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VirginiaLaborLaw.com. H ogge L aw . What Government Contractors Need to Know About Executive Order 13494 “Economy in Government Contracting” Raymond L. Hogge, Jr. Hogge Law Attorneys and Counselors at Law 500 E. Plume Street, Suite 800 Norfolk, Virginia, 23510 (757) 961-5400

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H ogge L aw

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  1. VirginiaLaborLaw.com Hogge Law What Government Contractors Need to Know About Executive Order 13494 “Economy in Government Contracting” Raymond L. Hogge, Jr. Hogge Law Attorneys and Counselors at Law 500 E. Plume Street, Suite 800 Norfolk, Virginia, 23510 (757) 961-5400 rayhogge@virginialaborlaw.com This presentation is intended solely for informational purposes and is not offered as legal advice

  2. VirginiaLaborLaw.com Hogge Law Federal Acquisition Regulations Part 31: Determines allowable costs under contracts with General Services Administration Department of Defense NASA

  3. VirginiaLaborLaw.com Hogge Law Federal Acquisition Regulations Subpart 31.2: Governs contracts with commercial organizations

  4. VirginiaLaborLaw.com Hogge Law Federal Acquisition Regulations Subpart 31.205-21: Governs costs allowable as labor relations costs

  5. VirginiaLaborLaw.com Hogge Law Federal Acquisition Regulations Subpart 31.205-21 before Executive Order 13494: “Costs incurred in maintaining satisfactory relations between the contractor and its employees” are allowable

  6. VirginiaLaborLaw.com Hogge Law Federal Acquisition Regulations Subpart 31.205-21 before Executive Order 13494: Allowable labor relations costs include Costs of shop stewards Costs of labor management committees Costs of employee publications Costs of other related activity

  7. VirginiaLaborLaw.com Hogge Law Executive Order 13494 “Economy in Government Contracting” Amended Federal Acquisition Regulations Subpart 31.205-21 Issued January 30, 2009 Amended Oct. 30, 2009 by Exec. Order 13517

  8. VirginiaLaborLaw.com Hogge Law Proposed regulations issued April 14, 2010 Final regulations issued Nov. 2, 2011 and effective December 2, 2011 48 CFR 31.205-21

  9. VirginiaLaborLaw.com Hogge Law Under Executive Order 13494 costs incurred in maintaining satisfactory relations between the contractor and its employees include Costs of shop stewards Costs of labor management committees Costs of employee publications Costs of other related activities (same as before Executive Order 13494)

  10. VirginiaLaborLaw.com Hogge Law Executive Order 13494 allows costs of “Costs incurred in maintaining satisfactory relations between the contractor and its employees” other than the costs of persuader activities

  11. VirginiaLaborLaw.com Hogge Law Executive Order 13494 disallows costs of “persuader activities” “Any activities to persuade undertaken to persuade employees to exercise or not to exercise, or concerning the manner of exercising, the right to organize and bargain collectively through representatives of the employees’ own choosing”

  12. VirginiaLaborLaw.com Hogge Law 31.205-21 After Exec. Order 13494: Specifically disallows persuader activity costs of “preparing and distributing materials” 31.-205-21(b)(1)

  13. VirginiaLaborLaw.com Hogge Law 31.205-21 After Exec. Order 13494: Specifically disallows persuader activity costs of “hiring or consulting legal counsel or consultants” 31.-205-21(b)(2)

  14. VirginiaLaborLaw.com Hogge Law 31.205-21 After Exec. Order 13494: Specifically disallows persuader activity costs of “meetings (including paying the salaries of the attendees at meetings held for this purpose)” 31.-205-21(b)(3)

  15. VirginiaLaborLaw.com Hogge Law 31.205-21 After Exec. Order 13494: Specifically disallows persuader activity costs of “planning or conducting activities by managers, supervisors, or union representatives during work hours” 31.-205-21(b)(4)

  16. VirginiaLaborLaw.com Hogge Law Costs associated with development, implementing, and enforcement of neutrality agreements Allowable provided the activity is not a persuader activity and is not “otherwise unlawful” (Preamble to Final Regulations)

  17. VirginiaLaborLaw.com Hogge Law Costs associated with negotiating collective bargaining agreements Allowable provided the negotiation is not “otherwise unlawful” (Preamble to Final Regulations)

  18. VirginiaLaborLaw.com Hogge Law Costs associated with encouraging employees to ratify a collective bargaining agreement Allowable provided the activity is not “otherwise unlawful” (Preamble to Final Regulations)

  19. VirginiaLaborLaw.com Hogge Law Costs associated with “administering collective bargaining agreements” Allowable provided the activity is not “otherwise unlawful” (Preamble to Final Regulations)

  20. VirginiaLaborLaw.com Hogge Law Costs associated with any activity found unlawful by the National Labor Relations Board Not allowable (Preamble to Final Regulations)

  21. VirginiaLaborLaw.com Hogge Law Public Comment: The rule favors unions and penalizes contractors Response in Final Rule Preamble: The rule only applies to persuade activities

  22. VirginiaLaborLaw.com Hogge Law Public Comment: The rule infringes on the rights of employers to engage in speech which is lawful under the National Labor Relations Act Response in Final Rule Preamble: The rule does not prohibit speech; it only disallows the contractor’s cost of engaging in that persuader activities

  23. VirginiaLaborLaw.com Hogge Law Public Comment: The rule is unclear as to what costs are disallowed Response in Final Rule Preamble: The rule identifies the costs that are allowed and the costs that are disallowed

  24. VirginiaLaborLaw.com Hogge Law Public Comment: The rule defines “persuader activity” more broadly than the Labor Management Relations Reporting and Disclosure Act Response in Final Rule Preamble: The rule does not alter the reporting obligations of employers under the LMRDA

  25. VirginiaLaborLaw.com Hogge Law Public Comment: The rule imposes significant compliance burdens and accounting costs to segregate disallowed costs Response in Final Rule Preamble: FAR 31.201-6 requires contractors to have accounting system to segregate allowable costs

  26. VirginiaLaborLaw.com Hogge Law Employee handbook of non-union employer expressing preference to remain non-union A persuader activity? Cost disallowed for only the policy or for the entire handbook?

  27. VirginiaLaborLaw.com Hogge Law Employee satisfaction surveys A persuader activity? Or maintaining satisfactory labor relations?

  28. VirginiaLaborLaw.com Hogge Law Employer wage and benefit surveys A persuader activity? Or maintaining satisfactory labor relations?

  29. VirginiaLaborLaw.com Hogge Law Workplace “town hall” meetings conducted by employer to discuss employee concerns A persuader activity? Or maintaining satisfactory labor relations?

  30. VirginiaLaborLaw.com Hogge Law Use by employer of management consultants to improve workforce satisfaction A persuader activity? Or maintaining satisfactory labor relations?

  31. VirginiaLaborLaw.com Hogge Law Use by employer of legal counsel for advice on labor relations issues A persuader activity? Or maintaining satisfactory labor relations?

  32. VirginiaLaborLaw.com Hogge Law To obtain a complementary copy of this presentation, or for assistance in complying with Executive Order 13494, please contact Ray Hogge at (757) 961-5400 or at rayhogge@virginialaborlaw.com

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