Wednesday, September 2, 2015

Fair Pay and Safe Workplaces - Public Comments - Part 3

We are in the midst of recapping public comments to the proposed regulations implementing the President's Fair Pay and Safe Workplaces Executive Order (EO). Who could possibly be opposed to fair pay and safe workplaces? No one, really. But the EO and the accompanying regulations have very little to do with fair pay and safe workplaces. Fair pay and safe workplaces are already ensured by 14 different labor laws already on the books. The proposed regulations require contractors to disclose violations of those laws (including non-judicial settlements) that occurred withing the three years preceding the submission of a proposal for a Government contract. If you're just coming in to this series, you may want to start with Parts 1 and 2.

Today, we will look at comments from the American Bar Association's Section of Public Contract Law (PCL).  The purpose of the PCL Section is to seek to improve the process of public contracting for needed supplies, services, and public works. While agreeing that contractors and subcontractors must comply with U.S. labor laws, the PCL believes that the proposed rules as drafted would be

  • difficult to implement
  • significantly disrupt procurements
  • impose significant costs and burdens on offerors, contractors, and subcontractors and the Government

The PCL calls for the FAR Councils and the Department of Labor to withdraw the proposed guidance and regulations.
The Proposed Rule and Proposed Guidance effect a major modification to the current acquisition process. This major modification creates a complex compliance regime that is new both to the Government and to contractors. Implementation of systems both within the Government and at the contractor and subcontractor levels throughout the supply chain will take time and require a significant expenditure of money and resources. Moreover, the labor-law compliance review includes a new agency participant, the Agency Labor Compliance Adviser ("ACLA"); new reporting requirements; and new responsibility reviews that will have to operate within the already-existing procurement environment governed by a complicated and layered system of statutes and regulations.
Like the AGC, the PCL believes that the cost om implementing the EO have omitted some forseeable costs and impacts from their cost-benefit analysis. This is a polite way of saying that the Government's estimates are grossly understated. The Government estimates that 26 thousand contractors and subcontractors will be impacted and each of those will spend eight hours during the first year and zero hours each year thereafter. The PCL points out that basing an estimate on the use of a single contractor employee to understand all the complex requirements is neither reasonable no realistic. The PCL believes that compliance with the reporting obligations will be a multi-disciplinary effort that involves such functions as human resources, legal, ethics and compliance, information technology, program management, business development, contract management, and subcontract or supply-chain management.

Also, like the AGC, the PCL recommended that the FAR Council should consider the impact of the proposed rule on small businesses. Not only is the new requirements onerous but small business subcontractors might be negatively impacted because a prime contractor may have difficulty evaluating labor violations for small contractors.

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