Acquisition

PSC wants Obama to rescind contractor crackdown order

President Obama should rescind an executive order that attempts to crack down on federal contractors who violate labor laws, according to a contracting group,

Stan Soloway, president of the Professional Services Council, called The Fair Pay and Safe Workplaces executive order "unworkable" and detrimental to law-abiding companies while requiring contractors to fulfill an expensive and burdensome new regulatory requirement.

"Companies with pervasive, willful, and repeated violations of law should not be awarded federal contracts," said Soloway. "However, as constructed, this E.O. is fundamentally unfair, vague, complex and in-executable. It will be costly, burdensome and is simply unnecessary."

President Obama signed the executive order July 31, which requires federal contractors to disclose any labor law violations made over the last three years and for agencies to take that into account when awarding contracts.

The executive order affects contracts valued at more than $500,000 and will be implemented in stages during 2016, according to the administration.

Soloway said the executive order strays from ensuring willful lawbreakers are denied contracts by treating intentional violations of the law and honest mistakes the same way. It also fails to meet basic due process tests for the contractors in question, he said.

""It does not focus on fully adjudicated cases where the established legal procedures have been allowed to play out as intended. Instead, it covers arbitral settlements, settlements without any finding of guilt, and even allegations of wrongdoing that have not been adjudicated at any level. And that is fundamentally unfair," Soloway said.

The executive order also provides a range of rules and guidance for agencies and contractors, according to the administration. It:

■Requires contractors to disclose labor law violations from the past three years before they can get a contract, including violations of laws regarding collective bargaining, family and medical leave and wages;

■Mandates each agency to appoint a senior official as a labor compliance officer overseeing contracting officers, to make sure agencies are complying with the new rules, and;

■Forbids contractors with $1 million or more in government business from requiring employees to enter into arbitration agreements for issues related to sexual assault or harassment.

But the extra regulations and requirements contained within the executive order create an expansive and burdensome new compliance process that is unnecessary and unjustified, Soloway said. The government should focus on gathering the information it already collects, he added.

"The government already has a wide range of authorities under which to deny contracts to companies it deems to be irresponsible or unethical," he explained. "The real issue is the government's ability to collect and efficiently utilize information from a variety of sources and make that information available to those who need it in order to make reasoned procurement decisions."

President Obama should rescind the executive order and instead convene a panel of federal acquisition and labor officials, private sector companies and contractors, and labor unions to report back on the nature of the existing problems and the scope of any potential solution, Soloway said.

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