Contractors say they’ve had it with White House executive orders

This story was updated Wednesday, Aug. 12, 2015, at 2 p.m., with quotes from Alan Chvotkin, executive vice president of the Professional Services Council.

Four associations representing federal contractors sent a polite, yet terse, letter to the White House Tuesday saying, in so many words, that they were fed up with executive orders and presidential memos that target their member companies.

“We respectfully request that no further presidential directives primarily focused on government contractors be issued for the foreseeable future,” said the letter. It was signed by the heads of the National Defense Industrial Association, the Aerospace Industries Association, the Professional Services Council and the IT Alliance for Public Sector.

While not mentioning any by name, they point collectively to a dozen executive orders and memos that President Barack Obama has issued since 2009. Those directives have led to 16 new regulations, they said.

Alan Chvotkin
Alan Chvotkin

“While we have openly expressed our support for some, suggested changes to others with which we agree on the intent, and raised major concerns about yet others, the net effect has been to significantly increase the costs of doing business with the government,” the letter said.

By some estimates, it says, 30 cents out of every contracting dollar is spent on complying with government regulations.  There is little to show for that effort, it suggested.

“We’re asking for a pause to not issue any new executive orders and, hopefully, fewer new procurement regulations derived from that,” Alan Chvotkin, executive vice president of the Professional Services Council, told Federal Drive with Tom Temin Wednesday.

He added that companies are struggling to implement all of these new policies and regulations, which is raising the cost burden to them and the government.

“It’s not a debate of whether these actions are right policy or wrong policy,” Chvotkin said. “It’s just the volume of it and the need for some pause to give companies an opportunity to figure out how to implement them in a smart, coordinated and consistent manner.”

When legislation has stalled in the Republican-led Congress, the Obama administration has turned to executive orders to set labor policy. A 2014 directive set the minimum wage for contractors’ employees at $10.10 per hour.  Another required companies on contracts worth at least $500,000 to  report any recent violations of 14 separate labor laws and policies.

“The minimum wage executive order is a good example of an order that will have a direct and immediate effect on the cost on the direct cost of labor,” Chvotikin said. “Now in the professional services marketplace for many of our members, they’re already paying salaries well in excess of that minimum wage. But for others, it is an increase and that will have a direct impact on labor. Besides the cost for the increase, there are a number of compliance and regulatory requirements that come out of that order and implementing rules about paychecks and record keeping that also drive time and cost.”

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The one executive order Chvotkin said the four associations would like to see taken away is the Fair Pay and Safe Workplaces executive order.

“This rule covers not only federal laws but an unstated number of additional state and local laws the Department of Labor guidance identifies one, OSHA requirements at the local level and state level that companies would have to comply with,” he said.

The groups said the resulting regulations have  further complicated the already complex federal acquisition process.  They warn that the executive orders are deterring new businesses from seeking government work at a time when agencies need innovative solutions.

“This rapid growth in compliance requirements is becoming untenable,” the letter said.

The letter ends with a request for a meeting with Denis McDonough, the White House chief of staff, and Valerie Jarrett, a senior adviser to the President.

According to the Professional Services Council, the 12 Obama administration executive orders that have burdened contractors are:

1. Nondisplacement of Qualified Workers Under Service Contracts (1/30/2009)

2. Economy in Government Contracting (1/30/2009)

3. Notification of Employee Rights Under Federal Labor Laws (1/30/2009)

4. Use of Project Labor Agreements for Federal Construction Projects (2/6/2009)

5. Focused on Federal Leadership in Environmental, Energy, and Economic Performance (10/5/2009)

6. Memorandum for the Heads of Executive Departments and Agencies on Contractor Tax Delinquency (1/20/2010)

7. Strengthening Protections Against Trafficking In Persons In Federal Contracts (9/25/2012)

8. Minimum Wage for Contractors (2/12/2014)

9. Non-Retaliation for Disclosure of Compensation Information (4/8/2014)

10. Presidential memorandum, “Advancing Pay Equality Through Compensation Data Collection” (4/8/14)

11. Further Amendments to Executive Order 11478, Equal Employment Opportunity in the Federal Government, and Executive Order 11246, Equal Employment Opportunity (7/21/2014)

12. Fair Pay and Safe Workplaces (7/31/2014)

“On many of these, it’s not an objection that nobody doesn’t want to not comply with or suggest that contractors should not comply with the labor laws, 14 of them that are called out in that order,” Chvotkin said. “It is the administrative burden, in many respects, the regulatory scheme is almost impossible for companies to comply with.”

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