____________________________________________________ DISMISSED FOR LACK OF JURISDICTION: March 30, 1993 ____________________________________________________ GSBCA 11922 JL ASSOCIATES, INC., Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Sigvart Sande, Executive Vice President and Chief Operating Officer, JL Associates, Inc., Hampton, VA, appearing for Appellant. Jerry Ann Foster, Office of General Counsel, General Services Administration, Fort Worth, TX, counsel for Respondent. Before Board Judges HENDLEY, NEILL, and WILLIAMS. HENDLEY, Board Judge. This appeal, docketed on July 10, 1992, concerns a dispute between appellant, JL Associates, Inc. (JL Associates), and respondent, General Services Administration (GSA), over whether an increase in the contract price, under contract number GS07F- 33790, should be granted to appellant based upon appellant's increased labor costs resulting from the collective bargaining agreement negotiated with its employees' union, the International Association of Machinists and Aerospace Workers (IAM&AW). Appellant elected to proceed with this appeal under the accelerated procedure, Board Rule 14. The respondent moved to dismiss the appeal for lack of jurisdiction. We agree. The appeal is dismissed for lack of jurisdiction. Background JL Associates contracted with GSA to provide for the repair, maintenance, and overhaul of Government vehicles at Fort Polk, Louisiana. The contract is a fixed price, indefinite delivery requirements contract. The contract was awarded on January 14, 1991, for a one-year term starting April 1, 1991, with options for two additional years. The contract is subject to the Service Contract Act of 1965, 41 U.S.C. 351-358 (1988). The Act is implemented by the Federal Acquisition Regulation (FAR) subpart 22.10 (1989). On November 1, 1991, as required by FAR 22.1007, seven months into the contract, but more than sixty days prior to the exercise of the option, the contracting officer submitted to the Department of Labor (DOL) Standard Forms (SF) 98 and 98a, entitled "Notice of Intention to Make a Service Contract and Response to Notice" and "Attachment A," seeking a new or revised wage determination to be effective during the first option year of the contract.[foot #] 1 ----------- FOOTNOTE BEGINS --------- [foot #] 1 FAR 22.1007 states, in pertinent part: The contracting officer shall submit Standard Forms 98 _____ and 98a . . ., "Notice of Intention to Make a Service Contract and Response to Notice" and "Attachment A" (both forms hereinafter referred to as "Notice"), together with any required supplemental information to [DOL], for the following service contracts: (a) Each new solicitation and contract in excess of $2,500. (b) Each contract modification which brings the contract above $2,500, and - (1) Extends the existing contract _______________________________ pursuant to an option clause or _______________________________ otherwise. . . . (emphasis added). FAR 22.1008-7 states, in pertinent part: (a) If the contract action is for a recurring or known requirement, the contracting officer shall submit the _____ Notice [Standard Forms 98 and 98a] not less than 60 days (nor more than 120 days, except with the approval of [DOL]) before the earlier of (1) issuance of any invitation for bids, (2) issuance of any request for proposals, (3) commencement of negotiations, (4) issuance of modification for exercise of option, ----------- FOOTNOTE BEGINS --------- contract extension, or change in scope, (5) annual __________________________________________ anniversary date of a contract for more than 1 year subject to annual appropriations, or (6) each biennial anniversary date of a contract for more than 2 years not subject to annual appropriations unless otherwise advised by the Wage and Hour Division (see 22.1008-5). . . . (continued...) ----------- FOOTNOTE ENDS ----------- On January 16, 1992, the contracting officer notified appellant of respondent's intent to exercise option I. On January 22, 1992, the contracting officer received a revised area wage determination from DOL. On that same day, as required by FAR 22.1012-1, the contracting officer incorporated the new area wage determination into the contract and wrote to appellant to inform appellant that it should submit, within thirty days of receipt of the letter, any claims it might have for adjustment to the option price as a result of the incorporation of the revised area wage determination into the contract.[foot #] 2 It must be understood that this wage determination is not the wage determination desired by the appellant which is at issue in this case. On February 6, 1992, appellant notified the contracting officer that it had recognized the IAM&AW as the bargaining agent of its employees and that negotiations with IAM&AW on a collective bargaining agreement were scheduled to begin prior to February 24, 1992. By letter on February 11, 1992, the contracting officer acknowledged receipt of the contractor's letter of February 6, 1992, but indicated that since DOL had recently issued an area wage determination, any collective bargaining agreement would not be effective during the first option year. On February 25, 1992, appellant, pursuant to the clause entitled "FAIR LABOR STANDARDS ACT AND SERVICE CONTRACT ACT - PRICE ADJUSTMENT (MULTIPLE YEAR AND OPTION CONTRACTS)" (hereinafter "the adjustment clause"), set out in FAR 52.222-43, sought a price adjustment for the first option period based upon ----------- FOOTNOTE BEGINS --------- [foot #] 1 (...continued) (emphasis added). In addition, DOL regulations state that "whenever the term of an existing contract is extended, pursuant to an option clause . . ., the contract extension is considered to be a new contract for purposes of the Act's provisions. All such 'new' contracts . . . require the insertion of a new or revised wage determination in the contract. . . ." 29 CFR 4.143 (1992). [foot #] 2 FAR 22.1012-1 states: [DOL] will issue a wage determination or revision to it ____ in response to [Standard Forms 98 and 98a]. The contracting officer shall incorporate the determination _____ or revision in the particular [contract] for which the wage determination was sought. (emphasis added). ----------- FOOTNOTE ENDS ----------- the new area wage determination. The clause states, in pertinent part: (a) This clause applies to both contracts subject to area prevailing wage determinations and contracts subject to collective bargaining agreements. . . . . (c) The wage determination issued under the Service Contract Act of 1965, as amended, (41 U.S.C. 351, et seq.), by [DOL], current on the . . . beginning of each renewal option period, shall apply to this contract. . . . (d) The contract price or contract unit price labor rates will be adjusted to reflect the Contractor's actual increase or decrease in applicable wages and fringe benefits to the extent that the increase is made to comply with . . .: (1) [DOL] wage determination applicable . . . at the beginning of the renewal option period . . .; (2) An increased or decreased wage determination otherwise applied to the contract by operation of law; . . . . (e) Any adjustment will be limited to increases or decreases in wages and fringe benefits as described in paragraph (c) of this clause, and the accompanying increases or decreases in social security and unemployment taxes and workers' compensation insurance, but shall not otherwise include any amount for general and administrative costs, overhead, or profit. (f) The Contractor shall notify the Contracting Officer of any increases claimed under this clause within 30 days after receiving a new wage determination unless this notification period is extended in writing by the Contracting Officer. . . . FAR 52.222-43 (1989) (emphasis added). Appellant also indicated that it intended to submit a collective bargaining agreement on a date ten days prior to the commencement of the first option period. Hence, appellant sought to reserve its right to submit additional revised prices if the collective bargaining agreement negotiations concluded prior to the start of the first option period. On February 28, 1992, respondent mailed to appellant a contract modification exercising the first option of the contract. The modification also adjusted the contract prices to reflect the increased wages and benefits contained in the revised wage determination which had been incorporated into the contract. Respondent indicated that appellant was to sign, date, and return the copies of the modification to respondent to signify appellant's acceptance of the modification. On March 4, 1992, appellant signed the copies of the modification and returned them to respondent. Appellant again indicated that negotiations with IAM&AW were continuing and that it was expected that a collective bargaining agreement would be achieved not later than ten days before the commencement of the first option year. Appellant further stated that it would submit revised cost data to respondent with the ratified collective bargaining agreement. On March 9, 1992, respondent indicated by letter to appellant that the first option for a one-year period starting April 1, 1992, had been exercised. On March 13, 1992, appellant commenced formal negotiations with IAM&AW. These negotiations ended on March 16, 1992, when a collective bargaining agreement was agreed upon by appellant and the union and accepted by the union membership. On March 20, 1992, appellant, believing that it had a valid collective bargaining agreement that was current on the beginning of the first option period, forwarded an unsigned copy of the collective bargaining agreement to the contracting officer so that it could, in turn, be forwarded to DOL in accordance with the Service Contract Act, 41 U.S.C. 351(a)(1), and FAR 22.1008- 3.[foot #] 3 This copy of the collective bargaining agreement contained several typographical errors. On March 24, 1992, the contracting officer, citing the lack of a signature and the various typographical errors, indicated, by letter to the contractor, that no valid collective bargaining agreement existed. On April 8, 1992, appellant forwarded a signed and corrected copy of the collective bargaining agreement to the contracting officer. In the letter accompanying the collective bargaining agreement, appellant contended that, since the contracting officer was presented with a copy of the collective bargaining agreement prior to the exercise of the first option period, the collective bargaining agreement should be incorporated, in accordance with FAR 22.1012-5,[foot #] 4 into the modification exercising the first option period. On April 20, 1992, the contracting officer indicated, by letter to the contractor, that he was again denying the existence of a collective bargaining agreement prior to the beginning of the first option period. The contracting officer specifically ----------- FOOTNOTE BEGINS --------- [foot #] 3 FAR 22.1008-3 states, in pertinent part: (d) If section 4(c) of the [Service Contract Act of 1965] applies, the contracting officer shall obtain a copy of any collective bargaining agreement between an incumbent contractor or subcontractor and its employees. . . (Paragraph (m) of the clause at 52.222- 41, Service Contract Act of 1965, as amended, requires the incumbent prime contractor to furnish the contracting officer a copy of each collective bargaining agreement). The contracting officer shall _____ submit a copy of each collective bargaining agreement together with any related documents specifying the wage rates and fringe benefits currently or prospectively payable under each agreement with the Notice [Standard Forms 98 and 98a]. (emphasis added). [foot #] 4 FAR 22.1012-5 states that the wage and fringe benefit terms of the collective bargaining agreement or the collective bargaining agreement itself are to be incorporated into the solicitation by the contracting officer "[i]f the contracting officer has not filed the Notice within the time limits in 22.1008-7, has not received a response from [DOL], and a successorship/same locality/incumbent collective bargaining agreement situation exists . . .," and after the contracting officer has contacted DOL it is revealed that DoL "is unable to provide the wage determination or revision by the latest date needed to maintain the acquisition schedule. . . ." ----------- FOOTNOTE ENDS ----------- noted that the signature page of the forwarded collective bargaining agreement contained in the letter of April 8, 1992, was not an original, and that the collective bargaining agreement also contained a statement reserving the union's right to change or modify "this proposal." On May 11, 1992, appellant wrote to the contracting officer and indicated that clerical errors were responsible for the union's "retention of rights" statement appearing in the contracting officer's copy of the collective bargaining agreement. The contracting officer issued a final decision on June 15, 1992, denying appellant's claim for an equitable adjustment to the contract under the adjustment clause. Discussion Appellant appeals a denial of its claim for an increase in the contract price based upon its increased labor costs resulting from the collective bargaining agreement negotiated with its employees' union, IAM&AW. The respondent contends that we lack jurisdiction to entertain such a claim and, therefore, moves that we dismiss this case. Respondent's motion cuts to the heart of this dispute which ultimately is over what the applicable wage determination should have said. We agree with respondent. This is not an issue over which we have jurisdiction. We, therefore, grant the motion. The Service Contract Act, 41 U.S.C. 351(a)(1) (1988),[foot #] 5 requires the Secretary of Labor to establish the minimum wages to be paid to the service employees employed by the contractor under the contract. As here, in a contract with an option clause, the price adjustment clause adjusts the contract price for the option period to reflect changes mandated by any new or revised contractually required minimum wages which are required to be paid during the option period. The contract's adjustment clause provides that the minimum wages, established by the Secretary of Labor and incorporated into the contract, current on the beginning of each renewal option period, apply to the contract. The minimum wages established by DOL are incorporated in the contract prior to the commencement of the option period. The ----------- FOOTNOTE BEGINS --------- [foot #] 5 41 U.S.C. 351(a) states, in pertinent part: Every contract (and any bid specification therefor) entered into by the United States . . . in excess of $2,500, except as provided in section 356 of this title, whether negotiated or advertised, the principal purpose of which is to furnish services in the United States through the use of service employees, shall _____ contain the following: (1) A provision specifying the minimum monetary wages to be paid the various classes of service employees in the performance of the contract . . . as determined by [DOL] in accordance with prevailing rates for such employees in the locality, or where a ________ collective-bargaining agreement covers any ----------- FOOTNOTE BEGINS --------- such service employees, in accordance with _______________________ the rates for such employees provided for in such agreement, including prospective wage increases provided for in such agreements as a result of arm's length negotiations. . . . (emphasis added). ----------- FOOTNOTE ENDS ----------- adjustment is not for changes in the wages paid by the contractor to its employees under an agreement with the employees, but are instead for changes in the minimum wages established by DOL that are required to be paid by the terms of the contract between appellant and the Government. There is a real difference. The minimum wages mandated by the contract are just that, minimums. The contractor may pay its employees amounts in excess of the minimum wages specified in the contract. If there is no increase in the contractually required minimum labor rates, then there is no adjustment called for under the price adjustment clause. A&C Building & Industrial Maintenance Corp., GSBCA 5589, 82-1 BCA 15,634 (the contractor can pay its employees any amount above the contractually required minimum wages that it wishes; however, only increased labor costs incurred in meeting the minimum mandatory wages are recoverable under the price adjustment clause). In the instant case, we are asked to decide whether the minimum wage, applicable to the first option period of this contract, should have been established in accordance with the collective bargaining agreement that was negotiated between the contractor and IAM&AW. The contracting officer has stated in his final decision that no collective bargaining agreement existed prior to the start of the first option period. Be that as it may, this is not an issue that can be decided by this Board. As we noted in Kass Management Services, Inc., GSBCA 8819, 88-3 BCA 20,891, at 105,618, we do not have the power to "challenge the accuracy of the . . . wage determinations issued under the Service Contract Act and applied by the DOL to appellant's contracts with GSA . . ." See also Tele-Sentry Security, Inc., GSBCA 10945(7703)-REIN, 91-2 BCA 23,880, at 119,619, Aff'd, 950 F.2d 730 (Table) (Fed. Cir. 1991), (noting that this Board has no jurisdiction over disagreements concerning classification or wage rates contained in the wage determination); A&C Building, GSBCA 5589, 82-1 BCA 15,634 at 77,232 ("this tribunal has no jurisdiction to review the correctness of a wage determination issued by [DOL]"). In the case before us, the contractor is ultimately challenging the accuracy of DOL's wage determination. The contractor is arguing that the determination was founded on an incorrect assumption, i.e. the lack of a collective bargaining agreement. Whether or not the collective bargaining agreement should be the basis of a revised wage determination is a decision which is solely within the jurisdiction of the Department of Labor. Kass, 88-3 BCA at 105,618. We simply do not have the authority to change the amount of any wage determination applied to appellant's contract. Id; see also IBI Security Services, Inc., ASBCA 38960, 90-2 BCA 222,687, at 113,949 (noting that "DOL has final authority to resolve disputes associated with DOL Wage Determination issues arising under the Service Contract Act"); FAR 22.1015 (only DOL has the power to correct an erroneous failure to include an appropriate wage determination into a contract). We note that we do not have the problem presented in Security Services, Inc. v. General Services Administration, GSBCA 11052 (Nov. 10, 1992), or Broad Avenue Laundry and Tailoring v. United States, 231 Ct.Cl. 1, 681 F.2d 746 (1982), where the Government agreed to modify a contract based upon a collective bargaining agreement entered into after the commencement of the option period. Admittedly, we do have jurisdiction to prevent the Government from reneging on such a modification, Broad Avenue, 231 Ct.Cl. at 4, 681 F.2d at 747-748, but we are not faced with such a situation. In the case before us, the contractor ultimately contends that rather than apply the wage determination in the contract which was applicable to the option period, we should apply some "new" wage determination that does not exist inasmuch as no such "new" wage determination has been issued by the DOL. We have no authority or power to invent such a determination. In short, the relief requested requires actions on our part that are beyond our jurisdiction. FAR 52.222-41(t) and 29 CFR part 7 set forth the procedure for appellant to follow if it has any questions concerning the correct wage determination to be used in its contract with GSA. Our jurisdiction is limited to matters governed by the Contract Disputes Act of 1978, 41 U.S.C. 601-613 (1988). It is evident that FAR 52.222-41(t) establishes DOL as the sole forum for matters concerning the content of wage determinations. See Kass, 88-3 BCA at 105,618. Decision The appeal is DISMISSED FOR LACK OF JURISDICTION. ____________________________ JAMES W. HENDLEY Board Judge We concur: ____________________________ EDWIN B. NEILL Board Judge ____________________________ MARY ELLEN COSTER WILLIAMS Board Judge