B-208915.OM., DEC 1, 1982

B-208915.OM., DEC 1, 1982

PRECIS-UNAVAILABLE

THE COMPTROLLER GENERAL:

WE ARE FORWARDING THE FILE PERTAINING TO THE APPARENT VIOLATIONS OF THE DAVIS-BACON ACT, 40 U.S.C. 276A, BY I.ALPER COMPANY, CAMDEN, NEW JERSEY, WHICH PERFORMED WORK UNDER ARMY CORPS OF ENGINEERS CONTRACT NO. DACA31-76- C-0206 AT DEFENSE CONSTRUCTION SUPPLY CENTER, COLUMBUS, OHIO.

DETAILS OF THE VIOLATIONS AND ADMINISTRATIVE RECOMMENDATIONS CONCERNING DEBARMENT ARE CONTAINED IN THE ATTACHED INVESTIGATIVE REPORT AND DEPARTMENT OF LABOR TRANSMITTAL LETTER.

WE PROPOSE, WITH YOUR APPROVAL, TO DISBURSE THE $6,343.73 ON DEPOSIT HERE TO THE 55 AGGRIEVED WORKERS IN ACCORDANCE WITH ESTABLISHED PROCEDURES, AND RETURN THE BALANCE TO THE CONTRACTOR. OUR PROPOSAL AND THE MATTER OF WHETHER THE CONTRACTOR'S NAME SHOULD BE PLACED ON THE DEBARRED BIDDERS LIST FOR VIOLATIONS UNDER THE DAVIS-BACON ACT ARE FORWARDED FOR YOUR CONSIDERATION AND INSTRUCTIONS.

FOR FURTHER INFORMATION, PLEASE CONTACT MYRON COLBREUNER ON EXTENSION 53218.

INDORSEMENT

ASSOCIATE DIRECTOR, AFMD-CLAIMS GROUP

RETURNED. THE DEPARTMENT OF THE ARMY, CORPS OF ENGINEERS, AWARDED CONTRACT NO. DACA31-76-C-0206 TO I.ALPER CO., CAMDEN, NEW JERSEY, ON SEPTEMBER 27, 1976. THIS CONTRACT WAS FOR THE REPLACEMENT OF BUILT-UP ROOFING ON WAREHOUSES AT THE DEFENSE CONSTRUCTION SUPPLY CENTER, COLUMBUS, OHIO.

A REVIEW OF THE CERTIFIED PAYROLLS INDICATED THAT WHILE A MAJORITY OF THE CONTRACTOR'S EMPLOYEES WERE RESIDENTS OF OHIO AND PENNSYLVANIA, NEW JERSEY STATE INCOME TAX AND NEW JERSEY STATE UNEMPLOYMENT INSURANCE WERE DEDUCTED FROM THE PAY OF THESE EMPLOYEES, AS WELL AS FROM EMPLOYEES WHO WERE RESIDENTS OF NEW JERSEY. WHEN IT WAS POINTED OUT TO THE CONTRACTOR THAT THE DEDUCTIONS FROM THE PAY OF OHIO AND PENNSYLVANIA RESIDENTS WERE NOT AUTHORIZED BY THE TERMS OF THE CONTRACT, THE CONTRACTOR MADE FULL RESTITUTION TO 27 EMPLOYEES AND PARTIAL RESTITUTION TO ANOTHER 29 EMPLOYEES WHO, DUE TO CLERICAL ERRORS, WERE DUE AN ADDITIONAL $62.94. THE LATTER AMOUNT, AS WELL AS $2,033.50 OWED 25 WORKERS WHO COULD NOT BE LOCATED, WAS TRANSMITTED TO GAO BY THE AGENCY FOR DISBURSAL. SINCE THE CONTRACTOR DID NOT QUESTION THE DETERMINATION THAT THE DEDUCTIONS WERE UNAUTHORIZED, EVEN THOUGH IT HAD AN OPPORTUNITY TO DO SO, WE MUST CONCLUDE THAT THE CONTRACTOR AGREES WITH THE ARMY THAT THE AMOUNT OF THE DEDUCTIONS HAD TO BE RETURNED TO THE EMPLOYEES IN QUESTION. THEREFORE, WE WILL NOT OBJECT TO THE DISBURSAL OF THE ABOVE AMOUNTS.

ALSO, AS A RESULT OF A LABOR STANDARDS INVESTIGATION BY THE DEPARTMENT OF LABOR (DOL) IT WAS DETERMINED THAT A NUMBER OF EMPLOYEES WERE MISCLASSIFIED. THE CONTRACTOR DISAGREED WITH THIS DETERMINATION AND THE MATTER WAS APPEALED. AN ADMINISTRATIVE LAW JUDGE (ALJ) RULED THAT SIX EMPLOYEES HAD BEEN MISCLASSIFIED AND WERE ENTITLED TO BACK WAGES TOTALLING $3,843.73. THE RECORD CONTAINS SUFFICIENT EVIDENCE TO SUPPORT THE ALJ'S RULING.

ACCORDINGLY, $5,940.17 MAY BE DISBURSED TO THE AGGRIEVED EMPLOYEES IN ACCORDANCE WITH ESTABLISHED PROCEDURES. THE BALANCE OF THE $6,343.73 WITHHELD UNDER THE CONTRACT ON DEPOSIT WITH YOUR OFFICE MAY BE RETURNED TO THE CONTRACTOR.

WE DO NOT BELIEVE THAT DEBARMENT OF THE CONTRACTOR IS WARRANTED, SINCE THE UNDERPAYMENTS RESULTING FROM THE UNAUTHORIZED DEDUCTIONS APPEAR TO HAVE BEEN THE RESULT OF IGNORANCE OR MISUNDERSTANDING OF THE LAW ON THE PART OF THE CONTRACTOR, RATHER THAN A WILLFUL INTENT TO UNDERPAY THE WORKERS. IN REGARD TO THE UNDERPAYMENTS RESULTING FROM THE MISCLASSIFICATION OF THE SIX EMPLOYEES, IT APPEARS THAT THESE UNDERPAYMENTS WERE THE RESULT OF A BONA FIDE DISAGREEMENT AS TO THE PROPER CLASSIFICATION OF THE WORKERS INVOLVED AND NOT OF SUCH A WILLFUL NATURE AS TO REQUIRE DEBARMENT. SEE B-202093-O.M., MAY 19, 1981, AND CASES CITED THEREIN. NEITHER DOL NOR THE DEPARTMENT OF THE ARMY RECOMMENDS DEBARMENT.