§ 22.2004-2 - Preaward assessment of an offeror's labor law violations.

22.2004-2 Preaward assessment of an offeror's labor law violations.

(a) General. Before awarding a contract in excess of $500,000, the contracting officer shall -

(1) Consider relevant past performance information regarding compliance with labor laws when past performance is an evaluation factor; and

(2) Consider information concerning labor law violations when determining whether a prospective contractor is responsible and has a satisfactory record of integrity and business ethics.

(b) Assessment of labor law violation information during responsibility determination. When the contracting officer initiates a responsibility determination (see subpart 9.1) and a prospective contractor has provided an affirmative response to the representation at paragraph (c)(2) of the provision at 52.222-57, Representation Regarding Compliance with Labor Laws (Executive Order 13673), or its equivalent for commercial items at 52.212-3(s)(2)(ii) -

(1) The contracting officer shall request that the prospective contractor -

(i) Disclose in SAM at www.sam.gov for each labor law decision, the following information, which will be publicly available in FAPIIS:

(A) The labor law violated.

(B) The case number, inspection number, charge number, docket number, or other unique identification number.

(C) The date rendered.

(D) The name of the court, arbitrator(s), agency, board, or commission rendering the determination or decision;

(ii) Provide such additional information, in SAM, as the prospective contractor deems necessary to demonstrate its responsibility, including mitigating factors and remedial measures such as actions taken to address the violations, labor compliance agreements, and other steps taken to achieve compliance with labor laws. Prospective contractors may provide explanatory text and upload documents in SAM. This information will not be made public unless the contractor determines that it wants the information to be made public; and

(iii) Provide the information in paragraphs (b)(1)(i) and (ii) of this section to the contracting officer if the prospective contractor meets an exception to SAM registration (see 4.1102(a));

(2) The contracting officer shall -

(i) Request that the ALCA provide written analysis and advice, as described in paragraph (b)(3) of this section, within three business days of the request, or another time period determined by the contracting officer;

(ii) Furnish to the ALCA all relevant information provided to the contracting officer by the prospective contractor; and

(iii) Request that the ALCA obtain copies of the administrative merits determination(s), arbitral award(s) or decision(s), or civil judgment(s), as necessary to support the ALCA's analysis and advice, and for each analysis that indicates an unsatisfactory record of labor law compliance. (The ALCA will notify the contracting officer if the ALCA is unable to obtain any of the necessary document(s); the contracting officer shall request that the prospective contractor provide the necessary documentation).

(3) The ALCA's advice to the contracting officer will include one of the following recommendations about the prospective contractor's record of labor law compliance in order to inform the contracting officer's assessment of the prospective contractor's integrity and business ethics. The prospective contractor's record of labor law compliance, including mitigating factors and remedial measures -

(i) Supports a finding, by the contracting officer, of a satisfactory record of integrity and business ethics;

(ii) Supports a finding, by the contracting officer, of a satisfactory record of integrity and business ethics, but the prospective contractor needs to commit, after award, to negotiating a labor compliance agreement or another acceptable remedial action;

(iii) Could support a finding, by the contracting officer, of a satisfactory record of integrity and business ethics, only if the prospective contractor commits, prior to award, to negotiating a labor compliance agreement or another acceptable remedial action;

(iv) Could support a finding, by the contracting officer, of a satisfactory record of integrity and business ethics, only if the prospective contractor enters, prior to award, into a labor compliance agreement; or

(v) Does not support a finding, by the contracting officer, of a satisfactory record of integrity and business ethics, and the agency suspending and debarring official should be notified in accordance with agency procedures;

(4) The ALCA will provide written analysis and advice, using the DOL Guidance, to support the recommendation made in paragraph (b)(3) of this section and for the contracting officer to consider in determining the prospective contractor's responsibility. The analysis and advice shall include the following information:

(i) Whether any labor law violations should be considered serious, repeated, willful, and/or pervasive.

(ii) The number and nature of labor law violations (depending on the nature of the labor law violation, in most cases, a single labor law violation may not necessarily give rise to a determination of lack of responsibility).

(iii) Whether there are any mitigating factors.

(iv) Whether the prospective contractor has initiated and implemented, in a timely manner -

(A) Its own remedial measures; and

(B) Other remedial measures entered into through agreement with or as a result of the actions or orders of an enforcement agency, court, or arbitrator.

(v) If the ALCA recommends pursuant to paragraphs (b)(3)(iii) or (iv) of this section that the prospective contractor commit to negotiate, or agree to enter into, a labor compliance agreement prior to award, the rationale for such timing (e.g., (1) the prospective contractor has failed to take action or provide adequate justification for not negotiating when previously notified of the need for a labor compliance agreement, or (2) the labor violation history demonstrates an unsatisfactory record of integrity and business ethics unless an immediate commitment is made to negotiate a labor compliance agreement).

(vi) If the ALCA's recommendation is that the prospective contractor's record of labor law compliance does not support a finding, by the contracting officer, of a satisfactory record of integrity and business ethics, the rationale for the recommendation (e.g., a labor compliance agreement cannot be reasonably expected to improve future compliance; the prospective contractor has shown a basic disregard for labor law including by failing to enter into a labor compliance agreement after having been given reasonable time to do so; or the prospective contractor has breached an existing labor compliance agreement).

(vii) Whether the ALCA supports notification to the suspending and debarring official and whether the ALCA intends to make such notification.

(viii) If the ALCA recommends a labor compliance agreement pursuant to paragraphs (b)(3)(ii), (iii), or (iv) of this section, the name of the enforcement agency or agencies that would execute such agreement(s) with the prospective contractor.

(ix) Any such additional information that the ALCA finds to be relevant;

(5) The contracting officer shall -

(i) Consider the analysis and advice from the ALCA, if provided in a timely manner, in determining prospective contractors' responsibility;

(ii) Place the ALCA's written analysis, if provided, in the contract file with an explanation of how it was considered in the responsibility determination;

(iii) Proceed with making a responsibility determination if a timely written analysis is not received from an ALCA, using available information and business judgment; and

(iv) Comply with 9.103(b) when making a determination that a prospective small business contractor is nonresponsible and refer to the Small Business Administration for a Certificate of Competency;

(6) Disclosure of labor law decision(s) does not automatically render the prospective contractor nonresponsible. The contracting officer shall consider the offeror for contract award notwithstanding disclosure of one or more labor law decision(s), unless the contracting officer determines, after considering the analysis and advice from the ALCA on each of the factors described in paragraph (b)(4) of this section, and any other information considered by the contracting officer in performing related responsibility duties under 9.104-5 and 9.104-6, that the offeror does not have a satisfactory record of integrity and business ethics (e.g., the ALCA's analysis of disclosed or otherwise known violations and lack of or insufficient remediation indicates a basic disregard for labor law).

(7) If the ALCA's assessment indicates a labor compliance agreement is warranted, the contracting officer shall provide written notification, prior to award, to the prospective contractor that states that the prospective contractor's disclosures have been analyzed by the ALCA using DOL's Guidance, that the ALCA has determined that a labor compliance agreement is warranted, and that identifies the name of the enforcement agency or agencies with whom the prospective contractor should confer regarding the negotiation of such agreement or other such action as agreed upon between the contractor and the enforcement agency or agencies.

(i) If the ALCA's recommendation is that the prospective contractor needs to commit, after award, to negotiating a labor compliance agreement or another acceptable remedial action (paragraph (b)(3)(ii) of this section), the notification shall indicate that -

(A) The prospective contractor is to provide a written response to the contracting officer and that the response is not required prior to contract award. The response is due in a time specified by the contracting officer. (The contracting officer shall specify a response time that the contracting officer determines is reasonable for the circumstances.);

(B) The contractor's response will be considered by the contracting officer in determining if application of a postaward contract remedy is appropriate. The prospective contractor's commitment to negotiate in a reasonable period of time will be assessed by the ALCA during contract performance (see 22.2004-3(b));

(C) The response shall either -

(1) Confirm the prospective contractor's intent to negotiate, in good faith within a reasonable period of time, a labor compliance agreement, or take other remedial action agreed upon between the contractor and the enforcement agency or agencies identified by the contracting officer, or

(2) Explain why the prospective contractor does not intend to negotiate a labor compliance agreement, or take other remedial action agreed upon between the contractor and the enforcement agency or agencies identified by the contracting officer; and

(D) The prospective contractor's failure to enter into a labor compliance agreement or take other remedial action agreed upon between the contractor and the enforcement agency or agencies within six months of contract award, absent explanation that the contracting officer considers to be adequate to justify the lack of agreement -

(1) Will be considered prior to the exercise of a contract option;

(2) May result in the application of a contract remedy; and

(3) Will be considered in any subsequent responsibility determination where the labor law decision on the unremediated violation falls within the disclosure period for that solicitation;

(ii) If the ALCA's recommendation is that the prospective contractor commit, prior to award, to negotiating a labor compliance agreement or another acceptable remedial action (paragraph (b)(3)(iii) of this section), use the procedures in paragraph (b)(7)(i) but substitute the following paragraphs (b)(7)(ii)(A) and (B) for paragraphs (b)(7)(i)(A) and (B):

(A) The prospective contractor is to provide a written response to the contracting officer and that the response is required prior to contract award. The response is due in a time specified by the contracting officer. (The contracting officer shall specify a response time that the contracting officer determines is reasonable for the circumstances.);

(B) The contractor's response will be considered by the contracting officer in determining responsibility.

(iii) If the ALCA's recommendation is that the prospective contractor enter, prior to award, into a labor compliance agreement (paragraph (b)(3)(iv) of this section), the notification shall state that the prospective contractor shall enter into a labor compliance agreement before contract award;

(8) The contracting officer shall notify the ALCA -

(i) Of the date notice was provided to the prospective contractor; and

(ii) If the prospective contractor fails to respond by the stated deadline or indicates that it does not intend to negotiate a labor compliance agreement; and

(9) If the prospective contractor enters into a labor compliance agreement, the entry shall be noted in FAPIIS by the ALCA.

(c)

(1) The contracting officer may rely on an offeror's negative response to the representation at paragraph (c)(1) of the provision at 52.222-57, Representation Regarding Compliance with Labor Laws (Executive Order 13673), or its equivalent for commercial items at 52.212-3(s)(2)(i) unless the contracting officer has reason to question the representation (e.g., the ALCA has brought covered labor law decisions to the attention of the contracting officer).

(2) If the contracting officer has reason to question the representation, the contracting officer shall provide the prospective contractor an opportunity to correct its representation or provide the contracting officer an explanation as to why the negative representation is correct.

Note to 22.2004-2:

By a court order issued on October 24, 2016, this section is enjoined indefinitely as of the date of the order. The enjoined section will become effective immediately if the court terminates the injunction. At that time, DoD, GSA, and NASA will publish a document in the Federal Register advising the public of the termination of the injunction.

[81 FR 58639, Aug. 25, 2016, as amended at 81 FR 91639, Dec. 16, 2016]