On July 15, 2015, several members of Congress sent a letter to the Department of Labor (DOL) and the Office of Federal Procurement Policy, commenting on the proposed guidance and rule implementing the Fair Pay and Safe Workplaces Executive Order also referred to as the “Blacklisting” Executive Order and requesting their withdrawal. The proposed regulations can be found at: http://www.gpo.gov/fdsys/pkg/FR-2014-09-17/pdf/2014-21945.pdf.
The “Blacklisting” Executive Order requires federal contractors to disclose certain violations that have occurred during the previous three years during the bidding process for federal contracts over $500,000. Eight members of congressional committees and subcommittees wrote a letter requesting that the proposed implementing guidance and rule be withdrawn, or alternately be given an additional 90 day extension on the comment period. Several major concerns were raised in the five-page letter.
The proposed rule and guidance rely on three reports, which according to the congressional representatives are, “lacking empirical evidence as the basis for imposing this new and burdensome reporting requirement on over 360,000 federal contractors”. Numerous issues with the reports referenced in the proposed guidance and rule are identified in the letter. One report does not acknowledge that many of the companies involved should have been excluded, however, the contracting officer failed to check the excluded parties list, and the agency often failed to include the contract clause informing the contractor that prevailing wage rules applied. Another report draws conclusions from data on only 28 companies which accounts for a miniscule portion of the contractor community. The third report by the Government Accountability Office (GAO) explicitly states, “GAO did not evaluate whether federal agencies considered or should have considered these violations in the awarding of federal contracts, thus no conclusions on that topic can be drawn from this analysis”.
The letter goes on to address the issue that the EO includes requirements relating to “equivalent state laws” which have not yet been defined, making it impossible to determine accurately the true extent of the changes to the federal procurement system. There is no projected date for the list of equivalent state laws.
The letter states that some of the largest federal contractors have indicated that they will need to develop new and costly systems to comply, which will lead to rising contract prices. This may eliminate competition from some of the smaller contractors who will not be able to afford to maintain these systems, leading to higher priced contracts, which is not in the best interests of stakeholders.
The closing remarks state, “DOL’s existing statutory authorities for enforcement of federal labor laws are sufficient to hold bad actors accountable. Further, our current suspension and debarment system already gives agencies the authority to deny federal contracts to problematic employers”. The letter sites a report by the Annual Interagency Suspension and Debarment Committee, which reveals that the DOL did not use their suspension or debarment authority during the fiscal years of 2012 through 2014. The eight committee and subcommittee members suggest that rather than add to the bureaucracy, “the Administration should work with Congress and stakeholders to use the existing system”.
Please contact us by calling (732) 446-2529 or sending us an e-mail at glennbarlett@gbcs.net if you are interested in discussing the proposed guidelines or proposed rule.