Nothing matches the entrepreneurial energy found in a room full of small business owners.  And little stands to kill that spirit more than an executive order that's meant to protect workers' rights, but does so at a price.

The intention of Executive Order 13673 is admirable, but adds more red tape to an already complex acquisition process. This is only a minor inconvenience to large companies, but poses a major obstacle to small business with fewer resources at their disposal.

The main requirement of the executive order mandates contractors competing for contracts worth $500,000 or more to disclose violations of 14 federal labor laws and corresponding state laws issued over the past three years. These laws address topics ranging from wages to civil rights and even collective bargaining.

According to the President's Fact Sheet on the executive order, a business owner only needs to check one box on a bid form to prove their company does not have a "history of labor law violations." For the companies unable to check that box, they can automatically notify all federal agencies about their failure to follow labor laws through one website created by the General Services Administration.

While notifying the government of a companies' labor law compliance (or incompliance) history is simple, a business' internal process for determining how they should respond to new government requirements is costly and time consuming. Businesses need to hire lawyers or additional staff to review their compliancy background. Business owners simply have too much at risk if they falsely report their compliance history. An honest mistake could result in contracting officers, or potential teaming partners blacklisting their company.

Prime contractors are not only responsible for reporting their own compliance history, but are also accountable for their subcontractors' violations.  The executive order substantially increases the risks associated with priming contracts.   If a contracting officer finds a subcontractor incorrectly reported their compliance history, the blame falls on the prime, thus placing the prime's reputation with the federal government at risk and jeopardizing future contracting opportunities. This is a considerable gamble to small companies when teaming with other small businesses.

Not implementing the executive order would be beneficial to both small businesses and President Barack Obama's economic legacy. In 2013 and 2014, federal agencies met and exceeded the SBA's goal of awarding 23 percent of federal contract dollars to small businesses.  It will be challenging to maintain this progress once the executive order complicates the teaming and priming process for small businesses.

There is a slim possibility the executive order will not be executed. In May 2015, the Department of Labor and the Federal Acquisition Regulatory Council released proposed guidance and draft regulation intended to implement the executive order. Since then eight members of Congress sent a letter to the heads of the DOL and FAR expressing their disapproval, and the public comment period was extended twice.

Even if the executive order is implemented, there is still hope it will be a brief hurdle for the small business community. This is because unless Congress decides to make Executive Order 13673 a law, the next president has the power to revoke or modify the decree.  If only the same could be said for LPTA.

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