has been used verbatim in at least nine other cases, it seems appropriate to state our reasons for believing that the basis of the decision does not fully reflect the policy or letter of the legislation. It appears to us proper, in construing the provisions of the Davis-Bacon Act, to consider the several provisions as a whole. After stating that advertised specifications shall contain a schedule of minimum wages to be paid various classes of mechanics as predetermined by the Secretary of Labor, the act requires that every contract based upon these specifications shall contain a stipulation "1. That the contractor shall pay all mechanics and laborers unconditionally and not less often than once a week, the full amounts acerned at time of payment computed at wage rates not less than those stated in the advertised specifications, regardless of any contractual relationship which may de alleged to exist between the contractor * and such laborers and mechanics 2. That there may be withheld from the contractor so much of accrued payments as may be considered necessary by the contracting officer to pay to laborers and mechanics employed by the contractor or any subcontractor on the work the difference between the rates of wages required by the contract to be paid laborers and meebanies on the work, and the rates of wages received by such laborers and mechanics and not refunded to the contractor, subcontractor, or their agents.” Section 3 (a) of the act then states: "The Comptroller Geveral of the United States is hereby authorized and directed to pay directly to laborers and mechanics from any accrued payments withheld under the terms of the contract any wages found to be due laborers and Mechanics pursuant to thS KA The provision for withheld ng finds "considered necessary by the contracting officer" is thus seem to offer merely the basis upon which the Comptroller General is directed to pay dirvedly to`aberers and mechanics "any wages found to be due" them in pursuance of the contractor's eèligation to pay “the full amounts goonwod at time of perment.* It, Derefore, sens dear that this legislation was intended to protect not only the laborer or mechanic who had received part of The constient to which be was entitled, but also the worker whose position was even worse because de had received none of the wages due him. THIS CONSTRUCCIon is tether supported by a consideration of the arithmetical formula for decerm ung the amounts to be withheld and paid directly to the employees It IN ESC WORLD Being that even by the arithmetical formula, a suna meus vobing wil produce a remainder, this technically representing a "d Terence But it is not west to assume that the legislature was concerned with such techy ve view 9 með g 2 sting out the "kick-back racket." That This was the prices grew augs te eta nate s evidenced not only by the ave boateigs du, sise by the committee's change of the first diate from “che difference between the rates of wages required to be paid and the races A Wigen Armacy mand” to the diference between the rates of Wagon rogue toď dy dhe overact to be paid and the rates of sad me nenadci 30 the contraCTI to sum by three sample if ISCTRDOUS Would seem to support the reasoning We are WA? The provisions for direct administrative relief should be liberally construed since individual workmen are seldom prepared or willing to resort to formal litigation. In fact, it was brought out in the Senate Hearings that attorneys advised exploited workmen that they "stay out of court." Denying administrative relief to these claimants and reference to their rights under the Miller A Act would thus run contrary to the very purpose of the Davis-Bacon Act. complete explanation of the reason why Congress required direct payment by the Comptroller General to the claimant is the experience under the former Davis-Bacon Act. Under that act, the Board of Labor Review of the Federal Emergency Administration of Public Works ordered a contractor to pay the workers the difference between the $0.80 paid for "apprentice" and the $1.10 rate required under the "carpenter" classification. The contractor offered said sums to the workmen; but on this threat to blackball every man who accepted it, none took the money. It has been asserted that from an administrative standpoint the payment of some amount of wages is necessary to a conclusive determination that the claimant is in fact an employee, but it would seem that the expert investigators of the contracting agency could supply reliable evidence on this point. And in the actual cases, the claimants were admitted by all parties to have been employed as laborers or mechanics by the contractor. For the reason that laborers and mechanics are hardly able to do more than present the facts of their cases and since the decisions of the Comptroller General are so important in setting the standards of enforcement for contractors. workers, and the numerous agencies associated in this effort, it is urged that the General Accounting Office reexamine the basis of these decisions. A member of this office will be very glad to discuss this question with you in greater detail, if you believe that would be helpful. So far as here pertinent the Davis-Bacon Act, as amended August 30, 1935, 49 Stat. 1011, provides as follows: That the advertised specifications for every contract in excess of $2,000, to which the United States or the District of Columbia is a party, for construction, alteration, and/or repair, including painting and decorating, of public buildings or public works of the United States or the District of Columbia within the geographical limits of the States of the Union or the District of Columbia, and which requires or involves the employment of mechanics and/or laborers shall contain a provision stating the minimum wages to be paid various classes of laborers and mechanics which shall be based upon the wages that will be determined by the Secretary of Labor to be prevailing for the corresponding classes of laborers and mechanics employed on projects of a character similar to the contract work in the city, town, village, or other civil subdivision of the State in which the work is to be performed, or in the District of Columbia if the work is to be performed there; and every contract based upon these specifications shall contain a stipulation that the contractor or his subcontractor shall pay all mechanics and laborers employed directly upon the site of the work, unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account, the full amounts accrued at time of payment, computed at wage rates not less than those stated in the advertised specifications, regardless of any contractual relationship which may be alleged to exist between the contractor or subcontractor and such laborers and mechanics, and that the scale of wages to be paid shall be posted by the contractor in a prominent and easily accessible place at the site of the work; and the further stipulation that there may be withheld from the contractor so much of accrued payments as may be considered necessary by the contracting officer to pay to laborers and mechanics employed by the contractor or any subcontractor on the work the difference between the rates of wages required by the Contract to be paid laborers and mechanics on the work and the rates of wages received by such laborers and mechanics and not refunded to the contractor, subcontractors, or their agents. SEC. 2. Every contract within the scope of this act shall contain the further provision that in the event it is found by the contracting officer that any laborer or mechanic employed by the contractor or any subcontractor directly on the site of the work covered by the contract has been or is being paid a rate of wages less than the rate of wages required by the contract to be paid, as 470350m-42--15 aforesaid, the Government may, by written notice to the contractor, terminate his right to proceed with the work or such part of the work as to which there has been a failure to pay said required wages and to prosecute the work to completion by contract or otherwise, and the contractor and his sureties shall be liable to the Government for any excess costs occasioned the Government thereby. SEC. 3. (a) The Comptroller General of the United States is hereby authorized and directed to pay directly to laborers and mechanics from any accrued payments withheld under the terms of the contract any wages found to be due laborers and mechanics pursuant to this act; and the Comptroller General of the United States is further authorized and is directed to distribute a list to all departments of the Government giving the names of persons or firms whom he has found to have disregarded their obligations to employees and subcontractors. No contract shall be awarded to the persons or firms appearing on this list or to any firm, corporation, partnership, or association in which such persons or firms have an interest until three years have elapsed from the date of publication of the list containing the names of such persons or firms. (b) If the accrued payments withheld under the terms of the contract, as aforesaid, are insufficient to reimburse all the laborers and mechanics with respect to whom there has been a failure to pay the wages required pursuant to this act, such laborers and mechanics shall have the right of action and/or of intervention against the contractor and his sureties conferred by law upon persons furnishing labor or materials, and in such proceedings it shall be no defense that such laborers and mechanics accepted or agreed to accept less than the required rate of wages or voluntarily made refunds. [Italics supplied.] In the application of said act to particular cases this office has disallowed claims of laborers and mechanics for payment, from funds withheld by the contracting officer, of wages apparently owed by the contractor, when it appeared no wages had been paid to such persons by the contractor during the period involved, as distinguished from cases wherein the contractor had made payments to laborers and mechanics but at wage rates less than those required by the contract to be paid, or cases wherein proper wage rates had been paid but refund of a portion thereof had been required by the contractor, etc. The view of the Solicitor of the Department of Labor appears to be that the cases are indistinguishable, within the meaning of the Davis-Bacon Act, as amended, and that this office should make direct payment, from funds withheld, to laborers and mechanics who had received no amounts from contractors as well as to those who had received payments at lower rates of wages than those required by the contract to be paid or who had received proper rates but had been required to refund a portion thereof. That the provisions of the Davis-Bacon Act, as amended, are not free from ambiguity is conceded, but this matter was carefully considered at the time the settlements in question issued and it was concluded, in the light of the language employed in the act and what appeared to be the intention of the Congress, that this office was not authorized to make payments direct to laborers and mechanics in those cases where the alleged dereliction of the contractor had been not the payment of a wage rate less than that required by the contract but a failure to pay any amount to such laborers and mechanics. It will be observed that the payments which the act authorizes this office to make must be made "from any accrued payments withheld under the terms of the contract." Contracts subject to and incorporating the provisions of the Davis-Bacon Act, as amended, authorize the withholding from accrued payments of only "the difference between the rates of wages required by the contract to be paid laborers and mechanics on the work and the rates of wages received by such laborers and mechanics and not refunded to the contractor, subcontractors, or their agents." While it may be, as urged by the Solicitor, that the failure of a contractor to pay any amount of wages "technically" represents a "difference," it would not appear to represent a "difference" within the meaning of the act, as such a construction would not be consonant with the words "rates of wages received," which clearly indicate that some rate of wage must have been received. There was considered the legislative background of the DavisBacon Act, as amended, in order clearly to ascertain the intent of the Congress, but nothing was found indicating an intention of the Congress to protect laborers against the refusal or failure of contractors to pay them any wages for labor performed, except to the extent of their remedy against the contractor's bond. See the act of August 24, 1935, 49 Stat. 793. And, of course, unpaid laborers and mechanics may enforce their valid claims against contractors in local courts. The entire legislative history of the said act indicates that the Congress was concerned primarily with the maintenance of wage rates and that it was the intention of the Congress to require the payment of prevailing wage rates and to protect laborers and mechanics against an unscrupulous contractor who might, by reason of their economic necessity, require them to agree to work for a lesser rate or to refund a portion of the amount paid them at proper rates, under such circumstances that they might not otherwise be able legally to enforce their claims for the balance due computed at the prevailing rates. Furthermore, there should not be overlooked the fact that it is the natural right of a contractor to select its employees, to negotiate with them as to the conditions of their employment and the compensation to be paid therefor, to insist upon a judicial determination of elaims of employees and to present, in court, any legal defense thereto that it may have. While this right is subject to the supreme power of the sovereign, in the exercise of its constitutional authority, to legislate with respect to such matters or to prescribe, by virtue of a statute carried into a contract and thereby made a matter of agreement between a contractor and the Government, the conditions upon which it will permit work to be done on its behalf, Atkin v. Kansas, 191 U. S. 207, it is a settled principle of law that statutes in deroga tion of natural rights are to be strictly construed and are not to be extended by construction to matters not clearly and expressly included therein, particularly where such statutes are penal in nature. Such principle would appear to be equally applicable in the case of a contract under which a contractor, in effect, relinquishes such natural rights. Also, it is to be noted that the language used in these contracts incorporating the provisions of the Davis-Bacon Act, as amended, is that of the Government and not the contractor. It is well settled that where a contract is ambiguous it will be construed most strongly against the party employing the words concerning which doubt arises. Bijur Motor Lighting Co. v. Eclipse Machine Co., 237 Fed. 89. But, aside from these considerations and notwithstanding any justification there may be from an administrative standpoint for giving a liberal construction to the act here involved, this office cannot, in performing its duties under the said act, disregard the legal rights of a contractor and thereby jeopardize the interests of the United States. It must be apparent that were this office to adjudicate claims of laborers and mechanics to whom no wages had been paid and use funds otherwise due the contractor to make payments based upon such adjudications-a procedure not clearly authorized by the act-it well might result in a direct loss to the Government by reason of eventually having to pay the amounts involved to the contractor notwithstanding the previous payments made by the Government to the laborers. Under the circumstances, I do not feel warranted in adopting the construction of the act urged by your Solicitor. (B-19959) COMPENSATION-WITHIN-GRADE PROMOTIONS-POST OFFICE DEPARTMENT CUSTODIAL EMPLOYEES The salary rates of custodial employees of the Post Office Department are required to be fixed in accordance with the Classification Act of 1923, as amended, and, therefore, the act of August 1, 1941, providing a uniform within-grade salary-advancement plan for employees whose salary rates are fixed under the Classification Act, is applicable to such employees. Acting Comptroller General Elliott to the Postmaster General, September 5, 1941: I have your letter of August 27, 1941, as follows: Your decision is requested as to whether the Automatic Promotion Act, Public, No. 200, known as the Ramspeck Act, applies to any of the classes of custodial employees assigned to duties in connection with the operation and maintenance of public buildings under the jurisdiction of the Post Office Department. As bearing upon the question mention is made of your decisions of December 11, 1934, and October 5, 1936, and to the statutes codified as section 832 of title 39, United States Code, 1934 edition, employees of the custodial service (except charwomen and charmen) being by such legislation placed upon the 40-hour week basis. |