B-153030, MAR. 2, 1964

B-153030, MAR. 2, 1964

TO DIETL AND KRAFT, INC.:

ENCLOSED IS A COPY OF OUR FINDING OF TODAY THAT DIETL AND KRAFT, INC., HAROLD R. SAFRIS, MYRON H. KRAFT AND ANTHONY G. DIETL HAVE DISREGARDED OBLIGATIONS TO EMPLOYEES WITHIN THE MEANING OF THE DAVIS BACON ACT, 40 U.S.C. 276A, IN THE PERFORMANCE OF CONTRACT GS-02B-8064 FOR INSTALLATION OF A PACKAGE WATER CHILLER AT THE UNITED STATES POST OFFICE, GRAND CENTRAL STATION, NEW YORK, NEW YORK.

PURSUANT TO THE PROVISIONS OF SECTION 3 (A) OF THE ACT, THESE NAMES WILL BE INCLUDED ON A LIST FOR PUBLICATION MARCH 2, 1964, 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 SHALL HAVE ELAPSED FROM SUCH DATE.

FINDING

IN THE MATTER OF DIETL AND KRAFT, INC., ANTHONY G. DIETL, PRESIDENT, HAROLD R. SAFRIS, VICE PRESIDENT, AND MYRON H. KRAFT, SECRETARY TREASURER.

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, OF 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 GS-02B-8064, IN EXCESS OF $2,000 FOR THE INSTALLATION OF A PACKAGE WATER CHILLER AT THE UNITED STATES POST OFFICE, GRAND CENTRAL STATION, NEW YORK, NEW YORK, WAS ENTERED INTO JUNE 27, 1960, BY THE UNITED STATES (GENERAL SERVICES ADMINISTRATION) WITH DIETL AND KRAFT, INC. THE CONTRACT CONTAINED THE STIPULATIONS AND REPRESENTATIONS REQUIRED BY SECTION 1 OF THE ACT.

AN INVESTIGATION BY THE GENERAL SERVICES ADMINISTRATION DISCLOSED THE EXISTENCE OF DAVIS-BACON WAGE UNDERPAYMENTS. THE PAYROLL AFFIDAVITS AND PAY RECEIPTS SUBMITTED TO THE CONTRACTING AGENCY CONTAINED FALSE INFORMATION SIMULATING COMPLIANCE WITH DAVIS-BACON WAGE REQUIREMENTS. WHILE THE CERTIFIED PAYROLLS AND PAY RECEIPTS REFLECTED PAYMENT OF PREDETERMINED MINIMUM WAGE RATES, THE BASIC RECORDS OF THE FIRM SHOWED PAYMENT OF SUBSTANTIALLY LOWER RATES. THE IMPROPER PAYROLL REPORTS WERE CERTIFIED FOR THE CONTRACTOR BY ITS VICE PRESIDENT, HAROLD R. SAFRIS. THE IMPROPER PAY RECEIPTS, ADMITTEDLY FALSE, WERE SUBMITTED TO THE CONTRACTING AGENCY BY ITS SECRETARY TREASURER, MYRON H. KRAFT. MR. SAFRIS, MR. KRAFT AND THE FIRM WERE INCLUDED IN AN INDICTMENT HANDED DOWN BY A FEDERAL GRAND JURY AT NEWARK, NEW JERSEY, ON OCTOBER 16, 1963, CHARGING VIOLATION OF 18 U.S.C. 1001 ARISING OUT OF THE IRREGULARITIES.

ONLY THROUGH INVESTIGATION AND DETECTION OF THE MISLEADING INFORMATION FURNISHED IN PAYROLL REPORTS AND PAY RECEIPTS WAS IT POSSIBLE FOR THE GOVERNMENT TO ADOPT MEASURES PROTECTING THE EMPLOYEES INVOLVED AND ENSURING COMPLIANCE. BOTH THE GENERAL SERVICES ADMINISTRATION AND THE DEPARTMENT OF LABOR HAVE RECOMMENDED DEBARMENT.

WE THEREFORE FIND THAT DIETL AND KRAFT, INC., AND ITS RESPONSIBLE OFFICERS, ANTHONY G. DIETL, HAROLD R. SAFRIS AND MYRON H. KRAFT, HAVE DISREGARDED "OBLIGATIONS TO EMPLOYEES" WITHIN THE MEANING OF THE DAVIS BACON ACT. ACCORDINGLY, THEIR 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 YEARS HAVE ELAPSED FROM THE DATE OF PUBLICATION OF SUCH LIST.