ABC Urges USDA to Withdraw Proposal That Includes New Labor Law Compliance Certifications and Reporting

On Feb. 17, the U.S. Department of Agriculture published a proposed rule to make amendments to the Agriculture Acquisition Regulation, which includes new labor law compliance certifications and reporting provisions that present wide-ranging implications for ABC members that perform work on federal contracts awarded under the AGAR. On March 21, ABC submitted comments urging the USDA to withdraw the proposal.

“The proposal would insert a clause requiring contractors to certify compliance with 15 different labor laws and their state law equivalents, as well as certify the compliance of any subcontractors and suppliers,” ABC said in its comments. “The proposed rule would also insert a clause requiring contractors to certify that they and any subcontractors comply with previously required corrective actions for adjudicated labor law violations and provide a list of specific violations to a contracting officer.

ABC supports a level and transparent playing field for federal contractors and believes unethical firms should be held accountable. Bad actors who facilitate inequities in the federal procurement process are a detriment to taxpayers, contractors and the employees whose livelihoods rely on a fair contracting marketplace. But the current proposal is overbroad, arbitrary and capricious, and violates the statutory and constitutional rights of responsible, ethical contractors.

ABC had substantive concerns with an earlier USDA direct final rule and proposed rule, which similarly sought to amend the AGAR to include a new clause addressing labor law compliance certification and reporting. Those changes—which were proposed and then quickly withdrawn in 2012—would have had significant negative implications for the federal procurement system, construction industry and USDA contractor stakeholders. The 2022 proposed rule suffers from the same flaws previously identified by ABC and other stakeholders and must therefore be withdrawn.”

In addition, the language proposed by the USDA’s latest proposed rule is substantially the same as the U.S. Department of Labor’s 2016 Guidance Document and Federal Acquisition Regulation Final Rule implementing President Obama’s July 31, 2014, Fair Pay and Safe Workplaces Executive Order 13673, commonly referred to as the blacklisting rule. On Oct. 24, 2016, implementation of the reporting and disclosure requirements of the controversial EO was blocked by a U.S. District Court for the Eastern District of Texas judge in Associated Builders and Contractors of S.E. Tex. v. Rung.

The court ruled in favor of ABC’s lawsuit and granted a preliminary injunction, after finding that very similar certification and disclosure requirements in the FAR rules conflicted with the labor statutes themselves; were arbitrary and capricious; and violated contractors’ constitutional rights. Subsequently, Congress voted to disapprove the FAR’s blacklisting rule pursuant to the Congressional Review Act, signed into law by President Trump.

The CRA states that, once an agency rule is disapproved by Congress, such a rule may not be issued in “substantially the same form,” unless it is expressly authorized by a subsequent law. Congress has made no such authorization here. Therefore, because the language in the USDA’s 2022 proposed rule is substantially the same as the DOL’s 2016 Guidance Document and FAR final rule implementing EO 13673, the proposed rule violates the CRA as well as the judge’s findings in Associated Builders and Contractors of S.E. Tex. v. Rung.

ABC is concerned with the USDA’s rulemaking and the manner in which it was issued. Such a significant policy change requires a great deal of additional review. The proposal threatens to destabilize labor relations in the construction industry at a time when construction contractors are currently up against historic global supply chain disruptions, rising materials prices and a workforce shortage of 650,000. The new rules have the potential to harm existing businesses and impair their ability to grow and create new jobs. Therefore, ABC requests that the USDA withdraw its rulemaking on the challenged provisions without delay.

ABC will continue to inform members about new developments on this issue in Newsline.