UNITED STATESGENERALACCOUNTINGOFFICE REGIONAL OFFfCE 221 COURTLAND STREET N E ATLANTA, GEORGIA 30303 Captarn W H aster COITE-ED~ Officer, Southern Ixvlsion Naval Facilxtles mmeern.ng Command BOX 10068 Charleston, South Carolina 29411 Dear Captain Banrnster. The General Accounting Office 1s revlemng the Department of Labor's (DOL) and Federal contractung agencres' adrmnistration and enforcement of rmnl~numwage rate deterrrmnatlons issued for Federal or federally-assisted construction proJects SubJect to the labor standards provlsionsof the Davis-Bacon Act We are maIung the review at DOI; and at selected Federal contractmg agencies and contractor s&es 3i~1var3.0~~ regions. In Region IV we reviewed two Depa&nent of the Navy funded projects altered by the Southern D1tis1on, Naval Facltitles Fngineerlng C-d. The Davis-Bacon Act requires that all workers employed on a Federal or federally-asslsted construction proJect costmg in excess of $2,000 be pajld rmnu~lumwages and frmge benefits based on rates the Secretary of Labor deternnnes as prevaLlu?g on s11111ar proJects UI the area Every construction contract subject to the act must contm a provlslon stjpulatw that contractors and subcontractors must pay therr workers, at least once a week, wages not less than those which the Secretary of Labor determrnes to be prevarlm . Federal muvmum contracting agencies are responsible for enforcing the wage provlslons of the Davis-Bacon Act pursuant to regula- tlons and procedures issued by DOL. DOLrs labor standards regulations and proced%Ees are incorporated XI the Armed Services Procurement Regula?tions (ASPR) An ObJectlve of our review is to determnne whether the enforce- ment efforts by DOL and the Federal contract- agencies are adequate to 11?sure that contractors and subcontractors are complymg with the rmnirtavn wage provisions of the act We renewed enforcement and mor-ntornng practices of the Resident Officer 1~1Charge of Construction (ROICC), Naval Au? Station, Jacksonville, Florida, for the followzing two construction proJec-cs @o~ect and Construction DOLwage locatxon cost a/ Contract No detewtion 77-LIKLC housmg $671,224 N62467-75-C-0542 76-FL-262 unprovement protect Naval. AU StatIon Cecil Field 15-urnt housmg $131,870 N62467-75-C-0543 76-~262 unprovement proJect Naval Am Statxon Cecil Fxeld d The 77-mt proJect was 66 percent comlete and the &unit proJect was 100 percent complete as of February 28, 1977. The ROICC, Naval Am Statlon, Jacksonville, Florida, is responsible for enforcmg wage standards on Navy funded construction proJects m the Jacksonville area ASPRreqtures that contractmg offxxrs take actions, mncludmg the followmg, to msure that contractors and subcontractors comply with the act --mtervlew a sufflclent number of employees at the construction site and ascertain that they are paid the proper wage, -obtam written evidence that each apprentxe is regmtered by the appropriate State or Federal agency, --determne that contractors comply mth the apprentxce/ Journeyman ratio and that apprentices are paM the wage rates speclfled m their certlflcatlon; -4akie regular payroll reviews to assure that payrolls are * complete and correct, -post a copy of the wage detematlon, and of any approved additional classifxatlons, at the site of the work m a promment place where they cm be seen easily by the workers, -check payrolls for reclusion of only Job classifications and wage rates specified m the contract specificatxons, or othemse established for the contract, 2 --determme that laborers or mechanics are paid for all hours worked 111excess of 8 hours in any 1 calendar day at not less than one and one-half tunes their basic rates of pay, and -obtau? fro-m the prime contractor a statement signed by subcontractors (Statement and Acknowledgement-DD Form ~566) acknowledglulg the rneluslon of the l'Davls-Racon Act" clause in their subcontracts. The ROICC's enforcement efforts on the two Cecil Field housing improvement projects are discussed below Contract -0542 Cne prune contractor and 10 subcontractors worked on the 77-unit housing improvement project These contractors employed about 49 laborers and mechanics wortig m 11 trade classif'zations as of February 25, 1977 Cur lnqLllrles ldentlfled the follow instances of noncompliance with the act and the ASPR. -Bnployees interviewed by the construction representative did not include workers employed either in a sufficient number of trade classifications or by a sufficient number of contractors to assure compliance mth the labor standards provisions of the contract. The construction representative mterviewed three employees working m two trade classifications for one subcontractor. Two of these employees were nnsclasslfied and were underpaid. --The nwnber of apprentices employed by two subcontractors exceeded the specified ratio of one apprentice for each three Journeymen on their payroll of 23 payrolls submitted by Electrical Systems, Inc , 6 showed 2 apprentices and 1 journey-man and 3 listed 2 apprentices and 2 journeymen, Of 20 payrolls subrtntted by Associated Mecharncal Services, Inc., 2 qhowed 2 apprentrces and 3 Journeymen. On each of these I 11 payrolls,1 apprentice should have been paid at the wage rate for the classification of work they actually performed. We &d not compute the total underpayment but it could be as much as $3 20 an hour. In addltlon to this underpayment, some of these apprentices were paid less than the wage rate specified 111their apprentice certificates. (See page 4.) 3 --The ROICCdid not have a procedure to msure that certified payrolls were submitted weekly mthm 7 calendar days after' the regular payment date for the payroll week covered. Contractors were not required to show the payment date on their certified payrolls and the ROICCdid not date stamp payrolls to show when they were received Thus, next-her we nor the ROICCcould determne if the payrolls were submtted m a timely manner --Two contractors did not submt DD Form 1565, "Request for Authorization of AddQxonal Classifxatlon and Rate" for employees who worked in two classifxations not lls'ced ~tl the DOLwage determination applxable to thxs contract. A mason tender was classified as a laborer on the cetixfied payrolls, but we could not detmmine how glazlers were classified. The wage determnatron was not posted m a promnent place at the workslte where it could be easily seen by the workers. It was posted on an mside wall of the prime contractorrs trawler m the supermtendentts office. Our lmted examnatlon of certlfled payrolls dmclosed the followmg wage payment vlolatlons and maccuracies- --Three contractors classlried and paid 16 employees as carpenter helpers, roofer helpers, or sheet-metal helpers although these classlfxcatlons were not included m the wage det eMNnat1orI In the absence of a conformance agreement between the contractors and the contractmg offxcer, these employees should have been pald at rates issued for the classification of work actually performed. On the basis of rates issued m DOLls wage determnation for carpenters, roofers, and sheetmetal workers, these employees were underpaxd about $347 -Tw? contractors underpad five apprentices about $230. J These employees were paid less than the wage rate speclfred II? the apprentice certlflcates In addition, some of these employees should have been paid at the Journeyman rate fop the classification of work they performed. (See pomt on ratio of apprentices to Journeymen on page 3.) --One subcontractor underpaxd four electrmmns about $16.00. because he pad less than the $7 99 rate required by the DOLwage determmat~on 4 --Cne subcontractor underpaid two employees about $6.001 for overtme worked The construction representative had ldentlfxd these underpayments on January 10, 1977, but an amended payroll showing the correctsve action taken had not been received by the ROICCat IFiich 2'7, 1977.. Contract -0543 One prime contractor and five subcontractors worked on the 15-wut housing Improvement proJect. The prune contractor and four subcontractors employed about 24 laborers and mechanics working m 11 trade classlfxatlons The other subcontractor did not subm& certxfled pa~olls under thx3 protect Cur mquxrxes ldentifxed the follor(vmg instances of noncompliance with the act and the ASPR. -mloyees mtervlewed by the ConstructLon representatxves ad not include workers employed either xn a suffxxent number of trade classlfxatlons or by a sufficient number of contractors to assure compliance with the labor standards provisions of the contract. Constructxon representatives interviewed SIX employees worm XI four trade classlfxations for the prune contractor -Employee wage xntervlews were lneffectlve in assut%g compliance wxth contract labor standards provisions because construction representatives did not compare the data obtaxned m the six mtervlews with related certlfzed payroll data. Two employees Lntervlewed on July 2'7, 1976, stated that they worked on thxs proJect on July 13, 1976, but certified payroll No 1 does not show that either of these employees was paid for work on thxs date. tie of these employees also stated that he worked as a plumber for 8 hours at $6.25 an hour on July 26, 1976. We uould not deterrmne xf thx employee was properly paid because the certlfled payroll for the week endu?g July 30, 1976, showed that he worked un the dual classtilcatlon of plumber-laborer bu$ it tid not identify the number of hours worked U-I each J classifzcation. -The prxixz contractor and four subcontractors did not subrrut certlfud payrolls weekly wxthxn 7 calendar days after the regular payment date for the payroll week covered and one subcontractor dxd not subrmt payrolls at all. Wtxle we were unable to deteixune the actual dates that the payrolls were received by the ROICCoffice, the certification date on the back of each payroll x-&cated that one was prepared more than 7 weeks after the payroll week covered. Two other subcontractors prepared all of their payrolls after they had completed work on the proJect and the prime contractor and one subcontractor prepared payrolls about 5 once each month One subcontractor did not complete the certlfIcatlon on tis eight payrolls. -Payroll renew procedures followed by the construction representative did not assure timely ldentlflcation and correction of labor standards llolatlons. FOP example, he renewed payrolls subm&ted by one subcontractor 19 weeks after completion of the fust payroll week- 7 weeks after the subcontractor had completed work on the proJect. He renewed payrolls submtted by three subcontractors 6 weeks after they had completed work on the protect He did not obtaLn and review payrolls from the other subcontractor Hm renew of the prime con- tractor's payrolls was as late as 8 weeks after the payroll week covered. -my-wall mstallers were mcorrectly classified as carpenters on G E.T Construction Co 's certified payrolls, These carpenters were pad from $lc 25 to $6.50 an hour. Thus, the constructron representative could not determe from the certlfled payrolls whether drywall installers were pmd at least $5 00 as reqLured by the DOLwage deterrmnatlon -The prm contractor, G E T Constructron Co , did not subrmt statements (DD Form 1566) acknowledw the u?cluslon of the "Dabs-Bacon Act" clauses 11?its subcontracts Thus, the contracting offleer had no assurance that sub- contractors were aware of their responslbillties under the act. Our llrmted exarmniltion of certified payrolls disclosed the follow wage payment vlolatlons and maccuracles. -Two carpenters for G E T, Construction Co,, were underpaid about $29 On the original payroll, disapproved by the construction representative, these employees were classified 3 as laborers. On the amended payrolls, approved by the construction representative, the wage rate p-d was $O,lG less than the carpenter's rate m the DOLwage determination. -Certan G E T. Construction Co., employees were not paid overtme for work ILL excess of 8 hours m a calendar dw. Construction Representative Reports dated August 30, 1976, and November 12, 1976, stated that G E T. Construction Co , employees worked overtlme on August 30, 1976, and &ovember 11, 1976, but certified payrolls showed that no overtime was pad employees on these dates, 6 . p- . -Leggett Heating and Axr Conditlonmg Co,, under-pad a sheetmetal worker about $120. The employee was classified as a sheetmetal apprentxe on the certified payrolls but neither the contractor nor the ROICChad an apprentice certifxate on file If thx certificate is not provided, the contractor IS required to pay the journeyman wage rate. REORGANIZATIONPLAN NO 14 NOTFuLLIY mm In September 1974, the Secretary of Labor reissued Reorgarnza- tlon Plan No 14 to all Federal contracting agencies. tie principal ObJectlve of the plan is to assure consistent and effective enforce- ment of labor standards. Activities of the construction representative are fundamental to the successful enforcement of contract labor standards prov1saons. To be effective, the representative must become fully famx?~~~ wxth each contractor's responslbilltles U-I the employment and payment of persons engaged on the proJect as well as with the contractorts responsibxllties for meeting other specifications, such as matlerrtals used, adherence to buxla code regulations, and txne of completion of work. Our review at the ROICCoffice disclosed that: -0ffxxals of the Southern Dlvislon, Naval Facilities Engineer- Commandhave provided no formal trading on labor standards provlslons whxh would assure that construction representatives understand the mearnng and purpose of such standards ROICCofficials told us that construction representatives received on-the-job trallung and that labor problems were discussed with them in monthly meetings --Construction representatives are assumed other duties that have been ascribed a higher priority than labor standards enforcement. ROICCofficials told us that the enforcement of labor standards had a lower priority than any; other duties performed by construction representatives, J One ROICCofficxal stated that enforcement of labor standards was "a thorn 11?our side " Construction representatives stated that the= primary duties were to mspect quality of materials and workmanship and to check for safety. We discussed our findings with the Supervisory Crvxl Engx?eer U-I the ROICCoffice at NAS Jacksonville on March 24, 1977. 7 Since the Southern Dlvxlon,Naval Facilities Engmeering Command1s responsible for enforcing the provlslons of the act, we are referring these matters to you for appropriate investigation of contractors' violations and the ROICC's farlure to effectively carry out hxs enforcement responsib0lties, We would appreciate being advised of the results of any lnvestlgations and actions taken by the Navy 112connectron rnnth the matters dzcussed here= A copy of thus letter is being sent to the Department of the Navy, Naval Facllrtles Eylmeermg Command,Alexendrla, Virgmia, and to the Regional Ackrnnxstrator, Ekqloyment Standards Adttnnistra- tion, Department of Labor, ReGon IV, Atlanta, Georg7_a Sincerely yours, l'krvin Colbs RegLonal Manager cc! Naval Facilxtles Engzxeermg Command Alexandria, Va Reaonal Adrrmvstrator, ESA, DOL 8
Review of Administration and Enforcement of Davis-Bacon Act
Published by the Government Accountability Office on 1977-05-26.
Below is a raw (and likely hideous) rendition of the original report. (PDF)