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)

                              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
              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
@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,

     --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.)

    --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
    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

     --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

           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
         -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
         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,

.   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.
         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.

      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