Computer Sciences Corporation Workers Employed at Pratt & Whitney; West Palm Beach, FL; Notice of Negative Determination Regarding Application for Reconsideration

By application postmarked September 5, 2003, petitioners requested administrative reconsideration of the Department's negative determination regarding eligibility for workers and former workers of the subject firm to apply for Trade Adjustment Assistance (TAA). The denial notice applicable to workers of Computer Sciences Corporation employed at Pratt & Whitney, West Palm Beach, Florida was signed on August 4, 2003, and published in the Federal Register on August 18, 2003 (68 FR 49522).

Pursuant to 29 CFR 90.18(c) reconsideration may be granted under the following circumstances:

(1) If it appears on the basis of facts not previously considered that the determination complained of was erroneous;

(2) if it appears that the determination complained of was based on a mistake in the determination of facts not previously considered; or

(3) if in the opinion of the Certifying Officer, a mis-interpretation of facts or of the law justified reconsideration of the decision.

The TAA petition was filed on behalf of workers at Computer Sciences Corporation employed at Pratt & Whitney, West Palm Beach, Florida engaged in information technology services for Pratt & Whitney. The petition was denied because the petitioning workers did not produce an article within the meaning of Section 222 of the Act.

In the request for reconsideration, the petitioners alleged that the petitioning worker group did produce a product, describing their function specifically as “writing software programs.” The petitioner also infers that the fact that these software programs are copyrighted is proof of their status as a product and not a service. Further conversations with the petitioners indicated that they were coordinating a shift of work functions to India and Connecticut prior to their layoff.

A conversation with the company official indicated that some of the petitioning workers performed computer “source coding” for a mainframe owned by Pratt & Whitney, and that this mainframe was moved to Connecticut, necessitating a separation for workers at the West Palm Beach facility. The official also stated that other workers were engaged in creating design specifications for Pratt & Whitney's SAP applications, and that some “source coding services” were performed in India.

The Department has traditionally deemed custom software design and programming as a service. Electronically generated software code is not a tangible commodity. This is supported by the fact that they are not marketable products listed on the Harmonized Tariff Schedule of the United States (HTS), published by the United States International Trade Commission (USITC), Office of Tariff Affairs and Trade Agreements, which describes all articles imported to or exported from the United States.

Further support that Computer Sciences Corporation workers in West Palm Beach did not produce an article is found in examining what items are subject to a duty. Throughout the Trade Act, an article is often referenced as something that can be subject to a duty. To be subject to a duty on a tariff schedule, an article will have a value that makes it marketable, fungible, and interchangeable for commercial purposes.

However, although a wide variety of tangible products are described as articles and characterized as dutiable in the HTS, customized software code such as that created by the petitioning worker group is not listed in the HTS. Such items are not the type of work products that customs officials inspect and that the Trade Adjustment Assistance program was generally designed to address.

Further, a discussion with an official at the U.S. Customs Service clarified that, when software is considered dutiable, the tariff is based on the cost of the media (such as paper, CD, or computer disk) and not on the value of the information contained on the media. As the customized computer code in question for this worker group is transmitted electronically, no value could be assessed in terms of import impact.

In addition, the 2002 edition of the North American Industrial Classification System (NAICS), a standard used by the Department to categorize products and services, designates “establishments primarily engaged in writing, modifying, testing, and supporting software to meet the needs of a particular customer” as “Custom Computer Programming Services” (NAICS 541511).

Only in very limited instances are service workers certified for TAA, namely the worker separations must be caused by a reduced demand for their services from a parent or controlling firm or subdivision whose workers produce an article and who are currently under certification for TAA.

Conclusion

After review of the application and investigative findings, I conclude that there has been no error or misinterpretation of the law or of the facts which would justify reconsideration of the Department of Labor's prior decision. Accordingly, the application is denied.