Obama overhauls federal contracting rules

President Obama will sign an executive order Thursday aimed at improving workplace conditions for employees of federal contractors by pushing companies with shoddy records out of the government procurement process.

“The Executive Order will ensure that the worst actors, who repeatedly violate the rights of their workers and put them in danger, don’t get contracts and thus can’t delay important projects and waste taxpayer money,” the White House said.

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The action comes six months after President Obama effectively raised the minimum wage for workers at companies who do business with the federal government. There are roughly 24,000 businesses with federal contracts, employing about 28 million workers, according to Labor Department estimates.

Under Thursday’s order, companies seeking federal contracts must disclose labor law violations over the previous three years. That includes statutes covering pay, safety, health and collective bargaining — as well as past civil rights violations.

Each agency will designate a senior official as a Labor Compliance Advisor to guide decisions on whether contractors’ past actions “rise to the level of a lack of integrity or business ethics.”

A 2010 Government Accountability Office report concluded that the most egregious reported violations regarding pay, health and safety between fiscal 2005 and fiscal 2009 took place at firms that went on to receive new government contracts.

Workers rights advocates immediately hailed the order as a strong message to private sector firms looking for a contract from Uncle Sam.

“This policy would be a meaningful step toward providing a real economic incentive for employers to treat their workers fairly,” said Sarita Gupta, executive director of the group Jobs With Justice. “Once the order is implemented, labor law violations can no longer be considered an acceptable cost of doing business for federal contractors.”

The White House stressed that regulations and guidance developed as a result of the order would undergo public comment to ensure that responsible contractors don’t get unfairly excluded from government business.

The order also contains provisions meant to encourage companies to settle existing disputes, like paying back wages and adding new requirements related to the information appearing on pay stubs.

By cracking down on federal contractors who break the law, the president is helping ensure that all hardworking Americans get the fair pay and safe workplaces they deserve,” the White House said.