B-225091 O/M, FEB 20, 1987

B-225091 O/M: Feb 20, 1987

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GAO'S SOLE FUNCTIONS UNDER THE CWHSSA ARE PURELY MINISTERIAL. GAO WILL PAY THE WORKERS IN ACCORDANCE WITH THE WAGE APPEALS BOARD DECISION. CONTRACTS SUBJECT TO THE CONTRACT WORK HOURS AND SAFETY STANDARDS ACT WERE MADE BETWEEN AN AGENCY AND A CONTRACTOR BEFORE A 1983 CHANGE TO A RELEVANT DOL REGULATION. THE PREVIOUS GENERAL PROHIBITION ON CROSS-WITHHOLDING IN 48 COMP.GEN. 387 (1968) IS NOT APPLICABLE. YOU HAVE QUESTIONED WHETHER. WHICH WERE WITHHELD SOLELY FOR VIOLATIONS OF THE CONTRACT WORK HOURS AND SAFETY STANDARDS ACT. WHICH IS ON DEPOSIT WITH YOUR GROUP. THE BASIS FOR THIS REQUEST WAS THE DECISION OF THE WAGE APPEALS BOARD. THE ONLY VIOLATIONS WHICH DOL FOUND WERE CHWSSA VIOLATIONS.

B-225091 O/M, FEB 20, 1987

PROCUREMENT - SOCIO-ECONOMIC POLICIES - LABOR STANDARDS - OVERTIME - WAGE UNDERPAYMENT - GAO AUTHORITY DIGEST: 1. DEPARTMENT OF LABOR HAS REQUESTED THAT CERTAIN FUNDS WITHHED FROM A CONTRACTOR FOR VIOLATIONS OF THE CONTRACT WORK HOURS AND SAFETY STANDARDS ACT (CWHSSA) BE PAID TO WORKERS IN ACCORDANCE WITH A WAGE APPEALS BOARD DECISION. AS A MATTER OF CURRENT POLICY, GAO'S SOLE FUNCTIONS UNDER THE CWHSSA ARE PURELY MINISTERIAL, I.E., TO PLACE THE CONTRACTORS' NAMES, AS DETERMINED BY DOL, ON THE INELIGIBLE BIDDERS LIST, AND TO DISBURSE FUNDS, AS DETERMINED BY DOL, TO THE PARTIES INVOLVED. THUS, GAO WILL PAY THE WORKERS IN ACCORDANCE WITH THE WAGE APPEALS BOARD DECISION. PROCUREMENT - SOCIO-ECONOMIC POLICIES - LABOR STANDARDS - OVERTIME - FEDERAL PROCUREMENT REGULATIONS/LAWS - REVISION 2. CONTRACTS SUBJECT TO THE CONTRACT WORK HOURS AND SAFETY STANDARDS ACT WERE MADE BETWEEN AN AGENCY AND A CONTRACTOR BEFORE A 1983 CHANGE TO A RELEVANT DOL REGULATION. WHERE, AS HERE, AN AGENCY ENGAGES IN CROSS- WITHHOLDING, BUT A CONTRACTOR GIVES ACTUAL OR CONSTRUCTIVE CONSENT TO IT, THE PREVIOUS GENERAL PROHIBITION ON CROSS-WITHHOLDING IN 48 COMP.GEN. 387 (1968) IS NOT APPLICABLE. FURTHERMORE, THIS PREVIOUS GENERAL PROHIBITION ON CROSS-WITHHOLDING, AT LEAST INSOFAR AS IT PROHIBITS CROSS-WITHHOLDING BY THE GOVERNMENT AGAINST A CONTRACTOR, HAS BEEN SUPERSEDED BY A 1983 CHANGE IN THE RELEVANT DEPARTMENT OF LABOR REGULATIONS, NOW CODIFIED AS 29 C.F.R. SEC. 5.5(A)(2) (1986).

HARLOW RESTORATION CORP:

BY YOUR GROUP'S TRANSMITTAL, DATED OCTOBER 21, 1986, YOU HAVE QUESTIONED WHETHER, IN VIEW OF 48 COMP.GEN. 387 (1968), YOU MAY DISTRIBUTE THE FUNDS INVOLVED IN THIS CASE, WHICH WERE WITHHELD SOLELY FOR VIOLATIONS OF THE CONTRACT WORK HOURS AND SAFETY STANDARDS ACT, 40 U.S.C. SECS. 327-332 (1982), (CWHSSA), IN ACCORDANCE WITH THE DEPARTMENT OF LABOR'S CERTIFICATION. FOR THE FOLLOWING REASONS, YOU SHOULD DO SO IMMEDIATELY.

BY A LETTER DATED SEPTEMBER 15, 1983, THE DEPARTMENT OF LABOR (DOL) REQUESTED THAT GAO DISTRIBUTE THE AMOUNT OF $23,721.11, WHICH IS ON DEPOSIT WITH YOUR GROUP, TO THE WORKERS INVOLVED ON TWO CONTRACTS, GS 01B- 01634, (THE FIRST CONTRACT), AND GS-01B-01716 (THE SECOND CONTRACT), BETWEEN THE GENERAL SERVICES ADMINISTRATION (GSA) AND HARLOW RESTORATION CORP. THE BASIS FOR THIS REQUEST WAS THE DECISION OF THE WAGE APPEALS BOARD, HARLOW RESTORATION CORP., WAB CASE NO. 81-14 (MAY 11, 1983), WHICH FOUND, AFTER HOLDING AN ADVERSARIAL HEARING, THAT HARLOW RESTORATION CORPORATION HAD VIOLATED THE CWHSSA AS FOLLOWS:

TABLE OMITTED

WE NOTE THAT DOL DID NOT REQUEST DEBARMENT UNDER CHWSSA, AND THAT DOL'S LETTER STATES THAT HARLOW RESTORATION CORP. HAS EXPRESSED NO INTEREST IN SEEKING A RECONSIDERATION OF THE DECISION OF THE WAGE APPEALS BOARD, WHICH HAS BECOME FINAL. FURTHERMORE, THE ONLY VIOLATIONS WHICH DOL FOUND WERE CHWSSA VIOLATIONS. NO DAVIS-BACON ACT VIOLATIONS WERE FOUND.

THE SUM OF $23,721.11 WAS WITHHELD UNDER THE TWO CONTRACTS AND SENT TO GAO BY A LETTER FROM GSA, DATED MARCH 29, 1985. AT THAT TIME YOUR GROUP DISCOVERED THAT GSA HAD EMPLOYED CROSS-WITHHOLDING ON THE TWO CONTRACTS INVOLVED IN ORDER TO COME UP WITH THE TOTAL AMOUNT OF $23,721.11. THIS CROSS-WITHHOLDING MAY BE ILLUSTRATED AS FOLLOWS:

TABLE OMITTED

IN ORDER TO MAKE UP THE DEFICIENCY ON THE FIRST CONTRACT, GSA WITHHELD EXCESS FUNDS FROM THE SECOND CONTRACT. THUS, GSA WAS ABLE TO FORWARD THE AMOUNT OF $23,721.11, TO GAO, WHICH WAS THE TOTAL AMOUNT THE WAGE APPEALS BOARD HAD FOUND WAS DUE THE WORKERS ON THE TWO CONTRACTS INVOLVED.

IN REGARD TO THE PROPER RESOLUTION OF THIS CASE, WE FIRST NOTE THAT, AS A MATTER OF CURRENT POLICY, GAO'S SOLE FUNCTIONS UNDER THE CWHSSA ARE PURELY MINISTERIAL, I.E., TO PLACE THE CONTRACTORS' NAMES, AS DETERMINED BY DOL, ON THE INELIGIBLE BIDDERS LIST, AND TO DISBURSE FUNDS, AS DETERMINED BY DOL, TO THE PARTIES INVOLVED. B-205949 O.M., MARCH 29, 1982.

IN ORDER TO RESPOND MORE FULLY TO THE ISSUE WHICH YOUR TRANSMITTAL RAISED, WE NOTE THAT, BEFORE THE 1983 REVISION TO DOL REGULATIONS, IN THE CONTEXT OF THE DAVIS-BACON ACT, IT HAS BEEN HELD THAT WHILE THE GOVERNMENT MAY WITHHOLD PAYMENTS FROM A CONTRACTOR FOR VIOLATIONS, IT DOES NOT HAVE ANY RIGHT UNDER THAT ACT, AT LEAST AS THE GOVERNMENT'S STANDARD FORM CONTRACT AND DOL REGULATIONS WERE FORMERLY WRITTEN, TO WITHHOLD PAYMENT DUE UNDER ONE CONTRACT TO SATISFY THE CLAIMS OF UNPAID WORKERS UNDER ANOTHER CONTRACT. WHITNEY BROTHERS PLUMBING AND HEATING, INC. V. UNITED STATES, 224 F.SUPP. 860 (D. ALASKA 1963), AND SEE B-207659 O.M., OCTOBER 22, 1982. THE PRINCIPLE ENUNCIATED IN WHITNEY BROTHERS IS NOT APPLICABLE, HOWEVER, WHERE THE CONTRACTOR HAS GIVEN ACTUAL OR CONSTRUCTIVE CONSENT TO THE CROSS-WITHHOLDING. RELYING ON THE SAME RATIONALE AS WHITNEY BROTHERS, OUR DECISION IN 48 COMP.GEN. 387, 389-390 (1968) APPLIED THE SAME PRINCIPLE TO CASES ARISING UNDER THE CWHSSA, AND IT HAS ALSO BEEN FOLLOWED IN OUR PREVIOUS OFFICE MEMORANDA. SEE E.G., B-214963 O.M., MAY 22, 1984.

APPLYING THE ABOVE PRINCIPLES TO THE INSTANT CASE, WE NOTE THAT WHILE IT IS TRUE THAT THE REGULATIONS IN EFFECT AT THE TIME THE TWO CONTRACTS INVOLVED IN THIS CASE WERE ISSUED DID NOT PROVIDE FOR CROSS WITHHOLDING, SEE 29 C.F.R. SEC. 5.5(A)(2) (1978), NEVERTHELESS, ON THE BASIS OF DOL'S REPORT THAT HARLOW RESTORATION CORP. HAS EXPRESSED NO INTEREST IN SEEKING A RECONSIDERATION OF THE DECISION OF THE WAGE APPEALS BOARD AND THE LENGTH OF TIME WHICH HAS PASSED, WE FIND THAT THE CONTRACTOR INVOLVED HAS GIVEN CONSTRUCTIVE CONSENT TO THE CROSS WITHHOLDING. THUS, THE PRINCIPLE ENUNCIATED IN 48 COMP.GEN. 387 (1968) IS NOT APPLICABLE TO THE INSTANT CASE.

IN 1983, THE RELEVANT DOL REGULATIONS WERE REVISED. SEE 48 FED. REG. 19540 ET SEQ. (1983). THEY NOW PROVIDE THAT THE CONTRACTOR MUST CONSENT TO CROSS-WITHHOLDING BY AN EXPLICIT CLAUSE IN THE CONTRACT. SEE E.G., THE CURRENT REGULATION IN 29 C.F.R. SEC. 5.5(A)(2) (1986). THUS, IN VIEW OF THIS REGULATION, THE PREVIOUS GENERAL PROHIBITION ON CROSS-WITHHOLDING ENUNCIATED IN WHITNEY BROTHERS AND 48 COMP.GEN. 387 (1968), AS APPLICABLE RESPECTIVELY TO THE DAVIS-BACON ACT AND THE CWHSSA, HAS BEEN SUPERSEDED, AT LEAST INSOFAR AS IT PROHIBITS CROSS WITHHOLDING BY THE GOVERNMENT AGAINST A CONTRACTOR.

ACCORDINGLY, IN VIEW OF THE AGE OF THIS CASE, PLEASE IMMEDIATELY DISTRIBUTE THE $23,721.11 ON DEPOSIT TO THE WORKERS INVOLVED IN ACCORDANCE WITH ESTABLISHED PROCEDURES. ALSO, PLEASE NOTIFY US AND DOL WHEN THESE FUNDS HAVE BEEN DISTRIBUTED.

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