B-214365, AUG 18, 1986, OFFICE OF THE GENERAL COUNSEL

B-214365: Aug 18, 1986

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THE SUBCONTRACTOR WILL BE DEBARRED UNDER ACT. OHIO-83-113 THIS IS IN RESPONSE TO YOUR REQUEST THAT WE RECONSIDER OUR PRIOR DETERMINATION NOT TO PLACE RELY PAINTING AND DECORATING (RELY PAINTING) AND MESSRS. THE CONTRACTS WERE SUBJECT TO THE DAVIS-BACON ACT REQUIREMENTS THAT CERTAIN MINIMUM WAGES BE PAID AND THAT THE CONTRACTOR SUBMIT PAYROLL RECORDS CERTIFIED AS TO CORRECTNESS AND COMPLETENESS. THESE EMPLOYEES WERE NOT PAID WEEKLY. THESE EMPLOYEES WERE NOT PAID AT ALL. THE AIR FORCE INVESTIGATION ALSO REVEALED THAT THE CERTIFIED PAYROLLS SUBMITTED BY RELY PAINTING WERE INACCURATE. WERE NOT SUBMITTED ON A TIMELY BASIS. PAYMENT WAS SUBSEQUENTLY MADE BY THE PRIME CONTRACTOR. THE THREE ABOVE-NAMED PARTNERS IN RELY PAINTING WERE ADVISED OF THE VIOLATIONS BY CERTIFIED LETTER DATED JUNE 27.

B-214365, AUG 18, 1986, OFFICE OF THE GENERAL COUNSEL

BIDDERS - DEBARMENT - LABOR STIPULATION VIOLATIONS - DAVIS-BACON ACT SUBCONTRACTORS - DEBARMENT REQUIRED DIGEST: THE DEPARTMENT OF LABOR REQUESTED RECONSIDERATION OF OUR PRIOR DETERMINATION NOT TO DEBAR A SUBCONTRACTOR FOR VIOLATIONS OF THE DAVIS BACON ACT. UPON RECONSIDERATION AND BASED ON ANOTHER REVIEW OF THE RECORD BEFORE US, WE CONCLUDE THAT THE SUBCONTRACTOR DISREGARDED ITS OBLIGATIONS TO ITS EMPLOYEES UNDER THE ACT BY UNDERPAYING THE EMPLOYEES AND BY SUBMITTING INACCURATE, INCOMPLETE, AND FALSIFIED PAYROLL RECORDS. THEREFORE, THE SUBCONTRACTOR WILL BE DEBARRED UNDER ACT.

MR. JAMES L. VALIN:

ASSISTANT ADMINISTRATOR

WAGE AND HOUR DIVISION

EMPLOYMENT STANDARDS ADMINISTRATION

U.S. DEPARTMENT OF LABOR

SUBJECT: RELY PAINTING AND DECORATING

CONTRACT NOS. F33601-81-C0073

AND F33601-81-C0587

DOL FILE NO. OHIO-83-113

THIS IS IN RESPONSE TO YOUR REQUEST THAT WE RECONSIDER OUR PRIOR DETERMINATION NOT TO PLACE RELY PAINTING AND DECORATING (RELY PAINTING) AND MESSRS. RAYMOND L. HARRISON, HARRISON L. SUGG, AND WILLIAM E. SUGG, INDIVIDUALLY AND AS PARTNERS, ON THE INELIGIBLE BIDDERS LIST FOR VIOLATIONS OF THE DAVIS-BACON ACT, 40 U.S.C. SECS. 276A TO 276A-5 (1982), AND THE CONTRACT WORK HOURS AND SAFETY STANDARDS ACT (CWHSSA), 40 U.S.C. SECS 327-332 (1982). UPON RECONSIDERATION OF THE ENTIRE RECORD, WE CONCUR WITH THE DEPARTMENT OF LABOR RECOMMENDATION AND REVERSE OUR PRIOR DETERMINATION.

RELY PAINTING PERFORMED WORK AS A SUBCONTRACTOR UNDER CONTRACT NUMBERS F- 33601-81-C0073 AND F33601-81-C0587, RENOVATIONS AND REPAIRS TO TWO BUILDINGS AT WRIGHT-PATTERSON AIR FORCE BASE, OHIO. THE CONTRACTS WERE SUBJECT TO THE DAVIS-BACON ACT REQUIREMENTS THAT CERTAIN MINIMUM WAGES BE PAID AND THAT THE CONTRACTOR SUBMIT PAYROLL RECORDS CERTIFIED AS TO CORRECTNESS AND COMPLETENESS. SEE 29 C.F.R. SEC. 5.5(2) (1984).

FOLLOWING COMPLAINTS FROM THREE PAINTERS EMPLOYED BY RELY PAINTING, THE DEPARTMENT OF THE AIR FORCE CONDUCTED AN INVESTIGATION AND DETERMINED THAT, DURING THE PERIOD FROM DECEMBER 1981 TO APRIL 1982, RELY PAINTING FAILED TO PAY THE REQUIRED PREVAILING WAGE RATE ($14.32 PER HOUR) TO FOUR EMPLOYEES WHO WORKED AS PAINTERS. THESE EMPLOYEES WERE NOT PAID WEEKLY, AS REQUIRED BY THE DAVIS-BACON ACT, AND NEAR THE END OF THESE CONTRACTS, THESE EMPLOYEES WERE NOT PAID AT ALL. IN ADDITION, THE FIRM FAILED TO PAY OVERTIME COMPENSATION TO ONE EMPLOYEE FOR HOURS WORKED IN EXCESS OF 40 HOURS PER WEEK, A CWHSSA VIOLATION.

THE AIR FORCE INVESTIGATION ALSO REVEALED THAT THE CERTIFIED PAYROLLS SUBMITTED BY RELY PAINTING WERE INACCURATE, INCOMPLETE, AND WERE NOT SUBMITTED ON A TIMELY BASIS. THE PAYROLLS SUBMITTED FOR CONTRACT NUMBER F33601-C0587 FAILED TO SHOW THAT ANY PAINTERS WORKED ON THIS CONTRACT WHEN, IN FACT, AT LEAST FOUR PAINTERS HAD BEEN WORKING ON THE CONTRACT.

THE AIR FORCE COMPUTED BACK WAGES IN THE AMOUNT OF $3,786.52 AND OVERTIME BACK WAGES OF $158.64, BUT RELY PAINTING REFUSED TO MAKE RESTITUTION. PAYMENT WAS SUBSEQUENTLY MADE BY THE PRIME CONTRACTOR, C&N INDUSTRIAL CONTRACTORS, INC. THE THREE ABOVE-NAMED PARTNERS IN RELY PAINTING WERE ADVISED OF THE VIOLATIONS BY CERTIFIED LETTER DATED JUNE 27, 1983 (RECEIVED JULY 1, 1983), BUT THEY FAILED TO RESPOND TO THE OPPORTUNITY TO REBUT THE ALLEGATIONS BEFORE AN ADMINISTRATIVE LAW JUDGE.

LABOR RECOMMENDED DEBARMENT OF RELY PAINTING AND THE THREE ABOVE NAMED INDIVIDUALS, BUT WE INITIALLY DECLINED ON THE BASIS THAT THE VIOLATIONS APPEARED TO BE THE RESULT OF FINANCIAL DIFFICULTIES AND EXTREMELY CARELESS RECORDKEEPING. B-214365-O.M., JUNE 5, 1984. WE NOTED THAT C&N DID NOT PAY RELY PAINTING FOR CERTAIN WORK PERFORMED AND THAT IT APPEARED BECAUSE OF RESULTING FINANCIAL DIFFICULTIES, RELY PAINTING WAS FORCED TO POSTPONE OR FOREGO WAGE PAYMENTS. AS TO THE CERTIFIED PAYROLLS, WE NOTED THAT THE FAILURE TO LIST EMPLOYEES DID NOT INDICATE A PATTERN OF DELIBERATE CONCEALMENT OF WAGE UNDERPAYMENT OR A DELIBERATE FALSIFICATION OF PAYROLLS, BUT, RATHER, CARELESS RECORDKEEPING. FINALLY, WE NOTED THAT RELY PAINTING MAY HAVE BEEN CONFUSED AS TO THE PROPER WAGE PAYMENTS SINCE THE FIRM WAS AT THAT SAME TIME ALSO WORKING ON A THIRD, NONGOVERNMENT CONTRACT WHICH WAS NOT COVERED BY THE DAVIS-BACON ACT.

LABOR HAS REQUESTED RECONSIDERATION OF OUR DETERMINATION NOT TO DEBAR, CITING FIRST THAT A PRINCIPAL EMPLOYEE OF RELY PAINTING, MR. WILLIAM SUGG, HAD BEEN PREVIOUSLY INVESTIGATED FOR NONCOMPLIANCE WITH THE DAVIS-BACON ACT AND CWHSSA AND THAT HE HAD BEEN DEBARRED FOR 3 YEARS FOR DISREGARDING HIS OBLIGATIONS UNDER THIS ACT. B-199701, SEPTEMBER 25, 1980. LABOR ARGUES THAT HE SHOULD HAVE BEEN AWARE OF THE REQUIREMENT OF THE ACT IN CONNECTION WITH THESE TWO CONTRACTS.

LABOR ALSO ARGUES THAT IN ADDITION TO FAILING TO PAY THE PAINTERS FOR ALL HOURS WORKED AND FAILING TO PAY OVERTIME COMPENSATION, THE FIRM SUBMITTED INACCURATE AND INCOMPLETE PAYROLLS WHICH SHOWED THAT NO PAINTERS WORKED ON CONTRACT NUMBER F33601-81-C0587 WHEN AT LEAST FOUR PAINTERS ACTUALLY PERFORMED WORK. LABOR CONTENDS THAT BY NOT INCLUDING THE PAINTERS' NAMES ON THE PAYROLL, THE FIRM WAS CONCEALING THE VIOLATIONS.

UPON REEXAMINATION OF THE RECORD BEFORE US, WE AGREE WITH LABOR THAT RELY PAINTING AND THE ABOVE-NAMED INDIVIDUALS HAVE DISREGARDED THEIR OBLIGATIONS TO THEIR EMPLOYEES UNDER THE DAVIS-BACON ACT. THE RECORD ESTABLISHES THAT THE CERTIFIED PAYROLLS WERE PREPARED SOME TIME AFTER THE WORK WAS PERFORMED, WERE INACCURATE AND INCOMPLETE, AND DID NOT REFLECT WORK PERFORMED BY FOUR EMPLOYEES ON CONTRACT NUMBER F33601 C0587.

AS TO THE QUESTION OF POSSIBLE FINANCIAL DIFFICULTIES BY RELY PAINTING, THE AIR FORCE INVESTIGATING OFFICER FOUND THAT THE FAILURE TO PAY THESE EMPLOYEES WAS NOT CAUSED BY THE PRIME CONTRACTOR, C&N. AS TO THE QUESTION OF CONFUSION OVER PAYMENTS TO THE SAME EMPLOYEES FOR WORK PERFORMED ON GOVERNMENT AND NONGOVERNMENT CONTRACTS, THERE IS NO INDICATION IN THE RECORD BEFORE US OF CONFUSION ON THE PART OF RELY PAINTING AS TO WHICH EMPLOYEES WERE WORKING ON WHICH CONTRACT AND WHAT WERE THE PROPER WAGE RATES.

FINALLY, WE ARE ALSO PERSUADED BY LABOR'S ARGUMENT THAT RELY PAINTING, THROUGH MR. WILLIAM E. SUGG, SHOULD HAVE BEEN AWARE OF THE DAVIS-BACON ACT SINCE MR. SUGG AND SUGG PAINTING AND DECORATING OF DAYTON, OHIO, WERE PREVIOUSLY DEBARRED BY THIS OFFICE FOR DAVIS-BACON ACT VIOLATIONS. B-199701, SEPTEMBER 25, 1980. ALTHOUGH MR. WILLIAM SUGG IS LISTED AS A FOREMAN FOR RELY PAINTING, THERE IS EVIDENCE IN THE RECORD BEFORE US THAT HE PARTICIPATED IN THE MANAGEMENT OF THE FIRM AND WAS REGARDED AS AN OWNER BY OTHERS DEALING WITH THE FIRM.

THEREFORE, FOR THE REASONS SET FORTH ABOVE, WE CONCLUDE THAT THE FIRM HAS DISREGARDED ITS OBLIGATIONS TO EMPLOYEES UNDER SECTION 3(A) OF THE DAVIS- BACON ACT. ACCORDINGLY, THE NAMES RELY PAINTING AND DECORATING, AND RAYMOND L. HARRISON, HARRISON L. SUGG, AND WILLIAM E. SUGG, INDIVIDUALLY AND AS PARTNERS IN RELY PAINTING AND DECORATING, WILL BE INCLUDED ON THE INELIGIBLE BIDDERS LIST DISTRIBUTED TO ALL DEPARTMENTS OF THE GOVERNMENT. PURSUANT TO STATUTORY DIRECTION UNDER 40 U.S.C. SEC. 276A-2, NO CONTRACT SHALL BE AWARDED TO THEM OR TO ANY FIRM, CORPORATION, PARTNERSHIP OR ASSOCIATION IN WHICH THEY, OR ANY OF THEM, HAVE AN INTEREST UNTIL 3 YEARS HAVE ELAPSED FROM THE DATE OF PUBLICATION OF SUCH LIST.