AFL-CIO. The amendment specifically directed that the collective bargaining agreement be “incorporated in and made a part of this solicitation and any resulting contract.”

On March 16, 1992, plaintiff acknowledged receipt of Amendment 0001. Despite this acknowledgment, however, plaintiff thereafter submitted a bid whose pricing was premised on the prevailing local wage rates rather than on the wage rates listed in the collective bargaining agreement. Upon evaluation of all bids, Ashco was found to be the lowest responsible bidder and, after being requested to confirm its bid — which it did — it was awarded the contract on March 25, 1992. Performance under the contract began on April 1,1992.

Following the commencement of performance, plaintiff contacted the contracting officer, Ms. Larissa Hall, to inquire about the current status of the collective bargaining agreement and, in particular, to ask about Ashco’s obligation to pay its employees at the higher hourly rates called for by that agreement. According to plaintiff, those rates were “nearly 33% higher than the wages and benefits for surrounding federal installations where similar services are provided.” Plaintiff was advised that the wage rates specified in the collective bargaining agreement were [3]*3controlling and that Ashco was therefore obligated to adhere to those rates. Plaintiff did so.

In January 1993, Mr. Leslie Imboden, a field officer of the National Labor Relations Board (NLRB or Board), informed plaintiff that, in January 1991 (more than a year prior to contract award), A.MJB. (the predecessor contractor) had severed its relationship with the local union and had canceled the collective bargaining agreement. Mr. Imboden explained that a former A.M.E. employee had filed a grievance with the Board in late 1990, alleging that the SEIU and A.M.E. had violated the National Labor Relations Act by, among other things, entering into a collective bargaining agreement without the approval of an uncoerced majority of AM.E.’s employees. The parties settled this dispute voluntarily — the former employee withdrew his challenge and the company, in turn, withdrew its recognition of the union and terminated the collective bargaining agreement. However, neither the Army nor the DOL were advised of this “non-Board” settlement.

On January 22, 1993, plaintiff contacted the DOL, requesting that agency to cancel the wage determination adopting the collective bargaining agreement and, in its place, to establish a new wage determination based upon the prevailing wages in the locality. Upon consideration, the DOL issued a revised wage determination on May 24, 1994. This revised wage determination, which adopted the prevailing wage rates, became part of plaintiffs contract for the September 1994 through September 1995 option period.

DISCUSSION

The thrust of the claim put forward here is that the contract, properly read, sanctioned payment of the prevailing wage rates right from the start. The argument focuses on that portion of the text of Amendment 0001 which sets forth the revised wage determination. The language reads as follows:

In accordance with Sections 2(a) and 4(e) of the Service Contract Act, as amended [41 U.S.C. §§ 351(a) and 353(c) ], employees employed by the contractor in performing janitorial services and covered by the collective bargaining agreement(s) between A.M.E. Inc. and Local 100, SEIU, AFL-CIO are to be paid wage rates and fringe benefits set forth in the current collective bargaining agreement(s). [Underscoring added].

Referring to the underscored words (in the above-quoted text), plaintiff contends that those words do not prescribe a wage determination for all of Ashco’s janitorial service employees. Rather, asserts plaintiff, those words reach only those employees “covered by the collective bargaining agreement(s).” Thus, as to employees not covered by the collective bargaining agreement — the entirety of plaintiffs work force — plaintiff maintains that contractually it was free to pay the non-union wage scale, that is, the prevailing wage rates. Hence, the Government’s insistence upon payment according to the union wage scale, argues plaintiff, amounted to a constructive change in the contract for which additional compensation is now owing.

The argument is not persuasive. Granted, if one looks just to the words plaintiff focuses on, the wage determination could be read as being applicable only to contractor employees subject to the collective bargaining agreement between A.M.E. and Local 100 as opposed to being applicable to all contractor employees.

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Bluebook (online)
43 Fed. Cl. 1, 1997 U.S. Claims LEXIS 325, 1997 WL 1074284, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ashford-v-united-states-uscfc-1997.