Aug 17, 2011 - 3:43pm

DOL’s “Data Collection” Rule Revives High Road Contracting Proposal


Senior Vice President, Employment Policy Division

Last year, the administration floated a proposal to rig the government contracting process in ways that would favor unionized firms. This so-called “high road” contracting Executive Order seemed to have deflated once Congress and the public got wind of it, but a little-known regulatory agency in Washington is now trying to revive it.
 
The original “high road” proposal would have given extra points to contract proposals submitted by firms that paid a “living” wage, and also provided paid sick leave, health insurance, and an employer-sponsored retirement plan. These benefits would have been required for all employees at a firm, not just those working on the government contract.
 
Critics argued that the proposal would have hurt small businesses by making it more difficult for them to win contracts; limited competition for contracts while driving up costs — thus hurting the taxpayer; and, encouraged favoritism by government officials in awarding contracts. Moreover, there was absolutely no data to support the proposition that government contractors were paying such low wages that a policy like “high road” was even necessary.
 
Enter the Office of Federal Contract Compliance Programs (OFCCP) at the U.S. Department of Labor (DOL). This little-known agency is supposed to prevent discrimination by federal contractors and promote equal employment opportunity within those firms. On August 10, OFCCP issued an Advanced Notice of Proposed Rulemaking indicating they were developing a new “compensation data collection tool.” In English, this means the agency wants federal contractors to divulge to OFCCP intimate details of their compensation practices. Information the agency may require companies to submit could include:
 
·         Average starting compensation for employees, including paid leave, health benefits and retirement benefits.
·         Average pay raises
·         Average bonuses
·         Minimum and maximum salary
·         Standard deviation of salary
·         Average tenure
·         Average compensation by job series
 
“Compensation” could include:
 
·         Total W-2 earnings
·         Base salary
·         Holiday pay
·         Hourly wages
·         Shift differentials
·         Commissions
·         Stock options
 
In the proposed rule, the agency indicates an interest in collecting this data on a “nationwide basis rather than on an individual basis.” So, similar to the high road contracting idea, OFCCP may demand compensation information about all workers at a firm, not just those working on a government contract. Finally, OFCCP indicates that it may require compensation information to be part of submitting a contract bid: 
 
“An option that OFCCP is considering is the possibility of requiring businesses that are bidding on future Federal contracts to submit compensation data as part of the Request for Proposal process.” 
 
So firms that don’t provide the “right” sort of pay and benefits could ultimately see their contract bids penalized. This is all starting to sound a bit familiar.
 
The proposed high road contracting Executive Order faded away once Members of Congress and the public found out what was in it. Apparently the unions and their allies haven’t given up. High road may be back — only this time with DOL leading the charge.
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About the Author

Glenn Spencer Headshot
Senior Vice President, Employment Policy Division

Glenn Spencer is senior vice president of the Employment Policy division at the U.S. Chamber of Commerce.