The U.S. Senate withdrew the Obama Administration’s Fair Play and Safe Workplaces regulation, which required companies to report labor law violations when bidding on government contracts.
The Senate voted 49-48 this week to rescind the 2014 executive order, following a 236-187 vote in the House on Feb. 2 in favor of the withdrawal. President Trump is expected to sign the resolution to rescind.
The Fair Pay and Safe Workplaces Executive Order, considered the “blacklisting rule” by opponents, said companies that bid on federal contracts over $500,000 must be in compliance with federal labor laws and report any violations. Violations by subcontractors must also be reported.
The order said the goal is to help more contractors come into compliance, not to deny contracts to contractors. Companies with labor law violations receive early guidance on remedying any problems and contracting officers take these steps into account before awarding a contract. Repeat violators, however, would be barred from getting contracts. It also included paycheck transparency provisions.
The order was set to go into effect October 26, 2016, but implementation was put on hold with a temporary restraining order after construction and security industry groups filed a lawsuit against it.
The Small Business and Entrepreneurship (SBE) Council applauded the move to rescind.
“The blacklisting rule is incredibly unjust and amounts to a gross abuse of governmental powers,” Karen Kerrigan, SBE president and CEO said. “The federal government needs more small businesses competing for government contracts, not fewer. The blacklisting rule is one of several regulations driving small businesses out of this market. In the end, taxpayers lose. Less competition and small business participation undermines efficiency, innovation, and taxpayer value. Repealing this rule is a big win for small businesses and taxpayers.”
Opponents of the order said barring companies for “alleged violations” is a denial of due process.
“Rescinding the blacklisting rule is good news for small business contractors and subcontractors. It is also good news for taxpayers and our system of justice,” Kerrigan said. “We hope this move is followed by other reforms to make the federal procurement process more friendly and appealing to small businesses and entrepreneurs. The federal government needs their innovative services and competition they offer to make government work better and provide more value to American taxpayers.”
The House Small Business Committee reports that there are 100,000 fewer small businesses competing for federal contracts than there were in 2012.