July 15-August 4, 2015 —
COLORADO REAL ESTATE JOURNAL
— Page 19
Law & Accounting
B
idders on government
contracts will face
substantial disclosure
requirements if two govern-
ment proposals for implement-
ing the Fair Pay and Safe Work-
places Executive Order become
final.
Executive Order 13673
requires bidders on govern-
ment contracts to disclose
violations of federal and state
labor laws within the past three
years to contracting agencies so
that the agencies can consider
that information in making
contract awards. The executive
order is based on the premise
that a prospective contractor
must have a satisfactory record
of integrity and business ethics
to be determined responsible,
and the federal procurement
process is more efficient and
economical when contrac-
tors comply with labor laws.
The order applies to new con-
tracts and subcontracts over
$500,000, other than contracts
for commercially available off-
the-shelf items starting in 2016.
At the end of May, the Federal
Acquisition Regulatory Coun-
cil (Department of Defense,
General Services Administra-
tion and NASA) proposed
rules and the U.S. Department
of Labor proposed guidance
for implementing the order.
The proposals explain some of
the burdens and responsibili-
ties on the parties involved, but
many questions are yet to be
answered.
Offerors must disclose
whether any award, decision or
civil judgment has been entered
against them for violating any of
14 federal labor laws and execu-
tive orders or equivalent state
laws. The apparent awardee
must disclose detailed informa-
tion about any violations. The
awardee must agree to require
each covered subcontractor to
disclose its own violations and
the awardee must consider that
information before awarding a
subcontract to determine if the
subcontractor is a responsible
source. An awardee must update
information about its own viola-
tions and obtain updates from
each of its subcontractors semi-
annually.
The DOL’s
p r o p o s e d
g u i d a n c e
describes at
length what
labor viola-
tions must
be reported
and
what
information
must be dis-
closed about
v i o l a t i on s ,
explains how
to analyze
the severity of violations and
describes the roles of DOL and
the labor compliance advisers
that each agency must desig-
nate. The FAR Council’s pro-
posal would amend the Fed-
eral Acquisition Regulation
consistent with the guidance
by delineating solicitation pro-
visions and contract clauses;
identifying how, when and
to whom disclosures are to
be made; and describing the
responsibilities of contracting
officers and contractors.
The proposals would make
agency complaints and notices
or findings of violations that
have not been fully adjudi-
cated, and are subject to fur-
ther review, reportable. If an
apparent awardee reports
violations, the agency’s labor
compliance adviser is to collect
and analyze the information
and make recommendations to
the contracting officer based
on whether it finds the offer-
or’s record is satisfactory, the
record would be satisfactory if
a labor compliance agreement
were initiated, or the record
is unsatisfactory and the sus-
pending and debarring official
should be notified. Contracting
officers must consider mitigat-
ing factors such as corrective
action and steps taken by the
contractor to prevent its recur-
rence; however, a pattern of
serious, willful, numerous or
continuing violations with no
effort to remediate warrants
referral to the suspending
and debarring official for the
agency. Prime contractors are
to judge the responsibility of
prospective subcontractors in
the same way.
If new violations or changes
are reported or obtained from
other sources after a contract
has been awarded, the con-
tracting officer may continue
the contract; refer the matter
to DOL to obtain a new or
enhanced labor compliance
agreement; terminate the con-
tract; or, if the violations are
serious, notify the agency’s
suspending and debarring offi-
cial.
The proposals also address
provisions of the executive
order regarding employee pay,
independent contractor status
and arbitration agreements.
Contractors must provide pay
stubs containing certain infor-
mation to employees and can
satisfy this requirement by
complying with similar state
laws. Contractors must notify
independent contractors in
writing of their status before
they perform any work under
the contract. Limits are placed
on contractors’ ability to enter
agreements with employees to
arbitrate Title VII and certain
tort claims where the contract
exceeds $1 million.
The guidance states that DOL
will issue separate guidance on
what state laws are considered
equivalent to the 14 federal
labor laws but also declares
that OSHA-approved state
occupational safety and health
plans are equivalent. The pro-
posals do not indicate whether
the three-year violation period
is retroactive. Other matters
not resolved in these propos-
als include which state wage
statement requirements are
similar to the order’s pay state-
ment requirement, the scope of
public disclosure of violation
information, how contractors
should or must track violations
subject to disclosure, whether
to phase in the subcontractor
requirements, whether sub-
contractors should disclose
violations to DOL rather than
to the prime contractor and
procedures related to failures
to enter into DOL compliance
plans. The DOL’s guidance
invites comment on these mat-
ters. Comments on either pro-
posal must be submitted by
July 27.
s
Sue Schaecher
Partner, Fisher &
Phillips LLP, Denver
Because no two clients
are ever the same.
TM
Deals. Litigation. Great Service.
