Executive order targets labor law violators

The latest White House contracting directive singles out vendors while ignoring a much broader problem, says Alan Chvotkin of the Professional Services Council.

Under an executive order signed by President Barack Obama on July 31, the General Services Administration will create a centralized website to gather the information that will be used to identify the so-called "worst actors" in federal contracting.

Some groups representing contractors were less than pleased with the development.

"All companies, not just government contractors, need to faithfully execute the laws and regulations and have to be held accountable for their compliance," Alan Chvotkin, executive vice president and counsel of the Professional Services Council said in a statement. "Yet the White House and Department of Labor acknowledge that, even though compliance with these labor laws is challenging and that most violations are technical and unintentional, government contractors have been picked on for attention. Ironically, the compliance record among federal contractors, while not perfect, is significantly higher than by other types of businesses that have been ignored by this action."

The order tasks GSA with developing a centralized website for companies to report their compliance information regardless of how many contracts the companies hold or which agencies have granted them, to address Obama's concern that "many of the people who award contracts don't always have the information that they need to make sure contracts go to responsible companies."

"GSA is working closely with the Department of Labor to ensure that contractors comply with the president’s Fair Pay and Safe Workplaces Executive Order," an agency spokeswoman told FCW. "Enhancing contractor transparency is a key priority for GSA, and the agency is committed to pursuing measures that further these efforts."

White House officials said the desire to "report once in one place" was a central theme in the feedback received from current and potential contractors, and the website's creation is one in a series of actions to make the federal marketplace more attractive to contractors, more accessible for small businesses and other new entrants, and more affordable.

The order will cover federal contracts worth more than $500,000 starting in 2016. It will require companies to disclose any labor law violations from the previous three years before they can receive a federal contract. It covers 14 federal statutes and state laws that address wages and hours, safety and health, collective bargaining, family and medical leave, and civil rights protections, according to the White House. Prime contractors will also have to supply the same information from their subcontractors.

Although Obama said most federal contractors play by the rules, he added that those that don't should not be given contracts and a competitive advantage. The order's other provisions are aimed at weeding out the most egregious violators of federal labor laws, said a White House statement accompanying the order's release.

Chvotkin said the White House is looking in the wrong place and will do more harm than good.

"This order actually adds more complexity and confusion to the federal contracting process, risks adding further delays in agencies obtaining the goods and services they require, and does too little to promote labor law compliance and efficient federal contracting," he said. "Even GAO, in its December 2013 report on the Fair Labor Standards Act, highlighted a need for a 'systematic approach' for identifying 'areas of confusion that contribute to possible FLSA violations.' This order is the opposite of GAO’s recommendation."

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