Debarment Resulting From Davis-Bacon Act Violation

An investigation revealed that a contractor, having full knowledge of his statutory and contractual responsibilities, disregarded these obligations when he failed to pay five of his employees the prescribed wage rate under the Davis-Bacon Act. The record indicated that certified payrolls, which contained false information designed to simulate compliance with the applicable labor standards requirements, were submitted to the contracting agency. Also, the record indicated that the contractor apparently attempted to circumvent the labor standards requirements when he entered into subcontracting arrangements with three of his employees for performance of work under the contract. Although GAO recognized that the Davis-Bacon Act does not cover bona fide subcontractors, it agreed with the agency's position that the employees in question were not bona fide subcontractors and were, therefore, subject to the Davis-Bacon Act. There were no written agreements to substantiate the subcontract agreements, and in the certified payrolls covering most of the contract period, these individuals were treated as employees. The Employment Standards Administration issued a ruling sustaining the investigative finding and recommended imposition of debarment sanctions. No appeal was filed. GAO found that the contractor and his business firm had disregarded obligations to employees within the meaning of the Davis-Bacon Act. Accordingly, the names were placed on the debarred bidders list for distribution to all agencies of the Government.