B-207659.OM., OCT 22, 1982

B-207659.OM., OCT 22, 1982

PRECIS-UNAVAILABLE

THE COMPTROLLER GENERAL:

WE ARE FORWARDING THE FILE PERTAINING TO THE APPARENT VIOLATIONS OF THE DAVIS-BACON ACT, 40 U.S.C. 276A AND THE CONTRACT WORK HOURS AND SAFETY STANDARDS ACT, 40 U.S.C. 327 ET SEQ., BY RHODES EXCAVATING COMPANY, WHICH PERFORMED WORK UNDER THE GENERAL SERVICES ADMINISTRATION CONTRACT NOS. GS- 04B-16574(NEG)(Y), AND GS-04B-16730(NEG)(Y), AT FEDERAL CORRECTIONAL INSTITUTE, TALLADEGA, ALABAMA.

DETAILS OF THE VIOLATIONS AND ADMINISTRATIVE RECOMMENDATIONS CONCERNING DEBARMENT ARE CONTAINED IN THE ATTACHED INVESTIGATIVE REPORT AND DEPARTMENT OF LABOR TRANSMITTAL LETTER.

WE PROPOSE, WITH YOUR APPROVAL, TO DISBURSE THE $3,447.62 ON DEPOSIT HERE TO THE 16 AGGRIEVED WORKERS IN ACCORDANCE WITH ESTABLISHED PROCEDURES. OUR PROPOSAL AND THE MATTER OF WHETHER THE CONTRACTOR'S NAME SHOULD BE PLACED ON THE DEBARRED BIDDERS LIST FOR VIOLATIONS UNDER THE DAVIS-BACON ACT ARE FORWARDED FOR YOUR CONSIDERATION AND INSTRUCTIONS.

FOR FURTHER INFORMATION, PLEASE CONTACT MS. LILLIE JORDAN ON EXTENSION 53218.

INDORSEMENT

ASSOCIATE DIRECTOR-AFMD, CLAIMS GROUP

RETURNED. THE EVIDENCE OF RECORD IS SUFFICIENT TO ESTABLISH THAT RHODES EXCAVATING COMPANY, AN 8(A) SMALL BUSINESS SUBCONTRACTOR, UNDERPAID THE EMPLOYEES IN QUESTION WHILE PERFORMING GENERAL SERVICES ADMINISTRATION CONTRACT NOS. GS-04-B-16574 AND GS-04-B-16730. THE RECORD INDICATES THAT EMPLOYEES ON BOTH CONTRACTS WERE UNDERPAID IN VIOLATION OF BOTH THE DAVIS- BACON ACT, 40 U.S.C. SEC. 276A (1976), AND THE CONTRACT WORK HOURS AND SAFETY STANDARDS ACT, 40 U.S.C. SEC. 327 ET SEQ. (1976). HOWEVER, WE NOTE THAT FUNDS WERE WITHHELD FROM PAYMENTS DUE UNDER CONTRACT NO. GS-04-B- 16730 ONLY, FINAL PAYMENT ON CONTRACT NO. GS-04-B-16474 HAVING BEEN MADE PRIOR TO DISCOVERY OF THE UNDERPAYMENTS ON THAT CONTRACT.

WE HAVE HELD THAT THE GOVERNMENT CANNOT WITHHOLD FROM A CONTRACTOR SUMS DUE UNDER ONE CONTRACT TO SATISFY CLAIMS OF UNDERPAID LABORERS FOR WORK IN CONNECTION WITH PERFORMANCE OF A DIFFERENT CONTRACT BY THE SAME CONTRACTOR. VICTOR WELSH AND LARRY CARTER, B-187142, DECEMBER 28, 1976, 76-2 CPD 539. THE BASIS FOR THIS CONCLUSION IS THE HOLDING IN WHITNEY BROTHERS PLUMBING AND HEATING, INC. V. UNITED STATES, 224 F.SUPP. 860 (1963), TO THE EFFECT THAT THE DAVIS-BACON ACT DOES NOT AUTHORIZE PAYMENT OF UNDERPAID WORKERS FROM FUNDS WITHHELD FROM CONTRACTS OTHER THAN THOSE UNDER WHICH THE UNDERPAYMENTS WERE FOUND. ALSO, WE HAVE APPLIED THE SAME PRINCIPLE TO THE CONTRACT WORK HOURS AND SAFETY STANDARDS ACT, 40 U.S.C. SEC. 327-332 (1976). SEE 48 COMP.GEN. 387 (1968), AND B-170784, FEBRUARY 17, 1971. THERE IS NO LEGAL AUTHORITY TO SATISFY THE CLAIMS OF THOSE WORKERS, WHO WERE UNDER PAID WHILE WORKING UNDER CONTRACT NO. GS-04-B- 16574, FROM THE FUNDS PRESENTLY ON DEPOSIT WITH YOUR OFFICE SINCE THOSE FUNDS WERE WITHHELD FROM SUMS DUE RHODES UNDER CONTRACT NO. GS-04-B- 16730. HOWEVER, THE FUNDS ON DEPOSIT WITH YOUR OFFICE MAY BE DISBURSED TO THOSE EMPLOYEES WHO WERE UNDERPAID WHILE PERFORMING UNDER CONTRACT NO. GS- 04-B-16730, THE CONTRACT FROM WHICH THE FUNDS WERE WITHHELD, IN ACCORDANCE WITH ESTABLISHED PROCEDURES. THE BALANCE OF THE FUNDS SHOULD BE RETURNED TO THE GENERAL SERVICES ADMINISTRATION, RATHER THAN TO THE SUBCONTRACTOR, FOR APPROPRIATE DISPOSITION, SINCE IT APPEARS THERE MAY BE OTHER CLAIMS AGAINST RHODES WHICH PROPERLY ARE FOR SETOFF.

CONCERNING THE QUESTION OF WHETHER DEBARMENT SANCTIONS SHOULD BE IMPOSED AGAINST RHODES, WE ARE OF THE VIEW THAT DEBARMENT IS NOT WARRANTED SINCE IT HAS BEEN IN EXCESS OF 5 YEARS SINCE THE VIOLATIONS OCCURRED. IF WE WERE TO INITIATE DEBARMENT PROCEEDINGS AT THIS TIME, DUE PROCESS WOULD HAVE TO BE ACCORDED RHODES. DUE PROCESS IN THIS CASE WOULD ENTAIL, AT THE MINIMUM, NOTICE AND SOME SORT OF HEARING WHICH WOULD FURTHER DELAY PAYMENT TO UNDERPAID WORKERS. SEE B-205949-O.M., MARCH 29, 1982. THE DEPARTMENT OF LABOR DID NOT RECOMMEND IMPOSITION OF DEBARMENT SANCTIONS.