For CEOs with Government Contracts, Life is about to get Easier

GettyImages-629384774-compressorAnother piece of regulation introduced by the Obama administration has just been placed firmly on the chopping block. And this time it’s companies that perform work for the federal government that are poised to win out.

The so-called “contractor blacklisting” rule was finalized by the Department of Labor last August, though its implementation was held up in October by a temporary injunction entered by a federal judge in Texas.

Its repeal only requires a simple majority vote in the Senate after it was supported last week in the House of Representatives. Republicans hold a slim Senate majority of 52-to-48.

“We strongly support the goals of ensuring that only responsible companies do business with the federal government and that those companies compete on a level playing field.

The rule would require federal contractors to disclose any past violations of more than a dozen labor laws, even if they consisted of preliminary determinations by enforcement staff that had not yet been finalized. The disclosures could prevent companies from winning government contracts, unless they could explain how they’d changed their practices.

“We strongly support the goals of ensuring that only responsible companies do business with the federal government and that those companies compete on a level playing field,” Wes Bush, a representative of CEO peer group Business Roundtable, said in a statement.

However, Bush, who also is CEO of Northrop Grumman, said the regulation is “costly and flawed” and would fail to accomplish its goals.

Business Roundtable argued that there already were existing rules in place to deal with labor law violations. It also noted that the Federal Acquisitions Regulatory Council estimated the new requirements would slug the government and business with $474 million of additional regulatory costs.

What’s more, Bush claimed that making contract decision contingent on “labor violations” could pressure employers to settle meritless claims.

The contractor blacklisting rule is among a raft of workplace legislation that faces repeal, now that Donald Trump is in the White House. Obama’s generous overtime pay rules, also held up by a Texas judge, are among new rules in the firing line.

Ross Kelly
Ross Kelly is a London-based business journalist. He has been a staff correspondent or editor at The Wall Street Journal, Yahoo Finance and the Australian Associated Press.

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