Board of Contract Appeals General Services Administration Washington, D.C. 20405 ________________________ DENIED: March 23, 1999 ________________________ GSBCA 14651 SPOTLESS JANITORIAL SERVICES, INC., Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. J. Raymond Sparrow, Jr. of Shumate, Kraftson & Sparrow, P.C., Reston, VA, counsel for Appellant. David G. Gherlein, Office of Regional Counsel, General Services Administration, Boston, MA, counsel for Respondent. Before Board Judges NEILL and HYATT. NEILL, Board Judge. Appellant, Spotless Janitorial Services, Inc. (Spotless), appeals from the decision of a contracting officer of the General Services Administration (GSA) denying a claim for increased labor costs on two contracts for janitorial services. Spotless has elected to have this case decided using the accelerated procedure as provided in Board Rule 203. The record on which the Board bases this decision consists of the appeal file submitted by GSA, the appellant s supplements to that submission, joint stipulations filed by counsel, and the transcript of an on- the-record discussion, convened pursuant to Board Rule 201(d), in which sworn witnesses, counsel, and the presiding judge participated. Also included in the record, for informational purposes, is a series of forty-five proposed findings of fact prepared by counsel for appellant. These draft findings served as the basis for much of the on-the-record-discussion which took place. Based upon the record thus constituted and for the reasons set out below, the Board denies the appeal of Spotless. Findings of Fact Procurement Background 1. On October 7, 1988, GSA issued a solicitation for the provision of management, supervision, labor, material, supplies, and equipment for janitorial and related services at the John O. Pastore Federal Building and United States Post Office in Providence, Rhode Island. Joint Stipulation 1. 2. The solicitation called for bids of a firm fixed monthly price for basic services for an initial twelve-month period and then for two one-year option periods. The solicitation also included a requirement that the selected contractor provide "on-site supervisors." The provision read as follows: The contractor shall provide in writing to the contracting officer at least five days prior to the contract starting date, the names, telephone numbers and addresses of on-site supervisors. The term "on- site supervisor" means a person designated in writing by the contractor who has authority to act for the contractor on a day-to-day basis at the work site and to accept and sign for notices of deductions, inspection reports[,] and all other correspondence on behalf of the contractor. Joint Stipulations 3-4. 3. Spotless submitted the low bid in response to this solicitation and was awarded a contract (contract 1) by GSA on April 10, 1989. Joint Stipulation 5. During the course of performance, Spotless designated one of its employees as the on- site supervisor in accordance with the contract requirement. Transcript at 15. GSA ultimately exercised the two option years under this contract. Appeal File, Exhibits 32-33. 4. On or about January 22, 1992, GSA issued another solicitation for a successor contract to that previously awarded to Spotless. As did the earlier solicitation, this one also required the successful bidder to provide all management, supervision, labor, material, supplies, and equipment for janitorial and related services for the John O. Pastore Building. Bids were solicited for a firm fixed monthly price for basic services for an initial twelve-month period and then for two one- year option periods. The solicitation also included the requirement that the selected contractor provide on-site supervisors. Appeal File, Exhibit 1. 5. Spotless was the successful bidder for this successor contract (contract 2) and received an award on March 13, 1992. During the course of performance, Spotless designated one of its employees as the on-site supervisor in accordance with the second contract. GSA ultimately exercised the two option years under the contract. Appeal File, Exhibits 1-2, 5; Transcript at 17. The Department of Labor s Wage Determination for Working Custodial Supervisors 6. By letter dated May 18, 1993, the Department of Labor (DOL) notified the GSA contracting officer that DOL had determined that any employee designated by Spotless as an on- site supervisor during the course of performance under both contract 1 and contract 2 should be classified as a Working Custodial Supervisor at a conformed hourly rate of $6.91 per hour . . . . The DOL also stated in this wage determination that the conformed classification and wage rate were to be applied retroactively to the commencement dates of the contracts. Appeal File, Exhibit 6; Transcript at 81. 7. Shortly thereafter, Spotless itself was notified of the position taken by the DOL. Spotless did not challenge this DOL determination. Rather, inasmuch as it had paid those employees designated as on-site supervisors less than the wage rate subsequently determined by DOL to be required, Spotless sought an equitable adjustment in the price of both contracts to compensate it for the additional wages DOL required it to pay these employees. Appeal File, Exhibit 7; Transcript at 44, 63, 81. The Contracts Service Contract Act Provision 8. Both of the above-mentioned service contracts awarded to Spotless contained clause 52.222-41 of the Federal Acquisition Regulation (FAR), 48 CFR 52.222-41 (1989) (FAR 52.222-41), which is entitled: SERVICE CONTRACT ACT OF 1965, AS AMENDED (MAY 1989). Joint Stipulation 7; Transcript at 17-19. 9. That clause reads in part as follows: (c) Compensation. (1) Each service employee employed in the performance of this contract by the Contractor or any subcontractor shall be paid not less than the minimum monetary wages and shall be furnished fringe benefits in accordance with the wages and fringe benefits determined by the Secretary of Labor, or authorized representative, as specified in any wage determination attached to this contract. (2) (i) If a wage determination is attached to this contract, the Contractor shall classify any class of service employee which is not listed therein and which is to be employed under the contract (i.e., the work to be performed is not performed by any classification listed in the wage determination) 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. Such conformed class of employees shall be paid the monetary wages and furnished the fringe benefits as are determined pursuant to the procedures in this paragraph (c). (ii) This conforming procedure shall be initiated by the Contractor prior to the performance of contract work by the unlisted class of employee. The Contractor shall submit Standard Form (SF) 1444, Request For Authorization of Additional Classification and Rate, to the Contracting Officer no later than 30 days after the unlisted class of employee performs any contract work. The Contracting Officer shall review the proposed classification and rate and promptly submit the completed SF 1444 . . . to the Wage and Hour Division, Employment Standards Administration, U.S. Department of Labor. The Wage and Hour Division will approve, modify, or disapprove the action or render a final determination in the event of disagreement within 30 days of receipt or will notify the Contracting Officer within 30 days of receipt that additional time is necessary. . . . . (vi) Upon discovery of failure to comply with subparagraph (c)(2) of this clause, the Wage and Hour Division shall make a final determination of conformed classification, wage rate, and/or fringe benefits which shall be retroactive to the date such class or classes of employees commenced contract work. Appeal File, Exhibit 1 at 77-78. The Wage Determinations Used for Spotless Contracts 10. Prior to issuing the solicitations which led to the award of contract 1 and contract 2, GSA submitted to DOL s Wage and Hour Division the standard form 98/98a, namely, Notice of Intention to Make a Service Contract and Response to Notice. On the form, under the heading Classes of Service Employees to be Employed on Contract, the contracting officer identified a single class of employee designated as Janitor 11150. The contracting officer did not identify any other class of service employee. Joint Stipulation 9. 11. DOL completed the response block on the standard forms 98/98a submitted by the contracting officer for the two solicitations which eventually led to the award of contract 1 and contract 2. Both contracts incorporated the wage determinations (or updated revisions thereof) which were identified by DOL as applicable to the contracts in question. Joint Stipulations 11- 12; Transcript at 79-80. 12. None of these wage determinations or subsequent revisions thereof contained a classification of service employee identified as a working custodial supervisor. None contained any class of employee that had a wage rate of $6.91 per hour, and none contained a supervisory class of service employee. Appeal File, Exhibits 35-39; Transcript at 80-81. 13. Initially, the hourly rate paid by Spotless to the employee designated as an on-site supervisor was no different from that paid to other janitorial employees. Later in the course of contract performance, the supervisors were paid at a slightly higher rate. Transcript at 63, 101. 14. Spotless never initiated the conforming wage procedure pursuant to the Service Contract Act for a working custodial supervisor or other class of custodial worker. Transcript at 87, 100. Discussion The fundamental legal issue raised by this case is whether Spotless is entitled to an equitable adjustment in the prices of contract 1 and contract 2 to compensate it for the additional wages DOL required it to pay its on-site supervisors. The situation presented here must be distinguished at the outset from that described and provided for in the Fair Labor Standards Act Price Adjustment provision found in the two contracts awarded to Spotless and in other similar Government contracts. Under that provision, the Government agrees to adjust the contract price in the event there is an increase in the minimum monetary wages specified in any wage determination attached to the contract and being paid to an employee under the contract. The contractor, in turn, warrants that its offered prices did not include an allowance for any such increase. This, however, is not the situation before us here. We have already determined that none of the wage determinations, either in their original or revised form, which were applicable to the contracts between Spotless and GSA, contained a wage rate for a supervisory class of service employee. Nevertheless, we have also determined that both contracts required the contractor to identify on-site supervisors. What we are confronted with here, therefore, is a situation fundamentally different from that provided for in the contract s typical provision covering increases in wage rates actually set out in the applicable wage determination. Here, instead, we have an increase mandated by DOL in the wages being paid to a contract employee for whom no classification appeared in the applicable wage determination. The contract addresses situations where a contractor determines to pay a class of employee for which no minimum rate is set out in the applicable wage determination. Part (c)(2)(i) of the Service Contract Act Clause (Finding 9) states that if the contractor classifies a service employee to be employed under the contract according to a class not listed in the wage determination applicable to the contract, then the unlisted classifications must have a reasonable relationship (based upon the level of skill involved) to the classifications which are listed in the applicable wage determination. The clause further provided in (c)(2)(ii) that the contractor should initiate a conforming procedure prior to the performance of contract work by the unlisted class of employee. This procedure involves submission of a Request for Authorization of Additional Classification and Rate to the contracting officer within thirty days after the unlisted class of employee performs any contract work. Pursuant to the clause, the contracting officer is to review the submission and then forward it to DOL s Wage and Hour Division for approval. Although the contract called for designation of an on-site supervisor and no wage rate was contained in the wage determination for this class of employee, Spotless did not initiate a conforming procedure for a working custodial supervisor or other class of custodial worker. Finding 14. Nevertheless, the Service Contract Act provision of both its contracts with GSA put Spotless on notice that failure to do so could result in the Wage and Hour Division making and enforcing retroactively its own final determination of an appropriate wage rate for this classification. Given these express provisions in Spotless contracts, it is clear that the risks associated with any increase in wage rates for a class not contained in the applicable wage determination are expressly allocated, under the contract s actual scheme, to the contractor. GSA, therefore, has properly rejected arguments from Spotless that it is entitled to equitable relief for the additional wages DOL required Spotless to pay to the on-site supervisors. Any relief by the analogous application of the Fair Labor Standards Act Price Adjustment provision of the contract or through the contract s changes clause would clearly be inappropriate in view of the portions of the contract s Service Contract Act provision which expressly deal with labor classifications not listed in the applicable wage determination. We can readily understand the quandary in which contractors, on occasion, find themselves when faced with the need to prepare a competitive bid on a contract involving labor classifications for which no minimum wage rate is contained in the wage determination and for which the DOL will not issue one prior to contract award. As our appellate authority has observed: [T]he contractor is placed in an equally difficult spot of having to second-guess bureaucratic minds when it cannot obtain a prompt, pre-bid clarification of Labor s classifications. If the contractor guesses low and the employees successfully contest its classification, it will foot the bill as [claimant in this case] has. If it guesses high while a competitor guesses low, it will lose the contract. In short, application of this peculiar statutory scheme results in the business person bearing the burden of the Government s, and in particular Labor s, imprecision. Collins International Service Co. v. United States, 744 F.2d 812, 815 (Fed. Cir. 1984). Understandably, therefore, a contractor may be reluctant to initiate a conforming procedure for a classification not listed in an applicable wage determination. Nevertheless, the contractor s duty to do so -- and the consequences of ignoring that duty -- are spelled out in the contract. Consequently, we agree with GSA that there is no relief under the contract for Spotless failure to initiate a conforming procedure for wages to be paid to a site-supervisor. Neither do we find any merit in the suggestion that somehow the GSA should make Spotless whole for the additional wages DOL required the contractor to pay because the need for a conforming procedure for the wage to be paid to the on-site supervisor required by the solicitation was obvious once it was clear that no wage rate for this class of employee was stated in the wage determination. GSA convincingly responds that the contract was silent on how the contractor should assign responsibilities among its employees. GSA further explains that staffing for a contract such as that awarded to Spotless is not a matter in which it becomes involved nor is it one which GSA regularly monitors. Furthermore, the Government points out that it does not necessarily follow that the need for a conforming procedure after award of Spotless contract was obvious given the absence of a supervisory class in the wage determination. For example, nothing precluded the contractor from assigning the responsibilities of the on-site supervisor to an employee representing the contractor s management rather than to one of its laborers. Spotless also suggests that its contract prices should be adjusted or reformed based upon the existence of a mutual mistake of fact. That mistake, according to appellant, was the assumption, at the time the contract was entered, that there was no classification for a working custodial supervisor. Appellant's Prehearing Statement at 15. During the on-the-record discussion regarding this case, the Board sought clarification regarding the nature of the alleged mistake. At that time, it was explained that the mistake was that neither GSA nor appellant could ever have imagined, at the time they entered the contract, that the DOL would subsequently determine a wage rate applicable to the contractor's custodial or on-site supervisors. Transcript at 109. We find the argument unpersuasive principally because the alleged mistake concerns a future event. It is well established that mutual mistake of fact cannot lie against a future event. Dairyland Power Cooperative v. United States, 16 F.3d 1197, 1203 (Fed. Cir. 1994). In arguing its case, Spotless relies heavily on a decision of the Armed Services Board of Contract Appeals (ASBCA), namely, Ralph Construction, Inc., ASBCA 35633, 88-2 BCA 20,731. In that case, the wage determination provided to bidders by the Government did not contain any labor classification listing which was applicable or analogous to a particular position called for in the solicitation. The solicitation did, however, contain a provision which set forth, for informational purposes, a minimum federal wage rate which would have been applicable to that position if the work in question were to have been performed by employees of the agency rather than by a contractor. Shortly after award, Ralph Construction discovered from employees of the former contractor, whom it had hired, that the DOL had issued to that contractor a conformed classification and wage rate for the position in question. This DOL rate was considerably higher than the federal wage rate provided in the solicitation and on which Ralph Construction had relied in the absence of an applicable wage rate in the wage determination. The new contractor promptly initiated a conforming procedure in which a rate similar to the lower federal rate was proposed. The contracting officer, although aware of the earlier wage determination issued to the predecessor contractor, nevertheless endorsed Ralph Construction s proposed rate. DOL, however, determined that the appropriate classification and wage rate for the position in question was to be the higher rate issued to the prior contractor. Ralph Construction thereupon sought an equitable adjustment of the contract price to compensate for the difference in the two rates. The contracting officer denied the request. The ASBCA granted the contractor s appeal of this decision on the ground that the wage determination in this case was defective and the solicitation misleading. Specifically, the board found that the Government, although aware of the prior and higher wage rate issued to the previous contractor, nonetheless provided the new contractor and other bidders with a wage determination that made no mention of the wage rate applicable to the position in question. Further, in the absence of an applicable rate in the wage determination, the Government provided bidders with a much lower federal rate as a possible guide for computing their labor costs for this particular class of employees. Spotless argues that the substantive facts of Ralph Construction are identical to those in the instant case. We disagree. Unlike Spotless, Ralph Construction did in fact initiate a conforming procedure. The two cases differ from each other, however, on an even more fundamental point. Critical to the decision in Ralph Construction is the fact that a DOL wage determination had been issued previously regarding the position in question and the Government was fully aware of this fact. Nevertheless, bidders were told nothing about it and were given, for informational purposes, a much lower federal wage rate on which the contractor relied. No such allegations have been made in the instant case. The DOL determination for working custodial supervisors in this case was the first of its kind. Indeed, the parties have stipulated that GSA had no prior knowledge of a working custodial supervisor class prior to DOL s actual determination. Transcript at 55-56, 72. Furthermore, the Spotless official responsible for the company s bid explained that Spotless paid no attention to the federal wage rate for a custodial supervisor provided in the solicitation. Transcript at 60-62. The Government has neither misled nor withheld information from Spotless or the other bidders on the two procurements in question. Nor is there any allegation in the instant case that the wage determination provided to Spotless and other bidders was an inappropriate one. Transcript at 22-23. The absence of a particular class of service employee from a wage determination does not, in and of itself, render that determination inappropriate or defective. Rather, pursuant to the Service Contract Act provision of appellant s contracts, it alerts the contractor to the need to proceed without delay with its own classification and to initiate a conforming procedure. In short, we agree with GSA that neither in the contract nor elsewhere in the law is there any basis upon which appellant would be entitled to the relief it seeks. Accordingly, we affirm the contracting officer s decision denying appellant s claim. Decision This appeal is DENIED. _______________________ EDWIN B. NEILL Board Judge I concur: __________________________ CATHERINE B. HYATT Board Judge