In American Pavements, Inc. v. Ohio Department of Transportation, the Ohio Court of Claims granted summary judgment to ODOT, holding that its directive to a contractor to pay prevailing wages did not amount to a change in contract terms requiring compensation. The court ruled that the agency acted within its authority under Form FHWA-1273, which was incorporated into the contracts, and rejected the contractor's argument that the directive qualified as a change order under ODOT specifications.
American Pavements, Inc. (API) performed micro-surfacing work under multiple federally assisted highway construction contracts with ODOT. A dispute arose over whether API was required to pay Davis-Bacon prevailing wages to certain employees involved in operating paving machinery and working in nearby staging yards.
ODOT issued a written directive requiring API to pay prevailing wages to these employees. API complied but argued that the directive retroactively changed its contract obligations and warranted reimbursement as a change order. API later filed a complaint seeking damages and a declaratory judgment.
The contracts incorporated FHWA Form 1273, which provides that a contracting agency may take "any other action" deemed appropriate to enforce compliance with federal labor standards. Section IV of Form 1273 requires wage payments in accordance with classifications for work actually performed and permits withholding payments until violations cease.
API also relied on Section 101.03 of ODOT’s Construction and Material Specifications, which defines a "change order" as a written order altering contract terms or quantities and establishing payment adjustments. API argued that the directive to pay prevailing wages should be treated as such an order.
The court determined that API’s declaratory judgment claim was redundant of its breach of contract claim and analyzed both together. It concluded that ODOT’s directive did not alter the contract but enforced existing federal obligations incorporated through Form 1273.
Because the directive did not change any term or quantity under the contract, it did not meet the contractual definition of a change order. The court held that ODOT’s enforcement action was consistent with its regulatory authority and did not entitle API to additional compensation.
The court also noted that API had previously agreed to pay prevailing wages following communication with ODOT and the Department of Labor. Although API disputed the total back pay amount, it did not show that ODOT breached the contract or withheld payment without justification.
When working under federal-aid construction contracts, contractors must comply with Davis-Bacon prevailing wage requirements and related enforcement procedures. Our attorneys at Whitcomb, Selinsky, PC assist contractors with understanding federal labor standards, resolving wage classification disputes, and responding to government enforcement actions.