Final months of Obama administration proving costly for contractors

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As summer draws to a close, the November elections will become the center of attention for many people in our state and country. They are sure to be a hot topic at Labor Day weekend celebrations. And, no disagreement here, the direction of our country is something that should be widely debated.

But, it seems serious policy discussions at every level have been replaced with inflammatory tweets and juvenile name-calling — on both sides. The unfortunate result of this sound-bite era is that the real issues that affect people’s families and businesses are simply swept under the rug.

The current administration seems to understand this and is saddling businesses — including the construction industry — with countless new rules and regulations. While the sound bites may play well, the actual consequences are far from good.

Just last week, the Federal Acquisition Regulatory Council issued a final rule on the Fair Pay and Safe Workplaces Executive Order 13673, which was issued in July 2014. Judging just by the name, this sounds like a great idea. No one would be in favor of unfair pay and unsafe workplaces.

However, what is that old saying about judging books by their covers?

When we look at the entire final rule — also known as the administration’s “blacklisting” proposal — it is clear that competition will decrease, bureaucrats will be empowered to pick winners and losers and the process for bidding on federal projects will become even more unnecessarily complicated.

The new rule will require companies that are bidding on federal projects to disclose their history of labor-law violations for the three years leading up to the time of the bid. It also requires companies to disclose violations that are merely alleged and not yet officially final.

This could be detrimental to contractors because the information will then be made public. This could lead to the unwanted discovery of confidential or proprietary information. It could also unfairly damage the reputation of contractors, especially if there are errors in the information that is released or if the data do not paint a full picture of the company’s history.

In addition, contractors should be nervous that it’s not only actual violations that have to be reported, but also alleged violations. This puts their business in the hands of a federal bureaucrat who could be making decisions in response to what could proved to be unsubstantiated claims. So, a contractor might not only see its reputation tarnished after reporting an alleged violation, it could lose out on a contract for a violation that never actually happened.

I think Ben Brubeck, Associated Builders and Contractors vice president of regulatory, labor and state affairs, summed it up best last week.

“FAR’s flawed blacklisting final rule will create a murky and needlessly subjective procurement process that will result in fewer qualified and responsible contractors bidding on federal contracts,” he said. “Upon initial review, it appears that rather than working toward improving the federal government’s existing suspension and debarment system, the administration has finalized a proposal that is duplicative and cumbersome and will result in less competition for taxpayer-funded contracts.”

This is not the only rule that is making it increasingly difficult to do business in our country. Similar harm is befalling the construction industry thanks to other regulations passed down recently by the Obama administration.

The final rule on electronic record keeping that the Occupational Safety and Health Administration issued in May threatens to greatly increase costs for contractors while, at the same time, failing to make workplace safer. In fact, the rule can actually limit post-accident drug testing and other programs that lead to improved construction job site safety. Another OSHA rule announced this year — this one concerning respirable crystalline silica — is likewise far from economically feasible and demonstrates a fundamental misunderstanding of the construction industry.

To say the least, these final months of the Obama administration are proving costly for contractors and many others in the construction industry. I just wonder, come January, will it get better or worse?