B-215777, DEC 4, 1984

B-215777, DEC 4, 1984

BIDDERS - DEBARMENT - LABOR STIPULATION VIOLATIONS - DAVIS-BACON ACT WAGE UNDERPAYMENTS - DEBARMENT REQUIRED DIGEST: FIRM WHICH DISREGARDED OBLIGATIONS TO EMPLOYEES BY WAGE UNDERPAYMENTS WHICH WERE HIDDEN BY FALSIFIED CERTIFIED PAYROLLS HAS FAILED TO EXERCISE GOOD FAITH AND, THEREFORE, IS DEBARRED.

CERTIFIED ELECTRIC, INC.:

ENCLOSED IS A COPY OF OUR FINDING OF TODAY THAT CERTIFIED ELECTRIC, INC., AND GERALD LAROE, PRESIDENT, HAVE DISREGARDED OBLIGATIONS TO EMPLOYEES WITHIN THE MEANING OF THE DAVIS-BACON ACT, 40 U.S.C. SEC. 276A (1982), AS A PRIME CONTRACTOR UNDER CONTRACT NO. F33601-81-C0562 AND AS A SUBCONTRACTOR UNDER CONTRACTS NOS. F33601-81-C0329, F33601-82 C0183, F33601-82-C0136 AND F33601-81-C0290 FOR CONSTRUCTION WORK AT WRIGHT- PATTERSON AIR FORCE BASE.

PURSUANT TO THE PROVISIONS OF SECTION 3(A) OF THE ACT, THE NAMES OF THE ABOVE INDIVIDUAL AND FIRM SHALL BE INCLUDED ON OUR NEXT PUBLISHED DEBARRED BIDDERS LIST, AND NO GOVERNMENT CONTRACT SHALL BE AWARDED TO EITHER OF THEM OR TO ANY FIRM, CORPORATION, PARTNERSHIP, 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 CERTIFIED ELECTRIC, INC. (CERTIFIED ELECTRIC), AND GERALD LAROE, PRESIDENT.

SECTION 1 OF THE DAVIS-BACON ACT OF AUGUST 30, 1935, 49 STAT. 1011, 40 U.S.C. SEC. 276A (1982), 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 UNITES 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. F33601-81-C0329, F33601-82-C0183 AND F33601-82-C0136 WERE AWARDED TO STAFFCO CONSTRUCTION, INC. (STAFFCO), BY THE DEPARTMENT OF THE AIR FORCE. THE AIR FORCE ALSO AWARDED CONTRACT NO. F33601-81 C0290 TO STA -CON CONSTRUCTION, INC. (STA-CON), AND CONTRACT NO. F33601 81-C0562 TO CERTIFIED ELECTRIC. ALL THE CONTRACTS WERE FOR CONSTRUCTION WORK AT WRIGHT-PATTERSON AIR FORCE BASE. EACH CONTRACT WAS IN EXCESS OF $2,000 AND CONTAINED THE STIPULATIONS AND REPRESENTATIONS REQUIRED BY SECTION 1 OF THE DAVIS-BACON ACT.

BOTH STAFFCO AND STA-CON AWARDED SUBCONTRACTS TO CERTIFIED ELECTRIC FOR PERFORMANCE OF A PORTION OF THE WORK COVERED BY THE FOUR CONTRACT AWARDED TO STAFFCO AND STA-CON.

AN INVESTIGATION BY THE DEPARTMENT OF THE AIR FORCE DISCLOSED THAT CERTIFIED ELECTRIC DISREGARDED ITS OBLIGATIONS TO EMPLOYEES AS EVIDENCED BY THE DELIBERATE PAYMENT OF SUBMINIMUM WAGE RATES ON THE SUBJECT PROJECTS. AS A RESULT OF THIS INVESTIGATION, SIX EMPLOYEES WERE FOUND TO HAVE BEEN UNDERPAID A TOTAL OF $6,392.44 IN VIOLATION OF THE TERMS OF THE DAVIS-BACON ACT. CERTIFIED ELECTRIC MADE RESTITUTION TO THE EMPLOYEES. THE RECORD ALSO REVEALED THAT THE CERTIFIED PAYROLLS SUBMITTED TO THE CONTRACTING AGENCY CONTAINED INCORRECT INFORMATION DESIGNED TO SIMULATE COMPLIANCE WITH THE APPLICABLE LABOR STANDARDS REQUIREMENTS.

BY CERTIFIED LETTER DATED JUNE 21, 1983, THE DEPUTY ADMINISTRATOR, WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR, NOTIFIED CERTIFIED ELECTRIC IN DETAIL OF THE NATURE AND EXTENT OF THE LABOR STANDARDS VIOLATIONS CHARGED AGAINST THE FIRM AND OFFERED THE FIRM AN OPPORTUNITY TO REBUT THE ALLEGATIONS AT A HEARING BEFORE AN ADMINISTRATIVE LAW JUDGE. COUNSEL FOR CERTIFIED ELECTRIC RESPONDED TO THE LETTER, BUT THE DEPUTY ADMINISTRATOR FOUND THAT THE REBUTTAL DID NOT WARRANT TERMINATION OF THE RECOMMENDATION FOR DEBARMENT. COUNSEL FOR CERTIFIED ELECTRIC INDICATED THAT THE FIRM DID NOT DESIRE TO HAVE A HEARING ON THIS MATTER.

IT IS CLEAR, PARTICULARLY IN LIGHT OF THE FALSIFIED PAYROLLS, THAT THERE WAS A FAILURE TO EXERCISE GOOD FAITH. BOTH THE DEPARTMENT OF THE AIR FORCE AND THE DEPARTMENT OF LABOR HAVE RECOMMENDED IMPOSITION OF DEBARMENT.

WE THEREFORE FIND THAT CERTIFIED ELECTRIC AND ITS RESPONSIBLE OFFICER, GERALD LAROE, 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 AND, PURSUANT TO THE STATUTORY DIRECTION, NO CONTRACT SHALL BE AWARDED TO THEM OR TO ANY FIRM, CORPORATION, PARTNERSHIP 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.