B-222105, OCT 3, 1986, OFFICE OF THE GENERAL COUNSEL

B-222105, OCT 3, 1986, OFFICE OF THE GENERAL COUNSEL

PROCUREMENT - CONTRACTOR QUALIFICATION - DEBARMENT - HEARINGS - NOTIFICATION PROCUREMENT - CONTRACTOR QUALIFICATION - DEBARMENT - LABOR STANDARDS - FALSE STATEMENTS - WAGE UNDERPAYMENT DIGEST: A CONTRACTOR CHALLENGING OUR DECISION TO DEBAR HIM UNDER THE DAVIS BACON ACT REQUESTS A HEARING AND CITES SEVERAL FACTORS WHICH HE BELIEVES MILITATE AGAINST HIS DEBARMENT. WE ADVISE THE CONTRACTOR'S COUNSEL THAT: (1) HE IS NOT ELIGIBLE FOR A HEARING SINCE HE HAD RECEIVED THE DEPARTMENT OF LABOR'S CERTIFIED LETTER OFFERING HIM AN OPPORTUNITY FOR A HEARING BUT FAILED TO RESPOND WITHIN THE SPECIFIED TIME FRAME; AND (2) THE FACTS WHICH THE CONTRACTOR CITES AS MILITATING AGAINST HIS DEBARMENT ARE NOT MATERIAL, BECAUSE THE RECORD SHOWS THAT THE CONTRACTOR FALSIFIED CERTIFIED PAYROLL RECORDS AND THEREFORE COMMITTED A SUBSTANTIAL VIOLATION OF THE DAVIS-BACON ACT.

FREDERIC GOVER, ESQ.:

CANTERBURY, STUBER, ELDER & GOOCH

ATTORNEYS AND COUNSELORS

800 MURRAY FINANCIAL CENTER

5550 LBJ FREEWAY

DALLAS, TEXAS 75240

SUBJECT:MCNULTY ELECTRIC, INC. CONTRACT NOS. GS-05BC-82688 AND DACA45-84- C-0012

DOL FILE NO. V/MICH-84-140/141

THIS IS IN RESPONSE TO YOUR LETTER OF SEPTEMBER 5, 1986, CONCERNING OUR DEBARMENT OF MR. JOHN E. MCNULTY AND HIS FIRM, MCNULTY ELECTRIC, INC., FOR VIOLATIONS OF THE DAVIS-BACON ACT UNDER THE ABOVE-REFERENCED CONTRACTS. FIRST, YOU ASK WHETHER MR. MCNULTY MAY OBTAIN A HEARING TO CONTEST OUR DEBARMENT DETERMINATION OF JULY 3, 1986, IN VIEW OF HIS ALLEGATION THAT HE HAD RECEIVED NO PRIOR NOTICE CONCERNING THE POSSIBLE IMPOSITION OF DEBARMENT SANCTIONS AGAINST HIM. SECONDLY, YOU ASK THAT WE CONSIDER SEVERAL FACTORS WHICH YOU BELIEVE MILITATE AGAINST THE DEBARMENT OF MR. MCNULTY AND HIS FIRM.

WITH RESPECT TO YOUR FIRST QUESTION, INFORMATION FURNISHED TO US BY THE DEPARTMENT OF LABOR (DOL) SHOWS THAT, BY CERTIFIED LETTER DATED MAY 9, 1985, COPY ENCLOSED, DOL APPRISED MR. MCNULTY OF THE DAVIS-BACON ACT VIOLATIONS WITH WHICH HE WAS CHARGED AND ADMONISHED HIM THAT DEBARMENT WAS POSSIBLE. THE CERTIFIED LETTER ALSO OFFERED MR. MCNULTY A HEARING BEFORE AN ADMINISTRATIVE LAW JUDGE, ALLOWING HIM 30 DAYS FROM THE DATE OF HIS RECEIPT OF THE LETTER TO REQUEST SUCH A HEARING. MR. MCNULTY RECEIVED THE CERTIFIED LETTER, AS EVIDENCED BY HIS SIGNATURE ON THE RETURN RECEIPT DATED MAY 16, 1985, COPY ENCLOSED. HOWEVER, HE DID NOT REQUEST A HEARING.

UNDER DOL'S REGULATIONS IN 29 C.F.R. PART 5.12 (1985), A CONTRACTOR WHO FAILS TO REQUEST A HEARING WITHIN 30 DAYS AFTER RECEIVING DOL'S CERTIFIED LETTER HAS NO FURTHER OPPORTUNITY FOR A HEARING. ACCORDINGLY, SINCE MR. MCNULTY FAILED TO FILE A TIMELY RESPONSE TO DOL'S CERTIFIED LETTER, HE MAY NOT NOW RECEIVE A HEARING CONCERNING HIS DEBARMENT.

SECONDLY, WE DO NOT AGREE WITH YOUR ASSERTION THAT DEBARMENT SANCTIONS ARE INAPPROPRIATE IN THIS CASE BECAUSE MR. MCNULTY HAS MADE RESTITUTION TO THE UNDERPAID WORKERS AND IS ALLEGING THAT THE UNDERPAYMENTS RESULTED FROM A CLASSIFICATION DISPUTE. THE RECORD UPON WHICH WE BASED OUR DEBARMENT DETERMINATION SHOWS THAT MCNULTY ELECTRIC, INC. SUBMITTED FALSIFIED PAYROLL RECORDS UNDER BOTH OF ITS CONTRACTS IN ORDER TO CONCEAL UNDERPAYMENTS TO ITS WORKERS, AND THAT MR. MCNULTY ADMITTED TO THE FALSIFICATION WHEN HE WAS INTERVIEWED BY DOL'S INVESTIGATORS. WE HAVE CONSISTENTLY REGARDED THE FALSIFICATION OF PAYROLL RECORDS AS A SUBSTANTIAL VIOLATION OF THE DAVIS-BACON ACT WHICH ALONE WARRANTS A CONTRACTOR'S DEBARMENT UNDER THE ACT.