Fowler v. City of Anchorage
| Decision Date | 28 August 1978 |
| Docket Number | No. 3586,3586 |
| Citation | 583 P.2d 817 |
| Parties | 23 Wage & Hour Cas. (BNA) 1015, 84 Lab.Cas. P 55,144 Larry FOWLER d/b/a Star Construction Company, Appellant, v. CITY OF ANCHORAGE, Appellee. |
| Court | Alaska Supreme Court |
Before BOOCHEVER, C. J., and RABINOWITZ, CONNOR, BURKE and MATTHEWS, JJ.
Larry Fowler, a contractor, bid on and was awarded a public construction contract with the City of Anchorage. Between the time the invitation for bids was published and the time the contract was let, a change occurred in the minimum wage regulations for public contracts as provided by the Alaska Department of Labor. Thus, Fowler was required to pay $5,238.10 more in wages than he had planned to pay, based upon the earlier minimum wage figures. He filed a complaint against the city for this amount. The city was granted summary judgment, from which Fowler brings this appeal.
On June 28, 1974, the City of Anchorage published Invitation to Bid 74-C31 for a contract involving the construction of certain improvements in the Anchorage water system. This invitation included, among its specifications, a detailed schedule of prevailing wages for various classes of laborers. This schedule was a copy of the one issued by the Alaska Department of Labor on January 1, 1974. By mandate of AS 36.05.010, contractors performing work under public construction contracts are required to pay not less than the rates set forth in the current prevailing wage schedule. AS 36.05.070 requires that advertised specifications for public contracts of this type include a provision stating the minimum wages to be paid.
Three days later, on July 1, 1974, the Alaska Department of Labor issued a new schedule. It appears that this new schedule did not come to the immediate attention of either the City of Anchorage or Fowler. On July 9, the city issued an amendment to its previously published specifications which did not include any notification to potential contractors that a new wage scale was in effect. After the bidding was closed, the city awarded the contract to Fowler. The contract was formally executed on July 28. Shortly after the contract was executed, Fowler learned that a new wage scale existed and that he was required to pay his employees accordingly. Fowler apparently had planned to pay his employees the minimum wages provided by the schedule which was attached to the invitation for bids; the subsequent change in schedules caused him to pay more than he had planned. Consequently, Fowler filed a formal claim with the city for the additional amount; and it was denied. Fowler then filed suit alleging that he was entitled to recover for the additional amount of wages he had been required to pay. He asserted three theories: the parties had entered into the contract under a mutual mistake; the city had negligently failed to amend the bid offer to reflect the new schedule; and the city had misrepresented the minimum wages which the contractor would be required to pay. The superior court granted summary judgment for the city and in doing so stated, in part:
A lot of (Fowler's) argument, I think, would require me to take an equitable position in aid of the non-union contractor to allow him a lower standard of awareness than that which I think is required under the law and would, by that mechanism, engraft on the city certain duties which I do not think that the law does.
Fowler appeals from the superior court's grant of summary judgment to the City of Anchorage. 1
On appeal, Fowler contends that he should have been granted relief on one of the three theories mentioned above. We turn first to the two tort theories advanced by Fowler: negligence and misrepresentation. 2 He contends that AS 36.05.070 establishes a statutory duty requiring the governmental entity inviting bids to publish correctly the prevailing wages. AS 36.05.070(a) provides, in part:
The advertised specifications for a public construction contract exceeding $2,000 to which the state or a political subdivision of the state is a party which requires or involves the employment of mechanics, laborers, or field surveyors shall contain a provision stating the minimum wages to be paid various classes of laborers, mechanics, or field surveyors. . . .
The minimum wages to be paid, although not specified in this statute, are the prevailing wages. This is set forth in AS 36.05.010, which provided at the time of this action:
Wage rates on public construction. A contractor or subcontractor who performs work on public construction in the state, as defined by AS 36.95.010(3), shall pay not less than the prevailing rate of wages for work of a similar nature in the region in which the work is done. 3
The prevailing rates are determined by the Department of Labor which also decides whether a contractor has violated AS 36.05.010. 4 Thus, the city as the contracting government entity meets the requirement of AS 36.05.070 by appending to its invitation to bid the most recent schedule of prevailing wages as published by the Department of Labor. In the case at bar, this was done. At the time the initial invitation to bid was published, the correct schedule was attached and the city was in compliance with AS 36.05.070(a). However, three days later the schedule was revised by the Department of Labor. Neither the city nor Fowler knew about the change until after the contract was let but before work was commenced. The rule that Fowler urges this court to establish is that the city, as contracting agent, has a duty to be aware of changes in the wage rates and to amend the schedule published in its invitation to bid.
The language of AS 36.05.070 is mandatory, not directory: "The advertised specifications . . . Shall contain a provision . . . ." (emphasis added) Unless the context otherwise indicates, the use of the word "shall" denotes a mandatory intent. 5 Thus, it is clear that the city has a statutory duty to publish as part of its bid specifications the applicable minimum wage schedules. Before we can speak to the questions of whether this duty confers litigable rights on a contractor and whether the city had a duty to amend its specifications in the present circumstances, we think it appropriate initially to consider what representations, if any, were made in the invitation to bid and in the contract which was awarded to Fowler.
The January 1, 1974 schedule of wages published by the Department of Labor was attached to both the invitation to bid and the contract. Specifically included in the contract was a clause stating that the attached schedule was made part of the contract, and this clause was initialled separately by Fowler. 6 The invitation to bid had also emphasized the effect of the schedule:
Attention of bidders is particularly called to the requirements as to conditions of employment to be observed and minimum wage rates to be paid under the contract.
We note that both these clauses seek to limit the contract responsibilities of the parties and are not representations of the legal requirements which the contractor is bound to follow. In addition, the invitation to bid included as part of its information for bidders, the following statement:
Each bidder must inform himself fully of the conditions relating to the construction of the project and the employment of labor thereon. Failure to do so will not relieve a successful bidder of his obligation to furnish all material and labor necessary to carry out the provisions of this contract. Insofar as possible, the contractor, in carrying out his work, must employ such methods or means as will not cause any interruption of or interference with the work of any other contractor.
The January 1, 1974, wage schedule itself included the following disclaimer Changes in a wage classification may be made by the Commissioner upon receipt of sufficient evidence to show that a published rate does not represent the wage prevailing in the industry.
The disclaimer in the schedule appears from its wording to suggest the possibility of discreet changes rather than periodic revisions of the entire schedule. 7 Thus, the city's duties under AS 36.05.070(a) must be defined in light of statements in the agreement which tended to limit the required minimum wages to those provided by the contract's terms. At the same time, however, disclaimers in the agreement put Fowler on notice to some extent, at least that the schedule might be altered by the Department of Labor.
In arguing their positions regarding the city's duty under AS 36.05.070(a), Fowler and the city consider at length the applicability of federal case law interpreting the Davis-Bacon Act, 40 U.S.C. § 276a(a) (1970). 8 The wording of AS 36.05.070 is based upon 40 U.S.C. § 76a(a) (1970), which provides, in part:
The advertised specifications for every contract in excess of $2,000, to which the United States . . . is a party, for construction, alteration, and/or repair, . . . of public buildings or public works of the United States . . . within the geographical limits of the States of the Union, . . . and which requires or involves the employment of mechanics and/or laborers shall contain a provision stating the minimum wages to be paid various classes of laborers and mechanics which shall be based upon the wages that will be determined by the Secretary of Labor to be prevailing for the corresponding classes of laborers and mechanics employed on projects of a character similar to the contract work in the city, town, village, or other civil subdivision of the State, in which the work is to be performed . . . .
The city argues that federal case law is apposite to this court's construction of AS 36.05.070.
The leading case interpreting this section of the Davis-Bacon Act ...
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