B-217808, AUG 29, 1985, OFFICE OF GENERAL COUNSEL

B-217808, AUG 29, 1985, OFFICE OF GENERAL COUNSEL

BIDDERS - DEBARMENT - LABOR-STIPULATION VIOLATIONS - DAVIS-BACON ACT DEBARMENT UNWARRANTED DIGEST: 1. THE DEPARTMENT OF LABOR STATED THAT, IN VIEW OF THE CIRCUMSTANCES, IT DID NOT CONSIDER FURTHER ADMINISTRATIVE ACTION (I.E., DEBARMENT) NECESSARY AGAINST A CONTRACTOR FOR VIOLATIONS OF THE DAVIS BACON ACT. BASED ON OUR INDEPENDENT REVIEW OF THE RECORD, WE CONCLUDE THAT THE CONTRACTOR UNDERPAID EMPLOYEES, BUT THE RECORD DOES NOT CONTAIN SUFFICIENT EVIDENCE OF INTENTIONAL VIOLATION OF THE LABOR STANDARDS PROVISIONS OF THE ACT TO WARRANT DEBARMENT, AS OPPOSED TO INACCURACIES RESULTING FROM INADVERTENCE. THEREFORE, THE CONTRACTOR WILL NOT BE DEBARRED UNDER THE ACT. 2. A PRIME CONTRACTOR CONSENTED TO THE PAYMENT OF DAVIS-BACON ACT WAGE CLAIMANTS UNDERPAID BY ITS SUBCONTRACTORS, THOUGH ONE OF ITS SUBCONTRACTORS HAD NOT PARTICIPATED IN THE PROCEEDINGS. PURSUANT TO THE DAVIS-BACON ACT, A PRIME CONTRACTOR IS FINANCIALLY RESPONSIBLE FOR WAGE UNDERPAYMENTS TO EMPLOYEES BY ITS SUBCONTRACTORS. THEREFORE, THE WAGE CLAIMANTS ARE TO BE PAID IN ACCORDANCE WITH THE PRIME CONTRACTOR'S CONSENT AGREEMENT.

SYLVESTER L. GREEN, DIRECTOR: CONTRACT STANDARDS OPERATIONS U.S. DEPARTMENT OF LABOR ROOM S 3518 200 CONSTITUTION AVENUE, N.W. WASHINGTON, D.C. 20210

SUBJECT: AGUIRRE ASSOCIATES RANCHO PALOS VERDES, CALIFORNIA GUDINO BROTHERS SAN PEDRO, CALIFORNIA

KALISPELL EXPLOSIVE ENGINEERING RESEDA, CALIFORNIA

CONTRACT NO. 27-005

YOUR FILE NO. CAL-78-519

BY A LETTER DATED SEPTEMBER 11, 1984, YOU REQUESTED THAT WE DISTRIBUTE TO WAGE CLAIMANTS FUNDS WITHHELD FROM AGUIRRE ASSOCIATES (AGUIRRE), FOR VIOLATIONS OF THE DAVIS-BACON ACT, 40 U.S.C. SECS. 276A TO 276A-5 (1982). AS TO WHETHER AGUIRRE SHOULD BE PLACED ON THE INELIGIBLE BIDDERS LIST FOR THESE VIOLATIONS, YOU CONCLUDED THAT IN VIEW OF THE CIRCUMSTANCES, THE DEPARTMENT OF LABOR (DOL) DOES NOT CONSIDER FURTHER ADMINISTRATIVE ACTION NECESSARY.

AGUIRRE PERFORMED WORK UNDER CONTRACT NUMBER 27-005 WITH THE UNITED STATES FOREST SERVICE, CONSTRUCTING TRAILS, IN WHICH GUDINO BROTHERS (GUDINO) AND KALISPELL EXPLOSIVE ENGINEERING (KALISPELL) PERFORMED WORK AS SUBCONTRACTORS TO AGUIRRE. 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 TO SUBMIT PAYROLL RECORDS CERTIFIED AS TO CORRECTNESS AND COMPLETENESS, SPECIFYING FOR EACH WORKER-- AMONG OTHER THINGS-- DAILY AND WEEKLY HOURS WORKED, AND WAGE PAID.

THE DOL FOUND AS A RESULT OF AN INVESTIGATION THAT EMPLOYEES WERE NOT PAID THE MINIMUM WAGES REQUIRED PURSUANT TO THE DAVIS-BACON ACT. FURTHER, DOL FOUND THAT THE CERTIFIED PAYROLLS WERE INACCURATE IN THAT PAYROLLS REVISED AS TO RATE OF PAY WERE INCONSISTENT REGARDING REPORTED HOURS WORKED BETWEEN THE REVISED AN ORIGINAL PAYROLLS, SOME REPORTED HOURS WORKED WERE INCONSISTENT BETWEEN THE CERTIFIED PAYROLLS AND AGUIRRE'S OWN PAYROLLS, SOME REPORTED DAILY HOURS WORKED WERE LESS THAN THOSE ACTUALLY WORKED, SOME REPORTED HOURS WORKED WERE MIXED BETWEEN WEEKS, AND SOME REPORTED WAGES PAID WERE DIFFERENT THAN THOSE ACTUALLY PAID. AGUIRRE, GUDINO, AND KALISPELL, WERE NOTIFIED BY CERTIFIED LETTER OF THE OPPORTUNITY FOR A HEARING ON THE MATTER IN ACCORDANCE WITH 29 C.F.R. SEC. 5.11(B) (1984). SUCH A HEARING WAS REQUESTED. HOWEVER, SUBSEQUENTLY AN AGREEMENT WAS REACHED BETWEEN AGUIRRE AND DOL, AND APPROVED BY THE ADMINISTRATIVE LAW JUDGE (AGUIRRE ASSOCIATES, CASE NO. 82-DBA-4, OFFICE OF ADMINISTRATIVE LAW JUDGES, UNITED STATES DEPARTMENT OF LABOR (AUGUST 16, 1984) (BURCH, A.L.J.)), PROVIDING FOR PAYMENT OF THESE WAGE CLAIMS.

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. INADVERTENCE IS A BASIS FOR DECIDING NOT TO DEBAR UNDER THE DAVIS-BACON ACT.

BASED ON OUR INDEPENDENT REVIEW OF THE RECORD, WE CONCLUDE THAT THESE VIOLATIONS WERE THE RESULT OF INADVERTENCE. THE INVESTIGATIVE REPORT STATES THAT THE PAYROLL RECORDS CERTIFIED AS TO CORRECTNESS AND COMPLETENESS WERE INACCURATE AS TO DAILY AND WEEKLY HOURS WORKED, AND WAGES PAID. HOWEVER, THIS RECORD DOES NOT CONTAIN SUFFICIENT EVIDENCE OF INTENTIONAL VIOLATION OF THE LABOR STANDARDS PROVISIONS OF THE ACT TO WARRANT DEBARMENT, AS OPPOSED TO INACCURACIES RESULTING FROM INADVERTENCE. THEREFORE, WE DECLINE TO DEBAR AGUIRRE, GUDINO, KALISPELL.

FURTHER, WE FIND NO REASON TO OBJECT TO THE PAYMENT OF THE WAGE CLAIMANTS INVOLVED, ESPECIALLY SINCE THERE IS AN AGREEMENT BY AGUIRRE TO PAY THESE WAGE CLAIMS. WE NOTE THAT WHILE KALISPELL DID NOT (GUDINO DID) SIGN THIS AGREEMENT-- NOR PARTICIPATE IN THE PROCEEDINGS-- ONLY AGUIRRE'S CONSENT, AS THE PRIME CONTRACTOR, IS NEEDED TO AUTHORIZE PAYMENT OF THE WAGE CLAIMS. PURSUANT TO THE DAVIS-BACON ACT, A PRIME CONTRACTOR IS FINANCIALLY RESPONSIBLE FOR WAGE UNDERPAYMENTS TO EMPLOYEES BY ITS SUBCONTRACTOR. SEE 29 C.F.R. SECS. 5.5(A)(2) AND 5.9 (1984). ACCORDINGLY, THE FUNDS ON DEPOSIT WITH OUR OFFICE-$4,760.44-- ARE ORDERED TO BE DISBURSED TO THE WAGE CLAIMANTS IN ACCORDANCE WITH ESTABLISHED PROCEDURES.