Wednesday, June 3, 2015

Fair Pay and Safe Workplaces

Following is an update to prior postings on the President's Fair Pay and Safe Workplaces Executive Order (EO) from July 31, 2014. Prior coverage of this topic includes:

DoD, GSA, and NASA (the FAR Councils) issued a proposed rule last week to implement the EO. In short, the new rules will require prospective contractors to report on every proposal, whether they have had any violations of any of 14 federal labor statutes in the preceding three years. Contracting officers, along with their LCA's (Labor Compliance Advisors), will then use that information to determine if the prospective contractor has demonstrated a pattern of pervasive and willful abuse of the 14 statutes. If the ACO and LCA determine that there has been a pattern of pervasive and willful abuse, the prospective contractor will be determined non-responsible and consequently not eligible for the contract.

The proposed rule is out for comment for the next 60 days. Judging from the internet chatter, there should be plenty of comment. Concerns have been expressed from many interested parties. For example see here and here. Some have expressed concerns that under the proposed rules, patterns of pervasive and willful abuse includes arbitral settlements, administrative settlements, or simply allegations of wrongdoing.

With respect to making disclosures, the DOL guidance defines ther terms "administrative merits determination", "civil judgment," and "arbitral award or decision," for each of the fourteen enumerated labor laws and discusses what information related to these determinations must be reported byu contractors and subcontractors. The FAR rule creates solicitation provisions andcontract clauses that will include these disclosure triggers and explain when the required information described in the DOL guidance is to be submitted, how it is to be submitted, and to whom it is to be submitted.

The proposed rule applies to subcontractors as well. In fact, subcontractors have to make their own disclosures, then the prime contractors will have to decide whether the subcontractor has exhibited a pattern of pervasive and willful abuse, then report its findings to the Government and hope that the Government doesn't second guess its determination.

Implementing these new set of rules is going to be extremely costly for contractors.

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