Tuesday, September 1, 2015

Fair Pay and Safe Workplaces - Public Comments - Part 2

Yesterday we began a series on summarizing some of the public comments submitted in response to the proposed regulations that will require contractors to report three years worth of violations of 14 different labor laws when submitting proposals to the Government. This is a highly controversial and emotionally charged proposal. There were 918 comments submitted during the public comment period - a number rarely seen related to procurement regulations. Yesterday, we summarized positive comments submitted by POGO (Project on Government Oversight). Today we will look at a contrary position submitted by the AGC.

The Associated General Contractors of America (AGC) is an association in the contruction industry, representing both union and non-union prime and specialty construction companies. It represents more than 26 thousand firms engaged in the construction of the nation's commercial buildings, shopping centers, factories, warehouses, highways, bridges, tunnels, airports, waterworks facilities, waste treatment facilities, dams, water conservation projects, defense facilities, and more.

The AGC is firmly opposed to the proposed regulations, believing the President's EO (Executive Order) and accompanying regulations are "unfounded, unnecessary, unworkable and unlawful. If implemented, these executive actions would improve neither economy nor efficiency in government procurement." The AGC goes on to state:
If implemented, the EO and proposed rule would be destined to malfunction. They are unreasonable and inconsistent, and would be ineffective, excluding from service to the government not only bad-actor contractors but also a far greater number of well-intentioned, ethical contractors. The EO and proposed rule would needlessly create a new, complicated and unmanageable bureaucracy to address problems that a host of federal laws, regulations and bureaucracies already address. Furthermore, they would lead to crippling delays in federal contracting, encourage unnecessary litigation, and increase procurement costs to the government and taxpayers.
Other points made by AGC include:

  • The FAR Council's Economic Analysis of the Proposed Rule is Fundamentally Flawed. The estimated cost of compliance is significantly understated. Actually similar points were also made by other commentators.
  • The Executive Order and Proposed Rule are Unworkable. Prime contractors do not have sufficient time and information to perform responsibility determinations of all proposed subcontractors. Prime contractors fear liability from denying subcontractors potential subcontracts based on their labor law violations. What recourse does a subcontractor have against a prime? Who will cover the cost of termination after an irresponsibility determination? Disclosing sensitive information to potential competitors would increase the number of bid protests. The proposed rule would increase contractor litigation of suits that would have otherwise settled. The EO and proposed rule will prove difficult for small businesses and create a further barrier to entry into government contracting.

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