B-191962, JUN 13, 1978

B-191962, JUN 13, 1978

CERTIFIED MAIL - RETURN RECEIPT REQUESTED: ENCLOSED IS A COPY OF OUR FINDING OF TODAY NORTHEAST ELECTRIC COMPANY, INC., AND MR. WARNER B. KEE, PRESIDENT OF SAID FIRM, HAVE DISREGARDED OBLIGATIONS TO EMPLOYEES WITHIN THE MEANING OF THE DAVIS BACON ACT, 40 U.S.C. 276A (1970), IN THE PERFORMANCE OF SUBCONTRACTS UNDER GENERAL SERVICES ADMINISTRATION CONTRACTS NOS. GS-04B-13873 AND GS-04B-13855. PURSUANT TO THE PROVISIONS OF SECTION 3(A) OF THE ACT, THE NAMES OF THE ABOVE INDIVIDUAL AND FIRM WILL BE INCLUDED IN A LIST FOR PUBLICATION ON JUNE 15, 1978, AND NO GOVERNMENT CONTRACT WILL BE AWARDED TO EITHER OF THEM OR TO ANY FIRM, CORPORATION, PARTNERSHIP, JOINT VENTURE, OR ASSOCIATION IN WHICH THEY OR EITHER OF THEM HAS AN INTEREST UNTIL 3 YEARS HAVE ELAPSED FROM THE DATE OF PUBLICATION OF SUCH LIST.

NORTHEAST ELECTRIC COMPANY, INC.:

FINDING

IN THE MATTER OF NORTHEAST ELECTRIC COMPANY, INC. (NORTHEAST), AND MR. WARNER B. KEE, ITS PRESIDENT, 3014 SANTA MONICA DRIVE, DECATUR, GEORGIA 30032.

SECTION 1(A) OF THE DAVIS-BACON ACT OF AUGUST 30, 1935, 49 STAT. 1011, 40 U.S.C. 276A (1970), PROVIDES IN PART AS FOLLOWS:

"THE ADVERTISED SPECIFICATIONS FOR EVERY CONTRACT IN EXCESS OF $2,000, TO WHICH THE UNITED STATES *** IS A PARTY, FOR CONSTRUCTION, ALTERATION, AND/OR REPAIR, INCLUDING PAINTING AND DECORATING, OF PUBLIC BUILDINGS OR PUBLIC WORKS OF THE UNITED STATES *** AND WHICH REQUIRES OR INVOLVES THE EMPLOYMENT OF MECHANICS AND/OR LABORERS SHALL CONTAIN A PROVISION STATING THE MINIMUM WAGES TO BE PAID VARIOUS CLASSES OF LABORERS AND MECHANICS *** AND EVERY CONTRACT BASED UPON THESE SPECIFICATIONS SHALL CONTAIN A STIPULATION THAT THE CONTRACTOR OR HIS SUBCONTRACTOR SHALL PAY ALL MECHANICS AND LABORERS EMPLOYED DIRECTLY UPON THE SITE OF THE WORK, UNCONDITIONALLY AND NOT LESS OFTEN THAT ONCE A WEEK, AND WITHOUT SUBSEQUENT DEDUCTION OR REBATE ON ANY ACCOUNT, THE FULL AMOUNT ACCRUED AT TIME OF PAYMENT, COMPUTED AT WAGE RATES NOT LESS THAN THOSE STATED IN THE ADVERTISED SPECIFICATIONS, REGARDLESS OF ANY CONTRACTUAL RELATIONSHIP WHICH MAY BE ALLEGED TO EXIST BETWEEN THE CONTRACTOR OR SUBCONTRACTOR AND SUCH LABORERS AND MECHANICS ***." SECTION 3(A) OF THE ACT PROVIDES THAT -

"*** THE COMPTROLLER GENERAL OF THE UNITED STATES IS FURTHER AUTHORIZED AND IS DIRECTED TO DISTRIBUTE A LIST TO ALL DEPARTMENTS OF THE GOVERNMENT GIVING THE NAMES OF PERSONS OR FIRMS WHOM HE HAS FOUND TO HAVE DISREGARDED THEIR OBLIGATIONS TO EMPLOYEES AND SUBCONTRACTORS. NO CONTRACT SHALL BE AWARDED TO THE PERSONS OR FIRMS APPEARING ON THIS LIST OR TO ANY FIRM, CORPORATION, PARTNERSHIP, OR ASSOCIATION IN WHICH SUCH PERSONS OR FIRMS HAVE AN INTEREST UNTIL THREE YEARS HAVE ELAPSED FROM THE DATE OF PUBLICATION OF THE LIST CONTAINING THE NAMES OF SUCH PERSONS OR FIRMS."

CONTRACTS NOS. GS-04B-13873 AND GS-04B-13855, BOTH IN EXCESS OF $2,000, WERE AWARDED BY THE GENERAL SERVICES ADMINISTRATION (GSA) TO JIMCO CONSTRUCTION COMPANY, INC. (JIMCO), ATLANTA, GEORGIA. BOTH CONTRACTS CONTAINED THE STIPULATIONS AND REPRESENTATIONS REQUIRED BY SECTION 1 OF THE DAVIS-BACON ACT.

NORTHEAST PERFORMED AS A SUBCONTRACTOR UNDER BOTH OF THE ABOVE MENTIONED CONTRACTS. THE STIPULATIONS AND REPRESENTATIONS REQUIRED BY SECTION 1 OF THE DAVIS-BACON ACT WERE INCORPORATED INTO THE SUBCONTRACTS BY REFERENCE. MOREOVER, THE RECORD INDICATED THAT PRIOR TO BIDDING MR. KEE, NORTHEAST'S PRESIDENT, WAS FURNISHED A COPY OF THE SPECIFICATIONS INCLUDING THE LABOR STANDARDS PROVISIONS AND THE WAGE RATE.

TWO INVESTIGATIONS CONDUCTED BY GSA DISCLOSED THAT THE SUBCONTRACTOR, HAVING FULL KNOWLEDGE OF ITS STATUTORY AND CONTRACTUAL RESPONSIBILITIES, DID NEVERTHELESS DISREGARD THESE OBLIGATIONS AS EVIDENCED BY THE DELIBERATE PAYMENT OF SUBMINIMUM WAGE RATES TO WORKERS EMPLOYED BY IT ON BOTH PROJECTS. AS A RESULT OF THESE INVESTIGATIONS IT WAS DISCOVERED THAT ON THE TWO SUBCONTRACTS 18 EMPLOYEES WERE UNDERPAID A TOTAL OF $5,528.52 IN VIOLATION OF THE TERMS OF THE DAVIS BACON ACT. THE RECORD ALSO REVEALED THAT CERTIFIED PAYROLLS SUBMITTED TO THE CONTRACTING AGENCY CONTAINED INCORRECT INFORMATION DESIGNED TO SIMULATE COMPLIANCE WITH THE APPLICABLE LABOR STANDARDS REQUIREMENTS. IN THIS REGARD, THE RECORD INDICATES THAT ON AUGUST 26, 1977, MR. KEE WAS FOUND GUILTY ON 56 COUNTS OF AN INDICTMENT FOR THE SUBMISSION OF FALSE STATEMENTS TO THE GOVERNMENT AND SUBSEQUENTLY WAS SENTENCED TO 2 YEARS' IMPRISONMENT, WHICH WAS SUSPENDED, PLACED ON PROBATION FOR A PERIOD OF 3 YEARS AND FINED $3,000.

BY REGISTERED LETTER, DATED JANUARY 31, 1978, THE ACTING ADMINISTRATOR OF THE WAGE AND HOUR DIVISION OF THE DEPARTMENT OF LABOR NOTIFIED THE ABOVE- NAMED SUBCONTRACTOR AND ITS PRESIDENT IN DETAIL OF THE NATURE AND EXTENT OF THE LABOR STANDARDS VIOLATIONS CHARGED AGAINST HIM AND HIS FIRM, BUT NO FACTS IN REBUTTAL OR ARGUMENT AGAINST DEBARMENT WERE SUBMITTED BY THE SUBCONTRACTOR IN RESPONSE TO THE LETTER.

IT IS CLEAR, PARTICULARLY IN LIGHT OF THE FALSIFIED PAYROLLS, THAT GOOD FAITH WAS NOT SHOWN IN COMPLYING WITH THE ACT AND THE CONTRACTUAL PROVISIONS. BOTH GSA AND THE DEPARTMENT OF LABOR HAVE RECOMMENDED THE IMPOSITION OF DEBARMENT.

WE THEREFORE FIND THAT NORTHEAST ELECTRIC COMPANY, INC., AND MR. WARNER B. KEE, INDIVIDUALLY, HAVE DISREGARDED "OBLIGATIONS TO EMPLOYEES" WITHIN THE MEANING OF THE DAVIS-BACON ACT. ACCORDINGLY, THESE NAMES WILL BE INCLUDED ON A LIST FOR DISTRIBUTION TO ALL AGENCIES OF THE GOVERNMENT PURSUANT TO THE STATUTORY REQUIREMENTS AND NO CONTRACT SHALL BE AWARDED TO THEM OR TO ANY FIRM, CORPORATION, PARTNERSHIP, JOINT VENTURE OR ASSOCIATION, IN WHICH THEY OR EITHER OF THEM HAS AN INTEREST UNTIL 3 YEARS HAVE ELAPSED FROM THE DATE OF PUBLICATION OF SUCH LIST.