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The U.S. Department of Agriculture (USDA) has announced it is withdrawing a Dec. 1 direct final rule that would have altered the USDA’s procurement policies to require federal contractors to certify that they, as well as their subcontractors and suppliers, were in compliance with all applicable labor laws. The addition of this clause to the Agriculture Acquisition Regulation also would have required contractors to agree to report future violations and allegations. A failure to be in compliance with any part of the rule would have resulted in an undefined “corrective action.” 

In response to the initial rule, ABC in January submitted comments telling the USDA that it does not have the authority to impose the certification requirement. Notwithstanding the agency’s lack of authority, ABC also expressed several concerns over the change. 

ABC pointed out that the U.S. Supreme Court has barred the executive branch from imposing penalties on government contractors beyond those specified in existing labor law, which carry their own specific penalties and due process protections, including hearings. ABC argued that mere allegations should not constitute grounds for suspension or debarment. 

ABC also noted that the clause invited competitors or advocacy groups, such as unions, to make allegations against law-abiding contractors, knowing the allegations would be counted against the contractors while they were still being investigated by the appropriate labor agencies. 

In addition, ABC highlighted the inherent uncertainty in the rule, and addressed the difficulty of ensuring compliance. 

“Due to the complexity of the applicable laws, it is difficult, if not impossible, for any employer to ‘certify’ they are in compliance with any or all labor laws,” ABC wrote. “It is certainly impossible for any contractor to certify independent subcontractors are in compliance with such laws.” 

The proposal also contained an erroneous analysis of the burdens the rule would have imposed on contractors, ABC pointed out. Contrary to the USDA’s analysis, the rulemaking would actually require thousands of man hours per contractor to audit workplace practices. And to audit their subcontractors would increase that cost exponentially without offering any benefit to the government. 

ABC historically has opposed any orders or regulations that would create a situation where federal contractors could be unfairly barred from federal contracts. In 1999, ABC opposed an amendment to the Federal Acquisition Regulation offered by the Clinton administration that would have defined what would be considered “an unsatisfactory record of integrity and business ethics” for federal contractors and would have effectively created a blacklist of contractors. In 2001, the Bush administration reviewed and eventually suspended a later version of the rule. 

ABC will continue to speak out against the any new proposal or contracting provisions that facilitate inequality or favoritism in the federal contracting process.