Liability of Prime Contractor for Wage Underpayment by Subcontractor

B-201631: Jul 17, 1981

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Ralph O. White
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A prime contractor contended that it was not liable for a wage underpayment made by a subcontractor and requested payment of an amount furnished to GAO from contract withholdings for distribution to the aggrieved employee. A portion of the withholdings represented Davis-Bacon Act underpayments and a portion represented Contract Work Hours and Safety Standards Act (CWHSSA) underpayments. CWHSSA underpayments are not for GAO determination. Therefore, GAO would consider the contention only to the extent that it bore upon the Davis-Bacon withholding. The Davis-Bacon Act directs contractors or subcontractors to pay all mechanics and laborers, employed directly on the site of work, no less than the minimum wages specified in the contract. The Act could extend to offsite construction sites which are located in close proximity to the actual construction site. In this case, the subcontractor was performing prime-contract work at a quarry several miles away from the site. Therefore, it was appropriate to include the quarry as a part of the site of the work. The contracting officer was authorized to withhold funds from the prime contractor to pay laborers and mechanics employed by the contractor or the subcontractor the full amount of wages required by the contract. Therefore, the protester's claim for payment of the amount withheld was denied.