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In the wake of the Obama administration’s Aug. 24 issuance of the “blacklisting” final rule, officially known as the Fair Pay and Safe Workplaces Executive Order 13673, ABC recently surveyed membership to determine the impact of the rule on the contracting community interested in pursuing federal contracts. ABC’s survey of its members reveals that more than 51 percent of respondents said the final rule’s onerous requirements, including reporting alleged violations that firms are still contesting, will force them to abandon the pursuit of federal contracts. Ninety-one percent of contractors said the final rule will impose a significant or extreme burden for their firm through its new requirements to compile necessary information needed to comply with final rule. Finally, 93 percent said the final rule will make the contracting process less efficient and 98 percent said the final rule will make the contracting process more expensive. To put this into perspective, from FY2009-FY2015, ABC member prime contractors won 56 percent of large-scale federal contracts exceeding $25 million. That’s 626 contracts valued at roughly $40 billion (63.65 percent of total value) won by ABC members. With the loss of quality and experienced ABC member prime contractors with no record of reportable violations, the federal government would experience increased costs, reduced competition and perhaps less quality construction projects because of this burdensome blacklisting rule. About the Rule The final rule will require federal contractors and subcontractors to disclose any “violations” of 14 federal labor laws and OSHA-approved state plans to the federal government before being awarded federal contracts covered by this rule. The rule was issued by the Federal Acquisition Regulatory (FAR) Council and accompanied by a guidance document from the U.S. Department of Labor (DOL) and a White House amendment to Executive Order 13673. ABC issued a press release slamming the final blacklisting rule immediately afterward. The final rule is effective on Oct. 25, 2016, and will be implemented in phases that will impact prime contractors and subcontractors pursuing federal contractors of $500,000 or more when it is fully put into action Oct. 25, 2017. Prime contractors pursuing federal contracts over $50 million issued after Oct. 25, 2016, will be the first group that must comply with this rule. This threshold decreases to prime contracts of $500,000 or more issued after April 25, 2016, and extends to subcontracts of $500,000 or more issued after Oct. 25, 2017. In addition, on Jan. 1, 2017, the rule’s paycheck transparency provisions take effect, requiring contractors to provide wage statements and notice of any independent contractor relationship to their covered workers. ABC’s general counsel, Littler Mendelson P.C., has prepared an analysis of the blacklisting final rule. In addition, ABC will offer a free webinar for ABC members on Sept. 22 at 2 p.m. ET, titled, Federal Contractors: Learn About the Obama Administration’s Final Rule on “Blacklisting.” The final rule is expected to increase costs for taxpayers, threaten the livelihood of employees who work for responsible federal contractors and cripple the federal procurement process with needless uncertainty, delays and litigation. It places a new and costly regulatory burden on the federal contracting community and creates a process that will allow trial lawyers to extort larger settlements from firms, enable bureaucratic agencies to extract costly compliance agreements for conduct that may have been legal, and give labor unions leverage to persuade businesses to capitulate to their demands. “ABC supports a level and transparent playing field for federal contractors and believes unethical firms should be held accountable,” said Ben Brubeck, ABC’s vice president of Legal, Regulatory and State Affairs. “However, there are many troubling aspects of this rule. For example, the final rule strips federal contractors of their due process rights by forcing them to disclose pre-adjudicated ‘labor law decisions’ and alleged violations of the covered laws to government officials that can be used as the basis for contracting officers to deny a contract to an otherwise qualified firm.” “For this, and many other practical reasons raised in our comments to government officials during the past two years and highlighted in this recent survey, ABC will continue to explore every available avenue, including the judicial system, to protect taxpayers, contractors and their employees, whose livelihoods rely on a fair procurement system, from this overreaching policy,” said Brubeck. ABC has consistently opposed the blacklisting proposal since the White House first issued the Fair Pay and Safe Workplaces Executive Order 13673 on July 31, 2014. Specifically, ABC has: