Senate Joins House in Passing CRA Resolution to Invalidate Contractor Blacklisting Rules

McGuireWoods LLP

On March 6, 2017, by a party-line vote of 49-48, the United States Senate passed a resolution of disapproval (H.J. Res. 37) pursuant to the Congressional Review Act, to preclude enforcement of the Federal Acquisition Regulatory (FAR) Council’s final rule implementing President Obama’s “Fair Pay and Safe Workplaces” executive order.  As outlined in greater detail in earlier posts, the rule would require offerors on contracts or subcontracts estimated to exceed $500,000 to disclose “any administrative merits determination, arbitral award or decision, or civil judgment” against the contractor under fourteen enumerated labor and employment statutes and Executive Orders (“labor law violations”), for the three years preceding the contract bid. These disclosures, and any additional information supplied, would be taken into account by contracting officers in making responsibility determinations and awarding contracts.

The rule exceeded the President’s authority, denied statutory due process rights to covered contractors, and expanded statutory penalties beyond those proscribed by Congress.  As noted in the Washington Post, by Marc Freedman, executive director of labor law policy with the U.S. Chamber of Commerce:

They define violations to include mere allegations and citations where the contractors haven’t had a chance to defend them. We consider this a violation of their constitutional due-process rights.

It was thus entirely unconstitutional, which is why in October 2016, on the eve of its effective date, a federal judge in Texas enjoined most parts of it.  This resolution, however, would officially remove the rule from the Federal Acquisition Regulation and prevent its future enforcement.  In February, a House vote approved the resolution, 236-187.  The bill is likely headed now to the White House for President Trump’s signature.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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