B-214342 O/M, MAY 20, 1985

B-214342 O/M, MAY 20, 1985

BIDDERS - DEBARMENT - LABOR STIPULATION - VIOLATIONS - DAVIS-BACON ACT - DEBARMENT UNWARRANTED DIGEST: 1. PAYMENT OF WAGES ON THE BASIS OF THE SETTLEMENT AGREEMENT IN THE RECORD BETWEEN THE PRIME CONTRACTOR AND THE DEPARTMENT OF JUSTICE IS APPROVED, AND FUNDS ON DEPOSIT WITH GAO MAY BE DISBURSED IN ACCORDANCE WITH ESTABLISHED PROCEDURES. TERMS OF SETTLEMENT AGREEMENT ARE BEING ACCEPTED EVEN THOUGH THEY CONFLICT WITH POSITION OF THIS OFFICE ON ISSUE OF INCLUDING PER DIEM EXPENSES IN DETERMINING WHETHER REQUIRED WAGE RATES ARE BEING PAID. CONTRACTS - LABOR STIPULATIONS - DAVIS-BACON ACT - WAGE UNDERPAYMENTS - EXPENSES PAID BY CONTRACTOR 2. DEPARTMENT OF LABOR (DOL) DOES NOT RECOMMEND IMPOSITION OF DEBARMENT SANCTIONS AGAINST THE CONTRACTORS INVOLVED. IN VIEW OF THE SETTLEMENT AGREEMENT BETWEEN DOL AND PRIME CONTRACTORS, GAO CONCURS WITH DOL THAT NO FURTHER ACTION SHOULD BE TAKEN TO DEBAR THE CONTRACTORS INVOLVED. ACCEPTANCE OF SETTLEMENT AGREEMENT HERE DOES NOT MEAN GAO HAS ABANDONED ITS AUTHORITY TO MAKE INDEPENDENT DETERMINATIONS IN DAVIS-BACON CASES.

IOWA ROAD BUILDERS COMPANY, ET AL., (A DAVIS-BACON ACT CASE) - B-214342 O/M:

RETURNED HEREWITH IS YOUR FILE, Z-2850435. INVESTIGATIONS BY BOTH THE DEPARTMENT OF LABOR (DOL) AND THE UNITED STATES ARMY CORPS OF ENGINEERS HAVE FOUND THAT THE PRIME CONTRACTOR, IOWA ROAD BUILDERS COMPANY, AND THE SUBCONTRACTOR, MCBURNEY & ASSOCIATES, INC. ON CONTRACT NO. DACW 25-81-C- 0056 FAILED TO PAY THE PREVAILING WAGE RATES AND OVERTIME COMPENSATION AS REQUIRED BY THE DAVIS-BACON ACT, 40 U.S.C. SECS. 276A TO 276A-5 (1982) AND THE CONTRACT WORK HOURS AND SAFETY STANDARDS ACT, 40 U.S.C. SECS. 327-332 (1982) (CWHSSA). THE CORPS INVESTIGATION DETERMINED THAT A TOTAL OF $37,977.59 WAS DUE 36 EMPLOYEES UNDER THE FOREGOING ACTS. AFTER THE CONTRACTORS REFUSED TO MAKE RESTITUTION, THE CORPS WITHHELD $37,977.59 FROM THE FUNDS OTHERWISE DUE THE PRIME CONTRACTOR AND FORWARDED THAT AMOUNT TO GAO'S CLAIMS GROUP IN ACCORDANCE WITH ESTABLISHED PROCEDURES. IN COMPUTING THE AMOUNT TO BE WITHHELD, DOL DID NOT CREDIT AMOUNTS PAID BY THE CONTRACTOR TO SOME OF THE WORKERS AS EXPENSE MONEY OR PER DIEM. THIS IS CONSISTENT WITH PRIOR DOL PRACTICE, BUT NOT IN ACCORD WITH THE POSITION OF THIS OFFICE. SEE R.A. GOTTLIEB, INC., B-202851, JUNE 17, 1982.

SUBSEQUENTLY, IOWA ROAD BUILDERS COMPANY SUED THE UNITED STATES, AND THE U.S. DEPARTMENT OF JUSTICE ENTERED INTO A SETTLEMENT AGREEMENT. SEE JOINT STIPULATION OF DISMISSAL, AND SETTLEMENT AGREEMENT, IOWA ROAD BUILDERS COMPANY V. UNITED STATES, NO. 49-84C (CL.CT. JUNE 11, 1984). IN ESSENCE, THE SETTLEMENT AGREEMENT PROVIDES THAT IOWA ROAD BUILDERS COMPANY WILL WAIVE ITS CLAIM TO THE $37,977.59 WITHHELD, AND THE UNITED STATES WILL WAIVE ITS CLAIM TO AN ADDITIONAL $4,500 IN LIQUIDATED DAMAGES UNDER THE CWHSSA.

IT IS CLEAR THAT THE GENERAL ACCOUNTING OFFICE IS RESPONSIBLE, IN ALL INSTANCES WHERE COMPLIANCE WITH PROVISIONS OF THE DAVIS-BACON ACT HAS BEEN QUESTIONED, FOR DETERMINING WHETHER OR NOT "VIOLATIONS" OCCURRED IN A SENSE THAT REQUIRES IMPOSITION OF THE STATUTORY INELIGIBILITY SANCTION (DEBARMENT). ALSO, IT IS RESPONSIBLE, WHEN FUNDS HAVE BEEN WITHHELD FROM A CONTRACTOR TO COVER WAGE UNDERPAYMENTS, FOR PAYING AGGRIEVED EMPLOYEES AMOUNTS TO WHICH THEY MAY BE ENTITLED. A THIRD RESPONSIBILITY EXISTS, IN INSTANCES WHERE WITHHOLDING ACTION HAS BEEN TAKEN, TO SETTLE CLAIMS BY CONTRACTORS BASED UPON THE AMOUNTS WITHHELD. CIRCULAR LETTER B-3368, MARCH 19, 1957, AND SEE SWEET HOME STONE COMPANY, ET AL., B-185020, DECEMBER 26, 1976, 76-2 CPD 519; 55 COMP.GEN. 744 (1976); 46 COMP.GEN. 178 (1966). AS SET OUT ABOVE, OUR OFFICE HAS HELD THAT AMOUNTS PAID AN EMPLOYEE FOR MEALS AND LODGING EXPENSES WHILE WORKING AWAY FROM THE EMPLOYEE'S PERMANENT RESIDENCE MUST BE CREDITED AGAINST DAVIS-BACON ACT WAGE UNDERPAYMENTS. B-202851 O.M., AUGUST 18, 1981, RECONSIDERED AND AFFIRMED, R.A. GOTTLIEB, INC., B-202851, JUNE 17, 1982.

IN THE INSTANT CASE, HOWEVER, WE NOTE THE FOLLOWING CIRCUMSTANCES. THE RECORD INDICATES THAT OUR CLAIMS GROUP RECEIVED DOL'S AND THE CORPS' INVESTIGATIVE REPORTS AND OTHER MATERIALS ON JANUARY 30, 1984. HOWEVER, IN A LITIGATION REPORT ON THIS CASE TO THE DEPARTMENT OF JUSTICE (DOJ), IT WAS ERRONEOUSLY STATED THAT GAO HAD NO RECORDS OR INFORMATION CONCERNING IOWA ROAD BUILDERS COMPANY V. UNITED STATES. B-214342, FEBRUARY 23, 1984. WHILE DOJ INTERNAL RECORDS REFLECT THAT A SEARCH WAS UNDERTAKEN IN ACCORDANCE WITH ESTABLISHED PROCEDURES, NEVERTHELESS, THAT SEARCH FAILED TO DISCLOSE THE INFORMATION WHICH GAO POSSESSED ON THIS CASE. IN ANY EVENT, DOJ SUBSEQUENTLY ENTERED INTO THE JOINT STIPULATION OF DISMISSAL AND SETTLEMENT AGREEMENT MENTIONED ABOVE, WITHOUT FURTHER INVOLVEMENT BY THIS OFFICE.

IN VIEW OF THE CIRCUMSTANCES OF THIS CASE, WE WILL NOT INTERPOSE ANY OBJECTION TO THE SETTLEMENT AGREEMENT ON WHICH SETTLEMENT OF THIS MATTER MAY BE MADE. HOWEVER, OUR LACK OF OBJECTION IN THIS CASE SHOULD NOT BE CONSTRUED AS AN ABDICATION OF OUR WAGE ADJUSTMENT AUTHORITY UNDER THE DAVIS-BACON ACT, WHICH IS THE AUTHORITY TO MAKE AN INDEPENDENT DETERMINATION, BASED ON THE COMPLETE RECORD, AS TO THE ACTUAL AMOUNT, IF ANY, OWED TO THE PARTIES IN INTEREST. B-185875 O/M, MARCH 16, 1976, AND CASES CITED THEREIN.

ACCORDINGLY, UNDER THE AUTHORITY GRANTED BY SEC. 3(A) OF THE DAVIS BACON ACT, 40 U.S.C. SEC. 276A-2(A) (1982) WE HEREBY DETERMINE THAT THE $37,977.59 ON DEPOSIT WITH YOUR OFFICE MAY BE DISBURSED TO THE AGGRIEVED EMPLOYEES IN ACCORDANCE WITH ESTABLISHED PROCEDURES. WE ALSO CONCUR WITH DOL'S RECOMMENDATIONS, AND THUS UNDER THE SAME FOREGOING AUTHORITY, WE HEREBY DECLINE TO DEBAR THE CONTRACTORS INVOLVED. PLEASE NOTIFY DOL WHEN THE FUNDS HAVE BEEN DISBURSED SO IT MAY CLOSE ITS FILE ON THIS MATTER.