DOCURENT IRSoRE 02536 - [A1792799] (Restricted) [Administration and knforcement of the Davis-Bacon Act in Two Navy-Funded Projects]. May 26, 1977. 8 pp. Report to Capt. w. H. Bannister, Comranding Officer, Southern Div., Department of the Wavy: Yaval facilities Tagineeting Cossmmand, Charleston, SC; by Kyle 3. Hans (for rarvin Colbs, Regional Hanager, Field Operations Div.: Regiotal Office (Atlanta)). Issue Area: Consumer and Worker Protection: monitoring State and Local Enforce-ent and Providing Guidmnce (9041 Contact: Field Operations Div.: Regional Office ttlawt a). Budget Function: Education, Sanpower, and Social Services: Other Labor services (505). Authority: Davis-Bacon Act. The Department of Labor and Federal contracting agencies' administration and enforcement of the minimum wage provisions of the Davis-Bacon Act were reviewed at two Jacksonville, Florida, housing construction prcjects furded by the Department of the avy. Findings/fConclusions: The Resident Officer in Charge of Construction (ROICC), Naval Air Station, Jacksonville, was responsible for the enforcement of wage standards, but his enforcement efforts were not fully effective. Noncompliance was identified in hisclassification of employees, lack of interviews with workers, ratio of apprentices to journeymen, certified payrolls not timely submitted, wage determination not prominently posted at worksite, underpayments, and overtime not paid. The review of the ROICC office disclosed that no formal training on labor standards was given to construction representatives, anG that enforcement of the standards had a lower priority than other duties assigned the construction representatives. Recommendations: Appropriate investigation should be made of the contractors' violations and the failure of the ROICC to carry out his enforcement responsibilities. (DON) UNITED STATES GFNERAL ACCOUNi'lING OFFICE RgAIONAL OMF'IC fl RWFLARD tRIW. N.L ATIANTA, GEOlMIA 30303 MAY 2 6 1977 Captain W. H. Bannister CfrrendIng Officer, Southern Divisicn Naval Facilities Egineering Command Box 10068 Ctrleston, South Carolina 29411 DaoxCaptain Bnlnster: ~:;: -:=-r eeei -gnofiice reuig tt the Departng of Labor's (DOL) and Federal contracting agencies' administration and enmfbeonnt of mlninun wage rate determinations issued for Federal or fdsery-sisted construction projects subject to the labor standanl provisions of the Davis-Bacon Act. We are making the xewviw at DOL and at selected Federal contracting agenies and contractor sites in various regions. In Region IV we reviewed tWo Department of the Navy funded projects admitnistered by the Southern Division, Naval Facilities HngineeritZ Cnmmand. The Davis-Bacon Act requires that all workers ermlloyed cn a Federal or federall-assisted construction project costing in excess of $2,000 be paid mr.nmn wages and fringe benefits based on rates the S3cretary of Labor determines as prevailing on similar projects in the area. Every construction contract eubJect to the act must contain a provision stipulating that contractors and subcontractors must pay their workers at least once,a week, wages not less than those which the Secretary of Labor determines to be prevailing. Federal contracting %jenciesare responsible for enforcing the minimum wage provisions o.' the Davis-Bacon Act pursuant to regula- tions and procedures issued by DOL. DC, s labor standards regulations and procedures are incorpwoated in the Armed Services Procurement Reguilions (ASPR). An objective of our review is to detrmine whether the enforce- ment efforts by DOL and the Federal contracting agencies are adequate to insure that contractors and subcontractors are complying with the minimum wage provisions of the act. We reviewed enforcement and monitoring practices of the Re3id-.nt Officer in Charge of Construction (ROICC), Naval Air Station, Jacksonville, Florida, for the following two construction projects: Project and Construction DOL wage location cost A_ Contract No. determination 77-unit housing $671,224 N62467-7,5-C-0542 76-FL-262 improvement project Naval Air Station Cecil Field 15-unit housing $131,870 N62467-75-C-0543 76-FL-262 improvement project Naval Air Station Cecil Field he 77-unit project was 66 percent complete and the 15-unit project was 100 percent complete as of February 28, 1977. ENFCEME1R EFFORDS NOT FVLLY EFFECTIVE The ROICC, Naval Air Station, Jacksonville, Florida, is responsible for enforcing wage standards on Navy funded construction projects in the Jacksonville area. ASPR requires that, co3 tracting officers take actions, including the following, to insure t1at contractors and subcontractors comply with the act: -- interview a sufficient number of employees at the construction site and ascertain that they are paid the proper wage; -- obtain written evidence that each apprentice is registered by the apnropriate State or Federal agency; --determine that contractors comply with the apprentice/ Journeyman ratio and that apprentices are paid the wage rates specified in their certification; --make regular payroll reviews to assure that payrolls are * complete and correct; -post a copy of the wage determination, and of any approved additional classificatiocrs, at the site of the work in a prominent place where they can be seen easily by the workers; -check payrolls for inclusion of only Job classifications and wage rates specified in the contract specifications, or otherwise established for the contract; 2 -determine that laborers or mechanics are paid for all hours worked in excess of 8 hours in any 1 calendar day at not less than one and one-half times their basic rates of pay; end -obtain ftro the prime contractor a statement signea by subcontractors (Statement and Acknowledgement-DD Fbrm 1566) acknowledging the inclusion of the "Davis-Bacon Act" clause ir their subcontracts. The ROICC's enforcement efforts on the two Cecil Field housing improvement projects are discussed below. :Contract -0542 One prime contractor and 10 subcontractors worked on the 77-unit housing improvement project. These contractors employed about 49 laborers and mechanics wor:Lng in 11 trade classifications as of February 25, 1977. Our inquiries idezntified a . following instances of noncampliance with the act and the .o;PR. -Eh-ployees interviewed by the construction representative did not include workers employed either in a sufficient rnumer of trade classifications or by a sufficient ntmber of contractors to assure compliance with the labor standards provisions of the contract. The construction representative interviewed three employees working in two trade classifications for one subcontractor. Two of these employees were misclassified and were underpaid. -- The rarnber 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 journeyman and 3 listed 2 apprentices and 2 Journeymen. Of 20 payrolls submitted by Associated Mechanical Services, i nc., 2 qhowed 2 apprentices and 3 Journeymen. On each of these · 11 payrolls,l apprentice should have been paid at the wage rate for the classification of work they actually performed. We did not compute the total underpayment but it could be as much as $3.20 an hour. In addition to this underpayment, some of these apprentices were paid less. than the wage rate Specified in their apprentice certificates. (See page 4.) 3 --The ROICC did not have a procedure to insure that certified payrolls were submitted weekly within 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 ROICC did not date stamp payrolls to show when they were received. Thus, neither we nor the ROICC could determine if the payrolls were submitted in a timely manner. -- TIo contractors did not submit DD Form 1565, "Request for Authorization of Additional Classification and Rate" for eliployees who worked in two classifications not .iAsted in the DOL wage determination applicable to this contract. A mason tender was classified as a laborer on the certified payrolls, but we could not determine how glaziers were classified. -The wage determination was not posted in a proxminent place at the worksite where it could be easily seen by the workers. It was posted on an inside wall of the prime contractor's trailer in the superintendent's office. Our limited examination of certified payrolls disclosed the following wage payment violations and inaccuracies. --Three contractors classified and paid 16 employees as carpenter helpers, roofer helpers, or sheetmetal helpers although these classifications were not included in the wage determination. In the absence of a conformance agreement between the contractors and the contracting officer, these employees should haves been paid at rates issued for the classification of work actually performed. On the basis of rates issued in DOL's wage determin.tion for carpenters, roofers, and sheetmetal workers, these employees were underpaid about $347. -Tw 9 contractors underpaid five apprentices about $230. These employees were paid less than the wage rate specified in the apprentice certificates. In addition, some of these employees should have been paid at the Journeyman rate for the classification of work they performed. (See point on ratio of apprentices to Journeymen on page 3.) --One subcontractor underpaid four electricians about $16,00 because he paid less than the $7.99 rate required by the DOL wage determination. 4 --One subcontractor underpaid two employees about $6.00 for overtime worked. The construction representative had identified these underpayments on January 10, 1977, but an amended payroll showing the corrective action taken had not been received by the RDICC at March 27, 1977. Contract -0543 LUne prime contractor a.L: five subcontractors worked on the 15-unit housing mIprrenenrt pt oJect. The prime contractor and four subcontractors employed abhut 24 laborers and mechanics working in 11 trade classlfications. Rle other subcontractor did not submit certifie payrolls under this project. Our inquiries identified the following instances of nonconpliance with the act and the ASPR. -Employees interviewed by the construction representatives did not include workers employed either in a sufficient number of trade classifications or by a sufficient number of contractors to assure compliance with the labor standards provisions of the contract. Construction representatives interviewed six employees working in four trade classifications for the prime contractor. -Employee wage interviews were ineffective in assuring compliance with contract labor standards provisions because construction representatives did not compare the data obtained in the six interviews with related certified payroll data. Two employees interviewed on July 27, 1976, stated that they worked on this project on July 13, 1976, but certified payroll No. 1 does not show that either of these employees was paid for work on this date. One of these employees also stated that he worked as a plumber for 8 hours at $6.25 an hour on July 26, 1976. We could not determinr if this employee was properly paid because the certified payroll for the week ending July 30, 1970, showed that he worked in the dual classification of plumber-laborer but it did not identify the number of hours worked in each . classification. --The prime contractor and four subcontractors did not submit certified payrolls weekly within 7 calendar days after the regular payment date for the payroll week covered and one ,subcontractor did not submit payrolls at all. While we were unable to determine the actual dates that the payrolls were received by the ROICC office, the certification date on the back of each payroll indicated 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 certification on his eight payrolls. --Payroll review procedures followed by the construction representative did not assure timely identification and correction of labor standards violations. For example, he reviewed payrolls submitted by one subcontractor 19 weeks after completion of the first payroll week- 7 weeks after the subcontractor had completed work on the project. He reviewed payrolls submitted Fy three subcontractors 6 weeks after they had completed work on the project. He did not obtain and review payrols: from the other subcontractor. His review of the prime con- tractor's payrolls was as late as 8 weeks after the payroll week covered. --Drywall installers were incorrectly classified as carpenters on G.E.T. Construction Co.'s certified payrolls. These carpenters were paid from $4.25 to $6.50 an hour. Thus, the construction representative could not determine from the certified payrolls whether drywall installers were paid at least $5.00 as required by the DOL wage determinat ion. -iThe prime contractor, G.E.T. Construction Co., did not submit statements (DD Form 1566) acknowledging the inclusion of the "Davis-Bacon Act" clauses in its subcontracts. Thus, the contracting officer had no assurance that sub- contractors were aware of their responsibilities under the act. Our limited examination of certified payrolls disclosed the following wage panment violations and inaccuracies. -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 · as laborers. On the amnnded payrolls, approved by the construction repnesentaGive, the wage rate paid was $0.10 less than the carpenter's rate in the DOL wage determiration. --Certain G.E.T. Construction Co. employees were not paid overtime for work in excess of g hours ir a calendar day. Construction Representative Reports dated August 30, 1976, and November 12, 1976, stated that G.E.T. otnstructi¢,n Co., employees worked overtime on August 30, 1976, and November 11, 1976, but certified payrolls showed that no overtime was paid employees on these dates. 6 --Leggett Heating and Air Conditioning Co., underpaid a sheetmetal worker about $120. The employee was classified as a sheetmetal apprentice on the certified payrolls neither the contractor nor the but ROICC had an apprentice certificate on file. If this certificate is not provided, the contractor is required to pay the Journeyman wage rate. RECRGANIZATION PLAN NO. 14 FULLY W maII In September 1974, the Secretary of Labor reissued Rearganiza- tion Plan No. 14 to all Federal contracting agencies. The principal objective of the plan is to assure co:'sistent and effective mnent of labor standards. enforce- Activities of the construction representative are fundamental the successful enforcement of contract labor standards to To be effective, the representative must become fully provisions. each contractor's responsibilities in familiar with the employment and payment of persons engaged on the project as well as with the contractor's responsibilities o'r meeting other specifications, such used, adherence to building code regulations, and time as materials of work. of completion Our review at the ROICC office disclosed that: -Officials of the Southern Division, Naval Facilities Englneering Command have provided no formal training labor standards provisions which would assure that on construction representatives understand the meaning purpose of such standards. ROICC officials tola ,sand that construction representatives received on-the-Job training and that labor problems were discussed with them in monthly meetings. -Construction representatives are assigned other duties that have been ascribed a higher priority than labor standards enforcement. ROICC officials told us that enforcement of labor standards had a lower priority the than any. other duties performed by construction representatives. . One HOICC official stated that enforcement of labor standards was "a thorn in our side." Construction representatives stated that their primary duties were inspect quality of materials and workmanship and to to for safety. check We discussed our findings with the Supervisory in the ROICC office at NAS Jacksonville on March 24, Civil Engineer 1977. Since the Southern Division,Naval Facilities Engineering Command is responsible for enforcing the provisions of the act, are referring these matters to you for appropriate investigationwe contractors' violations and the ROICC's failure to effectively of out his enforcement responsibilities. We would appreciate beingcarry advised of the results of any investigations and actions taken the Navy in connection with the matters discussed herein. by A copy of this letter is being sent to the Department, of the Navy, Naval Facilities Engineering Ccmmand, Alexandria, Virginia, and to the Regio'al Administrator, Employment Standards tion, Department of Labor, Region IV,Atlanta, Georgia. Administra- Sincerely yours, Marvin Colbs I Regional Manager cc: Naval Facilittes Engineering Canmand Alexandria, Va. Regional Admiristrator, ESA, DOL
Administration and Enforcement of the Davis-Bacon Act in Two Navy-Funded Projects
Published by the Government Accountability Office on 1977-05-26.
Below is a raw (and likely hideous) rendition of the original report. (PDF)