AGENDA REPORT
Meeting Date: March 1, 2022
Item Number:
To:
D-11
Honorable Mayor & City Council
From: Daren Grilley, City Engineer
Manu Dhaliwal, Associate Project Manager
Subject: TERMINATION OF CONTRACT WITH MINAKO AMERICA
CORPORATION, DBA MINCO CONSTRUCTION, FOR THE ONCALL PAVEMENT REPAIRS PROJECT Attachment: 1. Notice of Debarred Contractor
RECOMMENDATION
Staff recommends City Council move to terminate a contract with Minako America Corporation, DBA Minco Construction, for on-call pavement repair services due to Minako America Corporation’s disbarment by the State of California and inability to maintain registration with the Department of Industrial Relations.
INTRODUCTION
The City of Beverly Hills received the State of California Department of Industrial Relations notice of disbarred contractor regarding Minako America Corporation’s disbarment dated November 22, 2021. As a result of the disbarment, Minako America Corporation is no longer eligible to register as a public works contractor, which is a requirement to work on any public works contract.
DISCUSSION
On September 14, 2021, City Council Awarded the On-Call Pavement Repairs Project to the apparent low bidder, Minako America Corporation. Late November, the City received notice of Minako America Corporation’s disbarment from the State of California Department of Industrial Relations (dated November 22, 2021). Upon receiving notice of Minako America Corporation’s disbarment the City paused any action on the project.
Due to their disbarment, the City cannot continue the project with Minako America Corporation as a contractor without being subject to civil penalties and potential liability.
Meeting Date: March 1, 2022
Staff received direction from the City Attorney’s office that the previous bid results cannot be used and the project must be rebid. Following termination of the contract, the project will be advertised for bids. Staff anticipates returning to City Council with a recommendation to award a new contract at the April 15, 2022, meeting.
FISCAL IMPACT
No financial impact to the City of Beverly Hills.
Shana Epstein,
Director of Public Works
Approved By
Attachment 1
STATE OF CALIFORNIA Gavin Newsom, Governor
DEPARTMENT OF INDUSTRIAL RELATIONS
Division of Labor Standards Enforcement
7575 Metropolitan Drive, Suite 210
San Diego, CA 92108-4424
Tel: (619) 767-2023
Fax: (619) 767-2026
Lance A. Grucela
Staff Attorney
November 22, 2021
Shana Epstein
Director of Public Works
City of Beverly Hills
345 Foothill Rd
Beverly Hills, CA 90210
via US Mail and email to [email protected]
Re: Prime Contractor: Minako America Corporation dba Minco Construction Project: On-Call Pavement Repairs Project
Subject: Notice of Debarred Contractor
Ms. Epstein:
Pursuant to Labor Code section 1777.1(f) and California Code of Regulations, Title 8, section 16801(a)(K), please be advised the following contractor(s), which have been awarded a contract for the On-Call Pavement Repairs Project for the City of Beverly Hills, have been debarred:
MINAKO AMERICA CORPORATION dba MINCO CONSTRUCTION; AND REFAAT HILMAY MINA, an individual, an individual and as RMO/CEO/President (collectively referred to as “Minco”)
The attached Decision Re: Debarment became effective on September 27, 2021, and provides that Minco and any firm, corporation, partnership, or association in which those individuals or entities have any interest as defined in Labor Code section 1777.1, or substantial interest as defined by California Code of Regulations, Title 8, section 16800, shall be ineligible to either bid on, be awarded a contract for, or perform work on any public works project for a period of one year. (Also see Pub. Contract Code § 6109.) As a result of the debarment, Minco is disqualified from registering as a public works contractor with the Department of Industrial Relations. Registration is a statutory perquisite to bid on or be engaged in the performance of any contract for public works. (Lab. Code § 1771.1(a).) Please be further advised that an awarding body that enters into a contract with or permits an unregistered contractor to engage in the performance of any public work is subject to civil penalties of $100.00 for each day of violation. (Lab.
Code §§ 1773.3, subd. (c)(1), (d).) The Labor Commissioner’s Office wishes to respectfully alert the City of this potential liability if Minco were to engage in the performance of any public works projects during this unregistered debarment period.
City of Beverly Hills
Notice of Debarred Contractor
November 22, 2021
The Labor Commissioner’s Office is committed to promoting compliance with workplace protections for vulnerable workers, which also levels the playing field and supports responsible, law-abiding contractors.
We hope to continue in strong partnership with the City toward these worthy goals.
Sincerely,
Lance A. Grucela
Attorney for the Labor Commissioner
Encl.
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PROPOSED STATEMENT OF DECISION RE: DEBARMENT OF RESPONDENTS FROM PUBLIC WORKS
PROJECTS AFTER ISSUANCE OF PEREMPTORY WRIT OF MANDAMUS
STATE OF CALIFORNIA
DEPARTMENT OF INDUSTRIAL RELATIONS
DIVISION OF LABOR STANDARDS ENFORCEMENT
Patricia Salazar, Esq. (SBN 249935)
320 W. 4th Street, Suite 600
Los Angeles, California 90013
Telephone No.: (213) 897-1511
Facsimile No.: (213) 897-2877
Attorney for the State Labor Commissioner
BEFORE THE DIVISION OF LABOR STANDARDS ENFORCEMENT
DEPARTMENT OF INDUSTRIAL RELATIONS
FOR THE STATE OF CALIFORNIA
In the Matter of the
Debarment Proceeding Against:
MINAKO AMERICA CORPORATION
DBA MINCO CONSTRUCTION; REFAAT
HILMY MINA,
Respondents.
CASE NO.: LB6333
PROPOSED STATEMENT OF DECISION
RE: DEBARMENT OF RESPONDENTS
FROM PUBLIC WORKS PROJECTS
AFTER ISSUANCE OF PEREMPTORY
WRIT OF MANDAMUS BY THE
SUPERIOR COURT OF LOS ANGELES
ON MINAKO AMERICA CORPORATION
DBA MINCO CONSTRUCTION’S AND
REFAAT HILMAY MINA’S VERIFIED
PETITION FOR WRIT OF MANDATE
[Labor Code § 1777.1]
Debarment proceedings pursuant to Labor Code section 1777.11 were initiated by the
DIVISION OF LABOR STANDARDS ENFORCEMENT, STATE LABOR COMMISSIONER, against the following named respondents in the administrative matter known as: MINAKO AMERICA CORPORATION DBA MINCO CONSTRUCTION; REFAAT HILMY MINA.
The hearing in this matter was held in Los Angeles, California on July 24 to July 26, 2017, December 14 to December 15, 2017, and January 8 to January 11, 2018. Patricia Salazar, 1 Unless otherwise stated, all statutory references are to the Labor Code. 1 2
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PROPOSED STATEMENT OF DECISION RE: DEBARMENT OF RESPONDENTS FROM PUBLIC WORKS
PROJECTS AFTER ISSUANCE OF PEREMPTORY WRIT OF MANDAMUS
of the Labor Commissioner’s office, served as the hearing officer.
On May 16, 2019, the Division of Labor Standards Enforcement issued a Proposed Statement of Decision Re: Debarment of Respondents From Public Works, and Decision re:
Debarment of Respondents from Public Works Projects (collectively, the “Decision”).
In the Decision, the hearing officer found that Minako America Corporation dba Minco Construction and Refaat Hilmy Mina had:
(1) ‘willfully violated public works laws on at least two projects within three years,’ (2) ‘violated public works laws with the inten[t] to defraud on the Joint Water Project, the Bike Parking Project, and the JOC 1029 Project,’ and (3) ‘knowingly committed serious violations of Labor Code section 1777.5 on the Long Beach Main, Joint Water Project, Bike Parking Project, JOC 1029 Project, Eastern Avenue Project, and the JOC 1026 Project. (Order2, p. 2.) The hearing officer ordered that Minako America Corporation dba Minco Construction and Refaat Hilmy Mina were ineligible to bid, be awarded a contract for a public works project, or to perform work as a subcontractor on a “public works” project for two years. (AR 43.) Accordingly, on May 16, 2019, the Labor Commissioner ordered debarment for a period of two years.
On June 12, 2019, Minako America Corporation dba Minco Construction (“Minco”); Refaat Hilmy Mina (collectively, “Petitioners”) filed its petition for writ of mandate in the matter entitled, Minako America Corporation dba Minco Construction; and Refaat Hilmay 3 Mina v.
California Department of Industrial Relations, Division of Labor Standards Enforcement and DOES 1 through 20, Inclusive, Case No. 19STCP02356.
On June 25, 2019, the Court approved Petitioners’ and Respondents California Department of Industrial Relations, Division of Labor Standards Enforcement’s (“Respondent” or “DLSE”) stipulation to stay the Decision pending the Court’s ruling on the writ petition.
The parties filed multiple briefs from July 31, 2020 to April 6, 2021. On May 11, 2021, 2 Pagination as referenced here is based on the page numbers in the Court’s Minute Order, dated May 11, 2021, which constitutes part of the “Order,” as defined further below. 3 The hearing officer notes Petitioner Refaat Hilmay Mina was named as “Refaat Hilmy Mina” for the administrative matter, Case No. LB6333, but later named as “Refaat Hilmay Mina” in Case No. 19STCP02356. For purposes of clarity and consistency, and because this is a Proposed Statement of Decision in Case No. LB6333, the hearing officer will refer to Petitioner as “Refaat Hilmy Mina.” 1 2
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PROPOSED STATEMENT OF DECISION RE: DEBARMENT OF RESPONDENTS FROM PUBLIC WORKS
PROJECTS AFTER ISSUANCE OF PEREMPTORY WRIT OF MANDAMUS
the court issued a Minute Order, followed on June 14, 2021 by a Peremptory Writ of Mandamus, a Judgment granting the Peremptory Writ of Mandamus, and a Notice of Entry of Judgment (collectively, the “Order”).
I. THE COURT’S ORDER
a. Prevailing Wage Violations per Sections 1777.1(a)-(b) In its Order, the Court found “substantial evidence” did not support the hearing officer’s findings that Petitioners committed prevailing wage violations with “intent to defraud” pursuant to section 1777.1(a) with respect to the Joint Water Project, Bike Parking Project, and JOC 1029 Project. (Order, p. 22.) The Court further determined substantial evidence did not support the hearing officer’s findings that Petitioners committed multiple “willful” violations per section 1777.1(b) within a three-year period regarding the Joint Water Project, Bike Parking Project, and JOC 1029 Project. (Id., pp. 22-23.)
b. The Apprenticeship Requirements of Section 1777.5
The next issue before the Court was whether substantial evidence supported the hearing officer’s findings that Petitioners committed “serious” violations of the apprenticeship requirements of section 1777.5 with respect to Long Beach Main, Joint Water Project, Bike Parking Project, JOC 1029 Project, Eastern Avenue Project, and the JOC 1026 Project.
The Court cited the applicable legal authority to determine whether substantial evidence supported the hearing officer’s findings of violations of the apprenticeship requirements under section 1777.5.
Section 1777.1(d)(1) authorizes debarment “[i]n the event a contractor or subcontractor is determined by the Labor Commissioner to have knowingly committed a serious violation of any provision of Section 1777.5.” (Order, p. 23.) “Section 1777.5 sets forth apprenticeship requirements that apply to public contractors.” (Id.) In finding whether a violation is “serious, and in determining whether and for how long a party should be debarred for violating Section 1777.5,” the Labor Commissioner “shall consider” five “circumstances.” (Labor Code § 1777.1(d)(2)(A)-(E); see also Order, p. 23.)
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PROPOSED STATEMENT OF DECISION RE: DEBARMENT OF RESPONDENTS FROM PUBLIC WORKS
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A “knowing” violation of apprenticeship requirements of section 1777.5 is determined as follows:
For purposes of Labor Code Section 1777.7, a contractor knowingly violates Labor Code Section 1777.5 if the contractor knew or should have known of the requirements of that Section and fails to comply, unless the failure to comply was due to circumstances beyond the contractor's control. There is an irrebuttable presumption that a contractor knew or should have known of the requirements of Section 1777.5 if the contractor had previously been found to have violated that Section, or the contract and/or bid documents notified the contractor of the obligation to comply with Labor Code provisions applicable to public works projects, or the contractor had previously employed apprentices on a public works project.
(California Code of Regulations (“C.C.R.”), tit. 8, § 231(h); see also Order, p. 23.) With the exception of the hearing officer’s findings of a “history of prior violations,” the Court found substantial evidence supported the hearing officer’s findings that Petitioners knowingly violated section 1777.5 for all six projects. (Order, pp. 23-24.) The Court also found substantial evidence, with the exception of a “history of prior violations,” supported the hearing officer’s findings that Petitioners’ violations of section 1777.5 were serious. (Id., p. 24.) The Court pointed to the hearing officer’s findings of violations under section 1777.5 as serious to include: the violations were intentional, and Minco failed to employ 3,300 apprentice hours depriving “apprentices of learning opportunities during the span of three years or more.” (Id.)(citing AR 41-42; see also Labor Code § 1777.1(d)(2)(A), (C)-(E).)
Moreover, and with the exception of a “history of prior violations,” the Court referenced multiple examples from the administrative record in support of this same conclusion, including:
• Each of the six public works contracts or bid documents notified Petitioners of the obligation to comply with Labor Code provisions applicable to public work projects. (Order, p. 24)(citing AR 198; 543; 820; 1081; 1214.) • Petitioners’ admission they failed to submit DAS 140 (Contract Award Information) and DAS 142 (Request for Dispatch of an Apprentice) forms to the union Joint Apprenticeship Training Committees. (Id.)(citing AR 21-27; 4439, 4697-4706.)
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the findings of apprenticeship violations. (Id.)(citing to AR 21-27; see e.g.
DLSE Exhibits 6-42 at AR 181-1104; see also AR 4292-4362 [Chen testimony].)
Petitioners did not “challenge or dispute this evidence in their writ briefs.” (Order, p. 24.) Petitioners contended they made a “good faith mistake” and “reasonably believed” Minco could not request or employ union apprentices because of its non-union status. (Id.) The Court determined substantial evidence supported the hearing officer’s rejection of this argument. The Court further concluded substantial evidence supported the hearing officer’s finding that Petitioners “knew or should have known” of the apprenticeship requirements based on the following:
• As noted, the public works contracts or bid documents notified Petitioners of the obligation to comply with Labor Code provisions applicable to public works projects. (Id., p. 24)(citing AR 198; 543; 820; 1081; 1214.) • Petitioners’ evidence – the DAS 140 forms – “explained the requirement that contractors submit contract award information to ‘ALL applicable Apprenticeship Committees in your craft or trade in the area of the site of the public work.’” (Id.)(citing AR 41, 3201.)
This was the same evidence the hearing officer considered when weighing the first “circumstance” of section 1777.1(d)(2)(A) regarding whether the violation was intentional, which militated toward a finding of a serious violation. (AR 41-42.) The Court then turned its attention to the second “circumstance” of section 1777.1(d)(2)(B) regarding whether Petitioners had committed other violations of section 1777.5. (Order, p. 25)(citing AR 42.) For the second “circumstance,” the hearing officer concluded as follows:
The evidence also showed a history of prior violations. In addition, the evidence demonstrates [Minco] violated this section for all six projects. (Id., p. 25.)[Emphasis added.]
In rejecting the hearing officer’s finding for this second “circumstance,” the Court stated, “[t]hus, the hearing officer found a history of prior violations ‘in addition’ to the six projects at issue in this case.” (Id.) After requesting supplemental briefing on this specific issue, the Court concluded substantial evidence did not support the hearing officer’s findings of a “history of 1 2
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prior violations.” (Id., pp. 25-26.)
The Court concluded:
Based on the foregoing, substantial evidence supports the hearing officer’s findings that Petitioners knowingly committed violations of Labor Code section 1777.5 on the Long Beach Main Project, Joint Water Project, Bike Parking Project, JOC 1029 Project, Eastern Avenue Project, and the JOC 1026 Project. (AR 43.) However, substantial evidence does not support the hearing officer’s finding of ‘a history of prior violations’ of the apprenticeship requirements. (AR
42.) That finding was material to the conclusion that Petitioners committed “serious” violations of section 1777.5. (AR 41-43.) The court does not know whether the hearing officer would have reached the same result without such finding. Accordingly, the matter must be remanded so that Respondent can reconsider whether Petitioners committed serious violations of section 1777.5 without the finding of a history of prior violations. [Emphasis added.] (Id., p. 26.)
The Court concluded substantial evidence did not support a “history of prior violations,” which was one of the findings the hearing officer cited to in support of the second “circumstance” under section 1777.1(d)(2)(B). (See Id., p. 26.) However, the Court did not reach the same conclusion for any of the remaining four “circumstances” of section 1777.1(d)(2). The Labor Commissioner was also required to consider the other “circumstances” in order to determine whether there was a serious violation of section 1777.5 apprenticeship requirements. c. The Propriety of the Penalty
Petitioners argued DLSE failed to consider mitigating factors as required by 8 C.C.R. section 16802(a) regarding the propriety of the penalty. (Id., p. 30.) In rejecting Petitioners’ argument, the Court found the hearing officer “gave a reasoned explanation for the penalty decision, and the extensive findings in the decision further show the basis for the penalty.” (Id.)(citing AR 41-43; AR 12-40.) The Court further noted, “[a]s required, the hearing officer considered ‘the nature of the offense; the amount of underpayment of wages per worker; the experience of the Respondent in the area of public works; and the Respondent's compliance with Labor Code section 1776.’” (Id.)(citing 8 C.C.R. § 16802(a).) However, in ordering the two-year debarment, the Court stated the debarment penalty was based on findings of prevailing wage violations under section 1777.1(a)-(b), and a finding under section 1777.1(d)(2) of a serious violation of apprenticeship requirements per section 1 2
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1777.5. (See Id., p. 30.) The Court remanded this matter for reconsideration, stating “it seems possible the Labor Commissioner would have reached a different decision on the penalty without the findings under” sections 1777.1(a)-(b), and the finding of a “history of prior violations” under section 1777.5. (Id., pp. 30-31.)
II. LEGAL ANALYSIS
a. The Issue
The Court ordered the hearing officer to reconsider whether the two-year debarment penalty is proper in light of the Court’s ruling under C.C.P. section 1094.5(f) that substantial evidence did not support the hearing officer’s findings of a “history of prior violations” of the apprenticeship requirements, which finding was material to the conclusion that Petitioners committed “serious” violations of section 1777.5. In addition, the Court ordered the hearing officer to reconsider whether Petitioners committed serious violations of section 1777.5, without the finding of a “history of prior violations.”
b. The Hearing Officer’s Reconsideration Given the Order In finding whether a violation is “serious, and in determining whether and for how long a party should be debarred for violating Section 1777.5,” the Labor Commissioner “shall consider” “all of the following circumstances:”
(A) Whether the violation was intentional.
(B) Whether the party has committed other violations of Section 1777.5. (C) Whether, upon notice of the violation, the party took steps to voluntarily remedy the violation.
(D) Whether, and to what extent, the violation resulted in lost training opportunities for apprentices.
(E) Whether, and to what extent, the violation otherwise harmed apprentices or apprenticeship programs.
(Labor Code § 1777.1(d)(2).)
The hearing officer’s findings regarding a “history of prior violations” concerned the second circumstance of section 1777.1(d)(2)(B), i.e., “[w]hether the party has committed other violations of Section 1777.5.” The hearing officer’s findings concluded, “[t]he evidence showed 1 2
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a “history of prior violations,” which the Court later determined was not supported by substantial evidence.
Section 1777.1(d)(2) is one of multiple provisions found in the Prevailing Wage Law (or, “PWL”) in California. (See Azusa Land Partners v. Dep’t of Indus. Rels. (2010) 191 Cal.App.4th 1, 14)(“Azusa Land Partners”).) In providing an overview of PWL, the California Supreme Court states it is the Legislature’s intent that the public policy of California “vigorously enforce minimum labor standards in order to ensure employees are not required or permitted to work under substandard unlawful conditions, and to protect employers who comply with the law from those who attempt to gain competitive advantage at the expense of their workers by failing to comply with minimum labor standards.” (Id.)(citing Labor Code § 90.5.) (Lusardi Construction Co. v. Aubry (1992) 1 Cal.4th 976, 985)(“Lusardi”).) The PWL was also enacted to protect and benefit the workers on public works projects, the public, and are to be liberally construed. (Id.; City of Long Beach v. Dep’t of Indus. Rels. (2004) 34 Cal.4th 942, 949-950.) In interpreting the statutory provisions at issue, the court’s first task is to determine legislative intent. (Henson v. C. Overaa & Co. (2015) 238 Cal.App.4th 184, 193) (“Henson”)(discussing Labor Code section 1777.5.) To determine intent, the courts look to the plain language of the statute which, if clear and unambiguous, will control, obviating the need for judicial construction. (Id.) However, courts do not view the language of the statute in isolation and, instead, construe the words of the statute in context, keeping in mind the statutory purpose. (Id.) The courts will choose the construction that comports most closely with the legislative intent, with a view toward promoting, not defeating, the statute’s general purpose. (Azusa Land Partners, supra, 191 Cal.App.4th at 21-22.) The drafters of PWL took into account multiple considerations regarding apprenticeship requirements, including the basic idea of an apprenticeship program “to allow on-the-job training for apprentices who work under the supervision of journeymen” and “to encourage and assist persons to enter into the skilled work force. . .” (See Henson at 189.)
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warranted where the Court ruled substantial evidence did not support her findings of a “history of prior violations,” and whether the hearing officer would have reached the same conclusion of “serious” violations without it.
Section 1777.1(d)(2) requires the hearing officer consider all the “circumstances” to determine whether Petitioners’ violations were serious in supporting a finding of debarment for violations of apprenticeship requirements under section 1777.5. The hearing officer’s findings regarding a “history of prior violations” supported one of the five circumstances articulated by section 1777.1(d)(2). However, the finding of a “history of prior violations,” assisted the hearing officer in considering the second circumstance of section 1777.1(d)(2)(B), “whether the party has committed other” section 1777.5 violations. This second “circumstance” cannot be viewed in isolation of the other “circumstances” of section 1777.1(d)(2). (See Henson, supra, 238 Cal.App.4th at 193.)
Rather, the hearing officer’s finding regarding a “history of prior violations” must be construed in the larger context and statutory purpose of the PWL so as not to defeat the statute’s general purpose. (See Id. at 193; see also Azusa Land Partners, supra, 191 Cal.App.4th at 21-
22.) This includes the Legislature’s goals behind the apprenticeship program, which is to allow on-the-job training opportunities for apprentices, and encourage and assist persons to enter into the skilled work force. (Henson at 189.) It also includes interpreting section 1777.1(d)(2) with the purpose of protecting and benefitting workers on public works projects. (Lusardi, supra, 1 Cal.4th at 985; City of Long Beach, supra, 34 Cal.4th at 949-950.) This is consistent with the hearing officer’s other findings that Petitioners’ violations were intentional, and Minco failed to employ 3,300 apprentice hours, which deprived apprentices of learning opportunities during the span of three years or more. (Order, p. 24.) These further support the hearing officer’s findings of other serious violations under section 1777.1(d)(2)(A), (D)-(E). (See AR 41-42.) In sum, the rules of statutory construction prohibit the hearing officer from considering one of the “circumstances” of section 1777.1(d)(2) in isolation. It also requires the hearing officer to consider the legislative goals of PWL, including the drafters’ considerations regarding 1 2
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apprenticeship requirements, and the liberal construction of PWL provisions. Accordingly, these considerations compel the hearing officer to determine that she must consider all five “circumstances” under Labor Code section 1777.1(d)(2) to determine whether Petitioners’ violations of apprenticeship requirements were “serious.” Moreover, with the exception of a “history of prior violations,” the Court stated the other hearing officer findings concerning the serious nature of section 1777.5 violations were supported by substantial evidence. (See Order, p. 24.) This not only included the hearing officer’s findings that the violations were intentional, and Minco’s failure to employ 3,300 apprentice hours deprived apprentices of learning opportunities during the span of three years or more. It also included the Court’s references to multiple examples from the administrative record to support the hearing officer’s, and ultimately, its conclusion, that substantial evidence supports these other findings.
These examples include: (i) the public works contracts or bid documents on all six projects notifying Petitioners of the obligation to comply with Labor Code provisions applicable to public work projects; (ii) Petitioners’ admission that they failed to submit DAS 140 and DAS 142 forms to the union Joint Apprenticeship Training Committees; (iii) Petitioners’ evidence, the DAS 140 Forms, which explain that contractors were required to submit contract award information to “ALL” applicable apprenticeship committees of the craft or trade in the area of the site of public work; and (iv) DLSE testimony from its investigators and documentary evidence supporting the findings of apprenticeship violations. (Id., p. 24.) The hearing officer’s findings regarding a “history of prior violations” may have been material to the conclusion that Petitioners committed “serious” violations of section 1777.5.
However, that was not the only consideration which led to this conclusion. As discussed above, the “history of prior violations” assisted the hearing officer in considering the “second” “circumstance” of section 1777.1(d)(2)(B). In weighing all the circumstances of section 1777.1(d)(2), however, substantial evidence supports the hearing officer’s other findings that Petitioners committed serious apprenticeship violations. These other findings were also material 1 2
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to the hearing officer’s conclusion.
Accordingly, with the exception of a “history of prior violations,” a debarment penalty remains warranted where Petitioners’ violations of apprenticeship requirements under section 1777.5 were serious, based on the weighing of all the other circumstances of section 1777.1(d)(2).
c. The Debarment Penalty
Next, in weighing all the circumstances, with the exception of a “history of prior violations,” the Labor Commissioner shall determine how long Petitioners should be disbarred.
Because Petitioners knowingly committed serious violations of Labor Code section 1777.5, the Labor Commissioner may deny Petitioners “the right to bid on or to be awarded or perform work as a subcontractor on any public works contract for a period of up to one year for the first violation and for a period of up to three years for a second or subsequent violation.” (Labor Code § 1777.1(d)(1).)
The hearing officer previously ordered a two-year debarment against Petitioners.
However, the Court ruled substantial evidence did not support the hearing officer’s findings of prevailing wage violations under Labor Code sections 1777.1(a)-(b), or the finding of a “history or prior violations,” which the hearing officer determined under one of the five circumstances articulated in section 1777.1(d)(2)(A)-(E). In light of the Court’s ruling regarding no substantial evidence supported the findings of prevailing wage violations under section 1777.1(a)-(b), or based on a “history or prior violations,” the two-year debarment is reduced to one year.
III. CONCLUSION
Based on the substantial evidence, and in light of the Court’s Order, this Proposed Statement of Decision Re: Debarment of Petitioners from Public Work Projects is amended to state we find that MINAKO AMERICA CORPORATION DBA MINCO CONSTRUCTION; REFAAT HILMY MINA, knowingly committed serious violations of section 1777.5 on the Long Beach Main Project, Joint Water Project, Bike Parking Project, JOC 1029 Project, Eastern Avenue Project, and JOC 1026 Project.
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PROPOSED STATEMENT OF DECISION RE: DEBARMENT OF RESPONDENTS FROM PUBLIC WORKS
PROJECTS AFTER ISSUANCE OF PEREMPTORY WRIT OF MANDAMUS
Debarment
“Although debarment can have a severe economic impact on contractors, it ‘is not intended as punishment. It is instead, a necessary means to enable the contracting governmental agency to deal with irresponsible bidders and contractors, and to administer its duties with efficiency.’” (Southern Cal. Underground Contractors, Inc. v. City of San Diego (2003) 108 Cal.App.4th 533, 542.) The evidence established that Minco repeatedly acted irresponsibly. With the exception of a “history of prior violations,” the evidence establishes Minco knowingly committed serious violations of the apprenticeship requirements. Accordingly, debarment is appropriate. The proper period of debarment for purposes of the sanctions mandated by section 1777.1 and California Code of Regulations, Title 8, Section 16802(a), is one (1) year. The debarment applies to MINAKO AMERICA CORPORATION DBA MINCO CONSTRUCTION; REFAAT HILMY MINA.
AMENDED ORDER OF DEBARMENT
In accordance with the foregoing, it is hereby ordered that Respondents MINAKO AMERICA CORPORATION DBA MINCO CONSTRUCTION; REFAAT HILMY MINA, shall be ineligible to, and shall not, bid on or be awarded a contract for a public works project, and shall not perform work as a subcontractor on a “public works” project as defined by Labor Code sections 1720, 1720.2 and 1720.3, for a period of one (1) year, effective 45 days after this decision is issued by the Labor Commissioner. A one-year period is appropriate under these circumstances where Respondents MINAKO AMERICA CORPORATION DBA MINCO CONSTRUCTION; REFAAT HILMY MINA, knowingly committed serious violations of the apprenticeship requirements.
This debarment shall also apply to any other contractor or subcontractor in which MINAKO AMERICA CORPORATION DBA MINCO CONSTRUCTION; REFAAT HILMY MINA, have any interest or for which either MINAKO AMERICA CORPORATION DBA MINCO CONSTRUCTION; REFAAT HILMY MINA, act as responsible managing employees, 1 2
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PROPOSED STATEMENT OF DECISION RE: DEBARMENT OF RESPONDENTS FROM PUBLIC WORKS
PROJECTS AFTER ISSUANCE OF PEREMPTORY WRIT OF MANDAMUS
responsible managing officers, general partners, managers, supervisors, owners, partners, officers, employees, agents, consultants, or representatives. As defined under Labor Code section 1777.1(h), “ ‘Any interest’ includes, but is not limited to, all instances where the debarred contractor or subcontractor receives payments, whether cash or any other form of compensation, from any entity bidding or performing work on the public works project, or enters into any contracts or agreements with the entity bidding or performing work on the public works project for services performed or to be performed for contracts that have been or will be assigned or sublet, or for vehicles, tools, equipment or supplies that have been or will be sold, rented or leased during the period of from the initiation of the debarment proceedings until the end of the term of the debarment period.”
Dated: August 11, 2021 ______________________________________
PATRICIA SALAZAR
Hearing Officer
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DECISION RE: DEBARMENT OF RESPONDENTS FROM PUBLIC WORKS PROJECTS AFTER ISSUANCE OF
PEREMPTORY WRIT OF MANDAMUM
STATE OF CALIFORNIA
DEPARTMENT OF INDUSTRIAL RELATIONS
DIVISION OF LABOR STANDARDS ENFORCEMENT
Patricia Salazar, Esq. (SBN 249935)
320 W. 4th Street, Suite 600
Los Angeles, California 90013
Telephone No.: (213) 897-1511
Facsimile No.: (213) 897-1511
Attorney for the State Labor Commissioner
BEFORE THE DIVISION OF LABOR STANDARDS ENFORCEMENT
DEPARTMENT OF INDUSTRIAL RELATIONS
FOR THE STATE OF CALIFORNIA
In the Matter of the
Debarment Proceeding Against:
MINAKO AMERICA CORPORATION
DBA MINCO CONSTRUCTION; REFAAT
HILMY MINA,
Respondents.
CASE NO.: LB6333
DECISION RE: DEBARMENT OF
RESPONDENTS FROM PUBLIC WORKS
PROJECTS AFTER ISSUANCE OF
PEREMPTORY WRIT OF MANDAMUS
BY THE SUPERIOR COURT OF LOS
ANGELES ON MINAKO AMERICA
CORPORATION DBA MINCO
CONSTRUCTION’S AND REFAAT
HILMAY MINA’S VERIFIED PETITION
FOR WRIT OF MANDATE
[Labor Code § 1777.1]
The Proposed Statement of Decision Re: Debarment of Respondents from Public Works Projects after Issuance of Peremptory Writ of Mandamus by the Superior Court of Los Angeles on Minako America Corporation dba Minco Construction’s and Refaat Hilmay Mina’s Verified Petition for Writ of Mandate, of the undersigned attorney Patricia Salazar, debarring Respondents MINAKO AMERICA CORPORATON DBA MINCO CONSTRUCTION; REFAAT HILMY MINA, from working on public works projects in the State of California for one year, is hereby adopted by the Division of Labor Standards Enforcement as the Decision in the above-captioned matter.
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DECISION RE: DEBARMENT OF RESPONDENTS FROM PUBLIC WORKS PROJECTS AFTER ISSUANCE OF
PEREMPTORY WRIT OF MANDAMUM
This Decision shall become effective _____________________, 2021. The debarment shall commence in 45 days on _____________________, 2021.
IT IS SO ORDERED.
Dated: STATE OF CALIFORNIA
DEPARTMENT OF INDUSTRIAL RELATIONS
DIVISION OF LABOR STANDARDS ENFORCEMENT
______________________________________
LILIA GARCIA-BROWER
STATE LABOR COMMISSIONER
08-11-2021
September 27
August 11