Federal Contractor "Blacklisting" Rule Has Been Finalized
The Department of Labor (DOL) and the Federal Acquisition Regulatory (FAR) Council, published guidance and a final rule, respectively, requiring all prospective federal government contractors and subcontractors to disclose labor law violations before a federal contract can be awarded. Federal agencies will rely on this information to determine if potential contractors/subcontractors are "responsible" sources worthy of receiving federal contracts. As well, once a contract is awarded the disclosures will continue every six months for the duration of the contract. This final rule is in response to President Obama’s July 2014 Executive Order 13673, known as the ‘‘Fair Pay and Safe Workplaces’’ Executive Order, attempting to "ensure that federal contractors better comply with laws that protect their workers’ safety, wages and civil rights."
While the guidance aims to uphold current labor laws and compel wider compliance, its impact on contractors and subcontractors will likely be dramatic and unrelated to compliance. In part, the potential exists for impending federal contracts to be denied simply for labor violation accusations and current unresolved violations regardless of the circumstances. These very real scenarios bring about the question of businesses being penalized before violations are resolved and thus violating due process rights for such businesses. Not to mention lost contracts harm not only the business but also its workers.
Contractors bidding on contracts equal to or greater than $50 million will have to start disclosures October 25, 2016. Subcontractors bidding on subcontracts equal to or greater than $500,000 will have to start disclosures October 25, 2017.