B-197282(A), L/M, JUL 22, 1980

B-197282(A): Jul 22, 1980

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BERNARD BECKERMAN PRESIDENT: ENCLOSED IS A COPY OF OUR FINDINGS OF TODAY THAT EDWARDS FURNACE COMPANY. HAVE DISREGARDED OBLIGATIONS TO EMPLOYEES WITHIN THE MEANING OF THE DAVIS-BACON ACT. THESE NAMES WILL BE INCLUDED ON THE LIST OF DEBARRED BIDDERS AND NO GOVERNMENT CONTRACT WILL BE AWARDED TO THEM OR TO ANY FIRM. OR ASSOCIATION IN WHICH THEY HAVE AN INTEREST UNTIL 3 YEARS HAVE ELAPSED FROM THE DATE OF THE PUBLICATION OF THE LIST. TO WHICH THE UNITED STATES *** IS A PARTY. 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.

B-197282(A), L/M, JUL 22, 1980

PRECIS-UNAVAILABLE

EDWARDS HOME IMPROVEMENT AND FURNACE COMPANY:

ATTENTION: MR. BERNARD BECKERMAN PRESIDENT:

ENCLOSED IS A COPY OF OUR FINDINGS OF TODAY THAT EDWARDS FURNACE COMPANY, INC., EDWARDS HOME IMPROVEMENT AND FURNACE COMPANY D/B/A EDWARDS HOME IMPROVEMENT COMPANY, AND BERNARD BECKERMAN, PRESIDENT, HAVE DISREGARDED OBLIGATIONS TO EMPLOYEES WITHIN THE MEANING OF THE DAVIS-BACON ACT, 40 U.S.C. SEC. 276A (1976), IN THE PERFORMANCE OF CONTRACTS FOR THE REHABILITATION OF FHA-OWNED PROPERTY.

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

FINDING

IN THE MATTER OF EDWARDS FURNACE COMPANY, INC., EDWARDS HOME IMPROVEMENT AND FURNACE COMPANY D/B/A EDWARDS HOME IMPROVEMENT COMPANY, AND BERNARD BECKERMAN, PRESIDENT.

SECTION 1 OF THE DAVIS-BACON ACT OF AUGUST 30, 1935, 49 STAT. 1011, 40 U.S.C. SEC. 276A (1976), 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."

EDWARDS HOME IMPROVEMENT AND FURNACE COMPANY (EDWARDS) WAS AWARDED VARIOUS FEDERAL HOUSING ADMINISTRATION (FHA) CONTRACTS FOR THE REHABILITATION OF FHA-OWNED PROPERTY. THESE CONTRACTS WERE SUBJECT TO THE DAVIS-BACON ACT AND CONTAINED THE STIPULATIONS AND REPRESENTATIONS REQUIRED BY SECTION 1 OF THAT ACT.

AN INVESTIGATION CONDUCTED BY THE WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR (DOL), FOR THE PERIOD FROM APRIL 1972 TO MARCH 1974 REVEALED THAT EDWARDS FAILED TO PAY FOUR OF ITS CARPENTERS THE PRESCRIBED DAVIS BACON RATE. THE EMPLOYEES WERE FOUND TO HAVE BEEN UNDERPAID A TOTAL OF $17,508.30. A PORTION OF THIS AMOUNT ($6,366.68) WAS PAID THE EMPLOYEES, BUT EDWARDS HAS STEADFASTLY REFUSED TO PAY THE BALANCE.

BY LETTER OF JUNE 7, 1976, DOL DETAILED THE EXTENT AND NATURE OF THE VIOLATIONS AND OFFERED EDWARDS AN OPPORTUNITY TO REBUT THE ALLEGATIONS. AFTER AN EXCHANGE OF CORRESPONDENCE, EDWARDS REQUESTED AN INFORMAL HEARING PURSUANT TO SECTION 5.6(C)(1), TITLE 29, CODE OF FEDERAL REGULATIONS (CFR). THIS INFORMAL MEETING BETWEEN DOL REPRESENTATIVES AND EDWARDS WAS HELD ON MARCH 30, 1977, IN CLEVELAND, OHIO, AND WAS PRESIDED OVER BY THE EMPLOYMENT STANDARDS ADMINISTRATION REGIONAL ADMINISTRATOR WHO ISSUED A RULING SUSTAINING THE INVESTIGATION FINDINGS AND RECOMMENDING DEBARMENT BECAUSE EDWARDS REFUSED TO MAKE RESTITUTION OF THE BALANCE FOUND DUE AND CHANGE ITS METHOD OF OPERATION. EDWARDS APPEALED TO THE WAGE AND HOUR DIVISION ADMINISTRATOR WHO SUSTAINED THE RULING BY THE REGIONAL ADMINISTRATOR. EDWARDS THEN APPEALED TO THE WAGE APPEALS BOARD WHICH SUSTAINED THE ADMINISTRATOR'S RULING.

PRIOR TO AND DURING THE ADMINISTRATIVE APPEAL PROCESS, EDWARDS HAD EVERY OPPORTUNITY TO MAKE COMPLETE RESTITUTION BUT DID NOT DO SO. THE BASIS FOR EDWARDS' REFUSAL TO MAKE RESTITUTION IS THAT THE CARPENTERS WERE BONA FIDE SUBCONTRACTORS NOT COVERED BY THE DAVIS-BACON ACT. IN SUPPORT OF ITS POSITION, EDWARDS RELIES ON THE WRITTEN CONTRACT EACH CARPENTER SIGNED IN WHICH EACH AGREED TO PERFORM CERTAIN WORK FOR A SPECIFIED AMOUNT OF MONEY. UNDER THE TERMS OF THE CONTRACTS, MATERIALS WERE TO BE FURNISHED BY EDWARDS AND THE CARPENTERS WERE