The Board has jurisdiction to hear and decide appeals taken from ALJs' decisions and orders concerning questions of law and fact arising under the DBA and the numerous related Acts which incorporate DBA prevailing wage requirements. See 29 C.F.R. § 5.1 (2002); 29 C.F.R. § 6.34 (2002); 29 C.F.R. § 7.1(b) (2002).

   In reviewing an ALJ's decision, the Board acts with "all the powers [the Secretary of Labor] would have in making the initial decision . . . ." 5 U.S.C.A. § 557(b) (West 1996). See also 29 C.F.R. § 7.1(d)(2002) ("In considering the matters within the scope of its jurisdiction the Board shall act as the authorized representative of the Secretary of Labor. The Board shall act as fully and finally as might the Secretary of Labor concerning such matters.") Thus, "the Board reviews the ALJ's findings de novo." Thomas & Sons Building Contractors, Inc., ARB No. 00-050, slip op. at 4 (Aug. 27, 2001); see also Sundex, Ltd. and Joseph J. Bonavire, ARB No. 98-130, slip op. at 4 (Dec. 30, 1999) and cases cited therein.

   The labor standards disputes in this matter arose from Griffin's roles in the development and construction of a so-called "Turnkey scattered sites" housing project. This project consisted of some 92 separate housing units located at different sites throughout the city of Providence, Rhode Island. Funded in part by Federal financial assistance provided by the United States Department of Housing and Urban Development (HUD) under the USHA, construction and development of the project was therefore subject to the prevailing wage labor standards provisions of the DBA pursuant to section 1437j of the USHA.

   Griffin disagreed with the findings of the Wage and Hour Division's investigation and requested an administrative hearing to determine the merits of the allegations. During that administrative hearing (which lasted for 24 days and proved to be only the first of two hearings), Griffin asserted the argument, inter alia, that several HUD employees informed it that the various categories of employees the Wage and Hour Division alleged were underpaid were exempt from the DBA's prevailing wage requirements on the Turnkey Project. Thus, based on this purportedly erroneous advice, Griffin argued that the Federal government agents (i.e., HUD) misled it into committing the prevailing wage violations. Accordingly, because of this deception, Griffin further asserts that the Federal government (i.e., the Administrator) should be estopped from asserting the Wage and Hour Division's claim for all three of the categories of employees alleged to be due back wages. On July 1, 1993, an ALJ issued a Decision and Order (1993 D. & O.) holding, in part, that the doctrine of equitable estoppel did not apply to the United States government. 1993 D. & O. at 40. Given the conclusion that the Administrator's wage claims were not estopped, the ALJ proceeded to rule that Griffin had failed to pay applicable prevailing rates to the employees and thereby committed prevailing wage violations with respect to each of the three categories of Griffin employees. The ALJ also ordered debarment of all the Respondents for commission of willful or aggravated violations of the USHA.

   The ALJ in the second proceeding also ruled that the Administrator was estopped from seeking back wages on the Turnkey Project for all of the employees allegedly due back wages because of their work in fabricating the modular housing panels at the Veazie Street facility. The Administrator's Petition for Review seeks reversal of the adverse Veazie Street ruling. Intervenor BCTD filed a separate Petition for Review seeking our review of this issue.

   Each party (and the BCTD as an interested person in this proceeding) has filed statements in opposition to the Petition for Review filed by the opposing side(s).

   For our framework in discussing the merits of the Petitions for Review in this matter, in Part I, we address the issues raised by the Griffin Petition for Review. With respect to Griffin's Petition, we will discuss separately the question of estoppel and its possible applicability to each of the two categories of violations alleged regarding the individuals treated as exempt "owner-operators" of Griffin subcontractors and the Gatsby workers who cleaned the scattered sites housing after construction but prior to occupancy. We will also briefly address Griffin's appeal of the ALJ's order that the all of the respondents be debarred for a period of time not to exceed three years. The Petitions of the Administrator and the BCTD seeking review of the adverse determination regarding the Veazie Street fabrication workers will be treated in Part II of this discussion.

I. Griffin's Petition for Review

   A. Working Subcontractors

   Griffin asserts that the ALJ erred in ruling that the estoppel defense was not available to it with respect to this category of violations. Within the context of this matter, the term "working subcontractors," refers to certain of Griffin's employees whom Griffin purported to be bona fide owners of a construction business enterprise who also performed construction work on the project and were therefore due the prevailing rate according to the Administrator's charges. Griffin posits that it relied on "working subcontractor" advice contained in a HUD publication which contains guidance concerning all aspects of its DBA programs: Federal Labor Standards Compliance in Housing and Community Development Programs (the Handbook) (Complainant's (Administrator's) Exhibit (CX) 38). Before us, the Administrator notes that the Wage and Hour Division considers even bona fide owner-operators performing DBA-covered work on a DBA-covered project to be due the prevailing rate. Adm. Response to Respondents' Pet. for Rev., at 5 n.2. Without conceding this assertion regarding bona fide owner operators, the Administrator argues that the ALJ properly reached the conclusion of law that estoppel was not available based on the ALJ's finding of fact that Griffin failed to demonstrate that it relied on the Handbook's guidance and that this reliance caused the violations.

   Specifically, Griffin relies on Section 7-3 of the HUD Handbook, which contains the following guidance, compliance with which (in HUD's view) exempts working subcontractors from the DBA requirements:

CX 38 (emphasis added).

   HUD's plain language in this guidance makes it explicit that there are two types of working subcontractors: those who are bona fide and those who are non-bona fide. The Handbook is unambiguous in explaining that the prevailing wage requirements apply to non-bona fide subcontractors. In fact, the Handbook underscores the seriousness of such violations in stating that these violations can warrant debarment from Federal contracting.

   In the decision on remand, the ALJ "concluded from [his] review of the record that the Respondents have not established that they complied with HUD's policy on subcontractors." Rem. D. & O. at 17. The ALJ specifically observed "no evidence has been offered [by Griffin] in the proceedings on remand which is inconsistent with Judge DiNardi's findings regarding [Griffin's] conduct with respect to subcontractors." Id. at 18. The first ALJ's findings of fact regarding Griffin's purported bona fide subcontractors are extensively quoted and adopted in the decision and order on remand. These findings include the facts that Mr. Griffin knew the purported subcontractors were not bona fide and, of course, that the "subcontractors" did not have any of the HUD-required proof to document status as legitimate subcontractors. Further, the ALJ on remand found that Mr. Griffin participated in a scheme to avoid payment of prevailing rates to the fraudulent subcontractors and encouraged the preparation and submission of false certified payrolls to HUD to conceal the underpayments. Id. at 17-18.

   Griffin intentionally failed to comply with the HUD Handbook regarding subcontractor status verification. Accordingly, it is abundantly clear that Griffin did not commit the working subcontractor violations because Griffin relied on the HUD Handbook. Rather, the record demonstrates Griffin's working subcontractor violations were committed because Griffin failed to comply with the applicable HUD Handbook directive concerning this category of employees. Therefore, the estoppel defense is not available to Griffin on this category of violations, since nothing that HUD representatives said or wrote induced Griffin to commit these working subcontractor violations.

   In passing, we note that the Petitioners object to the ALJ's adverse working subcontractor determination partly because the ALJ on remand relied on facts found by the first ALJ. Rather than error, we view this economy measure as being sound husbandry of scarce administrative hearing resources. We see no error in this reliance on the findings generated by the first trier-of-fact. Our review of the entire administrative record demonstrates that the "working subcontractor" facts found by the first ALJ were properly and adequately based on the evidence of record and that the second ALJ was correct in adopting these facts. As the second ALJ correctly noted, "no evidence has been offered in the proceedings on remand which is inconsistent with [the first ALJ's] findings regarding [Griffin's] conduct with respect to subcontractors." Rem. D. & O. at 18.

   B. Post-Construction Cleaning Work

   The ALJ also ruled that the defense of estoppel was unavailable regarding underpayment for cleaning of the units after construction but before occupancy. Griffin challenges this legal conclusion as erroneous, arguing that the record demonstrates it relied on HUD advice in committing these violations. As with the question of working subcontractors, Griffin argues that it relied on advice from HUD and that advice induced it to commit the prevailing wage violations arising from the post-construction cleaning work. Our review discloses no factual basis in either administrative record to support Griffin's assertion it committed the scattered sites cleaning violations because it relied on incorrect HUD advice.

   Regarding the cleaners, Section 7-4 of the HUD Handbook is implicated in Griffin's claim of reliance. Griffin does not allege that HUD provided it with any advice other than the Handbook regarding the post-construction cleaning. On this issue, the Handbook states:

Cleaning performed during construction is subject to prevailing wage provisions. In the absence of a specific wage rate for the cleaning classification, or if [the Department of Labor] disapproves a conformance request, the cleaners must be paid the predetermined wage rate for laborers. Cleaning performed after the completion of construction in order to prepare the premises for occupancy which is not being done under the construction contract is not subject to the prevailing wage requirements.

CX 38 (emphasis added). Attempting to demonstrate that these Gatsby cleaning violations were induced by HUD's representations, Griffin relies on the Handbook's purported distinction between cleaning prior to occupancy during construction (which is covered by the DBA provisions) and cleaning prior to occupancy, which is not done under a covered

construction contract (which is not covered). But, the ALJ on remand rejected the notion that there was any such distinction made on the Turnkey Project between the two types of cleaning noted in the Handbook. In the hearing on remand, the key witness on the nature of the cleaning work was Kemphis Bason, who the property management firm for the Turnkey Project employed to perform cleaning work at the scattered sites. The ALJ found that the specifics and details of Bason's testimony on this category of violations made Bason's testimony more credible than that of Mr. Griffin. The ALJ explained in great detail the reasons why he rejected Mr. Griffin's testimony:

Mr. Bason's description of the cleaning work performed by Gatsby employees is far more detailed and consequently more credible than Mr. Griffin's vague testimony about construction-related and post-construction, pre-occupancy cleaning. Accordingly, I find that a preponderance of the credible evidence of record establishes that the individuals employed by Gatsby at less than prevailing wage rates performed cleaning work such as removing stucco from windows, toilets and bathtubs and cleaning tile adhesive from floors and baseboards which is not only clearly covered by the technical specifications of the Turnkey Project contract but which can not reasonably be classified as separate and distinguishable from construction-related cleaning that Mr. Griffin claims was done by tradesmen at prevailing wage rates. Indeed, Mr. Bason's testimony shows that the Gatsby employees performed some functions (e.g., laying grass and moving appliances into the housing units) which appear to be more appropriately considered construction activities than cleaning. Rather than adhering to the distinction made by HUD officials between construction-related and post-construction final cleaning, I find that the Respondents substantially merged cleaning on the Turnkey Project into a single undertaking which was accomplished by Gatsby employees who were not paid at prevailing wage rates.

Rem. D. & O. at 23-24 (emphasis added). Bason's detailed testimony, which the ALJ accepted over Mr. Griffin's less credible testimony, demonstrates the Gatsby work was construction-related and due the prevailing wage pursuant to the HUD Handbook guidance. Gatsby employees' "heavy" clean-up (such as clean up of debris and removal of construction materials and adhesives) was not the sort of "light" cleaning after construction of units was complete (but before occupancy) contemplated by the HUD Handbook.

   Generally, this Board will defer to the factual findings of an ALJ, especially in cases in which those findings are predicated upon the ALJ's weighing and determining credibility of conflicting witness testimony. As we have noted, although the Board "reviews the ALJ's findings de novo, ‘it must be remembered that the ALJ heard and observed the witnesses during the hearing. It is for the trial judge to make determinations of credibility, and an appeals body such as the … Board should be loathe to reverse credibility findings unless clear error is shown.'" Sundex, Ltd., ARB No. 98-130 (Dec. 30, 1999) (quoting Homer L. Dunn Decorating, Inc., WAB No. 87-03 (March 10, 1989)). Griffin has failed to demonstrate that the ALJ on remand committed clear error in weighing the credibility of the witnesses on this issue and determining that Bason's testimony was more credible than Mr. Griffin's. Bason's credible testimony is substantial evidence that proves Gatsby's cleaning work was the type of construction contract-related cleaning which the Handbook advice deems DBA-covered work.

   We reject Griffin's further argument that it relied to its detriment on misleading HUD advice because the disputed cleaning work was not performed "under" the construction contract (within the meaning of the guidance provided in the Handbook) since the Gatsby employees' cleaning work occurred after Phoenix and the Authority closed on individual units of the scattered-site project. But the Turnkey construction contract itself requires in Section 3.2 of the specifications that the final cleaning of the units – such as removal of construction-related debris and spills – had to be completed in preparation for substantial completion of the construction or for occupancy. CX 95. Thus, early closing on the units contrary to the terms of the contract did not change the nature of the cleaning work. That work was construction cleaning work performed under the terms of the construction contract. Griffin did not rely on HUD advice in committing the Gatsby cleaning violations. Rather, regardless of the timing of closing on the units, the Gatsby cleaning work always remained covered construction work as specified in the construction contract itself.

   C. Debarment of Respondents

   The final issue Griffin raises to the Board is whether upon remand the ALJ committed error in finding that Respondents had committed prevailing wage and payroll certification violations, which were "willful or aggravated." Debarment from Federal contracting for a period not to exceed three years is a possible sanction for commission of "willful or aggravated" violations of prevailing wage statutes (such as the USHA) related to the DBA (the so-called Davis-Bacon Related Acts; see 29 C.F.R. § 5.1 (2002)). 29 C.F.R. § 5.12(a)(1).

   Respondents challenged the debarment findings and order in their Petition for Review. During the pendency of these proceedings, counsel for Respondents notified the Board that Mr. Griffin died after the filing of the present Petition for Review. The Administrator, in response to the notification of Mr. Griffin's death, reconsidered the question of whether debarment remained appropriate under the circumstances. Counsel for the Administrator informed the Board that "[b]ecause of the death of Mr. Griffin, and the fact that all the respondent corporations served as Mr. Griffin's alter ego, the Administrator is dropping the claim for debarment." Adm. Resp. to Resp. Pet. for Rev. at 2. Accordingly, we hereby vacate those portions of the 1993 D. & O. and the 1999 Rem. D. & O. directing the debarment of Mr. Griffin and the Griffin corporate Respondents.

II. The Administrator's and BCTD's Petitions

   By far the largest amount of back wages alleged due in this matter arises from Griffin's construction activities at the Veazie Street wall panel fabrication facility. The Administrator has noted to the Board that "approximately $250,000 of the total of $300,000" back wages concern this category of alleged violations. Adm. Stmt. in Support of Pet. for Rev. at 7 n.4.

   Both the Administrator and the BCTD seek review of the ALJ's adverse determination on remand that the Administrator is estopped from enforcing the USHA's prevailing wage provisions on behalf of Griffin employees who fabricated the wall panels at Veazie Street. However, the Administrator and Intervenor advance markedly different rationales in support of their Petitions for Review on this issue.

   The Administrator argues that the factual record demonstrates that Griffin did not and, indeed, could not as a matter of law have relied on any HUD advice in the record regarding off-site panel fabrication, thereby inducing Griffin to commit the Veazie Street violations. Rather, reasons the Administrator, if Griffin had actually followed the fabrication facility advice provided Griffin by HUD, no violations would have been committed. All of HUD's advice to Griffin, argues the Administrator, provided that no exemption from DBA requirements was available if Veazie Street production went solely (or nearly so) to the scattered sites housing project.

29 C.F.R. § 5.2(l)(2) (1993) (emphasis added). Under the clear terms of this regulation, an off-site fabrication facility (such as Veazie Street) could not be exempted from DBA coverage if production of the plant was dedicated "exclusively, or nearly so," to the DBA-covered project it is serving.

   This regulatory language is essentially, and in some cases is exactly, the same as the only three items of HUD information provided to Griffin. The first item was HUD policy guidance in the Handbook. Regarding "site of the work" DBA coverage and fabrication facilities serving covered Federal projects, the Handbook offered the following guidance for compliance with the Act's requirements:

The precutting of parts and/or the prefabrication of assemblies are not covered unless conducted in connection with and at the site of the project, or in a temporary plant set up elsewhere to supply the needs of the project and dedicated exclusively, or nearly so, to the performance of the contract or project.

Handbook, 1344.1 (Rev. 1) 7.12 (1986) (emphasis added).

   The second item of HUD information that Griffin argues led it to commit the fabrication plant violations is contained in a HUD letter dated September 9, 1989. CX 42. With respect to the question of "site of the work" coverage, the letter contained exactly the same language as that of the regulation at 29 C.F.R. §5.2(l)(2).

   The third and final piece of HUD information alleged by Griffin to have induced it to commit the Veazie Street violations was in the form of a single oral statement of a single HUD employee, Mr. Azar, whose sole contribution to the question of coverage, according to Mr. Griffin's own testimony was that Azar:

looked in the [Handbook] and said, "Well, if you want to do this for Turnkey, you have to have more than one project that you are going to service from Veazie Street." Mr. Griffin responded that he intended to use the Veazie Street plant for a planned second phase of the Turnkey Project, for which he had a letter of commitment from the PHA, and for another project known as Barbara Jordan III, and Mr. Azar indicated that he would not have to pay prevailing wages as long as the plant was not specifically used for a single project.

1993 Transcript at 2670, 2695 (testimony of Mr. Griffin)(emphasis added).

   Azar's hearsay statement (as recounted by Mr. Griffin) was very clear: Veazie Street's operations were exempt from DBA coverage, but only if not used for the single scattered sites project. Thus, the HUD Handbook, the HUD letter, and the HUD employee statement contain the same or virtually the same language and guidance as the Department of Labor regulation, which required DBA "site of the work" coverage for off-site prefabrication plants where the production went solely to service the needs of otherwise covered projects.

   We have reviewed the records of both administrative proceedings and conclude that all of the pertinent record evidence demonstrates beyond doubt that the Veazie Street prefabrication plant exclusively served the scattered sites project. We now turn our examination to factual bases for the ALJ's conclusion of law on remand that Griffin committed its prefabrication plant violations because of the HUD advice.

   The ALJ's findings of fact on remand which the ALJ cited to support his conclusion that HUD misled Griffin do not resolve this dispute. The ALJ found that Mr. Griffin "came up with the concept of manufacturing housing panels at a separate facility for delivery to construction sites before he became involved with the Turnkey Project which he saw as an opportunity to put his prefabrication concept into practice." Rem. D. & O. at 7. Similarly, based on the evidence presented in both administrative hearings, the ALJ found that "Mr. Griffin created the Veazie Street plant with the intention of supplying prefabricated building panels for use in housing construction projects throughout the Providence area, including Phase I of the Turnkey Project, a second planned phase of the Turnkey Project as well as another scattered site housing project known as Barbara Jordan III." Id. at 8 (emphasis added). The ALJ also found that, although Griffin used the Veazie Street facility for other activities, such as:

Id. (emphasis added). Mr. Griffin's "intentions" regarding making the Veazie Street fabrication a continuing concern remained merely that: intentions and not actions. The Department of Labor regulation and the written HUD advice could not be more clear in requiring that a fabrication plant had to serve more than the DBA project at hand, and failure to do so removes the plant from eligibility for exemption from the Act's and USHA's requirements. Similarly, Griffin argues that it based its bid for the project on the incorrect assumption that work at Veazie Street was exempt. The ALJ found that Griffin's "[l]abor costs were factored into the proposal which assumed that prevailing wage rates would not be required for employees working at a separate pre-fabrication facility." But the purported basis for Griffin's bid is not relevant. It is relevant that HUD advised Griffin that the Veazie Street panel fabrication plant could be exempt if not used solely for scattered sites project. Griffin's failure to meet this HUD criterion caused the violations, in retrospect rendering its purported "basis" a bad business decision in light of its subsequent failure to follow the HUD advice.

   For the foregoing reasons, the Administrative Law Judge's Decision and Order on Remand dated December 7, 1999 is AFFIRMED in part, REVERSED in part and VACATED in part.

   SO ORDERED.

      WAYNE C. BEYER
      Administrative Appeals Judge

      OLIVER M. TRANSUE
      Administrative Appeals Judge