Guillermo A. Saavedra, Individually and Doing Business as Saagan Moving & Storage Company v. Raymond Donovan, Secretary of Labor
Opinion
Opinion
Wright, J.
The Service Contract Act of 1965, 41 U.S.C. §§ 351-358 (the Act), mandates minimum wages and fringe benefits for employees engaged in government contract work. Its purpose is to protect employees of government contractors. Before the Act, the federal government had been “subsidizing” substandard levels of compensation by awarding contracts to those who were able to bid low by paying less. American Federation of Government Employees, Local 1668 v. Dunn, 561 F.2d 1310,1312 (9th Cir.1977).
The Act requires the Secretary of Labor (Secretary) to determine wages and benefits by job category and geographic area (“wage determinations”). Contracts subject to the Act must incorporate the appropriate wage determinations. 41 U.S.C. § 351 (a), (b).
Plaintiff-appellant Saavedra, dba Saagan Moving and Storage Co., was awarded two government contracts which were subject to the Act. He is not proficient in English and did not fully understand the contracts or even read them thoroughly. He based his bid for the first contract on an irrelevant set of figures occurring early in that document. Being unaware that he had to provide fringe benefits, he failed to do so.