President Obama issued three Executive Orders affecting federal contractors on January 30, 2009. These Executive Orders also revoked Executive Orders issued by President Bush covering similar issues.
The first EO requires the posting of workplace notices explaining employees' rights under federal labor laws. Noting that the federal government has an interest in avoiding labor unrest, the EO states that "The attainment of industrial peace is most easily acheived and worker's productivity is enhanced when workers are well informed of their rights under federal labor laws." The EO requires contractors and subcontractors to agree to post notices issued by the labor secretary. Failure to comply with the notice requirement or rules the "contract may be cancelled , terminated, or suspended in whole or in part, and the contractor may be declared ineligible for further Government contracts."
It also revokes Executive Order 13201 issued by President Bush informing employees that they have a right not to join a union.
Executive Order 13495 directs that a clause be inserted in service contracts and solicitations for such contracts that "requires the contractor, and its subcontractors, under a contract that succeeds a contract for performance of the same or similar servi ces at the same location, to offer those employees (other than managerial and supervisory employees) employed under the predecessor contract whose employment will be terminated as a result of the successor contract, a right of first refusal of employment under the contract in positions for which they are qualified." The Order applies to solicitations issued on or after the date the Federal Acquisition Regulation is amended to require inclusion of the clause in solicitations and contracts under the Order. Full text of EO 13495 is available here.
The final Executive Order addressed allowability of costs for activities regarding persuading employees on the exercise of their labor rights. Entitled "Economy in Government Contracting" the Order states that "[t]o promote economy and efficiency in Government contracting, certain costs that are not directly related to the contractors' provision of goods and services to the Government shall be unallowable for payment, thereby directly reducing Government expenditures." Unallowable costs under the Order include "the costs of any activities undertaken to persuade employees . . . to exercise or not exercise, or concerning the manner of exercising, the right to organize and bargain collectively ..." Costs "incurred in maintaining satisfactory relations between the contractor and its employees. . .' are allowable.
