ABC: USDA Abandoning Illegal Blacklisting Provisions Is a Win for the Rule of Law and Federal Contractor Members

WASHINGTON, July 26-In response to Associated Builders and Contractors' and federal contractor opposition, the U.S. Department of Agriculture scrapped controversial blacklisting provisions targeting federal contractors in a proposed rule published in the Federal Register today specific to the USDA's procurement policies.

"The USDA's decision to drop unnecessary and duplicative blacklisting provisions harming federal contractors is a victory for the rule of law and federal contracting stakeholders," said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. "ABC and the federal contracting community held the USDA accountable for proposing to circumvent the courts and Congress and are pleased this issue appears to be resolved."

On Feb. 17, 2022, the USDA published a proposed rule to make amendments to the Agriculture Acquisition Regulation, which included new labor law compliance certifications and reporting provisions that presented wide-ranging implications for ABC members that perform work on federal contracts awarded under the AGAR.

According to March 21, 2022, comments that ABC submitted urging the USDA to withdraw the proposal, "The proposal would insert a clause requiring contractors to certify compliance with 15 different labor laws and their state law equivalents, as well as certify the compliance of any subcontractors and suppliers. The proposed rule would also insert a clause requiring contractors to certify that they and any subcontractors comply with previously required corrective actions for adjudicated labor law violations and provide a list of specific violations to a contracting officer."

ABC's comments further said the USDA's 2022 proposed rule was substantially the same as the U.S. Department of Labor's 2016 Guidance Document and Federal Acquisition Regulation Final Rule implementing President Barack Obama's July 31, 2014, Fair Pay and Safe Workplaces Executive Order 13673, commonly referred to as the blacklisting rule. On Oct. 24, 2016, implementation of the reporting and disclosure requirements of the controversial EO was blocked by a U.S. District Court for the Eastern District of Texas judge in Associated Builders and Contractors of S.E. Tex. v. Rung.

The court ruled in favor of ABC's lawsuit and granted a preliminary injunction, after finding that very similar certification and disclosure requirements in the FAR rules conflicted with the labor statutes themselves; were arbitrary and capricious; and violated contractors' constitutional rights. Subsequently, Congress voted to disapprove the FAR's blacklisting rule pursuant to the Congressional Review Act, signed into law by President Donald Trump.

ABC supports a level and transparent playing field for federal contractors and believes unethical firms should be held accountable. Bad actors who facilitate inequities in the federal procurement process are a detriment to taxpayers, contractors and the employees whose livelihoods rely on a fair contracting marketplace. But the USDA's proposal was overbroad, arbitrary and capricious, and violated the statutory and constitutional rights of responsible, ethical contractors.

ABC will submit comments on the new proposed rule before the Aug. 26 deadline supporting the USDA's decision to abandon the blacklisting provisions.