The Obama administration released new regulations on Wednesday that critics say will hinder businesses from competing for government contracts.
The Department of Labor, acting on a 2014 executive order from President Obama, released proposed guidelines for awarding government contracts to private businesses.
The regulations could restrict federal agencies from working with companies that have been accused of labor violations or have long track records of “serious” or “pervasive” violations. It forces government agencies to hire “Labor Compliance Advisors” to oversee contractors. Companies will also be forced to disclose pay determinations to employees and regulators over the course of the contract.
“By ensuring that its contractors are in compliance, the Federal Government can level the playing field for contractors who comply with the law. Those contractors who invest in their workers’ safety and maintain a fair and equitable workplace should not have to compete with contractors who offer slightly lower bids—based on savings from skirting labor laws—and then ultimately deliver poor performance to taxpayers,” the guidance says.
“The Federal Government can ensure that taxpayers’ money supports jobs in which workers have safe workplaces, receive the family leave they are entitled to, get paid the wages they have earned, and do not face unlawful workplace discrimination.”
Critics have dubbed the department’s guideline a form of “blacklisting,” since it may force suppliers, contractors, or subcontractors to face extra scrutiny, and House Republicans warned that the new regulations represent overreach from the executive agency.
House Workforce Protections Subcommittee Chairman Tim Walberg (R., Mich.) and Health, Employment, Labor, and Pensions Subcommittee Chairman Phil Roe (R., Tenn.) released a joint statement Wednesday, saying that the rules were a waste of resources, since contracting agencies already have oversight over the actions of contractors.
“We already have a system in place to deny federal contracts to these bad actors. Instead of promoting more government overreach and more regulations, the administration has a responsibility to ensure the current system is enforced and used effectively,” the statement says. “Instead of promoting more government overreach and more regulations, the administration has a responsibility to ensure the current system is enforced and used effectively.”
Associated Builders and Contractors have voiced opposition to the rule ever since President Obama’s executive order in July 2014. ABC said that the “cumbersome” process could discourage small businesses from pursuing contracts and misallocate resources to worse stewards of taxpayer dollars.
“This rule creates a murky federal acquisition system that is absurdly cumbersome and allows contracts to be awarded in a subjective nature by unelected bureaucrats,” ABC Vice President Geoff Burr said in a statement. “The ‘blacklisting’ proposal released today will unnecessarily complicate the federal acquisition process by adding undue subjectivity and may result in some of the best federal contractors being blacklisted from winning future contracts. Additionally, the administration’s latest assault on federal contractors will result in more bid protests and more frequent and costly labor and employment disputes.”
Reps. Roe and Walberg said that they have heard similar complaints from businesses and entrepreneurs about the regulatory regime.
“The committee held a hearing on the president’s executive order in February and found that its proposed structure would be redundant, unworkable, and unnecessary,” the congressmen said. “We also learned that it would inflict harm on small businesses, workers, and taxpayers … based on what we know so far, this regulatory scheme will not serve the nation’s best interests.”
The agency said that its proposal should not be understood as a roadblock for obtaining contracts.
“This proposed guidance, when final, will provide a roadmap to contracting officers, Labor Compliance Advisors, and the contracting community for assessing contractors’ history of labor law compliance with regard to their business integrity and ethics,” the regulations say. “The objective of the Order is to help contractors come into compliance with federal labor laws, not to deny them contracts.”