Government Contracts Back Pay Reimbursement Claim Was Not Within DOL’s Jurisdiction
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Tuesday, January 8, 2019

Back Pay Reimbursement Claim Was Not Within DOL’s Jurisdiction

By Government Contracts Editorial Staff

The Armed Services Board of Contract Appeals did not dismiss, for lack of jurisdiction, an appeal from a contracting officer’s final decision denying the contractor’s claim for reimbursement of back pay arising out of a contract for fire protection services, because the contractor did not seek a wage determination or other ruling on labor standards, and there was no relevant Department of Labor administrative process to complete. In moving to dismiss, the government contended the claim was foreclosed by the contract’s labor standards requirements, which vested DOL with exclusive jurisdiction to entertain disputes concerning the requirements. Pursuant to FAR 52.222-41(t), DOL, not the board, possesses jurisdiction to entertain “disputes concerning labor standards requirements.” According to the government, labor standards for federal service contracts include matters involving overtime compensation for service employees. The contractor countered the dispute did not concern the labor standards requirements applicable to the contract, but rather the government’s obligation to reimburse the contractor for costs incurred pursuant to an arbitration award under a collective bargaining agreement with its unionized employees. According to the contractor, any dispute involving labor standards requirements already had been resolved in favor of the unionized employees, and the only remaining question was whether the government was required to reimburse the contractor for costs incurred pursuant to the arbitration award.

No Underlying Labor Dispute. The board agreed that the appeal did not involve a “dispute[] concerning labor standards requirements,” as that term is used in FAR 52.222-41(t), because the underlying labor dispute—which concerned entitlement to overtime pay under the CBA—was not subject to the procedures set forth at 29 CFR Parts 4, 6, and 8 and therefore fell outside the scope of FAR 52.222-41(t). Moreover, even if FAR 52.222-41(t) did apply, there was no basis to conclude the board’s jurisdiction was premature, because the underlying labor dispute already had been resolved pursuant to the terms of the CBA. In the absence of an underlying labor dispute, FAR 52.222-41(t) was not implicated and any remaining dispute, including entitlement to reimbursement for allowable costs pursuant to FAR 52.216-7, was subject to the contract’s Disputes clause. (Centerra Group, LLC, ASBCA, ¶95,638).

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