B-201511.OM, APR 8, 1981

B-201511.OM: Apr 8, 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. WE NOTE THAT WE HAVE RECEIVED A NOTICE OF LEVY FROM THE INTERNAL REVENUE SERVICE WHICH STATES THAT ELMO P. 000.00) AS WELL AS 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. MCEWEN IS INTERESTED IN THIS MATTER. IT IS UNDERSTANDABLE WHY REDDICK IS OF THE VIEW THAT MR.

B-201511.OM, APR 8, 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, BY REDDICK AND SON'S OF GOUVERNEUR, INC., AND PAT'S CONSTRUCTION, SUBCONTRACTOR, FOR WORK PERFORMED UNDER CORPS OF ENGINEERS CONTRACT NO. DACA51-76-C-0152 AT FORT DRUM, 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 NOTE THAT WE HAVE RECEIVED A NOTICE OF LEVY FROM THE INTERNAL REVENUE SERVICE WHICH STATES THAT ELMO P. LOOMIS, PAT'S CONSTRUCTION, OWES $3,060.88.

ACCORDINGLY, THE MATTER OF DISBURSEMENT OF THE WITHHELD FUNDS ($3,000.00) AS WELL AS 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.

CONGRESSMAN ROBERT C. MCEWEN IS INTERESTED IN THIS MATTER.

FOR FURTHER INFORMATION, PLEASE CONTACT MR. KEN SCHUTT ON EXTENSION 53218.

INDORSEMENT

ASSOCIATE DIRECTOR-AFMD, CLAIMS GROUP

RETURNED. THE PRIME CONTRACTOR, REDDICK AND SON'S OF GOUVERNEUR, INC. (REDDICK), ENTERED INTO WHAT APPEARS TO BE A LEGITIMATE SUBCONTRACT WITH PAT'S CONSTRUCTION. THEREFORE, IT IS UNDERSTANDABLE WHY REDDICK IS OF THE VIEW THAT MR. ELMO P. LOOMIS, OWNER OF PAT'S CONSTRUCTION, IS NOT ENTITLED TO BE PAID THE PREVAILING WAGE RATE PRESCRIBED BY THE DAVIS-BACON ACT. THUS, WE DO NOT BELIEVE THAT REDDICK'S REFUSAL TO REIMBURSE MR. LOOMIS CONSTITUTES A WILLFUL VIOLATION OF THE ACT SO AS TO WARRANT DEBARMENT. HOWEVER, THE DAVIS BACON ACT MANDATES THAT ALL MECHANICS AND LABORERS EMPLOYED DIRECTLY UPON THE CONSTRUCTION SITE BE PAID THE PREVAILING WAGE RATE "REGARDLESS OF ANY CONTRACTUAL RELATIONSHIP WHICH MAY BE ALLEGED TO EXIST BETWEEN THE CONTRACTOR OR SUBCONTRACTOR AND SUCH LABORERS AND MECHANICS ***." SEE 40 U.S.C. SEC. 276AA) (1976). OUR OFFICE HAS CONSTRUED THIS TO MEAN THAT WHEN THE OFFICERS/OWNERS OF A SUBCONTRACTOR ARE THEMSELVES PERFORMING THE WORK OF LABORERS AND MECHANICS, THE PRIME CONTRACTOR MUST PAY THEM AT LEAST THE APPLICABLE PREVAILING WAGE FOR THE HOURS WORKED IN THE SPECIFIC CLASSIFICATION. SEE B-197640-O.M., MARCH 28, 1980, AND B-195040-O.M., OCTOBER 1, 1979. ALSO, SEE UNITED STATES EX REL. SOUTHERN G-F CO. V. LANDIS AND YOUNG ET AL., 16 F. SUPP. 832 (1935), WHERE THE COURT HELD THAT A SUBCONTRACTOR-INDEPENDENT CONTRACTOR WHO DID THE WORK HIMSELF WAS ENTITLED TO BE PAID THE PREVAILING WAGE RATE. THEREFORE, WE ARE OF THE VIEW THAT MR. ELMO P. LOOMIS IS ENTITLED TO BE PAID THE PREVAILING WAGE RATE FOR THE HOURS HE WORKED AS A PLUMBER. IT WAS DETERMINED THAT MR. LOOMIS WAS UNDERPAID A TOTAL OF $4,593.87 IN VIOLATION OF THE DAVIS-BACON ACT. HOWEVER, ONLY $3,000 WAS WITHHELD FROM MONIES OWED UNDER THE CONTRACT AND FORWARDED TO THE GENERAL ACCOUNTING OFFICE (GAO). WHILE ORDINARILY THIS AMOUNT WOULD BE DISBURSED TO MR. LOOMIS, THE RECORD INDICATES THAT THE INTERNAL REVENUE SERVICE (IRS) HAS SERVED A NOTICE OF LEVY IN THE AMOUNT OF $3,060.88 ON GAO BECAUSE OF MR. LOOMIS' TAX INDEBTEDNESS TO IRS. WE KNOW OF NO REASON WHY THESE FUNDS ON DEPOSIT WITH YOUR OFFICE SHOULD NOT BE FORWARDED TO IRS. SEE 26 U.S.C. SEC. 6331 (1976) AUTHORIZING IRS TO LEVY UPON THE WAGES OF A TAXPAYER.

IN REGARD TO THE ALLEGED UNDERPAYMENT OF THE TWO SUBCONTRACTOR EMPLOYEES, MR. DAVIS MERRIT AND MR. DANIEL KUZZUER, WE CONCUR WITH THE DEPARTMENT OF ARMY'S VIEW THAT THE EVIDENCE OF RECORD IS NOT SUFFICIENT TO ESTABLISH THE AMOUNT OF THE UNDERPAYMENTS. FURTHER, WE DO NOT BELIEVE THAT DEBARMENT OF THE SUBCONTRACTOR IS WARRANTED, SINCE, IF WE WERE TO INITIATE DEBARMENT PROCEEDINGS AT THIS TIME, DUE PROCESS WOULD HAVE TO BE ACCORDED THE SUBCONTRACTOR, WHICH WOULD ENTAIL NOTICE AND HEARINGS. THIS WOULD FURTHER DELAY RESOLUTION OF THIS CASE WHICH HAS ALREADY LASTED ALMOST 3 YEARS. SEE B-191911-O.M., JULY 7, 1978, AND B-192682-O.M., OCTOBER 17, 1978. THE DEPARTMENT OF LABOR DOES NOT RECOMMEND THE DEBARMENT OF EITHER THE PRIME CONTRACTOR OR THE SUBCONTRACTOR.

DIGEST

1. WHERE CONTRACTOR SUBCONTRACTED OUT CERTAIN PLUMBING AND DUCT WORK, OWNER OF SUBCONTRACTOR IS ENTITLED TO BE PAID PREVAILING WAGE RATE SINCE HE DID PERFORM WORK AS PLUMBER AND DAVIS-BACON ACT MANDATES THAT ALL MECHANICS AND LABORERS EMPLOYED DIRECTLY UPON CONSTRUCTION SITE BE PAID PREVAILING WAGE RATE REGARDLESS OF ANY CONTRACTUAL RELATIONSHIP WHICH MAY BE ALLEGED TO EXIST BETWEEN CONTRACTOR AND SUCH MECHANIC OR LABORER.

2. DEBARMENT OF PRIME CONTRACTOR NOT WARRANTED SINCE RECORD DOES NOT INDICATE THAT HE WAS AWARE OF FACT THAT OWNER OF SUBCONTRACTOR, WHO PERFORMED WORK AS PLUMBER ON SUBCONTRACT, WAS ENTITLED TO BE PAID PREVAILING WAGE RATE FOR PLUMBERS. DEBARMENT OF SUBCONTRACTOR FOR UNDERPAYMENT OF TWO EMPLOYEES IS UNWARRANTED WHERE (1) VIOLATION OCCURRED IN EXCESS OF 3 YEARS AGO AND (2) SHOULD GAO DECIDE TO DEBAR, SUBCONTRACTOR WOULD HAVE TO BE ACCORDED NOTICE AND OPPORTUNITY FOR HEARINGS, WHICH WOULD FURTHER DELAY RESOLUTION OF CASE.