On February 17, 2022, the United States Department of Agriculture (USDA) published a Notice of Proposed Rulemaking updating USDA’s Agriculture Acquisition Regulation (AGAR), the agency’s counterpart to the Federal Acquisition Regulation (FAR).  In the proposed rulemaking, USDA included a requirement to add two new clauses that would revive and expand the Obama-era “blacklist rule” requiring contractors to disclose violations of certain labor and employment laws, and certify compliance with labor laws during the term of the contract. 

USDA’s new AGAR regulation requires the agency to include two clauses in every supply and service (including construction) acquisition above the simplified acquisition threshold.  The first clause, entitled “Labor Law Violations,” requires the contractor to certify compliance with 15 specified labor laws, and equivalent state-law enactments, and promptly report to the contracting officer any future adjudications of noncompliance. Contractors must also certify, to the best of their knowledge, that their subcontractors and suppliers are in compliance with the specified laws.  Under the clause, these certifications may give rise to False Claims Act liability if untrue. The second clause, entitled “Past Performance Labor Law Violations,” requires contractors submitting offers to certify that they and any subcontractors are in compliance with all previously required corrective actions for adjudicated labor law violations, and to provide a list of any such violations prior to award.

The labor laws that are subject to the certification requirement include: Fair Labor Standards Act (FLSA), Occupational Safety and Health Act (OSHA), National Labor Relations Act (NLRA), Service Contract Act (SCA), Davis-Bacon Act (DBA), Title VII of the Civil Rights Act, Americans with Disabilities Act (ADA), Age Discrimination in Employment Act (ADEA), and Family and Medical Leave Act (FMLA), among others.

USDA’s move brings to mind the saying that “everything old is new again,” and in that vein, it is worth reviewing the prior history of the Obama-era efforts to impose a similar certification requirement across federal contracting.  On July 31, 2014, then President Obama issued Executive Order 13673 requiring contractors to disclose alleged labor law violations in connection with contracting proposals, ostensibly for the purpose of assisting agencies in their “responsible source” determination.  However, the Executive Order’s implementation was enjoined by a federal judge in October 2016.  Congress then repealed the implementing regulations on March 27, 2017, using a procedure that barred the FAR Council from issuing a similar rule without Congress’s affirmative approval. 

USDA’s proposed rulemaking could be the start of individual agency-level efforts to impose Executive Order 13673’s requirements on an agency-by-agency basis.  Given the history of the Obama Administration’s similar blacklisting rule, one can expect legal challenges if the rule is eventually finalized.