B-161867, AUG. 16, 1967

B-161867: Aug 16, 1967

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A BIDDER - A CURRENT CONTRACTOR - WHO IS BEING INVESTIGATED FOR VIOLATION OF OBLIGATION TO EMPLOYEES UNDER THE SERVICE CONTRACT ACT OF 1965. KAHN: REFERENCE IS MADE TO YOUR LETTER OF JUNE 20. IN THIS CONNECTION WE ARE ADVISED THAT AN INVESTIGATION CONDUCTED BY THE FIELD OFFICE OF THE WAGE AND HOUR AND PUBLIC CONTRACTS DIVISIONS OF THE DEPARTMENT OF LABOR. (THE STATUTORY MINIMUM RATE WAS $1.40 PER HOUR.). PART 6) FOR ENFORCEMENT OF THE SERVICE CONTRACT ACT HAVE BEEN COMPLETED OR THAT ANY FINAL FINDING OF THE ALLEGED VIOLATIONS HAS BEEN MADE EITHER BY THE CONTRACTING AGENCY OR BY THE SECRETARY OF LABOR. SECTION 5 OF THE ACT (41 U.S.C. 354) DIRECTS THE COMPTROLLER GENERAL OF THE UNITED STATES TO DISTRIBUTE A LIST TO ALL AGENCIES OF THE GOVERNMENT "GIVING THE NAMES OF PERSONS OR FIRMS THAT THE FEDERAL AGENCIES OR THE SECRETARY HAVE FOUND TO HAVE VIOLATED THIS CHAPTER.'.

B-161867, AUG. 16, 1967

BIDDERS - DEBARRED DECISION TO MILITARY BASE MANAGEMENT, INC. PROTESTING AGAINST AWARDS OF CONTRACT FOR MESS ATTENDANT SERVICES TO IRA GELBER FOOD SERVICES, INC. BY NAVAL STATION, KEY WEST, FLORIDA. A BIDDER - A CURRENT CONTRACTOR - WHO IS BEING INVESTIGATED FOR VIOLATION OF OBLIGATION TO EMPLOYEES UNDER THE SERVICE CONTRACT ACT OF 1965, 41 U.S.C. 351-357, BUT WHO HAS NOT ACTUALLY BEEN RECOMMENDED FOR LISTING ON DEBARRED LIST, ALTHOUGH AN AMOUNT HAS BEEN WITHHELD FROM DURRENT CONTRACT PAYMENT TO COVER WAGE UNDERPAYMENTS MAY BE CONSIDERED FOR AWARD BASED ON DETERMINATION THAT FIRM'S ABILITY TO PERFORM WOULD NOT BE IMPAIRED BY WITHHOLDING.

TO MR. ALAN R. KAHN:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 20, 1967, ADDRESSED TO THE HONORABLE RICHARD C. WHITE, HOUSE OF REPRESENTATIVES, PROTESTING AGAINST AN AWARD TO IRA GELBER FOOD SERVICES, INC., UNDER IFB NO. N00200-67-B0056, ISSUED APRIL 25, 1967, FOR MESS ATTENDANT SERVICES AT THE NAVAL STATION, KEY WEST, FLORIDA. THIS OFFICER HAS BEEN ASKED TO CONSIDER YOUR PROTEST.

AS THE BASIS FOR THE PROTEST YOU ALLEGE THAT GELBER HAS VIOLATED THE FAIR LABOR STANDARDS ACT. IN THIS CONNECTION WE ARE ADVISED THAT AN INVESTIGATION CONDUCTED BY THE FIELD OFFICE OF THE WAGE AND HOUR AND PUBLIC CONTRACTS DIVISIONS OF THE DEPARTMENT OF LABOR, MIAMI, FLORIDA, RESULTED IN A PRELIMINARY DETERMINATION THAT GELBER HAD IN FACT VIOLATED ITS CONTRACTUAL AND STATUTORY OBLIGATIONS TO EMPLOYEES IMPOSED UNDER THE SERVICE CONTRACT ACT OF 1965, PUB. L. 89-286 (41 U.S.C. 351-357), IN CONNECTION WITH THE PERFORMANCE OF CONTRACT NO. N00200-67-C-0001 FOR MESS ATTENDANT SERVICES AT THE NAVAL STATION, KEY WEST, FLORIDA, IN THAT FOR THE PERIOD FEBRUARY 1 THROUGH MAY 31, 1967, GELBER HAD PAID SUBMINIMUM WAGES OF $1.25 PER HOUR. (THE STATUTORY MINIMUM RATE WAS $1.40 PER HOUR.)

IT DOES NOT APPEAR, HOWEVER, THAT THE PROCEEDINGS PRESCRIBED BY THE SECRETARY OF LABOR (SEE 29 C.F.R. SUBTITLE A, PART 6) FOR ENFORCEMENT OF THE SERVICE CONTRACT ACT HAVE BEEN COMPLETED OR THAT ANY FINAL FINDING OF THE ALLEGED VIOLATIONS HAS BEEN MADE EITHER BY THE CONTRACTING AGENCY OR BY THE SECRETARY OF LABOR.

SECTION 5 OF THE ACT (41 U.S.C. 354) DIRECTS THE COMPTROLLER GENERAL OF THE UNITED STATES TO DISTRIBUTE A LIST TO ALL AGENCIES OF THE GOVERNMENT "GIVING THE NAMES OF PERSONS OR FIRMS THAT THE FEDERAL AGENCIES OR THE SECRETARY HAVE FOUND TO HAVE VIOLATED THIS CHAPTER.' IT IS FURTHER PROVIDED THAT "UNLESS THE SECRETARY OTHERWISE RECOMMENDS NO CONTRACT OF THE UNITED STATES SHALL BE AWARDED TO THE PERSONS OR FIRMS APPEARING ON THIS LIST * * * UNTIL THREE YEARS SHALL HAVE ELAPSED FROM THE DATE OF PUBLICATION OF THE LIST * * *.'

SINCE OUR OFFICE HAS NOT BEEN ADVISED OF ANY SUCH FINDING AS REQUIRED BY THE ACT, THE NAME OF THE IRA GELBER FOOD SERVICES, INC., HAS NOT BEEN PLACED ON THE LIST OF VIOLATORS OF THE ACT DISTRIBUTED BY THE COMPTROLLER GENERAL, AND THE DEBARMENT PROVISIONS OF THE ACT HAVE NOT COME INTO EFFECT, ALTHOUGH THE DEPARTMENT OF THE NAVY HAS, PURSUANT TO SECTION 3 OF THE ACT, WITHHELD FROM CONTRACT PAYMENTS TO GELBER AN AMOUNT SUFFICIENT TO COVER THE ALLEGED UNDERPAYMENTS TO ITS EMPLOYEES.

IN THESE CIRCUMSTANCES THE BID OF THE GELBER COMPANY ON THE IFB IN QUESTION WAS NOT REQUIRED TO BE REJECTED, AND AWARD WAS MADE TO THAT FIRM ON THE BASIS OF A DETERMINATION THAT IT WAS THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER, INCLUDING A DETERMINATION THAT THE FIRM'S ABILITY TO PERFORM WOULD NOT BE IMPAIRED BY THE WITHHOLDING OF BACK WAGES OWED EMPLOYEES.

FOR THE REASONS STATED WE MUST CONCLUDE THAT THE AWARD TO GELBER RESULTED IN A VALID AND BINDING CONTRACT, AND YOUR PROTEST IS THEREFORE DENIED.