Congress Narrowed Fair Pay Order After Vigorous Lobbying

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By Ben Penn —with reporting by Roxana Tiron

Aug. 2 — Some of the largest government contractors and their trade association representatives were heavily involved in a GOP strategy to scale back one of the president’s most controversial labor initiatives, a Bloomberg BNA lobbying analysis shows.

“Republicans, responding to the contractors' lobbyists, are using the National Defense Authorization Act to gut the order before it takes effect by effectively exempting DoD,” Arun Ivatury, policy director at the Service Employees International Union, told Bloomberg BNA in an e-mail. SEIU and other labor groups are pushing lawmakers to restore the executive order.

Fair Pay and Safe Workplace Lobbying

At least 20 private companies and business groups lobbied Congress on the Fair Pay and Safe Workplaces executive order’s reporting requirements for federal contractors, according to recently filed second-quarter lobbying reports.

The list includes Lockheed Martin Corp., Boeing Co. and International Business Machines Corp., along with the U.S. Chamber of Commerce, HR Policy Association and National Association of Manufacturers.

Unions and other worker advocacy groups filed about half as many lobbying reports on the subject as their business counterparts. The American Association for Justice and the National Employment Law Project were among those joining the SEIU to ask Congress to remove Republican riders that they argue weaken the order.

The April-May-June lobbying period coincided with the passage of defense authorization bills in both chambers that included provisions to exempt Pentagon contractors from the executive order. The DOD accounts for about two-thirds of all federal contracting, according to a Bloomberg Government analysis.

The Senate-House conference committee must now decide whether to retain the National Defense Authorization Act language pertaining to the order.

The Fair Pay and Safe Workplaces executive order (E.O. 13,673) requires businesses seeking government contracts worth more than $500,000 to disclose violations of 14 federal labor and employment laws—and state-law counterparts—for the previous three years.

Signed by President Barack Obama in 2014, the order now awaits final implementing regulations and guidance from the Federal Acquisition Regulatory Council and Labor Department before it takes effect.

HR Policy Association Leads Pack

Most lobbying reports on this issue didn't contain detailed descriptions of the registrant’s involvement. But one notable exception came from the HR Policy Association, which represents chief human resources officers for the nation’s largest companies. The group is considered a heavyweight in steering the legislative response to the executive order.

The HR Policy Association second-quarter lobbying disclosure details 24 congressional meetings on the executive order between April 11 and May 24. Staffers for members of the House and Senate Armed Services Committees responsible for drafting the annual defense authorization bill discussed the order with lobbyists from HR Policy Association and other business coalition representatives.

Many of those discussions revolved around using the Fiscal Year 2017 NDAA to narrow the executive order’s impact. The first seed of this approach may have been planted when business groups met with House Education and the Workforce Committee staff April 11.

Two weeks later, Rep. John Kline (R-Minn.), who chairs the Education and Workforce Committee and sits on the Armed Services Committee, introduced an NDAA amendment that would remove DOD from the order.

Mark Wilson, who attended the meetings with fellow HR Policy Association officials, told Bloomberg BNA: “The NDAA historically has been passed every year. It’s a vehicle that a lot of people have looked to, to try to get things done.”

“To the extent that we could provide some relief from the executive order for defense contractors, it was only natural to use the NDAA as a vehicle to do that,” said Wilson, vice president of health and employment policy at the HR Policy Association.

The House amendment exempting all DOD contractors, and similar language in the Senate version, applying to most defense contractors, survived both chambers’ final bills. NDAA conferees will iron out the differences when Congress reconvenes in September.

The business coalition also lobbied the staff of other committees for appropriations riders to block the order’s implementation. But the appropriations strategy is not the top priority. Their real focus remains on the defense bill language, Wilson said.

Large Companies Target Executive Order on Hill

The HR Policy Association’s message to Congress reflects the concerns from powerful defense contractors that the executive order’s requirements will be unnecessarily burdensome.

“The negative impact that it will have on the procurement process should not be underestimated whatsoever,” Wilson said. “Some large contractors have thousands of subcontractors; it’s just ridiculous to think that every six months you have to collect accurate reports on alleged violations out there for all your subcontractors.”

The association’s views on contractors with multimillion- or billion-dollar awards are likely influenced by the 10 members on its board of directors who are executives at some of the nation’s leading military contractors.

Senior officials at Merck & Co., AT&T Inc., McKesson Corp., IBM, Honeywell International Inc., Northrop Grumman Corp. and General Electric Co. all occupy seats on HR Policy Association's board. Those companies are also among the 200 largest federal contractors by dollar amount in FY 2015, according to a Bloomberg Government analysis.

Honeywell did not lobby on the issue in the second quarter but did coordinate “with the HR Policy Association and NAM to represent industry’s view opposing the Obama Administration’s Fair Pay and Safe Workplaces Executive Order,” company spokesman Rob Ferris told Bloomberg BNA in a statement.

The top two overall contractors, Boeing and Lockheed Martin, filed reports disclosing communication with Congress on the executive order.

“The proposed rules are unfeasible to implement and would subject employers and workers to corrective action based on potentially false accusations or incomplete adjudication,” Boeing spokeswoman Kate Bernard said in an e-mailed statement. Lockheed spokesman Bill Phelps declined to comment.

Other companies that mentioned the executive order as one of their second-quarter lobbying targets either declined to comment or did not respond to a Bloomberg BNA request.

Lobbying disclosures don't detail the amount of time or money spent advocating on the House and Senate NDAA bills or on the executive order in general. Instead, the disclosures include those bills among any number of measures that are being lobbied.

The filings also don't necessarily capture a complete list of all groups weighing in on the matter, as some reports only provide the name of the bill without mentioning which of the NDAA's long list of provisions they were interested in.

One such company, BAE Systems Inc., told Bloomberg BNA through spokesman Brian Roehrkasse, “We have not actively lobbied Congress on this matter.” BAE Systems, with $4.6 billion in FY 2015 government awards, did assist its trade associations in developing their position, he added.

SEIU Says Its Coalition Is Strong

Labor unions and allies strategizing to remove the NDAA language exempting defense contractors are outnumbered on this issue, the lobbying reports show.

The SEIU, an influential Capitol Hill voice on this issue, pointed out that the balance isn't necessarily tilted in favor of employer interests.

“We stand with civil rights, disability rights, and good governance groups, as well as responsible business allies and advocates for seniors in support of the president’s efforts to hold lawbreaking companies accountable,” the SEIU's Ivatury said.

“We join with dozens of members of the House and Senate demanding Congress pass a clean NDAA, and with the president who has threatened to otherwise veto it,” he said.

The majority party’s conferees face a Democratic bid, led by Sen. Richard Blumenthal (Conn.), to strike the executive order restrictions, along with veto threats issued by the White House if the bill retains that language and other NDAA sections it opposes.

The April-May-June filings also cover congressional activity on the executive order from the International Brotherhood of Teamsters, American Association for Justice, Public Citizen and the AARP.

In addition to advocating in favor of the order on their own, the SEIU and AAJ hired government relations firm NVG LLC to lobby Congress to remove the NDAA rider.

One trade association, the Mechanical Contractors Association of America, lobbied generally in support of the executive order because it raises federal contracting standards, John McNerney, the group's general counsel, told Bloomberg BNA. MCAA's second-quarter efforts were more focused on urging the administration to finalize the rule than to educate Congress, he said.

Activity to Keep Up in Third Quarter

A senior lobbyist who favors the executive order told Bloomberg BNA that the list of groups working to remove the defense bill language is continuing to grow. It will soon expand to include some organizations not traditionally aligned with worker advocates, the lobbyist said.

Proponents have told members of Congress that the order is necessary to ensure companies that violate wage and safety laws aren't awarded taxpayer dollars. That effort continues into the third quarter, as NDAA conferees on both sides of the aisle could still use further education on this issue, said the senior lobbyist, who spoke on condition of anonymity.

The Center for American Progress, which describes itself as "a nonpartisan policy institute," has advised the Obama administration on contracting standards. The group was involved early on in discussions with the White House about how to improve conditions for employees of federal contractors. CAP strongly supports the Fair Pay and Safe Workplaces executive order and opposes any attempt to limit its coverage.

“Is it disappointing that there are some trade associations lining up in opposition to this? Yes it is,” Karla Walter, director of CAP's American Worker Project, told Bloomberg BNA. “What I’m really heartened by is the fact that we’ve got such a diverse list of groups coming forward to say that this is important.”

CAP did not list the executive order in its congressional lobbying disclosure. The group’s primary outreach activities have been aimed at the White House, not Congress, Walter said.

All lobbyists contacted are reluctant to predict how the defense authorization negotiations will shake out. But despite its advantage in sheer volume of lobbying activity, the business side acknowledges it faces an uphill climb.

“Clearly there are a large number of Democrats that are protecting the president on this issue, and that's going to be a big obstacle to overcome,” Roger Jordan, who lobbied against the order as vice president of government relations at PSC, told Bloomberg BNA.

“But the House and Senate versions of the NDAA very clearly state that there's real concern about the executive order and that its implementation ought to be significantly limited, particularly in regards to the Department of Defense,” added Jordan, who recently left PSC to represent contractor Unisys on Capitol Hill.

“My hope would be that the final version of the bill maintains as much of that language as possible,” he said.

To contact the reporter on this story: Ben Penn in Washington at

To contact the editor responsible for this story: Susan J. McGolrick at

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