B-166143, APR. 22, 1969

B-166143, APR. 22, 1969

TO MR. HOWARD B. STRICKLIN:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 7, 1969, AND OUR REPLY THERETO OF MARCH 5, 1969, CONCERNING DISPOSITION OF FUNDS BEING WITHHELD FROM PACKER CONSTRUCTION COMPANY (PACKER) FOR ALLEGED VIOLATION OF THE DAVIS-BACON ACT, 40 U.S.C. 276A.

AS INDICATED IN OUR LETTER OF MARCH 5, 1969, WE DEFERRED RENDERING A DECISION IN THIS MATTER UNTIL THE INTERIOR BOARD OF CONTRACT APPEALS HAD CONCLUDED THE PROCEEDINGS BEFORE IT. WE HAVE BEEN FURNISHED A COPY OF ITS DECISION OF APRIL 2, 1969 (IBCA-754-12-68), WHEREIN IT WAS HELD THAT DAVIS -BACON ACT PROVISION DO NOT EXTEND TO PROTECTION OF CREDITORS OF LABORERS AND MECHANICS, AND IN THE ABSENCE OF A CLAIM OF UNDERPAYMENT OF WAGES BY WORKMEN, THE WITHHOLDING OF FUNDS FROM THE FINAL PAYMENT DUE PACKER WAS IMPROPER.

WE CONCUR WITH THE CONCLUSION REACHED BY THE BOARD. WE OBSERVE, HOWEVER, THAT A NOTICE OF NON-PAYMENT OR UNDERPAYMENT OF WAGES TO THE PROPER GOVERNMENT OFFICIAL DOES NOT HAVE TO EMANATE FROM THE AGGRIEVED EMPLOYEE BUT MAY COME FROM ANY PARTY OR SOURCE. THIS DOES NOT, HOWEVER, ENTITLE A THIRD PARTY CREDITOR OF AN EMPLOYEE TO THE BENEFIT OF THE WITHHOLDING AUTHORIZED BY THE DAVIS-BACON ACT.

WHILE OUR OFFICE HAS THE SOLE RESPONSIBILITY FOR MAKING WAGE ADJUSTMENTS UNDER THE TERMS OF THE DAVIS-BACON ACT, WE ARE AUTHORIZED TO DISTRIBUTE WITHHELD FUNDS ONLY TO THE LABORER OR MECHANIC FOUND NOT TO HAVE BEEN PAID HIS WAGES IN FULL. THE FUNDS WITHHELD CANNOT THEREFORE PROPERLY BE PAID TO THE TRADING COMPANY, AND THE SUM OF $791.47, CURRENTLY BEING WITHHELD FROM PAYMENT TO PACKER SHOULD THEREFORE BE PAID TO THE CONTRACTOR.