In this complaint, the
Department of Labor, Wage and Hour Division, alleged that the Respondent had failed and
refused to pay employees fringe benefits as required by the Act. On August 7, 1996, Chief
Administrative Law Judge John M. Vittone issued an Order Partially Granting Summary
Judgment in which the Respondent was ordered to pay fringe benefits in the amount of
$23,623.01 (ALJX 1 at 1). Accordingly, the only remaining issue to be resolved is whether the
Respondent should be debarred from any further federal contracts for a period of three years.
See 41 U.S.C. §354(a).
It is the Department of Labor's position that there are no unusual
circumstances present in this case to warrant relief from the debarment provisions of the Act. It
is the Respondent's position that unilateral change of the terms of the contract by the Social
Security Administration, the death of his mother, and the theft of money from Professional
Building Services by his brother constitute unusual circumstances which should warrant relief
from debarment.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Sidney Stewart is the owner and operator of a janitorial service,
Professional Building Services and Maintenance (hereinafter "Professional Building
Services")(ALJX 1). Professional Building Services was awarded Contract No. 600 90
0254 to clean the Social Security Building in Baltimore for the period between August 1, 1990
and July 31, 1991. Respondent stopped performing the contract on February 6, 1991 (TR 18-19).
Respondent stated at the hearing that employees were never paid fringe benefits during the
performance of the contract (TR 19).
The Comptroller General is required to distribute a list to all agencies of
the government of person or firms that violate the provisions of the Service Contract Act. 41
U.S.C. § 354(a) (1994). Unless "unusual circumstances" can be demonstrated,
no contract may be awarded to the person or firm appearing on the list for a period of three years.
The term "unusual circumstances" is not defined in the Act, and the regulations
require that a determination be made on a case-by-case basis. However, the regulations do state
that:
where the respondent's conduct in causing or permitting violations of the Service
Contract Act provisions of the contract is willful, deliberate or of an aggravated
nature or where the violations are a result of culpable conduct such as culpable
neglect . . . relief from the debarment cannot be in order. Furthermore, relief from
the debarment cannot be in order where a contractor has a history of similar
violations, where a contractor has repeatedly violated the provisions of the Act, or
where previous violations were serious in nature.
Respondent asserts that the Social Security Administration's unilateral
changing of the contract, his mother dying, and his brother stealing money from Professional
Building Services constitutes "undue circumstances" such that he should be relieved
from debarment. However, the facts do not support his claim. While the respondent for the most
part testified credibly that the above events happened, he also clearly stated that he while he was
aware of the requirements of the Service Contract Act, he never paid fringe benefits to his
employees (TR 19-21).
First, even if one assumes that the Social Security Administration did
unilaterally change the terms of the contract, that does not permit respondent to ignore the legal
requirement that he pay his employees fringe benefits under the Service Contract Act. Second,
while the court is sympathetic to the situation of a dying relative, this does not excuse respondent
from his obligations under the Service Contract Act, even if his mother was responsible for
keeping the company's records. Third, respondent's brother did not steal money from
Professional Building Services until sometime in November 1990, yet respondent admitted that
he did not pay fringe benefits from the commencement of the contract in August 1990.
Therefore, his brother's theft of money could not have affected respondent's ability to pay fringe
benefits before November 1990. Finally, respondent has previously violated the Service
Contract Act by failing to pay fringe benefits (TR 52) and testified that he knew that he had to
pay fringe benefits to his employees performing the Social Security Administration contract.
Based on the above reasons, I find that respondent willfully and
knowingly violated the fringe benefit provisions of the Service Contract Act and has not
demonstrated that unusual circumstance exist. Accordingly, I find that debarment is appropriate.
ORDER
IT IS ORDERED that respondent Sidney Stewart d/b/a
Professional Building Services and Maintenance not be relieved from being placed on the
ineligible list in accordance with §5(a) of the Act.
JEFFREY TURECK
[ENDNOTES]
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