ABC June 14 filed comments with the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council opposing a proposed rule implementing Executive Order 13494, “Economy in Government Contracting.”  

The executive order was issued in January 2009 and prohibits federal contractors from being reimbursed for costs associated with educating employees about joining a union, including preparing and distributing materials; hiring or consulting legal counsel; holding meetings; and activities planned or conducted by managers, supervisors or union representatives during work hours.   

ABC criticized the proposed rule for being a misguided attempt to regulate labor policy through the procurement process and in a manner preempted by the National Labor Relations Act.   

In its comments, ABC expressed concern that the classification of the costs listed as “unallowable” in the proposed rule will significantly diminish a contractor’s ability to inform employees about the potential disadvantages of unionization and to engage in legal counsel in the face of organizing campaigns – both of which are legal, protected activities.   

ABC also pointed out the proposed rule would especially have a negative impact on contractors for which government projects comprise the bulk of their workload because the overhead associated with the having to pay for the costs of protected activities out of pocket would result in lower profit margins.  Contractors that cannot afford to bear these expenses would essentially have their protected rights eliminated because they would no longer be able to engage in these activities.   

In addition, while the proposed rule does not currently include explicit recordkeeping or disclosure requirements, ABC is concerned that employers may be required to record and retain records on their unallowable expenses, and then submit the information to government entities.