On April 15, 2015, the Congressional Progressive Caucus held a forum renewing their request for President Obama to issue another Executive Order related to labor policies governing Federal Contractors. Specifically, the CPC is asking the President to issue an Executive Order giving “preference” to federal contractors who pay workers at least $15 an hour and offer benefits, paid leave, full-time hours and predictable schedules. A preference $15 per hour floor would represent a substantial increase over the recently passed Executive Order 13658, which raised the minimum wage for workers on Federal construction and service contracts to $10.10 per hour. In support of this initiative, House Democrats argue that the wage increase would save tax money by reducing reliance on federal subsidies for health care, housing and food.
Such an Executive Order raises several questions, and could necessitate a re-evaluation of the procurement process. For example, would the proposed preference apply to all procurements, or just select procurements in targeted industries? How would the preference be taken into consideration during evaluations? Further, what additional information would contractors be required to submit to certify their compliance with the minimum wage floor and would this implicate additional auditing requirements? Finally, the financial implications must be thoroughly analyzed. Whether it is feasible for the federal contracting industry to undertake wage hikes when the trend regarding federal procurements is to keep costs low would be a consideration. Any increases to the costs of procurement expenditures – both contract pricing and additional administrative costs to effectuate the policy – would still have to be weighed against the ultimate saving to the tax payer as proposed by the House Democrats urging the President to execute this order.
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