Previous attempts at similar “Blacklisting” efforts ultimately failed
Although not mentioned in the Senators’ letter, their concerns and recommended actions harken back to previous attempts by the Obama and Clinton Administrations to suspend and/or debar contractors for alleged misconduct. In July 2014, President Obama signed Executive Oder 13673, “Fair Pay & Safe Workplaces” (aka “The Blacklisting Rule”). Among other things, it required that, for procurement contracts for goods and services, where the estimated value of the supplies acquired and services required exceeds $500,000, a prospective contractor or subcontractor must report any administrative merits determination, arbitral award or decision, or civil judgment rendered against it within the preceding 3-year period for violations of 15 federal labor and employment laws or equivalent state laws.
E.O. 13673 directed the DOL and the FAR Council to issue regulations and guidance to implement the new requirements. The E.O. and its implementing regulations would have required contracting officers to review a contractor’s labor/employment law violations to assess the contractor’s record of compliance during the pre-award “responsibility” determination and when making post-award decisions such as whether to exercise contract options.
Eventually, the Obama Rule died in April 2017 after President Trump took office. (See, WIR: “Trump Signs into Law the Congressional Resolution to Kill Obama’s Dreaded “Blacklisting Rule”)
The Clinton Administration published a somewhat similar, but broader, FAR Council Final Rule of “contractor responsibility” regulations in its waning days. That Rule would have not only barred companies with poor labor and employment law compliance records (as determined by federal contracting officers) from federal government contracts, but it would have required prospective federal contractors to have a satisfactory record of compliance with tax, environmental, anti-trust, and consumer protection laws as well. However, following the political and legal joust between the Democrats and Republications in the 2000 election year, the Clinton Administration’s final rule was initially suspended, and ultimately revoked, by the successor (George W.) Bush Administration.
The rationale behind both the Clinton and Obama Administrations’ actions was to prevent the award of government contracts to companies with poor track records of compliance with federal laws. Debarments, their proponents reasoned, would save costs and increase the efficiency of the federal procurement process. Still, both employer advocacy groups and legal counsel bitterly criticized the efforts of both Administrations. Some opponents argued that unions, plaintiffs, and various interest groups would seek to exploit the federal government’s debarment authority to demand concessions or settlements from contractors, and, as a result, would also cause unwarranted delays in the procurement process. Another major concern was an infringement of the due process rights of prospective contractors. (See, WIR for
Thursday, August 25, 2016: “USDOL Publishes Fair Pay and Safe Workplaces Final Guidance and Acknowledges DirectEmployers’ Comments.”)
For more background on the Obama Administration’s – ultimately unimplemented – “Blacklisting Rule” and a related pending recent development, see WIR: “USDA Seeks To Criminalize Federal Contractor Non-Compliance With Federal Labor Laws.”