B-200980.OM, MAR 2, 1981

B-200980.OM: Mar 2, 1981

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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 PROPOSALS 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. APPARENTLY AN AGREEMENT WAS ENTERED INTO WITH BURLINGTON WHEREBY IT WAS AGREED THAT BURLINGTON WOULD ONLY HAVE TO PAY THE WORKERS ONE-HALF OF THE $15. 991.56 WAS FORWARDED TO YOUR OFFICE.

B-200980.OM, MAR 2, 1981

PRECIS-UNAVAILABLE

COMPTROLLER GENERAL:

WE ARE FORWARDING THE FILE PERTAINING TO THE APPARENT VIOLATIONS OF THE DAVIS-BACON ACT, 40 U.S.C. 276A, AND THE CONTRACT WORK HOURS AND SAFETY STANDARDS ACT. 40 U.S.C. 327 ET SEQ., BY PRUDENTIAL CONSTRUCTION COMPANY WHICH PERFORMED WORK UNDER GENERAL SERVICES ADMINISTRATION, CONTRACT NOS. GS-02B-17,048; GS-02B-16,885; GS-02B 16,898 AT FEDERAL OFFICE BUILDINGS AT 201 VARICK ST., AND 252 7TH AVE., 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 $27,912.50 ON DEPOSIT HERE TO THE 18 AGGRIEVED WORKERS WHO WORKED UNDER CONTRACT NO. GS-02B- 17,048, AND TO DISBURSE ON A PRO RATA BASIS THE $7,991.56 ON DEPOSIT HERE TO THE 12 AGGRIEVED WORKERS WHO WORKED UNDER CONTRACT NOS. GS-02B-16, 885 AND GS-02B-16, 898 IN ACCORDANCE WITH ESTABLISHED PROCEDURES. OUR PROPOSALS 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 - AFMD, CLAIMS GROUP

RETURNED. THE RECORD INDICATES THAT AS SUBCONTRACTORS UNDER CONTRACT GS- 02B-17,048, AWARDED TO THE COSMIC CONSTRUCTION CO., INC., BY THE GENERAL SERVICES ADMINISTRATION (GSA), PRUDENTIAL CONSTRUCTION COMPANY AND ALCHRIST CONSTRUCTION COMPANY, BOTH OWNED BY VERNAL STAMPP, UNDERPAID 18 EMPLOYEES THE SUM OF $27,912.50 IN VIOLATION OF THE DAVIS BACON ACT, 40 U.S.C. SEC. 276A (1976), AND THE CONTRACT WORKS HOURS AND SAFETY STANDARDS ACT, 40 U.S.C. SEC. 327, ET SEQ. (1976). ALSO, PRUDENTIAL CONSTRUCTION COMPANY AS A SUBCONTRACTOR UNDER CONTRACT NOS. GS-02B-16885 AND GS-02B- 16898, AWARDED TO BURLINGTON CONSTRUCTION COMPANY (BURLINGTON) BY GSA, UNDERPAID 12 EMPLOYEES THE SUM OF $15,982.12. HOWEVER, IN REGARD TO THE LATTER TWO CONTRACTS, APPARENTLY AN AGREEMENT WAS ENTERED INTO WITH BURLINGTON WHEREBY IT WAS AGREED THAT BURLINGTON WOULD ONLY HAVE TO PAY THE WORKERS ONE-HALF OF THE $15,982.12. THE SUM OF $7,991.56 WAS FORWARDED TO YOUR OFFICE.

THE UNDERPAYMENTS UNDER CONTRACT GS-02B-17,048, TO A LARGE EXTENT, WERE THE RESULT OF THE SUBCONTRACTORS' FAILURE TO PAY FRINGE BENEFITS TO EITHER THE INDIVIDUAL EMPLOYEES OR TO THE EMPLOYEES' UNION. ALSO, MANY OF THE UNDERPAYMENTS UNDER CONTRACT NOS. GS-02B-16885 AND GS-02B-16898 RESULTED FROM FAILURE TO PAY FRINGE BENEFITS. OF COURSE, IF THE UNIONS, OR FRINGE BENEFITS FUNDS REPRESENTING THE UNIONS, WERE TO SUBMIT CLAIMS WE COULD, AND UNDOUBTEDLY WOULD, HONOR THE CLAIMS SINCE MANY OF THE UNDERPAID WORKERS WERE UNION MEMBERS. SEE B-193615-O.M., MAY 17, 1979, AND CASES CITED THEREIN. HOWEVER, THERE IS NO EVIDENCE OF RECORD THAT ANY UNION OR FRINGE BENEFIT FUND HAS EVER SUBMITTED A CLAIM. IN THE ABSENCE OF SUCH A CLAIM, THE AMOUNT WITHHELD TO COVER FRINGE BENEFITS FOR THESE INDIVIDUALS MAY BE DISBURSED DIRECTLY TO THE INDIVIDUAL EMPLOYEES, SINCE THE EMPLOYER'S OBLIGATIONS TO PAY FRINGE BENEFITS MAY BE DISCHARGED IN THIS MANNER. 40 U.S.C. SEC. 276AB) (1976). ALSO, SEE B-194242-O.M., MAY 23, 1979.

THE EVIDENCE OF RECORD MIGHT BE SUFFICIENT TO ESTABLISH THAT VERNAL STAMPP, THROUGH HIS COMPANIES, WILLFULLY UNDERPAID THE ABOVE-MENTIONED EMPLOYEES SO AS TO WARRANT DEBARMENT. HOWEVER, THE VIOLATIONS OCCURRED 6 TO 7 YEARS AGO AND THE DEPARTMENT OF LABOR DID NOT COMMENCE DEBARMENT PROCEEDINGS OR RECOMMEND DEBARMENT. THUS, AN ADDITIONAL EXTENDED PERIOD OF TIME WOULD BE REQUIRED TO ACCORD DUE PROCESS BEFORE WE COULD IMPOSE DEBARMENT. FURTHER, DEBARMENT WOULD APPEAR TO BE A NEEDLESS ADMINISTRATIVE EXERCISE SINCE VERNAL STAMPP HAS BEEN ON THE DEBARRED BIDDERS LIST FOR VIOLATION OF THE POSTAL REORGANIZATION ACT, 39 U.S.C. SEC. 410(B)(4)(C), SINCE MARCH 3, 1980. IN THE CIRCUMSTANCES, WE DO NOT INTEND TO TAKE ANY DEBARMENT ACTION.

THE $27,912.50 WITHHELD FROM AMOUNTS DUE THE CONTRACTOR UNDER CONTRACT NO. GS-02B-17,048, AND PRESENTLY ON DEPOSIT WITH YOUR OFFICE, SHOULD BE DISBURSED TO THE AGGRIEVED EMPLOYEES IN ACCORDANCE WITH ESTABLISHED PROCEDURES. THE $7,991.56 ON DEPOSIT WITH YOUR OFFICE, WHICH WAS WITHHELD FROM AMOUNTS DUE THE CONTRACTOR UNDER CONTRACT NOS. GS-02B-16885 AND GS- 02B-16898, MAY BE DISBURSED TO THE 12 UNPAID WORKERS ON A PRO RATA BASIS IN ACCORDANCE WITH ESTABLISHED PROCEDURES.

DIGESTS

1. WHEN THERE ARE FRINGE BENEFIT UNDERPAYMENTS, GAO MAY EITHER MAKE DIRECT PAYMENTS TO UNDERPAID WORKERS OR TO EMPLOYEES' UNION OR FRINGE BENEFIT FUND REPRESENTING UNION, PROVIDED UNION OR FRINGE BENEFIT FUND HAS SUBMITTED CLAIM FOR FUNDS. SINCE IN PRESENT CASE NO SUCH CLAIM WAS SUBMITTED, GAO WILL MAKE DIRECT PAYMENT TO UNDERPAID WORKERS.

2. DEBARMENT ACTION UNDER DAVIS-BACON ACT WILL NOT BE TAKEN WHERE VIOLATIONS OCCURRED 6 TO 7 YEARS AGO. DEPARTMENT OF LABOR DID NOT COMMENCE DEBARMENT PROCEEDINGS OR RECOMMEND DEBARMENT, EXTENDED TIME WOULD BE REQUIRED TO PROVIDE DUE PROCESS BEFORE DEBARMENT AND DEBARMENT WOULD APPEAR TO BE NEEDLESS ADMINISTRATIVE EXERCISE, SINCE VIOLATOR HAS BEEN ON DEBARRED BIDDERS LIST SINCE MARCH 3, 1980, FOR VIOLATION OF THE POSTAL REORGANIZATION ACT.