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August 27, 1974

Curtiss-Wright Corporation, Plaintiff
John L. McLucas, Secretary of the Air Force, Defendant, and Southwest Airmotive Company, a division of Cooper Airmotive, Inc., Intervenor-Defendant

Coolahan, D.J.

The opinion of the court was delivered by: COOLAHAN

In its earlier opinion in this action, Curtiss-Wright Corp. v. McLucas, 364 F. Supp. 750 (D.N.J. 1973), this Court held that plaintiff had failed to show violations of the Armed Services Procurement Act by the Air Force, 10 U.S.C. § 2304 et seq., in the formulation of contract No. F34601-73-D-1444. The Court further determined that the Secretary of Labor (Secretary) was the proper official to review the contract to determine whether it was subject to the Service Contract Act (SCA), 41 U.S.C. § 351 et seq. The opinion of the Court intimated that a finding by the Secretary that the SCA was applicable would annul the contract at issue (364 F. Supp. at 774):

. . . there exists a possibility that plaintiff could ultimately succeed in gaining a declaration of coverage under the Service Contract Act, which, in effect, would be a declaration that the contract as presently constituted, without statements of wage and benefits as required by the Act, 41 U.S.C. § 351(a)(1), (2), is illegal on its face.

 And earlier in the opinion it is stated (364 F. Supp. at 772):

Had the Secretary issued a decision as to the particular contract at hand, the Court would have been bound to accept his conclusion.

 The instant motions were prompted by the decision of the Secretary of March 19, 1974 holding contract No. F34601-73-D-1444 to be subject in part to the SCA. The opinion stated:

we conclude that none of the work in performing this contract which is done prior to the selection of the parts for assembly into particular engines is work in accordance with the provisions of the Walsh-Healey Act, within the meaning of Section 7(2) of the Service Contract Act. All the work not within such exemption is, as previously stated, subject to the Service Contract and the wage determinations made thereunder. *fn1"

 On the strength of this ruling and this Court's earlier opinion, plaintiff Curtiss-Wright has moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Intervenor-defendant Southwest Airmotive and the Air Force have also made motions to dismiss the action pursuant to Rule 12(b) (6) of the Federal Rules of Civil Procedure or, in the alternative, for summary judgment.

 The central issue before the Court is whether it should accept a newly argued legal theory advanced by the Air Force and Southwest Airmotive (defendants) and rule in their favor, irrespective of the decision of the Department of Labor. Essentially, defendants contend that annulment of the contract is not a legally required consequence of the Secretary's decision. *fn2" It is averred that the SCA can be lawfully enforced through modification of the contract to reflect the ruling of the Secretary.

 At the outset, this Court recognizes that the language from its earlier opinion set forth above could be interpreted to mean that the March 19, 1974 opinion of the Secretary should automatically trigger summary judgment for plaintiff. It is incumbent upon this Court, however, to address the new issues defendants have introduced. It is not infrequently the responsibility of courts to "recede from the implications of . . . dicta in . . . earlier cases" when being "squarely presented" with a new issue. NLRB v. Boeing Co., 412 U.S. 67, 72, 36 L. Ed. 2d 752, 93 S. Ct. 1952 (1973). A reconsideration on new grounds of the summary judgment motions of defendants does not moot the discussion of the SCA in the earlier opinion of this Court or the decision of this Court to refer the question of SCA coverage to the Secretary. A determination by the Secretary that the SCA did not apply to the instant contract would have obviated the need for this Court to consider the issues now before it.

 Defendants opine that the instant contract is valid unless the Air Force violated 29 C.F.R. § 4.4(a), which provides:

Not less than 30 days prior to any invitation for bids, request for proposals, or commencement of negotiations for any contract exceeding $2,500 which may be subject to the Act, the contracting agency shall file with the Office of Special Wage Standards, Employment Standards Administration, Department of Labor, its notice of intention to make a service contract. Such notice shall be submitted on Standard Form 98, Notice of Intention to Make a Service Contract, which shall be completed in accordance with the instructions provided and shall be supplemented by the information required under paragraphs (b) and (c) of this section.

 Defendants would have this Court conclude, as did the Comptroller General in the Lockheed Protest, n. 2, supra, that the Air Force contract officer in charge of reviewing the instant contract made a good faith decision that it was not one which "may be subject" to the provisions of the SCA. In support of this argument, defendants cite a footnote in this Court's earlier opinion which stated that it was the view of the Court that the Air Force had not acted unreasonably (364 F. Supp. at 772 n. 21):

It should be emphasized that in no way whatsoever does this Court intimate any wrongdoing or bad faith on the part of Air Force personnel in determining the application of the Service Contract Act to contracts for jet engine overhaul, repair, modification or maintenance. In the earlier years of the Act, coverage under the Act was mooted by the Secretary of Labor's nonissuance of wage and benefits determinations. The problem of dual coverage under the Service Contract Act and Walsh-Healey Act, an extremely ...

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