February 04, 2019 Public Contract Law Journal

Lacking Labor Protections in the U.S. Procurement System: A Comparative Analysis of European Labor Protections

by Meghan McGuirk

Meghan McGuirk (mmcguirk@law.gwu.edu) is a J.D. candidate at The George Washington University Law School and is a Senior Articles Editor for the Public Contract Law Journal.

I.  Introduction

In 2014, it seemed as though labor protections in federal procurement were on the rise and federal contractors would be held responsible for any violations against U.S. labor laws when President Barack Obama issued the Fair Pay and Safe Workplaces Executive Order (E.O.).1 This order allowed contracting officers within agencies to consider labor violations in making responsibility determinations in the pre-award stage.2 This program was criticized heavily by conservatives and ultimately was ended in 2017, but the revocation did not go without criticism given that certain provisions of the executive order were intended to protect workers from sexual harassment and pay inequality in the workplace.3

This is not simply an issue of using taxpayer funds to pay contractors who violate federal law. One study conducted by the Center for American Progress showed a correlation between violations in wage, hour, and safety laws with poor performance of the contract itself.4 The study found “significant performance problems” in seven of the twenty-eight companies that received some of the worst workplace violations between 2005 and 2009.5 This correlation between poor performance and labor violations indicates that continuing to award contracts to known violators of federal wage, hour, and safety laws costs the government more money.

Continuing to award contracts to contractors violating federal law also adversely impacts employees of those contractors. With over twenty-two percent of the U.S. workforce employed by federal contractors,6 it is vital that the government use its power as the largest buyer in the country to enforce the labor laws that are rampantly disregarded by contractors. As the United States has pulled back on protections for employees of government contractors, the trend elsewhere, particularly in Europe, has been to connect social policies such as labor and environmental laws and regulations to procurement.7 Because government contractors continue to violate labor laws and to receive contract awards from the federal government, the United States must take a more active role in enforcing labor laws through procurement policy. Provisions such as those used in the European Union, and implemented in Sweden and Norway, offer a guide to less intrusive ways that a government can use procurement policy to enforce labor laws that ultimately will improve the lives of many.

This Note argues that the European model is an example of a less intrusive yet still protective form of ensuring wage, hour, and safety violations are considered in awarding government contracts. Following the Introduction in Part I, Part II will discuss labor violations and subsequent awards in U.S. government contracts. Part II also outlines the Fair Pay Safe Workplaces Executive Order issued by President Obama and its subsequent revocation through the courts and the Trump administration. As discussed in Part III, the European Union has already taken steps to enforce labor protections through procurement. The trend towards labor protections in government procurement will be examined in the context of advancements taking place in Europe, particularly in Sweden and Norway. Part IV outlines how Sweden implemented the EU directive by only requiring the consideration of social, labor, and environmental policies in procurement “when necessary.” Norway’s implementation of the same directive, requiring considerations of social, labor, and environmental policies in high-risk sectors, is discussed in Part V. Part VI argues that the United States should look to both Sweden and Norway as examples of implementing incremental changes to procurement on a sector-by-sector basis. By implementing adjustments over the course of time, in place of one government-wide regulation, change can be both sustainable and efficient.

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