B-151147, APR. 12, 1963

B-151147, APR. 12, 1963

TO MR. CHRIST KALLAS, D.B.A; DIXON INDUSTRIAL TRACK CONSTRUCTION COMPANY:

ATTACHED IS A COPY OF OUR FINDING OF TODAY THAT CHRIST KALLAS, DOING BUSINESS AS DIXON INDUSTRIAL TRACK CONSTRUCTION COMPANY, HAS DISREGARDED OBLIGATIONS TO EMPLOYEES WITHIN THE MEANING OF THE DAVIS BACON ACT, 40 U.S.C. 276A, IN THE PERFORMANCE OF CONTRACT NBY-19955, FOR CONSTRUCTION OF A POLARIS MISSILE ASSEMBLY FACILITY AT THE NAVAL WEAPONS ANNEX, CHARLESTON, SOUTH CAROLINA.

PURSUANT TO THE PROVISIONS OF SECTION 3 (A) OF THE ACT, THESE NAMES WILL BE INCLUDED ON A LIST FOR PUBLICATION APRIL 15, 1963, AND NO GOVERNMENT CONTRACT WILL BE AWARDED TO THEM OR TO ANY FIRM, CORPORATION, PARTNERSHIP, OR ASSOCIATION IN WHICH THEY HAVE AN INTEREST UNTIL THREE YEARS HAVE ELAPSED FOR SUCH DATE.

FINDING

IN THE MATTER OF CHRIST KALLAS, DOING BUSINESS AS DIXON INDUSTRIAL TRACK CONSTRUCTION COMPANY, DIXON, ILLINOIS.

SECTION 1 OF THE DAVIS-BACON ACT OF AUGUST 30, 1935, 49 STAT. 1011, 40 U.S.C. 276A, PROVIDES IN PART THAT---

"THE ADVERTISED SPECIFICATIONS FOR EVERY CONTRACT IN EXCESS OF $2,000, TO WHICH THE UNITED STATES * * * IS A PARTY, FOR CONSTRUCTION, ALTERATION, AND/OR REPAIR, INCLUDING PAINTING AND DECORATING, OR PUBLIC BUILDINGS OR PUBLIC WORKS OF THE UNITED STATES * * * AND WHICH REQUIRES OR INVOLVES THE EMPLOYMENT OF MECHANICS AND/OR LABORERS SHALL CONTAIN A PROVISION STATING THE MINIMUM WAGES TO BE PAID VARIOUS CLASSES OF LABORERS AND MECHANICS * * * AND EVERY CONTRACT BASED UPON THESE SPECIFICATIONS SHALL CONTAIN A STIPULATION THAT THE CONTRACTOR OR HIS SUBCONTRACTOR SHALL PAY ALL MECHANICS AND LABORERS EMPLOYED DIRECTLY UPON THE SITE OF THE WORK, UNCONDITIONALLY AND NOT LESS OFTEN THAN ONCE A WEEK AND WITHOUT SUBSEQUENT DEDUCTION OR REBATE ON ANY ACCOUNT, THE FULL AMOUNTS ACCRUED AT TIME OF PAYMENT, COMPUTED AT WAGE RATES NOT LESS THAN THOSE STATED IN THE ADVERTISED SPECIFICATIONS, REGARDLESS OF ANY CONTRACTUAL RELATIONSHIP WHICH MAY BE ALLEGED TO EXIST BETWEEN THE CONTRACTOR OR SUBCONTRACTOR AND SUCH LABORERS AND MECHANICS * * *.'

SECTION 3 (A) OF THE ACT PROVIDES THAT---

"* * * THE COMPTROLLER GENERAL OF THE UNITED STATES IS FURTHER AUTHORIZED AND IS DIRECTED TO DISTRIBUTE A LIST TO ALL DEPARTMENTS OF THE GOVERNMENT GIVING THE NAMES OF PERSONS OR FIRMS WHOM HE HAS FOUND TO HAVE DISREGARDED THEIR OBLIGATIONS TO EMPLOYEES AND SUBCONTRACTORS. NO CONTRACT SHALL BE AWARDED TO THE PERSONS OR FIRMS APPEARING ON THIS LIST OR TO ANY FIRM, CORPORATION, PARTNERSHIP, OR ASSOCIATION IN WHICH SUCH PERSONS OR FIRMS HAVE AN INTEREST UNTIL THREE YEARS HAVE ELAPSED FROM THE DATE OF PUBLICATION OF THE LIST CONTAINING THE NAMES OF SUCH PERSONS OR FIRMS.'

CONTRACT NBY-19955, IN EXCESS OF $2,000, FOR CONSTRUCTION OF A POLARIS MISSILE ASSEMBLY FACILITY AT THE NAVAL WEAPONS ANNEX, CHARLESTON, SOUTH CAROLINA, WAS ENTERED INTO DECEMBER 8, 1958, BY THE UNITED STATES (BUREAU OF YARDS AND DOCKS) WITH FIVE BORO CONSTRUCTION CORPORATION. PORTIONS OF THE WORK WERE SUBCONTRACTED TO CHRIST KALLAS, DOING BUSINESS AS DIXON INDUSTRIAL TRACK CONSTRUCTION COMPANY. THE APPLICABILITY OF THE STIPULATIONS AND REPRESENTATIONS REQUIRED BY SECTION 1 OF THE ACT HAS BEEN ACKNOWLEDGED.

INVESTIGATION BY THE DEPARTMENTS OF THE NAVY AND LABOR OF COMPLIANCE WITH LABOR STANDARDS, INCLUDING PAYMENT TO EMPLOYEES OF PRESCRIBED MINIMUM WAGES, DISCLOSED EVIDENCE INDICATING THAT FOURTEEN (14) EMPLOYEES HAD BEEN UNDERPAID AMOUNTS AGGREGATING $2,979.39, SUBSTANTIALLY AS DETAILED BY THE SOLICITOR OF LABOR IN A LETTER TO THE SUBCONTRACTOR DATED OCTOBER 8, 1962. PAYROLL REPORTS FURNISHED TO THE GOVERNMENT FAILED TO LIST ALL HOURS WORKED, INFLATED THE WATES ACTUALLY PAID, AND FALSELY SHOWED FULL PAYMENT OF REQUIRED MINIMUM WAGES. ON MAY 31, 1962, IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF SOUTH CAROLINA, MR. KALLAS PLEADED GUILTY TO TWENTY-SEVEN (27) COUNTS OF AN INDICTMENT CHARGING THAT HE HAD VIOLATED PROVISIONS OF THE FALSE INFORMATION ACT (18 U.S.C. 1001) IN CONNECTION THEREWITH.

IT IS CLEAR, PARTICULARLY IN THE LIGHT OF THE FALSE PAYROLLS, THAT GOOD FAITH WAS NOT SHOWN IN COMPLYING WITH THE ACT AND CONTRACTUAL PROVISIONS. ONLY THROUGH INVESTIGATION AND DETECTION OF THE MISLEADING INFORMATION FURNISHED IN PAYROLL REPORTS WAS IT POSSIBLE FOR THE GOVERNMENT TO ADOPT MEASURES PROTECTING THE EMPLOYEES INVOLVED AND ENSURING COMPLIANCE. THE DEPARTMENT OF THE NAVY AND THE DEPARTMENT OF LABOR HAVE RECOMMENDED IMPOSITION OF DEBARMENT.

WE THEREFORE FIND THAT CHRIST KALLAS, DOING BUSINESS AS DIXON INDUSTRIAL TRACK CONSTRUCTION COMPANY, HAS DISREGARDED "OBLIGATIONS TO EMPLOYEES" WITHIN THE MEANING OF THE DAVIS-BACON ACT. ACCORDINGLY, THESE NAMES WILL BE INCLUDED ON A LIST FOR DISTRIBUTION TO ALL AGENCIES OF THE GOVERNMENT AND, PURSUANT TO THE STATUTORY DIRECTION, NO CONTRACT SHALL BE AWARDED TO THEM, OR TO ANY FIRM, CORPORATION, PARTNERSHIP, OR ASSOCIATION IN WHICH THEY HAVE AN INTEREST UNTIL THREE ..END :