On May 4, the Labor Department and Federal Acquisition Regulatory (“FAR”) Council submitted to the White House Office of Management and Budget (“OMB”) their final versions of regulations and guidance (respectively) implementing Executive Order 13673, entitled “Fair Pay and Safe Workplaces” (“FPSW Order”). The FPSW Order, which requires contractors bidding on government contracts to disclose past violations of any one of at least 14 federal labor laws and their state law counterparts, has been met with harsh criticism from contractors and members of congress since its July 2014 issuance by President Obama. (See our blog post here for more analysis of the proposed regulations implementing the Order.) The most recent attack occurred just one week prior to the Labor Department and FAR Council submissions: the House Armed Services Committee adopted an amendment that would exempt the entire Department of Defense (“DOD”) from the FPSW Order.
The Labor Department and FAR Council submissions occurred in compliance with Executive Order 12866 which requires the OMB to review agency rulemaking “to ensure that regulations are consistent with applicable law, the President’s priorities, and the principles set forth in [Executive Order 12866].” While this submission brings the FPSW Order one step closer to implementation, it remains unclear when such implementation will occur. Executive Order 12866 provides that OMB “shall waive review or notify the agency in writing of the results of its review . . . within 90 calendar days after the date of submission.” However, either the rulemaking agency or OMB may extend the review process by 30 calendar days. And, even at the conclusion of the review period, OMB may return the rules to the agency with further comments for consideration.
While the FPSW Order moves toward final implementation, the challenges to the Order – which began shortly after its issuance — have endured. At a September 2014 hearing, the chairman of the House Small Business Contracting and Workforce Subcommittee called it “an executive Order in search of a problem.” In February 2015, the Subcommittee on Workforce Protections joined with the Subcommittee on Health, Employment Labor, and Pensions and held a hearing on the FPSW Order tellingly titled, “The Blacklisting Executive Order: Rewriting Federal Labor Policies through Executive Fiat.” In April 2015, a group of contractor associations wrote a letter to the House and Senate Armed Services Committees requesting that the Committees “consider options for delaying implementation” of the Order. And for good measure, in August 2015, contractor associations wrote a letter to the White House requesting broadly “that no further presidential directives primarily focused on government contractors be issued to the foreseeable future.”
Now, opponents to the FPSW Order have taken a more concrete measure: on April 28, 2016, the House Armed Services Committee adopted an amendment to the 2017 National Defense Authorization Act, that would exempt DOD contractors from complying with the FPSW Order. It provides that the FPSW Order “and any implementing rules or regulations shall not apply to the acquisition, contracting, contract administration, source selection, or any other activities of the Department of Defense or National Nuclear Security Administration.” It remains to be seen whether the amendment will survive a vote among the full House, and it will certainly be a harder sell to the Senate where Democrats favoring the FPSW Order have a stronger vote. What is clear, however, is that as the Administration moves forward to finalize the Order, its opponents are only picking up steam.