This is not the first time that President Biden has shown commitment to advancing sustainable goals through the government supply chain. An earlier example occurred during his tenure as vice president under the Obama administration, when two significant anti-slavery executive orders were executed and subsequently implemented into the U.S. federal procurement framework established under the Federal Acquisition Regulation (FAR). These executive orders, which attempted to address anti-slavery practices in the U.S. federal supply chain, include Executive Order No. 13673 on fair pay and safe workplaces (set forth in FAR Subpart 22.20) and Executive Order No. 13627 on strengthening protections against trafficking in persons (set forth in FAR Subpart 22.17).
Despite tackling slavery and exploitative practices in these executive orders, significant issues remain, especially in relation to child labor concerns in the U.S. federal supply chain. This is because, while FAR Subpart 22.15 (introduced from the 1999 Executive Order 13126 made by the Clinton administration) prohibits the acquisition of products produced by forced or indentured child labor in the U.S. federal procurement regime, fundamental questions persist regarding the use and treatment of child laborers in U.S. government contracts.
This article advances suggestions on how the Biden administration and federal procuring agencies can strengthen Subpart 22.15 to ensure that federal contracting officers enforce laws relating to child labor in the procurement process and, therefore, achieve human rights protection for children. This is particularly important as the United Nations (UN) has called for an increased protection of children from child labor. This article asserts that strengthening Subpart 22.15 will also support the United States in achieving several targets in the UN Sustainable Development Goals. For example, Target 8.7 of the UN goals, which concerns immediate and effective measures to eradicate forced labor, “end[s] modern slavery and human trafficking and secure[s] the prohibition and elimination of the worst forms of child labor,” and Target 12.7 focuses on sustainable contracting practices.
An additional reason for strengthening child labor rules in the FAR relates to the impact of the COVID-19 pandemic and its implication for child laborers. This is because “[a]s economic contraction reduces opportunities in the labour markets for parents, it can push their children into hazardous and exploitative work.” While Subpart 22.15 prohibits forced or indentured child labor in federal contracts, federal contracts are still at risk of being performed using child labor, particularly in light of the ravaging effects of COVID-19. By strengthening Subpart 22.15 now, as advocated in this article, the U.S. federal government will protect children engaged in producing goods during or after this global emergency.
Underlying this inquiry are two questions. First, how adequate is Subpart 22.15 in prohibiting child labor in the U.S. federal supply chains? Second, how can such inadequacies be remedied? The answers to these questions will be addressed by analyzing the regulation through the lens of the contracting process, beginning with the regulation’s scope and coverage, and provisions relating to procurement planning, solicitation, tendering, contract awards, and contract management. Throughout the analysis, this article will highlight appropriate provisions that effectively prohibit child labor and examine inadequate provisions by focusing on three key perspectives: the provision of legal certainty, comprehensive scope and coverage, and significant limitations or loopholes that hinder the effectiveness of Subpart 22.15. While many labor and anti-trafficking regulations in the FAR have been extensively discussed in academic literature, the prohibition of forced or indentured child labor under Subpart 22.15 has been discussed minimally. Thus, assessing the inadequacies that exist under Subpart 22.15 provisions on the prohibition of forced or indentured child labor and its potential remedies will provide useful insights and significantly contribute to the existing literature on government contracting.
Next, Part II of this article discusses the regulation of government contracts and sustainable contracting under the FAR and introduces the federal legislation that aims to address child labor concerns in the U.S. federal supply chains. Part III of this article analyzes the procurement procedures under Subpart 22.15, discusses significant limitations to Subpart 22.15, and recommends changes that will strengthen the inadequate provisions highlighted. Finally, Part IV encourages the U.S. government to lead by example in addressing the regulatory and administrative deficiencies that hinder the effective prohibition of acquisitions tainted by child labor.
II. Context and Background: U.S. Federal Government Contracts Regime, Labor Exploitation, and Child Labor in the Supply Chain
A. The U.S. Government Contracts Regime
As the largest single global purchaser, the U.S. federal government annually procures approximately $500 to $600 billion worth of goods, works, and services. This significant fiscal expenditure requires a regulatory regime that is efficient, effective, and simple and that can be uniformly applied by all procuring agencies. For this reason, U.S. government contracts have been the subject of great attention from policymakers, procuring agencies at federal and state levels, non-governmental institutions, and academics.
The U.S. federal procurement system is governed by the FAR and agency regulations. In the context of exploring the prohibition of child labor in the FAR, Part 22 of the FAR is crucial to the subject matter, with the relevant regulation being Subpart 22.15, as it contains the prohibition of acquisition of products produced by forced or indentured child labor. Since the issuance of Executive Order 13126 in 1999, Subpart 22.15 has not been revised to keep up with societal and legal developments that will “better serve the American people” and global citizens. The lack of U.S. federal attention to Subpart 22.15 underscores the urgency for updated solutions; this article encourages revisions that will bring the provision in line with current debates and developments.
B. Sustainable Contracting and Labor Exploitation
Government contracts have been used to promote objectives beyond the acquisition of goods, works, and services. Many countries use government contract activities to support various goals including the protection of the rights of workers involved in the government supply chain. This advancement of environmental, economic, and social agenda, including those related to addressing human rights concerns through government contracts, is referred to by many names, including sustainable procurement, green procurement, and environmentally responsible public procurement.
At an international level, sustainable contracting is so important that a specific UN Sustainable Development Goal target, SDG 12.7.1, calls for the promotion of public procurement practices that are sustainable in accordance with national policies and priorities by 2030. This is an issue of significant concern in the specific case of human rights violations in government supply chains, which are expected to “prevent, investigate, punish and redress [business-related human rights abuses] through effective policies, legislation, regulations and adjudication.” Governments have gone to extra lengths to ensure that they do not engage in business with criminals, thereby facilitating criminal schemes and increasing the risk of government contracts being tainted by unethical and illegal practices. This was the case even during the unprecedented COVID-19 pandemic.
Several international organizations encourage governments to prevent, mitigate, or address trafficking practices that could occur through government contracts. For example, the UN, through its Guiding Principles on Human Rights, encourages governments to promote “respect for human rights by business enterprises with which they conduct commercial transactions.” Other international organizations such as the International Labour Organization and the Organisation for Security and Co-operation in Europe (OSCE), argue that governments (including the United States) have an inescapable obligation to eliminate exploitative practices adopted by their suppliers.
Regarding the U.S. approach to sustainable contracting and prevention of labor exploitation, under Article II of the Constitution and the Federal Property and Administrative Services Act 1949, U.S. presidents are permitted to issue executive orders to oversee various aspects of federal contracts including suppliers’ behaviors in such contracts. As a result, several executive orders that advance the federal government’s economic, environmental, and social policies have been issued and implemented into the FAR. Regarding economic policies, FAR Part 19 promotes small business programs by requiring federal entities to set aside specified contracts for small and disadvantaged businesses (SDBs) owned largely by minorities such as women, Black Americans, Hispanic Americans, and other minorities in America. Another economic policy promoted by the FAR is the Buy American regime, which is implemented in FAR Part 25, following the Buy American Act of 1933. This policy essentially limits procuring agencies from buying foreign goods or services, and promotes the acquisition of products produced or manufactured in full or in part in the United States. Similarly, FAR Part 23 promotes environmental policies of the federal government. For example, Executive Order 13693 on “planning for federal sustainability in the next decade” requires federal agencies to continue protecting the environment by adopting measures such as mandatory life cycle costing, drug-free workplace, renewable energy, and environmentally friendly evaluation criteria.
Social policies are regulated mainly under FAR Part 22. Implementing these FAR provisions shows that the federal government is not politically neutral in matters involving human and labor rights violations. However, these regulations require a thorough analysis to determine their application and impact. This article focuses primarily on FAR Subpart 22.15, which prohibits the use of forced or indentured child labor in the U.S. federal supply chain.
C. Child Labor in the U.S. Supply Chain and Early Prohibition Under Federal Law
Child labor is the employment of a child whose work is “mentally, physically, socially or morally dangerous” and “interferes with their schooling.” While it is recognized that the ideas of childhood and child-appropriate activities vary across national borders and not all work carried out by a child is child labor, this definition of child labor is consistent with the U.S. definition of “oppressive child labor” under the Fair Labor Standards Act (FLSA).
Globally, there are approximately 160 million child labor victims, with “16.8 million more children aged 5 to 11 in child labour in 2020, than in 2016”. The International Labour Organisation (ILO) notes that this figure is likely to increase due to the COVID-19 pandemic and, thus, makes the issue a persistent problem that should be addressed. While various national legislation and international conventions have sought to abolish child labor, this criminal activity continues to be reported, especially within government suppliers’ practices, including within the U.S. procuring agencies. Thus, the passing of laws and rules such as Executive Order 13126 and its implementation as FAR Subpart 22.15 is itself evidence that child labor exists in the U.S. supply chains. Also, evidence shows that suppliers use child laborers in sourcing or mining minerals, working in farms, fisheries, sewing apparels, and carrying materials to a construction site. For example, in Bangladesh, many in the workforce producing licensed apparel for the U.S. Department of Defense were children. Further, over 150 goods produced by child labor in seventy-seven countries are listed in the U.S. Department of Labor (DoL) list of goods produced by forced labor and child labor, and thirty-four products from twenty-five countries are listed on Executive Order 13126 list of products produced by forced or indentured child labor (“the List”).
The possibility that federal agencies procure products produced by child labor has led to federal laws that seek to eradicate this form of slavery from the U.S. supply chain. For example, the Walsh-Healey Act requires government suppliers to adhere to rules relating to child labor when producing and supplying specified goods to federal procuring agencies. Despite the early prohibition of child labor in this manner, the Act has been assessed as inadequate as it fails to comprehensively tackle this practice across the U.S. global supply chain because its sole focus is on goods produced within the United States, Puerto Rico, and the Virgin Islands.
In addition to the Walsh-Healey Act and the FLSA, FAR Subpart 22.15 is another significant provision that seeks to tackle child labor in the federal government supply chain. In Part III below, this article turns attention to the analysis of Subpart 22.15, with a clear focus on examining provisions that lack legal certainty, create loopholes, and hinder the elimination of child labor from the U.S. supply chain.
III. The Analysis of Subpart 22.15: Scope, Procurement Process, and Procedures
To effectively tackle child labor and other exploitative practices, the federal government must implement provisions that cover the entire contracting process from planning to contract management. Adopting this cradle to grave approach arguably reduces the likelihood of federal agencies awarding contracts to suppliers that produce goods, works, or services tainted by inhumane and human rights violations. This section of the article focuses on the cradle to grave approach by analyzing Subpart 22.15 procedures under the four key stages of the contracting process: procurement planning, solicitation of bids, contract award, and contract management. Throughout the analysis, the article focuses on the adequacy of Subpart 22.15 in prohibiting federal agencies from procuring products tainted by forms of child labor. As noted in Part I, to determine the subpart’s adequacy, issues relating to legal certainty, the comprehensiveness of subpart’s scope and coverage, and loopholes that hinder the effectiveness of the subpart’s procedures will be examined. However, before progressing with these matters, the article reviews the scope and coverage of Subpart 22.15.
A. Scope and Coverage of Subpart 22.15
The prohibition of acquisitions of products produced by forced or indentured child labor under Subpart 22.15 shows that the U.S. government is committed to eradicating unlawful and unethical practices from the federal government supply chains. Subpart 22.15 contributes to this goal by seeking to limit the likelihood of procuring agencies acquiring products produced under conditions that violate children’s human rights. This section of the article examines provisions relating to the scope and coverage of Subpart 22.15 and highlights significant limitations of the definition of forced or indentured child labor, covered acquisitions, and the title of the regulation.
1. Definition of Forced or Indentured Child Labor
As noted earlier, the prohibition under Subpart 22.15 is specifically limited to goods produced by forced or indentured child labor. Underpinning the issue of the scope and coverage of Subpart 22.15 is the question of the definition of forced or indentured child labor. This concern is reflected in FAR 22.1501, which provides:
[A]ll work or service-
(1) exacted from any person under the age of 18 under the menace of any penalty for its non-performance and for which the worker does not offer himself voluntarily; or
(2) [p]erformed by any person under the age of 18 pursuant to a contract the enforcement of which can be accomplished by process or penalties.
The above definition reflects four salient elements of forced or indentured child labor: (1) age, (2) work or services, (3) involuntary labor, and (4) menace of penalty. The elements of forced or indentured child labor are a combination of the elements of child labor (age and work or services) and the elements of forced labor (involuntary and menace of penalty). The combination of forced labor and child labor to arrive at the subpart’s prohibition of forced or indentured child labor is severely inadequate when it comes to legal certainty, comprehensive coverage, and clarity.
The definitions of the first three elements—age, work/service, and involuntariness—are not in dispute because they are clearly outlined by the FAR. However, “menace of penalty” is problematic because it is not defined in Subpart 22.15 and, thus, ambiguous. The regulation fails to provide concrete examples of actions considered as “menace of penalty.” This omission in the subpart creates legal uncertainty because it does not indicate when a contractor’s practice or actions could be deemed as a penalty and affect the classification of a product as that produced by force or indentured labor. For example, while nonpayment, physical violence, and threats toward child laborers are easily classified as menaces of penalty, more subtle mistreatment, such as reducing working hours to limit the amount earned, threats of dismissal, or other covert discriminatory actions, are not as readily identifiable. Stakeholders may resist reporting contractors’ rudimentary standards of decency to the DoL because of this unclear definition and, therefore, may prevent those products manufactured using forced or indentured labor from being added to the list of products.
Additionally, the limited coverage of forced and indentured child labor in Subpart 22.15 fails to comprehensively confront all forms of economic exploitation of children by federal contractors. The government should take a broader approach to the acquisition of goods produced or manufactured by “child labor,” rather than limiting child exploitation to only forced or indentured child labor. If widened to cover to child labor more broadly, Subpart 22.15 will include several forms of child labor practices, leading to a thorough attack on this form of economic exploitation in the U.S. federal supply chain. This solution will contribute to the U.S. prohibition of all forms of child labor, even those outside the field of government contracting, including “work that is likely to harm the health, safety or morals of children.”
The federal government has considered the widening Subpart 22.15’s prohibition of child labor, as evidenced by the subpart’s current scope being consistent “with other federal legislation that prohibit child labor” as described by the DoL. However, this mere consideration is unsatisfactory. The replacement of “forced or indentured child labor” with “child labor” defined more broadly does not shape current law for the better because U.S. federal legislation already widely prohibits child labor.
For example, the FLSA prohibits importing goods produced or manufactured by child labor, which is arguably a similar agenda pursued by Subpart 22.15. Significantly, the FLSA protects children by setting conditions under which they are employed or, in certain circumstances, prohibiting their employment altogether. The term “oppressive child labor” is used in the FLSA to describe children’s employment. This term does not have the same meaning as forced or indentured child labor. Oppressive child labor is “a condition of employment under which (1) any employee under the age of sixteen years is employed by an employer . . . in any occupation, or (2) any employee between the ages of sixteen and eighteen years is employed by an employer in any occupation which the Secretary of Labor shall find and by order declare to be particularly hazardous for the employment of children between such ages or detrimental to their health of well-being.” This definition, consistent with that in the ILO Worst Forms of Child Labor convention, differs from the definition of forced or indentured child labor because it does not require the elements of involuntariness or penalties. If consistency with federal law was the main criteria for prohibiting forced or indentured labor, then the FLSA’s term and definition should have been adopted. Prohibiting all forms of child labor will not create inconsistencies in federal child labor laws. Rather, it will contribute to the elimination of child labor from the supply chain and generally in society.
2. Coverage—Excluded Acquisitions
Another issue with Subpart 22.15 concerns goods that are subject to the subpart’s specific procurement procedures. Subpart 22.15 makes it clear that its procurement procedures apply to goods that “exceed the micro-purchase threshold” of $3,500 and that are found on “the list” (“List”) of products requiring contractor certification as to forced or indentured child labor. Thus, there are two exclusionary measures that affect the comprehensive coverage of Subpart 22.15: the exclusion of acquisitions by threshold and exclusions resulting from goods not found on the List.
Regarding the exclusion by threshold, Subpart 22.15 should comprehensively cover all acquisitions irrespective of the contract value. This is because Executive Order 13126’s objective is to prevent procuring agencies from buying products produced or manufactured by forced or indentured child labor, which should include products below the micro-purchase threshold. Additionally, excluding micro-purchase contracts from the scope of Subpart 22.15 might encourage procuring agencies to split contracts into lots, thereby avoiding compliance with the provisions of Subpart 22.15. By delineating a threshold, the government may be protecting the administrative resources of procuring agencies as micro-purchase acquisitions are easily acquired and insignificant to the volume of goods procured under the FAR. Despite the potential administrative advantage of the micro-purchase threshold, the requirement for certification that a supplier will not supply products manufactured by child labor as discussed in Part III B and D is not rigorous and so should be adapted to cover micro-purchase contracts. Thus, to comprehensively eliminate child labor from the federal supply chain, all federal acquisitions should be targeted by Subpart 22.15.
The second exclusionary measure affecting Subpart 22.15’s scope and coverage relates to the exclusion of goods or products, which do not appear on the List, even if there are credible allegations of forced or indentured child labor used in producing or manufacturing the goods in whole or in part.
Essentially, the absence of a product from the List does not mean that the product is not produced or manufactured by forced or indentured child labor. On the contrary, an omission of a product from the List only signifies that the DoL does not have a “reasonable basis” for believing that the said product should be listed. For example, the DoL’s refusal to add carpets from India on the List, despite strong evidence of “a significant prevalence of forced labor and child labor” for such carpets, did not mean that such carpets were not manufactured using forced or indentured child labor. Such refusal from the DoL suggests that indisputable evidence of forced or indentured child labor (e.g., unchallenging evidence of penalties employed to force children to work) is required to satisfy the reasonableness test. Proving the element of “force” may be challenging because it requires strong evidence without any guidance of what constitutes a penalty. The DoL’s standard makes it difficult for goods to be added to the List, which means that unlisted goods produced by forced or indentured labor could still be supplied to federal procuring entities.
As a result, the Subpart 22.15 (EO 13126) list should be replaced with another list produced by the federal government. Authorized by the Trafficking Victims Protection Reauthorization Act of 2005 (TVPRA) and developed by the Bureau of International Labor Affairs (ILAB), the “list of goods . . . produced by forced labor or child labor” adopts a zero-tolerance approach, resulting in 155 goods from 77 countries. In addition to a large number of goods on the TVPRA list, the List appears to follow a less stringent and objective standard, as it requires evidence relating to the nature, date, source of information, collaborative reports, and data for a product to appear on the List. The replacement of EO 13126 list with the TVPRA list will result in more goods being subject to Subpart 22.15 procedures and should significantly contribute to the elimination of child labor from the supply chain.
3. Subpart 22.15’s Title
A further concern relates to the imprecise title of Subpart 22.15, labeled the “prohibition of acquisitions of products produced by forced or indentured child labor.” This title lacks legal certainty because it does not represent the procedures under Subpart 22.15 and, thus, is misleading. A literal interpretation of the title suggests that Subpart 22.15 is a regulation that automatically prohibits procuring agencies from procuring products manufactured by forced or indentured child labor. However, this interpretation is incorrect because Subpart 22.15’s procedures are designed to ensure contracting officers follow a rigorous procedure that reduces the possibility of goods produced by forced or indentured child labor from being supplied to federal procuring agencies. The title should reflect its purpose and intention. For example, government could amend the title to “mitigating the acquisitions of products manufactured by forced or indentured child labor.” This updated title would provide more clarity and precision.
B. Subpart 22.15 and Procurement Planning
Procurement planning signifies the beginning or foundation of any contracting exercise and is a crucial stage of the contracting process. Planning effectively leads to better risk identification and management, provides a well-developed specification, and allows procuring agencies to be proactive throughout the rest of the procurement process. The planning stage generally requires procuring agencies to carry out market analysis, due diligence, and risk assessments, develop the technical specification, and prepare the procurement documents needed for soliciting bids. Under the FAR, procurement planning is regulated under FAR Part 5, which governs the publication of procurement opportunities, and FAR Part 7, which governs acquisition planning. The following subsection discusses limitations affecting the planning stage, with specific focus on the planning due diligence and the solicitation documents.
1. Planning Due Diligence
Contracting officers (COs) are required to carry out due diligence by checking the proposed acquisition against the list of products manufactured by forced or indentured child labor. This due diligence serves as an “alert that there is a reasonable basis to believe that such product may have been mined, produced or manufactured by forced or indentured child labor.” This may then enable procuring agencies to apply the rest of the procedures under Subpart 22.15.
This level of due diligence may slow the elimination of forced or indentured child labor from the U.S. supply chain because the due diligence is tailored toward the listed end product. This means that if the listed product is used in making the end product, then Subpart 22.15 would not apply. For example, the listed products of cassiterite, tungsten ore, and coltan from Congo procured as an end product would give rise to Subpart 22.15 procedures. However, if the same listed product from the listed country is used in producing or manufacturing an end product (e.g., mobile phones which use coltan to make the capacitors), the final product would fall outside Subpart 22.15. The subpart’s focus on end products creates a loophole, which may result in procuring agencies acquiring end products produced (in part) by forced or indentured child labor. To mitigate this issue, Subpart 22.15 should apply to all listed products, irrespective of whether the agency is procuring the listed product as an end product or as a product used to manufacture the end product.
This recommendation is not without flaw because it could create the effect of an increased administrative workload for COs. The listed products are not “consumer friendly” and could be “meaningless to the ordinary American consumer.” Also, contracting officers, arguably, may not be knowledgeable on the use of listed products in producing end products and, therefore, would be required to carry out a higher level of due diligence on each acquisition to determine if a listed product could be used in an end product. The U.S. government should create a supplementary list outlining end products that are manufactured using materials or minerals found on the List be provided to contracting officers. This would mean that end products such as mobile phones, laptops, and other electronic appliances, for example, if made with coltan from the listed country, will appear on the supplementary list and give rise to the application of Subpart 22.15 procedures.
2. Solicitation (Procurement) Documents
Where an acquisition exceeds the micro-purchase threshold, FAR 22.1505 stipulates that the solicitation document for that acquisition should include FAR 52.222-18, “Certification Regarding Knowledge of Child Labor for Listed End Products.” FAR 52.222-18 states:
The Government will not make award to an offeror unless the offeror, by checking the appropriate block, certifies to either paragraph (c)(1) or paragraph (c)(2) of this provision.
(1) The offeror will not supply any end product listed in paragraph (b) of this provision that was mined, produced, or manufactured in a corresponding country as listed for that end product.
(2) The offeror may supply an end product listed in paragraph (b) of this provision that was mined, produced, or manufactured in the corresponding country as listed for that product. The offeror certifies that it has made a good faith effort to determine whether forced or indentured child labor was used to mine, produce, or manufacture such end product. On the basis of those efforts, the offeror certifies that it is not aware of any such use of child labor.”
The inclusion of FAR 52.222-18 at the planning stage is advantageous for many reasons. First, it demonstrates the government’s stance on the use of forced or indentured child labor within its supply chain from the outset, as procuring agencies will not award a contract without a certification. Second, it indirectly creates a self-elimination process whereby potential bidders seeking to compete in the procurement opportunity for a listed end product who engage in forced or indentured child labor will exclude themselves from the tendering process. Finally, the certification prompts potential bidders to, at a minimum, investigate the existence or extent of this illegal practice within their operations.
While the inclusion of FAR 52.222-18 at the planning stage is advantageous, the clause does not stipulate when the certification will be required from the offeror (contractor). Rather, it states that “the Government will not make award to an offeror.” Potential suppliers are not informed of when to submit the certification. This omission creates uncertainty, and, for this reason, FAR 52.222-18 lacks legal certainty.
C. Subpart 22.15 and Tendering or Solicitation of Bids
The tendering or solicitation stage in the contracting process presents numerous opportunities for tackling forced or indentured child labor. This is because the information presented in the solicitation document is used to assess potential suppliers’ eligibility and capability, including excluding contractors that do not meet the requirements for participating further in the tendering exercise. As COs must assess potential suppliers’ capabilities and capacity to perform the contract in a manner that satisfies the qualification standards outlined in FAR Part 9, they can use this stage to explore issues related to their concerns around suppliers’ use of child labor in the contract.
The qualification procedure under FAR Part 9 requires COs to determine the “responsibility” of potential suppliers by considering their financial resources, performance records, integrity and business ethics, technical capability, and legal standing. Contractors that do not meet the agency’s responsibility determination should be excluded from the procurement process. Relevant to the issue of child labor is the “integrity and business ethics” ground under FAR Part 9’s qualification standards; this arguably relates to suppliers’ reputation of complying with laws (e.g., labor laws) and adoption of unethical practices in their operations and supply chains. The provision requires that the assessment of contractors’ integrity and business ethics should focus both on past conduct and current ability to meet the contract. In the past, illegal practices such as fraud, corruption, conflicts of interest, bribery, and other related offences had taken the front seat, while other practices such as child labor, forced labor, and other exploitative practices were not given significant considerations as qualification requirements.
Despite the generic consideration of a potential supplier’s responsibility under FAR Part 9, neither FAR Subpart 9.1 nor Subpart 22.15 has no explicit reference to child labor. This omission presents a loophole that enables contractors to escape the determination of irresponsibility. Despite the omission of child labor from the FAR responsibility determination, engaging in such practices should lead to an exclusion under the business and ethics disqualification ground. Such exclusion should only be made if the contractor violated child labor laws or if there was an administrative order against the contractor for engaging in forced or indentured child labor. Without judicial and administrative decisions, which are difficult to obtain due to the geographical span of the crime and the vulnerability of the victims, contractors that continue to perform government contracts through forced or indentured child labor escape exclusion as a result of the loophole in Subpart 22.15.
To improve the effectiveness of Subpart 22.15, when assessing integrity and business ethics, COs should consider contractors’ past or present slavery practices (including forced or indentured child labor). Such consideration should include the review of credible reports alleging that the contractor has engaged in forced or indentured child labor. Additionally, procuring agencies should require potential contractors to submit a solicitation certification alongside their bid. Doing so has the advantage of encouraging contractors who want to contract with the federal government to assess forced or indentured labor practices within their operations before bidding for a government contract. It also enables COs to assess the business ethics of potential contractors by automatically excluding those unable to provide the certification. Slavery practices such as forced or indentured labor should “have no place” in the federal acquisition of goods or services as it affects the integrity and reputation of the federal government.
D. Subpart 22.15 and Contract Awards
Following the determination of responsibility and evaluation of bids, the contractor that meets the procuring agency’s requirements may be selected for contract award. However, before the contract is signed, procuring agencies may enter negotiations or require further documentation from the chosen contractor. Under Subpart 22.15, where the acquisition relates to a product found on the List, contracting officers must execute two measures relating to contract award. First, they must obtain a contract award certification from suppliers and, second, include child labor provisions as part of the contract clauses.
1. Contract Award Certification
As mentioned in Part III.B.2, contracting officers must obtain a certification from the successful contractor. The certification, which is the same as that contained in FAR 52.222-18, must be submitted to the CO before the contract award, thereby addressing the lack of legal certainty that exists in the clause. The contract award certification provides contractors with a choice of an absolute or qualified certification. An absolute certification means that the contractor “will not supply any end product on the List.” Consequently, there is an outright declaration that in no circumstance will such product be supplied to the procuring agency. In contrast, a qualified certification means that the contractor commits to making “a good faith effort to determine whether forced or indentured child labor was used to mine, produce, or manufacture any end product.” In essence, before making a qualified certification, contractors must carry out some due diligence to determine whether forced or indentured child labor is present in the production or manufacturing of the end product.
While the use of absolute certification is desirable and an advantageous means of prohibiting child labor from the federal government supply chain, a qualified certification weakens the federal government’s prohibition because certifying in good faith is the weakest form of due diligence as it raises debateable issues. For example, determining what is meant by a “good faith effort” is incredibly subjective and can only be applied on a case-by-case basis. Thus, it is likely that contractors with multi-tier global supply chains will rely heavily on qualified certification because it places a lesser burden on them and presents them with opportunities to potentially escape liability when any listed end product produced by forced or indentured child labor is incidentally supplied to procuring agencies. Further, with the current lack of contractors’ transparency and insufficient government resources to carry out in-depth due diligence on contractors’ practices, a qualified certification presents a loophole for suppliers and does not adequately address forced or indentured child labor.
Despite the limitation in a qualified certification, the general requirement of a contract award certification is an advantageous measure for ensuring that contractors do not supply products produced by forced or indentured child labor. This is because under FAR 22.1504(a), the certification creates a legal obligation that is subject to remedial measures against the contractor. Additionally, engaging in forced or indentured child labor could lead to investigations by “the agency’s Inspector General, the Attorney General, or the Secretary of the Treasury.”
2. Contract Clauses
In addition to the contract award certification measure, procuring agencies can insert a clause into the contract that will address situations where a contractor has supplied products manufactured by forced child labor. According to FAR 22.1505, FAR 52.222-19 must be included in all contracts “for the acquisition of supplies that are expected to exceed the micro-purchase thresholds.” FAR 52.222-19 essentially outlines the excluded countries and their contract thresholds. It requires suppliers to cooperate with authorities to “enforce laws prohibiting the manufacture or importation of products mined, produced or manufactured by forced or indentured child labor” by providing access, records, documents, persons, or premises required to conduct investigations, detailed grounds for violating the clause, and the remedies to the procuring entity for such violations.
If FAR 52.222-19 is breached, it will arguably lead to contractual remedies or criminal prosecution. This argument is supported by the Supreme Court ruling in United States v. Winstar Corp. where the court ruled that the “ordinary principles of contract construction and breach” apply to federal contracts. Practically, this has led to the enforcement of the FAR provisions against contractors that import goods mined, produced, or manufactured, wholly or in part, under forced child labor. Thus, contractual remedies such as damages, withhold orders, and costs for re-tendering the goods should be available to the government when a breach of the FAR rules occurs. Additionally, where the contractor fails to cooperate with an investigation as required under FAR 52.222-19, it is a violation of the clause, leading to remedies such as termination of the contract and suspension of payment. Some of these remedies also apply to the violation of Subpart 22.15.
E. Subpart 22.15 and Contract Management
Contract management plays a vital role in the success of a contract because it requires procuring agencies to monitor contract performance and assess risks or issues affecting contract performance. This means that any measure that addresses issues arising after contract award and during contract performance can be used a contract management tool. Thus, measures relating to administration, audits, site visits, quality control, capacity building, sanctions, and remedies are examples of such contract management tools and are detailed in subchapter G of the FAR.
1. Violation of Subpart 22.15
Under Subpart 22.15, four grounds give rise to sanctions against contractors that supply products tainted by forced or indentured labor. The first ground of violation occurs when contractors submit false certifications “regarding knowledge of the use of forced or indentured child labor for listed end products.” Where a contractor fails to cooperate with child labor investigations as stipulated under FAR 52.222-19, a violation occurs. Additionally, a contractor violates Subpart 22.15 if forced or indentured child labor is used in the mining, production, and manufacturing process. Finally, where a contractor supplies an “end product or components” produced “wholly or in part” by forced or indentured child labor, such contractor has violated Subpart 22.15.
False certifications concerns arise when an absolute certification was submitted to the procuring agency. This is based on the argument that an absolute certification merely requires a contractor to state that it will not supply an end product produced by forced or indentured child labor. In contrast to a qualified certification, it will be challenging to argue that a contractor provided a false certification as procuring agencies would need credible evidence that show that the contractor did not make a “good faith effort” or was aware of forced or indentured child labor being used in the production or manufacture of the product before issuing the certification.
The third and fourth grounds are advantageous and noteworthy because they outrightly prohibit contractors from engaging in the illegal and inhumane treatment of child workers. For example, a literal interpretation of the third ground suggests that contractors who use forced or indentured child labor to produce goods have violated the subpart even if such goods are not supplied to the procuring agency. Thus, this prohibition will widely affect all contractors performing contracts within the scope and coverage of Subpart 22.15.
Similarly, the fourth ground is directed explicitly at contractors who supply goods produced by forced or indentured child labor products. Thus, where a supply violates the third ground, it has automatically violated the fourth and final ground. Despite the comprehensive coverage of violation grounds, procuring agencies will require strong evidence of the contractor manufacturing products through forced or indentured labor to assert that the contractor has violated the third and fourth grounds. This problem is escalated in contracts performed outside the United States because of shortages of resources in monitoring such contracts.
2. Remedies
When a violation of Subpart 22.15 occurs, procuring agencies are entitled to terminate the contract when it is in their best interests, as emphasised in United States v Corliss. Additionally, procuring agencies may issue suspension and debarment orders against contractors, in accordance with procedures under FAR 9.407. The suspension of suppliers is a “serious action to be imposed on the basis of adequate evidence, pending the completion of an investigation or legal proceedings.” This makes suspension an interim remedy utilised when further investigation is required to determine a final remedy to be imposed on a contractor. The period of suspension for violating Subpart 22.15 is subject to the discretion of the suspending officers. However, the suspension period will terminate either when the contract is terminated or when debarment is imposed.
In contrast to suspensions, debarment in public procurement is often termed the “death penalty” sanction because it disengages contractors from competing in future government procurement opportunities for three years, thereby limiting future earnings and profits. Irrespective of the sanction imposed on contractors for violating Subpart 22.15, the contractor will face severe financial and reputational consequences. Thus, these remedies are proportionate to the severity of human rights violations that occur when forced or indentured child labor is used by contractors in their productions, operations, and supply chains.
3. The Prohibited Party—Contractors/Offerors
The term “contractor” or “offeror” is used in conformity to the language adopted under Subpart 22.15. According to FAR 22.1503 and 22.1504, the terms “contractor” and “offeror” are used (interchangeably) to describe the entity that must submit a contract award certification. Interestingly, both terms are undefined in Subpart 22.15, and the term “contractor,” while used predominantly throughout the FAR, is not defined in the FAR. However, the definition of an “offeror” is drawn from FAR 2.101 and refers to the bidder.
While the terms may be interpreted to mean the entity awarded a public contract, they note that the use of terms in this manner is more than semantics because the literal interpretation of a contractor or offeror excludes subcontractors. This lack of explicit reference to subcontractors hinders the effectiveness or comprehensive prohibition of forced or indentured child labor from the U.S. federal supply chain. This interpretation could mean that subcontractors in countries with little or no national prohibition of forced or indentured child labor may engage in this prohibited practice when producing goods (in whole or in part) for the federal contractors. Further, this loophole not only hinders the effectiveness of Subpart 22.15, but also provides a plausible defense that would allow contractors to limit their liability when an end product is produced partly by forced or indentured labor.
For example, if a contractor is awarded a contract to supply laptops to the Department of Justice (DoJ), it can outsource the production of the hardware parts to a subcontractor who engages in forced or indentured child labor. The parts tainted by forced or indentured child labor are shipped to the contractor for assembling, packaging, and delivery to the DoJ. In this example, while the end product supplied to the procuring agency was not produced by forced or indentured labor by the contractor, it is still tainted by this practice as a result of the subcontractor who is not subject to Subpart 22.15 procedures. Thus, while the contractor’s lack of knowledge could be a plausible defence, forced or indentured child labor continues to exist in the federal government supply chain.
To remedy this, Subpart 22.15 should be reframed to explicitly prohibit both contractors and subcontractors from supplying products by forced or indentured child labor. Such prohibition is not revolutionary as FAR Subpart 22.17 on the prohibition of trafficking includes both contractors and subcontractors. Alternatively, procuring agencies should require their contractors to request similar contract award certifications from their subcontractors and submit to the agency before such end product is supplied. To effectively and comprehensively eliminate child labor from the government supply chain, all federal suppliers must be prohibited from engaging in this practice.
IV. Conclusion
In conclusion, the 1999 Executive Order 13126 issued by President Clinton and now implemented as Subpart 22.15 is a step in the right direction in addressing the acquisition of products manufactured by forced or indentured child labor. However, as the discussions show, some weaknesses remain, which raises the need for the Biden administration to introduce changes to strengthen Subpart 22.15. Specifically, weaknesses relating to legal certainty, the subpart’s scope and coverage, and significant loopholes that hinder the effectiveness of eliminating child labor exist in Subpart 22.15. Until the United States addresses such inadequate provisions, its federal government supply chain will continue to be tainted by child labor.
In addition to the weaknesses outlined in this article, Subpart 22.15 contains notable provisions that attempt to tackle forced or indentured child labor. Such provisions include rules on carrying out due diligence against the DoL list of products manufactured by forced or indentured labor; rules on inserting the certification requirement in all solicitations; rules on requesting certification before contract award; and rules on inserting a clause that requires contractors to comply with investigations. Despite these advantageous provisions, critical limitations outlined in this paper show the importance of strengthening Subpart 22.15 into a regulation that can adequately tackle all forms of child labor in the government’s supply chains. The strengthening of Subpart 22.15 as advocated by the authors will contribute to eliminating child labor from the supply chain. Additionally, such strengthening of Subpart 22.15 could lead to other countries adopting similar provisions in their regulated procurement frameworks.
