CBCA 7769

DENIED: April 23, 2024 CBCA 7769, 7911 DIDLAKE, INC., Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Charlotte R. Rosen of Odin Feldman Pittleman PC, Reston, VA, counsel for Appellant. Michael Converse, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges SHERIDAN and CHADWICK. SHERIDAN, Board Judge. Didlake, Inc. (Didlake) holds a multi-year contract with the General Services Administration (GSA) to provide janitorial and related services at the United States Food and Drug Administration (FDA) White Oak campus in Maryland. Didlake’s appeals pose the questions as to (1) whether an increase in the local (county) minimum wage applies to the contract, as opposed to a Department of Labor (DOL) wage determination, and (2) if so, when the wage increase became applicable. Didlake elected the accelerated procedure of Board Rule 53 (48 CFR 6101.53 (2023)) and submitted the case on the written record under Rule 19. We deny the appeals because the county’s implementation of a minimum wage did not entitle Didlake to a price adjustment. CBCA 7769, 7911 2 Background In November 2017, Montgomery County, Maryland, the jurisdiction in which the FDA White Oak campus is located, enacted a statute addressing minimum wage rates for several jobs, including janitorial services, which are the subject of this contract. See Montgomery County, Md., County Code, ch. 27 § 68 (2017). This was not an issue until the wage rate of janitors rose to $15.65 per hour, effective July 1, 2023, to be adjusted on July 1 of each year. When that happened, Didlake demanded to be paid the higher $15.65 county wage rate instead of the lower wage rate of $15.40 per hour for janitors under DOL WD [Wage Determination]-2015-4269, Revision 17 (Dec. 27, 2021) (DOL Revision 17). Didlake’s contract was awarded through the Ability One program for people with disabilities. It provides for a base year beginning on March 1, 2022, and four option years, plus an optional six-month extension after the fourth follow-on year. The contract is firm- fixed-priced and “performance based,” meaning that Didlake is required to satisfy performance standards rather than applying any specified approach. The contract is subject to the Service Contract Labor Standards (SCLS), formerly known as the Service Contract Act (SCA), and the Fair Labor Standards Act (FLSA). The contract incorporates Federal Acquisition Regulation (FAR) clauses 52.222-41 and 52.222-43 (48 CFR 52.222-41, -43 (2022)), which implement the SCLS and FLSA. In addition, the contract includes the prevailing DOL wage determination for Montgomery County, Maryland. DOL Revision 17. The DOL wage determination provided for a rate of $15.40 per hour for service employees classified as janitors, the only classification of SCLS-covered employees that Didlake utilizes for this contract. Didlake’s proposal, which was incorporated into the contract, used the hourly rate of $15.40 to develop its price. We see no reference to the Montgomery County minimum wage rate in the contract. Section I, of the contract, titled “Contract Clauses,” details the terms and conditions of the contract and makes extensive reference to both the FAR and the General Services Administration Regulation/Manual (GSAR/M), including FAR 52.222-43, titled “Fair Labor Standards Act and Service Contract Act - Price Adjustment (Multiple Year and Option Contracts). As its title suggests, this FAR clause details the authority and process for adjusting the contract price on account of the requirements of the FLSA and SCLS. In another section, titled “Supplemental Terms and Conditions,” the contract “incorporates” the then-latest, applicable DOL wage determination, DOL Revision 17. This wage determination details the applicable wage rates under the contract at the time of award, including $15.40 per hour for the janitor classification. On June 3, 2022, Curtis Salter, a Didlake officer, emailed the contracting officer, stating that effective July 1, 2022, Didlake would be subject to a minimum wage of $15.65 CBCA 7769, 7911 3 per hour in Montgomery County. Mr. Salter added that Didlake planned to submit a request to GSA for this increase.