B-217725, AUG 12, 1985, OFFICE OF GENERAL COUNSEL

B-217725: Aug 12, 1985

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IT WAS TAKING NO FURTHER ACTION (I.E. WE FIND THAT THE UNDERPAYMENT MAY HAVE RESULTED FROM LEGITIMATE DISAGREEMENT CONCERNING CLASSIFICATION AND MAY NOT HAVE BEEN INTENTIONAL. THE CONTRACTOR WILL NOT BE DEBARRED UNDER THE ACT. THE DEPARTMENT OF LABOR (DOL) WAS TAKING NO FURTHER ACTION. THIS CONTRACT WAS SUBJECT TO THE DAVIS- BACON ACT REQUIREMENTS THAT CERTAIN MINIMUM WAGES BE PAID. THE CONTRACTOR WAS REQUIRED TO PAY THESE WAGES BASED UPON THE CLASSIFICATION OF WORK ACTUALLY PERFORMED. THESE EMPLOYEES WERE CLASSIFIED AS "ROOFER'S HELPER. DOL WAS TAKING NO FURTHER ACTION. THE DAVIS-BACON ACT PROVIDES THAT THE COMPTROLLER GENERAL IS TO DEBAR PERSONS OR FIRMS WHOM HE HAS FOUND TO HAVE DISREGARDED THEIR OBLIGATIONS TO EMPLOYEES UNDER THE ACT. 40 U.S.C.

B-217725, AUG 12, 1985, OFFICE OF GENERAL COUNSEL

BIDDERS - DEBARMENT - LABOR STIPULATION VIOLATIONS - DAVIS-BACON ACT WAGE UNDERPAYMENTS - DEBARMENT NOT REQUIRED DIGEST: THE DEPARTMENT OF LABOR STATED THAT, IN VIEW OF THE CIRCUMSTANCES, IT WAS TAKING NO FURTHER ACTION (I.E., DEBARMENT) AGAINST A CONTRACTOR FOR VIOLATIONS OF THE DAVIS-BACON ACT. BASED ON OUR INDEPENDENT REVIEW OF THE RECORD, WE CONCLUDE THAT THE CONTRACTOR UNDERPAID EMPLOYEES, BUT THE RECORD DOES NOT CONTAIN SUFFICIENT EVIDENCE OF WILLFUL VIOLATIONS OF THE LABOR STANDARDS PROVISIONS OF THE ACT TO WARRANT DEBARMENT. RATHER, WE FIND THAT THE UNDERPAYMENT MAY HAVE RESULTED FROM LEGITIMATE DISAGREEMENT CONCERNING CLASSIFICATION AND MAY NOT HAVE BEEN INTENTIONAL. THEREFORE, THE CONTRACTOR WILL NOT BE DEBARRED UNDER THE ACT.

SYLVESTER L. GREEN, DIRECTOR: CONTRACT STANDARDS OPERATIONS U.S. DEPARTMENT OF LABOR ROOM S 3518 200 CONSTITUTION AVENUE, N.W. WASHINGTON, D.C. 20210

SUBJECT: PRIME ROOFING, INC. BURLINGAME, CALIFORNIA

CONTRACT NO. DAAG10-78-C-0812

YOUR FILE NO. CAL-83-329

BY A LETTER DATED MAY 22, 1984, YOU REQUESTED THAT WE DISTRIBUTE TO WAGE CLAIMANTS FUNDS WITHHELD FROM PRIME ROOFING, INC. (PRIME ROOFING), FOR VIOLATIONS OF THE DAVIS-BACON ACT, 40 U.S.C. SECS. 276A TO 276A-5 (1982). AS TO WHETHER PRIME ROOFING SHOULD BE PLACED ON THE INELIGIBLE BIDDERS LIST FOR THESE VIOLATIONS, YOU CONCLUDED THAT IN VIEW OF THE CIRCUMSTANCES, THE DEPARTMENT OF LABOR (DOL) WAS TAKING NO FURTHER ACTION.

PRIME ROOFING PERFORMED WORK UNDER CONTRACT NUMBER DAAG10-78-C-0812 WITH THE UNITED STATES ARMY, DOING ROOFING REPAIR AND REPLACEMENT AT SHARPE ARMY DEPOT, LATHROP, CALIFORNIA. THIS CONTRACT WAS SUBJECT TO THE DAVIS- BACON ACT REQUIREMENTS THAT CERTAIN MINIMUM WAGES BE PAID. FURTHER, PURSUANT TO 29 C.F.R. SEC. 5.5(A) (1984), THE CONTRACTOR WAS REQUIRED TO PAY THESE WAGES BASED UPON THE CLASSIFICATION OF WORK ACTUALLY PERFORMED-- EXCEPT FOR CERTAIN APPRENTICES AND TRAINEES NOT INVOLVED HERE.

THE DOL FOUND AS A RESULT OF AN INVESTIGATION THAT THE CONTRACTOR MISCLASSIFIED EMPLOYEES PERFORMING WORK UNDER THIS CONTRACT. THESE EMPLOYEES WERE CLASSIFIED AS "ROOFER'S HELPER," RATHER THAN THE APPROPRIATE CLASSIFICATION: "ROOFER." BY AN AUTHORIZATION DATED AUGUST 12, 1983, PRIME ROOFING AGREED TO THE PAYMENT OF FUNDS WITHHELD UNDER THE ACT TO THE WAGE CLAIMANTS. YOU CONCLUDED THAT IN VIEW OF THE CIRCUMSTANCES, DOL WAS TAKING NO FURTHER ACTION. FOR THE REASON THAT FOLLOWS, WE CONCUR THAT PRIME ROOFING SHOULD NOT BE DEBARRED.

THE DAVIS-BACON ACT PROVIDES THAT THE COMPTROLLER GENERAL IS TO DEBAR PERSONS OR FIRMS WHOM HE HAS FOUND TO HAVE DISREGARDED THEIR OBLIGATIONS TO EMPLOYEES UNDER THE ACT. 40 U.S.C. SEC. 276A-2. IN CIRCULAR LETTER B-3368, MARCH 19, 1957, WE DISTINGUISHED BETWEEN "TECHNICAL VIOLATIONS" WHICH RESULT FROM INADVERTENCE OR LEGITIMATE DISAGREEMENT CONCERNING CLASSIFICATION, AND "SUBSTANTIAL VIOLATIONS" WHICH ARE INTENTIONAL AS DEMONSTRATED BY BAD FAITH OR GROSS CARELESSNESS IN OBSERVING OBLIGATIONS TO EMPLOYEES WITH RESPECT TO THE MINIMUM WAGE PROVISIONS OF THE DAVIS- BACON ACT. LEGITIMATE DISAGREEMENT CONCERNING CLASSIFICATION IS A BASIS FOR DECIDING NOT TO DEBAR UNDER THE DAVIS-BACON ACT.

BASED ON OUR INDEPENDENT REVIEW OF THE RECORD, WE CONCLUDE THAT THERE WAS LEGITIMATE DISAGREEMENT CONCERNING CLASSIFICATION. THE INVESTIGATIVE REPORT STATES THAT PRIME ROOFING INTENTIONALLY MISCLASSIFIED THESE EMPLOYEES: IT USED THE "ROOFER'S HELPER" CLASSIFICATION EVEN AFTER ITS REQUEST TO USE THAT CLASSIFICATION HAD BEEN DENIED BY THE AGENCY CONTRACTING OFFICER. THE INVESTIGATIVE REPORT CONCLUDES THAT PRIME ROOFING MAKES A PRACTICE OF GETTING CONTRACTS BASED ON "ROOFER" CLASSIFICATIONS, AND THEN PAYS SOME WORKERS AS "ROOFER'S HELPER." THERE IS NO SUPPORT IN THE RECORD FOR THIS CONCLUSION. NOR DID PRIME ROOFING CONCEAL ITS "ROOFER'S HELPER" CLASSIFICATION. ALSO, THE INVESTIGATIVE REPORT STATES THAT PRIME ROOFING ASSERTED THAT IT WAS PURSUING THE CLASSIFICATION ISSUE ON OTHER CONTRACTS AT HIGHER LEVELS WITHIN THE CONTRACTING AGENCY. THIS RECORD DOES NOT CONTAIN SUFFICIENT EVIDENCE OF WILLFUL VIOLATION OF THE LABOR STANDARDS PROVISIONS OF THE ACT TO WARRANT DEBARMENT, AS OPPOSED TO LEGITIMATE DISAGREEMENT CONCERNING CLASSIFICATION. THEREFORE, WE DECLINE TO DEBAR PRIME ROOFING.

FURTHER, WE FIND NO REASON TO OBJECT TO THE PAYMENT OF THE WAGE CLAIMANTS INVOLVED, ESPECIALLY SINCE THERE IS AN AUTHORIZATION BY PRIME ROOFING TO PAY THESE WAGE CLAIMS. ACCORDINGLY, THE FUNDS ON DEPOSIT WITH OUR OFFICE- $16,109.25-- WILL BE DISBURSED TO THE WAGE CLAIMANTS IN ACCORDANCE WITH ESTABLISHED PROCEDURES.

TO: GROUP DIRECTOR, CLAIMS GROUP/GGD - GERALD R. MILLER

SUBJECT: PRIME ROOFING, INC. B-217725-O.M. (A DAVIS-BACON ACT CASE)

RETURNED HEREWITH IS YOUR FILE Z-2818451(2), WHICH INVOLVES DAVIS BACON ACT WAGE CLAIMS AGAINST PRIME ROOFING, INC., ARISING UNDER CONTRACT NUMBER DAAG10-78-C-0812 WITH THE UNITED STATES ARMY. ALSO, ATTACHED IS OUR LETTER OF TODAY FOR YOUR IMPLEMENTATION. THE DEPARTMENT OF LABOR SHOULD BE NOTIFIED WHEN THE FUNDS HAVE BEEN DISBURSED. ATTACHMENTS)

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