Opposition — Universities Research Assn., Inc. v. Coutu

No. 78-1945

In the

Supreme Court of the Anited States

Octoser Term, 1978

UNIVERSITIES RESEARCH ASSOCIATION, INC.,

Petitioner,

vs.

STANLEY E. COUTU,

Respondent.

BRIEF IN OPPOSITION TO PETITION

FOR WRIT OF CERTIORARI

Hueco B. ARNotp

DanieL N. Kansan

ARNOLD AND Kansan

11 South LaSalle Street

Chicago, Illinois 60603

Rosert Jay Nye

Nye anp Nye

420 North Euclid Avenue

Oak Park, Illinois 60302

Attorneys for Respondent

Stanley E. Coutu, and

the Respondent Class.

The Scheffer Press, Inc.—(312) 263-6850

INDEX

SOO TRI csciscesivssvsctsincensseassenpusyicinsisdeieneiaateneniemaiian

IRTRON F ORNIID aicincictcsniscrnicnstnnemnyenssencenneruiniannaiaininis

SNE ETI CORIO vevsekesnitertiseaiesinvcaceenssivetenniniieninniniens

There Are No Special and Important Reasons for the

I.

Grant of Certiorari im This Case ...........c.cccccccccccscccseees

The Court of Appeals Has Not Decided a Ques-

tion of Federal Law Which Has Not Been But

Should Be Settled By This Court. It Has Not

Decided a Federal Question In a Way In Con-

flict With Applicable Decisions of This Court ....

A. The Seventh Circuit was manifestly correct

B.

when it ruled that ‘‘the provisions of the

Davis-Bacon Act must be read into [the ‘Labor

Provisions’ article of this government con-

tract] when, pursuant to a contract requiring

Davis-Bacon Act work, the defendant [peti-

tioner] performs ‘construction, alteration, and/

or repair * * * of public buildings or public

works of the United States * * * which re-

quires or involves the employment of me-

COMICON GUG/OF WOT OTIL! 9? as cecclsssisticestrerssevesene

Where a government contract clause is re-

quired by statute or by procurement regula-

tion to be included in a government contract,

that clause is deemed incorporated, as a mat-

ter of law, into the contract. The Davis-Bacon

Act minimum wage stipulation is part of the

subject government contract by operation of

law, and employees who perform Davis-Bacon

Act work must be paid the minimum wage

rates established by the Secretary of Labor’s

published wage determinations ............ccee

10

10

10

li

PAGE

1. The Davis-Bacon Act mandatory require-

BNET acciccscsensciscessrssscessmnensnccescncesscnsesenereeoessseoonenesees

2. Incorporation of Mandatory Clauses—the

I Te sicincsptenmiciinnssinesnsscsnesees

C. A contractor takes a government contract sub-

ject to all applicable statutes. All statutes re-

lating to the subject matter of the contract

and existing at the time of contracting become

a part thereof and must be read into the con-

tract. Our petitioner contractor-employer is

charged with knowledge that construction work

performed by its employees is subject to the

Davis-Bacon Act, and is obligated to pay the

CORRE WHS CIIID cc cenctivcvescesocssnsssvccessssesscnssconre

1. Davis-Bacon Act is part of all government

CONSETUCTION CONTACTS ........cssssecsseseseereeeetees

2. Petitioner’s acts imply assumption of Davis-

TR IID | sin ctssssvncesscxsscssnceinsssonssessessoces

3. The Davis-Bacon Act Congressionally-man-

dated effects on the procurement process ....

II. The Supreme Court Will Consider Only the

‘*Question Presented’’ By the Petitioner and

Those Questions Fairly Comprised Therein. The

Question Presented by Petitioner Concerns Con-

tract Interpretation and the Impact of the Davis-

Bacon Act on the Interpretation of Its Govern-

ment Contract. Arguments By Petitioner To the

Effect That Respondent has No Right of Action

Under or By Reason of the Act, and That Res-

pondent Has Failed to Exhaust Administrative

Remedies, Are Not So Fairly Comprised and

Have Already Been Recently Considered By This

Court Twice in Related Litigation ..............0.

bo NRE Re ee Cian tenet Al BEY he We OS ET a ee ae

14

20

20

22

24

ili

TasBLeE Or AUTHORITIES

CASES

PAGE

Ainslie Corp. v. Middendorf, 381 F.Supp. 305 (D.Mass.

BPE) <niicuininvnsnmtercsisinamnmenniaaamanaeaaan 14

Antoni v. Greenhow, 107 U.S. 769, 2 S.Ct. 91 (1883) .. 21

Armour Packing Co. v. United States, 209 U.S. 66,

Be NG TD CRED civivcaccesncoseracinnntsiinccsaiilepatiaandineamiaiiaiis 21

Assn. of American Railroads v. Castle, 562 F.2d 1310

Picuin. EAE, TIPEED <cvssenantcineiecmivasdnaninemmahenslidudalmunanial 12

Board of Supervisors v. Lackawanna Iron & Coal Co.,

93 U.S. 619, 2B L.Ed. GOD (1877) ...cccccsrsscsncversssoverssnsecen 23

Bulkley v. United States, 86 U.S. 37 (1874) we. 23

Bushman Construction Co. v. Conner, 260 F.Supp.

Fe Ee RR, OD crtsitnenscinsnnssesiciciseenadiklaiiaadaanas 23

City of Tullahoma v. Coffee County, 204 F.Supp. 794

(E.D. Tenn. 1962), rev’d on other grounds 328 F.2d

Ge Creeks Ey RUMI winerinteinscctsislecstonsininiiesnatninminbndiaagleammanal 15

Compagnie Generale Transatlantique v. American To-

bacco Co., 31 F.2d 663 (C.C.A. 2, 1929) oe eeeee 18

Coutu v. Universities Research Association, Inc., 595

Fame aoe (C.A. 7, AMOS 6, TOE) cece 1, 5, 9, 27

Everett Plywood Corp. v. United States, 512 F.2d

PE CCGA, TOD cecctenssstcrssassnseneniinenaeiiiaal 24

Farmers & Merchants’ Bank v. Federal Reserve Bank,

S63 UB. G40, 43 B.Cb. GEL (BOER) cccrccreesecesescssncocmnatonns 20

G. L. Christian and Associates v. United States, 312

F.2d 418, 160 Ct.Cl. 1, opinion on reargument de-

nied 320 F.2d 345, 160 Ct.Cl. 58, certiorari denied,

375 U.S. 954 (1963), rehearing denied 376 U.S. 929,

Be ic Ee CID - cxestoninthessssiotnceimsnccnchindeadama’ 15, 16, 17

Hartford Accident & Indemnity Co. v. N. O. Nelson

Mfg. Co., 291 U.S. 352, 54 S.Ct. 392 (1934) ............ 19

iv

PAGE

Hendrickson v. Apperson, 245 U.S. 105, 38 S.Ct. 44

STITT Ok. sicabscsciebieinislnklbresdiionecini hacibettioeoepbeoeisalaoneniisemietaienienniae 21

Home Building & Loan Assn. v. Blaisdell, 290 U.S.

ey Oe AR, BRR CIRIE) cviiicricntienseveseenaicasszeienenmnaies 20

Maryland-National Capital Park Commission v. Lynn,

GEE FOS BaP (CA. TRC. UBT). siscvviscscceisccisiscsicsssancensomese 22

McDaniel v. University of Chicago, 512 F.2d 583 (C.A.

7, 1975), vacated and remanded, 423 U.S. 809, 96

S.Ct. 20, 46 L.Ed.2d 30 (1975), reaffirmed on remand,

548 F.2d 689 (C.A. 7, 1977), certiorari denied, 434

U.S. 1033, 98 S.Ct. 765, 54 L.Ed.2d 780 (1978) ....9, 27

M’Cracken v. Haywood, 11 L.Ed. 397 (1844) «0.0... 21

Northern Pacific Ry. Co. v. Wall, 241 U.S. 87, 36 S.Ct.

SES I seecseidetniinis cceesncoansinssinatnaninnrtirieniaaesnimecteniienat 21

Ogden v. Saunders, 25 U.S. (12 Wheat.) 212, 6 L.Ed.

RIE III siciancieciassisticicctendhmsesenieridapadesimalelamcanididdnvensionisancaniaiee 10, 21

Perry v. Sindermann, 408 U.S. 593, 92 S.Ct. 2694

SSRIS ERSTE AAP Rory Sa es ete Se RR ee a 24

Personal Industrial Bankers, Ine. v. Citizens Budget

Aig OO cee ee CCA, GDI) « cnstncersvesesscimecscetscieves 22

Southern Surety Co. v. Oklahoma, 241 U.S. 582, 36

ho eGR kan rane ak NO 21

United States v. Bingiamton Construction Co., 347

U.S. 171, 74 S.Ct. 488, rehearing denied 347 U.S.

Pe ee RE, 0 RUN Sibstieccccsessairdickiceremoncenceiies 11,13

United States v. McKinnon, 289 F.2d 908, (C.A. 9,

ap ARSED a WATS OMEN OnE PO RRR, OOM T INEN So cer TE A 21

United States v. New Orleans Public Service, Inc.,

SE See SO cela Wik BOPE ED cissvscinnsernccmsbiteniinslaniinlontaen 15,18

United States ex rel. Von Hoffman v. City of Quincy,

a Ra, MN ITED ics vsisteeanins inieaunconpindarn caulabsoacataan genase 21

Walker v. Whitehead, 83 U.S. 314, 21 L.Ed. 357 (1873) 21

Woods v. Lovett, 313 U.S. 362, 61 S.Ct. 983 (1941) .. 20

¥

STATUTES

PAGE

Contract Disputes Act of 1978, 41 U.S.C. §§601-613,

SPRINT MINNIS drisicsidcerie aisnccancatetbdsbnnticliidainaensShenidethalehdiens tabactovsii 26

Contract Work Hours and Safety Standards Act, 40

ENED saistnicceusaics cous cacctsccdnip aursieedycncrobedlashihincssenss 15

Copeland (Anti-Kickback) Act, Section 2, 40 U.S.C.

RE iesincrediiadiceruhbencepteantsecidanshec insindeeiaetanienbactdhiauinbsecenaesiabiaeen 2,14

Davis-Bacon Act, 40 U.S.C. §$§$276a-276a-7 oo... ccesees

UGclatc lnlddaceciiatsia baueigatedabsdardtanndeiuilishctensciaa 2, 6, 8, 12, 15, 20, 24, 25

Department of Energy Organization Act of 1977,

P.L. 95-91, $7194 (Title V, $504, 91 Stat. 590) ........ 26

Freedom of Information Act, 5 U.S.C. $552 et seq. ..4, 23

MeNamara-O’Hara Service Contract Act of 1965, 41

I I a ail ceurpaniasindausbavoiienia 15, 25

Reorganization Plan No. 14 of 1950, 5 U.S.C. note,

Ne iy SR UU, | AIOE nnsisansticunsubensivnducwarevicesevsde 14

Walsh-Healey Publie Contracts Act, 41 U.S.C. §§35-

I Ae Ne a can emaabnens 15, 25

Wunderlich Act, 41 U.S.C. §$$321-322 ..................ccccccees 26

Ruies AND REGULATIONS

Rules of the Supreme Court of the United States,

I a aL caning ggaaiinis ari Nimnasens 2, 29

Regulations of the Department of Labor, 29 C.F.R.

EE NE MULE canrccessihicontiicnavessiecesenualicieannidinisibieastpheaiaboienes 14

Regulations of the Department of Labor, 29 C.F.R.

MRMEI RPE. GED Mati cicerssssnnnsebicapdenincsnessccnivipncsbenesdnian’ 2, 14

Disputes Clause, AEC/ERDA/DOE Regulations, 41

Se a Oe NM. CRT . WILD siccsrccactavesiecissovsstansenstvsenians 26

Equitable Adjustments Clause, AEC/ERDA/DOE

Regulations, 41 C.F.R. §9-1.5004-2 (1978 ed.) ....... 26

vi

LEGISLATIVE History

PAGE

H.R.Report 1162, 74th Cong., 2nd Sess. (concerning

Dewig-~Wnncn Baby sseciinccsesssiniontsacssenspalemancalaanainaal 25

S. Report 1157, 74th Cong., Ist Sess. (concerning

Woaled-Eiemlag Batt) scicccssceicesssnstcscmptinibnnainn 25

H.R. Report 948, 89th Cong., lst Sess. (concerning

Service Contracting Act) ...ccccsesssssesecssesnssncssevsissentanstt 25

H.R. Report 91-468, 91st Cong., I8t Sess... 25

Senate Report 91-427, 91st Cong., 1st Sess. ............ 25

1 Commission on Government Procurement Report

(1969 Commission on Government Procurement) .. 25

TreExTBOOKS AND MISCELLANEOUS

Opinion of the Attorney General of the United States

(March 9, 1979), 1979 Labor Law Reports (C.C.H.),

BORD (GR TI) ivvissccntscccisnsistiecstetgeseninennetieaenanmniabain 25

17 Am. Jur. 2d, Contracts, §257, at 654-656 (1964 ed.) 21

3 Corbin on Contracts, §51, at 197 (1960 ed.) «0.0... 21

3 Corbin on Contracts, $551, at 200-201 (1960 ed.) .... 19

17A Corpus Juris Secundum, Contracts, $330, at 295

C2US CEL) csciikimnitsttteencunnateeaeeesabaeneeel 21

17A Corpus Juris Secundum, Contracts, §330, at

BOR CRGGR GB.) sieccssssrcsvisesscevinhscctsctunissiakucennucelananienan 19

91 Corpus Juris Secundum, United States, §89, at

STO (RBRS GD -cnicienncunisctinianeine 24

Dees and Ginsburg, Contract Interpretation and De-

fective Specifications (Government Contracts Mono-

graph No. 4, 1975 Edition; The George Washing-

WOM TREVORIEEI) sesciciwincnivesicepsiasnenitiersnenineenneaeaes 15

Williston on Contracts, §615, at 1767 (1936 ed.) ............ 21

4 Williston on Contracts, §615, at 597 (3d ed. 1961) .. 21

In THE

SUPREME COURT OF THE UNITED STATES

Ocroser Term, 1978

No. 78-1945

UNIVERSITIES RESEARCH ASSOCIATION, INC.,

Petttioner,

vs.

STANLEY E. COUTU,

Respondent.

BRIEF IN OPPOSITION TO PETITION

FOR WRIT OF CERTIORARI

Respondent, Stanley E. Coutu, on his behalf and on

behalf of the class he represents,’ opposes the Petition

for Writ of Certiorari filed by petitioner on June 30, 1979.

OPINIONS BELOW

The opinion of the United States Court of Appeals

for the Seventh Circuit, reversing a summary judgment

granted on motion of the petitioner and remanding for

further proceedings, is reported at 595 F.2d 396 (April

4, 1979) and is reproduced as Appendix A to the Peti-

tion. The two unreported memorandum orders by differ-

ent District Judges referred to in the Court of Appeals

*The respondent class has been certified. See Coutu

v. Universities Research Association, Inc., 595 F.2d 396,

397 (C.A. 7, 1979), and Appendix A at A2-A3.

yy

a

opinion, are printed in their entirety as Appendix B and

Appendix C to the Petition.

QUESTION PRESENTED

Respondent submits that the petition does not contain,

as required by Supreme Court Rule 23-1(¢), a question

presented “expressed in the terms and circumstances of

the case.” Without waiver of this point or of his posi-

tion that there are no special and important reasons for

the grant of certiorari in this case, respondent suggests

that the appropriate question would be:

Is a prime contractor under a government contract

exempted as a matter of law from the statutory duty to

pay Davis-Bacon Act (40 U.S.C. §§276a-276a-7)* minimum

wages to its own employees, and is that government con-

tract therefore insufficient in law as a basis for recovery

of those unpaid minimum wages, when:

(a) the government contract expressly procures

“construction, alteration and/or repair” work (see 40

U.S.C. §$276a),

* The appeal was from a summary judgment allowed by

the second District Judge, based on an affidavit of peti-

tioner’s counsel that no Davis-Bacon Act contract clause

(see contract clauses specified by the Department of

Labor, 29 C.F.R. §5.5(a)) requiring petitioner to pay

Davis-Bacon minimum wages to its own employees for

construction work was contained in petitioner’s govern-

ment contract (see Appendix C). The first District Judge

had rejected that same contention when he denied peti-

ai prior motion to dismiss the suit (see Appendix

*Certain portions of the Davis-Bacon Act, and a re-

lated section of the Copeland (Anti- Kickback) Act (40

U.S.C. §276c), are reproduced as Appendix D to the

Petition.

ae yo

(b) the prime contractor uses its own employees

to perform certain construction work called for by

the contract,

(c) the contract requires the contractor to include

Davis-Bacon Act wage stipulations in subcontracts

entered into for construction work, but contains no

express stipulation requiring the contractor itself to

comply with the Act as to construction work per-

formed with its own employees, and

(d) applicable prevailing wage determinations by

the Secretary of Labor are published in the Federal

Register in accordance with law.

STATEMENT OF THE CASE

The petitioner’s ‘‘Statement of the Case’’ contains a

number of inaccuracies. Among them are the following:

(a) Petitioner’s construction contractor status, Peti-

tioner’s statement characterizes its government contract

as requiring it simply to ‘‘provide scientific and technical

management services to the United States in connection

with the construction and operation of Fermi National

Accelerator Laboratory’’ (petition, at 3). The fact is that

the government contract makes petitioner responsible for

the ‘‘two categories of work contemplated by this con-

tract’? which are

“a. Construction: Includes design, fabrication or

procurement, erection, test and inspection, assembly

and installation of the systems, components, build-

ings, ete., comprising the accelerator and the conven-

tional facilities, as described * * * below.

“bh, Research and Development: * * *.” [Appen-

dix ‘‘A’’ to Contract, at p. 1.]. ,

a

Furt'er, by Supplemental Agreement dated April 6, 1972

‘‘effeective as of July 1, 1971’ the contract was revised,

certain prefatory Recitals stating, inter alia,

‘‘The Association has heretofore undertaken, pur-

suant to the terms and conditions of the basic Con-

tract No. AT (49-8)-3000, the design and construc-

tion of an accelerator and related facilities * * *

‘* Accordingly, this contract sets forth the terms

and conditions, and the purposes and policies under

which the Association shall continue the design and

construction of the accelerator and related facilities

* * *? [Modification No. 14 to Contract No. AT

(4908)-3000, at p. 1.]

And if that were not enough to demonstrate that peti-

tioner is the contractor primarily responsible for the con-

struction called for by the contract, we also have peti-

tioner characterizing itself as ‘‘Thts Federally assisted

construction contractor’’ in a November 25, 1968 certifi-

cation to the government that it does not maintain seg-

regated facilities for its employees ‘‘under its Prime Con-

tract No. AT (4908)-3000’’.*

*The contract, originally dated January 23, 1968, ‘‘ef-

fective as of January 5, 1967’’ is not in the trial court

record and, of course, not therefore in the Record on

Appeal in the Court of Appeals. It, or portions of it,

may have been furnished to the district court by the

petitioner, although not to the respondent or the respond-

ent class. Respondent has secured a copy of the contract,

or portions of it, through Freedom of Information Act

procedures. 5 U.S.C. $582 et seg. Discovery procedures

initiated by the respondent and his class prior to sub-

mission by petitioner of the summary judgment motion

which resulted in the district court judgment reversed

in this case by the Seventh Circuit, including procedures

for production of documents (see Appendices filed in

Court of Appeals, Appendix F, at 39-44, entitled ‘‘ Amend-

ed First Request to Produce’’), were stayed pending

nak

(b) The summary judgment legal issue. Petitioner’s

statement asserts that its motion for summary judgment

was predicated upon the failure by respondent to show

that ‘‘the [contracting] ageney had rendered a Davis-

Bacon Act coverage determination regarding work he

performed’’ and that ‘‘Petitioner’s general counsel sub-

mitted an affidavit that no such determination had been

made’’ (petition, at 5). The fact is that this was not

and hed never been the issue on the summary judgment

motion, and petitioner thus misquotes the contents both

of its summary judgment motion and its general coun-

sel’s affidavit submitted in support. The sole issue on

the summary judgment metion, the granting of which

was reviewed in and reversed by the Seventh Circuit, was

‘‘whether or not [petitioner] has entered into [a con-

tract based upon provisions of the Davis-Bacon

Act]’’ (Motion for Summary Judgment, paragraph

alk ? hei

And petitioner’s general counsel’s affidavit—which peti-

tioner describes as supporting its claim that ‘‘the agency

had rendered [no] Davis-Bacon Act coverage determina-

(* Continued)

disposition of the said motion and determination of the

legal question presented. See also Coutu opinion, 595 F.

2d 396, at 397, and Appendix A at A2-A3. (‘‘Discovery

was apparently stayed in February 1977’’ and fn. 3 ‘‘De-

fendant’s brief nowhere disputes the stay. An earlier dis-

covery stay was ordered by Judge McGarr on December

22, 1975’’). It is apparent that there may be other agree-

ments and documents, yet to be discovered, concerning

petitioner’s Davis-Bacon duties.

* Paragraph ‘‘(2)’’ of the Motion for Summary Judg-

ment reads in full that: ‘‘(2) The only material issue is

whether or not Defendant has entered into such a con-

tract.” (Appendices filed in the Court of Appeals, Ap-

pendix I, at 47).

smtibaas

tion regarding work [respondent] performed’’ (petition,

at 5)—speaks only of the absence of express Davis-Bacon

Act wage stipulations from petitioner’s government con-

tract. It says nothing at all about determinations made or

not made by the contracting agency concerning the con-

tract construction work or concerning respondent’s share

in that work. It simply says:

**3. No Davis-Bacon Act, 49 U.S.C. §$276a, et seq.,

stipulations requiring the payment of prevailing

wages have ever been made a part of or incorporated

in said contract No. EY-76-C-02-3000.

‘‘4. Further the affiant sayeth not.’’ (Appendices

filed in the Court of Appeals, Appendix J, at 49).

Finally, the district judge who allowed the summary

judgment which the Seventh Cireuit reversed, was also

under no misconception about the legal issue he was de-

ciding. The actual question was whether petitioner is ex-

empt as a matter of law from the statutory duty to pay

Davis-Bacon Act minimum wages for the sole reason

that its government contract does not expressly require

it to comply as to construction work performed with its

own employees. Granting that judgment, he said:

“This court concludes that there is no issue of ma-

terial fact that this contract fails to contain the req-

uisite Davis-Bacon Act specifications essential for

maintenance of the claim stated in Count IT. Accord-

ingly, this court enters judgment for defendant on

Count II of the complaint and that count is dis-

missed.’’ (See Memorandum Order, Appendix C at

A27).

(c) Alleged search for so-called “coverage determina-

tions”. Petitioner’s statement further asserts, without any

warrant in the record, that respondent has attempted to

a on

discover some Davis-Bacon Act ‘‘coverage determination

regarding work [respondent] performed [but] found

none’’ (petition, at 5). The fact is that respondent, indi-

vidually and on behalf of his class, relies on the explicit

‘fecoverage determination’’ of the Davis-Bacon Act it-

self. Neither the rights of the respondent under the Act—

nor the rights of the respondent class—depend upon the

existence of a contracting agency (AEC/ERDA/DOE)

ruling that this respondent was performing Davis-Bacon

work. Further, it is clear that were contracting-agency

‘‘coverage’’ rulings required to entitle respondent or his

class to the Davis-Bacon Act minimum wage, the stay

of discovery pending disposition of the summary judg-

ment legal issue, previously described (see fn. 4, supra),

has made it procedurally impossible at this point in the

proceedings to establish their existence and application

to the work assignments actually given to respondent

and his class by the petitioner-employer-contractor.°

(d) Did the Seventh Circuit “alter” or “revise” the

contract? Petitioner’s statement asserts—as if it were

a matter of fact—that the Court of Appeals ‘‘held that

°Of course, respondent would weleome the existence of

AEC/ERDA/DOE rulings that he and the others in his

class were performing Davis-Bacon Work. At this point,

limited discovery has revealed a number of items recom-

mending that certain work projects under the prime con-

tract be treated as Davis-Bacon Act work. Discovery has

not yet proceeded to the point where it can be learned

whether respondent and other class members were as-

signed some of that work. However, the question of the

existence and availability of those items and that informa-

tion, is quite different from the question actually posed

by the summary judgment motion and actually ruled on

by the district and circuit judges who considered the sum-

mary judgment issue in this case,

ae, ear

the District Court did have jurisdiction * * * to revise

the contract’’ (petition, at 5). This assertion, with the

single substitution of the word ‘‘alter’’, draws our atten-

tion once again to petitioner’s ‘‘Question Presented’’

(petition, at 2), upon the propriety of which respondent

has previously commented (this brief, at 2). It is of

course understandable that a petitioner seeking certiorari

might harshly characterize the adverse decision. But it

is respectfully submitted that a petitioner should, at least

in his ‘‘Statement of the Case’’, state the facts—not his

interpretation, nor an altered or revised version of the

facts. The fact is that the Seventh Circuit applied long-

settled principles of statutory construction to the provi-

sions of the Davis-Bacon Act, and equally-well-settled

principles of contract (and government contract) inter-

pretation to the contract here in question. The fact is

that the Seventh Circuit did not ‘‘alter’’ or ‘‘revise’’ that

contract. The fact is that the court held, inter alia, as

follows:

*‘[H]ere, the provisions of the Davis-Bacon Act

must be read into Article XXXIIT [the ‘Labor Pro-

visions’ article of the contract] when, pursuant to

a contract requiring Davis-Bacon Act work, the de-

fendant [petitioner] performs ‘construction, altera-

tion, and/or repair * * * of public buildings or pub-

lic works of the United States * * * which requires

or involves the employment of mechanics and/or la-

borers.’ * * * 40 U.S.C. §276a.

‘‘Indeed, in a January 23, 1973, letter from the

Atomic Energy Commission’s Chicago Operations

Office Manager to the president of the defendant,

both those parties foresaw that conditions might

arise which might make it necessary for the defen-

dant to perform Davis-Bacon Act work and in such

instance to modify the contract to incorporate the

a Ae

Davis-Bacon Act provisions relative to labor and

wages. Since under McDaniel I [McDaniel v. Univer-

sity of Chicago, 512 F.2d 583 (C.A. 7, 1975), reaf-

firmed on remand, 548 F.2d 689 (C.A. 7, 1977), cer-

tiorari denied, 434 U.S. 1033, 98 S.Ct. 765, 54 L.Ed.

2d 780] the contract was already so modified by op-

eration of law, amendments to the contract were not

needed to accomplish that result.

‘‘McDaniel was not an isolated instance of read-

ing applicable statutory requirements into govern-

ment contracts. We were merely following preced-

ents established as early as 1827 and applied con-

sistently thereafter. [footnote citations] Because the

provision to pay the prevailing wage rate was incor-

porated by operation of law, the affidavit relied up-

on by the district court to the effect that no Davis-

Bacon Act ‘stipulations requiring the payment of

prevailing wages have ever been made a part of or

incorporated in’ the contract * * * is insufficient to

support the grant of summary judgment. Therefore

it was unnecessary for plaintiff [respondent] to ten-

der a counter-affidavit.

‘*It is uncontested that the Secretary of Labor has

published general wage determinations in decisions

published in the Federal Register that are applicable

to labor on government projects in Kane County,

Illinois, where the Fermi Laboratory is located and

where the defendant’s alleged construction activity

has been performed. [footnote citations to wage de-

terminations]. Therefore the district court was mis-

taken in concluding that to sustain plaintiff’s position

would require it to make wage determinations for

the parties.’’ [Coutu v. Universities Research Asso-

ciation, Inc., 595 F.2d 396, 399-400 (C.A. 7, April

4, 1979); also Appendix A at A7-A9].

— an

THERE ARE NO SPECIAL AND IMPORTANT

REASONS FOR THE GRANT OF CERTIORARI

IN THIS CASE.

I.

THE COURT OF APPEALS HAS NOT DECIDED A

QUESTION OF FEDERAL LAW WHICH HAS NOT

BEEN BUT SHOULD BE SETTLED BY THIS COURT.

IT HAS NOT DECIDED A FEDERAL QUESTION IN

A WAY IN CONFLICT WITH APPLICABLE DECI-

SIONS OF THIS COURT.

A. The Seventh Circuit was manifestly correct when it

ruled that “the provisions of the Davis-Bacon Act

must be read into [the ‘Labor Provisions’ article of

this government contract] when, pursuant to a con-

tract requiring Davis-Bacon Act work, the defen-

dant [petitioner] performs ‘construction, alteration,

and/or repair * * * of public buildings or public

works of the United States * * * which requires or

involves the employment of mechanics and/or la-

borers.’ ”

Contrary to the petitioner’s claim, the ruling of the

Seventh Circuit is neither ‘‘novel’’ nor ‘‘unprecedented’”’

by prior decisions of this Court and of other courts and

authorities in the area of contract law generally, and

public contract law in particular. Contrary to petitioner’s

assertion, the Seventh Cireuit’s decision is not a ‘‘de-

parture’’—much less a ‘‘wholesale departure’"—from ex-

isting law relative to government contracting.

The Court of Appeals has followed established prec-

edent existing in this Court since at least 1827 (e.g., ‘‘the

law of the contract * * * forming a part of it’’)’. The

"See petition, at 6.

® Ogden v. Saunders, 25 U.S. (12 Wheat.) 212, 6 L.Ed.

606, 621-622 (1827), cited by the Court of Appeals at 595

F.2d 396, 400. See Appendix A at A8.

Court of Appeals has complied with mandate of Congress

consistently reaffirmed by Congress and by this Court

since 1931 that the Davis-Bacon Act is to be applied to

‘‘protect * * * employees from substandard earnings by

fixing a floor under wages on Government projects’’.° And

the Court of Appeals has recognized the express contrac-

tual intent, found in the petitioner’s 1968 government

contract and in contract documents since that date, that

Davis-Bacon requirements must apply concerning Davis-

Bacon work contemplated by that prime contract.”

*United States v. Binghamton Construction Co. 347

U.S. 171, 177, 74 S.Ct. 488, 441, rehearing denied 347

U.S. 940, 74 S.Ct. 625 (1954).

It is, indeed, impossible to conceive how petitioner

can at this date claim lack of knowledge that in its capac-

ity as contractor or subcontractor it must pay Davis-

Bacon minimum wages to its employees whom it assigns

to do Davis-Bacon work, when (a) the statute says it,

(b) the cases say it, (c) the Department of Labor regu-

lations say it, (d) the G.S.A. and AEC/IERDA/DOE

regulations say it, (e) the contract itself says that it

must include Davis-Bacon clauses in subcontracts it en-

ters into for others to do such work, and (f) documents

involving the contract say that Davis-Bacon stipulations

are to apply if its own employees do such work.

a ye

B. Where a government contract clause is required by

statute or by procurement regulation to be included

in a government contract, that clause is deemed in-

corporated, as a matter of law, into the contract.

The Davis-Bacon Act minimum wage stipulation is

part of the subject government contract by opera-

tion of law, and employees who perform Davis-Bacon

Act work must be paid the minimum wage rates

established by the Secretary of Labor’s published

wage determinations.

1. The Davis-Bacon Act mandatory requirement. Sec-

tion | of the Davis-Bacon Act (40 U.S.C. §276a) requires,

inter alia, that

“every contract * * * shall contain a stipulation that

the contractor or his subcontractor shall pay all

mechanics and laborers * * * the full amounts accrued

at time of payment, computed at wage rates not less

than those |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 (locality) in

which the work is to be performed]. (Emphasis

supplied).

The requirement that every contract involving construc-

tion on government projects shall contain the required

minimum wage stipulation, cannot be construed as any-

thing but mandatory. As was recently said in Assn. of

American Railroads v. Castle, 562 F.2d 1310, 1312 (C.A.

D.C. 1977), “The word ‘shall’ is the language of command

in a statute, and there is no doubt that the Congress has

commanded [what the statute requires].”

But we need not rely alone on mere, albeit accurately

applicable generalizations. This Court has already author-

itatively construed the Davis-Bacon Act as mandatory. In

a oe

United States v. Binghamton Construction Co., 347 U.S.

171, 74 S.Ct. 438 (1954), rehearing denied 347 U.S. 940,

74 S.Ct. 625, a decision in which—as here—a govern-

ment contractor claimed that the wage rates expressly

contained in its contract amounted to a binding represen-

tation or warranty as to the wage rates which it must

actually pay its workers for Davis-Bacon work, it was

declared (347 U.S. at 172, 74 S.Ct. at 439):

“The Davis-Bacon Act requires that the wages

of workmen on a Government construction project

shall be ‘not less’ than the ‘minimum wages’ specified

in a schedule furnished by the Secretary of Labor.”

[Emphasis supplied.]

And, econcluding—as the Seventh Circuit has concluded

in the case at bar—that the contractor’s contention must

be rejected, this Court further noted (347 U.S. at 178,

74 S.Ct. at 442):

“On its face, the Act is a minimum wage law de-

signed for the benefit of construction workers. The

Act does not authorize or contemplate any assurance

to a successful bidder that the specified minima

will in fact be the prevailing rates. Indeed, its re-

quirement that the contractor pay ‘not less’ than the

specified minima presupposes the possibility that the

contractor may have to pay higher rates. Under these

circumstances, even assuming a representation by the

Government as to the prevailing rate, respondent’s

reliance on the representation in computing its bid

cannot be said to have been justified. [Emphasis sup-

plied.]

Further, it is not only the Davis-Bacon Act itself and

the decisions of this Court construing it, which mandate

the inclusion of the minimum wage stipulation in our con-

tract. The regulations issued by the Secretary of Labor

isk Wl ee

pursuant to 40 U.S.C. §276c' and Reorganization Plan

No. 14 of 1950,*° complement the requirements of the Act

by commanding a like incorporation of the applicable

regulations, among which are included the standard con-

tract clauses which stipulate compliance with the Act’s

minimum wage obligations. Thus the Secretary’s regula-

tion $3.11 (29 C.F.R. $3.11 (1978 ed.)) reads:

$3.11 Regulations part of contract

“All contracts made with respect to the construc-

tion, prosecution, completion, or repair of any public

building or public work or building or work financed

in whole or in part by loans or grants from the

United States covered by the regulations in this part

shall expressly bind the contractor or subcontractor

to comply with such of the regulations in this part

as may be applicable. In this regard, see $5.5(a) of

this subtitle [which contains the specific contract pro-

visions].” [Emphasis supplied. ]

Here, too, there is no doubt that ‘‘the verb ‘shall’ in the

regulation is mandatory’’, Ainslie Corp. v. Middendorf,

381 F.Supp. 305, 308 (D.Mass. 1974).

2. Incorporation of Mandatory Clauses—the “Chris-

tian Doctrine”. It is clear that the Davis-Bacon Act

minimum wage provisions represent long-standing and

fundamental procurement policies of the United States.

The eases which deal with government contracts teach

that contract clauses made mandatory by procurement

regulation, are incorporated into government contracts

as a matter of law. Is it not even more certain that con-

Section 2 of the Copeland (Anti-Kickback) Act of

June 13, 1934, c. 482, 48 Stat. 948; as amended May 24,

1949, c. 139, $134, 63 Stat. 108, and August 28, 1958, P.L.

85-800, §12, 72 Stat. 967.

25 U.S.C. $903 note, 15 F.R. 3176, 64 Stat. 1267.

—

tract clauses made mandatory by statute are so incor-

porated as a matter of law! Dees and Ginsburg, Con-

tract Interpretation and Defective Specifications at 4

(Government Contracts Monograph No. 4, 1975 Edition;

The George Washington University); G.L. Christian and

Associates v. United States, 312 F. 2d 418, 160 Ct. Cl.

1, opinion on reargument denied 320 F. 2d 345, 160 Ct. Cl.

58, certiorari denied 375 U.S. 954 (1963), rehearing denied

376 U.S. 929, 377 U.S. 1010 (1964) See also, e.g., United

States v. New Orleans Public Service, Inc., 553 F.2d

459 C.A. 5, 1977); City of Tullahoma v. Coffee County,

204 F. Supp. 794 (E.D. Tenn. 1962), rev’d on other

grounds 328 F. 2d 683 (C. A. 6, 1964).

In Dees and Ginsburg, Contract Interpretation and

Defective Specifications (Government Contracts Mono-

graph No. 4, 1975 Edition; The George Washington

University), the authors note:

‘*Surprisingly, there are very few federal statutes

which directly affect the performance of a Govern-

ment contract. There are, of course, the basic stat-

utes authorizing the Government to enter into con-

tracts and placing certain limitations on the methods

of contracting. * * * Federal statutes and executive

orders affecting performance include those that

require equal employment opportunity requirements

on contractors doing business with the Government,

those that impose certain minimum standards for

wages and working conditions of employees work-

ing for Government contractors [citing the Walsh-

Healey Act, 41 U.S.C. §§35-45; the Davis-Bacon Act,

40 U.S.C. §$276(a); the Service Contract Act of 1965,

41 U.S.C. §§1-57; the Contract Work Hours and Safe-

ty Standards Act, 40 U.S.C. $§327-333] and those

which require protection of the environment. * * *’’

[Ibid., at 1-2; emphasis supplied.]

ig i asian

Then, speaking of the binding effect of statutory require-

ments and implementing regulations, we are reminded:

‘*Statutory requirements and regulations which im-

plement statutory requirements have the force and

effect of law. Accordingly, contracts made in viola-

tion of such requirements are illegal. * * *’’ [Ibid.,

at 3.]

And, finally, concerning the question Whether govern-

ment contracts are to be interpreted as incorporating

mandatory clauses specified by law, in order to preclude

invalidation of those contracts for violation of statutory

and regulatory requirements or otherwise:

‘*It is common for Government contracts to include

standard clauses and specifications by reference. These

should present no problem to the contractor who has

read the contract and is aware that these additional

provisions are binding on the parties. A problem of

interpretation does arise, however, when one party

seeks to incorporate a contract clause which is not

referenced in the contract but which is required by

regulation.

‘‘In G. L. Christian & Associates v. United States,

the Court of Claims held that the Termination for

Convenience clause which had been consciously omit-

ted by the Government (and the contractor) had the

force and effect of law and was incorporated in the

contract as a matter of law. The Court emphasized

the fact that pertinent regulations made the incorpo-

ration of the clause in a contract mandatory and that

a Termination for Convenience clause was historical-

ly an important component. of a Government con-

tract.

‘*How broad is the ‘Christian doctrine’ and does it

apply to all mandatory clauses or only to certain

ones? Until recently, the prevailing view was that

the Christian doctrine applied to all provisions of

a ee

the regulations which make the use of a particular

contract clause mandatory. However, there is a grow-

ing minority view which believes that the Christian

doctrine should be restricted to the incorporation of

only those mandatory clauses which implement long-

standing and fundamental procurement policies of

the United States.’ [Ibid., at 4; emphasis supplied. ]

Thus, under both the prevailing view and the so-called

developing minority view, we must recognize that the

Davis-Bacon Act minimum wage stipulations are part of

the subject government contract and binding on the peti-

tioner.

So far as the Christian case opinions themselves are

concerned (Christian I, 312 F.2d 418, 160 Ct.Cl. 1 (1963) ;

and Christian IT, 320 F.2d 345, 160 Ct.Cl. 58 (1963)), it

should be noted that there the contractor’s prime objec-

tion to the ‘‘ineorporation’’ doctrine was that the subject

contract clause was required only by “pre-existing regula-

ticn”, the court pointing out that there was no question

but that “if a statute requires the inclusion of a termina-

tion clause, such a provision would be read into the agree-

ment whether the negotiators put it there or not”. (320

F.2d at 350; emphasis supplied). And, speaking further

concerning the ‘‘incorporation’’ doctrine, the Court of

Claims said (320 F.2d at 350-351):

“TAs the Supreme Court cases demonstrate, ‘mere’

regulations can supersede state laws which would

otherwise control; giving the regulations the status

of law equates them fully to federal legislation. The

concept of such incorporation is not novel. A well-

known example is Executive Order No. 9001 (imple-

menting the First War Powers Act), supra, which

expressly required, without specific statutory foun-

dation, that World War II contracts should contain

se

a covenant-against-contingent-fees, as well as an anti-

discrimination clause. If the contracts were to be

deemed valid, these articles had to be read as part

of all war procurement agreements, whether or not

they were physically incorporated. * * * It was im-

portant then, and it is important now, that procure-

ment policies set by higher authority not be avoided

or evaded (deliberately or negligently) by lesser offi-

cials, or by a concert of contractor and cortracting

officer. * * * Obligatory Congressional enactmeuts are

held to govern federal contracts because there is a

need to guard the dominant legislative policy against

ad hoc encroachment or dispensation by the executive

[citation].

“Like other individuals who deal with the Federal

Government [citation], potential contractors ean

validly be bound to discover the published directives

telling them the limits and the scope of the agree-

ments the Government can make. Our concern is not

at all whether the policy of embodying mandatory

contractual provisions in regulations is the best one.

Our special interest is only the legality of such a

practice, and we hold that, in the procurement field as

in others, an authorized regulation can impose such

peremptory requirements on federal officials and those

who seek to enter into transactions with the Govern-

ment.” [Italics by the court; other emphasis sup-

plied.]

See too, e.g., United States v. New Orleans Public Service,

Ine., 553 F.2d 459, 469 (C.A. 5, 1977), holding “the clause

is incorporated into the contract, even if it has not been

expressly included in a written contract or agreed to by

the parties; Compagme Generale Tramsatlantique v.

American Tobacco Co., 31 F.2d 663, 666 (C.C.A. 2, 1929),

holding that “a lawful statute in force at the time the

contract was made is read into the contract and becomes

part of it” and “Such a contract must be and is deemed

oe

to be modified to conform to the statute”; 3 Corbin on

Contracts, §551, at 200-201 (1960 ed.), noting the same re-

sult “even though the parties know nothing of the statute

and do not include the provision, and even though they

know of it and expressly agree upon the exact contrary”;

17A Corpus Juris Secundum, Contracts, §330, at 301

(1963 ed.), noting that “where a provision is integrated

into a contract by force of statute, as a matter of publie

policy, it must be interpreted and given effect in ac-

cordance with the intention of the legislature, irrespective

of how the contractors understood it”.

Also of particular significance on this point is this

Court’s opinion in Hartford Accident & Indemnity Co. v.

N. O. Nelson Mfg. Co., 291 U.S. 352, 54 S.Ct. 392 (1934),

where the Court required that a contractor’s bond be con-

strued to include a clause required by state statute but

omitted from the express terms of the bond, and said:

“All that the statute does by force of section 3

is to standardize the form, at least in some particu-

lars, when bonds are freely given, and to define the

consequences attaching to the standard thus _ pre-

scribed. * * * The business of insurance is one pecu-

liarly subject to supervision and control [citations.]

The Fourteenth Amendment does not make it neces-

sary that materialmen and laborers shall be deprived

of fair protection to the end that sureties for profit

may be given an opportunity to diversify their bonds.

‘‘Liberty of contract is not an absolute concept.

[citations.] It is relative to many conditions of time

and place and circumstance. The Constitution has

not ordained that the forms of business shall be cast

in imperishable moulds, There is no question here of

the impairment of the obligation of a contract by

later legislation. The act assailed by the appellants

was in existence for many years before the bond in

=

suit was written. Principal and surety in writing it

became subject to the statutes then in force, and by

these they must abide.” [291 U.S. at 359, 360-361;

54 S.Ct. at 395-396; emphasis supplied.]

C. A contractor takes a government contract subject

to all applicable statutes. All statutes relating to the

subject matter of the contract and existing at the

time of contracting become a part thereof and must

be read into the contract. Our petitioner contractor-

employer is charged with knowledge that construc-

tion work performed by its employees is subject to

the Davis-Bacon Act, and is obligated to pay the

statutory wages rates.

1. Davis-Bacon Act is part of all government con-

struction contracts. Whether or not the mandatory stipula-

tion required by the Davis-Bacon Act to be included in

“every contract * * * for construction, alteration, and/or

repair, including painting and decorating, of public build-

ings or public works * * *” is deemed incorporated, as a

matter of law, into the contract, it is basic hornbook

law that the Davis-Bacon Act itself is a part of the con-

tract. Statutes relating to the subject matter of a contract

and existing at the time of execution of such contract,

become a part thereof and must be read into the contract,

as if they were expressly referred to or incorporated in

its terms.

See, e.g., Woods v. Lovett, 313 U.S. 362, 370, 61 S.Ct.

983, 987 (1941) (‘‘laws which subsist * * * enter into and

form a part of it, as if they were expressly referred

to or incorporated in its terms”); Home Building & Loan

Assn. v. Blaisdell, 290 U.S. 398, 429-430, 54 S.Ct. 231,

237 (1934) (concerning Minnesota Mortgage Moratorium

Law); Farmers’ & Merchants’ Bank v. Federal Reserve

Bank, 262 U.S. 649, 660, 43 S.Ct. 651, 655 (1923) (“This

— ea

frineiple embraces alike those laws which affect its con-

struction and those which affect its enforcement or dis-

charge”); Hendrickson v. Apperson, 245 U.S. 105, 38

S.Ct. 44, 45 (1917) (Kentucky statute authorizing appoint-

ment of special collectors); Northern Pacific Ry. Co. v.

Wall, 241 U.S. 87, 91-92, 36 S.Ct. 4938, 495 (1916) (Car-

mack Amendment to the Interstate Commerce Act);

Southern Surety Co. v. Oklahoma, 241 U.S. 582, 587, 36

S.Ct. 692, 694 (1916) (Oklahoma enabling act and Okla-

homa Constitution) ; Armour Packing Co. v. United States,

209 U.S. 66, 81, 82, 28 S.Ct. 428, 435, 436 (1907) (“the

design of the statute to prohibit” “abuses of unequal

rates”); Antoni v. Greenhow, 107 U.S. 769, 2 S.Ct. 91,

95 (1883) (rule applies to “those laws which affect its

validity, construction, discharge, and enforcement’) ;

Walker v. Whitehead, 83 U.S. 314, 317, 21 L.Ed. 357, 358

(1873) (Georgia statute held to impair obligation of

contract); United States ex rel. Von Hoffman v. City of

Qumcy, 71 U.S. 535, 550 (1867) (“These are as much

incidents and conditions of the contract as if they rested

upon the basis of a distinct agreement”); M’Cracken v.

Hayward, 11 L.Ed. 397, 399 (1844) (“laws in existence

* * * measure of the obligation to perform”); Ogden v.

Saunders, 6 L.Ed. 606, 621-622 (1827) (“the law of the

contract * * * forming a part of it”; 17A C.J.S., Contracts,

$330, at 295 (1963 ed.); 17 Am.Jur.2d, Contracts, §257, at

654-656 (1964 ed.); 3 Corbin on Contracts, $51, at 197

(1960 ed.); Williston on Contracts, §615, at 1767 (1936

ed.) ; 4 Williston on Contracts, §615, at 597 (3d ed. 1961).

Thus, as the Ninth Cireuit declared in United States v.

McKinnon, 289 F.2d 908, 909 (C.A. 9, 1961), concerning

a claim for extra work by a government contractor, “one

just must take his government contracts subject to appli-

cable statutes.”

99 —

It must not be forgotten that we have even more in

the case at bar; we have express contract references

to the Act. Specific reference was, indeed, made in the

subject government contract to the Davis-Bacon Act. Those

contract provisions were, first, a statement that such

construction work should be done by subcontracts which

would contain Davis-Bacon Act stipulations, rather than

by the contractor’s own employees, and second, a letter

dated concurrently with the date of the contract stating

that if the contractor does perform Davis-Bacon work

with its own employees, the contract will be modified

to incorporate the Davis-Bacon Act stipulations. Again,

because of the limited scope of discovery permitted thus

far, it may be later found that further provisions and

agreements exist. In any event, the law is clear that a

reference in a contract to a statute renders that statute

a part of the agreement. Further, it is clear that in con-

struing a contract which rests upon a statute, the statute

must be read into the contract, with the construction in-

tended by the legislature. Maryland-National Capital Park

Commission v. Lynn, 514 F.2d 829, 833 (C.A. D.C. 1975);

Personal Industrial Bankers, Inc. v. Citizens Budget Co.,

80 F.2d 327, 328 (C.C.A. 6, 1935).

2. Petitioner’s acts imply assumption of Davis-Bacon

obligations. It is asserted in this cause by respondent and

the respondent class that they, as employees of the pe-

titioner, were assigned and did perform work constituting

construction work within the meaning of the Davis-Bacon

Act. At this point in the proceedings, and for purposes

of the summary judgment now on appeal which was

granted on other grounds, this assertion must be taken

as true. It is clear, then, that to the extent the petitioner’s

employees were performing Davis-Bacon Act construction

work so assigned to them, the petitioner is and has placed

_— =

itself in the position of a subcontractor under its prime

contract. Article XXXIII (“Labor Provisions’) of the

contract prescribes that such work is to be done by sub-

contract which shall “contain the provisions relative to

labor and wages’’ required by Davis-Bacon. In the capac-

ity of a subcontractor performing construction work on

the project, well knowing of the contract requirement

that all such subcontractors are obligated to pay the

statutory wages, petitioner must be deemed by impli-

cation to have undertaken those same obligations.*®

It is not unusual for a general contractor also to act

as a subcontractor on the job. Indeed, in Bushman Con-

struction Co. vy. Conner, 260 F.Supp. 779 (D.Colo., 1966),

it is noted that ‘‘The prime contractor did only the

cement and carpentry work. All of the other construction

was subcontracted” (260 F.Supp. at 782). And anyone

familiar with construction activities is familiar with the

practice of the general contractor “acting as his own

carpentry (or cement, or electrical, or plumbing, or

painting) subcontractor.”

That which is implied in a contract situation is as

effectual as what is expressed. Bulkley v. United States,

86 U.S. 37, 40 (1874) (saying, in addition, that “Human

affairs are largely conducted upon the principle of im-

plications”; Board of Supervisors vy. Lackawanna Iron

** Indeed, petitioner in its capacity as prime contractor

has entered into a number of construction subcontracts,

all including the Davis-Bacon Act required stipulations

and the standard contract clauses promulgated by pro-

curement regulations and included within printed forms

used with those subcontracts. Copies of certain of those

subcontracts have been obtained by the respondent class,

again through Freedom of Information Act procedures,

5 U.S.C. $552 et seq.

=

& Coal Co., 93 U.S. 619, 624, 23 L.Ed. 989, 991 (1877);

Perry v. Sindermamn, 408 U.S. 593, 599-602, 92 S.Ct. 2694,

2699-2700 (1972) (affirming reversal of a summary judg-

ment in a teacher’s action claiming the existence of a

“de facto tenure program” for “absence of such an explicit

contractual provision may not always foreclose the possi-

bility”). Where a well-established practice or custom

exists (such as that pursuant to which general contractors

often undertake subcontractor functions as to certain

crafts), it is assumed that the parties to the contract

intend that practice or custom to apply, absent express

language in the contract to the contrary. Everett Plywood

Corp. v. United States, 512 F.2d 1082, 1089 (Ct.Cl. 1975)

(also holding that “regulations in effect at the time of a

contract are a useful guide in the resolution of a contract

case”). Indeed, the rules with respect to the creation

of implied contracts apply in government contract situa-

tions, and “A contract may be implied where all the

formalities in connection with the execution of a contract

have not been complied with’? (91 C.J.S., United States,

§89, at 170 (1955 ed.)).

Assuming then, arguendo, that by reason of the gov-

ernment contract in the case at bar our petitioner-

contractor is not bound by the Davis-Bacon Act in its

capacity as prime contractor, it is nonetheless bound as a

subcontractor who, without question, is expressly au-

thorized by that contract to perform Davis-Bacon Act

work and likewise obligated to pay the statutory wage.

3. The Davis-Bacon Act Congressionally-mandated ef-

fects on the procurement process. No one can deny that

the procurement process would be easier and cheaper

for the government and for certain government contrac-

tors, had Congress not enacted the Davis-Bacon Act (40

—

U.S.C. §276a et seq.), the Walsh-Healey Public Con-

tracts Act (41 U.S.C. §35 et seg.) and the MeNamara-

O’Hara Service Contract Act (41 U.S.C. $351 et seq.).

Yet these statutes represent important policy decisions

which have been consistently reaffirmed by Congress,

nothwithstanding their impact on the procurement pro-

cess. Thus, the Attorney General of the United States,

in an opinion issued on March 9, 1979, in response to a

request of the President (see 1979 Labor Law Reports

(C.C.H.), 731,253 (4-13-79)), has noted:

“Congress considered the contract labor standards

statutes to be among the ‘ancillary’ statutes which

affect procurement [citing at fn 32: S.Rept. 91-427,

9ist Cong., Ist Sess., at 6, 13-14; H.R.Report 91-

468, 91st Cong., Ist Sess., at 151.]. * * *

“(These are] statutory socio-economic programs

implemented through the procurement process * * *

[which the 1969 Commission on Government Procure-

ment] viewed * * * as extraneous burdens on the

procurement system [noting at fn. 49: See CGP Re-

port, vol. 1, at 111-18. The report refers to the Labor

Department’s wage-hour regulations as ‘collateral’

ones that ‘affect’ procurement. Id. at 33.] * * *

‘*As the Commission report points out, these pro-

grams serve a broad variety of interests: labor, en-

vironment, small business, anti-discrimination, pro-

tection of domestic industry, and others. * * * The

contract wage-hour statutes in particular are the re-

sult of a strong legislative concern that the govern-

ment’s general interest in efficient, economical pro-

curement will not be satisfied at the expense of

contractors’ employees. [noting at fn. 52: See H.R.

Rept. 1162, 74th Cong., 2d Sess., at 2 (Davis-Bacon

Act); S.Rept. 1157, 74th Cong., 1st Sess., at 4 (Walsh-

Healey Act); H.R.Rept. 948, 89th Cong., 1st Sess.,

at 3 (Service Contracting Act).].’’

a fm

The effects of the legislative policies represented by the

Davis-Bacon Act and thus described, are effects which

the government procurement agencies and government

contractors must accept, and to which the courts must

defer. Our petitioner has, of course, any number of con-

tractual, administrative, judicial and statutory remedies

in proceedings involving the government, for any uncer-

tainties, inequities and improprieties petitioner has sus-

tained or may hereafter suffer by reason of its contract.

II.

THE SUPREME COURT WILL CONSIDER ONLY

THE “QUESTION PRESENTED” BY THE PETI-

TIONER AND THOSE QUESTIONS FAIRLY COM-

PRISED THEREIN. THE QUESTION PRESENTED BY

PETITIONER CONCERNS CONTRACT INTERPRETA-

TION AND THE IMPACT OF THE DAVIS-BACON

ACT ON THE INTERPRETATION OF ITS GOVERN-

MENT CONTRACT. ARGUMENTS BY PETITIONER

TO THE EFFECT THAT RESPONDENT HAS NO

RIGHT OF ACTION UNDFi OR BY REASON OF

THE ACT, AND THAT RESPONDENT HAS FAILED

TO EXHAUST ADMINISTRATIVE REMEDIES, ARE

NOT SO FAIRLY COMPRISED AND HAVE ALREADY

BEEN RECENTLY CONSIDERED BY THIS COURT

TWICE IN RELATED LITIGATION.

Respondent and the respondent class respectfully sub-

mit that the question presented by petitioner in his with-

See, for example: (a) Contract Disputes Act of 1978,

41 U.S.C. §§601-613, P.L. 95-563, (b) Wunderlich Act, 41

U.S.C. §$§321-322, (c) 42 U.S.C. §7194(a)(b), providing

for Department of Energy adjustments to rules, regula-

tions and orders to prevent special hardship, inequity

or unfair distribution of burdens, (d) Disputes Clause,

AEC/ERDA/DOE regulations, 41 C.F.R. $9-7.802-5, (e)

Equitable Adjustments Clause, AEC/ERDA/DOE regula-

tions, 41 C.F.R. $9-1.5004-2.

ei ate

in Petition, does not fairly comprise certain arguments

which petitioner attempts at various points in the Peti-

tion. In addition, it is clear that the petitioner is in this

round-about and indirect manner, seeking to renew re-

cently unsuccessful attempts in a related case” to prevail

on those same arguments. Indeed, those recent attempts

have been terminated only last year, in 1978, with the

denial of the second petition for certiorari in that case.

These arguments may be characterized, briefly but ac-

curately, as the following: (a) that respondent and his

class have no implied right of action under or by rea-

son of the Davis-Bacon Act, and (b) that respondent and

his class have failed to exhaust administrative remedies.

The conclusion that these arguments are but repetitions

of identical claims so recently rejected, is not just that

of this respondent. The Seventh Circuit, in its opinion

in the instant case supporting its decision to reverse the

summary judgment allowed in the district court, re-

marked, inter alia (see Coutu v. Universities Research

Association, Inc., 595 F.2d 396, 397 (C.A. 7, 1979), and

Appendix A at A2):

“We held in McDaniel v. University of Chicago, 512

F.2d 583 (7th Cir. 1975), reaffirmed on remand, 548

F.2d 689 (7th Cir. 1977), certiorari denied, 434 U.S.

*% McDaniel v. University of Chicago, 512 F.2d 583

(C.A. 7, 1975), vacated and remanded “for further con-

sideration in light of SIPC v. Barbour, 421 U.S. 412, 95

S.Ct. 1733, 44 L.Ed.2d 263 (1975) and Cort v. Ash, 422

U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975)”, 423 U.S.

809, 96 S.Ct. 20, 46 L.Ed.2d 30 (1975), reaffirmed on re-

mand, 548 F.2d 689 (C.A. 7, 1977), certiorari denied, 434

U.S. 1033, 98 S.Ct. 765, 54 L.Ed.2d 780 (1978). Counsel

are the same in both the instant Coutu and the McDaniel

cases.

_—

1033, 98 S.Ct. 765, 54 L.Ed.2d 780, that employees

have an implied private right of action to sue for

wages due under the Act. Our decision in the pres-

ent case flows directly from the McDaniel opinions.

The complications arise only from the procedural

posture of the case and from defendant’s renewed

attempts to establish an exhaustion requirement.”

The “Question Presented” in the Petition to which this

brief in opposition responds, reads in full as follows

(petition, at 2):

“Whether the Court of Appeals, reversing the Dis-

trict Court, erroneously construed the Davis-Bacon

Act by holding that the District Court had juris-

diction thereunder to alter in favor of a third party

substantive terms of a federal contract which was

valid as between the contracting parties.”

That question concerns, and may be deemed to comprise

subsidiary questions dealing with, contract interpretation

and the impact of the Davis-Bacon Act on the interpreta-

tion of petitioner’s government contract. It certainly does

not comprise or suggest, even remotely, arguments con-

cerning the existence of an implied right of action or the

existence of an exhaustion requirement.

Respondent, individually and on behalf of the respon-

dent class, is prepared again to brief these arguments;

and respondent will continue to be prepared to brief them

as long and as many times as petitioner and its counsel

and the nature of the issues demand. But a respondent

should not be required to do so when the arguments are

but repetitions of identical claims so recently made and

rejected, when they are not reasonably subsumed under

a question actually presented by a petitioner seeking re-

view on writ of certiorari, and when this Court has di-

—_

rected that “Only the questions set forth in the petition

or fairly comprised therein will be considered by the

court” (see Supreme Court Rule 23-1(c))."

CONCLUSION

There are no special and important reasons for this

Court to grant certiorari in this cause. The Seventh Cir-

cuit has not rendered a decision in conflict with decisions

of this Court or of other courts of appeals; nor has it

decided an important question of federal law which has

not been, but should be, settled by this Court; nor has it

so far departed from the accepted and usual course of

judicial proceedings as to call for an exercise of this

Court’s power of supervision; nor are there other rea-

sons why the Court should grant the discretionary writ.

The Seventh Circuit was manifestly correct when it

ruled that summary judgment should not have been

granted against the respondent and the respondent class,

that the judgment dismissing the complaint be reversed,

and that the cause be remanded to the district court for

further proceedings.

*® Respondent submits, in addition, that the fact that

these arguments have been so recently and so authori-

tatively rejected—by the Court of Appeals for substance

and by the United States Supreme Court for review on

certiorari—forms additional support for respondent’s

osition that there are no special and important reasons

or the grant of certiorari in this case.

—30—

Respondent, individually and on behalf of his class, re-

quests that this Court deny the Petition for Writ of Cer-

tiorari to the United States Court of Appeals for the

Seventh Circuit.

Respectfully submitted,

Hueu B. Arnoip

DanieL N. Kansan

ARNOLD AND KapJAN

11 South LaSalle Street

Chicago, Illinois 60603

Rospert Jay Nye

Nye AND NYE

420 North Euclid Avenue

Oak Park, Illinois 60302

Attorneys for Respondent

Stanley E. Coutu, and

the Respondent Class.

October 10, 1979