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<![CDATA[
CCASE:
ATEC INC. & COMMERCIAL OVERHAUL SVC INC.
DDATE:
19880114
TTEXT:
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[1] U.S. DEPARTMENT OF LABOR
DEPUTY SECRETARY OF LABOR
WASHINGTON, D.C.
20210
DATE: January 14, 1988
CASE NO. SCA-1181
IN THE MATTER OF
RESPONDENTS.
BEFORE: THE DEPUTY SECRETARY OF LABOR
ORDER OF THE DEPUTY SECRETARY DENYING REQUEST
FOR RECONSIDERATION AND RELATED REQUESTS
Respondent Atec, Inc. (Atec) has filed a request for
reconsideration and other submissions pertaining to my Decision and
Order (D. and O.) of July 21, 1987, which found that there were no
"unusual circumstances" within the purview of Section 5(a) of the
Service Contract Act (SCA), 41 U.S.C. [sec] 354(a) (1982),
to relieve Atec from debarment. D. and O. at 23. Having fully
considered Atec's submissions and the responses of the Associate
Solicitor for Fair Labor Standards, the matter is now before me for
decision.
A. Atec's Request of July 23, 1987
Atec argues that my Decision and Order of July 21, 1987, did
not address Atec's prior request for a remand to an Administrative
Law Judge (ALJ) to consider facts which allegedly. have arisen
subsequent to the 1980 hearing and to consider issues which
allegedly were not fully and properly addressed at that [1]
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[2] hearing. /FN1/ Request of Atec, Inc. for Reconsideration of the
Order of the Deputy Secretary (Request for Reconsideration) at 1-2.
Atec is mistaken, as the following discussion from my July 21
decision shows:
Atec argues that there is new information which I should
consider, [*] or remand to an ALJ to consider [*], for
purposes of determining "unusual circumstances." Atec
claims such new evidence and arguments thereon include
the following:
* * * */FN2/
Atec urges consideration of all such evidence in view of
the "catastrophic" [footnote omitted] sanction of a
three-year debarment. [citations to record omitted].
[*] Atec's alleged new facts and information cannot be
considered at this time [*]. There is no provision in
the SCA or in the regulations for the receipt of new
evidence on matters occurring after the close of the ALJ
proceedings below. See 41 U.S.C. [sec] 354(a) (1982); 29
C.F.R. [secs] 8.1(d) and 8.9(b) (1986). See also In the
Matter of Darrell E. Yates, No. SCA-171, Decision of the
Assistant Secretary, June 13, 1974, slip op. at 3-4,
aff'd, 22 WH Cases (BNA) 705, Secretary's Decision,
September 27, 1974. Cf. 41 C.F.R. [sec] 60-30.29 (1986).
/FN1/ On August 6, 1987, Atec's counsel wrote to the Director of
the Office of Administrative Appeals to request a meeting with her
and the Department's counsel to discuss "in further detail" Atec's
request that this case be remanded for a new hearing to consider
further evidence on the issue of "unusual circumstances." This is
the basis of Atec's July 23 Request for Reconsideration. While the
Office of Administrative Appeals, inter alia, assists me in
reviewing and adjudicating SCA cases, it has never conducted such
proceedings, and I see no reason why it should do so here. Atec
has had abundant opportunity to argue its remand position through
various pleadings, including those filed subsequent to the issuance
of my Decision and Order.
/FN2/ Here my decision summarized five points Atec urged warranted
remand. [2]
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[3] D. and O. at 7-10 [*](emphasis added)[*]. Responding to Atec's
request that I consider its new information or remand it to an ALJ
for consideration, I ruled unqualifiedly that "Atec's alleged new
facts and information cannot be considered at this time," i.e.,
neither by me nor by an ALJ. In either instance,
[a]cceptance of such post-hearing evidence might enable
some serious violators in older cases to escape
debarment. Contractors might be less willing to comply
because of the reduced likelihood of sanctions. The
decisional process would become more protracted.
Findings of "unusual circumstances" might cease to be
unusual. Such results are inconsistent with the
statutory scheme imposing a strict test for what
comprises "unusual circumstances. " 29 C.F.R. [secs]
4.188(b)(1) and (2) (1986).
D. and O. at 11.
Atec's counsel points out that 29 C.F.R. [secs] 8.1(d) and
8.9(b) (1986), cited in the quoted extract from my Decision and
Order at page 2, supra, authorize remand to an ALJ. However, that
does not mean that the taking of additional evidence by an ALJ is
limitless. Rather, the remand language in the third sentence of 29
C.F.R. [sec []] 8.1(d) /FN3/ must be read in pari materia with the
first sentence in [sec] 8.1(d), /FN4/ whereby the remand is
directed at clarifying some of the "relevant matter contained in
the . . . record before [the Board]." Obviously, such
clarification cannot involve matter arising after the hearing and
therefore not part of the hearing record. [3]
/FN3/ "[The Board] may remand with appropriate instructions any
case for the taking of additional evidence and the making of new or
modified findings by reason of the additional evidence."
/FN4/ "The Board is an appellate body and shall decide cases
properly brought before it on the basis of all relevant matter
contained in the entire record before it." [3]
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[4] Atec argues that other issues were not fully and properly
addressed at the hearing. Request for Reconsideration at 2.
However, Atec was accorded full and ample opportunity to establish
its case for "unusual circumstances" before the ALJ. Thus, there is
no basis for remanding this matter for the taking of additional
evidence existing at the time of the 1980 hearing. See D. and O.
at 13-16, 22.
Atec's arguments for a rehearing are not enhanced by the
length of time between its violations and my Decision and Order. As
indicated above, there is no provision in the SCA or in the
regulations for the receipt of new evidence on matters occurring
after the ALJ hearing. Atec engaged in serious violations of the
SCA /FN5/ and should not be allowed to reopen its case because it
was not debarred earlier.
B. Atec's Request of September 25, 1987
In finding no "unusual circumstances" to relieve Atec from
debarment, my Decision and Order did not consider Atec's assertions
that its debarment would adversely affect the national interest.
As I stated therein:
Similarly, I decline to consider Atec's various
assertions that its debarment would adversely affect the
national interest. There is nothing on this point in the
record before the ALJ. Significantly, among the various
post-hearing affidavits in the Appendix to the Supplement
to the Application of Atec, Inc. for Relief from the
Ineligible List, there are none from appropriate federal
military or civilian officials supporting its contention
[footnote omitted]. Since the filing of its Appendix,
Atec has submitted no affidavits from such officials, nor
have they filed anything with me on their own initiative.
Although a [4]
/FN5/ See D. and O. at 1-5. [4]
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[5] few ALJ decisions briefly touch on the issue of
Government needs in the context of many mitigating
factors [footnote omitted], I do not believe this issue
is before me in concrete form, even were I to consider
Atec's post-hearing information.
D. and O. at 17. Atec's letter to me of September 25, 1987, again
raises the issue of Atec's asserted importance to Department of
Defense activities in support of its July 23 Request for
Reconsideration.
Atec encloses a copy of a letter dated September 22, 1987,
from Scott S. Ford, Purchasing Agent, Pratt & Whitney Division of
United Technologies, to John E. Healy, Department of the Air Force,
DET 4, AP Contract Mgt. Div., AF Plant Representative OFC (AFSC),
Pratt & Whitney, P.O. Box 109600, West Palm Beach, Florida
33410-9600, which states, in part:
The attached listing of part numbers /FN6/ represents
those major P&W parts for which Atec is the sole
qualified source. A large quantity of this hardware has
already been delivered to the Department of Defense and
Atec as the sole qualified source is also supplying spare
parts for the many units in the field. Any restriction
of Government contracts to Atec's facility approaching
three years would result in the hardware already in the
field as well as new planned site activitions [sic] being
unsupportable for some period of time.
In the event that such an action would be levied, P&W
would take appropriate steps to minimize the impact on
field supportability. Unfortunately, the leadtime to
qualify an alternate source on this type of hardware
would approximate the three year penalty. The cost to the
DOD in requalification charges would also be prohibitive.
In light of Atec's established technical capabilities and
competitive pricing, P&W has begun preliminary [5]
/FN6/ This listing was not attached to the copy of the Pratt &
Whitney letter enclosed with Atec's letter of September 25,
1987.[5]
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[6] discussions with their facility for the future design and
qualification of the PW1129 and PW5000 engine test
adapter equipment. If Atec were declared ineligible, P&W
would be required to bring another supplier "up to speed"
which would jeopardize our schedule and cost projections
for flight test and operations deployment of these
advanced engines.
I will continue to keep your office apprised of this
situation as it develops. In the interim, any vehicle
your office can use to convey these program concerns to
ASD, ALC, and, in turn, to the Department of Labor may
benefit our common goal of supportability for U.S.
Government hardware in the field.
Atec urges that a new hearing is appropriate and necessary to
consider these matters in relation to the "serious adverse impact
[of Atec's debarment] on Defense Department programs now getting
underway, programs that were not in existence in 1980 when the
hearing was held before the Administrative Law Judge." Atec
September 25 letter at 2.
Similarly, Atec states that it has recently obtained a
contract to provide jet engine test equipment for the SR-71
Blackbird Reconnais[s]ance aircraft,
a highly-classified "black" program. Atec has been in
contact with the Air Force project manager concerning
this debarment proceeding and the effect that a three-
year debarment would have on Atec and the SR-71 project.
Due to the classified status of the SR-71 project and Air
Force policy, the Air Force has advised Atec that it can
provide information to the Labor Department concerning
Atec's role in the project only upon the request of the
Labor Department. Accordingly, Atec cannot, on its own,
provide information concerning the importance of the
SR-71 project to the national defense, Atec's role in the
project and the effect of the debarment of Atec on the
project. However, Mr. William M. Umble, the Air Force
Project Manager, has stated that he would respond to any
questions by the Labor Department on this matter.
[Address and telephone number]
Atec September 25 letter at 2-3. Atec requests that the Department
of Labor contact Mr. Umble to verify Atec's [6]
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[7] importance to the SR-71 program and that this matter be
considered along with Atec's contracts with Pratt & Whitney at
a new hearing which would examine, inter alia, the importance of
Atec's current national defense contracts.
As indicated in my discussion of Atec's request of July 23,
1987, supra, I continue to adhere to the view expressed in my
Decision and Order of July 21, 1987, that "Atec's alleged new facts
and information cannot be considered at this time. There is no
provision in the SCA or in the regulations for the receipt of new
evidence on matters occurring after the close of the ALJ hearing
below." D. and O. at 10. Accordingly, the issue of Atec's
asserted importance to Department of Defense efforts cannot be
remanded to an ALJ for purposes of reconsidering Atec's debarment.
/FN7/
Although Atec's evidence of its alleged importance to the
national defense or national interest cannot be considered in these
proceedings, Atec is not precluded from offering such evidence to
the Wage and Hour Administrator for purposes of obtaining a
limitation, variation, tolerance or exemption from the impact of
its debarment on a contract-by-contract basis pursuant to Section
4(b) of the SCA, 41 U.S.C. [sec] 353(b) (1982), if warranted. Such
action is authorized in special circumstances where it is
determined to be "necessary and proper in the public interest or to
avoid the serious impairment of government business,[7]
/FN7/ This rationale also precludes my contacting Mr. William M.
Umble, the Air Force Project Manager for the SR-70 project. [7]
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[8] and is in accord with the remedial purpose of this chapter to
protect prevailing labor standards." See 29 C.F.R. [sec] 4.123(a)
and (b) (1986), particularly the need for supporting information
from the contracting agency in subsection (b). Although debarred,
"Atec could submit a variance request for a given contract at any
time .... [N]o such request would be necessary with respect to
ongoing contracts already awarded to Atec because they would not be
affected by any subsequently imposed debarment." Memorandum of the
Associate Solicitor for Fair Labor Standards, November 6, 1987, at
3.
Atec urges in its Reply to the Memorandum of the Associate
Solicitor, dated November 18, 1987, that it sati[s]fies the
criteria for such an exemption under Section 4(b). Atec Reply at
2 and 4-6. However, this debarment proceeding is not the proper
forum to seek such relief since the granting of such exemptions is
within the purview of the Wage and Hour Administrator. See 29
C.F.R. [sec] 4.123(b). Further, Atec seems to be arguing for a
complete exemption applicable to all future Federal contracts and
subcontracts. Atec Reply at 2 and 4-6. However, such exemptions
should be on a contract-by-contract basis to ensure that the
Section 4(b) criteria are satisfied for each procurement action.
Order
I have considered Atec's assertions regarding the effect of
debarment on Atec and its employees. See D. and O. at 17-18.
Although I certainly understand Atec's desire to avoid this
sanction, I am mindful of my responsibilities for deciding SCA
cases according to law. Accordingly, having duly considered [8]
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[9] Atec's submissions, /FN8/ its request for reconsideration of my
Decision and Order of July 21, 1987 is DENIED. [9]
/FN8/ On November 2, 1987, Atec's counsel and president submitted
separate letters requesting a conference with me, personally, and
with counsel for the Department. Counsel for Atec states, in part:
The alternatives we would like to discuss would be a
determination that Atec should not be debarred because,
among other reasons, Atec is today a completely different
company than the one that was involved in the events way
back in 1977, this was a one-time violation, Atec is an
important supplier to the Defense Department, and Atec's
debarment would result in expense and delay for the
Defense Department. The attached letter from Atec's
president, Mr. J.E. Maxwell, which was sent to you under
separate cover and a copy of which is attached, discusses
these points in greater detail. The second alternative
would be to seek your decision to remand this case for a
new hearing so that all available facts could be
considered, including facts that have arisen since the
hearing over seven and a half years ago as well as facts
not fully brought out at the hearing.
A conference with you is particularly necessary to bring
to your attention very recent supporting documentation in
the form of statements from Pratt & Whitney, to whom Atec
is a subcontractor, and from personnel from the Air
Force, about the critical importance of Atec's survival
to certain Defense Department procurements. This
information had not previously been available to Atec.
While the company's prior filings had mentioned Atec's
importance to the Defense Department, the company had not
obtained actual documentation or supportive statements
from Pratt & Whitney or the Air Force, an omission noted
in the Department's July 21 Decision. When the
Department's Decision brought home to these customers of
Atec that, in fact, Atec would no longer be qualified to
be a supplier, they responded strongly about how
important Atec is to them.
Letter from Richard J. Leidl, Esq., at 1-2. Similarly, Atec's
president writes, in part:
As you know, since the issuance of your Decision on July
21, 1987, we have filed a request for reconsideration.
We have also submitted a letter from Pratt & Whitney,
dated September 22, 1987, outlining the disruptive effect
that Atec's [9][FN8 CONTINUED ON PAGE 10] (footnote
continued) ineligibility would have on certain of its
defense contracts and have given your office the name of
a person in the Air Force who is available to discuss the
good work that Atec is doing on its contracts. Other Air
Force personnel may also be able to submit statements
concerning our excellent record under defense contracts.
Letter from J.B. Maxwell at 1. Atec's Reply of November 18, 1987
to the Memorandum of the Associate Solicitor renews its request for
a meeting on the topics mentioned in its November 2 letters and
also requests a discussion of Section 4(b) relief. Atec Reply at 2
and 6. Similarly, Atec's counsel's letter of December 23, 1987,
renews Atec's request for an "oral presentation" and urges that the
SCA and the regulations give the Deputy Secretary the authority to
grant the parties herein the opportunity for such a presentation of
the issues. Although I am mindful of Atec's situation as it has
been extensively and repeatedly described in Atec's may filings
before me, I do not believe this adjudication should be treated any
differently from other SCA adjudications, none of which has
involved such a conference or oral presentation. Atec has had full
and ample opportunity to bring these matters to my attention in
writing, both prior and subsequent to my Decision and Order, and
Atec's counsel has done so. Each of Atec's submissions has been
thoroughly reviewed and considered. Therefore, I decline to
convene the requested proceeding.[10][END FN8]
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[10] My Decision and Order, finding no "unusual circumstances"
to relieve Atec, Inc., Commercial Overhaul Services, Inc., and
William Thorne from the sanction of Section 5(a) of the SCA, shall
be forwarded to the Comptroller General with the request that he
place their names on the list of ineligible bidders pursuant to
Section 5(a). /FN9/
SO ORDERED.
[Dennis E. Whitfield]
Deputy Secretary of Labor
Washington, D. C. [10]
/FN9/ In accordance with counsel's urging at pages 1 and 3 of
Atec's July 23, 1987 Request for Reconsideration, Atec's name was
not forwarded to the Comptroller General during these
deliberations. [10]
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