TEST Paragraph
Awards
Events/Products/Programs
Legislation
Politics and Policy
Regulations
Safety
State/Local News
Workforce Development
ABC Newsline
In December 2023, President Joe Biden announced a final rule implementing Executive Order 14063, which requires federal construction contracts of $35 million or more to be subjected to controversial project labor agreements. ABC issued a statement announcing plans to challenge the new rule in court.
On Jan. 4, ABC authored a coalition letter to Congress signed by 23 construction and business organizations opposing the final rule and urging members to co-sponsor the ABC-backed Fair and Open Competition Act. In addition, Ben Brubeck, ABC vice president of regulatory, labor and state affairs, authored a Fox Business op-ed on the Biden PLA rule, which ran on Jan. 4. Letters to the editor critical of the Biden PLA rule by ABC chapter leaders have also been published in print media.
On Jan. 12, a dozen pro-taxpayer groups sent a letter to Congress opposing the Biden rule and supporting FOCA.
Next Steps
The rule goes into effect on Jan. 22, 2024, and will take additional time for numerous federal agencies to implement in their procurement policies and forthcoming solicitations for construction services.
A Dec. 18, 2023, White House Office of Management and Budget memo, M-24-06, Use of Project Labor Agreements on Federal Construction Projects, provides guidance about how this rule should be implemented by federal agencies. Of note, it describes when federal contracting officers shall require a PLA in a solicitation and how the PLA requirement can be waived under limited circumstances.
ABC members and chapters are encouraged to register for an ABC members-only webinar from 2 to 3:15 p.m. ET on Wednesday, Jan. 17, 2024, where experts will discuss the rule, the OMB memo and ABC’s legal, advocacy and public relations strategies to fight federal PLA requirements.
In the interim, ABC members are encouraged to flag for ABC National’s advocacy team any solicitations with PLA requirements or pro-PLA language, as well as any federal agency PLA surveys, by emailing [email protected].
In addition, ABC members are strongly encouraged to participate in this ABC Action grassroots campaign and ask their federal lawmakers to fight the Biden administration’s pro-PLA schemes and co-sponsor the Fair and Open Competition Act (H.R. 1209/S. 537), introduced in the 118th Congress by Rep. James Comer, R-Ky., and Sen. Todd Young, R-Ind.
Review ABC’s Jan. 3 Newsline article to learn more about the final rule.
On Jan. 9, the U.S. Department of Labor’s Wage and Hour Division announced the final rule on Employee or Independent Contractor Classification Under the Fair Labor Standards Act, which rescinds the ABC-supported 2021 final rule and replaces it with a confusing multifactor analysis to determine whether a worker is an employee or an independent contractor. The final rule takes effect on March 11. Learn more about the 2024 final rule.
Immediately following the release of the 2024 final rule, ABC issued a statement opposing it, saying "it will cause workers who have long been properly classified as independent contractors in the construction industry to lose opportunities for work."
On Jan. 10, ABC, its Southeast Texas chapter, the Coalition for Workforce Innovation and the Financial Services Institute filed a motion in the U.S. Court of Appeals for the 5h Circuit requesting that it lift the stay of appeal and remand the case to the U.S. District Court for the Eastern District of Texas, Beaumont Division so that the district court may consider whether the 2024 final rule complies with the Administrative Procedure Act in its attempt to rescind and replace the current 2021 final rule. In 2022, the district court found that the DOL violated the APA when it first attempted to delay, and later attempted to withdraw the 2021 final rule; the court vacated these efforts and held that the 2021 final rule has been and remains in effect since March 8, 2021.
“The Biden administration cannot be allowed to undermine flexible work opportunities for millions of Americans who choose to work independently,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs.
Read the business coalition’s statement.
On Dec. 14, 2023, the Biden administration announced a 779-page U.S. Department of Labor proposed rule that would make significant and controversial revisions to the National Apprenticeship System that will affect ABC members, ABC chapters, apprentices and other industry stakeholders participating in government-registered apprenticeship programs.
On Jan. 30, 2024, from 2 to 3:15 p.m. ET, ABC is offering an ABC members-only webinar on the proposed rule where you will learn about the problematic and beneficial provisions of the rule and hear how you can best participate in regulatory and advocacy efforts to help improve this extensive regulation. Encourage ABC member and chapter education professionals, human resources, management professionals and other stakeholders to register to attend the webinar.
In addition, the U.S. Department of Labor’s Employment and Training Administration is sponsoring a webinar that's been postponed to a later date. Participants can expect to receive a summary of the Biden administration’s proposal from DOL officials. Register to attend the webinar.
DOL Proposal Widely Criticized
On Dec. 18, ABC issued a press release in response to the ABC-opposed proposal:
“ABC supports government-registered apprenticeship programs and offers more than 450 such education programs across the country as part of its all-of-the-above approach to meet the workforce needs of the construction industry,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “ABC is thoroughly reviewing the Biden DOL’s overreaching, 779-page proposal and is concerned that aspects of the proposed rule will limit the number of apprentices and employers participating in GRAPs.
“Already, the government-registered apprenticeship system is woefully inadequate in meeting the workforce needs of the construction industry,” said Brubeck. “Recent data suggests that it would take 12 years for the current broken GRAP system to educate the more than half a million workers needed by the construction industry in 2023 alone. Additional unclear and onerous requirements in the DOL proposal are likely to exacerbate the construction industry’s skilled labor shortage.
“The misguided proposal will discourage employer participation in the GRAP system by adding more bureaucracy and paperwork requirements while also eliminating flexible competency-based approaches to workforce development that benefit apprentices and employers,” said Brubeck. “As currently written, the Biden’s proposal threatens to undermine significant investments recently made by taxpayers in infrastructure, clean energy and manufacturing projects procured by government and private owners.”
The Biden DOL’s proposed rule was also panned by both the chairwoman of the U.S. House Education and the Workforce Committee Virginia Foxx, R-N.C., and the ranking member of the Senate HELP Committee Bill Cassidy, R-La.
Rep. Foxx’s statement derided the new rule, stating, “If the goal was to make an already dysfunctional registered apprenticeship system less workable and relevant to the needs of workers and employers, this proposed rule appears likely to succeed.”
Sen. Cassidy’s statement criticized the rule’s circumvention of Congress, seeking to implement a new regulation “395 times longer than the legislation it is supposedly interpreting.” According to Cassidy’s statement:
“The regulations would inject political ideology into the National Apprenticeship System, including diversity, equity, and inclusion (DEI) policies. The rule would allow DOL to dissolve the apprenticeship programs of employers accused by labor unions of misconduct without a requirement that the charges are verified by the National Labor Relations Board (NLRB). This would empower unions to intimidate and coerce employers with baseless accusations. It would also give unions veto authority over new apprenticeship programs, limiting job training opportunities for American workers. This comes at a time when workforce shortages continue and the labor force participation rate remains well below pre-COVID levels.
“Additionally, the rule gives the U.S. Department of Labor’s Office of Apprenticeship and State Apprenticeship Agencies enforcement authority over labor disputes, a role already performed by the NLRB. Ultimately, the proposed regulation applies more bureaucracy to a system in need of flexibility when responding to pressing workforce needs.”
The Biden proposal was also roasted in a Wall Street Journal editorial (Biden to Apprentices, You’re Fired, Dec. 18):
“DOL’s manifest goal is to limit non-union programs that don’t result in more union jobs. The rule would let the department dissolve programs accused by unions of misconduct or found to be non-compliant with minor government regulations and DEI benchmarks.
“One result of DOL’s regulations will be fewer job-training opportunities for minorities. The rule will also undercut the Administration’s industrial policy and climate agenda. The Inflation Reduction Act’s myriad green energy tax credits require employers to utilize apprentices from government-approved programs. Good luck finding them.
“President Biden’s message to non-union apprentices: You’re fired.”
In the coming weeks, ABC will provide detailed analysis and resources on the proposal to construction industry stakeholders and government-registered apprenticeship program providers and participants.
ABC will also request feedback from affected parties on aspects of the proposal that are problematic, as well as those that may be beneficial to the construction industry.
In addition, ABC will submit comments on the proposed rule and make recommendations that will help create a final rule that can deliver value to taxpayers, the construction industry workforce and employer participants in the GRAP system.
The deadline for public comments on the DOL proposal will be 60 days after the proposal is published in the Federal Register.
Please contact Michael Altman for additional information.
Additional Background
On May 9, 2023, an ABC-led coalition of construction and business associations submitted a letter to the Advisory Committee on Apprenticeships opposing the committee’s recommendations to the DOL for dramatic changes to the GRAP system. These recommendations included a proposal to establish a new “Quality Seal” program to give preferential treatment to GRAPs meeting certain requirements.
It appears that some aspects of the ACA’s recommendations opposed by the coalition were incorporated into the proposal, which is likely to undermine employer and employee participation in GRAP system.
Visit abc.org/workforce to learn how ABC is building the people who build America.
On Jan. 9, the U.S. Department of Labor’s Wage and Hour Division announced the final rule on Employee or Independent Contractor Classification Under the Fair Labor Standards Act, which rescinds the ABC-supported 2021 final rule and replaces it with a confusing multifactor analysis to determine whether a worker is an employee or an independent contractor. The final rule takes effect on March 11, 2024.
Immediately following the release of the rule, ABC issued the following statement from Ben Brubeck, vice president of regulatory, labor and state affairs:
“By undermining the flexible, independent work for millions of Americans, President Joe Biden’s DOL is choosing to move forward with a final rule that creates an ambiguous and difficult-to-interpret standard for determining independent contractor status. Under the rule’s multifactor test, employers will now be forced to guess which factors should be given the greatest weight in making the determination. Instead of promoting much-needed economic growth and protecting legitimate independent contractors, the final rule will result in more confusion and expensive, time-consuming, unnecessary and often frivolous litigation, as both employers and workers will not understand who qualifies as an independent contractor.
“Regrettably, the confusion and uncertainty resulting from the final rule will cause workers who have long been properly classified as independent contractors in the construction industry to lose opportunities for work. Legitimate independent contractors are a vital part of the construction industry, providing specialized skills, entrepreneurial opportunities and stability during fluctuations of work common to the industry. They play an important role for large and small contractors, delivering construction projects safely, on time and on budget for their government and private customers. This move will jeopardize the ability of construction firms to continue the industry’s longstanding practice of utilizing legitimate independent contractors.”
The DOL issued FAQs, which discuss provisions of the final rule, including:
7. What analysis guides whether a worker is an employee or independent contractor under this final rule?
This final rule continues to affirm that a worker is not an independent contractor if they are, as matter of economic reality, economically dependent on an employer for work. Consistent with judicial precedent and the Department’s interpretive guidance prior to 2021, the final rule applies the following six factors to analyze employee or independent contractor status under the FLSA:
(1) opportunity for profit or loss depending on managerial skill;
(2) investments by the worker and the potential employer;
(3) degree of permanence of the work relationship;
(4) nature and degree of control;
(5) extent to which the work performed is an integral part of the potential employer’s business; and
(6) skill and initiative.
The final rule provides detailed guidance regarding the application of each of these six factors. No factor or set of factors among this list of six has a predetermined weight, and additional factors may be relevant if such factors in some way indicate whether the worker is in business for themself (i.e., an independent contractor), as opposed to being economically dependent on the employer for work (i.e., an employee under the FLSA).
10. How does the final rule differ from the Department’s 2021 Independent Contractor Rule?
This final rule differs from the guidance provided in the 2021 Independent Contractor Rule in several important ways. Specifically, consistent with the approach taken by federal courts, this final rule:
To learn more about the final rule, read the DOL’s FAQs. and an analysis from ABC’s general counsel, Littler Mendelson.
ABC staff are continuing to analyze the 339-page final rule and will be offering a webinar for members in the near future. Continue to monitor Newsline for updates.
Background:
ABC strongly supported the 2021 final rule, which simplifies and clarifies the factors for determining when a worker is an independent contractor versus an employee under the FLSA. The Biden DOL froze and then rescinded the 2021 rule over the opposition of ABC and other industry associations.
In March 2021, ABC, its Southeast Texas chapter and the Coalition for Workforce Innovation filed suit against the DOL, which remains pending. In March 2022, the U.S. District Court for the Eastern District of Texas dealt a blow to the Biden administration’s efforts to delay and rescind the 2021 independent contractor final rule in that case. Under a decision applauded by ABC, the ABC-supported rule went into effect as scheduled on March 8, 2021.
In October 2022, the DOL announced a new proposed rule to rescind and replace the 2021 final rule and ABC submitted comments in opposition on Dec. 13. The DOL received approximately 55,400 comments in response to the proposed rule.
In December 2023, President Biden announced a final rule implementing Executive Order 14063, which requires federal construction contracts of $35 million or more to be subjected to controversial project labor agreements. ABC issued a statement announcing plans to challenge the new rule in court.
On Jan. 4, ABC authored a coalition letter to Congress signed by 23 organizations opposing the final rule and urging members to co-sponsor the ABC-backed Fair and Open Competition Act. In addition, Ben Brubeck, ABC vice president of regulatory, labor and state affairs, authored a Fox Business op-ed on the Biden PLA rule, which ran on Jan. 4.
ABC also urges members to contact their U.S. representative and senators to voice their opposition to the final rule and support for FOCA through the ABC Action Center.
In December 2023, ABC submitted comments as a steering committee member of the Construction Industry Safety Coalition and the Coalition for Workplace Safety in response to the Occupational Safety and Health Administration’s potential standard for Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings following its review of the Small Business Advocacy Review Panel materials and the SBAR Panel’s final report. In September, the SBAR Panel hosted six video conferences to gather input from small entity representatives. An ABC member participated as a SER during one of the video conferences. The panel’s final report was issued on Nov. 3.
CISC’s comments state, “The construction environment is inherently fluid and CISC has significant concerns with any regulatory approach that imposes prescriptive, complicated requirements on construction industry employers.
“The CISC urges OSHA to focus their regulatory approach on the key concepts of ‘Water, Rest, and Shade’ and provide construction employers the necessary flexibility to make such a standard effective. For the same reasons, the CISC reiterates their invitation for OSHA to consider a separate regulatory approach for the construction industry, as OSHA has done in other rulemakings.”
CWS’ comments state, “The CWS supports recommendations expressed in the Panel Report, and in other comments submitted to the agency, recognizing that flexibility, versus a ‘one-size-fits-all’ standard, is necessary for employers to prevent or mitigate heat-related injuries and illnesses in their workplaces the most effectively.” Read CWS’ press release.
In January 2022, ABC, as a steering committee member of the CISC, also submitted comments in response to the Advance Notice of Proposed Rulemaking on Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings.
Additional OSHA Actions:
On April 12, 2022, OSHA announced a National Emphasis Program on Outdoor and Indoor Heat-Related Hazards, which sets out a targeted enforcement effort and reiterates OSHA’s compliance assistance and outreach efforts.
On July 27, 2023, OSHA issued a heat hazard alert to remind employers of their obligation to protect workers against heat illness or injury in outdoor and indoor workplaces. The agency also announced that OSHA will intensify its enforcement where workers are exposed to heat hazards, with increased inspections in high-risk industries like construction and agriculture. These actions will fully implement OSHA’s National Emphasis Program on heat, announced in April 2022, to focus enforcement efforts in geographic areas and industries with the most vulnerable workers.
On Sept. 29, OSHA issued new resources to protect workers from the effects of heat.
ABC strongly supports worker safety and protection from heat injury and illness, while maintaining flexibility for the fluid nature of the construction environment. Employers play a key role in providing training and awareness regarding heat protection, and ABC will continue to support members in ensuring preparedness for heat-related issues through a wide range of resources.
Learn more about OSHA’s Heat Illness Prevention Campaign
On Dec. 14, 2023, the Biden administration announced a U.S. Department of Labor proposed rule that would make significant and controversial revisions to the National Apprenticeship System.
Additionally, the rule gives the U.S. Department of Labor’s Office of Apprenticeship and State Apprenticeship Agencies enforcement authority over labor disputes, a role already performed by the NLRB. Ultimately, the proposed regulation applies more bureaucracy to a system in need of flexibility when responding to pressing workforce needs.”
One result of DOL’s regulations will be fewer job-training opportunities for minorities. The rule will also undercut the Administration’s industrial policy and climate agenda. The Inflation Reduction Act’s myriad green energy tax credits require employers to utilize apprentices from government-approved programs. Good luck finding them.
President Biden’s message to non-union apprentices: You’re fired.”
In addition, ABC will submit comments on the proposed rule and make recommendations that will help create a final rule that can deliver value to taxpayers, the construction industry workforce and employer participants in the government-registered apprenticeship system.
Public comments on the DOL proposal must be submitted in early March, which is 60 days after the proposal is expected to be published in the Federal Register later this week.
Background
On Dec. 22, 2023, the Biden administration published the long-awaited Federal Acquisition Regulatory Council’s final rule, Use of Project Labor Agreements for Federal Construction Projects, implementing President Joe Biden’s Executive Order 14063, which requires federal construction contracts of $35 million or more to be subjected to controversial project labor agreements.
On Dec. 18, ABC issued a statement in response to the White House announcement of the new ABC-opposed rule.
“The Biden administration’s burdensome, inflationary and anti-competitive PLA mandate rule will needlessly raise costs on taxpayer-funded construction projects and steer contracts to unionized contractors and workers,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “Absent a successful legal challenge, this executive overreach will reward powerful special interests with government construction contracts at the expense of taxpayers and the principles of free enterprise and fair and open competition in government procurement.
“When mandated by governments, PLAs increase construction costs to taxpayers by 12% to 20%, reduce opportunities for qualified contractors and their skilled craft professionals and exacerbate the construction industry’s worker shortage of more than half a million people in 2023,” said Brubeck. “ABC will continue to fight on behalf of quality, experienced contractors harmed by this rule and the 88.3% of America’s construction industry who have made the choice not to belong to a union and want a fair opportunity to participate in federal construction projects––but cannot do so because of PLA schemes.
“In addition, ABC condemns Biden administration policies independent of this rulemaking that push PLAs on competitive grant programs administered by federal agencies, affecting nearly $260 billion worth of federally assisted infrastructure projects procured by state and local governments, as well as schemes by the Biden administration to coerce private developers of hundreds of billions of dollars’ worth of clean energy and domestic microchip manufacturing projects to mandate PLAs. Biden’s PLA policies circumvent congressional intent as none of these policies were passed in funding legislation.
“ABC plans to challenge this Biden administration scheme in the courts on behalf of taxpayers and the majority of the construction industry,” said Brubeck. “In the interim, ABC will continue to oppose its special interest-favoring policy using all tools in our advocacy and legal toolbox while educating stakeholders about the negative impact of government-mandated PLAs on federal and federally assisted projects.”
ABC’s comments were picked up in dozens of industry publications and media reports.
Background on President Biden’s Executive Order 14063
On Feb. 4, 2022, President Biden signed EO 14063, requiring federal construction contracts greater than $35 million to be subjected to PLAs. ABC blasted the EO, calling it anti-competitive for small businesses and costly for taxpayers.
On Aug. 19, 2022, the Federal Acquisition Regulatory Council issued its proposed rule implementing EO 14063.
In October 2022, ABC submitted more than 40 pages of comments to the Federal Acquisition Regulatory Council, calling on the Biden administration to withdraw its controversial proposed rule.
ABC’s opposition was shared by more than 50 members of the U.S. Senate and U.S. House of Representatives, 19 Republican governors and a diverse coalition of construction industry, small business and taxpayer advocates urging the administration to withdraw its proposal and additional policies promoting PLA mandates on federal and federally assisted construction projects.
At least 8,000 stakeholders across the country––including 2,500 ABC member contractors––submitted comments opposed to this proposed rule during the 60-day comment period. According to a September 2022 survey of ABC contractor members, 98% oppose this proposed rule. Additionally, 97% said a construction contract that required a PLA would be more expensive compared to a contract procured via fair and open competition.
The new Biden administration policy replaces President Barack Obama’s 2009 Executive Order 13502, which encouraged, but did not require, federal agencies to mandate PLAs on large-scale federal construction projects exceeding $25 million in total value on a case-by-case basis.
According to government data, of the 2,499 large-scale federal construction contracts valued at $165.6 billion procured from FY 2009 to FY 2023 subject to President Obama’s pro-PLA policy, federal agency contracting officers chose to require PLAs on just 12 large-scale federal construction contracts. There were no reports of widespread cost overruns, delays, labor unrest or poor-quality construction on $164.4 billion worth of non-PLA projects during this time period, indicating that PLA mandates are not needed to ensure economy and efficiency in government contracting. The Biden administration expects its mandatory PLA rule to affect about 120 federal contracts valued at $10 to $14 billion per year, in total.
ABC and a diverse construction industry coalition strongly support the Fair and Open Competition Act (H.R. 1209/S. 537)––reintroduced in the 118th Congress by Sen. Todd Young, R-Ind., and Rep. James Comer, R-Ky.––which prohibits government-mandated PLAs on federal and federally assisted projects and helps taxpayers get the best possible product at the best possible price.
Members of the U.S. House and Senate supportive of the Fair and Open Competition Act have written letters to the White House in opposition to anti-competitive, pro-PLA policies championed by the Biden administration.
Currently, 25 states restrict government-mandated PLAs on state, state-assisted and local construction projects to some degree, which has protected more than $1 trillion worth of taxpayer-funded construction projects since 2007. Governors also filed comments with the FAR Council and, in April 2022, expressed disappointment in White House efforts to push government-mandated PLAs on federally assisted construction projects through infrastructure grant programs administered by federal agencies.
To learn more about how corrupt government-mandated PLAs rig the competitive bidding process, hurt taxpayers and endanger plans to rebuild America’s infrastructure, visit BuildAmericaLocal.com, and access additional ABC resources at abc.org/pla.
On Dec. 26, 2023, the U.S. Department of Defense released a proposed rule and guidance documents implementing the Cybersecurity Maturity Model Certification 2.0 Program.
As proposed, CMMC 2.0 would require federal contractors and subcontractors competing for DOD contracts to demonstrate continued compliance with a range of cybersecurity measures to maintain eligibility for performing and winning new federal awards.
The new requirements would apply to all contractors and subcontractors that process, store or transmit information on contractor servers that meet the standards for Federal Contract Information or Controlled Unclassified Information. Requirements vary from a self-assessment of compliance with cybersecurity measures to triennial assessment and certification of compliance by third-party contractors or the DOD, dependent on the data involved in a specific contract.
More than 200,000 companies in the defense industrial base could be affected by the rule.
The Pentagon is planning for a phased implementation. It intends to include CMMC requirements in all solicitations issued on or after Oct. 1, 2026, when applicable, although waivers could be issued in certain cases before solicitations are issued.
Experts expect aspects of this rule to be eventually implemented by additional federal agencies as well as state and local governments.
On Jan. 25, 2023, ABC hosted a webinar, “Cybersecurity Maturity Model Requirements for ABC Members Doing Federal Work,” with two cybersecurity experts who provided practical tips and best practices for businesses to assess their cybersecurity readiness in advance of complying with CMMC 2.0. Additional information and resources are available on ABC’s Cybersecurity Resource Guide website.
Comments on the proposed rule are due to the DOD by Feb. 26.
To inform ABC’s comments on the proposal, ABC members are encouraged to submit feedback to Michael Altman at [email protected].
In the interim, ABC will continue to review the proposed rule and plans to provide additional analysis for ABC member DOD contractors.
On Dec. 13, the U.S. Department of Labor announced its final rule on Nondisplacement of Qualified Workers Under Service Contractors, which will implement Executive Order 14055.
Issued on Nov. 18, 2021, by President Joe Biden, the EO requires that contractors and subcontractors that work on covered federal service contracts, which include most contracts valued at or above $250,000 covered by the Service Contract Act, must in good faith offer service employees employed under the predecessor contract a right of first refusal of employment on the successor contract. ABC opposed the proposed rule and urged the DOL to withdraw the entire rule. To learn more, read ABC general counsel Littler Mendelson’s analysis of the final rule.
According to the DOL press release, the final rule does the following:
The final rule is effective Feb. 12, 2024, and will apply to solicitations issued on or after the effective date of the final regulations issued by the Federal Acquisition Regulatory Council.
More information on the final rule:
On Aug. 15, ABC submitted comments to the DOL identifying a number of concerns with its proposed rule on Nondisplacement of Qualified Workers Under Service Contracts, which would implement EO 14055.
In its comments, ABC urged the DOL to withdraw the rule in its entirety. The comments state, “ABC is concerned that, as written, the NPRM conflicts with the plain language of the SCA, which does not authorize the DOL, or the president, to require contractors to hire the incumbent employees of predecessor contractors on projects covered by the SCA. Two courts have so held without contradiction by Congress or by any other courts. In each of these cases, the courts rejected efforts by employees and/or labor organizations to assert preferential hiring rights for incumbent employees under the Act.
“In addition to and apart from the above conflict between the NPRM and the governing statute, ABC is also concerned that the proposal would create gross inefficiencies in the procurement process and would disproportionately impact small contractors and subcontractors through the imposition of additional regulatory burdens and substantial costs of compliance.” According to the NPRM, the total number of potentially affected small firms ranges from 74,097 to 329,470.
Further, “ABC observes that neither the EO nor the proposed rule contains any evidentiary support for the claim that the proposed changes will actually achieve greater efficiency in federal procurement. As is evident from the discussion of specific provisions of the NPRM, the proposed rule is likely to create greater inefficiencies as successor contractors are forced to employ workers who are not familiar with the often-different work practices that the successors may wish to implement. Thus, the cost savings that an agency may seek to achieve by hiring a new contractor will be lost or unobtainable if the successor is not allowed to bring its own uniquely qualified workforce onto the project.”
The Obama administration finalized a similar rule which was rescinded by the Trump administration in 2020.
Continue to follow Newsline for any further updates.