Contractors Stay Hopeful Trump Will Rescind Executive Orders

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By Sam Skolnik

Nov. 9 — Donald Trump’s upset presidential victory is likely to provide federal contractors with one of the biggest items on their wish list: the reversal of most if not all of the executive orders President Barack Obama has aimed at them over the past eight years.

Trump promised during his campaign to wipe out “job-killing” regulations Obama issued — and that he would use the power of the executive order (EO) to do so. There is now little doubt in the contracting community that Trump will fulfill his promise regarding the specific subset of EOs with which they have been forced to comply.

“The likelihood is that most of these orders are gone,” Larry Allen, president of Allen Federal Business Partners, a contracting consulting group, told Bloomberg BNA.

‘I Won’t Refuse It.’

Trump’s intentions as they pertain to contractors seem clear: He wants them, like other businesses, to be free of regulations that hinder their ability to grow.

“Regulations have grown into a massive job-killing industry,” Trump said this month during a speech. “The regulation industry is one business I will absolutely put an end to on Day One.”

In January, Trump said on NBC’s “Meet the Press” that he would take Obama’s lead in using executive orders as he deemed necessary. “I won’t refuse it. I’m going to do a lot of things,” Trump said. “I mean, he’s led the way, to be honest with you.”

Contractors and their representatives see these as clear signs that many of Obama’s dozen EOs and one presidential memorandum could soon be on the chopping block.

“Obama has issued more executive orders regarding contractors than anyone else,” Rob Burton, a partner with Crowell & Moring and former deputy administrator of the Office of Federal Procurement Policy (OFPP) in the George W. Bush administration, told Bloomberg BNA before the election.

“The Trump administration would definitely pull away” from most of Obama’s contractor-focused EOs and instead focus on policies that promote competition, Burton said.

Overly Burdensome

Obama’s EOs have touched on a range of issues, almost entirely directed at promoting federal worker and union rights. They have included orders to ensure that contractors provide a minimum wage of $10.10 per hour for federal workers; prohibit discrimination by contractors based on sexual orientation and gender identity; and require agencies to work with contractors to reduce greenhouse gas emissions by federal contractors by 3 percent, in an effort to combat climate change.

Contractors have repeatedly taken issue with the EOs, saying that they’re overly burdensome, costly to comply with, and saddle contractors with policy prescriptions that Obama couldn’t get through Congress. Two, in particular, have sparked their ire:

  •  Executive Order 13673, Fair Pay and Safe Workplaces, is at the top of the list. That July 2014 EO — which a federal judge in Texas recently mostly blocked from moving forward — mandates that contractors comply with applicable labor laws and disclose violations of 14 federal environmental and labor laws to the government, including the Family and Medical Leave Act, the National Labor Relations Act, the Fair Labor Standards Act and employment discrimination laws.
  •  Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors, is the other. That September 2015 EO ensures that contractor employees can earn up to seven days of paid sick leave annually, including paid leave for family care.

The issue came to a head last year, when four contracting trade groups sent a request to two top administration officials that “no further presidential directives primarily focused on government contractors be issued for the foreseeable future.”

The net effect of the EOs, wrote top officials from the Professional Services Council, the National Defense Industrial Association, the Aerospace Industries Association, and the IT Alliance for Public Sector in their Aug. 3, 2015, letter, “has been to significantly increase the costs of doing business with the government.”

Obama, backed by his labor movement and progressive allies, has passionately promoted the social and economic benefits of his EOs. A fact sheet that accompanied the paid sick leave EO estimated, for example, that 44 million private-sector workers do not have access to paid sick leave — and that the order would give about 300,000 federal contractor employees a new ability to earn up to seven days of sick leave per year.

One at a Time

Trump has several options regarding how he might begin to unravel Obama’s contractor-focused EOs.

A new president can stop an executive order from being implemented simply by issuing a new order that rescinds the earlier one. So he could decide to go after some or each of Obama’s contractor-targeted orders one at a time. This would give the president flexibility if he decides there are some orders he agrees with.

Trump also could order agencies to begin repealing each of the rules set in motion by a previous administration.

Finally, he could issue a blanket order repealing all of Obama’s orders at once.

Even if a new president rescinds a previous president’s EO, those orders that have already gone through the regulatory process take some time to be officially ended.

“It takes time to undo, yes, but if the EO has been rescinded, it basically becomes moot at that point,” said Allen, the former president of the Coalition for Government Procurement, a nonprofit association of government contractors. “If the rug is pulled out from underneath you, you have nothing left to stand on.”

The one-at-a-time option seems the most likely for Trump, said federal contracting trade group leaders and government contracts attorneys. And it’s certainly possible that the president-elect, and whomever he picks to lead the Office of Management and Budget (OMB) and its OFPP, might conclude that while some EOs are obvious candidates for elimination, others should be ignored.

It’s conceivable, for example, that because contracting groups have said they already mostly adhered to the minimum wage and lesbian, gay, bisexual and transgender discrimination rules anyway, they have little reason to ask for the EOs to be quashed.

Obama’s 2012 EO on human trafficking might be a special case. That order requires contractors to actively monitor their subcontractors and vendors for signs that they may be allowing trafficking — which they must report immediately to the government. Contractors, who have complained about the reporting requirements of the rule — and the possible criminal and administrative penalties attached — also have taken pains to ensure that their companies not be associated with trafficking.

Allen predicted that in this case, instead of rescinding the EO or letting it be, the Trump administration could modify it.

A Principal Question

In the end, attempting to determine exactly what Trump will do regarding Obama’s contractor-focused EOs is an uncertain proposition, government contracts attorney said.

“One of the principal questions is, how much attention is this going to get” in President Trump’s administration, Dan Graham, a partner with Vinson & Elkins’ government contracts practice group in Washington, told Bloomberg BNA.

And if it does get Trump’s attention, when might that happen?

The issue might not be decided until a new OMB director or OFPP administrator is selected, which could take months, Graham said.

Business people, including contractors, relish certainty, Graham said. But right now “there’s a tremendous amount of uncertainty.”

To contact the reporter on this story: Sam Skolnik in Washington at sskolnik@bna.com

To contact the editor responsible for this story: Jerome Ashton at jashton@bna.com

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