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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c .
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$152.20as .theresulting additional
amount paid for Workmen8 Compensationand Public Llablllty
Insurance. ,
This claim is based on thenproposition that Arti- ,'
cle XII of the contract (previouslyquoted) furnished an
.
.
Hon. T. B. Warden - Page 3 (V-594) *
erroneous wage scale,.tha&the contractor Fder.the law
and ifiaccordance with bfs ;zz;act was required to pays
th6 actual prevailingwage ~a , and .. that
^ .thXs~mutua1
mistake of Sict warrants a rerormatlon or tne.contraCt
to cwer the sum-so expended.' Opinion No. O-5187 oS
the Attorney Ge,neral .supportsthis propositioti,andallow-
ed paymen% OS tislmllarcla~ In subs,tantlally the-.same
fact sl+&ioni '.
You point out th@t':"should-thisclaim be paid,
then we must'+dmlt.thatany contract drawn incorporating
House,Blll 54 la always subject to thb contingencythat
an error arose with respeot to the prevailing rate bf
per~diem wages. . .W and the further possiblllty~that.ln
many Instances 'IS the clalm.ls allowed, . .,. the oon-
tract may exce,edthe appropriationfor such work.?
Pursuant to.'yotirequest we hai* t&i&&en a
reexaminationof the pro~lsions of the atatutea *elating.
to the rat6 of wages'.oSpersons employed In the construe- ::
tion OS publiC.works.'The provisions of H.B. No. 54, Ch.
.45, Acts of the Regul~L.S8asl~npf the 43rd.Legislature ..
'~?Pca~ied'as'Ar$. -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
77J!i.&9
ATTOFOBY 0-L
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