B-198964.OM, MAR 15, 1982

B-198964.OM, MAR 15, 1982

DIGEST: 1. WHILE EVIDENCE OF RECORD IS SUFFICIENT TO ESTABLISH THAT WORKERS WERE UNDERPAID, RECORD INDICATES THAT THERE WAS BONA FIDE DISAGREEMENT OR DISPUTE CONCERNING CLASSIFICATION OF CERTAIN WORKERS AND UNDERPAYMENTS WERE NOT OF SUCH WILLFUL NATURE AS TO WARRANT DEBARMENT OF EITHER PRIME CONTRACTOR OR SUBCONTRACTOR. 2. DAVIS-BACON CONTRACTOR IS RESPONSIBLE FOR UNDERPAYMENTS TO EMPLOYEES OF SUBCONTRACTOR.

THE COMPTROLLER GENERAL:

WE ARE FORWARDING THE FILE PERTAINING TO THE APPARENT VIOLATIONS OF THE DAVIS-BACON ACT, 40 U.S.C. 276A, AND THE CONTRACT WORK HOURS AND SAFETY STANDARDS ACT, 40 U.S.C. 327 ET SEQ., BY THERMAL CONTROL, INC., EL PASO, TEXAS, WHICH PERFORMED WORK UNDER ARMY CORPS OF ENGINEERS CONTRACT NO. DACA 63-77-C-0098 AT FORT BLISS, TEXAS.

DETAILS OF THE VIOLATIONS AND ADMINISTRATIVE RECOMMENDATIONS CONCERNING DEBARMENT ARE CONTAINED IN THE ATTACHED INVESTIGATIVE REPORT AND DEPARTMENT OF LABOR TRANSMITTAL LETTER.

WE PROPOSE, WITH YOUR APPROVAL, TO DISBURSE THE $1,724.44 ON DEPOSIT HERE TO THE FIVE AGGRIEVED WORKERS IN ACCORDANCE WITH ESTABLISHED PROCEDURES. OUR PROPOSAL AND THE MATTER OF WHETHER THE CONTRACTOR'S NAME SHOULD BE PLACED ON THE DEBARRED BIDDERS LIST FOR VIOLATIONS UNDER THE DAVIS-BACON ACT ARE FORWARDED FOR YOUR CONSIDERATION AND INSTRUCTIONS.

FOR FURTHER INFORMATION, PLEASE CONTACT MYRON COLBREUNER ON EXTENSION 53218.

INDORSEMENT

ASSOCIATE DIRECTOR, AFMD-CLAIMS GROUP

RETURNED. THERMAL CONTROL, INC. (THERMAL), UNDERPAID FIVE EMPLOYEES IN VIOLATION OF THE DAVIS-BACON ACT, 40 U.S.C. SEC. 276A (1976), AND THE CONTRACT WORK HOURS AND SAFETY STANDARDS ACT, 40 U.S.C. SEC. 327, ET SEQ. (1976), WHILE PERFORMING AS A SUBCONTRACTOR FOR JORDAN & NOBLES CONSTRUCTION CO. (JORDAN & NOBLES) ON CONTRACT DACA63-77-C-0098 AT FORT BLISS, TEXAS. THE DEPARTMENT OF LABOR (DOL) DOES NOT RECOMMEND DEBARMENT OF THE CONTRACTOR OR SUBCONTRACTOR.

WHILE THE EVIDENCE OF RECORD IS SUFFICIENT TO ESTABLISH THAT THE WORKERS WERE UNDERPAID, THE RECORD ALSO INDICATES THAT THERE WAS A BONA FIDE DISAGREEMENT OR DISPUTE CONCERNING THE CLASSIFICATION OF CERTAIN WORKERS AND THAT THE UNDERPAYMENT OF THE WORKERS WAS NOT OF SUCH A WILLFUL NATURE AS TO WARRANT THE DEBARMENT OF EITHER THERMAL OR JORDAN & NOBLES. SEE B-177938-O.M., MARCH 23, 1977.

IN REGARD TO THIS DISPUTE, COUNSEL FOR THERMAL AND JORDAN & NOBLES BY LETTER OF NOVEMBER 30, 1979, REQUESTED THAT OUR OFFICE CONSIDER A CLAIM FOR THE FUNDS, $1,724.44, WITHHELD BY THE CONTRACTING OFFICE TO COVER THE ALLEGED UNDERPAYMENTS BY THERMAL. THE CLAIMANTS CONTENDED THAT THERE WERE NO DAVIS-BACON VIOLATIONS BECAUSE THE EMPLOYEES WERE PAID IN ACCORDANCE WITH THE WORK CLASSIFICATION ESTABLISHED BY PREVAILING AREA PRACTICE.

IN OUR DECISION, JORDAN & NOBLES CONSTRUCTION CO. AND THERMAL CONTROL, INC., B-198964, JUNE 18, 1980, 80-1 CPD 430, WE POINTED OUT THAT THE CONTRACT CONTAINED THE "DISPUTES CONCERNING LABOR STANDARDS" CLAUSE WHICH PROVIDES THAT DISPUTES INVOLVING THE MEANING OF CLASSIFICATIONS OR WAGE RATES CONTAINED IN THE WAGE DETERMINATION OF THE SECRETARY OF LABOR OR THE APPLICABILITY OF THE LABOR PROVISIONS OF THE CONTRACT SHALL BE REFERRED TO THE SECRETARY OF LABOR IN ACCORDANCE WITH DEPARTMENT OF LABOR PROCEDURES. THEREFORE, OUR OFFICE DECLINED TO TAKE ANY ACTION ON THE CLAIM, LEAVING IT FOR RESOLUTION UNDER THE PROCEDURES PROVIDED IN THE CONTRACT.

THE CLAIMANTS SUBSEQUENTLY REQUESTED THE CONTRACTING AGENCY TO FOLLOW THE CONTRACT PROCEDURES. THE CONTRACTING AGENCY FORWARDED THE CLAIMANTS' DISPUTE TO DOL. SECTION 5.11(B) OF THE DOL PROCEDURES, 29 C.F.R. SEC. 5.11(B) (1981), MAKE IT DISCRETIONARY WITH THE SECRETARY OF LABOR AS TO WHETHER TO HOLD HEARINGS IN THE EVENT OF A DISPUTE CONCERNING THE PAYMENT OF PREVAILING WAGE RATES OR PROPER CLASSIFICATION. SECTION 5.12 OF THE PROCEDURES, 29 C.F.R. SEC. 5.12 (1981), PROVIDES FOR A RULING BY THE SECRETARY OF LABOR ON ALL QUESTIONS RELATING TO THE APPLICATION OF LABOR STANDARDS PROVISIONS. DOL DID NOT PROVIDE A HEARING ON THE MATTER OR ISSUE ANY FORMAL DECISION. INSTEAD, DOL HANDLED THE MATTER IN ACCORDANCE WITH THE STANDARD PROCEDURE EMPLOYED IN PROCESSING WAGE UNDERPAYMENTS FROM THE CONTRACTING AGENCY TO OUR OFFICE FOR SETTLEMENT. IN THE PROCESSING OF THE UNDERPAYMENTS TO OUR OFFICE, DOL GAVE CONSIDERATION TO AREA PRACTICE AND ULTIMATELY CONCURRED WITH THE CONTRACTING AGENCY THAT THE UNDERPAID EMPLOYEES WERE MISCLASSIFIED. THEREFORE, DOL, AWARE OF THE CLAIMANTS' REQUEST AND CONTENTIONS, HAS DECIDED, IN EFFECT, THAT THE CLAIMANTS DID NOT ACT IN ACCORDANCE WITH APPLICABLE AREA PRACTICE.

JORDAN & NOBLES, AS THE PRIME CONTRACTOR, IS FINANCIALLY RESPONSIBLE FOR UNDERPAYMENTS TO EMPLOYEES OF ITS SUBCONTRACTOR. SEE B-202854 O.M., AUGUST 18, 1981. ACCORDINGLY, THE $1,724.44 ON DEPOSIT WITH YOUR OFFICE MAY BE DISBURSED TO THE AGGRIEVED EMPLOYEES IN ACCORDANCE WITH ESTABLISHED PROCEDURES.