Amidst the flurry of Executive Orders President Obama has issued in the past year affecting U.S. Government Contractors, Executive Order 13673, entitled “Fair Pay and Safe Workplaces,” carries the highest stakes. Beyond imposing significant additional obligations and requirements on the contracting community, E.O. 13673 is unique because it directly affects procurement. This, together with the breathtaking scope of what it could mean to have to comply with E.O. 13673, makes it an Executive Order contractors should pay close attention to over the remainder of the Obama presidency and beyond.
The key features of E.O. 13673 are relatively simple and straightforward in concept. E.O. 13673 applies to procurement of any federal contracts in excess of $500,000. It requires contractors, as a condition of eligibility for such high dollar contracts, to self-report on both their own, and eventually their subcontractors’, records of “compliance with labor laws.” With these self-reports, the government itself is then tasked with coordinating between and among federal acquisition, the U.S. Department of Labor and a number of other federal labor and employment law enforcement agencies to determine what, if any, affect each contractors’ compliance record should have on contact awards. Beyond this, E.O. 13673 also requires such contractors to establish special paycheck notifications for employees working on any contracts that are subsequently awarded and, for contracts in excess of $1,000,000, prohibits contractors from imposing mandatory arbitration of employment law claims.