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IT WAS NOT TAKING FURTHER ADMINISTRATIVE ACTION (I.E. THE SUBCONTRACTOR WILL NOT BE DEBARRED UNDER THE ACT. THE DOL IS NOT TAKING FURTHER ADMINISTRATIVE ACTION. THIS WAS A CONTRACT FOR THE PERFORMANCE OF RENOVATION WORK. CAPE COD WAS A SUBCONTRACTOR TO CECO. THE CONTRACT AND PURCHASE ORDER WERE SUBJECT TO THE DAVIS-BACON ACT REQUIREMENTS THAT CERTAIN MINIMUM WAGES BE PAID. THE CONTRACTOR WAS TO SUBMIT PAYROLL RECORDS CERTIFIED AS TO CORRECTNESS AND COMPLETENESS. THE DOL FOUND AS A RESULT OF AN INVESTIGATION THAT CAPE COD EMPLOYEES WERE NOT PAID THE MINIMUM WAGES REQUIRED PURSUANT TO THE DAVIS-BACON ACT. THE DAVIS-BACON ACT PROVIDES THAT THE COMPTROLLER GENERAL IS TO DEBAR PERSONS OR FIRMS WHOM HE HAS FOUND TO HAVE DISREGARDED THEIR OBLIGATIONS TO EMPLOYEES UNDER THE ACT. 40 U.S.C.

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B-218738, OCT 22, 1985, OFFICE OF GENERAL COUNSEL

BIDDERS - DEBARMENT - LABOR STIPULATION VIOLATIONS - DAVIS-BACON ACT SUBCONTRACTORS - DEBARMENT UNWARRANTED DIGEST: THE DEPARTMENT OF LABOR STATED THAT, IN VIEW OF THE CIRCUMSTANCES, IT WAS NOT TAKING FURTHER ADMINISTRATIVE ACTION (I.E., DEBARMENT) AGAINST A SUBCONTRACTOR FOR VIOLATIONS OF THE DAVIS-BACON ACT. BASED ON OUR INDEPENDENT REVIEW OF THE RECORD, WE CONCLUDE THAT THE SUBCONTRACTOR UNDERPAID EMPLOYEES, BUT THE RECORD DOES NOT CONTAIN SUFFICIENT EVIDENCE OF INTENTIONAL-- AS OPPOSED TO INADVERTENT-- VIOLATION OF THE LABOR STANDARDS PROVISIONS OF THE ACT TO WARRANT DEBARMENT. THEREFORE, THE SUBCONTRACTOR WILL NOT BE DEBARRED UNDER THE ACT.

SYLVESTER L. GREEN, DIRECTOR:

CONTRACT STANDARDS OPERATIONS

U.S. DEPARTMENT OF LABOR

ROOM S3518

200 CONSTITUTION AVENUE, N.W.

WASHINGTON, D.C. 20210

SUBJECT: CAPE COD SPRAYING & PAINTING, INC.

NORTH FALMOUTH, MASSACHUSETTS

CONTRACT NO. V525C-279

YOUR FILE NO. 84-109-00529

BY A LETTER DATED JULY 12, 1984, THE CHIEF, BRANCH OF CONSTRUCTION CONTRACT OPERATIONS, WAGE AND HOUR DIVISION, EMPLOYMENT STANDARDS ADMINISTRATION, UNITED STATES DEPARTMENT OF LABOR (DOL), REQUESTED THAT WE DISTRIBUTE TO WAGE CLAIMANTS FUNDS WITHHELD FOR VIOLATIONS OF THE DAVIS- BACON ACT, 40 U.S.C. SECS. 276A TO 276A-5 (1982), BY CAPE COD SPRAYING & PAINTING, INC. (CAPE COD). AS TO WHETHER CAPE COD SHOULD BE PLACED ON THE INELIGIBLE BIDDERS LIST FOR THESE VIOLATIONS, THE BRANCH CHIEF CONCLUDED THAT, IN VIEW OF THE CIRCUMSTANCES, THE DOL IS NOT TAKING FURTHER ADMINISTRATIVE ACTION. FOR THE REASON THAT FOLLOWS, WE CONCUR THAT CAPE COD SHOULD NOT BE PLACED ON THE INELIGIBLE BIDDERS LIST FOR THESE VIOLATIONS.

THESE VIOLATIONS AROSE IN CONNECTION WITH THE PERFORMANCE OF CONTRACT NUMBER V525C-279 BETWEEN CECO CONSTRUCTION AND ENGINEERING COMPANY (CECO) AND THE UNITED STATES VETERANS ADMINISTRATION. THIS WAS A CONTRACT FOR THE PERFORMANCE OF RENOVATION WORK. CAPE COD WAS A SUBCONTRACTOR TO CECO. CAPE COD CONTINUED PERFORMANCE UNDER A VETERANS ADMINISTRATION PURCHASE ORDER AFTER CECO DEFAULTED ON THE CONTRACT. THE CONTRACT AND PURCHASE ORDER WERE SUBJECT TO THE DAVIS-BACON ACT REQUIREMENTS THAT CERTAIN MINIMUM WAGES BE PAID. FURTHER, PURSUANT TO 29 C.F.R. SEC. 5.5(A) (1984), THE CONTRACTOR WAS TO SUBMIT PAYROLL RECORDS CERTIFIED AS TO CORRECTNESS AND COMPLETENESS.

THE DOL FOUND AS A RESULT OF AN INVESTIGATION THAT CAPE COD EMPLOYEES WERE NOT PAID THE MINIMUM WAGES REQUIRED PURSUANT TO THE DAVIS-BACON ACT. FURTHER, DOL FOUND THAT CAPE COD DID NOT MAINTAIN PAYROLL RECORDS FOR THIS WORK, AND, SO, DID NOT SUBMIT PAYROLL RECORDS CERTIFIED AS TO CORRECTNESS AND COMPLETENESS. ON APRIL 23, 1984, SUBSEQUENT TO THE INVESTIGATION, CAPE COD AUTHORIZED THE RELEASE OF THE WITHHELD FUNDS TO THE WAGE CLAIMANTS.

THE DAVIS-BACON ACT PROVIDES THAT THE COMPTROLLER GENERAL IS TO DEBAR PERSONS OR FIRMS WHOM HE HAS FOUND TO HAVE DISREGARDED THEIR OBLIGATIONS TO EMPLOYEES UNDER THE ACT. 40 U.S.C. SEC. 276A-2. IN CIRCULAR LETTER B-3368, MARCH 19, 1957, WE DISTINGUISHED BETWEEN "TECHNICAL VIOLATIONS" WHICH RESULT FROM INADVERTENCE OR LEGITIMATE DISAGREEMENT CONCERNING CLASSIFICATION, AND "SUBSTANTIAL VIOLATIONS" WHICH ARE INTENTIONAL AS DEMONSTRATED BY BAD FAITH OR GROSS CARELESSNESS IN OBSERVING OBLIGATIONS TO EMPLOYEES WITH RESPECT TO THE MINIMUM WAGE PROVISIONS OF THE DAVIS- BACON ACT. SUBSTANTIAL VIOLATIONS WARRANT DEBARMENT; TECHNICAL VIOLATIONS DO NOT. INADVERTENCE RESULTING IN A TECHNICAL VIOLATION IS A BASIS FOR DECIDING NOT TO DEBAR UNDER THE DAVIS-BACON ACT. AGUIRRE ASSOCIATES, GUDINO BROTHERS, AND KALISPELL EXPLOSIVE ENGINEERING, B-217808, AUGUST 29, 1985.

BASED ON OUR INDEPENDENT REVIEW OF THE RECORD, WE CONCLUDE THAT THESE VIOLATIONS WERE THE RESULT OF INADVERTENCE. THE INVESTIGATIVE REPORT STATES THAT CAPE COD HAD PREVIOUS EXPERIENCE-- NOT VIOLATIONS-- WITH THE DAVIS-BACON ACT. HOWEVER, IT ALSO STATES THAT THERE WAS SOME CONFUSION ABOUT THE APPLICABILITY OF THE ACT. THE VETERANS ADMINISTRATION, ITSELF, APPARENTLY BELIEVED INITIALLY THAT THE ACT DID NOT APPLY TO THE WORK PERFORMED UNDER THE PURCHASE ORDER. CAPE COD COOPERATED IN THE INVESTIGATION, ACCEPTED THE CONCLUSIONS, AND AUTHORIZED PAYMENT OF THE WAGE CLAIMS. NEITHER THE VETERANS ADMINISTRATION, NOR DOL, SOUGHT DEBARMENT OF CAPE COD. WE CONCLUDE THAT THE RECORD DOES NOT CONTAIN SUFFICIENT EVIDENCE OF INTENTIONAL-- AS OPPOSED TO INADVERTENT-- VIOLATION OF THE LABOR STANDARDS PROVISIONS OF THE ACT TO WARRANT DEBARMENT. THEREFORE, WE DECLINE TO DEBAR CAPE COD.

FURTHER, WE FIND NO REASON TO OBJECT TO THE PAYMENT OF THE WAGE CLAIMANTS INVOLVED, ESPECIALLY SINCE THERE IS AN AUTHORIZATION BY CAPE COD TO PAY THESE WAGE CLAIMS. ACCORDINGLY, THE FUNDS ON DEPOSIT WITH OUR OFFICE-- $936.70-- ARE ORDERED TO BE DISBURSED TO THE WAGE CLAIMANTS IN ACCORDANCE WITH ESTABLISHED PROCEDURES.

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