CCASE:
TILO COMPANY, INC
DDATE:
19770606
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
TILO COMPANY, INC. WAB Case No. 76-01
HUD Project No. ME-3-1
Sagamore Village,
Portland, Maine Dated: June 6. 1977
APPEARANCES: John Barry Donahue, Jr., Esquire, Burt A. Braverman,
Esquire for Tilo Company, Inc.
George E. Rivers, Esquire, Gail V. Coleman, Esquire
for the Wage & Hour Division U.S. Department of
Labor
Before: Alfred L. Ganna, Chairman, William T. Evans, Member
Thomas Phelan, Member
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition of
Tilo Company, Inc., (hereinafter Tilo) which sought a review of the
September 29, 1975, decision of the Assistant Secretary for
Employment Standards affirming the April 9, 1975, recommendation of
Asso[ci]ate Assistant Regional Director George J. Regan that Tilo
Company, Inc., and its president, Mr. Emmet B. Thompson, should be
placed on the ineligible bidders list of the Comptroller General in
accordance with Section 5.6(b)(1) of Title 29 , Code of Federal
Regulations. [1]
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[2] In August 1972, Tilo subcontracted with F.W. Cunningham &
Sons to provide roofing for the construction of 200 dwelling units
in 90 buildings on a Department of Housing and Urban Development
project in Portland, Maine. In April and May 1973, an
investigation of Tilo's certified payrolls was made by the
Department of Labor and a total of $9,215.07 in back wages was
found due 24 employees and $518.14 in overtime was found due 12
employees. DHUD also assessed liquidated damages of $730 against
Tilo. In late June 1973, Tilo through its attorney agreed to pay
the back wages and overtime found due and in September 1973,
certified checks for each employee were sent to the Solicitor's
Office for disbursement.
Fifteen months later, in December 1974, the Deputy
Administrator advised Tilo that there was reasonable cause to find
that the violations were aggravated and willful and unless
satisfactory explanations were presented, the petitioner could be
subject to the imposition of ineligibility sanctions. An informal
proceeding was held in early 1975 to permit petitioner's
representatives to offer explanations of the violations. In April
1975, after the hearing, the Associate Assistant Regional Director
concluded Tilo had committed willful and aggravated violations of
labor [2]
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[3] standards provisions and recommended that Tilo be
placed on the Comptroller General's ineligible bidders list. [2]
[3] In May 1975, petitioner appealed the Associate Assistant
Regional Director's recommendation to the Wage and Hour Division
and in September 1975, the Assistant Secretary for Employment
Standards responded to Tilo and affirmed the Associate Assistant
Regional Director's recommendation. In July 1976, the Solicitor
provided petitioner with certain information from the narrative
report of the investigation of Tilo, pursuant to Tilo's request for
information under the Freedom of Information Act. And, on October
25, 1976, a petition to appeal the decision of the Assistant
Secretary was made to the Wage Appeals Board.
Although the petitioner and the Assistant Administrator have
raised numerous issues in their briefs, the Board finds there is
one issue on which this case may be disposed; i.e.: Is debarment
appropriate under the facts of this case.
The violations alleged by the Wage and Hour Division occurred
in late 1972 and early 1973. After conferences with
representatives of the Wage and Hour Division, the petitioner in
September 1973 made full restitution of wages due laborers and
mechanics employed [3]
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[4] on the project and paid liquidated damages assessed by DHUD.
Fifteen months later petitioner was advised that debarment was being
contemplated. No explanation was given to the Board as to why a span of
15 months expired between monetary settlement by the contractor and the
notification that debarment was being contemplated.
The Board feels that it must take cognizance of the elapse of
nearly 5 years since the alleged violations occurred, in
conjunction with the satisfactory behavior of Tilo on gover[nm]ent
contracts since the Sagamore Village project. It is particularly
noted that Tilo has complied with suggestions made by the Wage and
Hour Division during conferences in 1973 by changing the system by
which it handled government contracts. The responsibility for the
performance of government contracts was placed with a vice
president at the central headquarters in Stratford, Connecticut,
and new procedures to prevent violations were instituted.
In April 1976 a further reorganization occurred wherein a
separate commercial and government contracts department with a
full-time director was established for central control and
responsibility. It was stated at the hearing by the attorney for
petitioner that this director is personally responsible for labor
standards compliance, he personally appoints the full-time on-site
director and he must review all labor compliance. [4]
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[5] The Department's Regulations 29 CFR, Part 5 at Section
5.6(b)(1) provide in part:
. . . Provided, however, That the Administrator of the
Wage and Hour Division shall direct the removal from the
debarred bidders list of any contractor or subcontractor
whom he has found to have demonstrated a current
responsibility to comply with the labor standards
provision applicable to Federal contracts and federally
assisted construction work subject to any of the
applicable statutes listed in [sec] 5.1.
It appears to the Board that Tilo Company, Inc. has fulfilled the
above requirement and that no purpose would be served by placing
this firm on the debarred bidders list at this time.
The attorney for the Wage and Hour Division stated at the
hearing that a contractor can be removed from the debarred bidders
list if the Wage and Hour Division finds there is current
compliance. She further stated "If current compliance were a
factor in the debarment proceeding, it would make the procedure
infeasible. The contractor could put off debarment indefinitely by
forcing continual Wage and Hour investigations of the project."
The Board appreciates her concern and agrees that the position
would be well taken under different circumstances. Delays caused
by a contractor under consideration for a debarment action cannot
be used to defeat debarment procedures. However, in the instant
case, it is the government that is responsible for the delay, not
the contractor. [5]
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[6] In summary, the Board finds that all monetary payments were
made by Tilo Company, Inc., in September 1973. Tilo at that time
instituted practices to assure compliance on future government
contracts, and later reorganized its internal procedures to make
its government operations compliance even more effective.
Under the conditions stated above, the Board does not believe
it proper nor in the best interests of all concerned, including
current employees of the firm, to place Tilo Company, Inc., on the
debarred bidders list at this time.
BY ORDER OF THE BOARD
Craig Bulger,
Executive Secretary
Wage Appeals Board [6]
