On March 1, 2011, the Supreme Court of Missouri issued a
unanimous opinion holding that a contractor's "care
and maintenance" of the water storage tank and tower for the
city of Monroe City, Missouri, was "construction" and
thereby covered under the Missouri Prevailing Wage Act, Mo. Rev.
Stat. §§ 290.210, et seq. (the
"Act").
The company's contract with the city provided that the
company would, among other things, annually inspect and service the
tank, maintain and repair the tank and tower, and clean and repair
the tank. The contractor sought a written statement from the
Missouri Department of Labor and Industrial Relations (the
"Department") as to whether the work outlined by the
contract was covered under the Act. The company took the
position that the work was exempt from the Act because it
constituted "maintenance work," which Missouri law
defines to "mean[] the repair, but not the replacement, of
existing facilities when the size, type or extent of the existing
facilities is not thereby changed or increased." Mo. Rev.
Stat. § 290.210(4). The Department instead concluded that
the work constituted "construction," which is covered
under the Act. The company sought review of this
determination.
The Supreme Court of Missouri agreed with the Department. The
Court held that because the Act was "a remedial statute
intended to prevent payment of substandard wages for work on public
works projects," exceptions from the Act should be read
narrowly. The Court thereby disagreed with a lower
court's prior determination that exempt "maintenance
work" was work that did not "change or
increase . . . the size, type, or extent of the
existing facility." Instead, the Court focused on the
types of work that are defined as "construction," under
the Act, namely "construction, reconstruction, improvement,
enlargement, alteration, painting and decorating, or major
repair." Mo. Rev. Stat. § 290.210(1).
Specifically, the Court held, for example, that because
"reconstruction" was covered under the Act, and because
reconstruction is defined as reassembling "into its original
form or appearance," the lower court's standard could
not survive because that standard would result in expressly-covered
work (reconstruction) being not covered since it would not
"change or increase . . . the size, type, or
extent of the existing facility." The Court further
concluded that the various work expressly required by the contract
fell under dictionary definitions of reconstruction, improvement,
alteration, painting, and major repairs, and that, therefore, the
contract was subject to the Act's requirements.
The Missouri Court's ruling brings the Act to a similar
posture as to the federal Davis-Bacon Act
("DBA"). Similar to the Missouri statute, the DBA
only expressly covers "construction, alteration, or repair,
including painting and decorating." 40 U.S.C.
§ 3142(a). However, United States Department of
Labor regulations, promulgated at 29 C.F.R. § 5.2(j),
define these terms to include all of the following:
- Altering, remodeling, installation (where appropriate) on the
construction site of items fabricated off-site;
- Painting and decorating;
- Manufacturing or furnishing of materials. articles, supplies or
equipment on the construction site; and
- Certain limited transportation
Under the DBA, and similar to the Missouri Court's
determination, "servicing and maintenance work" are
exempted from the Act's requirements. However, given
the broad view of what constitutes "construction, alteration,
or repair" under the DOL's regulations, it should not
be surprising that agencies have taken a very narrow view as to
what constitutes "maintenance work." For example,
NASA's policy statement on the DBA and the Service Contract
Act ("SCA") defines "maintenance work" as
"work required to keep a facility in an effective and usable
working condition, which includes preventative maintenance
measures, which are normally performed on an annual or more
frequent basis." (see http://osi.hq.nasa.gov/labor/DBA-SCA-Policy-FINAL-Revision.pdf).
Likewise, the Department of Energy's Acquisition Guide
defines maintenance as "includ[ing] the routine, recurring
kind of work that is necessary to keep a facility in an efficient
operating condition." (see http://management.energy.gov/policy_guidance/1340.htm).
The Missouri Court's decision should provide an important
reminder to companies that contract with state and local
governments, as well as the federal government, of the breadth of
work that is subject to prevailing wage requirements under both the
DBA as well as under state laws. It is important to remember
that even if a federal contract is purely a maintenance
contract not subject to the DBA's prevailing wage
requirements, it is almost certainly a service contract subject to
the SCA's prevailing wage
requirements. Additionally, contractors ought not ignore
the possibility that severable construction work required by a
maintenance or service contract may still be subject to the
DBA's requirements.
The Missouri decision should also remind contractors of the need to
familiarize themselves with state laws (and city/county
regulations, where applicable), and the ways that they differ from
their federal counterparts, when pursuing contracts with state
and/or local governments.
The Supreme Court of Missouri's decision in Utility
Service Co., Inc. v. Department of Labor and Industrial Relations,
et al., case no. SC 90963, can be found at http://www.courts.mo.gov/file.jsp?id=44941.
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