Recently President Obama issued an Executive Order purportedly seeking to increase efficiency and cost savings in the work performed by parties who contract with the Federal Government by ensuring that they understand and comply with labor laws. In sum, the Executive Order requires contractors seeking federal contracts to disclose labor law violations, and to require their subcontractors to do the same, and creates new compliance advisers at agencies to oversee decisions about which contractors are awarded federal work.

The Executive Order requires, for procurement contracts for goods and services, including construction, where the estimated value of the supplies acquired and services required exceeds $500,000, each agency to ensure that provisions in solicitations require that the offeror represent, to the best of the offeror's knowledge and belief, whether there has been any administrative merits determinations, arbitral awards or decisions, or civil judgments rendered against the offeror within the preceding 3-year period for violations of any of the following:

  1. the Fair Labor Standards Act;
  2. the Occupational Safety and Health Act of 1970;
  3. the Migrant and Seasonal Agricultural Worker Protection Act;
  4. the National Labor Relations Act;
  5. 40 U.S.C. chapter 31, subchapter IV, also known as the Davis-Bacon Act;
  6. 41 U.S.C. chapter 67, also known as the Service Contract Act;
  7. Executive Order 11246 of September 24, 1965 (Equal Employment Opportunity);
  8. section 503 of the Rehabilitation Act of 1973;
  9. 38 U.S.C. 3696, 3698, 3699, 4214, 4301-4306, also known as the Vietnam Era Veterans' Readjustment Assistance Act of 1974;
  10.  the Family and Medical Leave Act;
  11.  title VII of the Civil Rights Act of 1964;
  12.  the Americans with Disabilities Act of 1990;
  13. the Age Discrimination in Employment Act of 1967;
  14. Executive Order 13658 of February 12, 2014 (Establishing a Minimum Wage for Contractors); or
  15. equivalent State laws, as defined in guidance issued by the Department of Labor

The offeror will, prior to making an award, be provided an opportunity to disclose any steps taken to correct the violations of or improve compliance with the labor laws, including any agreements entered into with an enforcement agency. However, contracting officers are required to consider the information provided in determining whether an offeror "is a responsible source that has a satisfactory record of integrity and business ethics."

In addition, for any subcontract where the estimated value of the supplies acquired and services required exceeds $500,000 and that is not for commercially available off-the-shelf items, each agency's contracting officer is to require that, at the time of execution of the contract, the contracting party represent that it: (A) will require each subcontractor to disclose any administrative merits determinations, arbitral awards or decisions, or civil judgments rendered against the subcontractor within the preceding 3-year period for violations of any of the requirements of the labor laws listed above, and update the information every 6 months; and (B) before awarding a subcontract, will consider the information submitted by the subcontractor in determining whether a subcontractor is a responsible source that has a satisfactory record of integrity and business ethics, except for subcontracts that are awarded or become effective within 5 days of contract execution, in which case the information may be reviewed within 30 days of subcontract award.

During performance of the contract, contractors subject to the Executive Order will be required to self-report their labor law violations every 6 months disclosing violations of any of the laws set forth above.