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)

                         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
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)
                              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
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.
     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;

     -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.)

     --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
     -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.

     --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

       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

     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.

       --Leggett Heating and Air Conditioning Co., underpaid
         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
      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
        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
       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
      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
                                Regional Manager
cc:   Naval Facilittes Engineering Canmand
        Alexandria, Va.
      Regional Admiristrator, ESA, DOL