B-217170 O/M, FEB 13, 1985, 85-1 CPD

B-217170 O/M, FEB 13, 1985, 85-1 CPD

CONTRACTS - LABOR STIPULATIONS - WAGE UNDERPAYMENTS - VOLUNTARY REMITTANCE BY CONTRACTOR - DISBURSEMENT THE DEPARTMENT OF LABOR DETERMINED THAT TWO EMPLOYEES OF A CONTRACTOR DID NOT RECEIVE THE PREVAILING WAGES REQUIRED IN ACCORDANCE WITH THE DAVIS- BACON ACT, 40 U.S.C. 276A (1982). SINCE THE CONTRACTOR AGREED TO THE PAYMENT OF THE AVAILABLE WITHHELD FUNDS TO THESE EMPLOYEES, PAYMENT OF THESE FUNDS SHOULD BE MADE TO THEM. SINCE THERE ARE NOT SUFFICIENT FUNDS TO PAY THE FULL AMOUNT DUE THESE WAGE CLAIMANTS, THE AMOUNT AVAILABLE SHOULD BE DISTRIBUTED ON A PRO RATA BASIS BETWEEN THEM. CONTRACTS - LABOR STIPULATIONS - DAVIS-BACON ACT - WAGE UNDERPAYMENTS

SUBJECT: KRUGER ALUMINUM & BRASS FOUNDRY, INC.: TO: GROUP DIRECTOR, GGD - CLAIMS GROUP FROM: GENERAL COUNSEL - HARRY R. VAN CLEVE

RETURNED HEREWITH IS YOUR FILE Z-2854903. PAYMENT OF THE FUNDS WITHHELD PURSUANT TO THE DAVIS-BACON ACT, 40 U.S.C. SEC. 276A (1982), SHOULD BE MADE TO THE WAGE CLAIMANTS-- MR. MARK COWGER AND MR. ROBERTO J. ROJAS-- ON A PRO RATA BASIS. SINCE THE DEPARTMENT OF LABOR (DOL) HAS NOT DECIDED WHETHER TO INITIATE DEBARMENT ACTION AGAINST THE CONTRACTOR-- KRUGER ALUMINUM & BRASS FOUNDRY, INC. (KRUGER)-- DOL SHOULD BE NOTIFIED, AS REQUESTED, WHEN PAYMENT OF THE FUNDS HAS BEEN MADE.

THIS MATTER AROSE UNDER CONTRACT F32605-82-C0065 BETWEEN KRUGER AND THE UNITED STATES AIR FORCE. THE CONTRACT WORK WAS THE REFINISHING OF WOOD FLOORS IN MILITARY HOUSING AT GRAND FORKS AIR FORCE BASE, NORTH DAKOTA. THE WORK UNDER THE CONTRACT WAS COMPLETED. HOWEVER, DOL FOUND THAT TWO INDIVIDUALS WORKING ON THE CONTRACT FOR KRUGER-- MESSRS. COWGER AND ROJAS -- DID NOT RECEIVE THE PREVAILING WAGES REQUIRED IN ACCORDANCE WITH THE DAVIS-BACON ACT. IT WAS DETERMINED THAT MR. COWGER WAS UNDERPAID $2,962.76, WHILE MR. ROJAS WAS UNDERPAID $1,383.09. IN RESPONSE TO A DOL REQUEST, THE AIR FORCE WITHHELD THE FINAL PAYMENT DUE KRUGER UNDER THE CONTRACT: $4,045.

SUBSEQUENTLY, KRUGER FILED FOR RELIEF UNDER 11 U.S.C. CHAPTER 11 (1982) WITH THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF TEXAS, WICHITA FALLS DIVISION. ON MARCH 21, 1984, THE COURT ISSUED AN ORDER THAT $1,795.82 BE RETURNED TO KRUGER AND THAT THE REMAINING WITHHELD FUNDS BE DISBURSED TO THE WAGE CLAIMANTS. THIS ORDER WAS ISSUED PURSUANT TO AN AGREEMENT REACHED BY ATTORNEYS FOR KRUGER; THE UNITED STATES DEPARTMENT OF LABOR, DALLAS, TEXAS; AND THE UNITED STATES ATTORNEY'S OFFICE, FORT WORTH, TEXAS. THE AIR FORCE PAID KRUGER THE $1,795.82 OF THE WITHHELD FUNDS, LEAVING $2,250 FOR THE WAGE CLAIMANTS WHOM DOL DETERMINED WERE DUE A TOTAL OF $4,345.85.

SINCE KRUGER, BY ITS ATTORNEY, AGREED THAT THE REMAINING FUNDS WITHHELD UNDER THE CONTRACT SHOULD BE PAID TO THE WAGE CLAIMANTS, PAYMENT SHOULD BE MADE TO THEM. SEE B-215947-O.M., AUGUST 23, 1984. SINCE THERE ARE NOT SUFFICIENT FUNDS TO PAY THE FULL AMOUNT DUE THESE WAGE CLAIMANTS, THE AMOUNT AVAILABLE SHOULD BE DISTRIBUTED ON A PRO RATA BASIS BETWEEN THEM. SEE B-174942-O.M., SEPTEMBER 22, 1972. MESSRS. COWGER AND ROJAS MAY PURSUE INDEPENDENTLY ANT CLAIMS TO THE ADDITIONAL AMOUNTS DUE THEM AGAINST THE CONTRACTOR AND ITS SURETIES AS PROVIDED BY 40 U.S.C. SEC. 276A-2(B) (1982). FINALLY, SINCE DOL HAS NOT DECIDED WHETHER TO INITIATE DEBARMENT ACTION AGAINST THE CONTRACTOR, DOL SHOULD BE NOTIFIED, AS REQUESTED, WHEN PAYMENT OF THE FUNDS HAS BEEN MADE.