B-197903.OM, APR 25, 1980

B-197903.OM: Apr 25, 1980

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PRECIS-UNAVAILABLE COMPTROLLER GENERAL: WE ARE FORWARDING THE FILE PERTAINING TO THE APPARENT VIOLATIONS OF THE DAVIS-BACON ACT. DETAILS OF THE VIOLATIONS AND ADMINISTRATIVE RECOMMENDATIONS CONCERNING DEBARMENT ARE CONTAINED IN THE ATTACHED INVESTIGATIVE REPORT AND DEPARTMENT OF LABOR TRANSMITTAL LETTER. 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. WAS FOR ALTERATIONS TO THE U. IT WAS DETERMINED THAT FMC HAD UNDERPAID 10 OF ITS EMPLOYEES IN VIOLATION OF THE DAVIS-BACON ACT. THE EVIDENCE OF RECORD INDICATES THAT THE EMPLOYEES WERE. CLAIMS TO HAVE PAID THE EMPLOYEES IN CASH FOR THE FRINGE BENEFITS.

B-197903.OM, APR 25, 1980

PRECIS-UNAVAILABLE

COMPTROLLER GENERAL:

WE ARE FORWARDING THE FILE PERTAINING TO THE APPARENT VIOLATIONS OF THE DAVIS-BACON ACT, 49 U.S.C. 276A, BY FMC PAINTING COMPANY (SUBCONTRACTOR) WHICH PERFORMED WORK UNDER GENERAL SERVICE ADMINISTRATION CONTRACT NO. GS- 02B-17006 AT U. S. COURTHOUSE, FOLEY SQUARE, NEW YORK, NEW YORK.

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 $645.70 ON DEPOSIT HERE TO THE APPRIEVED 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. MARCIA BROWN ON EXTENSION 53218.

INDORSEMENT

ASSOCIATE DIRECTOR, FGMS DIVISION - CLAIMS GROUP

RETURNED. ON JUNE 21, 1974, THE GENERAL SERVICES ADMINISTRATION (GSA) AWARDED CONTRACT NO. GS-02B-17008 TO THE JOSEPH MORTON COMPANY, INC. (MORTON), BROOKLYN, NEW YORK. THIS CONTRACT, IN THE AMOUNT OF $3,234,740., LATER AMENDED TO $3,450,753.50, WAS FOR ALTERATIONS TO THE U. S. COURTHOUSE, FOLEY SQUARE, NEW YORK. MORTON AWARDED A SUBCONTRACT, IN THE AMOUNT OF $42,000, TO FMC PAINTING COMPANY (FMC), LONG ISLAND CITY, NEW YORK.

AS THE RESULT OF A LABOR STANDARDS INVESTIGATION BY GSA IN 1976, IT WAS DETERMINED THAT FMC HAD UNDERPAID 10 OF ITS EMPLOYEES IN VIOLATION OF THE DAVIS-BACON ACT. THE EVIDENCE OF RECORD INDICATES THAT THE EMPLOYEES WERE, FOR THE MOST PART, PAID THE REQUIRED NET AMOUNT, I.E., GROSS PAY MINUS FRINGE BENEFITS AND OTHER WITHHOLDINGS SUCH AS SOCIAL SECURITY, FEDERAL AND LOCAL TAXES. MR. CHARLES MOSKOWITZ, PRESIDENT OF FMC, CLAIMS TO HAVE PAID THE EMPLOYEES IN CASH FOR THE FRINGE BENEFITS. HOWEVER, OTHER THAN THE STATEMENT BY MR. MOSKOWITZ THAT HE PAID THE FRINGE BENEFITS IN CASH AND ENTRIES IN FMC'S PAYROLL LEDGER, THERE IS NO RECORD OF SUCH CASH PAYMENTS TO THE EMPLOYEES. THE SUBCONTRACTOR DID NOT FURNISH IRS FORM 941 (EMPLOYEE'S QUARTERLY FEDERAL TAX RETURN), IRS FORM W-2 (WAGE AND TAX STATEMENT), CANCELED CHECKS OR ANY OTHER EVIDENCE TO SUBSTANTIATE THAT THE OTHER WITHHOLDINGS, MENTIONED ABOVE, HAD BEEN FORWARDED TO THE APPROPRIATE AGENCIES AND, BY HIS OWN ADMISSION, HE (MR. MOSKOWITZ) WAS, DUE TO FINANCIAL DIFFICULTIES, UNABLE TO FORWARD THE PAYROLL DEDUCTIONS FOR THE FIRST QUARTER OF 1976. MR. MOSKOWITZ STATED THAT HE HAD DISCONTINUED HIS BUSINESS IN DECEMBER 1976.

WHILE PERHAPS THE WEIGHT OF THE EVIDENCE WOULD SUPPORT DEBARMENT, WE CONCUR WITH THE DEPARTMENT OF LABOR'S VIEW THAT DEBARMENT IS NOT WARRANTED SINCE (1) IT HAS BEEN APPROXIMATELY 5 YEARS SINCE THE VIOLATIONS OCCURRED AND AN EXTENDED PERIOD OF TIME WOULD BE REQUIRED TO ACCORD THE SUBCONTRACTOR DUE PROCESS BEFORE WE COULD IMPOSE DEBARMENT, AND (2) DEBARMENT AT THIS TIME WOULD APPEAR TO BE A NEEDLESS ADMINISTRATIVE EXERCISE SINCE APPARENTLY THE SUBCONTRACTOR IS NO LONGER IN BUSINESS.

THE FUNDS ON DEPOSIT WITH YOUR OFFICE MAY BE DISBURSED TO THE AGGRIEVED WORKERS IN ACCORDANCE WITH ESTABLISHED PROCEDURES.