CCASE:
JEN-BECK ASSOCIATES
DDATE:
19861204
TTEXT:
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[1] -- [87-02.WAB ATTACHMENT]
U.S. Department of Labor Office of Administrative Law Judges
211 Main Street - Suite 600
(415) 974-0514 San Francisco, California 94105
FTS 8-454-0514
IN THE MATTER OF
Disputes concerning the payment CASE NO. 84-DBA-81
of prevailing wage rates and overtime
pay by:
JEN-BECK ASSOCIATES, INC., JEN-BECK
ASSOCIATES, and JEN-BECK
Contractor
and
Proposed debarment for labor standards
violations by:
JEN-BECK ASSOCIATES, INC., JEN-BECK
ASSOCIATES, and JEN-BECK
Contractor
DOUGLAS JENSEN - President
TIM FISHBECK - Vice-President
KEN FISHBECK - Secretary-Treasurer
With respect to laborers and mechanics
employed by the contractor under the
U.S. Department of the Air Force
Contract Nos. F04609-81-C0064,
F04609-81-C0031, and F04609-81-C0065
(George Air Force Base, CA) and U.S.
Department of the Navy Contract Nos.
N62474-80-C3816, N62474-81-C6735
(Long Beach Naval Shipyard, CA) and
N62474-80-C3832 (Naval Regional Medical
Center, Long Beach, CA)
Howard A. Allen, Esq.
For Jen-Beck Associates, Inc., et al.
Theresa Kalinski, Esq.
For the U.S. Department of Labor
BEFORE: EDWARD C. BURCH
Administrative Law Judge [1]
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[2] DECISION AND ORDER
This matter arises under the Davis-Bacon Act, 40 U.S.C. 276a-
276c, and its implementing regulations at 29 C.F.R. Parts 1, 3, 5,
5a, and 7.
Under the Davis-Bacon Act, construction contractors who are
parties to federal contracts must pay their laborers and mechanics
wages equivalent to the prevailing wage rates in the areas in which
the work is performed, as determined by the Secretary of Labor. 40
U.S.C. [sec 276a]; 29 C.F.R. [sec] 1.1. If a contractor is found
to be in willful violation of the Act, he can be subject to
debarment from any other contract with the federal government for
a period of three years.
At issue here are six federal contracts to which respondent
Jen-Beck Associates was a party. The Department of Labor (DOL) has
alleged that the employees under these contracts were underpaid,
and that incorrect certified payroll records were submitted to the
contracting officer. The parties to this action have stipulated
that eleven of the employees involved did not appear on the
certified payrolls at all, and that the employees who did appear on
these payrolls were shown to have been paid at Davis-Bacon wage
rates, when in fact they were paid a lower amount. Jen-Beck has
agreed to pay all of the amounts found to be due by DOL, without,
however, stipulating that [] all of the alleged violations did, in
fact, occur.
The only issue to be decided in this case is whether or not
respondent should be debarred.
Douglas Jensen, President of Jen-Beck, testified that Jen-Beck
was founded in 1978 by himself and Ken and Tim Fishbeck (Transcript
- T - p. 27), and that it was formed for the sole purpose of
performing government contracts, including state and local
governments (T p. 40-41). About 50% of these contracts were with
the federal government (T p. 411. The first federal government
contract in which Jen-Beck was involved was subject to the
Davis-Bacon Act, but since Jensen was both the owner and the only
employee of the company at that time, the provisions of the Act did
not come into play with respect to this contract (T p.p. 29-30).
The six contracts at issue here are six of the first seven federal
contracts to which Jen-Beck was a party, and the first ones in
which the provisions of the Davis-Bacon Act did come into play
(T p. 30). Jensen's employment background is in plumbing sales and
construction, and he handled the estimating and the purchasing of
equipment on each of these six contracts (T pp. 29 & 30). He was
not the superintendent on any of these jobs (T p. 30). [2]
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[3] Although Jensen signed the certified payrolls which are the
subject of this suit, he did so before they were filled out, so
that he had no knowledge of their accuracy (T pp. 42-43). As far
as he knew, all of the people who were listed on the payrolls as
employees, and who were determined to have been underpaid, were
neither laborers nor mechanics, but superintendents (T pp. 32-35).
As such, they would be salaried employees, not subject to
Davis-Bacon Act wage rates.
Jensen did not know why any of these employees should have
been paid the amounts found to be due to them by DOL (T pp.
32-35). With the exception of George Friend, all of these
employees were allegedly underpaid by very small amounts./FN1/
Jen-Beck also hired temporary employees from Manpower to move
furniture on the job site prior to the actual construction work (T
pp. 36-37). These employees were not listed at all on the
certified payrolls (T. pp. 8 & 17). At the time that these
employees were hired, Jensen did not believe that they were covered
by the Davis-Bacon Act, since they did not perform any skilled
trade, and the wage determination in the contract did not have a
laborer classification (T pp. 37-38).
Jensen testified that he did not intend to violate the
Davis-Bacon Act with respect to the contracts at issue here, and
was unaware of any violations until they were pointed out to him in
the course of a DOL investigation (T pp. 38 & 40). When Jen-Beck
was first formed, the payroll was completed manually, by another
company, Redhill, to save costs (T p. 39). The superintendents,
who were salaried employees, turned their time sheets in to the
bookkeeper, who converted them into checks based on the employees'
salaried rates (T pp. 44-45). However, there apparently was no
coordination between this process and the completion of the
certified payrolls, since Jensen could not explain how, for
instance, Charles Friend, whom Jensen considered a superintendent,
appeared on the certified payrolls as a carpenter (T pp. 45-46 &
48). Jensen admitted that Charles Friend was probably paid less
than the amount shown on the certified payroll (T p. 51). Jensen
testified that Jen-Beck's secretary probably filled in the
Davis-Bacon rates on the certified payrolls, but that the employees
were actually being paid by Redhill at their salaried rates (T pp.
59-60).[3]
ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ
/FN1/ Harley Pennington, Dave Baraszu, and Darryle Hudgins were
found to have been underpaid $80.48, $31.52, and $72.96
respectively on one of the contracts at issue here (T pp. 33-35;
Exhibit J-l, pp. 10 & 11). [3]
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[4] After the DOL investigation in which Jensen was first made
aware of these problems, a computerized payroll system was
instituted at Jen-Beck so that the certified payrolls would be
produced directly from the time sheets (T p. 38). Since that time,
Jensen testified, there have been no further violations of the
Davis-Bacon Act (T p. 39).
Ken Fishbeck was once an employee (in 1984), and is still an
officer of Jen-Beck (T p. 61). He was the President of Redhill,
and was the person who signed the Jen-Beck checks issued by Redhill
(T pp. 67-68). Like Jensen, he testified that Redhill was used to
issue these checks in order to cut Jen-Beck's costs (T p. 68).
Before Jen-Beck's formation, Fishbeck had no experience with
government jobs (T p. 62). Redhill, which is a real estate
development corporation, does no public works jobs (T pp. 61-62).
Fishbeck stated that he did not know what information was used to
prepare the checks, and that he did not know about the certified
payrolls (T p. 68).
Like Jensen, Fishbeck testified that he first heard of the
Davis-Bacon Act when Jen-Beck was first investigated, in March of
1982 (T p. 62). Fishbeck was not involved in this first
investigation (T pp. 62-63), but he was involved in a subsequent
investigation (T p. 63). In the second investigation, Fishbeck
provided information to the DOL compliance officer concerning
Jen-Beck's practices (T p. 63). Fishbeck testified that this
investigation took over four months, and that the compliance
officer interviewed a total of sixteen employees, virtually all of
the workers Jen-Beck had (T p. 64). Fishbeck testified, and DOL
stipulated, that no Davis-Bacon Act violations were found in this
second investigation (T p. 64).
Fishbeck also testified that after the first investigation, he
read up on the Act (T p. 69), and also would consult with a Mr.
Kelley, a DOL supervising agent, whenever he needed clarification
of a situation (T pp. 65). Fishbeck stated that Kelley also called
him concerning problems with Jen-Beck's subcontractors, and that
Jen-Beck even went so far as to make payments for its
subcontractors to meet Davis-Bacon Act standards, even if it was
unsure if violations had actually occurred (T pp. 65-66).
I found both Jensen and Fishbeck to be credible witnesses. In
view of their testimony, it is apparent that some violations of the
Davis-Bacon Act occurred with respect to the six contracts at issue
here. However, these violations were not willful, but were due to
inadvertence and lack of knowledge. Since the initial investigation
of its practices, Jen-Beck has made a concerted effort to stay in
compliance with the Act, and no further violations have occurred.
In view of this, and in view of the fact that Jen-Beck has fully
co-operated to eliminate future violations, I do not find that
debarment is appropriate in this case. [4]
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ORDER
It is recommended that respondent be relieved from placement
on the ineligible list.
EDWARD C. BURCH
Administrative Law Judge
Dated: 4 DEC 1986
San Francisco, California
