B-195955, DEC 26, 1979

PRECIS-UNAVAILABLE

EDWARD SMITH, INTERNATIONAL DRYWALL CO., INC.:

ENCLOSED IS A COPY OF OUR FINDING OF TODAY THAT INTERNATIONAL DRYWALL CO., INC., AND ITS PRESIDENT, EDWARD SMITH, HAVE DISREGARDED OBLIGATIONS TO EMPLOYEES WITHIN THE MEANING OF THE DAVIS-BACON ACT, 40 U.S.C. SEC. 276A (1976), IN THE PERFORMANCE AS A SUBCONTRACTOR ON CONTRACT NO. N62472- 74-C-0059, FOR THE CONSTRUCTION OF HOUSING UNITS AT THE PHILADELPHIA NAVAL BASE, PHILADELPHIA, PENNSYLVANIA.

PURSUANT TO THE PROVISIONS OF SECTION 3(A) OF THE ACT, THE NAMES OF THE ABOVE PERSON AND FIRM SHALL BE INCLUDED IN A LIST FOR PUBLICATION ON JANUARY 2, 1980, 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 MAY HAVE AN INTEREST UNTIL 3 YEARS HAVE ELAPSED FROM THAT DATE.

FINDING

IN THE MATTER OF INTERNATIONAL DRYWALL CO., INC., AND EDWARD SMITH, ITS PRESIDENT, 6302 N. 13TH STREET, PHILADELPHIA, PENNSYLVANIA.

SECTION 1(A) OF THE DAVIS-BACON ACT OF AUGUST 30, 1935, 49 STAT. 1011, 40 U.S.C. SEC. 276A (1976), PROVIDES IN PART THAT -

"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 THAN ONCE A WEEK AND WITHOUT SUBSEQUENT DEDUCTION OR REBATE ON ANY ACCOUNT, THE FULL AMOUNTS 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."

CONTRACT NO. N62472-74-C-0059, IN EXCESS OF $2,000, FOR THE CONSTRUCTION OF 350 HOUSING UNITS AT THE PHILADELPHIA NAVAL BASE, PHILADELPHIA, PENNSYLVANIA, WAS AWARDED BY THE DEPARTMENT OF THE NAVY ON JUNE 28, 1974, TO TMW JOINT VENTURE, MILWAUKEE, WISCONSIN. THE CONTRACT CONTAINED THE STIPULATIONS AND REPRESENTATIONS REQUIRED BY SECTION 1 OF THE DAVIS-BACON ACT.

A SUBCONTRACT WAS AWARDED TO INTERNATIONAL DRYWALL CO., INC., TO DO THE INSTALLATION OF DRYWALL AND RELATED WORK ON THE PROJECT. THE SUBCONTRACT ALSO CONTAINED THE STIPULATIONS AND REPRESENTATIONS REQUIRED BY SECTION 1 OF THE DAVIS-BACON ACT.

AN INVESTIGATION CONDUCTED BY THE WAGE AND HOUR DIVISION, U. S. DEPARTMENT OF LABOR, DISCLOSED THAT THE SUBCONTRACTOR, INTERNATIONAL DRYWALL CO., INC., HAVING FULL KNOWLEDGE OF ITS STATUTORY AND CONTRACTUAL RESPONSIBILITIES, DID NEVERTHELESS DISREGARD THESE OBLIGATIONS AS EVIDENCED BY THE DELIBERATE REFUSAL TO PAY 23 EMPLOYEES THE APPLICABLE PREVAILING WAGE RATE FOR THE CLASSIFICATION OF WORK THEY PERFORMED. AS A RESULT OF THIS INVESTIGATION IT WAS ORIGINALLY DETERMINED THAT THE 23 EMPLOYEES WERE UNDERPAID A TOTAL OF $11,490.98. THIS AMOUNT WAS LATER REDUCED TO $9,525.28. THE RECORD ALSO REVEALED THAT CERTIFIED PAYROLLS SUBMITTED TO THE CONTRACTING AGENCY CONTAINED INCORRECT INFORMATION DESIGNED TO SIMULATE COMPLIANCE WITH APPLICABLE LABOR STANDARDS REQUIREMENTS. THE INCORRECT INFORMATION WAS AN INDICATION ON THE CERTIFIED PAYROLLS THAT FRINGE BENEFITS WERE BEING SET ASIDE EACH WEEK TO BE FORWARDED TO APPROPRIATE FRINGE BENEFIT FUNDS WHEN, IN FACT, THIS WAS NOT DONE.

BY REGISTERED LETTER, DATED MARCH 8, 1979, THE DEPUTY ADMINISTRATOR, WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR, NOTIFIED THE SUBCONTRACTOR IN DETAIL OF THE NATURE AND EXTENT OF THE LABOR STANDARDS VIOLATIONS, BUT NOT 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. THE DEPARTMENT OF LABOR HAS RECOMMENDED THE IMPOSITION OF DEBARMENT SANCTIONS.

WE THEREFORE FIND THAT INTERNATIONAL DRYWALL CO., INC., AND EDWARD SMITH, 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 MAY HAVE AN INTEREST UNTIL 3 YEARS HAVE ELAPSED FROM THE DATE OF PUBLICATION OF SUCH LIST.