B-208907-OM, FEB 17, 1983

B-208907-OM: Feb 17, 1983

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PRECIS-UNAVAILABLE THE 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. IS NOT APPROPRIATE. MARCHINI UNDERSTATED THE NUMBER OF HOURS THE EMPLOYEES WORKED AND CERTIFIED THAT FRINGE BENEFITS WERE PAID INTO THE UNION TRUST FUNDS FOR ALL HOURS WORKED. THERE WAS A FALSIFICATION OF THE CERTIFIED PAYROLLS.

B-208907-OM, FEB 17, 1983

PRECIS-UNAVAILABLE

THE COMPTROLLER GENERAL:

WE ARE FORWARDING THE FILE PERTAINING TO THE APPARENT VIOLATIONS OF THE DAVIS-BACON ACT, 40 U.S.C. 276A, BY MARCHINI CONSTRUCTION INCORPORATED, WHICH PERFORMED WORK UNDER ARMY CORPS OF ENGINEERS CONTRACT NO. DACA84-76- C-0073 AT ALIAMANU MILITARY RESERVATION, HAWAII.

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 $35.05 ON DEPOSIT HERE TO THE TWO AGGRIEVED 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 MYRON COLBREUNER ON EXTENSION 53218.

INDORSEMENT

ASSOCIATE DIRECTOR, AFMD-CLAIMS GROUP

RETURNED. WE CONCUR WITH THE DEPARTMENT OF LABOR THAT DEBARMENT OF MARCHINI CONSTRUCTION, INC. (MARCHINI), IS NOT APPROPRIATE.

ON THE PAYROLLS FURNISHED TO THE GOVERNMENT, MARCHINI UNDERSTATED THE NUMBER OF HOURS THE EMPLOYEES WORKED AND CERTIFIED THAT FRINGE BENEFITS WERE PAID INTO THE UNION TRUST FUNDS FOR ALL HOURS WORKED. IN FACT, MARCHINI PAID THE EMPLOYEES FOR MORE HOURS THAN STATED AND PAID THE FRINGE BENEFITS FOR THE ADDITIONAL HOURS DIRECTLY TO THE EMPLOYEES. TECHNICALLY, THERE WAS A FALSIFICATION OF THE CERTIFIED PAYROLLS. HOWEVER, THE UNDERSTATEMENT OF HOURS WAS NOT MATERIAL IN THE CIRCUMSTANCES. FURTHER, ALTHOUGH THE UNION TRUST FUNDS SUED FOR AND RECOVERED THE FRINGE BENEFITS THAT WERE REQUIRED TO BE PAID TO THEM BY THEIR UNION AGREEMENTS, THE OBLIGATION TO EMPLOYEES WAS NOT DISREGARDED BY THE PAYMENT OF FRINGE BENEFITS TO THE EMPLOYEES, SINCE THE DAVIS BACON ACT PERMITS THAT. SEE 40 U.S.C. SEC. 276AB) (1976).

THE RECORD ALSO INDICATES THAT MARCHINI DID NOT GIVE THE UNION NOTICE OF THE USE OF SOME APPRENTICES, PAID AS APPRENTICES, PRIOR TO THEIR EMPLOYMENT. THIS RESULTED IN THEIR WAGES BEING ADJUSTED ON THE BASIS OF JOURNEYMEN WAGE RATES. APPARENTLY, THE APPRENTICESHIP PROGRAM FOR CARPENTERS UNION LOCAL 745 AFL-CIO IS AN APPROVED APPRENTICESHIP PROGRAM AND MARCHINI WAS A SIGNATORY TO THE APPRENTICESHIP AGREEMENT. THEREFORE, MARCHINI WAS ENTITLED TO USE APPRENTICES, BUT BECAUSE OF THIS PURELY TECHNICAL VIOLATION, THERE WERE SEVERAL UNINTENTIONAL UNDERPAYMENTS.

ALSO, CERTAIN OF MARCHINI'S EMPLOYEES, ESPECIALLY EMPLOYEES THAT MARCHINI BROUGHT FROM THE MAINLAND TO THE CONSTRUCTION SITE IN HAWAII, RECEIVED $50 PER DAY SUBSISTENCE ALLOWANCE. HOWEVER, NO ALLOWANCE WAS MADE FOR THIS IN ADJUSTING UNDERPAYMENTS. SEE R.A.GOTTLIEB, INC., B-202851, JUNE 17, 1982, 82-1 CPD 597. IN ANY EVENT, THE CONTRACTING AGENCY HAS CHARACTERIZED THE UNDERPAYMENTS FOR OTHER THAN FRINGE BENEFITS AS "MINOR AND TECHNICAL IN NATURE."

A NUMBER OF EMPLOYEES WERE NOT PAID FOR WORK PERFORMED. THIS FOLLOWED A PERIOD WHEN THE PAYCHECKS OF SOME EMPLOYEES WERE RETURNED FOR INSUFFICIENT FUNDS IN MARCHINI'S BANK ACCOUNT. THESE EVENTS OCCURRED AROUND THE TIME WHEN MARCHINI ABANDONED THE PROJECT, WHICH SUGGESTS THAT THE SITUATION MAY HAVE BEEN THE RESULT OF FINANCIAL DIFFICULTIES RATHER THAN A DELIBERATE INTENTION TO DISREGARD THE OBLIGATION TO EMPLOYEES. SEE B-188875-O.M., MAY 12, 1977.

ASIDE FROM THE MATTER OF DEBARMENT, ADJUSTMENTS WERE MADE BY MARCHINI'S PRIME CONTRACTOR TO ALL THE UNIONS AND EMPLOYEES INVOLVED WITH THE EXCEPTION OF TWO EMPLOYEES THAT COULD NOT BE LOCATED. SINCE THE PRIME CONTRACTOR HAS PROVIDED $35.05 FOR AN ADJUSTMENT TO THE LATTER EMPLOYEES, THE FUNDS SHOULD BE DISBURSED TO THE EMPLOYEES IN ACCORDANCE WITH ESTABLISHED PROCEDURES.