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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.
• Appropriations-based funding limitations on the DOL and FAR's blacklisting proposals.

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 places a sweeping new 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 persuade 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, EO 13673 adds uncertainty and subjectivity to the government contracting process and will likely increase the frequency and cost of labor and employment disputes.


Final Rules on Blacklisting, Sick Leave Forthcoming

On May 18, the administration released the latest regulatory agenda outlining their plans for their final months. The agencies are looking to work on several rulemakings impacting federal contractors. An update on rulemakings affecting the construction industry is outlined below. 

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Amendment to Exempt DOD, NNSA from ‘Blacklisting' Proposal Passes House Committee

An amendment which would exempt the Department of Defense (DoD) and the National Nuclear Security Administration (NNSA) from the controversial “Fair Pay and Safe Workplaces” Executive Order 13673, proposed rule and guidance, commonly referred to as “blacklisting,” passed the House Armed Services Committee on April 28.

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ABC Urges House Appropriators to Roll Back Job-Killing Regulations

On Feb. 17, ABC sent a letter to the U.S. House of Representatives Committee on Appropriations Subcommittee on Health and Human Services, Education, and Related Agencies Chairman Tom Cole (R-Okla.) and Ranking Member Rosa DeLauro (D-Conn.) expressing concern over several regulations issued by the U.S. Department of Labor (DOL) and the National Labor Relations Board (NLRB). 

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ABC Files Comments on New Paid Sick Leave Requirement for Fed Contractors

On April 12, ABC submitted comments in response to the U.S. Department (DOL) of Labor Wage and Hour Division’s proposed rule on establishing paid sick leave for federal contractors. The proposed rule  requires certain federal contractors to offer employees up to seven days of paid sick leave annually, including paid leave for family care. The paid sick leave required by the proposal is in addition to a contractor’s obligations under the Service Contract Act (SCA) and Davis-Bacon Act (DBA). Therefore, a contractor may not receive credit toward its prevailing wage or fringe benefit obligation under the SCA and DBA for paid sick leave provided in satisfaction of the requirements of the proposed rule.  

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Federal Contractor Alert: DOL Releases Proposed Rule on Paid Sick Leave

On Feb. 25, 2016, the U.S. Department of Labor (DOL), Wage and Hour Division released a proposed rule to implement Executive Order 13706 requiring certain federal contractors to offer employees up to seven days of paid sick leave annually, including paid leave for family care. ABC’s General Counsel Littler Mendelson, P.C prepared an in-depth analysis of the DOL proposal, which can be read here. 

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OFCCP Issues Final Pay Transparency Rule for Federal Contractors

On Sept. 10, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) issued its final rule
prohibiting federal contractors and subcontractors from terminating or otherwise discriminating against employees who discuss their compensation with co-workers or job applicants. This rule implements the Obama administration’s Equal Pay initiative under Executive Order 13665 and will take effect on Jan. 11, 2016.

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ABC Files Comments on New Paid Sick Leave Requirement for Fed Contractors

On April 12, ABC submitted comments in response to the U.S. Department (DOL) of Labor Wage and Hour Division’s proposed rule on establishing paid sick leave for federal contractors. The proposed rule requires certain federal contractors to offer employees up to seven days of paid sick leave annually, including paid leave for family care. The paid sick leave required by the proposal is in addition to a contractor’s obligations under the Service Contract Act (SCA) and Davis-Bacon Act (DBA). Therefore, a contractor may not receive credit toward its prevailing wage or fringe benefit obligation under the SCA and DBA for paid sick leave provided in satisfaction of the requirements of the proposed rule.

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Federal Contracting

The Obama administration has attempted to impose increased burdens on federal government contractors via executive actions that needlessly restrain competition, increase taxpayer costs, stifle job creation, and delay the delivery of goods and services to the government and its customers.

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Conference Offers In-Depth Look at Public-Private Partnerships

Join ABC and a growing list of industry professionals in Dallas, Texas, Feb. 23-25, for the annual Public-Private Partnership Conference (P3C), one of the largest gatherings of government and industry development professionals in the country.  The conference will host more than 750 owners, industry executives, key decision-makers, and more than 100 speakers for three days of in-depth learning, business development, and networking opportunities to address the critical principles behind successful public-private partnerships (P3).  

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Public-Private Partnership Miami Summit Addresses Social Infrastructure

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ABC Concerned Senate Water Resource Bill will Expand Davis Bacon, Exclude P3s

In response to the House-Senate Conference meeting on the Water Resources Reform and Development Act (H.R. 3080) and the Water Resources Development Act (S. 601), ABC Jan. 7 sent a letter to members of Congress thanking them for recognizing the importance of our nation’s water infrastructure and for moving forward with the first Water Resource Reauthorization bill since 2007. However, ABC also expressed concern that the proposed Senate bill would expand Davis Bacon requirements and exclude a public-private partnership (P3s) program.

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