987 F.

2d 206
61 USLW 2574, 124 Lab.Cas. P 35,782,
39 Cont.Cas.Fed. (CCH) P 76,542,
1 Wage & Hour Cas.2d (BNA) 468

FACCHIANO CONSTRUCTION COMPANY, INC., Michael

Facchiano,
Sr., Michael Facchiano, Jr., and John Facchiano, Appellants,
v.
The UNITED STATES DEPARTMENT OF LABOR, The
Secretary of
Labor Lynn Martin, in her official capacity, John R. Fraser,
Acting Administrator, Wage and Hour Division, in his
official capacity, The Comptroller General of the United
States of America, Robert L. Clarke, in his official
capacity, Appellees.
No. 92-3212.

United States Court of Appeals,

Third Circuit.
Argued Nov. 2, 1992.
Decided March 8, 1993.

Frederick J. Francis (argued), Meyer, Unkovic & Scott, Pittsburgh, PA,

for appellants, Facchiano Const. Co., Michael Facchiano, Sr., Michael
Facchiano, Jr., John Facchiano.
William J. Stone, Joan Brenner (argued), U.S. Dept. of Labor, Paul J.
Brysh, Office of U.S. Atty., Pittsburgh, PA, for appellees.
Before: SLOVITER, Chief Judge, STAPLETON and LAY * , Circuit
Judges.
OPINION OF THE COURT
LAY, Senior Circuit Judge.

Facchiano Construction Company, Inc., Michael Facchiano Jr., Michael

Facchiano Sr. and John Facchiano appeal the order of the district court1
debarring them from contracting with the federal government for three years
pursuant to 29 C.F.R. 5.12(a)(1) (1986). Our review of this matter is plenary.
General Comm. Of Adjustment, United Transp. Union v. CSX R.R. Corp., 893
F.2d 584, 589 (3d Cir.1990). We now affirm in part and vacate and remand in
part.

I. BACKGROUND
2

Between 1982 and 1984, Facchiano Construction Company had been paying
wages below prevailing standards for work done on HUD contracts in violation
of the Housing and Community Development Act of 1974, 42 U.S.C. 5310
(1988).2 Following a criminal investigation by the Department of Labor (DOL),
Michael Facchiano, Jr., the company secretary, pled guilty to violations of mail
fraud or sending falsified payrolls through the mail pursuant to 18 U.S.C. 1341
(1988) and was sentenced to six months imprisonment.3 The Department of
Housing and Urban Development (HUD) then filed an administrative complaint
against the Company and Michael Facchiano, Jr. seeking to debar them from
participating in HUD funded programs pursuant to 24 C.F.R. 24.6 (1985). On
March 5, 1986, HUD's Board of Contract Appeals ordered the debarment of the
Company and Michael Facchiano, Jr. from participation in HUD programs for
18 months. With credit for suspension already served, the debarment period
ended November 15, 1986.

While the HUD debarment proceeding was pending, DOL commenced its own
proceeding to debar the Company, Michael Facchiano, Sr., Michael Facchiano,
Jr. and John Facchiano from contracting with the Federal Government as a
whole pursuant to 29 C.F.R. 5.12(a)(1) (1986). The Facchianos sought
injunctive relief in district court to stay the administrative proceedings on the
ground that DOL's debarment action was precluded by principles of res judicata
and collateral estoppel by reason of the HUD disbarment. The district court
granted summary judgment for DOL, holding that res judicata and collateral
estoppel did not apply. On appeal, this court reversed the order granting
summary judgment on the issue of whether res judicata and collateral estoppel
applied to bar DOL's debarment proceeding. Facchiano v. United States Dep't
of Labor, 859 F.2d 1163, 1167 (3d Cir.1988), cert. denied, 490 U.S. 1097, 109
S.Ct. 2447, 104 L.Ed.2d 1002 (1989). This court remanded this issue to be
determined initially at a DOL administrative hearing. Id.

The hearing was held January 18, 1990 before Administrative Law Judge,
George P. Morin. The ALJ ruled that res judicata and collateral estoppel did not

bar DOL's proceeding, but that only the Company could be debarred, not the
individuals. The ALJ ordered that the Company be debarred for 18 months.
The Wage Appeals Board reversed the ALJ and ruled that both the Company
and the individuals should be debarred for a period of three years.
5

The Facchianos once again appealed the Board's ruling to the district court. The
district court granted summary judgment to DOL finding that the Wage
Appeals Board's debarment of the Plaintiffs for three years was within its
statutory authority under 29 C.F.R. 5.12(a)(1). It also upheld the Board's
determination that res judicata and collateral estoppel were not applicable.
Plaintiffs once again appeal to this court.

II. DISCUSSION
A. Executive Order No. 12549 4
6

Executive Order No. 12549 provides for government-wide debarment and

suspension. On February 18, 1986, President Reagan ordered:

7 the authority vested in me as President by the Constitution and laws of the

By
United States of America, and in order to curb fraud, waste, and abuse in Federal
programs, increase agency accountability, and ensure consistency among agency
regulations concerning debarment and suspension of participants in Federal
programs, it is hereby ordered that:
8
Section
1. (a) To the extent permitted by law and subject to the limitations in Section
1(c), Executive departments and agencies shall participate in a system for debarment
and suspension from programs and activities involving Federal financial and
nonfinancial assistance and benefits. Debarment or suspension of a participant in a
program by one agency shall have government-wide effect.
9

51 Fed.Reg. 6370 (1986) (emphasis added). In their supplemental brief,

plaintiffs assert that because President Reagan issued Executive Order 12549
on February 18, 1986 and HUD's debarment order was issued March 15, 1986,
the failure of DOL to give government-wide effect to the HUD debarment
precludes DOL from now attempting to impose the same penalty by debarring
the Facchianos on a government-wide basis.

10

We conclude that DOL is not precluded by reason of the Executive Order from
debarring the Facchianos from all government contracts. Generally, there is no
private right of action to enforce obligations imposed on executive branch
officials by executive orders. In Independent Meat Packers Ass'n v. Butz, 526

F.2d 228, 236 (8th Cir.1975), cert. denied, 424 U.S. 966, 96 S.Ct. 1461, 47
L.Ed.2d 733 (1976), the Eighth Circuit held that "Executive Order No. 11821
was intended primarily as a managerial tool for implementing the President's
personal economic policies and not as a legal framework enforceable by private
civil action." Id. The D.C. Circuit has held that executive orders without
specific foundation in congressional action are not judicially enforceable in
private civil suits. See In re Surface Mining Regulation Litig., 627 F.2d 1346,
1357 (D.C.Cir.1980) (Executive Order No. 11821 and OMB Circular No. A107 provide no basis for overturning the interim regulations); Manhattan-Bronx
Postal Union v. Gronouski, 350 F.2d 451, 456-57 (D.C.Cir.1965), cert. denied,
382 U.S. 978, 86 S.Ct. 548, 15 L.Ed.2d 469 (1966).
11

The purpose of Executive Order No. 12549 is "to curb fraud, waste, and abuse
in Federal programs, increase agency accountability, and ensure consistency
among agency regulations concerning debarment and suspension...." The Order
was intended to be an internal housekeeping measure or "managerial tool"
mandating government efficiency. Plaintiffs have not shown that the order was
designed for their benefit. Cf. Independent Meat Packers Ass'n, 526 F.2d at
236. Thus, we conclude that Executive Order 12549 does not constitute a basis
to challenge the DOL government-wide debarment order.

12

Even if the plaintiffs could challenge DOL's debarment order on the basis of
Executive Order No. 12549, we find that the executive order did not become
effective until well after DOL had begun its proceedings.5 It is clear from the
language of the executive order that it was not intended to be self-executing, but
would be dependent upon the issuance of guidelines by the Office of
Management and Budget (OMB) and subsequent implementing regulations by
the agencies.6 OMB issued "Guidelines for Nonprocurement Debarment and
Suspension" on May 29, 1987. See 52 Fed.Reg. 20360-69 (May 29, 1987).
After an extended notice and comment period, twenty-eight agencies published
a final common rule on "government wide nonprocurement suspensions and
debarment" in May 1988. See 53 Fed.Reg. 19160 et seq (May 26, 1988). We
conclude that the DOL properly continued operating according to its existing
regulations while awaiting from OMB direction that it was governed by the
Executive Order and guidance as to government-wide minimum due process
procedures.
B. Res Judicata and Collateral Estoppel

13

The Facchianos assert that DOL's debarment order is precluded because DOL
and HUD are in "privity" for res judicata purposes. They contend that DOL and
HUD, both being Cabinet departments, are subject to direct coordination and

control by the President of the United States. By permitting HUD to proceed

with the initial debarment, plaintiffs assert that the Executive Branch
coordinated the enforcement of federal labor standards pursuant to express
terms of the applicable statute and regulatory scheme. 7 Plaintiffs further
contend that because the HUD and DOL debarments "turn on the essential
similarity of the underlying events giving rise to the various legal claims,"
Davis v. United States Steel Supply Div. of U.S. Steel Corp., 688 F.2d 166, 171
(3d Cir.1982), cert. denied, 460 U.S. 1014, 103 S.Ct. 1256, 75 L.Ed.2d 484
(1983), res judicata and collateral estoppel bar DOL's subsequent debarment
proceeding.
14

The Supreme Court addressed the issue of res judicata as applied to

governmental parties in Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381,
402, 60 S.Ct. 907, 917, 84 L.Ed. 1263 (1940). There, the Court held that "there
is privity between officers of the same government so that judgment in a suit
between a party and a representative of the United States is res judicata in
relitigation of the same issue between that party and another officer of the
government." Id. at 402-03, 60 S.Ct. at 917. The Court, however, went on to
say "[t]he crucial point is whether or not in the earlier litigation the
representative of the United States had authority to represent its interests in a
final adjudication of the issue in controversy." Id. at 403, 60 S.Ct. at 917. We
are therefore directed to look to the authority Congress delegated to both
administrative agencies to bind the government in a final adjudication.

15

The Department of Housing and Urban Development Act, 42 U.S.C. 3535(d)

authorizes the Secretary of HUD to "make such rules and regulations as may be
necessary to carry out his functions, powers, and duties." HUD thereby issued
regulations regarding the debarment, suspension, and ineligibility of
contractors. See 24 C.F.R. 24 (1985). These regulations define "Debarment"
as "exclusion from a participation from HUD programs for a reasonable,
specified period of time...." 24 C.F.R. 24.4(a) (1985) (emphasis added).
Moreover, the regulations state:

16
Debarment,
suspension, placement in an ineligible status, temporary denial of
participation and conditional participation are measures which may be invoked by
offices of the Department either to exclude or to disqualify contractors and grantees
from participation in Department programs. These measures shall be used for the
purpose of protecting the public and are not for punitive purposes. 24 C.F.R.
24.5(a) (1985).
17

The plain language of the statute and regulatory scheme limits HUD's
debarment authority to participation in HUD programs. At the time of its

proceeding, HUD had no authority to debar participation from other federal

contracting programs.8 In addition, HUD had no authority to debar for labor
standards violations. Causes for debarment from HUD contracts include
conviction for criminal offenses incident to obtaining the contract, conviction
under Federal Antitrust statutes, and violation of contract provisions. See 24
C.F.R. 24.6 (1985). Nowhere is HUD authorized to enforce the Davis-Bacon
Act9 or Related Acts10 labor violations.
18

The Department of Labor, on the other hand, has broad delegated authority to
debar contractors and subcontractors from all federal contracts for labor
standards violations. Pursuant to 40 U.S.C. 276a, the Secretary of Labor has
promulgated 29 C.F.R. 5.12(a)(1) (1986) which states:

19
Whenever
any contractor or subcontractor is found by the Secretary of Labor to be in
aggravated or willful violation of the labor standards provisions ... such contractor or
subcontractor ... shall be ineligible for a period not to exceed three years ... to receive
any contracts or subcontracts subject to any of the statutes listed in 5.1.
20

We find that because the scope of HUD's enforcement authority is limited to

HUD programs, HUD, even though it acted as a representative of the United
States, did not have "authority to represent [the United States'] interests in a
final adjudication of the issue in controversy." Sunshine Coal, 310 U.S. at 403,
60 S.Ct. at 917. Reorganization Plan No. 14, while permitting HUD to enforce
the labor standards with regard to its programs, in no way precluded the
Secretary of Labor from government-wide enforcement of labor standards
pursuant to 29 C.F.R. 5.12(a)(1).

21

Moreover, we do not find that DOL's and HUD's causes of action are the same
for res judicata effect, nor were the issues identical for collateral estoppel
effect. The test for whether there is a single cause of action is: (1) whether the
acts and the demand for relief are the same (2) whether the theory of recovery
is the same, (3) whether the witnesses and documents necessary at trial are the
same, and (4) whether the material facts alleged are the same. United States v.
Athalone Indus., 746 F.2d 977 (3d Cir.1984).

22

Here, the HUD debarment was based solely on the criminal conviction of
Michael Facchiano, Jr. for mail fraud, which was a violation of HUD
regulations. DOL, on the other hand, was concerned with Michael Facchiano,
Sr., John Facchiano, as well as Michael Facchiano, Jr. and their alleged willful
and aggravated violations of the labor standards requirements--albeit on a
HUD-related project. Not only are the parties different, but the two violations
do not constitute the same cause of action. Although the HUD violation

involved the same underlying wrongful conduct, the two debarment

proceedings arose from different statutes and different evidence. What was
material to the HUD proceeding was the criminal conviction and mitigating
factors that would demonstrate the Company was now a "responsible" party
that could again be entrusted with HUD contracts. The facts material to the
DOL proceeding were actual evidence of the violations, the extent and nature
of the misclassification and underpayments, evidence of previous violations and
falsification of the certified payrolls. Finally, the demand for recovery in each
of these proceedings was different. DOL demanded a three year, governmentwide debarment for willful and aggravated violations of Davis-Bacon Related
Acts. HUD demanded a debarment from HUD programs only, for a period up
to three years.
23

Based on these considerations, we hold that res judicata and collateral estoppel
do not bar DOL's debarment proceeding.

24

C. The Debarment of Individuals Under 5.12(a)(1)

25

Plaintiffs assert that the district court erred in concluding that 29 C.F.R.
5.12(a)(1) authorized the debarment of Michael Facchiano, Sr., Michael
Facchiano, Jr. and John Facchiano. They argue that 29 C.F.R. 5.12(a)(1) only
authorizes the debarment of the Facchiano Company, not its individual
corporate officers.
29 C.F.R. 5.12(a)(1) (1986) states:

26
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 listed in 5.1 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 ... to receive any contracts or subcontracts subject to any of the
statutes listed in 5.1.
27

(emphasis added). Plaintiffs argue that the plain language of this regulation
provides only for debarment of the contractor or subcontractor, not the
individual corporate officers. They assert that if DOL intended 5.12(a)(1) to
include individuals, it would have said so as it clearly did in 5.12(a)(2).11

28

Although an agency is bound by the express terms of its regulations until it

rescinds or changes them, see United States v. Nixon, 418 U.S. 683, 94 S.Ct.

3090, 41 L.Ed.2d 1039 (1974), we find no error in DOL's interpretation that

5.12(a)(1) includes debarment of individual responsible officers. Courts must
accord substantial deference to an agency's "construction of a statutory scheme
it is entrusted to administer." Chevron U.S.A., Inc. v. Natural Resources
Defense Council, 467 U.S. 837, 844, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694
(1984). Moreover, an administrative agency's interpretation of its own
regulation receives even greater deference than that accorded to its
interpretation of a statute. Udall v. Tallman, 380 U.S. 1, 16-17, 85 S.Ct. 792,
801, 13 L.Ed.2d 616 (1965).
29

The Wage Appeals Board has consistently interpreted subsection 5.12(a)(1) to

include "responsible officers" and routinely debars individual corporate officers
in Related Acts cases. See, e.g., R.J. Sanders, Inc. and Raymond J. Sanders,
President, WAB case No. 90-25 (January 31, 1991); Janik Paving & Constr.,
Inc. v. Brock, 828 F.2d 84 (2d Cir.1987). We find such interpretation to be
reasonable in furthering the remedial goals of the Davis-Bacon Act and Related
Acts. Both 5.12(a)(1) and 5.12(a)(2) are designed to ensure the cooperation
of the employer, largely through self-enforcement, in complying with the
Davis-Bacon Act and Related Act requirements. Debarment may in fact "be the
only realistic means of deterring contractors from engaging in willful [labor]
violations based on a cold weighing of the costs and benefits of noncompliance." Janik Paving & Constr., Inc., 828 F.2d at 91. In furthering the
purpose of the Davis-Bacon Act and Related Acts, we can discern no rational
reason for including debarment of responsible officers in one regulation, but not
the other and thus defer to the Board's consistent interpretation that both
regulations allow debarment of responsible officers.12

30

Plaintiffs emphasize the fact that 5.12(a)(1) omits the words "responsible
officers," while 5.12(a)(2) specifically includes them. Nothing can be inferred
from differences in language of the two regulations because they were not
drafted at the same time. So long as the agency's interpretation of the regulation
is reasonable, it is entitled to deference. Udall, 380 U.S. at 16, 85 S.Ct. at 801.
"The ultimate criterion is the administrative interpretation [of an administrative
regulation], which becomes of controlling weight unless it is plainly erroneous
or inconsistent with the regulation." Id. at 16-17, 85 S.Ct. at 801 (citing Bowles
v. Seminole Rock Co., 325 U.S. 410, 413-14, 65 S.Ct. 1215, 1217, 89 L.Ed.
1700). We therefore affirm the Board's determination that the individual
corporate officers were subject to debarment under 29 C.F.R. 5.12(a)(1).

31

D. The Debarment of Michael Facchiano Sr.

32

Michael Facchiano, Sr. argues that the district court erred in concluding that he

could be debarred for willful and aggravated violations of the Davis-Bacon

Related Acts solely on the basis of his status as President of the Company. We
agree and reverse as to the debarment of Michael Facchiano, Sr.
33

The Wage Appeals Board debarred Michael Facchiano, Sr. because "Board
precedent did 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." WAB Case No. 91-06 (Aug. 29, 1991).13 We hold that
such precedent is contrary to law in that it incorrectly imposes strict liability on
corporate officers for labor standards violations. Unlike cases under the Federal
Food and Drug Act, where Congress dispensed with a "consciousness of
wrongdoing" or scienter element and therefore failure to act was deemed to be
a sufficient basis for a responsible corporate agent's liability, see United States
v. Park, 421 U.S. 658, 671, 95 S.Ct. 1903, 1911, 44 L.Ed.2d 489 (1974), labor
standards statutes that include the term "willful" have been interpreted to
require knowledge on the part of the corporate officer. See McLaughlin v.
Richland Shoe Co., 486 U.S. 128, 133, 108 S.Ct. 1677, 1681, 100 L.Ed.2d 115
(1987) (the word "willful" in the FLSA means conduct that is "voluntary,"
"deliberate" or "intentional" and not merely negligent); See also Donovan v.
Sabine Irrigation Co., Inc., 695 F.2d 190, 196 (5th Cir.1983) (the test for
"willfulness" under the Portal-to-Portal Act of 1947, as amended, 29 U.S.C.
255(a) is whether "there is substantial evidence in the record to support a
finding that the employer knew or suspected that his actions might violate the
FLSA"). Indeed, we know of "no precedent for failing to give effect to a
knowledge requirement that Congress has expressly included in a criminal
statute." United States v. MacDonald & Watson Waste Oil Co., 933 F.2d 35, 52
(1st Cir.1991). DOL's regulation 29 C.F.R. 5.12(a)(1) specifically requires
the labor standard violation to be "willful or aggravated" and thus Michael
Facchiano, Sr. cannot be held liable absent substantial evidence that he knew of
the violations.

34

Although there is some evidence in the record that Michael Facchiano, Sr. did
know about the labor standards violations, the Wage Appeals Board never
made such a finding. On appeal, DOL points to evidence that Michael
Facchiano, Sr. was present and assumed an active role in the day to day
operation of the business in order to prove that he knew of the labor standards
violations. However, "the courts may not accept appellate counsel's post-hoc
rationalizations for agency action." Motor Vehicle Mfrs. Ass'n v. State Farm
Mut. Auto. Ins. Co., 463 U.S. 29, 50, 103 S.Ct. 2856, 2870, 77 L.Ed.2d 443
(1983). It is well established that an agency's action must be upheld, if at all, on
the basis articulated by the agency itself. Id. (citing SEC v. Chenery Corp., 332
U.S. 194, 196, 67 S.Ct. 1575, 1577, 91 L.Ed. 1995 (1947); American Textile

Mfrs. Inst., Inc. v. Donovan, 452 U.S. 490, 539, 101 S.Ct. 2478, 2505, 69
L.Ed.2d 185 (1981)).
35

We find that the Wage Appeals Board's articulated basis for debarring Michael
Facchiano, Sr. is contrary to law. Because a reviewing court cannot affirm an
agency decision based on improper grounds, see SEC v. Chenery Corp., 332
U.S. at 196-97, 67 S.Ct. at 1577, the district court's approval of the Board's
debarment cannot stand.

36

Accordingly, the judgment of the district court affirming the debarment of

Michael Facchiano, Sr. is vacated, and we remand to the district court with
directions that the case be remanded to the Wage Appeals Board for a
determination as to whether Michael Facchiano, Sr. had the requisite
knowledge for a "willful or aggravated" violation. In all other respects, the
judgment of the district court is affirmed.

Honorable Donald P. Lay, Senior Judge of the United States Court of Appeals
for the Eighth Circuit, sitting by designation
The Honorable Alan N. Bloch, United States District Judge for the Western
District of Pennsylvania.

Facchiano Construction Company's certified payrolls showed that employees

received a higher wage rate than actually paid (Jt App. 32a; 124a-126a; 201a),
that employees were misclassified (Jt App. 201a), that Contract Work Hours
and Safety Standards Act (CWHSSA) overtime was underpaid (Jt App. 33a,
133a), that fewer hours were reported than employees had worked (Jt App.
33a), and that the names of certain employees were omitted (Jt App. 33a, 130a).
The payrolls had been certified as correct by John Facchiano, the company
treasurer

Fines were also levied against Michael Facchiano Jr. and the Company

This issue was not argued in the original briefs, but because of the relevant
language of the executive order, this court sought supplemental briefing as to
the applicability of the order

The Department of Labor issued its charging letter, notifying the Facchianos of
its intent to seek their debarment from all contracting with the federal
government on December 13, 1985

Section 6 specifically states:

The Director of the Office of Management and Budget is authorized to issue
guidelines to Executive departments and agencies that govern which programs
and activities are covered by this Order, prescribe government-wide criteria and
government-wide minimum due process procedures, and set forth other related
details for the effective administration of the guidelines.
Section 3 states:
Executive departments and agencies shall issue regulations governing their
implementation of this Order that shall be consistent with the guidelines issued
under Section 6. Proposed regulations shall be submitted to the Office of
Management and Budget for review within four months of the date of the
guidelines issued under Section 6. The Director of the Office of Management
and Budget may return for reconsideration proposed regulations that the
Director believes are inconsistent with the guidelines. Final regulations shall be
published within twelve months of the date of the guidelines.

This scheme includes Reorganization Plan No. 14 of 1950, 15 Fed.Reg. 3176

(1950), amended by Pub.L. No. 91-258, 84 Stat. 235 (1970), (codified at 5
U.S.C.App. (1988)), which states:
In order to assure coordination of administration and consistency of
enforcement of the labor standards provisions of each of the following Acts by
the Federal agencies responsible for the administration thereof, the Secretary of
Labor shall prescribe appropriate standards, regulations, and procedures, which
shall be observed by these agencies, and cause to be made by the Department of
Labor such investigations, with respect to compliance with and enforcement of
such labor standards, as he deems desirable....
The purpose of this plan was articulated in the Message of the President, March
13, 1950:
The methods adopted by the various agencies for the enforcement of labor
standards vary widely in character and effectiveness. As a result, uniformity is
lacking and the degree of protection afforded workers varies from agency to
agency.
In order to correct this situation, this plan authorizes the Secretary of Labor to
coordinate the administration of legislation relating to wages and hours on all
federally financed or assisted projects by prescribing standards, regulations, and
procedures to govern the enforcement activities of the various Federal agencies
and by making such investigations as he deems desirable to assure consistent

enforcement. The actual performance of enforcement activities, normally

including the investigation of complaints of violations, will remain the duty of
the respective agencies awarding the contracts or providing the Federal
assistance.
Id.
8

As noted above, Executive Order No. 12549 did not become effective until
OMB had issued guidelines and the agencies had promulgated implementing
regulations. HUD incorporated Executive Order No. 12549 by reference in May
of 1988. Thus, the regulations applicable to the Facchianos were those in effect
in 1985 and 1986

40 U.S.C. 276a-276c (1988)

10

The Housing and Community Development Act of 1974, as amended, 42

U.S.C. 1440(g), 5310 (1988); Contract Work Hours and Safety Standards
Act, as amended, 40 U.S.C. 327-333 (1988)

11

Plaintiffs point out that 5.12(a)(2), the regulation dealing with the DavisBacon Act cases, specifically includes debarment of individuals as well as the
corporate entity. It provides:
In cases arising under contracts covered by the Davis-Bacon Act, the
Administrator shall transmit to the Comptroller General the names of 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 recommendations 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 any contact or subcontract subject to the labor
standards provisions of the statutes listed in 5.1. (emphasis added).

12

A contrary interpretation of these regulations that would exclude responsible

officers from debarment may in fact render the regulations ineffective if an
offending corporate officer is allowed to create new businesses or continue to
bid through other preexisting businesses in order to avoid debarment

13

The Board cited Marc S. Harris, Inc., WAB Case No. 88-40 (Mar. 28, 1991) at
p. 4 and the cases cited therein as the precedent it was bound to follow