HR Policy Contests Flawed Cost/Benefit Assumptions Under Proposed Blacklisting Rules, Challenges $12.99M Cost Estimate

June 26, 2015

The Association joined other business groups this week in requesting an extension of the public comment period for the FAR Council's proposed regulations for the Fair Pay and Safe Workplaces (a.k.a. Blacklisting) Executive Order, noting "the agencies have presented an incomplete analysis based largely on assertions and assumptions not supported by empirical evidence."  Previous Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits and to use the best available techniques to quantify costs and benefits.  Some examples of the shortcomings include:

  • The initial year cost to federal contractors of $12.99 million is based on the assumption that each firm will spend 8 hours of time for this process.  There is no empirical evidence to back this up.

  • The estimate of affected contractors and subcontractors (25,775) relies only on those who currently hold awards of $500,000 or more.  This omits firms who submit bids but have no current awards and turnover in the number of incumbent federal contract awardees.

  • The estimate of the percentage of contractors who may have violations is based on a number that includes a preponderance of firms with fewer than 10 employees each and does not include civil judgments, arbitral awards, or state/local law violations.

  • The agency assumes that firms already track and maintain records of violations, and the cost of setting up such a system is inadequately analyzed.

  • There is no acknowledgement of the cost of entering into a negotiated labor compliance agreement, provided by the rule for firms with "serious" violations.
The Association requested an extension of 90 days to October 27, 2015 and was joined by the U.S. Chamber of Commerce, Associated Builders and Contractors, and the Associated General Contractors of America.  A reminder that the Association has scheduled a conference call briefing on July 1 at 12:00 p.m. EDT on the Blacklisting Executive Order and DOL's proposed expansion of overtime coverage if that is issued before then.  The July 1 call will be hosted by our Employment Rights Committee Chair Johnna Torsone, Executive Vice President and Chief Human Resources Officer, Pitney Bowes Inc., and will include commentary from other member companies.