DOL Offers “Fair Pay” Preassessment–But Will Contractors Use It Willingly?

The Department of Labor has announced a new “preassessment” initiative, under which a government contract can voluntarily ask the DOL for an assessment of the contractor’s record of labor law compliance.

The preassessment program is designed to help contractors discover if they may have any trouble with their mandatory disclosures under the new Fair Pay and Safe Workplaces Executive Order, which will take effect beginning on October 25. Voluntary use of the preassessment program may be a good idea for any contractor with a history of labor issues, but I wonder what will be more likely–contractors choosing to use it on their own, or being pushed to use it by prospective teammates?

In August, the FAR Council released its final rule implementing the Fair Pay Executive Order.  Under the final rule, contractors bidding on contracts over $500,000 must certify as to whether they have been subject to any judgments or determinations within the preceding three-year period under a variety of labor and employment laws, including the Davis-Bacon Act, Service Contract Act, and many others.  The information provided is to be used by the Contracting Officer as part of the overall responsibility determination. For subcontracts over $500,000, subcontractors are required to provide similar information directly to the DOL.

Effective September 12, contractors can now apply for preassessment.  The DOL explains the preassessment program as follows:

Independent of a specific acquisition, any current or prospective government contractor may voluntarily contact the Department of Labor to request an assessment of their record of labor law compliance. Using DOL Guidance, the Department will assess whether any of the prospective contractor’s violations are serious, repeated, willful, or pervasive; and whether a labor compliance agreement may be warranted. If a contractor that has been assessed by the Department of Labor subsequently submits a bid, and the contracting officer initiates a responsibility determination of the contractor, the contracting officer and the Agency Labor Compliance Advisor (ALCA) may use the Department’s assessment that the contractor has a satisfactory record of labor law compliance unless additional labor law violations have been disclosed.

To participate in the preassessment program, a contractor must fill out a short intake form on the DOL’s website, and wait for contact from the DOL. Even though the program is beginning now, DOL confirms that it is an ongoing initiative, and “does not end when the FAR Rule takes effect on October 25, 2016.”

The effectiveness of the preassessment program will depend on how it is implemented, but if it is done well, it could prove useful for contractors willing to voluntarily go through it. But as someone who works every day with teaming agreements and joint ventures, I wonder what is more likely: contractors voluntarily agreeing to go through the program, or being pushed to do so by prospective teammates?

If nothing else, it wouldn’t surprise me to see teaming agreements and joint venture agreements begin to require certifications related to the Fair Pay Executive Order. For prospective teammates who cannot certify to a “clean” record, the next step may be obvious: “if you want to team with us, go through preassessment.” We’ll see.