“[W]e respectfully request that no further presidential directives primarily focused on government contractors be issued for the foreseeable future,” wrote four government contractor associations in a letter to the White House dated August 3, 2015. The letter was released publicly on Tuesday, August 11, 2015, and signed by representatives of the Aerospace Industries Association, the National Defense Industrial Association, the Professional Services Council, and the Information Technology Industry Council. The four associations argued that the president’s 12 executive orders pertaining to government contracting, resulting in 16 new regulations, have “significantly increase[d] the costs of doing business with the government.” Illustrating this point, the letter references an estimate that “nearly thirty cents of every contract dollar goes toward compliance with unique government regulations.”
As we discussed in an article earlier this year, 2014 brought a series of executive orders and regulations in the labor and employment realm that impose significant compliance burdens upon a broad class of government contractors. The August 3 letter does not specifically identify any regulations as being particularly burdensome, but states that some of the president’s executive orders, while “well-intentioned,” “require substantial investments in time and systems even though their impact is exceedingly minimal.” Thus, the associations requested that the administration simply not issue any more directives geared toward government contractors. Such a categorical request made “on behalf of the thousands of companies” and “hundreds of thousands of employees” likely reflects a widespread concern and wariness among contractors with respect to this administration’s regulation of contractors.
This is not the first time these member organizations have expressed opposition to this administration’s executive orders affecting government contractors. On April 20, 2015, the Acquisition Reform Working Group (“ARWG”) (whose members include the contractor associations who penned the August 3 letter), wrote a letter to the House and Senate Armed Services Committees stating that the Fair Pay and Safe Workplaces Executive Order (EO 13673) would add “several layers of new, costly, and unnecessary burdens on businesses currently providing, or seeking to provide, goods and serves to the Department of Defense,” and requesting the committees “consider options for delaying implementation of [EO 13673] until such impacts are fully understood and alternative solutions are explored.” (Please see this previous blog post for further discussion of the obligations imposed by EO 13673.)
This deluge of new regulations specifically affecting government contractors likely reflects a strategy by the administration of using government contractor regulations to achieve policy goals when more widespread implementation, requiring congressional action, is unlikely to occur. Given the significant burdens that these regulations impose, if this trend continues it will be very important for industry players to remain a part of the conversation surrounding these regulations by informing policy makers of the regulations’ economic and practical impacts. One important way for businesses to have their voices heard in this way is by participating in the rulemaking process by providing comments on proposed rules.