Conclusion Of Investigation

Final Conference Procedure

  1. Inform the contractor generally of the investigation findings, and indicate that these findings are based solely on the facts and information disclosed by the investigation.
  2. Detail specifically what must be done to eliminate the violations, if any, and provide any available informational material such as copies of 29 C.F.R. Part 3 and/or Part 5.
  3. Be willing to consider additional evidence from the contractor which may affect the findings, such as an unresolved conformance request, evidence of contractor contributions to a fringe benefit plan, or inspection reports.
  4. Request for payment of back wages:
    1. The DBA contains no injunctive action procedures. Therefore, a demand for the payment of the back wages must always be made even if the employer refuses to comply.
    2. Contracting officers may accept partial back wage restitution for undisputed issues.
    3. Contracting officers may attempt to collect back wages even though the case meets the debarment criteria, unless there is evidence of possible Copeland "Anti-kickback" Act violations. However, in no event will a contractor be left with the impression that the payment of back wages will eliminate the possibility of debarment.
    4. If the employer is a subcontractor and refuses to make full restitution, the prime contractor must then be requested to make restitution. The prime contractor is ultimately responsible for the payment of the back wages.
  5. Notify the subcontractor and/or prime contractor of the potential for the assessment of liquidated damages ($10.00 per day per violation) under CWHSSA. The firm(s) should be advised that the contracting agency will make a decision on the assessment of liquidated damages at a later date.
  6. If there is no agreement to pay back wages, the file must be forwarded to the appropriate WHD Regional Office pursuant to 29 C.F.R. § 5.7 for review, collection of back wages, and debarment consideration. (See AAM No. 182. The updated addresses for the WHD regional offices are available at https://www.dol.gov/agencies/whd/government-contracts/construction/regions under the heading "WHD Regional Offices.")

Withholding

  1. In refusal-to-pay cases under both DBA/DBRA and CWHSSA, the contracting agency shall withhold contract funds to cover the back wages due.
  2. If funds remaining on the contract under which the violations occurred are insufficient to cover the back wages due, the contracting agency can withhold funds from other contracts subject to DBA/DBRA/CWHSSA or any other federal contract held by the same prime contractor - "cross-withholding".
  3. Contracting officers should immediately notify WHD if they become aware that the prime contractor may be filing for bankruptcy.
  4. In situations where WHD has instituted withholding actions, a letter to the prime contractor will describe the nature of the alleged violations and back wages found due. The prime contractor will have 15 days to provide written views on the alleged violations. Withholding procedures and the back wage disbursement process are discussed further in the " and Disbursement" chapter of this resource book.

Due Process for Withholding Action

  1. To ensure that contractors and subcontractors receive "due process" prior to the withholding of funds at the direction of the WHD, the following steps are included in the WHD enforcement procedures.
    1. Where a contractor refuses to pay back wages under DBA, DBRA, and/or CWHSSA and funds are available for withholding, WHD will generally send a "due process" letter to the prime contractor. This letter will include:
      1. A statement that the final conference was conducted at which time the contractor was provided an opportunity to discuss alleged violations; or if a final conference was not held, provide the reason(s) why;
      2. A brief description of the alleged violations;
      3. An affirmation that the contractor received a Summary of Unpaid Wages;
      4. A statement that the matter is being forwarded to a designated WHD deciding official, who will decide whether withholding action will be taken regarding the back wage findings;
      5. A statement that the contractor has fifteen (15) days to provide the WHD deciding official with written views on whether the violations occurred;
      6. A statement that any determination regarding the withholding of contract funds will not result in the distribution of the funds to the underpaid workers until such time as the administrative remedies available to the contractor have been completed. See discussion of "The Hearing Process And Appeal Rights," below.
    2. If the deciding official determines that withholding action is warranted, a copy of the WHD withholding request to the contracting agency and a letter indicating the deciding official's decision on withholding will be sent to the prime contractor.
  2. In certain cases, such as missed payrolls, likely bankruptcy filings, or imminent contract close out, it may be necessary to request withholding before the measures described above can be provided. In those cases, the procedures outlined above should be followed as quickly as reasonably possible after the withholding action; and based on the contractor's submission, the WHD deciding official may decide to revoke an earlier withholding request.

Debarment

  1. Debarment occurs when a contractor or subcontractor is declared ineligible (debarred) from receiving federal or federally assisted contracts for up to 3 years because it was found to be "in aggravated or willful violation of the labor standards provisions" of any of the related acts, or declared ineligible for 3 years because violations of the DBA were a disregard of the contractor's "obligations to employees or subcontractors."
  2. At the conclusion of the investigation, the contracting officer may advise the contractor of the potential for debarment where appropriate, but make no statement to the contractor about any recommendation concerning debarment.
  3. In no event should a contractor be left with the impression that payment of back wages eliminates the possibility of debarment.

Debarment Criteria

  1. The facts and circumstances of a given case will dictate whether debarment is appropriate. Some of the more common instances in which the DOL finds debarment appropriate are when a contractor has:
    1. Submitted falsified certified payroll records,
    2. Required kickbacks of wages or back wages,
    3. Committed repeat DBA/DBRA violations,
    4. Misclassified covered workers in clear disregard of proper classification norms, or
    5. As a prime contractor, failed to ensure compliance by subcontractors.
  2. DOL holds general contractors responsible not only for their own violations of the federal Davis-Bacon labor standards, but in appropriate circumstances also for those committed by their subcontractors. A July 26, 2012 WHD press release in a major case involving a prime contractor's enhanced compliance measures under a settlement agreement and debarment of multiple subcontractors is instructive in this regard. The July 26, 2012 press release is available at: https://www.dol.gov/newsroom/releases?agency=57&state=All&topic=All&year=all.

Contracting agency reports to DOL

  1. Federal agency responsibility to conduct labor standards investigations under DBA and to submit investigation reports to DOL are described in the FAR at 48 C.F.R. § 22.406.8. Investigation reports to DOL are addressed there and at 29 C.F.R. § 5.7. Agency investigation/enforcement reports to DOL, with relevant information, are required where:
    1. Underpayments by a contractor or subcontractor total $1,000 or more, or
    2. Where there is reason to believe that either the contractor has disregarded its obligations to employees and subcontractors under DBA or that the violations are aggravated or willful under one of the DBRA, or
    3. The agency investigation was made at the request of the Department of Labor, or
    4. Back wages have not been paid.
  2. In addition, upon DOL request, a federal agency head shall transmit to the WHD Administrator such information available to their agency with respect to contractors and subcontractors, their contracts, and the nature of the contract work as the WHD Administrator may find necessary for the performance of his or her duties with respect to the labor standards provisions referred to in this part. 29 C.F.R. § 5.7(c) and FAR 48 C.F.R. § 22.406.12.
  3. Also, semi-annual reports on compliance with and enforcement of the construction labor standards requirements of the DBA and CWHSSA are required from each contracting agency for the reporting periods October 1 through March 31 and April 1 through September 30. 29 C.F.R. § 5.7(b) and FAR 48 C.F.R. § 22.406.13. AAM No. 189 provides further guidance and includes the required reporting format.


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