Mistick PBT v. Chao, Elaine

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 20, 2005 Decided March 17, 2006

No. 04-5340

MISTICK PBT, D/B/A MISTICK CORPORATION,

APPELLANT

v.

ELAINE CHAO, SECRETARY,

UNITED STATES DEPARTMENT OF LABOR,

APPELLEE

Appeal from the United States District Court

for the District of Columbia

(No. 03cv01767)

Maurice Baskin argued the cause and filed the briefs for

appellant. Lesley A. Pate entered an appearance.

Alan Burch, Assistant U.S. Attorney, argued the cause for

appellee. With him on the brief were Kenneth L. Wainstein,

U.S. Attorney, and Michael J. Ryan, Assistant U.S. Attorney.

R. Craig Lawrence, Assistant U.S. Attorney, entered an

appearance.

Before: HENDERSON, BROWN, and GRIFFITH, Circuit

Judges.

2

Opinion for the Court filed by Circuit Judge GRIFFITH.

GRIFFITH, Circuit Judge: Under the Davis-Bacon Act, 40

U.S.C. § 3141, et seq., bidders on certain construction projects

funded by the federal government must pay workers specified

wage rates based upon the type of work performed. See 40

U.S.C. § 3142. The Department of Labor (the “Department” or

“Secretary”) determines the categories of jobs and the prevailing

wage rates for those jobs in the community where the

construction project will be undertaken. See 29 C.F.R. §§ 1.1-

1.9. This case involves the Department’s conformance

regulations, 29 C.F.R. § 5.5(a)(1)(ii)(A), which explain how the

Secretary determines the wages for a type of job that is left out

of the Department’s pre-bid wage decision, but that a contractor

subsequently requires for the project. Such omissions are not

uncommon.

After it had been awarded a federal contract, appellant

Mistick PBT (“Mistick”) proposed several types of jobs and

accompanying minimum rates of pay that were left out of the

Secretary’s pre-bid determination. Mistick argues the

Department acted in an arbitrary and capricious manner by

refusing to evaluate Mistick’s proposed wage rates in light of

several previously approved types of jobs and accompanying

wage rates. The District Court agreed with the Department that

because the conformance process results in a wage rate, and

because the Supreme Court held in United States v. Binghamton,

347 U.S. 171, 176-78 (1954), that the courts have no jurisdiction

to review whether the Secretary’s wage determination correctly

represents the “wages . . . prevailing,” 40 U.S.C. § 3142(b), in

a locality, the Department’s application of the conformance

regulations is insulated from judicial review. We disagree with

this conclusion. In accordance with our prior decision in Ball,

Ball & Brosamer, Inc. v. Reich, 24 F.3d 1447, 1451 (D.C. Cir.

1994), we conclude that the Davis-Bacon Act does not provide

3

clear and convincing evidence that Congress sought to preclude

review under the Administrative Procedure Act (“APA”), 5

U.S.C. § 701, et seq., of violations of Department regulations.

We hold, however, that the Department did not apply its

conformance regulations here in an arbitrary and capricious

fashion.

I.

Mistick won a bid to be general contractor for Crawford

Square Rental Phase III (“Crawford Square”), a residential

construction project in Allegheny County, Pennsylvania, which

was administered by the Urban Redevelopment Authority of

Pittsburgh (the “Authority”). Because the project received

federal funding and was subject to the Davis-Bacon Act, the

Secretary conducted a survey of prevailing wages for similar

projects in Allegheny County and issued a wage determination

in July 1996 (the “1996 Wage Determination”), which applied

to Crawford Square.

Mistick needed to employ seven types of workers not

addressed by the 1996 Wage Determination: operators of

backhoes, bobcats, excavators, hi-lifts, rollers, graders, and

pavers. Mistick requested that the Authority conform these

seven types of jobs to classifications found in an earlier wage

determination, which was based upon a November 1992 wage

survey (the “1992 Wage Determination”). The Authority

rejected Mistick’s request and concluded that (1) the bobcat

classification should be conformed to the wage rates paid to a

drywall finisher ($9.75) because the work required of a bobcat

operator is “not comparable to the power equipment

classifications;” and (2) Mistick’s other requested classifications

should be conformed to the wage rates paid to bulldozer

operators ($21.87) because each involved the operation of power

equipment. Mistick objected, contending that the power

4

equipment operator classifications in the 1996 Wage

Determination used by the Secretary were inapplicable here

because they addressed equipment needed on a “heavy”

commercial land development project and Crawford Square was

a “residential” development.

Pursuant to 29 C.F.R. § 5.5(a)(1)(ii)(C), the dispute was

submitted to the Department of Labor’s Administrator of the

Wage and Hour Division of the Employment Standards

Administration (the “Administrator”). Mistick requested that

two positions—bobcat and roller operators—be conformed to

the wage rates paid to drywall finishers ($9.75) and that the

other five positions be conformed to the wage rates paid to

ornamental ironworkers ($13.36). A section chief rejected

Mistick’s proposal without stating reasons and approved the

Authority’s determination; consequently, bobcat operators were

assigned a wage rate of $9.75 and the other six positions were

assigned a wage rate of $21.87. Mistick appealed to the

Administrator. Mistick agreed that the bobcat operator position

was properly conformed to the wage rate paid to drywall

finishers, but objected to conforming the remaining six

classifications to the much higher wage rate paid to a bulldozer

operator. These six classifications, Mistick contended, all

involved operating “light machinery much closer in nature to a

bobcat [which had been conformed to the lower-wage drywall

finisher position] than a heavy/highway bulldozer.” At most,

Mistick argued that these classifications involved the skill of a

drywall finisher or an ornamental ironworker.

The Administrator declined to conform the six remaining

new classifications to the drywall finisher or ornamental

ironworker positions. Instead, the Administrator conformed

these positions to the bulldozer classification, citing one of the

agency’s past decisions, Tower Construction, No. 94-17, 1995

WL 90010 (Dep’t of Labor, Wage Appeals Bd. Feb. 28, 1995),

5

for the proposition that the Administrator will not conform

power equipment operator positions to non-power equipment

operator classifications. The Administrator noted that it made

no change to the bobcat classification only because Mistick did

not take issue with that conformance. Pursuant to 29 C.F.R.

§ 7.1(b), Mistick appealed to the Administrative Review Board

(the “Board”). Mistick argued to the Board that if the

Administrator was going to follow Tower Construction, it would

be more reasonable to conform the six new equipment operator

positions to the conformed bobcat operator classification and not

the more highly skilled bulldozer classification. Mistick also

argued that Tower Construction was ill-reasoned and that it was

arbitrary for the Administrator to compare Mistick’s requested

classifications only to power equipment operator positions.

The Board rejected Mistick’s challenge but did not offer

any findings why these new classifications differed from the

bobcat classification. Instead, the Board relied upon procedural

grounds and concluded that it need not compare Mistick’s six

requested classifications with the bobcat classification. The

Board also determined that the Administrator properly followed

Tower Construction by comparing Mistick’s six remaining

requested classifications only to power equipment operator

positions.

On August 20, 2003, Mistick filed a complaint in the United

States District Court for the District of Columbia alleging

violations of the Davis-Bacon Act and the APA. The District

Court held that Binghamton precluded judicial review of

Mistick’s challenge to the Department’s application of its

conformance regulations because “the essence of Mistick’s

challenge falls upon the correctness of the Department’s

decision rather than the actual procedure that the Board

employed.” Mistick PBT v. Chao, No. 03-1767, slip op. at 8,

2004 WL 3517425, at *4 (D.D.C. July 27, 2004). In the

6

alternative, the District Court held that there was nothing

arbitrary and capricious about the Board’s decision to conform

the six new classifications to one of the pre-existing power

equipment classifications as opposed to any of the non-power

equipment classifications. Mistick filed a timely notice of

appeal, invoking our jurisdiction under 28 U.S.C. § 1291 to

review the final decision of the District Court.

II.

To understand the dispute in this case, some background is

needed on the wage determination process employed prior to a

construction firm’s bid for a federal contract and the subsequent

conformance process set forth in the Department’s regulations.

The Board provided a helpful summary of both processes in its

opinion, setting out the “fundamental differences” between the

two processes:

A wage determination dictates the minimum wage

rates paid to classifications of employees. It is

incorporated into bid packages and ultimately into the

contract. Thus all bidders are provided with the same

information concerning the minimum wage rates that

must be paid on a federal procurement. The

Administrator typically engages in extensive analysis

of statistical data in determining locally prevailing or

collectively-bargained rates. Interested parties must

challenge wage determinations prior to submissions of

bids on procurement. This requirement ensures an

equitable procurement process in order that competing

contractors know in advance of bidding what rates

must be paid so that they can bid on an equal basis.

A conformance, on the other hand, entails adding

an employment classification omitted from a wage

7

determination. Conformance occurs after the

conclusion of bidding on the contract and assumes that

the wage determination that was included in the bid

specifications essentially is correct with the limited

deficiency that a needed job classification and wage

rate are missing. The conformance mechanism is

designed to facilitate expedited addition of a missing

classification and wage rate while simultaneously

maintaining the integrity of the bidding procedure.

The Administrator must (i) determine which

classification already listed in the wage determination

is most comparable in terms of skill to the class of

employee performing under the contract but omitted

from the wage determination, and (ii) derive a wage

rate for the omitted class which is reasonably related to

the listed rates. The Administrator is not required to

conduct a wage survey or to issue a de novo wage

determination in order to effect a conformance.

Mistick Constr., No. 02-004, slip op. at 6-7, 2003 WL 21488362,

at *5 (Dep’t of Labor, Admin. Review Bd. June 24, 2003)

(quotation marks, internal citations, and alterations omitted).

Thus, for a wage determination, the Department conducts a

survey of wages paid for various jobs in a locality in which a

federal construction project is to take place. Bidders must

challenge those determinations prior to bidding. If they do not,

and are awarded the government contract, they must pay their

workers the wages set forth in the wage determination. The

conformance process, on the other hand, occurs after the

Government and bidder have signed a contract and requires the

Secretary to undertake a substantially different task. The

conformance process recognizes that there is a “missing

classification and wage rate” necessary to the project and

provides a means by which the Secretary can derive, in a manner

that maintains the integrity of the bidding process, a new

8

classification based upon the “most comparable” existing

classification and a wage rate “reasonably related” to existing

rates.

III.

In United States v. Binghamton, 347 U.S. 171 (1954), a

successful bidder for a Davis-Bacon contract sought damages

from the Government because the wage determination upon

which its bid was based contained wage rates that were too low

and left it “unable to obtain workmen at the rates specified in the

contract schedule . . . .” Id. at 175. The Court rejected the

bidder’s claim and held that when the Secretary determines what

wages are “prevailing” in a locality, see 40 U.S.C. § 3142(b)

(formerly 40 U.S.C. § 276a), that determination is not an

“affirmative representation” that the bidder is “entitled to rely on

. . . in the computation of its bid.” 347 U.S. at 175. While the

Act provides a cause of action for “employees to recover from

the contractor the amount due the employees under the

minimum wage schedule,” id. at 177 n.12, “[t]he Act does not

authorize or contemplate any assurance to a successful bidder

that the specified minima will in fact be the prevailing rates,” id.

at 178. Thus, “[t]he correctness of the Secretary’s determination

is not open to attack on judicial review.” Id. at 177.

Discussing Binghamton, the Supreme Court has since noted

that while the “correctness of the Secretary’s wage rate

determination is not subject to judicial review[,] . . . [a]t least

two Courts of Appeals have held, however, that the practices

and procedures of the Secretary are reviewable under the

standards of the Administrative Procedure Act, 5 U.S.C. § 701

et seq.” Univ. Research Assoc., Inc. v. Coutu, 450 U.S. 754, 761

n.10 (1981) (citing Virginia v. Marshall, 599 F.2d 588, 592 (4th

Cir. 1979); N. Ga. Bldg. & Constr. Trades Council v.

Goldschmidt, 621 F.2d 697, 707-08 (5th Cir. 1980)) (emphasis

9

added; additional citation omitted). The Court, however,

“express[ed] no view on the latter question.” 450 U.S. at 761

n.10.

The Department argues that this case falls within the

category of decisions that Binghamton holds are not subject to

judicial review. We disagree with the Department and conclude

that the Department’s application of its conformance regulations

is subject to judicial review under the Administrative Procedure

Act. Under the conformance process, as prescribed by 29 C.F.R.

§ 5.5(a)(1)(ii)(A)(3), the Secretary must determine whether a

proposed rate reasonably relates to existing rates in the wage

determination. The Department argues that because the result

of the conformance process is the determination of a wage rate,

Binghamton’s bar applies and the Department’s application of

the conformance regulations must also be immune from judicial

review under the APA.

But this argument reads too much into Binghamton.

Binghamton determined only that the Davis-Bacon Act does not

provide contractors a cause of action for challenging, as the

Fourth Circuit put it, the “substantive correctness of the wage

determination . . . . ” Marshall, 599 F.2d at 592. Binghamton

does not grant the Department license to arbitrarily apply its

own regulations with respect to a government contractor and

escape all APA review of its practices and procedures in its

dealings with a contractor. Binghamton does not refer to the

APA nor otherwise address in any way the extent to which a

contractor may seek APA review of whether the Department

acted arbitrarily in applying its practices and procedures.

Indeed, we have previously reviewed a facial challenge to

the validity of the conformance regulations. Bldg. & Constr.

Trades Dep’t, AFL-CIO v. Martin, 961 F.2d 269, 276 (D.C. Cir.

1992), cert. denied, 506 U.S. 915 (1992). The litigation over the

10

validity of parts of the conformance regulations in Martin

demonstrates that the conformance process is not, contrary to the

District Court’s suggestion, simply something that reflects the

Secretary’s view of what are the “correct” prevailing wages in

a community. As the Department explained, “[t]he conformance

mechanism is designed to . . . maintain[] the integrity of the

bidding procedure. . . . The Administrator is not required to

conduct a wage survey or to issue a de novo wage determination

in order to effect a conformance.” Mistick Constr., slip op. at 7,

2003 WL 21488362 at *5. The conformance regulations set out

a specific and critical regulatory process that allows the

Department to exercise binding discretion over contractors and

employees in filling a contractual gap, based upon specific

standards in 29 C.F.R. § 5.5(a)(1)(ii)(A) that look not to

prevailing wages but what new wage rates would reasonably

relate to rates in the wage determination. As Binghamton does

not answer the question before us, we employ the familiar

framework for determining whether Congress has precluded a

party from seeking APA review of an agency’s practices and

procedures.

The APA provides for judicial review of “final agency

action for which there is no other adequate remedy in a court,”

5 U.S.C. § 704, and allows for judicial review “except to the

extent that . . . (1) statutes preclude judicial review; or (2)

agency action is committed to agency discretion by law,” 5

U.S.C. § 701(a). See also id. § 702(1). With respect to the first

exemption, there is a “strong presumption that Congress intends

judicial review of administrative action.” Bowen v. Mich. Acad.

of Family Physicians, 476 U.S. 667, 670 (1986). “[O]nly upon

a showing of ‘clear and convincing evidence’ of a contrary

legislative intent should the courts restrict access to judicial

review.” Abbott Labs. v. Gardner, 387 U.S. 136, 141 (1967)

(quoting Rusk v. Cort, 369 U.S. 367, 380 (1962)), abrogated on

other grounds by Califano v. Sanders, 430 U.S. 99, 105 (1977).

11

The second exemption “is applicable in those rare instances

where statutes are drawn in such broad terms that in a given case

there is no law to apply.” Citizens to Pres. Overton Park, Inc.

v. Volpe, 401 U.S. 402, 410 (1971).

The Department directs us to nothing in the Davis-Bacon

Act, let alone clear and convincing evidence, demonstrating that

Congress sought to preclude judicial review of the Secretary’s

compliance with the conformance regulations or, looking even

to the broader administrative activity at issue here, the

Department’s alleged failure to follow its own regulations in its

post-bid dealings with a contractor. Nor are we aware of any

such provision. The Department does not argue that the

conformance regulations are so broad as to constitute one of

those “rare instances” where there is no law to apply. To the

contrary, the conformance regulations set out specific criteria

that are capable of review. The Department argues instead that

we should employ “a pertinent presumption of statutory

construction that Congress knows how to create a cause of

action when it wants to” and presume that Congress did not

intend for review of the conformance process. As Abbott

Laboratories makes clear, however, the presumption we are to

apply cuts the other way. Under the APA, absent clear and

convincing evidence to the contrary, we must presume that

Congress did not intend for the Department to be insulated from

judicial review in applying the conformance regulations.

Indeed, although not addressed by the Department, we have

previously applied the same Abbott Laboratories analysis to the

Davis Bacon Act:

The Secretary . . . cannot adopt regulations erasing the

presumption of reviewability embodied in the APA

unless the Davis-Bacon Act reveals clear and

convincing evidence that Congress intended to

12

foreclose judicial review of the Secretary’s regulations

under the Act when those regulations are applied in

later adjudicatory proceedings. . . . [W]e find nothing

in the Act indicating such to be the case . . . .

Ball, Ball & Brosamer, Inc. v. Reich, 24 F.3d 1447, 1450-51

(D.C. Cir. 1994) (quotation marks omitted). That conclusion

echoes the Fourth Circuit’s holding in Marshall, the Fifth

Circuit’s determination in Goldschmidt, and the decisions

reached by several district courts.1 The Department has not

directed us to any court that has departed from that conclusion.

The role of the conformance regulations under the Davis-

Bacon Act demonstrates why Congress has not sought to

preclude APA review. During the wage determination process,

a contractor unhappy with the Department’s interpretation of the

relevant regulations can protect itself simply by not bidding on

a Davis-Bacon project. But where, as here, a bid has been

accepted, a contractor faced with arbitrary and capricious

administrative action would not have such an option. Even

though the contractor entered the contract and began

performance in reliance on the good faith of the Department to

follow its conformance regulations, the Department’s proposed

exemption from judicial review would require the contractor to

keep performing regardless of whether the Department assigned

wage rates to missing classifications in an arbitrary and

capricious fashion. There would not just be “no other adequate

remedy in a court,” 5 U.S.C. § 704, for the agency’s allegedly

capricious action; in fact, there would be no remedy at all.

Absent clear and convincing evidence from Congress to the

1

Accord Miree Constr. Corp. v. Dole, 730 F. Supp. 385 (N.D.

Ala. 1990); Framlau Corp. v. Dembling, 360 F. Supp. 806 (E.D. Pa.

1973).

13

contrary, we decline to conclude that the Department may apply

its conformance regulations outside the limits of the

Administrative Procedure Act. We have jurisdiction to review

Mistick’s challenge to the Department’s application of the

conformance regulations.

IV.

Mistick takes issue with the Department’s application of the

third step of the conformance regulations, which requires the

contracting officer to determine whether “[t]he proposed wage

rate . . . bears a reasonable relationship to the wage rates

contained in the wage determination.” 29 C.F.R.

§ 5.5(a)(1)(ii)(A)(3).2 The Department concluded that the six

2

The three steps necessary for a conformance are found in 29

C.F.R. § 5.5(a)(1)(ii)(A), which provides:

The contracting officer shall require that any class of

laborers or mechanics, including helpers, which is not

listed in the wage determination and which is to be

employed under the contract shall be classified in

conformance with the wage determination. The

contracting officer shall approve an additional

classification and wage rate and fringe benefits

therefore only when the following criteria have been

met:

(1) The work to be performed by the

classification requested is not

performed by a classification in the

wage determination; and

(2) The classification is utilized in

the area by the construction

industry; and

14

new classifications requested by Mistick bore a reasonable

relationship to the bulldozer operator classification in the 1996

Wage Determination. Mistick challenges two aspects of how

the Department reached that decision.

A. Consideration of Only Other Power Equipment

Operator Positions.

Mistick argues that the Department’s decision was arbitrary

and capricious because it failed to conform the proposed

classifications, each of which involved operating power

equipment, to the lower-paid drywall finisher or ironworker

classifications. The Administrator declined to do so because

agency precedent determined that “power equipment operators

are a separate and distinct subgroup of construction worker

classifications.” Tower Constr., No. 94-17, 1995 WL 90010, at

*2 (Dep’t of Labor, Wage Appeals Bd. Feb. 28, 1995).

Following Tower Construction, the Administrator would only

compare Mistick’s requested classifications to other power

equipment operators. The Administrative Review Board agreed.

“This Court affords great deference to an agency’s

interpretation of its own regulation: under well-recognized

precedent, we can reject the Secretary’s interpretation only if it

is plainly erroneous or inconsistent with the regulation.” Sec’y

of Labor v. Twentymile Coal Co., 411 F.3d 256, 260 (D.C. Cir.

2005) (quotation marks omitted); see Bowles v. Seminole Rock

(3) The proposed wage rate,

including any bona fide fringe

benefits, bears a reasonable

relationship to the wage rates

contained in the wage determination.

Id.

15

& Sand Co., 325 U.S. 410, 414 (1945). The conformance

regulations require only a reasonable relationship between “[t]he

proposed wage rate” and “the wage rates contained in the wage

determination.” 29 C.F.R. § 5.5(a)(1)(ii)(A)(3). Applying that

standard, the Department concluded in Tower Construction that

power equipment operators have unique skill sets that make

them different from other workers, and that it is reasonable to

conform omitted power equipment operator classifications to

wage rates for power equipment operator classifications in the

applicable wage determination.

That reading of the reasonable relationship standard is far

from erroneous or inconsistent with § 5.5(a)(1)(ii)(A)(3). In

Tower Construction, the Department did what the regulations

expect and require. It employed its expertise with regard to the

skills required for various jobs and developed a uniform, fair

approach to conforming requested power equipment operator

classifications. We defer to that interpretation of

§ 5.5(a)(1)(ii)(A)(3).3

3

Mistick argues that Tower Construction is inconsistent with an

earlier decision of the Department, Clark Mechanical Contractors,

No. 95-03, 1995 WL 646572 (Dep’t of Labor, Wage Appeals Bd.

Sept. 29, 1995). There, the Wage Appeals Board concluded that the

Administrator properly conformed a requested plumber classification,

a skilled classification, to “the lowest rate for a skilled classification

above the unskilled classification of laborer.” Id. at *4. That is, the

Administrator properly compared a proposed skilled classification

with existing skilled classifications in a wage determination and not

with any existing unskilled classifications. Mistick argues that, under

Clark Mechanical, the Department “should [have] set a rate for a

conformed skilled classification equal to any skilled classification rate,

without arbitrarily limiting the rate to any particular category of

skilled classifications . . . .” Nothing in Clark Mechanical, however,

prevents the Department from determining that differences exist

among skilled classifications and that power equipment operators have

16

B. The Earlier Bobcat Conformance.

If all of the power equipment operator positions that Mistick

requested had been conformed to other power equipment

operator positions, our task would be straightforward and

complete. But, as Mistick notes, the bobcat operator

classification Mistick requested—a power equipment operator

position—was conformed to the drywall finisher classification.

Because the Administrator was willing to conform the bobcat

operator classification to a non-power equipment operator

position, Mistick argues that the Administrator acted arbitrarily

in refusing to consider conforming Mistick’s other requested

classifications to non-power equipment operator positions.

“Where an agency departs from established precedent

without a reasoned explanation, its decision will be vacated as

arbitrary and capricious.” Ramaprakash v. FAA, 346 F.3d 1121,

1130 (D.C. Cir. 2003) (quoting ANR Pipeline Co. v. FERC, 71

F.3d 897, 901 (D.C. Cir. 1995)) (quotation marks and alterations

omitted). Viewed out of context, allowing the bobcat operator

classification to be conformed to a non-power equipment

operator classification might appear to be not only a departure

from Tower Construction, but an unexplained departure from

the Department’s decision to not consider non-power equipment

operator classifications in reviewing Mistick’s proposed

classifications.

But the Department did offer a reasoned explanation why

the bobcat classification was not conformed in accordance with

Tower Construction. After the Authority agreed to conform the

unique skill sets that merit a separate subclassification. To the

contrary, Tower Construction follows the path set out in Clark

Mechanical by developing a uniform standard for conforming

requested classifications.

17

bobcat classification to the wage rate of a drywall finisher,

Mistick, acting on counsel, chose not to protest that

determination. The Administrator, and the Board, noted that had

Mistick protested the wage rate assigned to the bobcat

classification, “we would have given further consideration to

any evidence that the rate approved did not bear a reasonable

relationship with the other power equipment operator rates.”

Mistick Constr., slip op. at 8, 2003 WL 21488362 at *7. Had

Mistick protested the bobcat rate, there is a likelihood that the

Department would have required that bobcat operators be paid

a higher wage rate reasonably related to the wage rate paid to an

existing power equipment operator.

Mistick argues that once the Department created the bobcat

classification and its corresponding relatively low wage rate, it

had a duty to consider whether Mistick’s six other new

classifications bore a reasonable relationship, see 29 C.F.R.

§ 5.5(a)(1)(ii)(A)(3), to the bobcat classification. Given that the

bobcat classification is a power equipment operator

classification and assuming therefore that it was a proper subject

for comparison under Tower Construction, Mistick argues that

the Department’s failure to compare the six new classifications

to the newly conformed bobcat classification was itself

arbitrary.4

An agency’s “failure to respond meaningfully to the

evidence renders its decisions arbitrary and capricious. Unless

an agency answers objections that on their face appear

legitimate, its decision can hardly be said to be reasoned.”

Tesoro Alaska Petro. Co. v. FERC, 234 F.3d 1286, 1294 (D.C.

Cir. 2000) (citing Int’l Harvester Co. v. Ruckelshaus, 478 F.2d

615, 648 (D.C. Cir. 1973); City of Vernon v. FERC, 845 F.2d

4

Although this argument was raised below, the District Court did

not address it.

18

1042, 1048 (D.C. Cir. 1988)). Despite Mistick’s request to do

so, the Department did not consider whether the six new

classifications Mistick requested bore a reasonable relationship

to the bobcat classification. Instead, the Department concluded

that three procedural grounds prevented it from looking at the

bobcat classification: (1) “the bobcat conformance in no manner

‘amended’ the general wage determination,” as the 1996 Wage

Determination continues to list only “three classifications of

power equipment operator” and not the new bobcat

classification requested by Mistick for this project; (2)

“[c]onforming the disputed classifications rather than

‘amending’ the existing wage determination is consistent with

the language of the [conformance] regulation[s],” which

“require[] that a class of laborers or mechanics ‘which is not

listed in the wage determination and which is to be employed

under the contract shall be classified in conformance with the

wage determination,’” and contemplate that “the wage rate

proposed for the classification must ‘bear[] a reasonable

relationship to the wage rates contained in the wage

determination;’” and (3) “[e]ven assuming that the wage

determination effectively is amended in some manner, . . . [w]e

consider [the 1996 Wage Determination] as it existed on the date

of the request until all conformance issues associated with the

request are resolved.” Mistick Constr., slip. op. at 9, 2003 WL

21488362 at *7-8 (quoting 29 C.F.R. § 5.5(a)(1)(ii)(A)).

There is some textual support for Mistick’s suggestion that

the conformed bobcat rate is now another wage rate to which

proposed wage rates should be compared. The conformance

regulations indicate that after a requested wage rate has been

“classified in conformance with the wage determination” the

“contracting officer shall approve” it as “an additional

classification.” 29 C.F.R. § 5.5(a)(1)(ii)(A) (emphasis added).

But Mistick’s interpretation of 29 C.F.R. § 5.5(a)(1)(ii)(A) is not

the only possible interpretation of that regulation. The

19

Department notes that § 5.5 speaks of conforming a new

classification to classifications and wage rates found “in the

wage determination.” 29 C.F.R. § 5.5(a)(1)(ii)(A)(3) (emphasis

added). The text of the regulation thus reasonably can be read

to suggest that a new classification should only be compared to

classifications appearing in the original wage determination and

does not require that requested classifications be compared to

classifications previously created through the conformance

process.

Even though Mistick’s interpretation may be possible, it is

not the Department’s interpretation of its own regulation. We

can “reject the Secretary’s interpretation only if it is plainly

erroneous or inconsistent with the regulation.” Twentymile

Coal, 411 F.3d at 260 (quotation marks omitted). Nothing about

the Department’s reading of its regulation is plainly erroneous

or inconsistent with the text of the regulation. Accordingly, the

Department did not act arbitrarily under the conformance

regulations in refusing to compare Mistick’s six requested

classifications to a classification previously determined through

the conformance process.

V.

For the foregoing reasons, we affirm the order of the

District Court granting the Department’s motion to dismiss.

So ordered.