B-7870, APRIL 4, 1940, 19 COMP. GEN. 839

B-7870: Apr 4, 1940

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CONTRACTS - WAGE STIPULATIONS - EMPLOYEES' DIVISION OF WAGES WITH THIRD PERSON WHERE OWNER OF TRUCKS RENTED BY A GOVERNMENT CONTRACTOR WAS NEITHER AN AGENT NOR SUBCONTRACTOR WITHIN THE MEANING OF THE DAVIS-BACON ACT. AS FOLLOWS: THERE IS PRESENTED TO YOU HEREWITH FOR APPROPRIATE ACTION A CASE INVOLVING AN ALLEGED VIOLATION (TWO INSTANCES) OF THE PROVISIONS OF THE ACT OF AUGUST 30. THE LATTER PARTY IS CONSTRUCTING AN ACADEMIC BUILDING AT FORT RILEY. THE MINIMUM WAGE RATE IS FIXED AT 65 CENTS PER HOUR. WERE RENTED FROM A MR. HOERMAN REPRESENTED TO THEM THAT THEIR EMPLOYMENT WAS CONDITIONED UPON THEIR PAYING HIM A REFUND. HE WAS REQUIRED TO REFUND TO MR. HE WAS REQUIRED TO REFUND TO MR. THE FOREGOING IS SET FORTH IN DETAIL IN THE ATTACHED AFFIDAVITS (MARKED " ENCLOSURES 1.

B-7870, APRIL 4, 1940, 19 COMP. GEN. 839

CONTRACTS - WAGE STIPULATIONS - EMPLOYEES' DIVISION OF WAGES WITH THIRD PERSON WHERE OWNER OF TRUCKS RENTED BY A GOVERNMENT CONTRACTOR WAS NEITHER AN AGENT NOR SUBCONTRACTOR WITHIN THE MEANING OF THE DAVIS-BACON ACT, 49 STAT. 1011, THE FACT THAT TRUCK DRIVERS EMPLOYED DIRECTLY BY THE CONTRACTOR, PAID THE OWNER PART OF THEIR WAGES AFTER THE CONTRACTOR HAD PAID THEM IN FULL, DOES NOT, UNDER THE TERMS OF SAID ACT, AUTHORIZE EITHER WITHHOLDING PAYMENTS FROM THE CONTRACTOR FOR PAYMENT TO THE DRIVERS, OR LISTING THE OWNER OR THE CONTRACTOR AS A VIOLATOR OF ITS OBLIGATIONS TO EMPLOYEES, ETC.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF WAR, APRIL 4, 1940:

THERE HAS BEEN CONSIDERED YOUR LETTER OF JANUARY 2, 1940, AS FOLLOWS:

THERE IS PRESENTED TO YOU HEREWITH FOR APPROPRIATE ACTION A CASE INVOLVING AN ALLEGED VIOLATION (TWO INSTANCES) OF THE PROVISIONS OF THE ACT OF AUGUST 30, 1935 ( PUBLIC NO. 403-- 74TH CONGRESS), RELATING TO REFUNDS BY LABORERS AND MECHANICS. UNDER CONTRACT NO. ER W 6139 QM-14 DATED OCTOBER 27, 1938, BETWEEN THE UNITED STATES OF AMERICA AND THE OLSON CONSTRUCTION COMPANY, INC., 410 SO. 7TH STREET, LINCOLN, NEBRASKA, THE LATTER PARTY IS CONSTRUCTING AN ACADEMIC BUILDING AT FORT RILEY, KANSAS. IN ACCORDANCE WITH THE REQUIREMENTS OF THE ABOVE CITED ACT, THE SAID CONTRACT INCLUDES A LIST OF THE CLASSIFICATIONS OF LABOR TO BE EMPLOYED ON THE WORK, TOGETHER WITH THE PREDETERMINED (BY THE SECRETARY OF LABOR) MINIMUM WAGE RATE FOR EACH CLASSIFICATION. FOR TRUCK DRIVERS, THE MINIMUM WAGE RATE IS FIXED AT 65 CENTS PER HOUR.

IT APPEARS THAT SOME OF THE TRUCKS USED ON THE WORK BY THE OLSON CONSTRUCTION COMPANY, INC., WERE RENTED FROM A MR. A. W. HOERMAN OF MANHATTAN, KANSAS, THE DRIVERS BEING EMPLOYED AND PAID BY THE GENERAL CONTRACTOR. TWO OF THOSE TRUCK DRIVERS--- MESSRS. HENRY A. VOELKER AND ELI H. OPPENLANDER, BOTH OF MANHATTAN, KANSAS--- ALLEGE THAT MR. HOERMAN REPRESENTED TO THEM THAT THEIR EMPLOYMENT WAS CONDITIONED UPON THEIR PAYING HIM A REFUND. MR. VOELKER ALLEGES THAT, BETWEEN APRIL 21, 1939, AND SEPTEMBER 15, 1939, HE WAS REQUIRED TO REFUND TO MR. HOERMAN SUMS AGGREGATING $231.42. MR. OPPENLANDER ALLEGES THAT, BETWEEN JUNE 15, 1939, AND SEPTEMBER 26, 1939, HE WAS REQUIRED TO REFUND TO MR. HOERMAN SUMS AGGREGATING $107.10. THE FOREGOING IS SET FORTH IN DETAIL IN THE ATTACHED AFFIDAVITS (MARKED " ENCLOSURES 1, 2, 3, AND 4") MADE BY MR. VOELKER, MR. OPPENLANDER, MR. RICHARD E. CAMPBELL ( GOVERNMENT INSPECTOR ON WORK), AND MR. JOSEPH BINGHAM (CHIEF CLERK, OFFICE OF CONSTRUCTING QUARTERMASTER).

WHEN THE FOREGOING WAS BROUGHT TO HIS ATTENTION, THE QUARTERMASTER GENERAL DIRECTED THE CONSTRUCTING QUARTERMASTER IN CHARGE OF THE WORK AT FORT RILEY TO IMMEDIATELY ACQUAINT THE OLSON CONSTRUCTION COMPANY, INC., WITH THE STATEMENTS MADE BY MESSRS. VOELKER AND OPPENLANDER, CALL SPECIFIC ATTENTION TO THE PERTINENT PROVISIONS OF THE ACT HEREINBEFORE MENTIONED, AND DEMAND AN IMMEDIATE STATEMENT OF INTENTIONS. THIS WAS DONE AND THE CONTRACTOR'S RESPONSE IS HERETO ATTACHED, MARKED " ENCLOSURE NO. 5.' THAT LETTER SETS FORTH THAT THE CONTRACTOR HAD NO KNOWLEDGE OF THE PRACTICES DISCLOSED AND THAT THE TRUCK DRIVERS WOULD BE PROMPTLY REIMBURSED FOR THE AMOUNTS REFUNDED. THAT METHOD OF SETTLEMENT WAS OBJECTED TO BY THE QUARTERMASTER GENERAL ON THE GROUNDS THAT THE STATUTE REQUIRES THE SETTLEMENT TO BE MADE BY YOU.

ON THE TENTH PARTIAL PAYMENT TO THE OLSON CONSTRUCTION COMPANY, INC., UNDER THE HEREINBEFORE-NAMED CONTRACT, THE SUM OF $338.52 WAS DEDUCTED AND IS BEING HELD FOR YOUR DISPOSAL. THE PAYMENT IN QUESTION IS COVERED BY VOUCHER NO. 32, NOVEMBER 1939 ACCOUNTS OF O. W. DEGRUCHY, MAJOR, F.D. (SYMBOL NO. 95-451).

DUE TO THE FACT THAT NOTHING HAS BEEN DISCLOSED IN THIS CASE WHICH SUGGESTS THE LEAST HINT THAT THE GENERAL CONTRACTOR HAD ANY KNOWLEDGE OF THIS "RACKET" UNTIL IT WAS EXPOSED, IT IS RECOMMENDED THAT IF ANYONE IS TO BE BLACK-LISTED UNDER THE PROVISIONS OF SECTION 3 (A) OF THE ACT CITED, IT BE MR. A. W. HOERMAN OF MANHATTAN, KANSAS.

THE CIRCUMSTANCES WITH RESPECT TO THE "REFUNDS" TO A. W. HOERMAN APPEAR TO BE SUBSTANTIALLY IDENTICAL AND THEY ARE SET FORTH IN THE AFFIDAVIT OF HENRY A. VOELKER, WHICH READS IN PART AS FOLLOWS:

THAT ON OR ABOUT APRIL 21, 1939, MR. A. W. HOERMAN, OF MANHATTAN, KANSAS, CAME TO ME AND TOLD ME THAT HE HAD A TRUCK ON THE OLSON CONSTRUCTION COMPANY JOB AT FORT RILEY, KANSAS, AND THAT HE NEEDED A TRUCK DRIVER FOR THE TRUCK. HE STATED AT THAT TIME THAT THE OLSON CONSTRUCTION COMPANY WOULD PAY ME SIXTY-FIVE CENTS (65 CENTS) AN HOUR AND THAT I SHOULD REFUND THIRTY-FIVE CENTS (35 CENTS) AN HOUR OUT OF THE MONEY I RECEIVED FROM THE OLSON CONSTRUCTION COMPANY FOR MY SERVICES AS TRUCK DRIVER. THAT I PAID MR. A. W. HOERMAN THIRTY-FIVE (35 CENTS) CENTS AN HOUR OUT OF THE MONEY I RECEIVED FROM THE OLSON CONSTRUCTION COMPANY FOR THE FIRST WEEK. THAT I THEN COMPLAINED TO MR. A. W. HOERMAN THAT I SHOULD RECEIVE MORE MONEY AND THAT HE AGREED THAT THEREAFTER I WOULD BE REQUIRED ONLY TO PAY HIM THIRTY CENTS (30 CENTS) AN HOUR FROM THE MONEY I RECEIVED FROM THE OLSON CONSTRUCTION COMPANY FOR MY SERVICES AS A TRUCK DRIVER.

THAT, DURING THE PERIOD APRIL 22, 1939, TO SEPTEMBER 15, 1939, I WORKED FOR THE OLSON CONSTRUCTION COMPANY ON THE ACADEMIC BUILDING JOB AT FORT RILEY, KANSAS, SEVEN HUNDRED SIXTY-EIGHT AND THREE-QUARTERS (768 3/4) HOURS AS TRUCK DRIVER AND RECEIVED FROM THE OLSON CONSTRUCTION COMPANY FIVE HUNDRED AND ONE DOLLARS AND SEVENTY CENTS ($501.70). THAT FROM THIS $501.70 RECEIVED FOR MY SERVICES AS TRUCK DRIVER FOR THE OLSON CONSTRUCTION COMPANY, I PAID TO MR. A. W. HOERMAN, TWO HUNDRED THIRTY-ONE DOLLARS AND FORTY-TWO CENTS ($231.42) IN ACCORDANCE WITH THE AGREEMENT MENTIONED HERETOFORE.

THAT ON OR ABOUT SEPTEMBER 24, 1939, MR. WILLIAM B. DUNCAN, SUPERINTENDENT FOR THE OLSON CONSTRUCTION COMPANY ON THE ACADEMIC BUILDING AT FORT RILEY, KANSAS, TOLD ME THAT THE WORK HAD PROGRESSED SUCH THAT MY SERVICES AS A TRUCK DRIVER WOULD NO LONGER BE REQUIRED. THAT A FEW DAYS AFTER THAT I OBTAINED A POSITION WITH MR. L. A. SEAWALL, OF 427 PIERRE STREET, MANHATTAN, KANSAS, AS TRUCK DRIVER. THAT I DID NOT PAY MR. A. W. HOERMAN THE THIRTY CENTS (30 CENTS) AN HOUR OUT OF MY LAST CHECK RECEIVED FROM THE OLSON CONSTRUCTION COMPANY FOR THE PERIOD SEPTEMBER 16, 1939, TO SEPTEMBER 22, 1939. THAT MR. A. W. HOERMAN WENT TO MY NEW EMPLOYER, MR. L. A. SEAWALL, AND STATED THAT I OWED HIM FROM MY PAY RECEIVED FROM THE OLSON CONSTRUCTION COMPANY, AND TRIED TO COLLECT THE AMOUNT INVOLVED--- ELEVEN HOURS AT THIRTY CENTS AN HOUR. THAT MR. SEAWALL TOLD MR. HOERMAN THAT HE COULD NOT TAKE THE AMOUNT INVOLVED FROM MY CHECK. THAT MR. HOERMAN THEN SAID THAT HE WOULD INITIATE PROCEEDINGS TO GARNISHEE MY PAY TO COLLECT WHAT HE CLAIMED WAS DUE HIM UNDER OUR AGREEMENT.

THAT ON SEPTEMBER 30, 1939, I SPOKE TO MR. ELZA CAMPBELL, GOVERNMENT INSPECTOR ON THE ACADEMIC BUILDING JOB AT FORT RILEY, KANSAS, ABOUT MR. HOERMAN'S THREAT TO GARNISHEE MY PAY AND THE AGREEMENT WHICH HAD REQUIRED ME TO REFUND CERTAIN AMOUNTS AS MENTIONED HERETOFORE TO MR. A. W. HOERMAN. THAT ON OCTOBER 2, 1939, MR. A. W. HOERMAN CAME TO ME AND SUGGESTED IN SO MANY WORDS THAT WE DROP THE MATTER OF WHAT HE CLAIMED I OWE HIM, STATING THAT HE WAS WILLING TO DROP THE MATTER OF GARNISHEE OF MY PAY. HE ( MR. A. W. HOERMAN) FURTHER INTIMATED THAT IF I DID NOT DROP THE MATTER OF MY HAVING MADE CERTAIN PAYMENTS TO HIM, IT WOULD ONLY STIR UP A LOT OF TROUBLE; THAT WE (HE AND I) SHOULD REFRAIN FROM DOING OR SAYING ANYTHING THAT MIGHT BE DETRIMENTAL TO THE OLSON CONSTRUCTION COMPANY AND CAUSE THEM TO STAND A LOSS. MR. HOERMAN FURTHER STATED THAT MR. CAMPBELL COULD NOT DO ANYTHING FOR ME IN THE WAY OF EMPLOYMENT; THAT IT WAS CONTRACTORS LIKE THE OLSON CONSTRUCTION COMPANY THAT WE SHOULD KEEP ON THE GOOD SIDE OF--- THAT WE WOULD HAVE TO LOOK TO THEM FOR JOBS IN THE FUTURE.

THAT I NOW REALIZE THAT I SHOULD HAVE REFUSED TO ENTER INTO AN AGREEMENT WITH MR. A. W. HOERMAN SUCH AS I HAVE MENTIONED AND THAT I WAS ENTITLED TO THE FULL SIXTY-FIVE CENTS (65 CENTS) AN HOUR PAID ME FOR MY SERVICES AS TRUCK DRIVER BY THE OLSON CONSTRUCTION COMPANY. THAT I DESIRED TO BE REFUNDED THE AMOUNTS PAID BY ME TO MR. A. W. HOERMAN FROM THE AMOUNTS I RECEIVED FROM THE OLSON CONSTRUCTION COMPANY FOR MY SERVICES AS TRUCK DRIVER; TO WIT: TWO HUNDRED THIRTY ONE DOLLARS AND FORTY-TWO CENTS ($231.42).

THE UNCONTROVERTED FACTS WITH RESPECT TO THE EMPLOYMENT OF THE TWO TRUCK DRIVERS BY THE GENERAL CONTRACTOR ARE SET FORTH IN LETTER OF DECEMBER 16, 1939, FROM THE OLSON CONSTRUCTION COMPANY, INC., TO THE CONSTRUCTING QUARTERMASTER, AS FOLLOWS:

WE HAVE DELAYED A LITTLE IN REPLYING TO YOUR REQUEST OF DECEMBER 11TH ASKING US IF THERE WAS AN WRITTEN AGREEMENT BETWEEN MR. HOERMAN AND OURSELVES AND WHETHER OR NOT OUR AGREEMENT CALLED FOR HOERMAN'S APPROVAL OF THE DRIVERS EMPLOYED, BECAUSE WE WANTED TO VERIFY OUR FACTS CONCLUSIVELY BEFORE MAKING THIS REPLY. WE FIND AS FOLLOWS:

THE TRUCKS OPERATED ON THE ACADEMIC BUILDING JOB AT FORT RILEY, KANSAS, WERE ORIGINALLY RENTED FROM A. W. HOERMAN OF MANHATTAN, KANSAS, WITH DRIVER. FOR A WHILE THESE TRUCKS WERE OPERATED BY A. W. HOERMAN AND HIS BROTHER L. A. HOERMAN. AT ALL TIMES WHILE THESE TRUCKS WERE BEING SO OPERATED, THEY WERE UNDER THE DIRECT SUPERVISION OF THE SUPERINTENDENT FOR THE OLSON CONSTRUCTION COMPANY--- NEITHER OF THE HOERMAN BROTHERS HAD ANYTHING TO SAY AS TO WHAT WORK WAS TO BE DONE.

AT A LATER DATE, IT WAS DECIDED BY A. W. HOERMAN THAT IT WOULD BE TO HIS ADVANTAGE TO LEAVE THE JOB AND OPERATE OTHER TRUCKS OWNED BY HIM. HOERMAN OPERATES A TRUCK LINE TO VARIOUS POINTS OUT OF MANHATTAN, KANSAS. L. A. HOERMAN ALSO LEFT THE JOB TO ASSIST HIS BROTHER WITH THIS OTHER WORK.

IT WAS THEN NECESSARY TO EMPLOY OTHER DRIVERS. AS THE NAMES OF MEN SUITABLE TO OPERATE TRUCKS WERE NOT KNOWN, A. W. HOERMAN WAS ASKED TO SEND OUT ELIGIBLES TO THE JOB. THESE ELIGIBLES WERE INTERVIEWED AND IF IT WAS THOUGHT DESIRABLE TO EMPLOY THEM, THEY WERE HIRED AT THE RATE OF 65 PERCENT (CENTS) PER HOUR AS PER THE TERMS OF THE CONTRACT FOR THE CONSTRUCTION OF THE ACADEMIC BUILDING. NO SUCH WORKER WAS EVER EMPLOYED AT THE REQUEST OR RECOMMENDATION OF MR. A. W. HOERMAN.

THERE WAS NEVER A WRITTEN AGREEMENT WITH A. W. HOERMAN FOR THE RENTAL OF THE TRUCKS, EITHER WITH DRIVERS OR WITHOUT. IT HAS NEVER BEEN CUSTOMARY FOR THE OLSON CONSTRUCTION COMPANY TO ENTER INTO A CONTRACT FOR SUCH SERVICES. HOWEVER, WHEN IT WAS NECESSARY TO RENT TRUCKS AND WHEN IT WAS KNOWN THAT A. W. HOERMAN HAD SUCH TRUCKS AVAILABLE ON A RENTAL BASIS, HE WAS CONTACTED AND TOLD THE RATE THAT WAS TO BE PAID. ($1.00 PER HOUR WITH DRIVER, 35 CENTS FOR THE RENTAL OF TRUCK AND 65 CENTS PER HOUR FOR THE SERVICES OF THE DRIVER). HE AGREED TO FURNISH TRUCKS ON THIS BASIS AND WAS HIRED ACCORDINGLY. THIS WAS THE EXTENT OF THE UNDERSTANDING AND NO AGREEMENT OR CONTRACT WAS ENTERED INTO. A TRUCK WAS RENTED FROM W. C. DEIBLER ON THE SAME BASIS, HE OPERATING HIS OWN TRUCK THROUGHOUT THE ENTIRE TIME HE WORKED ON THE JOB.

AT NO TIME WAS THERE EVER AN AGREEMENT IN ANY WAY WHATSOEVER, WHEREBY A. W. HOERMAN WOULD PASS ON THE APPROVAL OF THE DRIVERS EMPLOYED TO OPERATE HIS TRUCKS.

THERE WAS NO AGREEMENT BY THE OLSON CONSTRUCTION COMPANY THAT THEY WOULD EMPLOY ONLY SUCH DRIVERS AS THE TRUCK OWNER WOULD RECOMMEND. THESE DRIVERS WERE HIRED IN THE SAME MANNER AS ANY OTHER WORKER, FOR NO DEFINITE DURATION OF TIME AND THEIR RETENTION DEPENDING SOLELY UPON THE SERVICES RENDERED BY THEM.

UNDER THE FACTS AND CIRCUMSTANCES AS REPORTED, THERE WOULD APPEAR TO BE NO AUTHORITY UNDER THE DAVIS-BACON ACT, 49 STAT. 1011, FOR THIS OFFICE TO PAY THE RETAINED AMOUNT OF $338.52 TO THE TRUCK DRIVERS OR TO LIST EITHER THE GENERAL CONTRACTOR, OLSON CONSTRUCTION CO., OR A. W. HOERMAN, UNDER SECTION 3 (A) OF THE SAID ACT.

THE CONTRACT WAS EXECUTED IN ACCORDANCE WITH THE TERMS OF THE DAVIS BACON ACT, AND PROVIDES UNDER ARTICLE 17, IN PART, AS FOLLOWS:

(A) THE CONTRACTOR OR HIS SUBCONTRACTOR SHALL PAY ALL MECHANICS AND LABORERS EMPLOYED DIRECTLY UPON THE SITE OF THE WORK, UNCONDITIONALLY AND NOT LESS OFTEN THAN ONCE A WEEK, AND WITHOUT SUBSEQUENT DEDUCTION OR REBATE ON ANY ACCOUNT, THE FULL AMOUNTS ACCRUED AT TIME OF PAYMENT, COMPUTED AT WAGE RATES NOT LESS THAN THOSE STATED IN THE SPECIFICATIONS, REGARDLESS OF ANY CONTRACTUAL RELATIONSHIP WHICH MAY BE ALLEGED TO EXIST BETWEEN THE CONTRACTOR OR SUBCONTRACTOR AND SUCH LABORERS AND MECHANICS; AND THE SCALE OF WAGES TO BE PAID SHALL BE POSTED BY THE CONTRACTOR IN A PROMINENT AND EASILY ACCESSIBLE PLACE AT THE SITE OF THE WORK. THE CONTRACTING OFFICER SHALL HAVE THE RIGHT TO WITHHOLD FROM THE CONTRACTOR SO MUCH OF ACCRUED PAYMENTS AS MAY BE CONSIDERED NECESSARY BY THE CONTRACTING OFFICER TO PAY TO LABORERS AND MECHANICS EMPLOYED BY THE CONTRACTOR OR ANY SUBCONTRACTOR ON THE WORK THE DIFFERENCE BETWEEN THE RATES OF WAGES REQUIRED BY THE CONTRACT TO BE PAID LABORERS AND MECHANICS ON THE WORK AND THE RATES OF WAGES RECEIVED BY SUCH LABORERS AND MECHANICS AND NOT REFUNDED TO THE CONTRACTOR, SUBCONTRACTORS, OR THEIR AGENTS.

THE AUTHORITY OF THIS OFFICE TO PAY WITHHELD AMOUNTS TO LABORERS AND MECHANICS IS CONTAINED IN SECTION 3 (A) OF THE DAVIS-BACON ACT, AS FOLLOWS:

THE COMPTROLLER GENERAL OF THE UNITED STATES IS HEREBY AUTHORIZED AND DIRECTED TO PAY DIRECTLY TO LABORERS AND MECHANICS FROM ANY ACCRUED PAYMENTS WITHHELD UNDER THE TERMS OF THE CONTRACT ANY WAGES FOUND TO BE DUE LABORERS AND MECHANICS PURSUANT TO THIS ACT; * * * THE AUTHORITY FOR WITHHOLDING UNDER THE CONTRACT AND FOR PAYMENT BY THIS OFFICE TO LABORERS AND MECHANICS OF THE AMOUNT WITHHELD RELATES TO "THE DIFFERENCE BETWEEN THE RATES OF WAGES REQUIRED BY THE CONTRACT TO BE PAID LABORERS AND MECHANICS ON THE WORK AND THE RATE OF WAGES RECEIVED BY SUCH LABORERS AND MECHANICS AND NOT REFUNDED TO THE CONTRACTOR, SUBCONTRACTORS, OR THEIR AGENTS.' IT APPEARS IN THE PRESENT SITUATION THAT THE GENERAL CONTRACTOR PAID THE TRUCK DRIVERS HERE INVOLVED, UNCONDITIONALLY AND WITHOUT SUBSEQUENT DEDUCTION OR REBATE TO IT, THE FULL AMOUNTS REQUIRED BY THE CONTRACT TO BE PAID. A. W. HOERMAN WAS NOT A SUBCONTRACTOR OR AGENT OF THE GENERAL CONTRACTOR WITHIN THE MEANING OF THE CONTRACT, AND THE AGREEMENT WHICH HE HAD WITH THE TRUCK DRIVERS, UNAUTHORIZED BY AND UNKNOWN TO THE GENERAL CONTRACTOR, CANNOT OPERATE TO PLACE RESPONSIBILITY ON THE OLSON CONSTRUCTION CO., INC., FOR THE DIVERSION OF THE CONTRACT WAGES PAID BY IT, UNCONDITIONALLY AND IN GOOD FAITH, TO ITS OWN EMPLOYEES. A. W. HOERMAN WAS NOT THE EMPLOYER OF THE TRUCK DRIVERS, HE DID PAY THEIR WAGES, AND THE DAVIS BACON ACT PLACES NO LIABILITY UPON THE GENERAL CONTRACTOR FOR THE IMPROPER DISPOSITION BY THE LABORERS AND MECHANICS OF THE CONTRACT WAGES PAID TO THEM, SO LONG AS THERE IS NO REFUND, ETC., TO THE GENERAL CONTRACTOR, ITS SUBCONTRACTORS, OR ITS AGENTS.

SECTION 3 (A) OF THE DAVIS-BACON ACT PROVIDES, ALSO, THAT:

* * * THE COMPTROLLER GENERAL OF THE UNITED STATES IS FURTHER AUTHORIZED AND IS DIRECTED TO DISTRIBUTE A LIST TO ALL DEPARTMENTS OF THE GOVERNMENT GIVING THE NAMES OF PERSONS OR FIRMS WHOM HE HAS FOUND TO HAVE DISREGARDED THEIR OBLIGATIONS TO EMPLOYEES AND SUBCONTRACTORS. * * *

THE FACTS AND CIRCUMSTANCES IN THE PRESENT CASE DO NOT ESTABLISH THAT THE OLSON CONSTRUCTION O., INC., DISREGARDED ITS "OBLIGATIONS TO EMPLOYEES AND SUBCONTRACTORS.' ON THE CONTRARY, IT APPEARS THE SAID COMPANY PAID ITS TRUCK DRIVERS IN STRICT ACCORDANCE WITH THE TERMS OF THE CONTRACT. CONSEQUENTLY, THERE APPEARS NO BASIS FOR LISTING THE CONTRACTOR UNDER THE ACT. FURTHERMORE, THESE TRUCK DRIVERS WERE NOT EMPLOYEES OF A. W. HOERMAN AND IT CANNOT BE SAID THAT HE DISREGARDED HIS "OBLIGATIONS TO EMPLOYEES AND SUBCONTRACTORS" SO AS TO BRING HIM WITHIN THE LISTING PROVISIONS OF THE DAVIS-BACON ACT.

UNDER THE CIRCUMSTANCES, THE CLAIMS OF THE TRUCK DRIVERS FOR REFUND OF THE AMOUNTS THEY TURNED OVER TO A. W. HOERMAN WILL BE DISALLOWED, BUT NO OTHER ACTION IN THE MATTER APPEARS REQUIRED BY THIS OFFICE. IT IS UNDERSTOOD THAT THE CONTRACT HAS NOT BEEN COMPLETED AND THAT ADDITIONAL PARTIAL PAYMENTS WILL BE MADE HEREAFTER. ACCORDINGLY, IN MAKING SUCH PAYMENTS PROPER ADJUSTMENT SHOULD BE MADE TO THE CONTRACTOR WITH RESPECT TO THE AMOUNT OF $338.52 HERETOFORE WITHHELD UNDER VOUCHER NO. 32 OF THE NOVEMBER 1939 ACCOUNTS OF O. W. DEGRUCHY, MAJOR, F.D., UNITED STATES ARMY.

WITH REFERENCE TO THE ACTIVITIES OF A. W. HOERMAN IN THIS MATTER ATTENTION IS INVITED TO THE ACT OF JUNE 13, 1934, 48 STAT. 948, WHICH PROVIDES, IN PART, AS FOLLOWS:

THAT WHOEVER SHALL INDUCE ANY PERSON EMPLOYED IN THE CONSTRUCTION, PROSECUTION, OR COMPLETION OF ANY PUBLIC BUILDING, PUBLIC WORK, OR BUILDING OR WORK FINANCED IN WHOLE OR IN PART BY LOANS OR GRANTS FROM THE UNITED STATES, OR IN THE REPAIR THEREOF TO GIVE UP ANY PART OF THE COMPENSATION TO WHICH HE IS ENTITLED UNDER HIS CONTRACT OF EMPLOYMENT, BY FORCE, INTIMIDATION, THREAT OF PROCURING DISMISSAL FROM SUCH EMPLOYMENT, OR BY ANY OTHER MANNER WHATSOEVER, SHALL BE FINED NOT MORE THAN $5,000, OR IMPRISONED NOT MORE THAN FIVE YEARS, OR BOTH.

THERE IS SUGGESTED FOR YOUR CONSIDERATION AND SUCH ACTION AS YOU MAY DEEM APPROPRIATE THE QUESTION OF WHETHER THE FACTS AND CIRCUMSTANCES IN THE PRESENT CASE SHOULD BE REPORTED BY YOU TO THE ATTORNEY GENERAL FOR FURTHER INVESTIGATION AND POSSIBLE PROSECUTION UNDER THE SAID ACT.