The opinion of the court was delivered by: SPORKIN
STANLEY SPORKIN, UNITED STATES DISTRICT JUDGE
This case involves the application of the McNamara-O'Hara Service Contract Act, as amended, 41 U.S.C. § 351 et seq., to five United States Department of Navy ("Navy") service contracts awarded variously to the Burnside-Ott Aviation Training Center, Inc. ("Burnside-Ott") and the Dynalectron Corporation, now known as DynCorp ("DynCorp"). In this action, representative plaintiffs Lloyd T. Danielsen, David W. King, and Jack Wagstaff
seek a writ of mandamus to compel the Secretary of Labor and the Secretary of the Navy to issue and enforce retroactive wage determinations against plaintiffs' former employers, Burnside-Ott and DynCorp. Currently pending before the Court is defendants'
motion to dismiss.
The five service contracts at issue in this case are three maintenance service contracts for the Navy's TH-57 helicopter training squadrons based in Florida and two maintenance service contracts for the Navy's T-34/44, and T-2 aircraft training squadrons based throughout the southern United States. The seeds of the present dispute were sown in November, 1985, when plaintiffs David King and Lloyd Danielsen filed a complaint with the regional office of the United States Department of Labor's Wage and Hour Division ("Wage and Hour Division") concerning the performance of the Navy's three contracts for maintenance of its TH-57 helicopter aircraft.
Prior to 1981, the Navy performed its own maintenance services for its TH-57 helicopter aircraft. On September 28, 1981, the Navy contracted out the maintenance services for its TH-57 helicopters to Burnside-Ott. Burnside-Ott continued to hold this contract, the first of the three TH-57 contracts at issue, under option until December 1, 1984 (Contract No. N00612-81-C-8007, "B-O Contract #1"). Complaint, paras. 16-17, 23. See also Affidavit of William W. Gross, Acting Assistant Administrator, Office of Program Operations ("Gross Aff.") para. 4, attached as Exhibit to Defendants' Motion to Dismiss. From December 1, 1984, until December 1, 1985, the TH-57 contract was performed by Dynalectron Corporation, now known as DynCorp (Contract No. N00612-84-C-8002, "DynCorp Contract #1"). Complaint, para. 32; Gross Aff., para. 4. On December 1, 1985, Burnside-Ott began performance on the third TH-57 maintenance contract (Contract No. 68520-86-D-0101, "B-O Contract #2") which it reacquired pursuant to competitive bid. Complaint, para. 27; Gross Aff., para. 4. Burnside-Ott continues to hold this contract through the present time.
As a result of plaintiffs' complaint concerning the TH-57 service contracts,
the Wage and Hour Division investigated the payment practices of the contractors on the TH-57 contract. Gross Aff., para. 5. In a report dated February 19, 1986, the Division determined that the Service Contract Act ("SCA") had been violated. Id. In particular, the Division concluded that Burnside-Ott was utilizing a system of job classification for its employees on B-O Contract #2 that resulted in misclassifications and the underpayment of wages required for the nature of the work performed.
Complaint, para. 25; Gross Aff., para. 5. No enforcement action was taken at that time, however.
Instead, on May 20, 1986, Burnside-Ott submitted to the Navy a proposed conformance action requesting the addition of 14 classes of service employees to the wage determinations on B-O Contract #2. Complaint, para. 75; Gross Aff., para. 7. Under Department of Labor ("DOL") regulations, when the performance of a contract requires the employment of a class of service employee not listed on the wage determination, the contractor must classify such employee "so as to provide a reasonable relationship (i.e. appropriate level of skill comparison) between such unlisted classifications and the classifications listed in the wage determination." 29 C.F.R. § 4.6(b)(2)(i). Such a "conformance action" is subject to the approval of the Administrator of the Wage and Hour Division. In its proposed conformance action, Burnside-Ott asserted that various technician classes not on the wage determination were necessary to the performance of the TH-57 contract and proposed that these classifications be paid at wage rates lower than the aircraft worker classification wage rate listed on the wage determination. Gross Aff., para. 7.
On December 15, 1986, the Administrator of the Wage and Hour Division determined that no conformance was necessary. Gross Aff., para. 9. The Administrator concluded that the duties of employees in the proposed "technician" classifications fell within those of the aircraft worker as described in the wage determination and, therefore, employees performing work under such classifications must be paid no less than the aircraft worker rate on the wage determination. The Administrator made similar determinations with respect to other proposed classifications. For those proposed classifications that did not match the duties of a classification on the wage determination, the Administrator used the "standard slotting methodology" to determine appropriate pay ratios between the requested classifications and those contained in the wage determination. Id.; 29 C.F.R. §§ 4.6(b)(2)(iv)(A) and 4.51(c).
On February 11, 1987, the Wage and Hour Division directed Navy to withhold amounts from contract funds to secure back wages owed by Burnside-Ott while the matter was under consideration by Labor. Specifically, the Division requested that $ 826,000 be withheld from contract funds and that an additional $ 59,000 per month be withheld to cover Burnside-Ott's on-going liability. By letter dated March 30, 1987, the Navy confirmed that it was withholding funds. Gross Aff., para. 11. On April 21, 1987, Burnside-Ott submitted a request to stay withholding of contract funds pending review of Navy's request for reconsideration of the Administrator's determination. This request was denied.
Gross Aff., para. 12.
On May 25, 1987, Navy requested review and reconsideration of the Administrator's conformance determination on the grounds that the lower paid technician classification rather than the aircraft worker classification was the primary classification required on the contract. Gross Aff., para. 10. The Administrator rejected the Navy's position on December 4, 1987. The Administrator based her decision on the determination that aircraft workers are better suited than technicians to perform inspection and repair of aircraft in operation, as required by the maintenance service contract, because unlike technicians, aircraft workers are qualified to work directly on aircraft and possess knowledge to recognize on the flight-line what repairs are necessary.
Burnside-Ott then petitioned the Deputy Secretary of Labor for review of the Administrator's conformance decisions of December 15, 1986, and December 4, 1987 pursuant to 29 C.F.R. § 8.7(b). Case No. 87-SCA-OM-2; Gross Aff. para. 14. Plaintiffs King and Danielsen participated as interested parties, pursuant to DOL regulations, by submitting exhibits and statements in support of the Administrator's determination. See 29 C.F.R. § 8.11; Gross Aff. para. 13. On January 10, 1989, the Deputy Secretary issued a final decision affirming the Administrator's conformance decisions regarding B-O Contract #2 in their entirety and directing that Burnside-Ott's employees be paid the wage rates as determined by the Administrator retroactive to December 1985, the date when the contract commenced. Gross Aff., para. 14.
Subsequently, the Wage and Hour Division demanded payment of back wages from Burnside-Ott for B-O Contract #2. Gross Aff., para. 15. To date, Burnside-Ott has distributed approximately $ 960,000 to employees in underpaid wages owed for the periods from December 1985 to September 1987.
Gross Aff., para. 16. Because the violations concerning B-O Contract #2 were alleged to have carried over from previous TH-57 contract periods, the Wage and Hour Division, pursuant to its standard practice, is also seeking back wages for the two-year period preceding its February 1986 investigation. Thus, DynCorp has acknowledged its liability for back wages for DynCorp Contract #1, which covers the period December, 1984 to December, 1985, although exact amounts have not as yet been computed. The Wage and Hour Division is also seeking to obtain further back wages from Burnside-Ott for the period from February 1984 to December 1984.
Gross Aff., para. 17.
The remaining two contracts at issue in the present dispute were awarded to DynCorp by the Navy for the maintenance of its T-2 and T-34/44 fixed wing aircraft, respectively. The T-2 maintenance services contract was awarded to DynCorp on February 4, 1985 (Contract No. N68520-85-D-9053, "DynCorp Contract #2"). Complaint, para. 33; Gross Aff., para. 18. The T-34/44 maintenance service contract was awarded to DynCorp on September 22, 1985 (Contract No. N68520-85-D-0033, "DynCorp Contract #3"). Complaint, para. 35; Gross Aff., para. 18. DynCorp submitted a conformance request for each contract, proposing rates for numerous classifications not contained on the wage determinations. The two conformance requests were consolidated for consideration by the Administrator, who issued a final ruling on April 3, 1987. Gross Aff., para. 19.
Once again, as with the TH-57 contracts, the primary dispute was the contractor's proposed use of technician classifications to perform aircraft maintenance on the flight-line. While the Administrator accepted the classifications proposed by DynCorp, she also increased most of the proposed wage rates for the classifications and directed DynCorp to apply these conformed wage rates to the commencement date of the applicable contract. Gross Aff., para. 19. On May 28, 1987, DynCorp petitioned the Deputy Secretary for review of the Administrator's determination. Case No. 87-SCA-0M-5; Gross Aff., para. 20.
On December 3, 1987, the Navy requested that the Deputy Secretary consolidate DynCorp's appeal in Case No. 87-SCA-OM-5, concerning the T-2 and T-34/44 contracts, with Burnside-Ott's appeal in Case No. 87-SCA-OM-2, concerning the TH-57 contract. Gross Aff., para. 20. The Administrator opposed consolidation, and plaintiffs King and Danielsen submitted a response supporting consolidation of the two appeals.