Section 827 of the 2013 National Defense Authorization Act [pdf] permanently enhances whistleblower protections for employees of DoD and NASA contractors and sub-contractors. Section 828 establishes a“pilot program” to provide enhanced whistleblower protections for employees of civilian
agency contractors and subcontractors for the next four years. In plain English, here is a look at what the enhanced…
Project Labor Agreements have become increasingly common on federal government construction projects, especially since the issuance of Executive Order 13502 [pdf] and the implementing regulations (FAR Subpart 22.5). These rules encourage the use of PLAs in connection with all “large-scale construction projects,” defined as a “project where the total cost to the Federal…
The Department of Labor has announced that new regulations addressing Nondisplacement of Qualified Workers Under Service Contracts will go into effect on January 18, 2013. (See 77 Fed. Reg. 75780 (Dec. 21, 2012) [pdf].) DOL issued the final regulations in August 2012 after receiving comments on proposed rules published in June. Our comments on the impact of the proposed rules appear here.
The DOL’s action means that all Service Contract Act contracts over the simplified acquisition threshold awarded on or after January 18, 2013 will include a contract clause requiring prime contractors and subcontractors to make good faith offers of employment to SCA-covered employees employed under the predecessor contract.
Here are some of the highlights of the new regulations and the new contract clause:
Jurisdictional issues arising from disputes about wages and benefits required by federal minimum wage statutes like the Davis-Bacon Act and the Service Contract Act can be tricky. In some cases, the Department of Labor has exclusive power to resolve such disputes. In others, the dispute must be resolved by the contracting officer, with appeal rights available under the Contract Disputes Act. The ASBCA’s recent decision in Caddell Constr. Co., ASBCA No. 57831 (May 21, 2012) [pdf] helps determine which cases fall on either side of this line.
The case arose from an Air Force contract to build a new commissary and related site work at Fort Campbell, Kentucky. The solicitation included two wage determinations—one for highway construction with low wage rates and another for building construction with much higher wage rates. Prior to bid, the agency told bidders to use the lower highway construction wage determination. During performance, the contracting officer required the contractor to pay wages according to the higher wage determination for building construction.
The contractor submitted a claim in accordance with the Contract Disputes Act. At the Board, the government moved to dismiss the appeal, arguing that such labor disputes are reserved to the Department of Labor. The Board denied the motion, holding that the Board has jurisdiction to hear disputes over wage issues “where there was an alleged mistake (mutual or unilateral) as to the applicability of the Davis-Bacon Act to appellant’s employees.” The Board concluded that it had jurisdiction to hear the contractor’s claim to recover additional wages paid to employees as a result of faulty wage rate information provided to bidders before submission of bids.
But why is this important?
The FAR Council has proposed a new FAR Subpart 22.12 addressing Executive Order 13495 and the Department of Labor’s final rule [pdf] on nondisplacement of qualified workers. The proposed amendments restate the substance of the Executive Order and the DOL rule, omitting only the procedures for investigation and enforcement that do not pertain directly to contract administration. A new mandatory contract clause will incorporate the nondisplacement policy into all contracts and subcontracts at any tier to furnish services in the United States that succeed contracts for the same or similar work in the same location (unless an exemption or waiver applies).
The new FAR language does not address the apparent conflict between the policy requirement for nondisplacement of qualified workers and the requirement to accept the terms of an existing collective bargaining agreement under the NLRB’s “perfectly clear” doctrine. The “perfectly clear” doctrine states that a successor employer is bound by the terms of a collective bargaining agreement when it is “perfectly clear” that the successor will retain all employees in the bargaining unit without changes to the terms and conditions of employment. This differs from a normal successor employer, which is required to bargain with the union but not to comply with the existing collective bargaining agreement.
The draft RFP issued by the Army Energy Initiatives Task Force is a significant step in the Army’s plan to develop large-scale renewable energy projects. It presents as much as $7 billion in new opportunities to the alternative energy market and reflects a growing synergy between the defense and energy industries. Here we highlight some of the key provisions in the draft RFP, including some that are unique to contracts with the federal government.
The Draft RFP
The draft RFP was issued by the Army Energy Initiatives Task Force. It contemplates a multiple-award indefinite delivery-indefinite quantity contract under which the Army could purchase up to $7 billion worth of renewable and alternative energy over 10 years—a base period of 3 years with 7 option years. Through competition with the IDIQ contract holders, the Army would issue individual firm-fixed-price task orders to purchase electricity through Power Purchase Agreements based on a fixed rate per unit of energy (e.g. $/kWh). The PPAs would be allocated across four renewable technologies: solar (1.5 billion kWh); wind (9 billion kWh); biomass (19 billion kWh); and geothermal (8 billion kWh).
Depending on the requirements of a particular task order, bidders could be responsible for constructing the energy generating systems and guaranteeing a certain level of renewable energy output by a specific date. Failing to meet the specified date could subject the contractor to liquidated damages for the output shortfall on a price-per-MWh basis.
Maintenance of the energy generation systems would be the contractor’s responsibility, as would achieving certain output performance levels over the course of the PPA. For variable energy production technologies (i.e. solar and wind), contractors would have to maintain performance levels that are in the top 25 percent of the industry in the United States. For continuous energy production technologies (i.e. geothermal and biomass), contractors would be required to provide replacement energy at no cost when their systems fail to meet the minimum production requirements.
To offset the construction and maintenance costs, bidders would be required to take advantage of all available utility incentive programs. The government would retain ownership of any renewable energy credits associated with the energy generated under the task order.
Just one month after its decision in United Space Alliance, the District Court for the District of Columbia has again addressed the question of limits on OFCCP’s audit rights. In Bank of America N.A. v. Solis, No. 09-2009 (D.D.C. Dec. 13, 2011) [pdf], United States Magistrate Judge Deborah A. Robinson issued a report and recommendation adopting the Fourth Amendment’s prohibition against unreasonable search and seizure as a limit on OFCCP’s ability to select contractors for audit.
The National Defense Authorization Act for Fiscal Year 2012 [pdf] puts an end to OFCCP’s effort to impose subcontractor status on retail pharmacies and health care providers serving TRICARE beneficiaries. The controversy had been brewing for some time. As we discussed in an earlier client alert, the October 2010 decision in OFCCP v. Florida Hospital, …
Affirmative action requirements for disabled workers have always taken a back seat to those for women and minorities. New regulations proposed by the Office of Federal Contract Compliance Programs put recruiting and retention of disabled workers on center stage. OFCCP seeks to impose a hiring goal of 7% disabled workers and to enhance obligations for…
Chief Judge Royce Lamberth’s 46-page decision in United Space Alliance, LLC v. Solis, No. 11-746 (D.D.C. Nov. 14, 2011), introduces new uncertainties for contractors facing OFCCP investigations. The case arose from a 2009 OFCCP desk audit of United Space Alliance’s facility in Cape Canaveral, Florida. Applying DOL’s established practices to the initial compensation data provided by United Space Alliance revealed no discriminatory pattern. But DOL sought additional information because “it appeared that women were earning less more frequently than men.” United Space Alliance refused, calling the request “unjustified.”
