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The Obama administration has attempted to impose increased burdens on federal government contractors via policies that needlessly injure competition, increase taxpayer costs, stifle job creation, and delay the delivery of goods and services to the government and its customers. The most abusive federal contracting policies affecting the construction industry are the administration’s continued efforts to expand the use of project labor agreements and the expanded application and enforcement of “prevailing wage” requirements under the Davis-Bacon Act.

See below for the latest news, legislative action, regulatory developments and compliance tools for hot button issues in federal, state and local procurement.

"Blacklisting" Fair Pay and Safe Workplaces

OVERVIEW
President Obama’s Executive Order (EO) 13673, known as the “Blacklisting” EO because it could prevent some federal
contractors from winning future federal contracts, will discourage qualified large and small businesses from pursuing federal contracts, threaten the livelihood of millions of Americans and increase costs to taxpayers.


ABC SUPPORTS
• Congress, the administration, federal procurement officers and stakeholders working together to develop a balanced approach to creating and implementing any reforms to the federal contracting procurement process.
• Safeguards for fair and transparent competition and protections against subjectivity and corruption in federal contracting.
• Federal agencies awarding contracts based on merit to firms that can deliver the highest quality product at the best price.

ABC OPPOSES
• Federal contractors who repeatedly and intentionally break federal labor and contracting laws and regulations.
• Executive Order 13673 and any executive order, legislation or regulation that would deny federal contractors due process and permit or encourage discrimination in federal contracting based on arbitrary criteria, pre-adjudicated and/ or false accusations, or a contractor’s labor affiliation.
• Any executive order, legislation or regulation that could discourage competition and delay federal construction projects by adding new levels of costly and time-consuming bureaucratic red tape to the federal contracting process.

BACKGROUND
On July 31, 2014, President Obama issued The Fair Pay and Safe Workplaces EO 13673, which creates a sweeping regulatory scheme on federal contractors that will disrupt the federal procurement process, significantly increase red tape and costs for both government and industry, and serve as a barrier to federal contracting for many businesses.

The EO instructs federal agencies to determine whether businesses seeking federal contracts are “responsible” enough to be awarded a contract based on a subjective review of its three-year compliance history with 14 federal and equivalent state labor, employment and safety laws. The EO could result in some of the best federal contractors being arbitrarily blacklisted from winning future federal contracts for committing even minor violations of a rapidly growing and constantly changing labyrinth of workplace laws and regulations. Even the federal government has a difficult time complying with the laws consistently.

Flouting Congressional authority, the EO disregards existing statutory enforcement powers found in the Federal Acquisition Regulation (FAR) and various labor laws. In addition, the EO imposes new and redundant data collection, review, inter-agency consultation and enforcement procedures. The EO also unfairly restricts the ability of employers to use arbitration to resolve employee disputes in certain circumstances (Federal law and subsequent Supreme Court decisions have made clear these arbitration agreements are acceptable).
 
While the full effect of the blacklisting EO won’t be known until more detailed regulations are finalized, there is great concern that the livelihoods of federal contractors and their employees could be jeopardized based on the subjective decisions of a team of new unelected bureaucrats (Agency Labor Compliance Advisors) who will be charged with judging federal contractors’ compliance records and advising federal agency contracting officers.

Many have expressed concern that this EO could be used to  reward political allies with contracts while blacklisting political foes. Such high stakes open the door to corruption and favoritism in the procurement process, allow trial lawyers to extort larger settlements from firms, enable bureaucratic agencies to extract costly settlements for conduct that may have been legal, and give labor unions leverage to get businesses to capitulate to their demands.

Taxpayers, contractors and their employees deserve a fair and transparent process that will award contracts based on merit to firms that can deliver the highest quality product at the best price. Instead, the EO 13673 adds uncertainty and subjectivity to the government contracting process and likely will increase the frequency and cost of labor and employment disputes.

ABC Opposes President Obama’s Fair Pay and Safe Workplaces Executive Order 13673

President Obama’s Executive Order 13673, known as the “Blacklisting” EO because it could prevent quality federal contractors from winning future federal contracts, will discourage small businesses from pursuing federal contracts, threaten the livelihood of millions of Americans and increase costs to taxpayers.

Signed July 31, 2014, the EO could result in some of the best firms being arbitrarily blacklisted from winning future federal contracts for committing even minor violations of a rapidly growing and constantly changing labyrinth of workplace laws and regulations, including 14 federal statutes and yet-to-be-defined equivalent state laws. By seeking to impose new penalties on contractors beyond those specified by Congress, the president is exceeding his office’s constitutional authority and undermining the carefully balanced contracting provisions that already exist.

While the full effect of the blacklisting EO won’t be known until more detailed regulations are finalized (on May 27, 2015, the Federal Acquisition Regulatory (FAR) Council issued a proposed rule and the U.S. Department of Labor (DOL) issued a proposed guidance document available for public comment for 60 days until July 27, 2015, which was extended to August 11 and then to August 26), there is great concern that the livelihoods of federal contractors and their employees could be jeopardized based on the subjective decisions of a team of new unelected bureaucrats who will be charged with judging federal contractors’ compliance records.

Besides complaints about the creation of a complicated regulatory burden, many have expressed concern that this EO could be used to reward political allies with contracts while blacklisting political foes. Such high stakes open the door to corruption and favoritism in the procurement process, allow trial lawyers to extort larger settlements from firms, enable bureaucratic agencies to extract costly settlements for conduct that may have been legal, and give labor unions leverage to get businesses to capitulate to their demands.

Taxpayers, contractors and their employees deserve a fair and transparent process that will award contracts based on merit to firms that can deliver the highest quality product at the best price. Instead, the Blacklisting EO adds uncertainty and subjectivity to the government contracting process and likely will increase the frequency and cost of labor and employment disputes.

To learn how to participate in the forthcoming rulemaking process and comply with new rules once Executive Order 13673 is in effect, email ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck.

Important Links

ABC National Comments urging the withdrawal of the Federal Acquisition Regulatory (FAR) Council’s Notice of Proposed Rulemaking (NPRM) and the U.S. Department of Labor’s (DOL) Notice of Proposed Guidance (NPG) implementing President Obama’s “Fair Pay and Safe Workplaces” Executive Order (Executive Order 13673). ABC Comments, August 26, 2015. 

ABC National News Release announcing comment submission in response to the proposed rulemaking implementing the "Fair Pay and Safe Workplaces" Executive Order. ABC News Release, August 26, 2015. 

ABC National 2015 Blacklisting Issue Brief (1 pager).

Littler Insight Document on Federal Acquisition Regulatory (FAR) Council proposed rule (FAR Case 2014-025) and U.S. Department of Labor (DOL) proposed guidance memo (DOL_FRDOC_0001-0453) implementing "Blacklisting" Executive Order13673. June 1, 2015. (ASAP Littler memo, May 27, 2015).

ABC Member Only Webinar by ABC General Counsel Maury Baskin of Littler, "Learn About the Obama Administration's Controversial Proposals on Blacklisting," 2:00 p.m. (ET), June 8, 2015.

ABC Lauds Passage of Amendment Protecting Contractors From ‘Blacklisting’ Proposal. ABC News Release, April 28, 2016.

ABC Continues Opposition to Blacklisting Proposal in Advance of House Hearing. ABC Newsline, September 30, 2015.

Call to Action: Oppose President Obama’s Blacklisting Proposal. ABC Newsline, August 20, 2015

Senators Urge Agencies to Withdraw Proposed “Blacklisting” Rules for Federal Contractors. ABC Newsline, August 12, 2015.

Blacklisting Proposal's Comment Deadline Extended to August 26
. ABC Newsline, August 5, 2015.

House Committee Chairmen Call for Withdrawal of Administration's Blacklisting Proposal
. ABC Newsline, July 22, 2015.

Blacklisting Proposal Public Comment Deadline Extended to August 11. ABC Newsline, July 15, 2015.

ABC Surveys Federal Contractors on ‘Blacklisting’ Proposal. ABC Newsline, July 8, 2015.

Businesses Blast Obama's Blacklisting Regulations.
The Hill, June 4, 2015.

Interview with ABC's Ben Brubeck on Blacklisting Regulations. Federal News Radio, June 1, 2015.

Acquisition Reform Working Group (ARWG) April 20, 2015, letter to the U.S. House and Senate Armed Services Committees outlining major concerns with the blacklisting EO. ABC Newsline, April 22, 2015.

The Blacklisting Executive Order: Rewriting Federal Labor Policies Through Executive Fiat. Joint hearing held by U.S. House Education and Workforce’s Subcommittee on Workforce Protections and the Subcommittee on Health, Employment, Labor, and Pensions. Feb. 28, 2015.

‘Blacklisting’ Executive Order Continues Regulatory Assault on Federal Contractors. Construction Executive Washington Update Column by Ben Brubeck, November 2014.

ABC’s news release on federal contracting coalition letter asking President Obama to withdraw Blacklisting EO. Nov. 7, 2014.

Blacklisting Executive Order Meets Opposition from ABC at White House Meeting. ABC Newsline, Oct. 22, 2014.

Nothing’s Fair About Obama’s Fair Pay Order. ABC’s Op-Ed by Geoff Burr in Government Executive, Sept. 12, 2014.

Editorial: Obama’s Make-Work Order. Wall Street Journal, Aug. 8, 2014.

Latest Obama Executive Order Could Create Federal Contractor “Blacklist”. ABC Newsline, Aug. 6, 2014.

New "Fair Pay and Safe Workplaces" Executive Order Dramatically Increases Risks for Government Contractors. Littler memo by ABC General Counsel Maury Baskin, Aug. 1, 2014.

ABC’s news release criticizing Obama Blacklisting EO. July 31, 2014.

White House Fact Sheet: Fair Pay and Safe Workplaces Executive Order. July 31, 2014.

Fair Pay and Safe Workplaces Executive Order 13673. July 31, 2014.


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