Southern Packaging and Storage Co., Inc. v. U.S., s. 79-1056

• Citation: 618 F.2d 1088
• Decision Date: 24 April 1980
• Docket Number: 79-1057,Nos. 79-1056,s. 79-1056
• Parties: 24 Wage & Hour Cas. (BN 701, 89 Lab.Cas. P 33,930, 27 Cont.Cas.Fed. (CCH) 80,382 SOUTHERN PACKAGING AND STORAGE COMPANY, INC., Appellee, v. UNITED STATES of America, Appellant. SOUTHERN PACKAGING AND STORAGE COMPANY, INC., Appellant, v. UNITED STATES of America, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

Page 1088

618 F.2d 1088 24 Wage & Hour Cas. (BN 701, 89 Lab.Cas. P 33,930,
27 Cont.Cas.Fed. (CCH) 80,382 SOUTHERN PACKAGING AND STORAGE COMPANY, INC., Appellee,
v.
UNITED STATES of America, Appellant.
SOUTHERN PACKAGING AND STORAGE COMPANY, INC., Appellant,
v.
UNITED STATES of America, Appellee. Nos. 79-1056, 79-1057. United States Court of Appeals,
Fourth Circuit. Argued Jan. 10, 1980.
Decided April 24, 1980.

Page 1089

William W. Goodrich, Jr., Washington, D. C. (Matthew S. Perlman, Arent, Fox, Kintner, Plotkin & Kahn, Washington, D. C., David W. Keller, Jr., McGowman, Nettles, Keller & Eaton, P. A., Florence, S. C., on brief), for Southern Packaging and Storage Co., Inc.

Gail V. Coleman, U. S. Dept. of Labor, Washington, D. C. (Carin Ann Clauss, Sol. of Labor, Ronald G. Whiting, Associate Sol., Jack Diamond, U. S. Dept. of Labor, Barbara Allen Babcock, Asst. Atty. Gen., Washington, D. C., Thomas E. Lydon, Jr., U. S. Atty., Columbia, S. C., William Kanter, Appellate Section, Civ. Div., Dept. of Justice, Washington, D. C., on brief), for the U. S.

Before WINTER and RUSSELL, Circuit Judges, and JONES, District Judge. ^*

SHIRLEY B. JONES, District Judge:

Southern Packaging and Storage Company, Inc., has for over thirty-five years assembled various component parts of the "Meal Combat Individual" (MCI) field rations (formerly C rations) pursuant to government contracts. Those contracts were issued subsequent to bid solicitations prepared by the Defense Logistics Agency and the Defense Personnel Support Center. The solicitation contained a wage determination prepared by the Employment Standards Administration of the Department of Labor which indicated that the Service Contract Act, 41 U.S.C. § 351, was applicable, ¹ the locality for the minimum wage determination was "nationwide" and the job description was "assembly of field rations."

The district court determined, after a trial without a jury, that the Service Contract Act was indeed applicable to the work performed by Southern Packaging. Southern Packaging and Storage Company, Inc. v. United States of America, 458 F.Supp. 726, 731-32 (D.S.C.1978). The court also held that the term "locality" as used in the Service Contract Act and as applied in this bid solicitation referred to "the standard metropolitan statistical area, if available, or the specific county, where the bidding party's plant or facility is located." 458 F.Supp. at 735.

The Department of Labor appeals, contending that in the context of this solicitation it did not err in determining nationwide minimum wage rates. Southern Packaging cross-appeals, asserting that the district court erred in not construing its assembly operations as manufacturing within the Walsh-Healey Act and regulations, 41 C.F.R. § 50-206.52 (1979), which would have rendered the provisions of the Service Contract Act inapplicable, 41 U.S.C. § 356(2).

Page 1090

We find that the district court was correct on both questions and we affirm. ²

The Service Contract Act ³ provides "protection of employees of contractors and subcontractors furnishing services to or performing maintenance service for Federal agencies." 1965 U.S. Code Cong. & Admin. News, pp. 3737, 3737; 1972 U.S. Code Cong. & Admin. News, p. 3534. Southern Packaging contends that it is a "manufacturer" within the Walsh-Healey Act ⁴ of the MCI procurements or, in the alternative, furnishes supplies, which also comes within the ambit of Walsh-Healey.

The district court described in detail the functions of Southern Packaging once it received the component parts shipped by the United States. The final end product is composed, for all practical purposes, from the material delivered to Southern Packaging. As the district court found, it is clear that Southern Packaging packages and assembles these component parts into the final product the MCI ration kit. The regulations define manufacturer as a "person who owns, operates, or maintains a factory or establishment that produces on the premises the materials, supplies, articles, or equipment required under the contract and of the general character described by the specifications." 41 C.F.R. § 50-201.101(a)(1) (1979). In light of the fact that Southern Packaging does not produce any of the materials required under the contract, it cannot be construed as a manufacturer within the regulations.

Southern Packaging alternatively seeks to bring itself within the definition of "assembler." 41 C.F.R. § 50-206.52 (1979).

"Assembly" means piercing or bringing together various interdependent or interrelated parts or components so as to make an operable whole or unit . . . . A firm which produces final items on its premises by assembling component parts, all or some of which have been purchased from others, will generally be considered to be a "manufacturer" where it performs a series of assembly operations utilizing machines, tools and workers which constitute substantial and significant fabrication or production of the desired product. § 50-206.52(b)(1).

Thus, the determination of whether a bidder proposing to assemble a final product from component parts is an eligible manufacturer must rest on whether the bidder has demonstrated an...