                                   Ausruv II.TEXAB
PRICE DANIEL
.4-I-    "p1-

                                      June 2 , 1940

   Hon. T. B. Warden                  opinion NO. v-594
   Board Of control
   Auetin, Texas                      Re: Zegality of payment of
                                          contractortsclaim for
                                          difference-between
                                          amounts paid to meet
                                          aotua1 prevailingwages
                                          and amrountsstipulated
                                          In publicworks .construo-
                                          tion contra& as prevall-
  2 .,                                    lng rage rktes.
   Dear sir:

             Your letter of May 4, 1948 and the file aub-
   mltted therewith apprise us of the following facts.
               On April 15, 1947, a contract was entered into
   by and betueen W. D. Anderson and the State of Texas,
   acting by and throiaghthe State Board of Control.    under
   the term3 of this contraat Hr. Anderson agreed to provide
   all the materials, includ%ng plumbing, heating and elec-
   trical rlrhg,    and perrorm all the work In the construc-
   tion of the Marine Laboratoq a8 shown b certain drawi s
   and 8 eclflcatlons whiah wm6 53ae a par t of the contrac Y .
   By A&$e       Ix   of   tha   oox&raot,     it   was mutually        agreed     that
   the smp to be p&Id far &ala work and material was 'tobe
   $77.800.00, subjeot to vrrioua additions and deductions
   specificallyprovided rer and not presently controverted.
                Article     XII 0r    the    aontract   reads      aa   r0ii0wa:
              '@MTICLJZ%II. The provisick of the pre-
         vailing wags law, R.B. Ho. 54, Chapter 45, dots
         of the Regular'Sesaloii'6fthe 4Srd Legl8latWe,
         ~111 be inseffect 09 thlrioontraqt.. Prevailing
         wagesscales by which the.adntractorwas govern-
         ed in bidding upon this work and rhloh will con-
         stitute the wage saalh  of the various classes
         of labor upon this work, and,upon uhlah the oon-
         traot price (hereinabovestated) is predicated,
         are as fo~llow8:
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Hon. T. B. Warden - Page'2 (V-594)



    Classification Per Hour Classification Per Hour
    AS SHOP m   SPEOIFICATION~FOR mum     GIBOFLITORY
         "The Contractor shall forfeit as a penalty
    to the State, ten ($10.00)dollars for each la-
    borer, work+n or meo$anlc~employed,for each
    calendar day, or portion thereof, such laborer,
    worlnnanor mechanic is paid less than the said
    stipulatedwtes for any work done under said
    contraat, by him or by any sub-contractorunder
    him."
          The wage rates embodied in ~thespeclflcatlons
were determinedby the Board of Control to w the general
prevailingrate of wages in the Rockport area, where the
work was to be performed, for each craft or type of work-
man or mmhanlc needed to execute the contract; and were
the same rates which were specified in the call for bids
on the aontract.
          In.your letter of May 4, 1948,,you state that
"shortly before this contraat was entered into inquiry
ooncerningwage rates was made of the Labor Coamlssioner
and we received a mimeographed sheet (not oertified)(,bear-
lng the purported wage rates~for the Rockport area. YOU
further state that on Maroh 6, 1948 (approximatelyone year
after the oontraot was made) the Department of Labor, ,act-
ing at the request of the attorney for W. D. Anderson and
Company, has advised you that the informationpreviously
furnished on,prevaillngwage rates was erroneoiaa and that
they have wg00a and ruffloientevldenor aonfa       the Tao-
tual wage rate in effect ln,(the~Boakport). . o wea in
March 1947.' The &arl.neLaboratoryhaa been~aompleted,and
w. D. Anderson Is olalming that the final ertlmate of the
+mount to be-paid under the oontract should lnolude the
sum of $3481005, $32%82 of suoh amount being the dlffer-
enoe between the actual prevafling wage rates which he paid
and the wage rates stipulatedin the spealfioatlonsas the
generally prevailing wage sates. One hundred twenty-eight
dollars and three cents Is olalmed,as the resulting addi-
tional amount pala~for Social Security and UnemploymentCwn-.
pensation Insurance and i$152.20as .theresulting additional
amount paid for Workmen8 Compensationand Public Llablllty
Insurance.     ,
          This claim is based on thenproposition that Arti-        ,'
cle XII of the contract (previouslyquoted) furnished an

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Hon. T. B. Warden - Page 3   (V-594)        *


erroneous wage scale,.tha&the contractor Fder.the law
and ifiaccordance with bfs ;zz;act was required to pays
th6 actual prevailingwage ~a , and .. that
                                         ^ .thXs~mutua1
mistake of Sict warrants a rerormatlon  or tne.contraCt
to cwer the sum-so expended.' Opinion No. O-5187 oS
the Attorney Ge,neral .supportsthis propositioti,andallow-
ed paymen% OS tislmllarcla~ In subs,tantlally   the-.same
fact sl+&ioni     '.
          You point out th@t':"should-thisclaim be paid,
then we must'+dmlt.thatany contract drawn incorporating
House,Blll 54 la always subject to thb contingencythat
an error arose with respeot to the prevailing rate bf
per~diem wages. . .W and the further possiblllty~that.ln
many Instances 'IS the clalm.ls allowed, . .,. the oon-
tract may exce,edthe appropriationfor such work.?
           Pursuant to.'yotirequest we hai* t&i&&en    a
 reexaminationof the pro~lsions of the atatutea *elating.
 to the rat6 of wages'.oSpersons employed In the construe-    ::
 tion OS publiC.works.'The provisions of H.B. No. 54, Ch.
.45, Acts of the Regul~L.S8asl~npf the 43rd.Legislature                     ..
'~?Pca~ied'as'Ar$. -SlS9&,V. C. S., and Art, 1681a,
           In.'thefollowlligexcerpt from Article S159a we
 h&e'unie&ored'the.ptioviaions which we regard as deter'     '_        .,
 'inlnatlve
          of the present queatldn:
          uSac* 1. Rot ldaa than the~generalprei-
     valling rate of per alem wage8 ror work of a
     sinular cMrao*oC In.tDA looality Lnwnlch t%e
     work Is perremd, and not lees than the gen-
     era* prevailing rate 0r per diem wages for le-
  .- gal holiday ~~~overtlme work, shall be paid '.
     to all laborera, workmen and meohanlca'employ-
     ea.by or on tamer
     b        bna3.r r
     c:tE '&nz d&at       ol'other
     vision of the Statei'engaged~inthe construe-




     county; city and oounty; oity, town, district
     or other political subdivisionof this State,
     or any officer or public body thereof, shall
     be deemed to be employed upon public woes
                                                        .   *

Hon. T. B. Warden - Page 4   (V-594)


          “Sec. 2.  The public body awarding any con-
     tract for public work on behalf of the State, or
     on behalf of any counts. cltv and countv. cftv.
     town, district br othei.'pollticalsubaiXsiOnV-
     thereof. or otherwise undertakina anv oublic
     work, shall ascertain the general PrevziiiGrate
     of uer diem wages in tne localitv in which the
    Boric la   to




    work, and it shall be.mandatorgupon the contrac-
    tor to whom the contract is'awarded,and upon
    bny suocontractorunder him, to pay not less than
    %he said specifiedrates to all laborers,work-
    men and mechanics employed by them in the execu-
    tion of the contract, The contractor shall Sor-
    felt as a penalty to the State, county, cimd
    county, city, town, district or'other politlcal
    subdlvision~onwhose behalf the~'oontra&. is made
    or awarded, Ten Dollars ($lO,OO)for e




          "sec. 3. The~contractorand each suboon-
     tract& shall kee   or cause to Abekept, an ac-
     curate recor
             --YmdL       the nawma and oceupmm
                "~~~c~iiT%~:~~~m;~=:~~*
                                 P        ag   P
     to each of such workers, . . . ~:
          %eo. 4. Any constructionor repair work
     done under contract, and paid forin whole or in
     part out of public funds, . a . shall be held to
     be ~publlc,works*within the meaning ofthis Act.
     The term Ilocalityin which the work is perform-
     edl shall be held to mean the county, aity and
  Hon. T. B. warden - Page 5   (V-594)


      County, 01~~ town, district or other poli-
      tical subdivialon of this State In which the
      building, highway, road, excavation,or oth-
      er struoture, project, development or.lm-
      provement Is situated in all cases in which
      the contract is awardedby the State, or any
      public body thereof, and shall be held to
      meanthe limits oSthe,oounty, city and coun-                .
      ty; city, town ~diatriator other political
      subdivisionson whose behall the.bontract is




            Appl ing the directions of the statute to this
 case, we find tLAt the Board of Control ascertained the
 "general prevailing rate" of per diem wages In the local-
 ity in which the work was to be performed for each type of
 workman needed to exeoute the contract. This determination
 of the prevailing wage rate was a power and a 'dutyconfer-
 red exclusively in this case upon the aboardof Control~inas-
 much as It was thevpublic body* awarding the contract.
 Southern Priaon Co..q. Rennels,.llO.S.W.2d 606. The stat-
 utedoes not prescrlDe any particular msthod for such ascer-
 tainment, ana'speclficallyprovides that the "general pre-
 vailing wage rate" Is the wrote determinedupon as auchxmte
 by the public body'awardlng tns aontract . . . .whoBe..dbcls-
 ion in the matter . . . (is) S$nal.". This rate was properly
 specified in the call SOr bids Sol?the.contraotand in the
 contract-1tselr. There was thereby Imposed upon.the con-~
 tractor an obllgatLon to pay enot'less thanthe sold speci-
 fied rates t&all laborera, workmen and meohanics employed
 by him in the execution of the oontract." It Is thus appar-
.ent that Article 5159a requires payment of a minimum wage
 rate, but thatthere is no inhibition against=        a great-
 er wage than the rates specified. In the event of nonper-
 formance of this provision requiring payment-of the stipu-
 lated minlmumwa~e rates, W:D. Anderson would have forfeit-
 ed to the State Ten Dollars ($10.00) for each . . . work-
 man..   . employed, for each calendar day or portion thereof;
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    Hon. T. B. Warden - Page 6   (V-594)


    such . . . workman . . . (was) paid less than the said
    stipulatedrates. . : .'I This is the only 01~11 penalty
    'providedfor the violation of~~theon1 obligation impos-
    ed upon the contractorby this prov  s on of the law, and
                                      -73
    therefore the only obligation Imposed upon Mr. Anderson
    by its Incorporationin A title XII of the contract was
    an obligation to pay not ]tesathan the wage rates etipu-
    lated.by the Board of Control; There is nothing in Arti-
    cle 5159a nor in the contract *hiti even suggests that
    the other part to the aontract agreed to pay any addi-
    tional amount & at the contractormight have-to pay to
    the laborers he.employed. It is a well known fact, and
    certainly one that should bm conrldered by any reasonably
    prudent contractor In making his bid,'that wages vary and
    that for,any number of reasons a contractor&ay desire or
    be forced to pay more than the stipulatedminimum rates.
    Several sections of A+tlcle 5159a anticipate such varl-
    antes. Section 3 reqtirea'the contractorto keep a rec-
    ord OS the "actual per diem wages paid" as contradistin-
    guished frommtipulated      general nrevailinarat&r




              The purpose of Ai;tiole5159a Is to "protect
    workmen . I . from being required; if they accept employ-
    ment, to work for less than the prevailingwages paid
          for the same class and character of work." South-                 ;
    &i &on     Coo-v. Rennela, 110‘8.W. 2d 606, 609. Seeal-
    so the emergency clause of H.B. 64, supra, expres$l .de-.,
    clarlng the need for an adequate law to protect warLen     ,~
    on-publicworks and prevent aontractora from taking ad-~
    vantage of industrialand economic conditions to reduoe
    wage levelsa We'thlnk it apparent that the Incorporation
    in the contract of the statute effectuatingthe determin-
    ed minimum wage rates In no wise constitutesa covenant
    by the contractingpublic body to pay the contractor any
    additionalamount Sn the event actual wages exoeed the
    stipulatedwage rates. Many other states have similar
    statutesrelating to the ,rateof wages of persons employ-                'C
    ed on public workso Various problems have arisen in con-
    nection with such statutes (see the Sollowing annotations:
    50 A.L.R. 1480; 81A.L.R. 349; 132 A.L.R. 1297; 144 A.L.R.
    1035); but in none of the reported cases has It been as-
    serted that the&r provisions gave what would be in effect
    a guarantee to the contractor of the rate of wag.eshewald
    have to pay to secure the labor necessary to complete the
    contract*
Hon. T. B. Warden - Page 7   (V-594)


          Being clearly at variance with the purpose of Ar-
ticle 5159a, and not being covered by any special provision
of the contract,we are of the opinion that a payment of
the additional amount here claimed would violate the provis-
ions of Article III, fl53 of the Constitutionof the State
of Texas, which reads, In part, as follows:
          "The Legislature shall have no power to
     grant, or to authoriee.anycounty oremunlci-
     pal authority to grant, any extra compensa-
     tion;fee or allowance to a . . . contractor
           after service has been rendered, or a
     EoAtGact entered into and performed In whole
     or in part; .' . .(I

and'also that part of Section 44,of the same article which
provides:
          "The Legislature shall~provideby law
     for the compensationof all officers, aer-
     vants, agents and public contractors,not
     provided for in this Constitution,but shall
     not grant.extra compensation to any officer,
     agent, servant, or public contractors,after
     such public servicesshall have been perform-
     ed or contract entered
                  . -. ,    into..for the perform-
     ante br tne same; . . .'I
      .
          For all these reasons the claim for additional
amounts expended for Insurance must likewise be denied, and
Opinion O-5187 is hereby overruled In so far as it is in
conflict with this opinion.
                         SUMMARY
          Where the general,prevailingwsge rates
     were determinedby the public body awarding
     public works construction contract and em-
     bodied In the contract aa the mInImum wage8
    ~to be paid by the eontractor for work done
     under the contract, aontractor's claim on oom-
     pletion of work for a cum additional to ~the
     agreed contract price, In the amaunt actual
     prevailing wages rates exceeded rates stipu-
     lated as general prevailing wage rates, oannot
Hon. T. B. Warden - Page 8        (V-594)


     be allowed; nor can the claim for reeulti%
     additIonal~Insurancecoverage co.3ts.

                                   youra very truly,
                         ATTCRliEYGENERALOFTEXA8

                                            c
                             m ~CLCCC
                                   ma. Marietta Creel
MC/JCP/wb                          Assistant




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