New rule affects federal contractor bids for new projects
A recent Executive Order has become law as the Final Rule for the Fair Play and Safe Workplaces EO was issued on August 25, 2016. Contractors have reason to be concerned about the new rule as it requires past labor violations to be disclosed during new contract bids. What does this meant to the EEO/AA community? Well, it is significant because any OFCCP audit that ends in a conciliation agreement would be disclosed during that bidding process. That means a potential impact on a contractors ability to win new business.
One discussion that has circulated in the Affirmative Action industry is the impact of OFCCP audits on future bids. Historically, contractors have often agreed to various forms of penalties both large and small to expedite the closure of an audit. With this new law in effect, contractors will now be forced to consider the impact a conciliation agreement may have on their ability to bid new work. Could a conciliation agreement or agreements result in the loss of a bid? Do contractors now have to take a different stance on their willingness to accept penalties? OFCCP audits could become a lot more contentious if the contractor is not willing to agree to a violation that could affect future earnings.
Read the Department off Labor posting here and see text provided below:
On July 31, 2014, President Obama signed the Fair Pay and Safe Workplaces Executive Order to require prospective federal contractors to disclose labor law violations and give agencies guidance on how to consider labor violations when awarding federal contracts.
While the vast majority of federal contractors play by the rules, every year tens of thousands of American workers are unlawfully denied overtime wages, discriminated against in hiring or pay, put in physical danger on the job, or otherwise denied basic workplace protections by the federal contractors who employ them using taxpayer dollars. Taxpayer dollars should not reward companies that break the law, and contractors who meet their legal responsibilities should not have to compete with those who do not.
The Executive Order also ensures that contractors' employees are given the necessary information each pay period to make sure that they are getting paid what they are owed, and that workers who are victims of sexual assault or sexual harassment get their day in court and are not forced to arbitrate these claims if they work for companies with very large federal contracts.
Bringing the Executive Order to Action
On August 25, 2016, after extensive input from the public, the Department of Labor (DOL) and the Federal Acquisition Regulatory Council (FAR Council) issued the final rules and guidance implementing the Executive Order. These regulations and guidance make sure that agencies have the information they need to determine which contractors are providing their workers with basic protections. Using this information, agencies can ensure that taxpayer dollars only go to contractors that are willing to meet their responsibilities to their employees. They also create a process for agencies and DOL to help contractors come into compliance with labor laws and to ensure that contractors who get federal contracts continue to comply with labor laws while they are receiving federal funds.
Phased-In Implementation Schedule
Week of September 12, 2016: Preassessment begins, through which current or prospective contractors may come to DOL for a voluntary assessment of their labor compliance history, in anticipation of bids on future contracts but independent of any specific acquisition.
October 25, 2016: The final rule takes effect. Mandatory disclosure and assessment of labor law compliance begins for all prime contractors under consideration for contracts with a total value greater than or equal to $50 million. The reporting disclosure period is initially limited to one (1) year and will gradually increase to three (3) years by October 25, 2018.
January 1, 2017: The Paycheck Transparency clause takes effect, requiring contractors to provide wage statements and notice of any independent contractor relationship to their covered workers.
April 25, 2017: The total contract value threshold for prime contracts requiring disclosure and assessment of labor law compliance is reduced to $500,000.
October 25, 2017: Mandatory assessment begins for all subcontractors under consideration for subcontracts with a total value greater than or equal to $500,000.