B-205949.OM, MAR 29, 1982

B-205949.OM: Mar 29, 1982

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DEBARMENT IS UNWARRANTED WHERE VIOLATIONS OCCURRED 8 YEARS AGO. CONTRACTOR WOULD HAVE TO BE ACCORDED DUE PROCESS WHICH WOULD ENTAIL NOTICE AND HEARINGS. IS LIMITED TO (1) PLACING NAMES OF FIRMS AND INDIVIDUALS WHO HAVE BEEN FOUND BY SECRETARY OF LABOR TO HAVE WILLFULLY VIOLATED ACT ON DEBARRED BIDDERS LIST AND (2) DISBURSAL OF WITHHELD FUNDS TO UNDERPAID WORKERS. DEBARMENT OF PRIME CONTRACTOR IS UNWARRANTED SINCE THERE IS NO EVIDENCE INDICATING THAT PRIME CONTRACTOR WILLFULLY PARTICIPATED IN OR CONTRIBUTED TO UNDERPAYMENT OF WORKERS SO AS TO PROVIDE BASIS FOR DEBARMENT. THE COMPTROLLER GENERAL: WE ARE FORWARDING THE FILE PERTAINING TO THE APPARENT VIOLATIONS OF THE DAVIS-BACON ACT. C. DETAILS OF THE VIOLATIONS AND ADMINISTRATIVE RECOMMENDATIONS CONCERNING DEBARMENT ARE CONTAINED IN THE ATTACHED INVESTIGATIVE REPORT AND DEPARTMENT OF LABOR TRANSMITTAL LETTER.

B-205949.OM, MAR 29, 1982

DIGEST: 1. DEBARMENT IS UNWARRANTED WHERE VIOLATIONS OCCURRED 8 YEARS AGO, AND SHOULD GAO DECIDE TO INITIATE DEBARMENT PROCEEDINGS, CONTRACTOR WOULD HAVE TO BE ACCORDED DUE PROCESS WHICH WOULD ENTAIL NOTICE AND HEARINGS. THIS WOULD FURTHER DELAY PAYMENT OF WORKERS. 2. GAO'S ROLE IN CONNECTION WITH ENFORCEMENT OF CONTRACT WORK HOURS AND SAFETY STANDARDS ACT, 40 U.S.C. SEC. 327, ET SEQ. (1976), IS LIMITED TO (1) PLACING NAMES OF FIRMS AND INDIVIDUALS WHO HAVE BEEN FOUND BY SECRETARY OF LABOR TO HAVE WILLFULLY VIOLATED ACT ON DEBARRED BIDDERS LIST AND (2) DISBURSAL OF WITHHELD FUNDS TO UNDERPAID WORKERS. DEPARTMENT OF LABOR HAS PRIMARY AUTHORITY FOR ENFORCEMENT OF ACT. 3. DEBARMENT OF PRIME CONTRACTOR IS UNWARRANTED SINCE THERE IS NO EVIDENCE INDICATING THAT PRIME CONTRACTOR WILLFULLY PARTICIPATED IN OR CONTRIBUTED TO UNDERPAYMENT OF WORKERS SO AS TO PROVIDE BASIS FOR DEBARMENT.

THE 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 S.KANE AND SONS, INC. PRIME CONTRACTOR AND MILTON FLEXER CONSTRUCTION CO, INC., SUBCONTRACTOR WHICH PERFORMED WORK UNDER GENERAL SERVICES ADMINISTRATION CONTRACT NO. GS-00B- 01729 AT THE U. S. POST OFFICE IN WASHINGTON, D. C.

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 $7,557.14 ON DEPOSIT HERE TO THE TWENTY-ONE AGGRIEVED WORKERS IN ACCORDANCE WITH ESTABLISHED PROCEDURES AND RETURN THE EXCESS TO GSA. 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 CONSIDERATIONS AND INSTRUCTIONS.

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

INDORSEMENT

ASSOCIATE DIRECTOR, AFMD-CLAIMS GROUP

RETURNED. GENERAL SERVICES ADMINISTRATION (GSA) CONTRACT NO. GS-00B-01729 FOR ROOF AND WINDOW REPAIRS AT THE UNITED STATES POST OFFICE AT MASSACHUSETTS AVENUE AND NORTH CAPITOL STREET, WASHINGTON, D. C., WAS AWARDED TO S.KANE AND SONS, INC. (S.KANE), ON MAY 14, 1973. ON AUGUST 10, 1973, MILTON FLEXER CONSTRUCTION, INC. (FLEXER), ENTERED INTO A SUBCONTRACT TO PERFORM A PORTION OF THE WORK COVERED BY THE CONTRACT.

FLEXER, AT THE REQUEST OF CERTAIN EMPLOYEES, ALLOWED ITS EMPLOYEES, MOST OF WHOM WERE FROM THE PHILADELPHIA AREA, TO WORK 12-HOUR DAYS, MONDAY THROUGH WEDNESDAY, AND 4 HOURS ON THURSDAY. THIS ARRANGEMENT WAS CONTINUED THROUGH MOST OF 1974. THE RECORD INDICATES THAT FLEXER, WITH ONE EXCEPTION, PAID THE REQUIRED DAVIS-BACON RATES; HOWEVER, FLEXER DID NOT PAY HIS EMPLOYEES TIME AND ONE HALF FOR HOURS WORKED IN EXCESS OF 8 HOURS PER DAY, WHICH, OF COURSE, IS IN VIOLATION OF THE CONTRACT WORK HOURS AND SAFETY STANDARDS ACT, 40 U.S.C. SEC. 327, ET SEQ. (1976). MOREOVER, FLEXER FALSIFIED ITS PAYROLLS BY INDICATING THAT THE WORKERS WORKED FIVE 8-HOUR DAYS INSTEAD OF THREE 12-HOUR DAYS AND ONE 4-HOUR DAY. IN THIS REGARD, HOWEVER, MILTON FLEXER, THE OWNER OF FLEXER, STATES THAT BEFORE HE ALLOWED THE 3-1/2-DAY WORKWEEK, HE CONSULTED THE OWNER OF S.KANE AS TO THE PROPRIETY OF SUCH AN ARRANGEMENT AND WAS ADVISED THAT IT WAS PERMISSIBLE, PROVIDED THAT THE PAYROLLS INDICATED THAT FIVE 8-HOUR DAYS WERE WORKED.

WHILE THE RECORD CLEARLY ESTABLISHES THAT THE WORKERS WERE UNDERPAID, WE CONCUR WITH THE DEPARTMENT OF LABOR'S VIEW THAT DEBARMENT SANCTIONS SHOULD NOT BE IMPOSED BECAUSE OF THE AMOUNT OF TIME THAT HAS ELAPSED. WE NOTE THAT 8 YEARS HAVE ELAPSED SINCE THE VIOLATIONS OCCURRED. SHOULD WE INITIATE DEBARMENT PROCEEDINGS AT THIS TIME, DUE PROCESS WOULD HAVE TO BE ACCORDED FLEXER. DUE PROCESS IN THIS CASE WOULD ENTAIL, AT THE MINIMUM, NOTICE AND SOME SORT OF HEARING WHICH WOULD FURTHER DELAY PAYMENT OF THE WORKERS. SEE B-191911-O.M., MAY 7, 1981.

ALSO, WE DO NOT BELIEVE THAT THE RECORD ESTABLISHES THAT THE DAVIS BACON VIOLATIONS WERE OF SUCH A WILLFUL NATURE AS TO WARRANT DEBARMENT. POINTED OUT ABOVE, NATURE AS TO WARRANT DEBARMENT. AS POINTED OUT ABOVE, FLEXER, FOR THE MOST PART, PAID ITS WORKERS THE REQUIRED PREVAILING WAGE RATE. ADDITIONALLY, FLEXER EXPENDED IN EXCESS OF $5,000, TO PAY FOR MOTEL ACCOMMODATIONS FOR THE EMPLOYEES FROM THE PHILADELPHIA AREA. IT IS THE POLICY OF THIS OFFICE TO CONSIDER SUCH EXPENDITURES IN COMPUTING THE AMOUNTS DUE THE WORKERS UNDER THE DAVIS BACON ACT. HOWEVER, IN THE PRESENT CASE, OF THE $1,121.39 DETERMINED TO BE DUE FIVE EMPLOYEES AS THE RESULT OF DAVIS-BACON VIOLATIONS, $981.97 WAS OWED TO ONE EMPLOYEE WHO LIVED IN THE WASHINGTON AREA. THIS EMPLOYEE WAS PAID AS A LABORER FOR A 3 -MONTH PERIOD WHEN HE SHOULD HAVE BEEN CLASSIFIED AND PAID AS A CARPENTER FOR THIS PERIOD. THIS WAS THE ONLY SERIOUS DAVIS-BACON VIOLATION.

IT APPEARS FROM THE RECORD THAT MOST OF THE SERIOUS VIOLATIONS WERE VIOLATIONS OF THE CONTRACT WORK HOURS AND SAFETY STANDARDS ACT. WE WILL NOT COMMENT ON THE AMOUNT DETERMINED TO BE DUE THE EMPLOYEES AS THE RESULT OF THESE VIOLATIONS, OR POSSIBLE DEBARMENT UNDER THAT ACT, SINCE THE DEPARTMENT OF LABOR IS VESTED WITH THE PRIMARY AUTHORITY FOR THE ENFORCEMENT OF THAT ACT. OUR ROLE UNDER THE ACT IS PURELY MINISTERIAL, I.E., WE PLACE THE NAMES OF VIOLATORS ON THE LIST AT THE DIRECTION OF THE SECRETARY OF LABOR. WE HAVE NO DISCRETIONARY AUTHORITY TO RULE ON THE PROPRIETY OF THE ACTIONS TAKEN BY THE DEPARTMENT OF LABOR IN CONNECTION WITH DEBARMENT PROCEEDINGS UNDER THE ACT. SEE B-185926, JULY 19, 1977. ALSO, IN THIS REGARD, SEE 40 U.S.C. SEC. 330(A) (1976), WHICH AUTHORIZES THIS OFFICE TO DISBURSE FUNDS, ADMINISTRATIVELY DETERMINED TO BE DUE EMPLOYEES AND WITHHELD FROM AMOUNTS DUE UNDER THE CONTRACT, DIRECTLY TO THE UNDERPAID EMPLOYEES.

AS TO THE PRIME CONTRACTOR, S.KANE, THERE IS NO EVIDENCE THAT IT PARTICIPATED IN OR CONTRIBUTED TO THE DISREGARD OF OBLIGATIONS TO THE EMPLOYEES WITHIN THE INTENT OF THE DAVIS-BACON ACT SO AS TO PROVIDE A BASIS FOR DEBARMENT. B-193145-O.M., SEPTEMBER 25, 1981, AND B-201411 O.M., AUGUST 28, 1981.

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