Blacklisting Executive Order Meets Opposition from ABC at White House Meeting

ABC strongly opposed a new executive order (EO) that will harm federal contractors, taxpayers and government procurement officials at an Oct. 13, 2014, White House listening session with major employer association representatives, businesses and Obama administration officials.

Signed July 31, 2014, the Fair Pay and Safe Workplaces Executive Order 13673 is the latest of several heavy-handed White House actions circumventing congressional authority and disrupting fair and open competition in federal contracting. The EO calls on the U.S. Department of Labor (DOL) to issue regulations that would impose a number of onerous and needless requirements on federal government contractors.

The listening session was hosted by Thomas E. Perez, U.S. Secretary of Labor; Cecilia Muñoz, director of the White House Domestic Policy Council; and Beth Cobert, deputy director at the Office of Management and Budget. Also present at the meeting were the DOL's Sharon Block—a current National Labor Relations Board (NLRB) nominee and former recess appointee to the board—and Lafe Solomon, former NLRB general counsel. 

This was one of a series of listening sessions on EO 13673 held to field stakeholder questions and concerns.

Contracting Community Has Concerns About Blacklisting EO
Currently, federal agency officials are permitted to prevent the award of federal contracts to employers that have committed serious violations relating primarily to contract performance. However, the new EO greatly expands the list of laws that will become part of this responsibility determination and includes a new focus on 14 labor and employment laws and equivalent state laws. 

The White House portrays it as a tool to crack down on “federal contractors who put workers’ safety and hard-earned pay at risk.” However, at the listening session, the federal contracting community said the EO is illegal and is so broad, vague and poorly constructed that it is effectively unexecutable.

“President Obama’s executive order is yet another example of politically motivated executive overreach that will end up harming taxpayers and the economy in the long run,” said ABC Vice President of Government Affairs Geoff Burr. “We are concerned these sweeping changes threaten the due process rights of federal contractors and conflict with existing federal procurement and labor law. While we appreciate efforts to ensure contractors comply with complex laws, the subjective nature of the order opens the door to favoritism and abuse of government contractors by administration officials.” 

Commonly referred to as the “blacklisting executive order” by critics, many have expressed concern it 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.

There is no public timetable for the Federal Acquisition Regulatory (FAR) Council or the DOL to issue regulations or guidance on the EO. While the full effect of the blacklisting EO won’t be known until more detailed federal regulations are finalized, there is concern it will discourage small businesses from pursuing federal contracts, threaten the livelihood of millions of Americans and increase costs to taxpayers; plus, it could prevent the best federal contractors from winning future federal contracts. 
In consort with the larger federal contracting community, ABC is exploring legal options to challenge the EO. ABC also will participate in the rulemaking process and educate ABC members about ways to comply with the order and explain to regulators and lawmakers how it will harm the construction industry.

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For questions or for more information, contact Ben Brubeck.