B-212396, AUG 12, 1985, OFFICE OF GENERAL COUNSEL
Highlights
THE RECORD INDICATES THAT THERE WAS A BONA FIDE DISAGREEMENT OR DISPUTE CONCERNING THE CLASSIFICATION OF ITS EMPLOYEES AND THE APPLICABILITY OF THE DAVIS-BACON ACT. WE CONCLUDE THAT THE VIOLATIONS UNDER THE ACT ARE NOT SUBSTANTIAL VIOLATIONS AND THAT THE UNDERPAYMENT OF EMPLOYEES WAS UNINTENTIONAL. WE CONCUR WITH DOL AND THE CONTRACTOR WILL NOT BE DEBARRED UNDER THE ACT. THE DEPARTMENT OF LABOR (DOL) WAS TAKING NO FURTHER ADMINISTRATIVE ACTION. THIS CONTRACT WAS SUBJECT TO THE DAVIS-BACON ACT REQUIREMENTS THAT CERTAIN MINIMUM WAGES BE PAID TO LABORERS AND MECHANICS EMPLOYED UPON THE SITE OF WORK. THE CONTRACTOR WAS REQUIRED TO PAY THESE WAGES BASED UPON THE CLASSIFICATION OF WORK ACTUALLY PERFORMED.
B-212396, AUG 12, 1985, OFFICE OF GENERAL COUNSEL
BIDDERS - DEBARMENT - LABOR STIPULATION VIOLATIONS - DAVIS-BACON ACT WAGE UNDERPAYMENTS - DEBARMENT NOT REQUIRED DIGEST: A CONTRACTOR FAILED TO PAY TWO OF ITS EMPLOYEES THE REQUIRED MINIMUM WAGE RATES DUE TO AN APPARENT MISUNDERSTANDING OF THE SITE OF WORK PROVISIONS OF THE DAVIS-BACON ACT. THE RECORD INDICATES THAT THERE WAS A BONA FIDE DISAGREEMENT OR DISPUTE CONCERNING THE CLASSIFICATION OF ITS EMPLOYEES AND THE APPLICABILITY OF THE DAVIS-BACON ACT. IN VIEW OF THE CIRCUMSTANCES INVOLVED THE DEPARTMENT OF LABOR (DOL) RECOMMENDED THAT NO FURTHER ADMINISTRATIVE ACTION BE TAKEN. BASED ON OUR INDEPENDENT REVIEW OF THE RECORD IN THIS MATTER, WE CONCLUDE THAT THE VIOLATIONS UNDER THE ACT ARE NOT SUBSTANTIAL VIOLATIONS AND THAT THE UNDERPAYMENT OF EMPLOYEES WAS UNINTENTIONAL. THEREFORE, WE CONCUR WITH DOL AND THE CONTRACTOR WILL NOT BE DEBARRED UNDER THE ACT.
SYLVESTER L. GREEN, DIRECTOR: CONTRACT STANDARDS OPERATIONS U.S. DEPARTMENT OF LABOR ROOM S 3518 200 CONSTITUTION AVENUE, N.W. WASHINGTON, D.C. 20210
SUBJECT: B & A ELECTRIC COMPANY, INC. SACRAMENTO, CALIFORNIA
CONTRACT NO. DACA09-80-C-0052
YOUR FILE NO. CAL-84319
BY A LETTER DATED NOVEMBER 28, 1984, YOU REQUESTED THAT WE DISTRIBUTE THE FUNDS ON DEPOSIT WITH OUR OFFICE WHICH HAD BEEN WITHHELD FROM B & A ELECTRIC COMPANY, INC. (B & A), TO WAGE CLAIMANTS FOR VIOLATIONS OF THE DAVIS-BACON ACT, 40 U.S.C. SECS. 276A TO 276A-5 (1982). YOU CONCLUDED THAT IN THE CIRCUMSTANCES INVOLVED IN THIS MATTER, THE DEPARTMENT OF LABOR (DOL) WAS TAKING NO FURTHER ADMINISTRATIVE ACTION.
UNDER CONTRACT DACA09-80-C-0052, B & A PERFORMED WORK FOR THE CORPS OF ENGINEERS, DEPARTMENT OF THE ARMY, DOING ELECTRICAL AND OTHER RELATED WORK. THIS CONTRACT WAS SUBJECT TO THE DAVIS-BACON ACT REQUIREMENTS THAT CERTAIN MINIMUM WAGES BE PAID TO LABORERS AND MECHANICS EMPLOYED UPON THE SITE OF WORK. FURTHER, PURSUANT TO 29 C.F.R. SEC. 5.5(A) (1984), THE CONTRACTOR WAS REQUIRED TO PAY THESE WAGES BASED UPON THE CLASSIFICATION OF WORK ACTUALLY PERFORMED.
TWO OF B & A'S EMPLOYEES WERE HIRED THROUGH THE CALIFORNIA STATE EMPLOYMENT DEVELOPMENT DEPARTMENT WITH THE UNDERSTANDING THAT THE FAIR LABOR STANDARDS ACT MINIMUM WAGES WOULD APPLY, SINCE THE EMPLOYEES WOULD NOT PERFORM WORK AT THE "ACTUAL CONSTRUCTION SITE." HOWEVER, DOL FOUND AS A RESULT OF THE DEPARTMENT OF THE ARMY'S INVESTIGATION THAT THESE EMPLOYEES WERE SUBJECT TO THE DAVIS-BACON ACT MINIMUM WAGES INSTEAD OF THE FAIR LABOR STANDARDS ACT MINIMUM WAGES WHICH B & A WAS PAYING ITS EMPLOYEES, BECAUSE THE EMPLOYEES WORKED ON THE JOB SITE.
THE DAVIS-BACON ACT VIOLATIONS WERE THE APPARENT RESULT OF THE CONTRACTOR'S MISUNDERSTANDING OF THE SITE OF WORK PROVISIONS OF THE ACT. ACCORDING TO THE INVESTIGATION, THE EMPLOYEES PERFORMED WORK IN AN ON-SITE TOOL YARD. THE DOL DETERMINED THAT THE TOOL YARD MUST BE CONSIDERED PART OF THE SITE OF WORK. DUE TO THIS MISUNDERSTANDING, THE EMPLOYEES WERE MISCLASSIFIED AS CLERKS INSTEAD OF AS LABORERS, RESULTING IN THE UNDERPAYMENT OF WAGES.
YOU INFORMED US THAT A CERTIFIED LETTER DATED OCTOBER 1, 1984, ISSUED A RULING UNDER 29 C.F.R. SEC. 5.11(C)(1). SINCE THERE WERE NO RELEVANT FACTS AT ISSUE, ONLY A RULING ON ISSUES OF LAW WAS REQUIRED. THAT LETTER AFFIRMED THESE FINDINGS. THE DOL ALSO ADVISED THE FIRM THAT IT COULD OBTAIN REVIEW OF ITS RULING BY SUBMITTING FURTHER STATEMENTS REGARDING THE FACTS IN DISPUTE. UNDER 29 C.F.R. SEC. 5.11(D), "IF A TIMELY RESPONSE TO THE ADMINISTRATOR'S FINDINGS OR RULING IS NOT MADE OR A TIMELY PETITION FOR REVIEW IS NOT FILED, THE ADMINISTRATOR'S FINDINGS AND/OR RULING SHALL BE FINA1." WHILE THE RECORD INDICATES THAT THIS LETTER WAS RECEIVED, THE FIRM DID NOT RESPOND.
THE DAVIS-BACON ACT PROVIDES THAT THE COMPTROLLER GENERAL IS TO DEBAR PERSONS OR FIRMS WHOM HE HAS FOUND TO HAVE DISREGARDED THEIR OBLIGATIONS TO EMPLOYEES UNDER THE ACT. 40 U.S.C. SEC. 276A-2. IN CIRCULAR LETTER B-3368, MARCH 19, 1957, WE DISTINGUISHED BETWEEN "TECHNICAL VIOLATIONS" WHICH RESULT FROM INADVERTENCE OR LEGITIMATE DISAGREEMENT CONCERNING CLASSIFICATION, AND "SUBSTANTIAL VIOLATIONS" WHICH ARE INTENTIONAL AS DEMONSTRATED BY BAD FAITH OR GROSS CARELESSNESS IN OBSERVING OBLIGATIONS TO EMPLOYEES WITH RESPECT TO THE MINIMUM WAGE PROVISIONS OF THE DAVIS- BACON ACT. A DISPUTE OVER CLASSIFICATION OF EMPLOYEES IS NOT GENERALLY AN INTENTIONAL VIOLATION AND IS NOT A REASON FOR DEBARRING UNDER THE ACT.
BASED ON OUR INDEPENDENT REVIEW OF THE RECORD IN THIS MATTER, WE CONCLUDE THAT THERE WAS LEGITIMATE DISAGREEMENT CONCERNING CLASSIFICATION AND THE APPLICABILITY OF THE DAVIS-BACON ACT DUE TO INTERPRETATIONS OF THE SITE OF WORK PROVISIONS OF THE ACT. THEREFORE, WE DECLINE TO DEBAR B & A ELECTRIC COMPANY, INC.
ACCORDINGLY, THE FUNDS ON DEPOSIT WITH OUR OFFICE WILL BE DISBURSED IN ACCORDANCE WITH ESTABLISHED PROCEDURES.