(D.C. No. 0315-2 : 91-01670).
Before: Sloviter, Chief Judge, Stapleton and Lay*fn* , Circuit Judges
LAY, Senior Circuit Judge.
Facchiano Construction Company, Inc., Michael Facchiano Jr., Michael Facchiano Sr. and John Facchiano appeal the order of the district court*fn1 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.
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).*fn2 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.*fn3 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, 109 S. Ct. 2447 (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.
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.
A. Executive Order No. 12549*fn4
Executive Order No. 12549 provides for government-wide debarment and suspension. On February 18, 1986, President Reagan ordered:
By the authority vested in me as President by the Constitution and laws of the 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 ...