USDA backs off controversial labor rule targeting contractors

Officials opted to withdraw the rule after receiving industry complains that it's too much of a burden.

In a win for federal contractors and contracting officers alike, Agriculture Department officials decided on Jan. 30 to withdraw a new final rule requiring companies to keep their subcontractors and suppliers in line with federal labor laws, a department spokesman told Washington Technology on Jan. 31.

Under USDA’s rule, companies contracting with the department would have to certify that they comply with labor laws and that their subcontractors of any tier and their suppliers also comply. It would have included reporting requirements for violations and the threat of tough action by the department if there were violations.

Officials took a unique approach to rule-making and added it as a direct final rule to the Agriculture Acquisition Regulation on Dec. 1. It was set to take effect Feb. 29. However, they said if the rule garnered any adverse comments, they would withdraw the rule in part or in whole.

The Council of Defense and Space Industry Associations, a group of six industry groups, objected to the rule in a letter to the USDA last week. The council said the rule overlapped more than 180 federal labor laws and regulations to implement the laws. The rule would also add additional work to both the prime contractors, which would have to monitor their subcontractors and suppliers, and the contracting officers who would review reports on compliance. Further, USDA could possibly bump heads with the Labor Department in the case of a labor law violation.

The council’s letter pushed USDA to withdraw the whole rule.

“Yesterday, USDA withdrew the Dec. 1, 2011, direct final rule adding a new clause to the Agriculture Acquisition Regulation,” the USDA spokesman said.

Alan Chvotkin, executive vice president and counsel for the Professional Services Council, a member of the overarching-industry group objecting the rule, said the USDA did well to withdraw its rule after receiving the letter from the council about the rule's ambiguities and overlap with other standing laws.

"I'm pleased USDA acted promptly in light of well-reasoned comments from the council," he said.