Violation of Davis-Bacon Act

B-201627: May 29, 1981

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A subcontract was awarded by the Department of the Army for the furnishing of electrical work. The contract contained the stipulations and representations required by the Davis-Bacon Act. In response to a complaint by one of the subcontractor's employees, a Department of Labor investigation 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 persons employed by it on the project. As a result of this investigation, it was determined that five employees were classified and paid as apprentices when, in fact, only one of these employees was registered in a bona fide apprenticeship program. Consequently, it was determined that, since the other four employees were not registered in an approved apprenticeship program, they had been underpaid. The fact that one of its employees was registered in an approved apprenticeship program, coupled with the fact that the subcontractor had been investigated for alleged violations of the Act and found to be in compliance, indicates that the subcontractor was aware of the requirements of the Act but chose not to comply with these requirements. The subcontractor refused to make restitution. The Department of Labor notified the subcontractor in detail of the nature and extent of the labor standards violations charged against the firm. No facts in rebuttal or argument against debarment were submitted by the subcontrator. Therefore, GAO found that the subcontractor and its president have disregarded obligations to employees within the meaning of the Act. Accordingly, these names will be included on the current debarred bidders list.

B-201627, MAY 29, 1981

PRECIS-UNAVAILABLE

FINDING

TOP ELECTRIC COMPANY, INC.:

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 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 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. DACA51-75-C-0183, IN EXCESS OF $2,000 FOR AN ADDITION TO THE UNITED STATES ARMY COLD STORAGE RESEARCH AND ENGINEERING LABORATORY, HANOVER, NEW HAMPSHIRE, WAS AWARDED BY THE DEPARTMENT OF THE ARMY ON JUNE 30, 1975, TO THE EDWARD R. MARDEN CORPORATION, ALSTON, MASSACHUSETTS. THE CONTRACT CONTAINED THE STIPULATIONS AND REPRESENTATIONS REQUIRED BY SECTION 1 OF THE DAVIS-BACON ACT.

A SUBCONTRACT WAS AWARDED TO TOP ELECTRIC COMPANY, INC., ON JULY 11, 1975, FOR THE FURNISHING OF ELECTRICAL WORK. THE STIPULATIONS AND REPRESENTATIONS REQUIRED BY THE DAVIS-BACON ACT WERE INCORPORATED BY REFERENCE.

AN INVESTIGATION CONDUCTED BY THE DEPARTMENT OF LABOR AS THE RESULT OF A COMPLAINT BY ONE OF THE SUBCONTRACTOR'S EMPLOYEES DISCLOSED THAT THE SUBCONTRACTOR, TOP ELECTRIC COMPANY, INC., 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 PERSONS EMPLOYED BY IT ON THE SUBJECT PROJECT. AS A RESULT OF THIS INVESTIGATION IT WAS DETERMINED THAT FIVE EMPLOYEES WERE CLASSIFIED AND PAID AS APPRENTICES WHEN, IN FACT, ONLY ONE OF THESE EMPLOYEES WAS REGISTERED IN A BONA FIDE APPRENTICESHIP PROGRAM. CONSEQUENTLY, IT WAS DETERMINED THAT SINCE THE OTHER FOUR EMPLOYEES WERE NOT REGISTERED IN AN APPROVED APPRENTICESHIP PROGRAM, THEY HAD BEEN UNDERPAID. THE FACT THAT ONE OF ITS EMPLOYEES WAS REGISTERED IN AN APPROVED APPRENTICESHIP PROGRAM COUPLED WITH THE FACT THAT THE SUBCONTRACTOR HAD, IN 1975, BEEN INVESTIGATED FOR ALLEGED VIOLATIONS OF THE DAVIS-BACON ACT AND FOUND TO BE IN COMPLIANCE, INDICATES THAT THE SUBCONTRACTOR WAS AWARE OF THE REQUIREMENTS OF THE DAVIS-BACON ACT, BUT CHOSE NOT TO COMPLY WITH THESE REQUIREMENTS. THE SUBCONTRACTOR REFUSED TO MAKE RESTITUTION.

BY CERTIFIED LETTER DATED MAY 16, 1979, THE DEPUTY ADMINISTRATOR, WAGE AND HOUR DIVISION, UNITED STATES DEPARTMENT OF LABOR, NOTIFIED THE SUBCONTRACTOR IN DETAIL OF THE NATURE AND EXTENT OF THE LABOR STANDARDS VIOLATIONS CHARGED AGAINST THE FIRM. ALTHOUGH THE CERTIFIED MAIL RECEIPT INDICATES THAT THE DEPARTMENT OF LABOR'S LETTER HAD BEEN RECEIVED, NO FACTS IN REBUTTAL OR ARGUMENT AGAINST DEBARMENT WERE SUBMITTED BY THE SUBCONTRACTOR IN RESPONSE TO THE LETTER.

WE, THEREFORE, FIND THAT TOP ELECTRIC COMPANY, INC., AND MR. WILLIAM E. TOLL, 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 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.