As we discussed in our August 9 blog post "Executive Order Requiring Paid Sick Leave for Federal Contractors In the Works," the New York times broke the news that the White House had drafted and the President plans to issue an Executive Order which would require federal contractors to provide their employees with paid sick leave.
On August 3, 2015, four contracting groups wrote a letter to the White House "respectfully requesting that no further presidential directives primarily focused on government contractors be issued for the foreseeable future." Those contracting groups were: the National Defense Industrial Association, the Aerospace Industries Association, the Professional Services Council and the Information Technology Council. The letter was short and to the point, noting the unintended consequences and negative impact that this regulatory firestorm is having not only on existing federal contractors but also on those hoping to get into the federal marketplace. Recognizing the need for continued discussion, the organizations conclude by indicating their willingness to work with the administration to "appropriately balance oversight and compliance."
In our humble view, while we believe that the federal contracting industry does require further reform and that federal contractors should certainly be held to a higher standard than commercial companies, particularly with respect to their federal contracts, we also feel there should be a balance and the impact on small businesses (whether intended or unintended) considered. The issuance of numerous regulatory and reporting requirements within a relatively short period of time has imposed significant burdens on small businesses to the point that it almost doesn't make sense for many small businesses to stay in the federal marketplace.
While one could argue that these regulations by and large do not apply to small businesses because they generally apply to contracts in excess of $500,000, the reality is that there are legitimate small businesses that are cable of obtaining and actually are obtaining contracts over $500,000. If the goal is to eliminate small businesses from the federal marketplace, then we are well on our way to doing that.