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92 C. Cls. Reporter's Statement of the Case Sec. 3. Where provisions concerning hours of labor or rates of pay have been established for specific projects, by competent governmental authority or agencies (whether Federal, State, or political subdivisions thereof) acting in accordance with law, any employer required to comply and complying with the provisions so established shail be relieved of compliance with any conflicting provisions of this Article or of any actions taken in accordance therewith.
Any employer required to comply and complying with the provisions of a valid labor agreement in force on the effective date shall be relieved to the extent of his legal obligations thereunder of compliance during the period of such agreement, with any conflicting provisions of this Article, or of any actions taken in
accordance therewith. The supplemental code for fair competition contained the following:
SECTION 1. No skilled electrical worker shall be paid at less than the rate of 75 cents per hour. The specifications stated in part as follows:
RATE OF WAGE.-The following paragraph pertaining to the rate of wage shall apply to every contract in excess of Five Thousand Dollars ($5,000) in amount:
The rate of wage for all laborers and mechanics employed by the contractor or any subcontractor on the public building covered by this contract shall be not less than the prevailing rate of wages for work of a similar nature in the city, town, village, or other civil division of the state in which the public building is located. In case any dispute arises as to what are the prevailing rates of wages for work of a similar nature applicable to the contract which cannot be adjusted by the contracting officer, the matter shall be referred to the Secretary of Labor for determination and his decision thereon shall be conclusive on all parties to the contract, as provided in the Act of March 3, 1931 (Public, Number 798).
(D) It is further expressly understood and agreed that if it should be found by the contracting Officer that any laborer or mechanic employed by the contractor, or any subcontractor on the public work covered by this contract, has been or is being paid a rate of wages less than the prevailing rate of wages, as
Reporter's Statement of the Case aforesaid, the Government may, by written notice to the contractor, terminate his right to proceed with the work, or such part of the work as to which there has been a failure to pay said prevailing wages. In such event, it is understood and agreed that the Government may take over the work and prosecute the same to completion by contract or otherwise, and that the contractor and his sureties shall be liable to the Government for
any excess cost occasioned the Government thereby. The code for the construction industry established many rules and regulations for that and other codes for the industry which were of benefit to plaintiff. These rules and regulations became void when the National Industrial Recovery Act was held to be invalid.
5. May 27, 1935, the Supreme Court decided the case of Schechter v. United States, 295 U. S. 495, in which the National Industrial Recovery Act was held invalid. On June 17, 1935, plaintiff, after having received notice to proceed, began work under his contract and completed same on November 4, 1936.
6. July 1, 1935, plaintiff submitted to defendant his proposed wage scale and posted same at the site of the work at Columbia, South Carolina. It was not changed or removed, and was as follows:
COLUMBIA, S. C., CT. H. JAMES I. BARNES
July 1, 1935.
92 C. Cls. Reporter's Statement of the Case Painters & Glaziers..
$0.60 Per Hr. Cement Finishers..
. 75 Iron Workers..
.60 Rod Setters....
.60 JAMES I. BARNES, By L. S. MITCHELL,
7. Plaintiff during the performance of the work under this contract employed common labor for a total of 63,45414 man-hours, at the rates per hour as follows: 708 hours at 10€
$70. 80 24 1144¢
2. 80 48172 12424
60. 19 44 1312€
5. 94 348 15¢
52. 20 41,73242 20¢
8, 346.50 559 22¢
122. 98 89 22124
20. 03 13,38594 25¢
3, 346. 44 4,20944 30€
1, 262. 78 1,8734 35€
655. 64 Plaintiff, during the work on this contract, employed electricians for a total of 31 man-hours, at the wage rate as follows: 15 hours 55° per hour--
$8. 25 16 40¢
6. 40 8. Defendant's construction engineer, on July 26, 1935, wrote plaintiff as follows:
The Office letter under date of July 15, 1935, advises me as follows, relative to prevailing wage scale for workmen employed on U. S. Court House, Columbia, S. C.
That any saving accruing to a contractor by reason of a departure by him from the requirements of the applicable codes of fair competition with which he has agreed to comply will be given consideration at time of final settlement of the contract, with a view to a possible reduction in his compensation.
The Construction Code required a minimum rate of 40 cents an hour for common labor and the Supplementary Code for the plastering and lathing Contracting Industry required a minimum rate of $1.00 an hour for plasterers and lathers in the southern zone and a minimum rate of 60 cents an hour for plasterer's laborers.
Reporter's Statement of the Case
Two rates for the carpenter's trade is not approved; the Department of Labor having taken the position that this trade cannot be properly subdivided, and that any workmen using the tools of a carpenter in construction work must be considered a carpenter. Separate rates should not be posted for rough and finish carpenters. It is also to be noted that bricklayers employed in connection with work under this Division have seldom
received less than $1.00 an hour. The only authority which the contract granted to defendant in the event of plaintiff's failure to comply with each approved code, assumed to be valid when the contract was made, was the right to cancel the contract and make open market purchases or to have the work called for performed at the expense of the contractor. No attempt was made to cancel the contract or to have the work otherwise performed.
9. Plaintiff based his estimates for bids on cost of labor at the minimum rates of 40¢ an hour for common labor and 75¢ an hour for skilled electrical workers. Plaintiff's wage scale, which was posted on the job, as stated in finding 6, after the N. I. R. A. was declared invalid, was arrived at after an investigation of the wages paid by the State, County, City, and general construction contractors in the locality where this work was performed.
The Government's construction engineer conducted an investigation at Columbia, South Carolina, resulting in his conclusion that 25° an hour was the prevailing rate there for common labor. He, not being able to convince plaintiff that this was the prevailing rate or to persuade plaintiff to adopt that rate, submitted the contractor's 20¢ rate to the Treasury Department Director of Procurement for approval, Neither rate was submitted for the consideration and decision of the Secretary of Labor, nor did defendant or the contracting officer demand that plaintiff pay 25¢ an hour for common labor.
10. Plaintiff completed and defendant accepted the work called for by the contract on November 4, 1936. Thereafter, on June 5, 1937, Assistant Director of Procurement Reynolds wrote the General Accounting Office as follows:
Reference is made to the contract with James I. Barnes, Springfield, Ohio, for construction of the Court House building at Columbia, South Carolina.
92 C. Cls, Reporter's Statement of the Case The records relative to this contract indicate that the contractor effected a saving of $11,443.50 by reducing the rates of wages paid to laborers and electricians after the decision of the Supreme Court in the Schechter Poultry Case, and in view of this the contract is referred to your office for direct settlement with the request that consideration be given to deducting the amount of $11,443.50 from the balance due the contractors.
Department letter of June 2, 1937, and photostatic copies of correspondence and pay rolls showing the sav
ing effected by the contractor are inclosed. The Treasury Department, on June 10, 1937, wrote plaintiff as follows:
Reference is made to your contract, dated April 30, 1935, for construction of the Court House at Columbia, South Carolina.
The records in this office indicate that a saving was effected by you in the amount of $11,443.50 by reducing the rates of wages paid to laborers and electricians after the decision of the Supreme Court in the Schechter Poultry Case (N. R. A. decision), and in view of this your contract was referred to the Comptroller General of the
United States for direct settlement on June 5, 1937. 11. The General Accounting Office on September 18, 1937, held that defendant owed plaintiff only a balance of $233.37 in full settlement of the contract herein. This sum was the amount remaining due after deducting from the lump-sum contract price the amount of $11,482.49 from the amount otherwise due plaintiff. There was no provision in the contract, specifications, or in any code authorizing the defendant, through either the contracting officer or the Comptroller General, to deduct any amount from the contract price for failure of the contractor to pay, or, if it should be determined that he was not required to pay either the prevailing wages in the locality or the minimum code wages.
The notice of settlement of the Comptroller General issued September 18, 1937, was in part as follows:
I have certified that there is due you from the United States, payable from the appropriation (s) indicated, the sum of Two HUNDRED THIRTY-THREE AND 37/100