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President Obama Creates New Bureaucracy To Manage Federal Procurement Process

8/26/2015 | Construction Blog

President Obama signed an executive order that will have a huge impact on the construction industry on July 31, 2014. Amazingly, it has received little fanfare or attention until now.

The Fair Play and Safe Workplaces EO, Number 13673, creates a new and sweeping regulatory scheme to manage federal contractors and the federal procurement process. This should be concern enough for any contractor interested or involved in federal public work given the additional red tape and difficulty it will add to an already cumbersome process. However, it also imposes a subjective standard that is ripe for mistakes and, worse, abuse.

The Executive Order directs federal agencies to determine whether a contractor seeking federal work is “responsible enough” to be awarded the project. There is little guidance for what constitutes “responsible enough” outside a subjective look back at 3 years of compliance history at the state and federal levels. There appears to be no carve out for whether the charges were found to be true or not and there is no mechanism to indicate how different state and federal agencies who already have trouble communicating will share this information. This could result in actual or constructive (due to the time it takes) exclusion of contractors from federal public work. It also represents further consolidation of power in the executive branch and leaves the door open to abuse in the form of favoring political allies of an administration according to some.

Much of the details relating to this change in policy have yet to be revealed, as the federal agencies in charge of overseeing the administrative structure are still working on the regulations. But contractors involved in federal public work should be aware that the administrative costs of working on federal projects is likely to go up and that they may receive arbitrary treatment.