Federal contractors, their workforces and taxpayers should be worried about President Obama’s Fair Pay and Safe Workplaces executive order.
It is just one of several recent heavy-handed executive actions flowing from the Obama administration that circumvent congressional authority to enact sweeping changes to the $500 billion-a-year federal contracting marketplace—discouraging small businesses from pursuing federal contracts, threatening the livelihood of millions of Americans and increasing costs to taxpayers. The White House estimates this executive order will affect 24,000 large and small businesses employing 28 million workers, including many experienced federal contractors.
Members of Associated Builders and Contractors were awarded 60 percent of large-scale federal construction contracts greater than $25 million from 2009 to 2013. ABC members are committed to delivering high quality work safely, ethically, and at the best price. Furthermore, we strongly believe that contractors found guilty of breaking wage and safety laws should be punished appropriately.
However, many members fear that the new executive order could result in some of the best firms being arbitrarily blacklisted from winning future federal contracts for committing even minor violations of a rapidly growing and constantly changing labyrinth of complex workplace laws and regulations, including 14 federal statutes and equivalent state laws. By seeking to impose new penalties on contractors beyond those specified by Congress, the president is exceeding his office’s constitutional authority and undermining the carefully balanced contracting provisions that already exist.
While the Obama administration seeks to impose these new compliance burdens and penalties on federal contractors, it is apparently unconcerned about violations of these same laws by its own federal agencies. For example, the Occupational Safety and Health Administration’s Office of Federal Agency Programs reported in 2012 that less than 30 percent of federal agencies were in full compliance with federal safety standards. The Equal Employment Opportunity Commission reported earlier this month that more than 15,000 complaints were filed against the federal government by its own employees in 2012. In addition, the U.S. Court of Federal Claims recently ruled in favor of 2,000 worker plaintiffs who accused their employer, the federal government, of violating the Fair Labor Standards Act in 2013. These are just a few examples. The bottom line is, under this order, President Obama seems to be holding private businesses to a higher standard than he requires of his own administration.
Shining a spotlight on this troubling “do as I say, not as I do” approach to governing does not excuse dangerous and repeat violations by federal contractors, but these examples are a reminder that well-intentioned employers, like Uncle Sam and those in the private sector, can get tripped up by ever-changing, ever-expanding and needlessly complicated laws.
While the full effect of the executive order won’t be known until more detailed regulations have been finalized, there is great concern that the livelihoods of federal contractors and their employees could be jeopardized or even destroyed based on the subjective decisions of a team of newly selected, unelected bureaucrats, who will be charged with picking winners and losers in federal contracting. It is no coincidence that these actions advance the needs of key special interests leading up to the critical midterm elections on Nov. 4. and many have expressed concern that this executive order could be used to reward political allies with contracts while blacklisting political foes. Such high stakes open the door to corruption and favoritism in the procurement process, allow trial lawyers to extort larger settlements from firms, enable bureaucratic agencies to extract costly settlements over conduct that may have been legal, and give labor unions leverage to get businesses to capitulate to their demands or else they will pursue meritless claims that will result in debarment.
Taxpayers, contractors and their employees deserve a fair and transparent process that will award contracts based on merit to those who will deliver the highest quality product at the best price. Instead, the president’s executive order adds uncertainty and subjectivity to the government contracting process and likely will increase the frequency and cost of labor and employment disputes.
Geoff Burr is the vice president of federal affairs for the Associated Builders and Contractors. ABC is a national construction industry trade association representing nearly 21,000 chapter members.