B-154427, MAR. 16, 1965, 44 COMP. GEN. 561

B-154427, MAR. 16, 1965, 44 COMP. GEN. 561

CONTRACTS - LABOR STIPULATIONS - WITHHOLDING UNPAID WAGES, OVERTIME, ETC. - DISBURSEMENT TO EMPLOYEES MONIES WITHHELD FROM A CONTRACTOR WITHOUT HIS CONSENT FOR MINIMUM WAGE VIOLATIONS UNDER A CONTRACT EXECUTED BY THE DISTRICT OF COLUMBIA REDEVELOPMENT LAND AGENCY AND FINANCED FROM FUNDS MADE AVAILABLE UNDER THE HOUSING ACT OF 1949, 42 U.S.C. 1459, WHICH, UNLIKE THE DAVIS-BACON ACT, 40 U.S.C. 276A-2, DOES NOT AUTHORIZE THE COMPTROLLER GENERAL TO DETERMINE WAGE ADJUSTMENTS NOR AUTHORIZE THE COMPTROLLER GENERAL TO MAKE DISBURSEMENTS TO LABORERS FOR SUMS WITHHELD FOR WAGE UNDERPAYMENTS ARE NOT MONIES WHICH SHOULD BE TRANSFERRED AND DISBURSED BY THE GENERAL ACCOUNTING OFFICE SINCE, IN THE ABSENCE OF ANY PROVISION IN THE HOUSING ACT REQUIRING GENERAL ACCOUNTING OFFICE TO DETERMINE WAGE ADJUSTMENTS, DISBURSEMENTS SHOULD NOT BE MADE BY THE GENERAL ACCOUNTING OFFICE AND, THEREFORE, WITHHELD FUNDS SHOULD BE DISBURSED BY THE CONTRACTING AGENCY.

TO THE CHAIRMAN, DISTRICT OF COLUMBIA REDEVELOPMENT LAND AGENCY, MARCH 16, 1965:

FURTHER REFERENCE IS MADE TO A LETTER DATED FEBRUARY 3, 1965, FROM MR. PHIL A. DOYLE, EXECUTIVE DIRECTOR, CONCERNING THE DISPOSITION OF MONIES WITHHELD FROM THE LIBERTY WRECKING AND BUILDING MATERIALS COMPANY FOR WAGE UNDERPAYMENTS TO ITS EMPLOYEES UNDER CONTRACT DC-RLA 483 WHICH WERE WITHHELD PURSUANT TO CONTRACTUAL PROVISIONS INCLUDED IN THE CONTRACT UNDER THE AUTHORITY OF THE HOUSING ACT OF 1949, 42 U.S.C. 1441 ET SEQ.

MR. DOYLE'S LETTER STATES THAT ON OR ABOUT DECEMBER 22, 1961, THE DISTRICT OF COLUMBIA REDEVELOPMENT LAND AGENCY (DCRLA) WAS NOTIFIED BY THE HOUSING AND HOME FINANCE AGENCY THAT IT WAS INVESTIGATING A COMPLAINT AGAINST LIBERTY WRECKING AND BUILDING MATERIALS COMPANY. LIBERTY, IT IS STATED, WAS SUSPECTED OF HAVING FAILED TO PAY APPLICABLE DAVIS-BACON WAGE RATES PURSUANT TO A DEMOLITION CONTRACT WITH DCRLA FINANCED, IN PART, FROM FUNDS MADE AVAILABLE THROUGH THE PROVISIONS OF TITLE I OF THE HOUSING ACT OF 1949, 42 U.S.C. 1451, AS AMENDED. MR. DOYLE'S LETTER FURTHER STATES THAT AFTER VERIFICATION OF THE COMPLAINT THE HOUSING AGENCY ADVISED DCRLA TO WITHHOLD $3,700 FROM THE CONTRACTOR TO MAKE RESTITUTION OF WAGE UNDERPAYMENTS TO SEVERAL OF ITS EMPLOYEES.

THEREAFTER, THE SUM OF $3,700 WAS TRANSFERRED TO OUR OFFICE IN ACCORDANCE WITH THE INSTRUCTIONS CONTAINED IN B-3368, MARCH 19, 1957. ON JANUARY 12, 1965, THE SUM SO TRANSFERRED WAS RETURNED TO DCRLA BY OUR CLAIMS DIVISION. THE VOUCHER WHICH ACCOMPANIED OUR CHECK CONTAINED THE FOLLOWING EXPLANATION:

I CERTIFY THERE IS DUE FROM THE UNITED STATES TO THE ABOVE-NAMED CLAIMANT/S), PAYABLE FROM THE APPROPRIATION/S) INDICATED, THE SUM OF $3,700 ON ACCOUNT OF FUNDS ERRONEOUSLY RECEIVED AND DEPOSITED, INCIDENT TO VIOLATIONS OF THE DAVIS-BACON ACT (40 U.S.C. 276A) IN THE PERFORMANCE OF CONTRACT DC-RLA 483 BY THE LIBERTY WRECKING AND BUILDING MATERIALS COMPANY, SINCE SUCH FUNDS ARE FOR DISPOSITION UNDER THE HOUSING ACT OF 1949, AND NO STATUTORY AUTHORITY EXISTS FOR DISTRIBUTION OF WITHHELD AMOUNTS BY THE U.S. GENERAL ACCOUNTING OFFICE. THE MATTER IS FOR DISPOSITION BY DCRLA UNDER TERMS OF ITS AGREEMENT WITH THE HOUSING AND HOME FINANCE AGENCY AND ANY APPLICABLE REGULATIONS.

MR. DOYLE'S LETTER STATES THAT UNLESS ADVISED TO THE CONTRARY, DCRLA WILL REGARD THE ABOVE-QUOTED VOUCHER TEXT AS A DECISION OF THE COMPTROLLER GENERAL THAT DCRLA IS NOT REQUIRED TO CONFORM TO OUR LETTER B-3368, MARCH 19, 1957, AND THAT THE VOUCHER OVERRULES THE LETTER ADDRESSED TO DCRLA DATED OCTOBER 10, 1962, FROM THE CHIEF OF THE DEBT SECTION, OF OUR CLAIMS DIVISION, INSTRUCTING YOU TO CONFORM TO THE PROCEDURES SET FORTH IN B- 3368.

THE CONTRACT WITH LIBERTY WRECKING AND BUILDING MATERIALS COMPANY WAS FINANCED BY FUNDS MADE AVAILABLE TO DCRLA BY THE HOUSING AND HOME FINANCE AGENCY UNDER THE HOUSING ACT OF 1949, 63 STAT. 413, 42 U.S.C. 1441, ET SEQ. THE MINIMUM WAGE PROVISIONS OF THE CONTRACT WERE INCLUDED PURSUANT TO THE PROVISIONS OF THE HOUSING ACT OF 1949. SEE 42 U.S.C. 1459 AND ARTICLE II OF THE CONTRACT. THUS, ANY VIOLATIONS OF THE MINIMUM WAGE PROVISIONS THAT MAY HAVE OCCURRED ON THE PART OF LIBERTY WRECKING AND BUILDING MATERIALS COMPANY IN THE PERFORMANCE OF THE CONTRACT ARE GOVERNED BY THE HOUSING ACT OF 1949 AND THE PROVISIONS OF THE CONTRACT, RATHER THAN BY THE DAVIS-BACON ACT, 40 U.S.C. 276A.

PARAGRAPH 2.6 OF THE SUBJECT CONTRACT PROVIDES THAT:

IN CASE OF UNDERPAYMENT OF WAGES OR SALARIES BY THE CONTRACTOR OR BY ANY SUBCONTRACTOR TO LABORERS, MECHANICS OR TECHNICAL EMPLOYEES EMPLOYED BY THE CONTRACTOR OR SUBCONTRACTOR UPON THE WORK COVERED BY THIS CONTRACT, THE AGENCY IN ADDITION TO SUCH OTHER RIGHTS AS MAY BE AFFORDED IT UNDER THIS CONTRACT MAY WITHHOLD FROM THE CONTRACTOR, OUT OF ANY PAYMENTS DUE THE CONTRACTOR, SO MUCH THEREOF AS THE AGENCY MAY CONSIDER NECESSARY TO PAY SUCH LABORERS, MECHANICS OR TECHNICAL EMPLOYEES THE FULL AMOUNT OF WAGES OR SALARIES REQUIRED BY THIS CONTRACT. THE AMOUNT SO WITHHELD SHALL BE DISBURSED BY THE AGENCY OR SUCH OTHER APPROPRIATE FEDERAL AGENCY WHICH MAY BE DESIGNATED BY LAW, FOR AND ON ACCOUNT OF THE CONTRACTOR OR THE SUBCONTRACTOR (AS MAY BE APPROPRIATE), TO THE RESPECTIVE LABORERS, MECHANICS OR TECHNICAL EMPLOYEES TO WHOM THE SAME IS DUE.

IT SHOULD BE NOTED, IN CONNECTION WITH THE ABOVE CONTRACTUAL PROVISIONS, THAT THE HOUSING ACT OF 1949 DOES NOT AUTHORIZE OUR OFFICE TO DETERMINE WHETHER WAGE ADJUSTMENTS SHOULD BE MADE, NOR DOES THE ACT REQUIRE OR AUTHORIZE US TO MAKE DISBURSEMENTS TO WORKERS OF SUMS WITHHELD BY A LOCAL PUBLIC AGENCY ON ACCOUNT OF WAGE UNDERPAYMENT. IN CONTRAST TO THIS SITUATION, OUR OFFICE IS SPECIFICALLY CHARGED WITH THE DUTY OF MAKING DISBURSEMENTS OF WITHHELD FUNDS UNDER CONTRACTS COVERED BY THE DAVIS-BACON ACT. SEE 40 U.S.C. 276A-2. IT IS SIGNIFICANT TO NOTE, MOREOVER, THAT UNDER THE DAVIS-BACON ACT WE HAVE THE FURTHER RESPONSIBILITY FOR DETERMINING WHETHER ANY WAGE ADJUSTMENTS SHOULD, IN FACT, BE MADE FROM FUNDS WITHHELD BY CONTRACTING AGENCIES. SEE B 3368, MARCH 19, 1957.

IN REGARD TO THE INSTRUCTIONS CONTAINED IN OUR CIRCULAR LETTER OF MARCH 19, 1957 (B-3368), WE WISH TO POINT OUT THAT THE "WITHHELD FUNDS" WHICH THAT LETTER ADVISES SHOULD BE TRANSMITTED TO OUR OFFICE ARE THOSE FUNDS WHICH ARE WITHHELD UNDER CONTRACTS SPECIFICALLY COVERED BY THE DAVIS-BACON ACT. ALTHOUGH OUR OFFICE HAS DISBURSED WAGE UNDERPAYMENTS UNDER THE EIGHT HOUR LAW, 40 U.S.C. 321, AS WELL AS UNDER LABOR STANDARDS PROVISIONS OF OTHER LAWS GOVERNING FEDERALLY AIDED OR FINANCED PROGRAMS, SUCH DISBURSEMENTS HAVE BEEN SPECIFICALLY LIMITED TO CASES WHERE THE FUNDS TO COVER WAGE UNDERPAYMENTS WERE REMITTED VOLUNTARILY BY THE OFFENDING CONTRACTOR OR WERE WITHHELD WITH HIS FULL ACQUIESCENCE AND CONSENT TO THEIR DISTRIBUTION. DISBURSEMENTS BY OUR OFFICE IN SUCH CASES ARE BASED UPON CONSIDERATIONS OF COURTESY AND COOPERATION WITH THE WAGE LAW ENFORCEMENT AGENCIES IN THE MATTER OF DISBURSING FUNDS TURNED OVER TO THE GOVERNMENT FOR A SPECIFIC USE, AND NOT UPON LEGAL JURISDICTION TO ADJUDICATE DISPUTED CLAIMS.

IN THE INSTANT CASE, THE LIBERTY WRECKING AND BUILDING MATERIALS COMPANY HAS NOT CONSENTED TO THE WITHHOLDING FROM PAYMENTS DUE UNDER THE CONTRACT AND HAS INDICATED THAT IT DOES NOT INTEND TO EFFECT RESTITUTION TO THE EMPLOYEES INVOLVED. IT IS FELT THAT THE WAGE DISBURSEMENT RESPONSIBILITY SHOULD NOT BE DIVORCED FROM THE RESPONSIBILITY OF DETERMINING WHETHER WAGE UNDERPAYMENTS HAVE IN FACT OCCURRED, AND SINCE OUR OFFICE IS WITHOUT JURISDICTION UNDER THE HOUSING ACT OF 1949 TO QUESTION THE CONTESTED WITHHOLDINGS IN THE INSTANT CASE, DISBURSEMENTS SHOULD NOT BE ACCOMPLISHED HERE. THE LETTER OF OCTOBER 10, 1962, FROM OUR CLAIMS DIVISION WHICH INSTRUCTED DCRLA TO CONFORM TO THE PROCEDURES SET FORTH IN B-3368 WAS PREDICATED UPON THE ASSUMPTION THAT THE CONTRACT UNDER WHICH THE WITHHOLDINGS WERE MADE WAS SUBJECT TO THE DAVIS-BACON ACT. THIS ASSUMPTION WAS BASED ON THE INCOMPLETE INFORMATION EXISTING AT THAT TIME AND ON THE ADVICE CONTAINED IN MR. DOYLE'S LETTER TO OUR OFFICE DATED SEPTEMBER 25, 1962, IN WHICH IT WAS REPORTED THAT THE IRREGULARITIES INVOLVED WERE "COVERED BY THE PROVISIONS OF THE DAVIS-BACON ACT, 40 U.S.C. 276A, FALLING WITHIN THE JURISDICTION OF YOUR DIVISION FOR INVESTIGATION AND COMMUNICATION.'

ACCORDINGLY, YOU ARE ADVISED THAT SINCE THE CONTRACTOR HAS NOT ACQUIESCED IN THE WITHHOLDING AND THE WITHHELD FUNDS WERE ERRONEOUSLY RECEIVED AND DEPOSITED WITH OUR OFFICE, THE RETURN OF SUCH FUNDS TO DCRLA WAS PROPER. FURTHER, AS STATED IN THE TEXT OF THE VOUCHER, THE MATTER IS ONE FOR DISPOSITION BY DCRLA UNDER THE TERMS OF ITS AGREEMENT WITH THE HOUSING AND HOME FINANCE AGENCY AND ANY APPLICABLE REGULATIONS.