I’m getting tired of Members of Congress describing Obama’s Executive Order (EO 13673) for government contractors “blacklisting.” Merriam-Webster defines blacklisting as “ a list of persons who are disapproved of or are to be punished or boycotted." The Cambridge dictionary defines it as “to decide that you will not do business with an organization or person.”
That’s not at all what the “Fair Pay and Safe Workplace" Executive Order says and it’s not what is described in the guidance document to implement it. That guidance document was published in the Federal Register on May 28.
Yet the reaction from the Republican leaders of House Subcommittees with jurisdiction on such matters suggests otherwise. They issued a “Statement on Blacklisting Regulation.” Congressmen Tim Walberg (R-MI) and Phil Roe (R-TN) of the House Education and the Workforce Committee issued a remark:
“…in response to the administration's proposed blacklisting regulation and guidance.”
I read the 30-page Federal Register notice, which is the proposed guidance on how federal agencies will implement EO 13673. The Administration is accepting public comment on it until July 27. It’s hard for me to see the Congressmen’s beef. The proposed guidance certainly doesn’t say the federal government will boycott a company. Here’s what is being proposed:
- For federal government contracts for goods or services which exceed $500,000, the company would have to disclose to the best of their knowledge whether they’ve been cited in the last three years for labor law violations. These could be safety violations under OSHA, wage violations under the Fair Labor Standards Act, infractions under Equal Employment Opportunity Commission rules, among others. The bidder would simply include a disclosure statement in their bid package.
- Firms would be required to ask subcontractors (who would be involved with the firm in providing the goods or services) to make their own disclosure.
Nowhere in the guidance document does it say that a firm with labor law violations is blacklisted and ineligible to bid on a government contract. This guidance for bidders is simply that they disclose it.
We know that a lot of firms may submit bids for government contracts, but only a subset move on to the pre-award stage. The EO is expected to affect about 24,000 businesses. Here's what is being proposed for those firms:
- If a company disclosed that they have been cited in the last three years for a labor law violation, they would be asked to provide additional information about the violation(s). The additional information would be items such as a copy of the citation, the docket number, the decision that was rendered, and how they corrected the violation. The proposed guidance acknowledges that a company may have contested or challenged a violation. It says: the Administration understands that a company “may raise good-faith disputes” about labor law violations. A firm could submit such information to the government’s contracting official about their rationale for challenging the violation and status of the contest.
Under the proposed guidance, firms with existing government contracts:
- Would be required to provide ongoing reporting (semi-annually) of any citations received for labor law violations and/or updates of previously reported violations.
The initial disclosure (for bidders) and submission of information (for pre-awardees and awardees) will be provided to the contracting officer in the agency seeking the goods or services. These are the same contracting officers who are already required to assemble and review the documents submitted by firms seeking and/or having government contracts. These individuals will have access to advisers in the US Labor Department to help them interpret the information submitted by firms.
The agencies that administer and enforce our labor laws have different terminology to characterize and classify violations. The proposed guidance document provides definitions and examples for terms such as, “serious violation,” “repeated violation,” and “pervasive violation.” With respect to OSHA violations, the definitions in the guidance document are consistent with the definitions used by OSHA. Some actually give more latitude to employers. For example, currently OSHA classifies a violation as “repeated” if the same standard was violated in the previous five years. The EO’s lookback period, however, is only three years. The way I read the guidance document, it gives employers the benefit of the doubt of being labor-law abiding, even when they've had labor law violations.
I didn't read anything in the proposed guidance that suggest these disclosure and reporting requirements are a gotcha intended to blacklist loads of firms and prevent them from receiving government contracts. Laced throughout the document and the EO is language calling on the Labor Department to work with the violators to help them comply with labor laws, including setting up "remedial measures" and providing "compliance assistance." Hardly what I'd call "blacklisting."
Congressmen Walberg and Roe assert
"Private employers who do business with the federal government ...[are] overwhelmingly responsible and law-abiding."
If that's the case, most employers won't have to worry about being asked to disclose their labor law compliance record. And even for those who have broken the law, most will be given a pass if they promise to do better.
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