DOCUHEWT FESU"] 025?B - [A1792798] (Restricted) [Administration and Inforciment of Davis-Bacon Act in Projects in Waycross, Georgia]. May 26, 1977. 5 pp. of Report to William A. a.rtsan, Jr., Area Director, Department GA; by Kyle Housing and Urban Development: Atlanta Area Office, E. Hams (for Marvin Colbs, Regional manager, Field Operations Div.: Regional Office (Atlanta)). Issue Area: Consumer and Worker Protection: Standards, Laws, aid Regulations Enforcement (903). Contact: Field Operations Div.: Regional Office <Atlanta). Budget Function: Education, Manpower, End Social Services: Other Labor services (505). Authority: Davis-Bacon Act. Housing Act of 1937, as amended, sec. 16. The Department of Labor and selected Federal contracting agencies and construction sites in Region IV were reviewed to determine whether their enforcement effnrts related to the Davis-Bacon Act ensured that contractors and the subcontractors complied with the minimum wage provisions of the act. Findings/Conclusions: Under Federal revenue sharing, Development (HUD) provided Department of housing and UrbanAuthority $783,165 to the Local Housing i. Waycross, Georgia, for the construction of 50 low-rent housing units. Several instances were found of noncompliance with the act and with HUD instructions concerning labor standards. Among the violations were misclassification of disclosed by a liaited investigation and workers, underpayments, pay at less than prevailing rates, certified payrolls not submitted. the Local Housing Authority 4 n securing compliance with the act. was deficient Recommendations: HUD should perform a full labor standards compliance review of the Waycross project. (DJH) Do 8ot mIn available to publc qudlng '* 3 UNITED STATES GENERAL ACCOUNTING OFFICE iREGIONAL OFFICE MUt ruTLAwo Smt,. N.t. ATLANTA, GEORQIA 30303 MAY 2 I(i M'. William A. Hartmani, Jr. Area Director, U. S. Department of Housing and Urban Development Atlanta Area Office 230 Peachtree Street, N, W. Atlanta, eorgia 30303 Dear Wr. Hartman: The General Accounting Office is reviewing lab~r's (DOL) and Federal contracting the Department of agencies' and enforcement of the labor standards provisions administration Act on Federal or federaly assisted construction of the Davis-Bacon to the act. We are making the review at DOL projects subject Fesdral contracting agencies and contractor and at selected including Region IV. sites in various regions One of the projects we selected for review the construction. of 50 low-rent housing in Region IV was units Houasing Authority (IIA) in Waycross, Georgia. for the Local Housing and Urban fDvelopment (HUD) provided The Department of of the Housing Act of 1937, as amended, for $783,165 under section 16 this project. the constructionr of, The Davis-Bacon Act requires that all workers Federal or federally-assisted employed on a c,.lstruction project costing in excess of $2,000 be paid at least the wages and fringe Secretary of labor determines as prevailing benefits which the the area. Every construction contract subject on similar projects in contain a provision stipulating that contractorsto the act must Pay thelrworkers, at least once a week, wages and subcontractors whichthe Secretary of Labor determtnes to not less than those be prevailing. Federal contracting agencies are responsible minimum wage orovisions of the Davis-Bacon for enforcing the and procedures issued by DOL. An objective Act pursuant to regulations determine whether the enforcement efforts by of our review is to contracting agencies are adequate to insure DOL and the Federal subcontractors are complying with the minimumthat contractors and the act. wage provisions of The HUD Atlanta Area Office has primary responsibility for enforcing labor standards on HUD-funded construction projects in Georgia, including the Waycrosa Housing Authority project. Although r.dD had delegated the enforcement responsibility to the HiA, the area office is still responsible for advising the iA concerning the act's and HUD's complince requirements and procedures and for monitoring the LHA's enforcement activities. In our opinion, the area office had not effectively monitored the LiHA's enforcement efforts on this project. During his monthly visits to the project, the HUD construction analyst questioned the contracting officer and the c]-'- of the works about whethe contractors were paying correct wages and were submitting pyolls, but he did not attempt to examinr any payrolls or records of employee interviews. Consequently, he did not discover the lack of enforcement by the LHA. Under HUD enforcement proced"-es, the LHA is required to take action, including the following, to insure that contractors and subcontractors comply with the act: -require the contractor to submit certified copl.es of his own payroll and that of each. of his subcontractors for each workweek no later than 'Idays after the end of the workweek covered by the payroll; -interview a sufficient number of construction workers to determine the degree of accuracy of the records and the nature and extent of violations, if any; --conform rei tz for worker classifications employed on the proJect ',At not included in DOL's wage determination;, -examine weekly payrolls to the extent necessary to insure completeness and accuracy of employee names, addresses, job classifications, hourly wage rates, daily and weekly hours worked during the pay period, gross weekly wages e earned, deductions made from wages, and net weekly wages paid; -require a certification by the contractor and each of his subcontractors that they have paid wage rates complying with the terms of the contract; and -retain, preserve, and enforce all its rights under the construction contract. 2 One prime contractor and 21 subcontractors worked on the Waycross low-rent housing construction project. We identified following instances the of noncompliance with the act as r with HUD instructions concerning labor standards. -None of the contractors submitted certified payrolls weekly and 11 subcontractors did not submit payrolls at all. The IHA did not have a procedure to insure the timely receipt of all certified payrolls. --Neither IHA nor HUD representatives interviewed con- struction workers. --The LHA and the prime contractor did not follow conformance procedures. The certified payrolls, or daily construction reports for those subcontrac+rs who did not subait payrolls, included eight worker classifications that were .ot shown on the DOL wage determination. -Tahe LHA made partial payments on the basis of false certifications by the prime contractor that he and his subcontractors had complied with the wage rate provisions of the contract.. -Payroll examinations by the clerk of the works were inadequate to insure that contractors corpited with labor standards. Although the clerk of the works ,.old us that he reviewed the payrolls, there was no evidence that he identified and corrected any violations. Also, there was no evidence when the clerk of the works received or reviewed the oi payrolls. Early detection and correction of the violations noted below could have saved time and money for everyone involved. Our limited examination of certified payrolls LHA disclosed the following wage payment violations submitted to the and inaccuracies. -IHutto Brothers Paint Contractors classified two employees as painter helpers although the classification was not included in the wage determination. Because the contractor and the contracting officer did not conform a rate for this classification, the employees should have been paid at the rate issued for the classification of work actually performed. Based on the painter rate Issued in DOL's wage determination, these employees were underpaid about $543. 3 --Do Good Tile Company classified one employee as a tile setter helper although the classification was not included in the wage determination. In the absence of a conformance agreement between the contractor and the contracting officer, this employee should have been paid at the rate issued for the classification of work actually performed. Based on the tile setter's rate issued in DOL's wage determination, this employee was underpaid about $264. --Douglas Tile Company paid .?our soft floor layers $0.63 ar, hour less than the prevailing wage rate, resulting in an underpayment of about $198.00. --Glen DeLoach Construction Company and Murray Staples Garden Center classified employees as form setters and agriculture workers, respectively. The wage determination did not include rates forx either of these classifications and the contractors a-d contracting officer did not conform the rates. For those subcontractors who did not submit payrolls, we reviewled the Daily Construction Reports prepared by the clerk of the works, visited one subcontractor, and contacted four other subcontractors by telephone. Our review disclosed that Davis Roofing Conpany paid one roofer $3.00 an hour and three roofes.$3.50 an hour rather than the predetermined wage rate of $5.00 an hour. On the basis of work hours recorded in the daily construction reports, we estimate that these four employees were underpaid more than $740. Four subcontractors classified employees in crafts not included in the wage determination as follows: -Economic Exterminators classified two employees as termite spray operators; -- Boyd Dry Wall Company classified six employees as drywall hangers or drywall finishers; -Waycaoss Insulating Company classified twc. employees as insulators; and -- Chauncy Brother, Dry Wall Company classified four employees as drywall hangers or drywall finishers. The LHA contracting officer and the prime contractor lid not conform wage rates for any of these classifications. Because certified payrolls mere not prepared and wage rates for these classifications were not obtained in our survey, we did not determine if these employees were underpaid. 4 In view of the contractors' violations and the deficiencies in the LHA's handling offound in our limited test labor standards enforcement, adequate assurance of compliance with the provisions the Davis-Bacon Act--as implemented by DOL and HUD regulations--wasof lacking. We discussed our findings with your labor relations who said tha* he would look into the violations. specialist, We believe that HUD,. as the primary enforcement agency, should perform a full labor standards compliance review of the housing Waycross project to insure that all provisions cf the act have been and that all violations are uncovered. When this review met is completed, we would appreciate betag advised of the results and of any taken by HUD on noncompliance and contractor violations. actions also like to know what steps are planned to insure that the would We Davis- Bacon Act is adequately enforced cn future projects. A copy of this letter is being sent to the Acting Regitcnal Administrator, Department of Housing and Urban Development, Region IV, and to the Regional Administrator, Employment Standards Administration, Department of Labor, Region IV. Sincerely yours, Marvin Colbs Regicnal Manager cc: Acting Regional Administrator, HUD, Pegion IV Regional Administrator, ESA, DOL, Region IV
Administration and Enforcement of Davis-Bacon Act in Projects in Waycross, Georgia
Published by the Government Accountability Office on 1977-05-26.
Below is a raw (and likely hideous) rendition of the original report. (PDF)