A. VENTO CONSTRUCTION, WAB No. 87-51 (WAB Oct. 17, 1990)
[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of
A. VENTO CONSTRUCTION WAB Case No. 87-51
Contractor
ARNOLD VENTO, Owner
BEFORE: Jackson M. Andrews, Chairman, Stuart Rothman, Member,
Ruth E. Peters, Member
DATED: October 17, 1990
DECISION OF THE WAGE APPEALS BOARD
This case is before the Wage Appeals Board on the petition
of the Administrator of the Wage and Hour Division seeking review
of the decision of the Administrative Law Judge, dated October
15, 1987 (Attachment). In his decision, the Administrative Law
Judge ("ALJ") determined that contractor A. Vento Construction
and its owner, Arnold Vento ("Vento" or "Respondent") had
committed "aggravated or willful" violations within the meaning
of 29 C.F.R. 5.12(a)(1), which governs debarment proceedings for
violations of the labor standards provisions of the Davis-Bacon
Related Acts. /FN1/ [1]
/FN1/ The matter was referred to the ALJ for hearing after the
Assistant Administrator of the Wage and Hour Division found
reasonable cause that Vento violated the labor standards provisions
of the United States Housing Act of 1937, as amended (42 U.S.C.
[sec] 1437j); the Housing and Community Development Act of 1974, as
amended (42 U.S.C. [sec] 5310, 1440(g)); and the Contract Work
Hours and Safety Standards Act (40 U.S.C. [sec] 327 et seq.). [1]
[2] The ALJ further determined that mitigating circumstances were
present and ordered that Vento be debarred for one year, rather
than the three-year debarment period requested by the
Administrator. On review, the Administrator requests that
Board reverse the ALJ's order and impose a three-year debarment.
For the reasons stated below, the Board concludes that an order
imposing a debarment of three years is warranted.
I. BACKGROUND
The pertinent facts in this case are not in dispute. A.
Vento Construction is a sole proprietorship owned and operated by
Arnold Vento. During the period from about March 1982 to
December 1984, Vento performed about 12 contracts that were
subject to prevailing wage and overtime labor standards
requirements. Subsequent to an investigation of Vento's
activities during this period, Vento was indicted by a federal
grand jury. Vento testified that with respect to the contracts
outlined in the indictment, he knowingly submitted falsified
certified payroll records to the contracting agencies
(Administrative Law Judge's Decision ("ALJD") 4; Tr. 19-20, 28-
29, 30). Vento also failed to pay 13 employees the applicable
wage and overtime rates (ALJD 3, 5; Tr. 16-18).
Vento and the U.S. Attorney entered into a plea bargain
agreement, whereby Vento agreed to enter a guilty plea to one
count of knowingly and willfully using false writings and
documents in violation of 18 U.S.C. [sec] 1001. In addition,
Vento agreed to pay $39,093.09 in restitution for the wage
underpayments. Arnold Vento's sentence was suspended and he was
placed on probation, on [2][3] the condition that he pay the
specified amount of restitution and perform community service work.
The ALJ found that the Respondent "has violated the DBA and
Related Acts in a willful and aggravated manner." The ALJ
further found that "[t]he falsification of payroll records to
simulate prevailing wage compliance is prima facie evidence of a
willful violation and a debarrable act." In addition, the ALJ
found that Arnold Vento's plea of guilty to violation of 18
U.S.C. [sec] 1001 was "sufficient in itself to show that
[Respondent] acted willfully and in a aggravated manner" in
violation of the labor standards provisions of the Related Acts.
However, the ALJ also found that "mitigating circumstances" were
present and concluded that Vento's debarment should be reduced to
a period of one year. The factors relied upon by the ALJ in
support of this conclusion included Vento's payment of
restitution for the underpayment of wages, Vento's completion of
community service work, Vento's status as a "first-time
offender," Vento's cooperation with the Wage and Hour
investigation, and Vento's inability to bid on Allegheny County,
Pennsylvania projects after the county was informed that the
Department of Labor had undertaken steps to place Vento on the
list of ineligible bidders.
II. THE PARTIES' CONTENTIONS
The Administrator has petitioned for review of the ALJ's
imposition of a one-year debarment period. On behalf of the
Administrator, the Solicitor states that "[i]t is the position of
the Administrator that as a general rule, debarment under the
DBRA, in keeping with debarment under the Davis-Bacon Act, should
be for [3][4] a three-year period. In exceptional circumstances,
not present here, a lesser period may be appropriate." (Statement
for the Administrator in Support of Petition for Review, at p.
7). The Administrator also claims that the ALJ applied the wrong
criteria in evaluating the appropriate length of the debarment
period. (Petition at p. 1). "In the absence of specific criteria
for determination of debarment under DBRA," states the Solicitor
on behalf of the Administrator, "the considerations set forth in
[29 C.F.R. 5.12(c)] (for removal of contractors' names from the
debarred bidders' list under DBRA) should be utilized."
(Statement, at p. 7) (footnote and citations omitted).
Vento, on the other hand, argues that the ALJ did not err in
imposing a reduced debarment period. The criteria in Section
5.12(c), Vento notes, "are actually the criteria for determining
a request for removal of a contractor from the ineligible bidder
list following the original debarment decision." (Reply
Statement at pp. 6-7). Furthermore, states Vento, the factors
listed in Section 5.12(c) "are not all inclusive by the very
language of the regulation." (Reply at p. 7) (original emphasis)
(citations omitted). Accordingly, argues Vento, the ALJ was
"free to consider the entire record in making his [debarment]
determination."
III. DISCUSSION
The contentions of the parties in this case focus on the
standards for determining the length of the debarment period for
violations of the labor standards provisions of the Davis-Bacon
Related Acts. Because of the importance of the issue, as well as
the number of Related Acts debarment cases that come before the
[4][5] Board, we take this opportunity to reexamine the Board's
approach to debarment for violation of the Related Acts. While
each debarment must be judged on a case-by-case basis, for the
reasons stated below the Board concludes that unless a case
presents extraordinary circumstances, an order imposing a
three-year debarment period is warranted under the provisions
governing debarment for "aggravated or willful" violations of the
labor standards provisions of the Related Acts.
A. The Terms of 29 C.F.R. 5.12(a)(1)
Section 3(a) of the Davis-Bacon Act provides for a three-
year debarment for those who have been found to have disregarded
their obligations to their employees under that Act. The
debarment provision was added to the Act in 1935 out of
congressional concern over the lack of a mechanism for enforcing
compliance with the Act's requirements. /FN2/
There is no statutory debarment mechanism for violations of
the labor standards provisions of the Related Acts. However, the
Secretary of Labor has had in place a regulatory debarment
procedure for violations of the Related Acts since 1951. Like
the statutory debarment procedure in the Davis-Bacon Act, the [5]
/FN2/ As stated in Part 3 of the Senate Report, "Thus we have the
anomaly presented in several cases, where violators of prevailing
wage scales and even contractors who have actually been guilty of
dishonest practices, such as defrauding their workmen and material
men, were granted additional contracts by the Government. This is,
of course, a condition which should be speedily remedied . . . ."
United States Dep't of Labor, Legislative History of the Davis-
Bacon Act at 179. "Common sense," the Senate Report stated,
"dictates that the Government ought to be protected against
encroachment by unscrupulous contractors who have defaulted on
their obligations or have been proved to have disregarded
departmental rules in their conduct of Government contracts." Id.
at 180. [5]
[6] Secretary's regulation is intended to foster compliance with
applicable labor standards. See Copper Plumbing and Heating Co.
v. Campbell, 290 F.2d 368, 372 (D.C. Cir. 1961) (the Secretary's
regulation is not penal in nature, "but is a regulation for
effectuating compliance, and furthering the public policy
represented by the labor acts"). As the Second Circuit observed,
"[D]ebarment may be the only realistic means of deterring
contractors from engaging in willful . . . violations based on a
cold weighing of the costs and benefits of non-compliance."
Janik Paving & Construction, Inc. v. Brock, 828 F.2d 84, 91
(1987).
The Secretary's procedures governing debarment for
violations of the Related Acts are set forth in 29 C.F.R. 5.12,
which provides in Section 5.12(a)(1):
Whenever any contractor or subcontractor is found by
the Secretary of Labor to be in [*aggravated or willful
violation*] of the labor standards provisions of any of
the applicable statutes . . . other than the Davis-
Bacon Act, such contractor or subcontractor or any
firm, corporation, partnership, or association in which
such contractor or subcontractor has a substantial
interest [*shall be ineligible for a period not to exceed
3 years*] (from the date of publication by the
Comptroller General of the name or names of said
contractor or subcontractor on the ineligible list
. . .) to receive any contracts or subcontracts subject to
[the Davis-Bacon Act or Related Acts]. [*(Emphasis
supplied)*].
Thus, under the terms of Section 5.12(a)(1) a contractor who
commits an "aggravated or willful" violation of the labor
standards provisions of the Related Acts is subject to debarment
"for a period not to exceed 3 years." These key terms of the
Secretary's regulation provide some guidance as to the
appropriate standards for determining the length of the debarment
period for violations of the Related Acts. [6][7]
We note first that the regulation calls for debarment only
where "aggravated or willful" violations have occurred. That
standard is on its face a strict standard and, at least in the
Related Acts debarment cases that have reached the Board, appears
to have been strictly applied. That is, the term "aggravated or
willful" has not been expanded to encompass merely inadvertent or
negligent behavior. /FN3/ Instead, the actions typically found to
be "aggravated or willful" seem to meet the literal definition of
those terms -- intentional, deliberate, knowing violations of the
labor standards provisions of the Related Acts. /FN4/
Had the evolution of the "aggravated or willful" term taken
a more expansive course, placement of these cases along a
continuum -- ranging from, perhaps, a six-month debarment for the
least serious types of violations to a three-year debarment for
the most serious types of violations -- might be a task easily
accomplished, or at least necessarily undertaken. Given the
manner in which the term has evolved, however, the narrow class
of behavior deemed to be "aggravated or willful" arguably makes
it both more difficult [7]
/FN3/ Cf. McLaughlin v. Richland Shoe, 486 U.S. 128, 133 (1988)
(rejecting interpretations of "willful" violations of the Fair
Labor Standards Act that encompassed violations other than those
that would fit within the plain meaning of the term "willful").
/FN4/ A typical example of "aggravated or willful" behavior in the
Related Acts debarment cases that have reached the Board is
falsification of certified payrolls to conceal violations or to
simulate compliance with the applicable labor standards. See, e.g.,
Brighton Painting Co. WAB Case No. 87-09 (Sept. 20, 1989); Warren
E. Manter Co., Inc., WAB Case No. 84-20 (June 21, 1985); Marvin E.
Hirchert, WAB Case No. 77-17 (Oct. 16, 1978). A violation of the
Copeland Anti-Kickback Act is also an act warranting debarment.
See Homer L. Dunn Decorating, Inc., WAB Case No. 87-03 (March 10,
1989).[7]
[8] and less necessary to differentiate among types of debarrable
violations and assign them debarment periods of varying lengths.
We turn next to the regulation term that addresses the
length of the debarment period: Section 5.12(a)(1) provides that
those who commit aggravated or willful violations of the Related
Acts "shall be ineligible for a period not to exceed 3 years."
The literal language of this term suggests that at least some
latitude exists for determining the length of the debarment
period. /FN5/ However, whatever latitude or discretion may exist is
not unfettered; to the extent that there is discretion in fixing
the length of the debarment period, that discretion must be
exercised in a manner that effectuates the purposes of the
Secretary's regulation -- fostering compliance with the labor
standards provisions of the Related Acts and furthering the
public policies underlying those provisions. See Copper
Plumbing, supra. And, of course, whatever discretion may exist
must not be exercised haphazardly, but instead must be guided by
the need for decisional consistency -- the need to decide like
cases in a like manner.
Furthermore, the literal terms of the regulation, while
suggesting that some latitude exists for determining the length
of [8]
/FN5/ We note, however, that Section 5.12(a)(1) does not literally
provide that the debarment order fashioned by an ALJ (or, on
review, by the Board) may specify a debarment period of up to three
years, although such latitude is not literally foreclosed, either.
Rather, Section 5.12(a)(1) provides that a contractor or
subcontractor who commits aggravated or willful violations "[*shall
be ineligible for a period not to exceed 3 years.*]" [*emphasis
supplied*] As discussed at pp. 10-11, infra, the existence of a
specific procedure in 29 C.F.R. 5.12(c) for removal of a violator
from the ineligible list only after the violator has completed a
minimum of six months on the list suggests that the drafters of the
regulatory debarment mechanism intended the Section 5.12(c)
procedure to be the avenue used, in most instances, for reducing
the length of the debarment period to less than three years. [8]
[9] the debarment period, do not specifically address the degree
of latitude offered by the regulation. In that regard, the term
calling for debarment "for a period not to exceed 3 years" seems
capable of more than one meaning. The reading urged by the
Administrator here -- that as a general rule debarment under the
Related Acts should be for a three-year period, and that in
exceptional circumstances a lesser debarment period may be
appropriate -- is one of the possible meanings that can be
attributed to the terms of the regulation, and it is a meaning
that is consistent with the purposes of the regulation. It is
axiomatic, of course, that considerable deference is generally
accorded to an agency's interpretation of its own regulations.
See Udall v. Tallman, 380 U.S. 1, 16-17 (1965). For that reason,
the reading given to this regulation by the Wage-Hour
Administrator can not lightly be set aside.
We further note that the terms of Section 5.12(a)(1) should
not be read in isolation, but should be construed with a view to
the regulation as a whole. In that context, the structure of the
Secretary's debarment regulation and the terms of 29 C.F.R.
5.12(c) offer further guidance in evaluating the meaning and
appropriate application of the regulation's provision for
debarment "for a period not to exceed 3 years."
Section 5.12(c) provides a mechanism for seeking a
modification of the debarment period. Under Section 5.12(c) a
debarred firm or individual may, after completing six months on
the ineligible list, submit a written request to the
Administrator for removal from the list. The Administrator
examines "the facts and circumstances surrounding the violative
practices which caused [9][10] the debarment," and issues a
decision on whether the violator "has demonstrated a current
responsibility to comply" with the labor standards provisions of
the Davis-Bacon and Related Acts. Among the factors to be
considered by the Administrator are the severity of the violations,
the attitude towards compliance, and the past compliance history.
A request for removal from the ineligible list will not be
considered until full restitution has been made to all underpaid
employees. Furthermore, Section 5.12(c) specifies that a removal
from the debarment list will not be effected unless the
Administrator determines after an investigation that the debarred
contractor is in compliance with the labor standards provisions of
the Davis-Bacon and Related Acts, as well as the provisions of
other labor standards statutes.
Thus, Section 5.12(c) is more than a list of factors to be
considered by the Administrator in assessing requests for removal
from the ineligible list. Section 5.12(c) is a carefully crafted
procedure that permits a violator to request removal from the
debarment list only [*after*] completing six months of the
debarment period, and provides for modification of the debarment
period only after an investigation by the Administrator -- an
investigation conducted [*after*] the violator has completed the
minimum six months on the ineligible list -- demonstrates
compliance with all applicable labor standards statutes. The
existence of this carefully drawn procedure, set forth in Section
5.12(c), suggests that this is the mechanism that the drafters of
Section 5.12 intended to be used, in most instances, for reducing
the length of the debarment period to less than three years. In
addition, the existence of this procedure supports a reading of
Section [10][11] 5.12(a)(1) that allows for reducing the
ineligibility period at the ALJ or Board stage of the debarment
proceeding -- before the violator has completed the minimum
six-month debarment period specified in Section 5.12(c) and before
the Administrator has conducted the post-debarment investigation
specified in that section -- only in extraordinary circum-
stances. /FN6/
B. Board Precedent Regarding Debarment
for "Aggravated or Willful" Violations
of the Davis-Bacon Related Acts
The Board has decided several Related Acts debarment cases
over the years, and a review of those cases illustrates the
seriousness with which the Board has viewed the commission of
debarrable violations. See, e.g., Warren E. Manter, Inc., WAB
Case No. 84-20 (June 21, 1985); Early & Sons, Inc., WAB Case No.
86-25 (Jan. 29, 1987); Brite Maintenance Corp., WAB Case No. 87-07
(May 12, 1989). However, the Board has determined that it is
appropriate to take this opportunity to reexamine and restate its
approach to determining the length of the debarment period in
Related Acts cases in order to provide guidance to ALJs (who,
since 1983 have had a role in the regulatory debarment procedure)
and to the parties, and to ensure decisional consistency.
In Manter, an ALJ searching for standards to guide his
determination of the length of the debarment period in a
Related [11]
/FN6/ As noted supra, at p. 8-9, the terms of 29 C.F.R. 5.12(a)(1)
are capable of more than one meaning. The Board is mindful that
much of the confusion inherent in applying the Related Acts
debarment standards lies with the ambiguities in the wording of
Section 5.12(a)(1). In this decision the Board has examined those
terms and has fashioned an approach that, in our view, is consonant
with the text, structure and purposes of the Related Acts debarment
regulation. Of course, nothing in this decision precludes the
Department of Labor from addressing the applicable standards in
Section 5.12(a)(1) through the rulemaking process. [11]
[12] Acts case decided to use the criteria set forth in Section
5.12(c) for removal of violators from the ineligible list.
Counsel for the Wage-Hour Administrator agreed that these
criteria were appropriate for consideration, and the Board
concurred.
Given that the criteria in Section 5.12(c) reflect the
purposes underlying the debarment regulation -- effectuating
compliance with the labor standards provisions of the Related
Acts -- it cannot be said that these criteria are completely
irrelevant to determining the appropriate length of the
ineligibility period at the ALJ or Board stage of the debarment
proceeding. It can be said, however, that transplanting the
Section 5.12(c) criteria into the pre-debarment stage of the
proceeding does not necessarily dispose of all the issues
involved in determining the length of the debarment period.
First, and as we have noted earlier, Section 5.12(c) is more than
just a list of criteria; it is a procedure specifically designed
for removal of violators from the ineligible list after they have
completed at least six months of the debarment period. As we
explained in Part III. A., the terms and structure of the
Secretary's debarment regulation -- including the existence of a
specific, post-debarment procedure in Section 5.12(c) for removal
from the ineligible list -- leads the Board to conclude that at
the ALJ or Board stage of the debarment proceeding an order
imposing a three-year debarment period is warranted absent
extraordinary circumstances. Second, although Section 5.12(c)
provides a list of criteria, that section does not specifically
indicate the weight to be accorded to the listed factors at the
post-debarment stage (whether, for example, the Administrator is
to give controlling weight to the severity of the violation, or
[12][13] whether more weight is to be allocated to the factors
dealing with current compliance or past compliance history). And
since Section 5.12(c) does not literally address the pre-debarment
stage of the proceeding, it certainly provides no specific
guidance on the weight to be accorded to the various enumerated
factors at that stage. /FN7/
In a 1989 decision (Brite Maintenance Corp., supra)
involving a typical "aggravated or willful" violation --
falsification of the certified payroll -- the Board took pains to
provide further guidance on determining the appropriate length of
the debarment period in Related Acts cases. The Board stated
(Brite Maintenance at 4) that as a general matter, it has
accepted the Administrator's position that "in the case of
deliberate, willful falsification of payroll information
debarment under the Related Acts, (as is required by the statute
for Davis-Bacon Act violations) should be for the three-year
period." The Board noted that it has reviewed ALJ decisions
where a three-year debarment period has not been imposed for
falsification of the certified payroll, or where the ALJ has
relieved the employer of debarment altogether on the ground that
the case involved the contractor's first Davis-Bacon job or the
first investigation of the contractor. However, the Board
explained (Id. at 5), "The purpose of the debarment provisions is
to enlist the cooperation of the Davis-Bacon employer in self-
enforcing compliance with the Act's requirements. Therefore,
in [13]
/FN7/ Thus, the ALJ in Manter applied the Section 5.12(c) criteria
and ordered a two-year debarment period after determining that the
contractor had accomplished compliance through its business
practices and restitution of underpaid wages. The Board, however,
described the violations as "unconscionable" and imposed a three-
year debarment period. [13]
[14] the case in which no rational explanation can be given for an
intentional falsification of the certified payroll report, the
employer who does this should be aware of the full three year
debarment."
The Board affirms the approach taken in Brite Maintenance
and, as stated earlier, concludes that "aggravated or willful"
violations of the labor standards provisions of the Related Acts
warrant an order imposing a three-year debarment period absent
extraordinary circumstances. Our conclusion is based on the
text, structure and purposes of the Secretary's regulation, as
well as on the development of Board precedent on this issue over
the past several years. It is our view that this approach, by
its faithfulness to the purposes underlying the Secretary's
regulation, best serves the interests of employees and
contracting agencies, as well as the interests of law-abiding
contractors who deserve a level playing field in the competition
for government contracts. In addition, in fashioning this
approach we are mindful that contractors or subcontractors who
are debarred for "aggravated or willful" violations of the
Related Acts do have available the Section 5.12(c) mechanism for
requesting removal from the ineligible list after completing at
least six months of the debarment period. See Abcon Sales Corp.,
WAB Case No. 87-44 (Oct. 26, 1988) at pp. 4-5 (Chairman Andrews,
concurring).
The Board's decision in this case addresses the standards to
be applied at the pre-debarment stage of Related Acts debarment
proceedings. We reserve decision on the appropriate
application [14]
/FN8/ To the extent that previous Board decisions are inconsistent
with this principle, they will no longer be followed. [14]
[15] of standards in the Section 5.12(c) procedure until presented
with a case that contains such issues. We note, however, that
the role of the Section 5.12(c) procedure is underscored by the
fact that the two appellate courts that have considered and
upheld the Secretary's authority to establish a regulatory
debarment mechanism for the Related Acts have relied, at least in
part, on the existence of the Section 5.12(c) procedure in
support of the courts' determination that the debarment mechanism
is not punitive in nature, but rather is intended to effectuate
compliance with applicable labor standards. See Copper Plumbing,
supra; Janik, supra. We note further that our approach in this
decision to the appropriate application of standards at the pre-
debarment stage takes the Section 5.12(c) procedure at face
value, in essence, and assumes that the procedure operates in a
manner that is procedurally fair to the parties, that imposes no
undue administrative burdens on the Administrator, and that is
capable of producing timely decisions based on discernible
standards. Should it become apparent that difficulties inhibit
practical and fair application of the Section 5.12(c) removal
mechanism, the Board may find it necessary to re-examine the
approach taken herein.
C. The Debarment Order in This Case
Based on the discussion in Parts III. A and B, above, and on
the record in this case, the Board concludes that a three-year
debarment period is called for in the circumstances presented
here. As in Brite Maintenance, this case involves falsification
of the certified payroll to simulate compliance with the
applicable labor standards. The violations occurred over a 2 1/2
year period and [15][16] involved about 12 contracts, resulting in
wage underpayments totalling $39,093.09. In addition, the
Respondent's activities resulted in a guilty plea to one count of
knowingly and willfully using false writings and documents in
violation of 18 U.S.C. [sec] 1001. The record presents no
extraordinary circumstances that would warrant a reduced
debarment period. In particular, we reject Respondent's argument
that Vento experienced a "de facto debarment" due to the
inability to bid on Allegheny County projects after the county
was informed that the Department of Labor had undertaken steps to
place Vento on the list of ineligible bidders. Wholly apart from
the relevance of such an argument, Respondent's claim of "de
facto debarment" is not supported by the record, given that Vento
continued to receive other federally funded contracts (ALJD at 4;
Exh. R-A). See Marvin E. Hirchert, WAB Case No. 77-17 (Oct. 16,
1978) at 8.
IV. ORDER
The petition for review is granted. To the extent that
the decision and order of the ALJ provides for a reduced one-year
debarment period, the decision and order is reversed. Pursuant
to 29 C.F.R. 5.12(a)(1), A. Vento Construction, contractor, and
Arnold Vento, owner, shall be ineligible to receive any contracts
or subcontracts subject to any of the statutes listed in 29
C.F.R. 5.1 for a period of three years. /FN9/
- - - [16]
/FN9/ Persons and firms placed on the ineligible list pursuant to
29 C.F.R. 5.12(a)(1) are permitted to request removal from the
ineligible list after completing six months of the debarment
period, pursuant to the procedure set forth at 29 C.F.R.
5.12(c). [16]
[17] Opinion of Member Rothman, concurring but writing separately
I join my colleagues in granting the Administrator's
petition, in reversing the decision of the Administrative Law
Judge imposing a one-year debarment period and in ordering that
the full three-year period of debarment be imposed.
I write separately for the following reasons.
1. The Board's decisions should be in simple terms
expressed in the context of the construction industry in which
the Davis-Bacon Act and Davis-Bacon Related Acts operate. The
Board writes for the industry as a whole but also for the many
small contractors who do not often have experienced Davis-Bacon
counsel to guide them.
2. The Davis-Bacon Act and Davis-Bacon Related Act
employers must keep weekly payroll records, the customary and
normal practice in the industry. Intentional falsification of
required Davis-Bacon reports based on the payroll or
falsification of the weekly payroll itself is aggravated, willful
and unconscionable. The Board has held that falsification of
payroll data to cover up Davis-Bacon Act violations is both
willful and aggravated. Employers that engage in such conduct
should not expect and will not receive leniency in the assessment
of debarment by requesting an Administrative Law Judge's review
of an Administrator's decision imposing the full three-year
period of ineligibility. Having found in the case before the
Board that the contractor's conduct was aggravated and willful,
the Administrative Law Judge's authority to modify the debarment
period was extremely circumscribed and limited by the decision of
the Administrator who has the primary interest and responsibility
within the U. S. Department of Labor [17][18] to use the
ineligibility list as a preventative instrument in Davis-Bacon
administration.
3. We know that intentional falsification of payrolls is
both aggravated and willful and warrants the full three-year
debarment under Davis-Bacon and Davis-Bacon Related Acts. The
Board proceeds with its work on a case-by-case basis. Beyond
falsification of payrolls, the Board may be going too far in
establishing a rule, not required for its decision in this case,
that all violations of Davis-Bacon Related Acts warrant the full
three-year debarment except in extraordinary circumstances.
Without the benefit of case-by-case analysis of what such
circumstances might be, I would not circumscribe the authority of
the Administrator to impose less than the full three-year
debarment in individual cases. If conduct is not willful or
aggravated, there is no justification to impose ineligibility to
receive future contracts. I would leave it to the Administrator,
subject to Board review in the appropriate case, to determine in
the individual case whether the full three-year period of
debarment should be imposed. The regulations, based on the
Davis-Bacon Related Acts, leave the door open for the
Administrator to impose less than the three-year debarment though
the violation is aggravated or willful. The decision of my
colleagues appears to me to close the door on such discretion in
the Administrator in future unknown circumstances. If as a
matter of policy the Administrator wishes to impose a three-year
debarment in all cases of aggravated or willful violation, that
is a policy decision to be made by the Administrator in the first
instance. In the event such a policy were adopted, I would still
look to a case-by-case approach by the Board on review to
determine what kinds of factual [18][19] situations warranted the
full three-year debarment and which did not.
I believe that the Board in past debarment cases has taken
this case-by-case approach under basic Davis-Bacon Related Act
principles. I do not agree therefore with the parts of my
colleagues' decision which provide that prior Board decisions
contrary to their decision are repealed. There is no actual
determination that there were earlier decisions which are
contrary to what my colleagues have decided. I cannot agree the
Board has not acted in accordance with correct principles because
each case turned on its own facts and each case was so handled.
Lastly, I am not in agreement that the Board has correctly stated
the rule to be applied as imbedded in the regulations and the
Davis-Bacon Related Acts, or that my colleagues have not
preempted a policy decision that must be made in the first
instance by the Administrator.
I see nothing wrong and believe it to be commendable for the
Board, as my colleagues have done in this case and as the Board
has done in earlier cases, to direct attention of the contractor
in this case and contractors generally to the provisions of the
regulation, Section 5.12(c) that provide procedures for removal
from the debarment list after six months. I would not hold out
any representation that a debarred employer can get itself
removed from the ineligible list after six months without
consideration of the entire background of each case.
BY ORDER OF THE BOARD:
JACKSON M. ANDREWS, Chairman [19]
