Federal Contractors Face Disqualification From Future Work

November 6, 2017 Advisory

Closely tracked by attorneys of Armstrong Teasdale’s Industrial Security practice area, the "Fair Pay and Safe Workplaces” federal rules discussed below have been rescinded (see http://bit.ly/2EtJsu3). The action prevents application of any provision of the contemplated federal rules and shields federal contractors from the onerous requirements described below.

06.05.2015

Federal contractors, including businesses and universities performing on federally funded projects, have new reporting obligations regarding their labor and safety practices. On May 28, 2015, the Department of Labor published proposed guidance on the implementation of Executive Order 13673, "Fair Pay and Safe Workplaces," aimed at promoting economy and efficiency in federal contracting.

The guidance requires contractors to report violations of federal and state labor laws when bidding on certain government contracts. Government contracting officers will be required to consider a contractor’s history of labor law violations when awarding certain federal contracts. Labor unions and employee organizations stand poised to increase their leverage by filing charges of labor and safety violations to build an unfavorable record for companies refusing to recognize and bargain with employees.

The new guidance contains several compliance requirements that federal contractors must complete prior to the award of certain contracts valued over $500,000. Among other requirements:

  • Contractors and subcontractors must report administrative merits determinations, civil judgments, and arbitral awards or decisions rendered against them within the previous three years for a violation of 14 different federal labor laws "or any equivalent State laws."
  • Contractors must disclose any similar labor law violations by subcontractors that will perform on the contract.
  • Contractors must update their labor law violation reporting semi-annually during the performance of the contract.

Government contracting officers will look unfavorably upon labor law violations that are "serious," "repeated," "willful," or "pervasive," and violations will be "assessed on a case-by-case basis in light of the totality of the circumstances, including the severity of the violation or violations, the size of the contractor, and any mitigating factors."

The Department’s lengthy proposed guidance can be accessed at http://1.usa.gov/1KAXlFV.

Contractors should proceed carefully and deliberately in reporting labor law violations and submitting mitigating information. Armstrong Teasdale is particularly well-equipped to assist contractors in preparing to comply with the Department’s new guidance. Drawing upon the experience of talented defense industry and labor attorneys, Armstrong Teasdale has partnered with numerous government contractors to tackle regulatory and compliance issues.

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