CONSTRUCTION
AND GOVERNMENT CONTRACT GROUP ALERT
Fair Pay and Safe Workplaces Executive Order Signed by
President Obama On July 31, 2014
On July 31, 2014, President Obama issued Executive Order
13673, entitled “Fair Pay and Safe Workplaces.” It is applicable to those
contracting with the Federal Government and its stated purpose is to insure
those contractors “understand and comply with labor laws.”
The Executive Order requires new pre- and post-contract
award actions by both agencies and contractors (and subcontractors), creates at
least one new senior agency official position, and requires regulatory
amendment consideration, including regarding consequences. Federal contractor
will need to develop implementation strategies to comply with this new EO.
Key aspects of EO 13673:
1. Pre-Award: For
offers exceeding $500,000, solicitations must include offer representations
regarding labor law violations within the preceding 3-year period.
Consideration of those representations will be part of responsibility
determinations. Contractors must similarly incorporate into their subcontracts
similar subcontractor disclosures.
2. Post-Award:
Contractors must update their labor law representations every 6 months during
contract performance. Contracting officers must then consider whether action is
necessary because of any changes to the representations (such as requiring
remedial measures, providing assistance, resolving issues, or in appropriate
instances termination or referral for suspension or debarment). Contractors
must similarly obtain updates from subcontractors, and then determine whether
action is necessary against their subcontractors based on those updates.
3. Labor
Compliance Advisors: Each agency is required to designate a senior agency
official as its Labor Compliance Advisor (LCA). The LCA have various duties,
including best practices interfaces, agency and contractor coordination, and assistance
to contracting officers regarding appropriate actions associated with EO’s
requirements.
4. Government-wide
Consistency: To help facilitate agency consistency regarding implementation,
the EO directs FAR Council consultation with the Department of Labor and other
key agencies to propose FAR amendments to implement the EO, including regarding
violation consequences. The EO further directs the Secretary of Labor to
develop guidance regarding EO implementation, including also regarding
violation consequences.
5. Paycheck
Transparency: This aspect of the EO requires contractors whose contracts are subject
to the pre- and post-award requirements discussed above to provide all individuals
performing work under their contracts and for whom they are required to
maintain wage records under applicable law (such as the Davis-Bacon Act, the
Service Contract Act or equivalent state law) with documented information
concerning that individual’s hours worked, overtime hours, pay, and any
additions made to or deductions from pay. Contractors much incorporate those
same requirements into their subcontracts for subcontractors to provide the
same information to their workers.
6. Complaint and
Dispute Transparency: This aspect of the EO limits contractor ability to
mandate arbitration of disputes. For all federal contracts that exceed $1
million, contractors must agree that the decision to arbitrate claims under
Title VII of the Civil Rights Act of 1964 or any tort related to or arising out
of sexual assault or harassment may only be made with the voluntary consent of
employees or independent contractors after such disputes arise. This same
requirement must be incorporated into subcontracts. Limited exceptions are: a)
contracts or subcontracts for the acquisition of commercial items or
commercially available off-the-shelf items; b) contractor or subcontractor
agreements covered by collective bargaining agreements; or c) contractor or
subcontractor agreements with valid arbitration provisions prior to bidding
upon a contract covered by the EO (but if such contracts allow for the changing
of terms, renegotiation or replacement, then the EO does apply).
Whether these terms are truly fair or will have any true
impact upon workplace safety will be in the eyes of affected persons and
companies. Regardless, the changes are significant, will required detailed
planning, and – unfortunately – are likely to be a significant source of future
litigation, and potentially detrimental administrative action for the unwary.
A copy of EO 13673 is currently available at the following White
House web-link:
For more information about EO 13673 or other construction or
government contracts related matters, please contact Neil Lowenstein, or any
other member of the Vandeventer Black Construction and Government Contracts
Group - VanBlackLaw.com.
