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USDOL/OALJ Reporter

FACCHIANO CONSTRUCTION CO., INC., WAB No. 91-06 (WAB Aug. 29, 1991)


CCASE: DECISION OF THE WAGE APPEALS BOARD DDATE: 19910829 TTEXT: ~1 [1] WAGE APPEALS BOARD UNITED STATES DEPARTMENT OF LABOR WASHINGTON, D.C. In the Matter of: FACCHIANO CONSTRUCTION COMPANY, INC., a/k/a MICHAEL FACCHIANO CONCRETE WAB Case No. 91-06 CONSTRUCTION COMPANY, Contractor MICHAEL FACCHIANO, SR., Owner MICHAEL FACCHIANO, JR., Owner JOHN FACCHIANO, Owner BEFORE: Charles E. Shearer, Jr., Chairman Ruth E. Peters, Member Stuart Rothman, Senior Member DATED: August 29, 1991 DECISION OF THE WAGE APPEALS BOARD This case is before the Wage Appeals Board on the petitions of the Acting Administrator of the Wage and Hour Division and of Facchiano Construction Company, Inc. ("Facchiano Construction") for review of the September 27, 1990 decision and order (Attachment) of Administrative Law Judge ("ALJ") George [1] ~ [2] P. Morin on debarment issues. The Acting Administrator petitions for review of the ALJ's determination that the Facchiano firm should be debarred for 18 months rather than for the full three-year debarment period provided for in 29 C.F.R. 5.12(a)(1); the Acting Administrator also seeks review of the ALJ's determination that corporate officers Michael Facchiano, Sr., Michael Facchiano, Jr. and John Facchiano (collectively, "the Facchianos") should not be debarred. The Facchiano firm requests review of the ALJ's rulings on Facchiano Construction's claim preclusion defenses, and requests reversal of the ALJ's order debarring the firm. For the reasons stated below, the Board denies Facchiano Construction's petition for review, grants the Acting Administrator's petition, and orders that Facchiano Construction and the Facchianos be debarred for three years. I. BACKGROUND Facchiano Construction is a Pennsylvania corporation, primarily engaged in operation of a concrete contracting business in Pittsburgh, Pennsylvania. The corporate officers of Facchiano Construction are Michael Facchiano, Sr., president; and his two sons Michael Facchiano, Jr., secretary, and John Facchiano, treasurer. At the time that Michael Facchiano, Jr. joined the family business on a fulltime basis after completing his education, the annual gross revenue was $400,000 to $500,000, all but about 20% of which came from residential concrete work. Michael Facchiano, Jr. embarked on an effort to increase the amount of the business' commercial work. A principal element of this effort was bidding on federally funded or assisted projects. From 1982 to 1984, 70 to 75% of the annual revenues of from $1 million to $1.5 million came from federal projects. (ALJ's Decision ("ALJD") at 8). In the period prior to 1984, the business was the subject of three investigations for Davis-Bacon violations involving travel time, failure to pay overtime and misclassification of workers; the investigation results required restitution of approximately $2,800, $400 and $45, respectively (ALJD at 9). Despite these investigations, the ALJ stated (Id.), Michael Facchiano, Jr. embarked on a scheme to increase the company's revenue and thereby enhance his business stature in the eyes of his father. This involved the deliberate misclassification of employees, payment of less than prevailing wages required in the federally funded contracts and the failure to pay overtime.... The witness testified that other contractors were doing the same thing and he felt it was necessary for his father's company to follow suit in order to [2] ~3 [3] occasionally be the low bidder on the numerous contracts they bid on, and to grow as a company. Several contracts were awarded to Facchiano Construction between January 1, 1982, and September 30, 1984. All the contracts were funded in whole or in part through community development block grants administered by the Department of Housing and Urban Development ("HUD"). The contracts were subject to the labor standards provisions of the Housing and Community Development Act of 1974, as amended (42 U.S.C. [secs] 5310, 1440(g)) ("HCDA") (a Davis-Bacon Related Act). In 1984 the Inspector General's Office of the Department of Labor, in conjunction with the Federal Bureau of Investigation, investigated Facchiano Construction's performance under the contracts. The investigation disclosed that, in some instances, Facchiano Construction had failed to pay the applicable prevailing wage rates. The investigation also disclosed that the firm had submitted falsified certified payroll records, which showed higher wage rates than the rates that were actually paid. The payrolls were certified as correct and complete by Michael Facchiano, Jr., or John Facchiano. As a result of the investigation, Facchiano Construction paid $128,298.27 to 20 employees -- the amount due to the employees as prevailing wages and fringe benefits. As a further result of the investigation, a two-count criminal information was filed against the firm and Michael Facchiano, Jr., the corporation's secretary, charging them with mail fraud in violation of 18 U.S.C. [sec] 1341, for sending falsified certified payrolls through the mail. Both defendants pleaded guilty to the charges. On February 22, 1985, Michael Facchiano was sentenced to six months in prison, fined $2,000 and placed on probation for five years. Facchiano Construction also was fined $2,000. The fines were paid, and Michael Facchiano, Jr. served the six-month prison sentence. On May 15, 1985, HUD notified Michael Facchiano, Jr. and Facchiano Construction that it was considering debarring them from further participation in HUD programs for a three-year period pursuant to 24 C.F.R. 24.6(a)(9), and that they were temporarily suspended from participation in HUD programs pending a final decision on debarment. Briefs and documentary evidence were submitted by the parties to the HUD proceeding. On March 5, 1986, HUD's Board of Contract Appeals debarred Facchiano Construction and Michael Facchiano, Jr. from participation in HUD programs for 18 months. With credit given for the period of suspension while the debarment proceedings were pending, they were debarred until November 15, 1986. When the suspension took effect, Michael Facchiano, Jr. resigned his position as an officer of the corporation and ceased all managerial duties. He [3] ~4 [4] went to work for his father's business (Michael Facchiano Contracting), essentially as a foreman. (ALJD at 9). At the time of the hearing before the Department of Labor ALJ, Facchiano Construction was still in existence but was inactive, and had not taken on any work since the investigation began and Michael Facchiano, Jr. resigned his position in the corporation (Id. at 10). The only active business is the sole proprietorship, Michael Facchiano Contracting. Michael Facchiano, Sr. owns the business and equipment; he also owned the equipment from 1982 to 1984, when the corporation was the active business entity. Generally, the same employees who worked for the corporation are employed by the sole proprietorship. Michael Facchiano, Jr. testified that he was employed as a superintendent by the proprietorship, and is also involved in the bidding process, purchase of equipment, employee relations and general office procedures. John Facchiano is also involved in bidding. Michael Facchiano, Jr. further testified that the gross volume of the business was about $4 million 1987, $5.5 million in 1988, and $5 to $5.5 million in 1989. (Id.). On December 13, 1985, while the HUD matter was pending, the Acting Administrator of the Wage and Hour Division notified Facchiano Construction; Michael Facchiano, Sr.; Michael Facchiano, Jr.; and John Facchiano of the Department of Labor's intention to seek their debarment from all contracting with the Federal government for three years, pursuant to 29 C.F.R. 5.12(a)(1), for aggravated and willful Related Acts violations. On October 27, 1986, the matter was referred to the Office of Administrative Law Judges for a hearing. The Order of Reference alleged that Facchiano Construction and the Facchianos had committed aggravated and willful violations of the HCDA and the Contract Work Hours and Safety Standards Act, as amended (40 U.S.C. [sec] 327 et seq.) ("CWHSSA"). On February 12, 1987 Facchiano Construction and the Facchianos (with the exception of Michael Facchiano, Sr.) filed an injunctive action in the United States District Court for the Western District of Pennsylvania, seeking to stay the administrative proceedings on the ground that the debarment action was barred by the doctrines of res judicata and collateral estoppel. The parties entered into a stipulation of facts and filed cross-motions for summary judgment. A U.S. magistrate made findings in favor of the Department of Labor on the res judicata and collateral estoppel issues, and those findings were affirmed by a district court judge, who entered an order granting the Department's summary judgment motion. Facchiano v. United States Dep't of Labor, 108 Lab. Cas. (CCH) [par] 35,071 (W.D. Pa. 1987). On appeal, the Third Circuit affirmed the district court's denial of the request of the Facchianos and Facchiano Construction for injunctive relief, but remanded the claim preclusion issue for determination in the administrative proceedings. Facchiano v. United States Dep't of Labor, 859 F.2d 1163 (3d Cir. 1988), cert. denied, 490 U.S. 1097 (1989). [4] ~5 [5] II. THE ALJ'S DECISION AND ORDER A. Claim Preclusion On the res judicata and collateral estoppel question, the ALJ noted that the magistrate and district court had found determinative (1) the fact that the debarment by HUD extended to HUD projects only, while debarment by the Department of Labor would have government-wide effect; and (2) that the HUD debarment was based on the criminal conviction, while debarment by the Department of Labor would be based on the Davis-Bacon violations themselves (ALJD at 13). The ALJ stated that he agreed with the magistrate and the district court that these factors "sufficiently distinguish the proceedings to defeat the res judicata and collateral estoppel defences." (Id.). B. Debarment of the Facchianos The ALJ stated that the Facchianos "appear resigned to entry of an order debarring Facchiano Construction Company, Inc., as well they might, in view of the fact that such an order would have little if any effect on the family's operation, given the inactive status of the corporation and the robust growth of Michael Facchiano Contracting since the era of the criminal proceedings and the HUD debarment action" (ALJD at 13). The ALJ acknowledged that "to be of any real effect in insuring future compliance with the requirements of the Acts and regulations governing their federal contract work, a debarment would have to be directed against Michael Facchiano and his two sons" (Id.). However, the ALJ accepted the Facchianos' argument that 29 C.F.R. 5.12(a)(1), which provides for debarment for "aggravated or willful" Related Acts violations, provides only for debarment of a "contractor or subcontractor" and not for debarment of individual corporate officers. Accordingly, the ALJ determined that a debarment order should be directed against only the corporation -- Facchiano Construction (ALJD at 15). C. Debarment of Facchiano Construction The ALJ found the conclusion "inescapable" that Facchiano Construction, by failing to pay the prevailing wage and overtime compensation and by falsifying payroll records to make it appear as if the prevailing wage and overtime rates had been paid, had committed aggravated and willful violations of the HCDA and the CWHSSA (ALJD at 15). However, the ALJ further stated that Facchiano Construction had already been debarred for 18 months from participating in HUD [5] ~6 [6] contracts. "Since the corporation has not been shown to have bid on any projects other than those administered by HUD," the ALJ stated, "a further 18-month debarment would appear to be appropriate in the circumstances . . . ." Accordingly, the ALJ ordered that Facchiano Construction be debarred for 18 months, rather than the full three-year debarment period requested by the Acting Administrator. III. DISCUSSION A. Claim Preclusion Facchiano Construction contends that the doctrine of res judicata operates to bar the Department of Labor from undertaking this debarment proceeding. /FN1/ Like both the district court and the ALJ, however, the Board rejects that contention. Under the res judicata doctrine, a final judgment on the merits bars further claims by parties or their privies on the same cause of action. As noted by the Solicitor (Response, at pp. 5-7), the critical issue to be examined concerning the application of res judicata to governmental parties is the authority delegated to an agency by Congress to bind the government in a final adjudication. Accordingly, the starting point of our analysis is the authority granted to the Department of Labor by the President and Congress to administer the labor standards applicable to federally funded or assisted construction projects. That authority is clear, for as the Board recently noted, "In the interests of government-wide consistency and the guidance of contracting officers throughout the United States, Congress and the Truman Administration enacted Reorganization Plan No. 14 of 1950 (5 U.S.C. App.), wherein the Secretary of Labor was given the authority and responsibility to achieve uniformity and consistency in Davis-Bacon administration." AT&T Communications, WAB Case No. 91-09 (Aug. 21, 1991). Indeed, the two Related Acts that are involved in this case -- the HCDA (at 42 U.S.C. [secs] 5310, 1440(g)) and the CWHSSA (at 40 U.S.C. [sec] 330(d)) -- make explicit reference to the authority of the Secretary of Labor under Reorganization Plan No. 14. [6] /FOOTNOTE1/ As noted by the Solicitor (Acting Administrator's Response to Petition for Review, at p. 4 n.2), Facchiano Construction's arguments before the Board appear to be confined to the res judicata issue, and do not appear to address the application of the collateral estoppel doctrine to this matter. To the extent that application of collateral estoppel remains at issue, the Board's discussion of Facchiano Construction's res judicata affirmative defense at pp. 6-8, infra, also applies to the collateral estoppel issue. [6] ~7 [7] The Reorganization Plan explicitly vests the Secretary with the authority to "prescribe appropriate standards, regulations, and procedures" to be observed by federal agencies, and to "cause to be made by the Department of Labor, such investigations, with respect to compliance and enforcement of such labor standards, as he deems desirable." In carrying out this responsibility for administration and enforcement of the labor standards requirements of the Davis-Bacon and Related Acts, the Department of Labor has promulgated 29 C.F.R. 5.12, which provides for government-wide debarment for "aggravated or willful" violations of the Related Acts. See Janik Paving & Construction, Inc. v. Brock, 828 F.2d 84 (2d Cir. 1987) (upholding Secretary of Labor's debarment authority for Related Acts violations); Copper Plumbing & Heating Co. v. Campbell, 290 F.2d 368 (D.C. Cir. 1961) (same). Under the statutory and regulatory scheme for Davis-Bacon administration, then, it is the Secretary of Labor, and not HUD, who has primary responsibility for enforcing the labor standards requirements of Related Acts such as the HCDA and the CWHSSA and for determining whether government-wide debarment is warranted for violations of those requirements. The authority delegated to the Secretary of Labor by Congress and the President to resolve such matters would seem to defeat Facchiano Construction's contention that res judicata principles preclude the Department of Labor's debarment proceeding. In addition, we take note of the same two points that were relied upon by the district court and the ALJ in turning aside Facchiano Construction's res judicata and collateral estoppel arguments. Namely, the district court and the ALJ determined that the following two points sufficiently differentiated the HUD and Department of Labor proceedings: (1) the HUD debarment applied to HUD projects only, whereas debarment by the Department of Labor would have government-wide effect; and (2) the focal point of the HUD debarment was the criminal conviction of Facchiano Construction and Michael Facchiano, Jr., whereas debarment by the Department of Labor would be based on the labor standards violations themselves. We agree that these are critical distinctions. First, these distinctions illustrate what we have discussed above -- that is, that the Secretary of Labor has the primary responsibility for administering and enforcing the labor standards requirements of the Davis-Bacon and Related Acts. Second, these distinctions demonstrate that the HUD and Department of Labor proceedings simply do not display the identity of cause of action that is required for application of the res judicata doctrine. Finally, we agree with the Solicitor (Acting Administrator's Response to Petition for Review, at pp. 19-20) that Facchiano Construction's argument that a government-wide debarment imposed by the Department of Labor would subject the firm to a second period of ineligibility from participation in HUD contracts is not germane to the res judicata issue. Indeed, the Facchiano family business simply switched its active operations to a sole proprietorship, continued to seek [7] ~8 [8] and obtain HUD contracts, and was not effectively debarred at all. Thus, neither the firm nor its principals have any basis whatsoever for making an equitable argument that they would be "harmed" by undergoing a second period of ineligibility from HUD contracts. B. Debarment of the Facchianos As noted above, debarment for violation of the Davis-Bacon Related Acts is governed by 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]. In his decision and order, the ALJ recognized that "to be of any real effect in insuring future compliance with the requirements of the Acts and regulations governing their federal contract work, a debarment would have to be directed against Michael Facchiano and his two sons" (ALJD at 13). Nevertheless, the ALJ accepted the Facchianos' contention that Section 5.12(a)(1) authorizes only debarment of a "contractor or subcontractor" and not of individual corporate officers. The Board concludes that the ALJ's reading of 29 C.F.R. 5.12 is erroneous, and must be reversed. The gist of the Facchianos' argument is that 29 C.F.R. 5.12(a)(2), regarding debarment for Davis-Bacon Act violations, specifically refers to placement of the "names of contractors or subcontractors or their responsible officers" (emphasis supplied) on the ineligibility list, whereas 29 C.F.R. 5.12(a)(1) does not expressly mention debarment of corporate officers for Related Acts violations. /FOOTNOTE2/ In our view, Facchiano Construction's argument that the "plain [8] /FOOTNOTE2/ 29 C.F.R. 5.12(a)(2) states: In cases arising under contracts covered by the Davis- Bacon Act, the Administrator shall transmit to the Comptroller General the names of [8] [FOOTNOTE 2 CONTINUED ON PAGE 9] ~9 [9] the contractors or subcontractors and their responsible officers, if any (and any firms in which the contractors or subcontractors are known to have an interest), who have been found to have disregarded their obligations to employees, and the recommendation of the Secretary of Labor or authorized representative regarding debarment. The Comptroller General will distribute a list to all Federal agencies giving the names of such ineligible person or firms, who shall be ineligible to be awarded any contract or subcontract of the United States or the District of Columbia and any contract or subcontract subject to the labor standards provisions [of the Davis-Bacon and Related Acts]. [END FOOTNOTE 2] [9] [9] language" of the regulation demonstrates that the Department of Labor lacks authority to debar corporate officers under Section 5.12(a)(1) is defective for several reasons. The plain terms of that section, referring to debarment of "any contractor or subcontractor" found to have committed "aggravated or willful" violations of the Related Acts, do not begin to suggest to us that the debarment of corporate officers of contractors or subcontractors is precluded by the regulation. This conclusion is supported by an examination of other sections of 29 C.F.R. 5.12 -- including 29 C.F.R. 5.12(b)(1), which describes the parties to be afforded hearings on debarment issues, and which applies to both Sections 5.12(a)(1) and (a)(2). The regulation provides, in Section 5.12(b)(1): [W]henever as a result of an investigation . . . the Administrator finds reasonable cause to believe that a contractor or subcontractor has committed willful or aggravated violations of the labor standards provisions of [the Related Acts], or has committed violations of the Davis-Bacon Act which constitute a disregard of the obligations to employees or subcontractors under section 3(a) thereof, the Administrator shall notify . . . [*] the contractor or subcontractor and its responsible officers [*], if any (and any firms in which the contractor or subcontractor are known to have a substantial interest), of the finding. The Administrator shall afford such [*] contractor or subcontractor and any other parties notified [*] an opportunity for a hearing as to whether debarment action should be taken under paragraph (a)(1) of this section or section 3(a) of the Davis-Bacon Act. [*] (Emphasis supplied.) [*] See also 29 C.F.R. 6.2(d) (setting forth the definition of "respondent" in administrative proceedings enforcing the labor standards provisions of the Davis-Bacon and Related Acts and the Service Contract Act). In addition, we note that 29 C.F.R. 5.12(c), which applies only to Related Acts debarments and which sets forth a procedure for removal from the ineligibility list after serving at least six months on the list, provides that "[a]ny [*] person or firm [*] debarred under [sec] 5.12(a)(1) may in writing request removal from the debarment list after six months from the date of publication by the Comptroller General of such [*] person [9] ~10 [10] or firm's name [*] on the ineligible list." (Emphasis supplied.) In short, the terms used in these other sections of the regulation support the interpretation offered by the Acting Administrator of the language used in 29 C.F.R. 5.12(a)(1). It is also important to keep in mind the purpose underlying the Department of Labor's Related Acts debarment regulation -- that is, to "effectuat[e] compliance, and further[] the public policy represented by the labor acts." A. Vento Construction, WAB Case No. 87-51, (Oct. 17, 1990) (29 WH 1685), at p. 6, quoting Copper Plumbing and Heating Co. v. Campbell, supra, 290 F.2d at 372. See also Brite Maintenance Corp., WAB Case No. 87-07 (May 12, 1989), at p. 5. As the ALJ acknowledged in the instant case, a debarment that is not directed against the principals of an ineligible firm may well be ineffective as a tool for achieving compliance with labor standards requirements. Absent any indication that the Department of Labor drafted the Related Acts debarment mechanism with the absurd intention of robbing that mechanism of its effectiveness, and absent any express language in the regulation which would preclude debarment of responsible officials, the Board adheres to its consistent precedent which permits debarment of responsible officials for aggravated or willful Related Acts violations. See, e.g., Brite Maintenance, supra; Marc S. Harris, Inc., WAB Case No. 88-40 (Mar. 28, 1991); Coastal Energy, Inc., WAB Case No. 89-07 (June 26, 1991). /FN3/ C. The Length of the Debarment Period As noted above, 29 C.F.R. 5.12(a)(1) provides for a debarment period "not to exceed three years" for "aggravated or willful" violations of the Related Acts. The investigation of Facchiano Construction's performance on the contracts that were subject to the labor standards requirements of the HCDA and the CWHSSA disclosed that the firm submitted falsified certified payrolls; furthermore, as a result of that investigation the firm paid $126,298.27 in back wages to 20 employees. It is established under Board precedent that falsification of certified payrolls is "aggravated or willful" conduct warranting debarment [10] /FOOTNOTE3/ Facchiano Construction also argues that the Davis-Bacon Act expressly refers in section 3(a) to placement of "persons or firms" (emphasis supplied) on the ineligibility list, whereas Related Acts such as the HCDA and the CWHSSA are somehow limited to contractors and subcontractors. However, the authority of the Department of Labor to establish a regulatory debarment mechanism for Related Acts violations has been upheld (see A. Vento Construction, supra, at pp. 5-6 and authority cited therein), and the Related Acts simply do not contain any reference precluding the debarment of responsible officials. See also, Marc S. Harris, Inc., supra, at p. 2 (noting the entry of a guilty plea by the individual owner of a corporate contractor to a violation of 40 U.S.C. [sec] 328, which sets forth CWHSSA's overtime compensation requirements, and [sec] 332, which provides that "any contractor or subcontractor" who commits an intentional violation of CWHSSA shall be guilty of a misdemeanor). [10] ~11 [11] under Section 5.12(a)(1). See, e.g., Marc S. Harris, supra; A. Vento Construction, supra, at p. 15, and cases cited therein at p. 7 n.4. The Board has explained that "[f]alsification of certified payrolls is itself deliberate conduct that violates law and regulation; furthermore, submission of falsified payrolls raises a prima facie case that any accompanying underpayment of wages or overtime compensation was deliberately undertaken." Gaines Electric Service Company, Inc., WAB Case No. 87-48 (Feb. 12, 1991), at p. 4. The ALJ in this case failed to debar the three principals of the Facchiano firm at all, and ordered that Facchiano Construction be debarred for 18 months rather than the full three-year debarment period permitted by 29 C.F.R. 5.12(a)(1). However, the Board held in A. Vento Construction (at p. 14) 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. See also A. Vento Construction, at p. 18 (Member Rothman, concurring) (falsification of payrolls warrants a three-year debarment period). The Board finds no extraordinary circumstances present here. The basis stated by the ALJ for shortening the debarment period to 18 months was the firm's previous debarment for participation in HUD contracts. The obvious infirmity in the ALJ's approach, however, is the fact that there simply was no effective debarment of the Facchiano family business and its principals from seeking or receiving contracts on HUD projects. See pp. 7-8, supra, and ALJD at 9-10, 13; see also, A. Vento Construction, at p. 16. Finally, we disagree with the contention that this matter should be remanded to the ALJ for findings on defenses and mitigating factors applicable to Michael Facchiano, Sr. For the reasons discussed above, a three-year debarment period is warranted for Facchiano Construction and its corporate officers (Michael Facchiano, Sr. is president of Facchiano Construction). Furthermore, Board precedent does not allow a responsible company official to avoid debarment by claiming that the labor standards violations were committed by agents or employees of the firm. See, e.g., Marc S. Harris, Inc., supra, at p. 4, and cases cited therein. IV. ORDER It is ordered that Facchiano Construction Company, Inc.; and corporate officers Michael Facchiano, Sr., president; Michael Facchiano, Jr., secretary; and John Facchiano, treasurer; shall be ineligible, pursuant to 29 C.F.R. 5.12(a)(1), [11] ~12 [12] 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. /FN4/ BY ORDER OF THE BOARD: Charles E. Shearer, Jr., Chairman Ruth E. Peters, Member ____________________________ Gerald F. Krizan, Esq. Executive Secretary DISSENTING OPINION OF SENIOR MEMBER ROTHMAN I dissent from the part of the majority decision which changes the Administrative Law Judge's 18-month debarment decision to three years. The ALJ concluded, "Since the corporation has not been shown to have been on any projects other than those administered by HUD, a further 18-month debarment would appear to be appropriate in the circumstances." HUD debarred Facchiano Construction and Michael Facchiano, Jr., from participating in HUD programs for 18 months. During that 18-month period it appears that the Facchiano enterprise continued to secure HUD contracts. However, I would not turn back the clock to pick up what may be a breakdown in HUD enforcement. In this case that matter would best be left to HUD to straighten out internally. Nor would I start the clock running again with a new full three-year debarment, thus making the total debarment period with respect to HUD work four and a half years, not three years. The 18-month period should apply to all three Facchiano principals, the father and two sons. I do not see the possibility of their being relieved of debarment during the 18-month period. [12] /FN4/ 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). [12] ~13 [13] I would affirm the decision of the Administrative Law Judge imposing an 18-month debarment. If after that time any of the principals should secure additional work and continue the practices that led to this debarment, he could be quickly debarred for an additional three years and other consequences could be considered. [13]