B-139720, MAY 25, 1961

B-139720, MAY 25, 1961

TO THE SECRETARY OF LABOR:

REFERENCE IS MADE TO A LETTER DATED MAY 2, 1961, FROM THE SOLICITOR OF LABOR, CONCERNING THE REQUEST IN OUR LETTER OF MARCH 28, 1961, THAT EARLY CONSIDERATION BE GIVEN TO AMENDING SECTION 5.6 (B) OF REGULATIONS, 29 CFR, SUBTITLE A, PART 5, TO SHOW THE ACTUAL EXTENT AND CONDITIONS OF DEBARMENT BEING EMPLOYED.

THE SOLICITOR OF LABOR ADVISED AS FOLLOWS:

"YOUR ATTENTION IS DIRECTED TO THE DECISION OF APRIL 20, 1961, BY THE UNITED STATES COURT OF APPEALS IN CASE NO. 16044, COPPER PLUMBING AND HEATING COMPANY, ET AL., V. JOSEPH CAMPBELL, COMPTROLLER GENERAL OF THE UNITED STATES, ET AL. A COPY OF THE COURT'S OPINION IS ENCLOSED FOR YOUR CONVENIENCE. YOU WILL OBSERVE THAT THE VALIDITY OF THE REGULATION WAS DIRECTLY CHALLENGED AND WAS FULLY SUSTAINED, AND THAT, DEFERRING TO THE SECRETARY'S INTERPRETATION OF HIS OWN REGULATION, THE COURT FOUND THAT THE DEBARMENT THEREIN PROVIDED IS NOT PENAL, IS REASONABLE, AND IS NOT ABSOLUTE. IT WOULD APPEAR, THEREFORE, THAT THERE IS NO URGENT NEED FOR THE AMENDMENT OF SECTION 5.6 (B), AND THAT IT MAY BE DEFERRED UNTIL THE PLANNED REVISION OF THE ENTIRE PART IS ACCOMPLISHED. MEANWHILE, IT WILL BE APPRECIATED IF YOU WILL TAKE PROMPT ACTION TO PUBLISH, AS HERETOFORE REQUESTED, THE NAMES OF THE PERSONS AND FIRMS IDENTIFIED IN THE ENCLOSED LIST.'

IT SHOULD BE NOTED THAT IN NEITHER OUR LETTER OF MARCH 28, 1961, NOR IN PREVIOUS CORRESPONDENCE HAVE WE CHALLENGED THE VALIDITY OF THE REGULATION PASSED UPON BY THE COURT OR QUESTIONED THE AUTHORITY OF YOUR OFFICE TO USE ADMINISTRATIVE OR NONSTATUTORY DEBARMENT. WHAT WE DID QUESTION WAS THE USE OF ADMINISTRATIVE DEBARMENT AS A PENALTY. THE LANGUAGE OF SECTION 5.6 (B), PROVIDING THAT FIRMS FOUND TO BE VIOLATORS OF CERTAIN LABOR STANDARDS "SHALL BE INELIGIBLE FOR A PERIOD OF THREE YEARS," LED TO THE OBSERVATION IN OUR LETTER OF JANUARY 6, 1960, THAT "ASSUMING THAT SOME ADMINISTRATIVE DETERMINATION OF IRRESPONSIBILITY AND INELIGIBILITY WAS WARRANTED * * * DEBARMENT OF THREE YEARS * * * DOES NOT APPEAR TO BE A DISQUALIFICATION PREDICATED UPON IRRESPONSIBILITY TO PERFORM SATISFACTORILY * * * BUT A DISQUALIFICATION IMPOSED AS A PUNISHMENT.'

UPON BEING INFORMED IN THE ACTING SOLICITOR OF LABOR'S LETTER OF JANUARY 26, 1961, THAT THE LANGUAGE OF SECTION 5.6 (B) WAS BEING CONSTRUED TO MEAN THAT RELIEF COULD BE OBTAINED FROM THE THREE YEAR INELIGIBILITY AT ANY TIME UPON DEMONSTRATION OF RESPONSIBILITY, WE STATED IN OUR LETTER OF MARCH 28, 1961, THAT "WE HAD NOT PREVIOUSLY UNDERSTOOD THAT THE DEPARTMENT OF LABOR HAD ADOPTED THIS POSITION * * * IT SEEMS QUITE CLEAR THAT THE PRESENT LANGUAGE OF THE REGULATIONS DOES NOT CARRY OUT THE INTENT AS STATED.' OUR REQUEST WAS NOT PREDICATED UPON ANY VIEW THAT THE REGULATION AS INTERPRETED BY THE SECRETARY OF LABOR WAS INVALID, BUT WAS FOR THE PURPOSE OF OBTAINING AN AMENDMENT TO THE REGULATIONS SO THAT THE PROVISIONS WOULD AGREE WITH THE INTERPRETATION BEING PLACED THEREON BY THE DEPARTMENT OF LABOR.

AN IMPORTANT REASON FOR OUR REQUEST OF MARCH 28, 1961, WAS A DESIRE TO DISCLOSE FAIRLY IN THE STATEMENT ACCOMPANYING PERTINENT DEBARMENT LISTINGS, WHICH ARE INCLUDED AS A COOPERATIVE MEASURE IN OUR PUBLICATION OF DEBARMENTS UNDER THE WALSH-HEALEY AND DAVIS-BACON ACTS, THAT THE THREE YEAR DEBARMENTS INVOLVED WERE NOT ABSOLUTE AND THAT RELIEF FROM INELIGIBILITY MIGHT BE OBTAINED UPON A SATISFACTORY SHOWING THAT THE PARTIES INVOLVED COULD BE RELIED UPON AS RESPONSIBLE PERSONS WHO WOULD COMPLY WITH THE REQUIRED LABOR STANDARDS. INASMUCH AS IT IS CLEAR THAT NO QUESTION EXISTS CONCERNING THE TERMS OR PROPRIETY OF THE INELIGIBILITY NOW BEING IMPOSED UNDER THE PROVISIONS OF SECTION 5.6 (B), IT IS BELIEVED THAT, PENDING PLANNED REVISION OF THE REGULATIONS, WE CAN AMEND THE STATEMENT TO AVOID MISUNDERSTANDING CONCERNING INELIGIBILITY SO THAT CASES REPORTED TO US CAN BE PUBLISHED WITHOUT DELAY ON THAT ACCOUNT.

OF COURSE, THIS DOES NOT MEAN THAT LISTING OF THE DEBARMENTS REPORTED TO US CAN BE ACCOMPLISHED OR MAINTAINED AUTOMATICALLY. THE GENERAL ACCOUNTING OFFICE CONSISTENTLY HAS TAKEN THE POSITION THAT ALL AGENCIES ARE REQUIRED TO OBSERVE CERTAIN SAFEGUARDS AND LIMITATIONS IN THE USE OF NONSTATUTORY DEBARMENTS. ALTHOUGH EVERY EFFORT IS MADE TO COOPERATE IN RECOGNITION OF THE FACT THAT SPECIALIZED ADMINISTRATIVE NEEDS REQUIRE EXERCISE OF A BROAD DISCRETION IN ESTABLISHING AND PASSING UPON THE QUALIFICATIONS OF BIDDERS, DETERMINATIONS OF INELIGIBILITY ARE CAREFULLY CONSIDERED BY US TO SEE THAT PROSPECTIVE COMPETITORS RECEIVE TREATMENT IN ACCORDANCE WITH FUNDAMENTAL STANDARDS OF FAIR PLAY, WITHOUT WHICH THE GOVERNMENT COULD NOT EXPECT TO OBTAIN THE FULL BENEFIT OF COMPETITION UNDER APPLICABLE PROCUREMENT LAWS. THERE HAVE BEEN NO MATERIAL DEVIATIONS FROM THIS TRADITIONAL POSITION. ITS PROPRIETY IS MADE EVEN MORE APPARENT BY THE COPPER CASE, IN WHICH IT IS POINTED OUT THAT, WHILE NO ONE HAS A RIGHT TO CONTRACT WITH THE UNITED STATES ON HIS OWN TERMS, ALL PERSONS "DO HAVE A RIGHT NOT TO BE INVALIDLY DENIED EQUAL OPPORTUNITY UNDER APPLICABLE LAW TO SEEK CONTRACTS ON GOVERNMENT PROJECTS, AND THAT," IF DEPRIVED OF THIS RIGHT, THEY SUFFER A "LEGAL WRONG" WHICH GIVES THEM ACCESS TO THE COURTS * * *.'