B-218848, NOV 5, 1985, OFFICE OF GENERAL COUNSEL

B-218848: Nov 5, 1985

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THE SUBCONTRACTOR WILL NOT BE DEBARRED UNDER THE ACT. PRODUCTION ELECTRIC WAS A SUBCONTRACTOR TO YOUNG CONSTRUCTION. THIS CONTRACT WAS SUBJECT TO THE DAVIS-BACON ACT REQUIREMENTS THAT CERTAIN MINIMUM WAGES BE PAID. THE CONTRACTOR WAS REQUIRED TO SUBMIT PAYROLL RECORDS CERTIFIED AS TO CORRECTNESS AND COMPLETENESS. THAT PRODUCTION ELECTRIC EMPLOYEES WERE NOT PAID THE MINIMUM WAGES REQUIRED PURSUANT TO THE DAVIS-BACON ACT. THE AIR FORCE INVESTIGATION REVEALED THAT THE CERTIFIED PAYROLLS WERE INACCURATE IN THAT REPORTED WAGE RATES AND REPORTED ACTUAL WAGES PAID WERE DIFFERENT THAN THOSE ACTUALLY PAID. " AND DEBARMENT WAS "STRONGLY RECOMMENDED" BY AIR FORCE HEADQUARTERS. STATED THAT DEBARMENT WAS NOT RECOMMENDED.

B-218848, NOV 5, 1985, OFFICE OF GENERAL COUNSEL

BIDDERS - DEBARMENT - LABOR STIPULATION VIOLATIONS - DAVIS-BACON ACT SUBCONTRACTORS - DEBARMENT UNWARRANTED DIGEST: THE DEPARTMENT OF LABOR STATED THAT, IN VIEW OF THE CIRCUMSTANCES, IT DID NOT CONSIDER FURTHER ADMINISTRATIVE ACTION (I.E., DEBARMENT) NECESSARY AGAINST A SUBCONTRACTOR FOR VIOLATIONS OF THE DAVIS-BACON ACT. BASED ON OUR INDEPENDENT REVIEW OF THE RECORD, WE CONCLUDE THAT THE SUBCONTRACTOR UNDERPAID EMPLOYEES, BUT THE RECORD DOES NOT CONTAIN SUFFICIENT EVIDENCE OF INTENTIONAL-- AS OPPOSED TO INADVERTENT-- VIOLATION OF THE LABOR STANDARDS PROVISIONS OF THE ACT TO WARRANT DEBARMENT. THEREFORE, THE SUBCONTRACTOR WILL NOT BE DEBARRED UNDER THE ACT. SUBJECT: C.C. YOUNG CONSTRUCTION CO. - PRIME CONTRACTOR PRODUCTION ELECTRIC, INC. - SUBCONTRACTOR FOLSOM, CALIFORNIA CONTRACT NO. FO4699-82-C-0311 YOUR FILE NO. CAL-84-405:

SYLVESTER L. GREEN, DIRECTOR:

CONTRACT STANDARDS OPERATIONS

U.S. DEPARTMENT OF LABOR

ROOM S3518

200 CONSTITUTION AVENUE, N.W.

WASHINGTON, D.C. 20210

BY A LETTER DATED APRIL 8, 1985, YOU REQUESTED THAT WE DISTRIBUTE TO WAGE CLAIMANTS FUNDS WITHHELD FOR VIOLATIONS OF THE DAVIS-BACON ACT, 40 U.S.C. SECS. 276A TO 276A-5 (1982), BY PRODUCTION ELECTRIC, INC. (PRODUCTION ELECTRIC). AS TO WHETHER PRODUCTION ELECTRIC SHOULD BE PLACED ON THE INELIGIBLE BIDDERS LIST FOR THESE VIOLATIONS, YOU STATED THAT THE DEPARTMENT OF LABOR (DOL) DOES NOT CONSIDER FURTHER ADMINISTRATIVE ACTION NECESSARY. FOR THE REASON THAT FOLLOWS, WE CONCUR THAT PRODUCTION ELECTRIC SHOULD NOT BE PLACED ON THE INELIGIBLE BIDDERS LIST FOR THESE VIOLATIONS.

THESE VIOLATIONS AROSE IN CONNECTION WITH THE PERFORMANCE OF CONTRACT NUMBER FO4699-82-C-0311 BETWEEN C.C. YOUNG CONSTRUCTION COMPANY (YOUNG CONSTRUCTION) AND THE UNITED STATES AIR FORCE (AIR FORCE), A CONTRACT FOR DORMITORY INTERIOR REPAIR WORK. PRODUCTION ELECTRIC WAS A SUBCONTRACTOR TO YOUNG CONSTRUCTION. THIS CONTRACT WAS SUBJECT TO THE DAVIS-BACON ACT REQUIREMENTS THAT CERTAIN MINIMUM WAGES BE PAID. FURTHER, PURSUANT TO 29 C.F.R. SEC. 5.5(A) (1984), THE CONTRACTOR WAS REQUIRED TO SUBMIT PAYROLL RECORDS CERTIFIED AS TO CORRECTNESS AND COMPLETENESS, SPECIFYING FOR EACH WORKER-- AMONG OTHER THINGS-- DAILY AND WEEKLY HOURS WORKED, WAGE RATES PAID, AND ACTUAL WAGES PAID.

THE DOL FOUND, BASED ON AN AIR FORCE INVESTIGATION, THAT PRODUCTION ELECTRIC EMPLOYEES WERE NOT PAID THE MINIMUM WAGES REQUIRED PURSUANT TO THE DAVIS-BACON ACT. FURTHER, THE AIR FORCE INVESTIGATION REVEALED THAT THE CERTIFIED PAYROLLS WERE INACCURATE IN THAT REPORTED WAGE RATES AND REPORTED ACTUAL WAGES PAID WERE DIFFERENT THAN THOSE ACTUALLY PAID. THE AIR FORCE INVESTIGATING OFFICER CONCLUDED THAT THIS "SEEMED WILLFUL," AND DEBARMENT WAS "STRONGLY RECOMMENDED" BY AIR FORCE HEADQUARTERS. THE AIR FORCE CONTRACTING OFFICER, HOWEVER, STATED THAT DEBARMENT WAS NOT RECOMMENDED, AND THE DOL AGREED.

THE DAVIS-BACON ACT PROVIDES THAT THE COMPTROLLER GENERAL IS TO DEBAR PERSONS OR FIRMS WHOM HE HAS FOUND TO HAVE DISREGARDED THEIR OBLIGATIONS TO EMPLOYEES UNDER THE ACT. 40 U.S.C. SEC. 276A-2. IN CIRCULAR LETTER B-3368, MARCH 19, 1957, WE DISTINGUISHED BETWEEN "TECHNICAL VIOLATIONS" WHICH RESULT FROM INADVERTENCE OR LEGITIMATE DISAGREEMENT CONCERNING CLASSIFICATION, AND "SUBSTANTIAL VIOLATIONS" WHICH ARE INTENTIONAL AS DEMONSTRATED BY BAD FAITH OR GROSS CARELESSNESS IN OBSERVING OBLIGATIONS TO EMPLOYEES WITH RESPECT TO THE MINIMUM WAGE PROVISIONS OF THE DAVIS- BACON ACT. SUBSTANTIAL VIOLATIONS WARRANT DEBARMENT; TECHNICAL VIOLATIONS DO NOT. INADVERTENCE RESULTING IN A TECHNICAL VIOLATION IS A BASIS FOR DECIDING NOT TO DEBAR UNDER THE DAVIS-BACON ACT. AGUIRRE ASSOCIATES, GUDINO BROTHERS, AND KALISPELL EXPLOSIVE ENGINEERING, B-217808, AUGUST 29, 1985.

BASED ON OUR INDEPENDENT REVIEW OF THE RECORD, WE CONCLUDE THAT THESE VIOLATIONS WERE THE RESULT OF INADVERTENCE. THERE WERE UNDERPAYMENTS. THE CERTIFIED PAYROLLS WERE INACCURATE IN THAT SOME REPORTED WAGE RATES AND REPORTED ACTUAL WAGES PAID WERE DIFFERENT THAN THOSE ACTUALLY PAID. HOWEVER, THE REPORTED HOURS WORKED WERE ACCURATE, MANY OF THE REPORTED WAGE RATES AND REPORTED ACTUAL WAGES PAID WERE ACCURATE, AND IN SOME INSTANCES WAGE RATES AND ACTUAL WAGES PAID-- BOTH REPORTED AND ACTUAL-- WERE HIGHER THAN THOSE REQUIRED PURSUANT TO THE DAVIS-BACON ACT. FURTHER, REPORTED FRINGE BENEFIT PAYMENTS WERE DIFFERENT THAN ACTUAL FRINGE BENEFIT PAYMENTS, BUT NOT ALL THOSE FRINGE BENEFIT PAYMENTS WERE REQUIRED TO BE PAID. FOR SEVERAL OF THE LAST WEEKS UNDER THE CONTRACT, CERTIFIED PAYROLLS OMITTED REQUIRED INFORMATION OR WERE NOT SUBMITTED AT ALL. HOWEVER, WE CONCLUDE THAT THIS RECORD DOES NOT CONTAIN SUFFICIENT EVIDENCE OF INTENTIONAL-- AS OPPOSED TO INADVERTENT-- VIOLATION OF THE LABOR STANDARDS PROVISIONS OF THE ACT TO WARRANT DEBARMENT. THEREFORE, WE DECLINE TO DEBAR PRODUCTION ELECTRIC.

FURTHER, WE FIND NO REASON TO OBJECT TO THE PAYMENT OF THE WAGE CLAIMANTS INVOLVED. ACCORDINGLY, FUNDS ON DEPOSIT WITH OUR OFFICE-- $8,086.79-- WILL BE DISBURSED TO THE AGE CLAIMANTS IN ACCORDANCE WITH ESTABLISHED PROCEDURES. ANY EXCESS WITHHELD FUNDS ARE TO BE RETURNED TO THE CONTRACTING OFFICER AT MCCLELLAN AIR FORCE BASE.

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